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Credit Facilities and Long-Term Debt

Below is a summary of our outstanding balances on credit facilities and long-term debt (in thousands):

December 31,	2016			2015
New vehicle floor plan commitment	$	1,506,895		$	1,265,872
Floor plan notes payable		94,602			48,083
Total floor plan debt		1,601,497			1,313,955

Used vehicle inventory financing facility		211,000			171,000
Revolving lines of credit		142,507			61,246
Real estate mortgages		428,367			387,861
Other debt		11,191			25,248
Debt issuance costs		(2,184	)		(2,169	)
Total debt	$	2,392,378		$	1,957,141

April

2015,

the FASB issued ASU

2015

03,

"Simplifying the Presentation of Debt Issuance Costs (Subtopic

835

30)."

ASU

2015

requires entities to present debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of that debt liability. The new standard is effective for fiscal years beginning after

December

15,

2016,

and therein. We have adopted the retrospective application of the new guidance, wherein the balance sheet of each individual period presented is adjusted to reflect the period-specific effect of presenting all debt issuance costs as a reduction from the carrying amount of the related debt liability for both current and prior periods. We reclassified

$2.2

million of debt issuance costs as a direct reduction from the carrying amount of debt as of

December

31,

2015.

Credit Facility

We have a credit facility with a total financing commitment of

$2.05

billion which matures in

July

2021.

This syndicated credit facility is comprised of

financial institutions, including

eight

manufacturer-affiliated finance companies. Under our credit facility we are permitted to allocate the total financing commitment among floor plan financing for new vehicle inventory, floor plan financing for used vehicle inventory (up to a maximum of

$350

million) and revolving financing for general corporate purposes, including acquisitions and working capital (up to a maximum of

$400

million). Our credit facility

may

be expanded to

$2.4

billion total availability, subject to lender approval. All borrowings from, and repayments to, our lending group are presented in the Consolidated Statements of Cash Flows as financing activities.

The availability of the revolving line of credit under our syndicated credit facility is determined according to a borrowing base comprised of a portion of certain accounts, receivables, invoices, inventory and equipment. The borrowing base is reduced by the sum of the outstanding aggregate principal balance of new and used vehicle floor plan loans and new and used swing line loans.

Our obligations under our revolving syndicated credit facility are secured by a substantial amount of our assets, including our inventory (including new and used vehicles, parts and accessories), equipment, accounts (and other rights to payment) and our equity interests in certain of our subsidiaries. Under our revolving syndicated credit facility, our obligations relating to new vehicle floor plan loans are secured only by collateral owned by borrowers of new vehicle floor plan loans under the credit facility.

We have the ability to deposit up to

$50

million in cash in Principal Reduction (PR) accounts associated with our new vehicle floor plan commitment. The PR accounts are recognized as offsetting credits against outstanding amounts on our new vehicle floor plan commitment and would reduce interest expense associated with the outstanding principal balance. As of

December

31,

2016,

we had no balances in our PR accounts.

If the outstanding principal balance on our new vehicle inventory floor plan commitment, plus requests on any day, exceeds

95%

of the loan commitment, a portion of the revolving line of credit must be reserved. The reserve amount is equal to the lesser of

$15.0

million or the maximum revolving line of credit commitment less the outstanding balance on the line less outstanding letters of credit. The reserve amount decreases the revolving line of credit availability and

may

be used to repay the new vehicle floor plan commitment balance.

The interest rate on the credit facility varies based on the type of debt, with the rate of

one

-month LIBOR plus

1.25%

for new vehicle floor plan financing,

one

-month LIBOR plus

1.50%

for used vehicle floor plan financing; and a variable interest rate on the revolving financing ranging from the

one

-month LIBOR plus

1.25%

2.50%,

depending on our leverage ratio. The annual interest rate associated with our new vehicle floor plan commitment was

2.02%

December

31,

2016.

The annual interest rate associated with our used vehicle inventory financing facility and our revolving line of credit was

2.27%

and

2.52%,

respectively, at

December

31,

2016.

Under the terms of our credit facility we are subject to financial covenants and restrictive covenants that limit or restrict our incurring additional indebtedness, making investments, selling or acquiring assets and granting security interests in our assets.

Under our credit facility, we are required to maintain the ratios detailed in the following table:

Debt Covenant Ratio	Requirement	As of December 31, 2016
Current ratio	Not less than 1.10 to 1	1.26	to	1
Fixed charge coverage ratio	Not less than 1.20 to 1	2.63	to	1
Leverage ratio	Not more than 5.00 to 1	2.18	to	1
Funded debt restriction	Not to exceed $900 million		$485.2 million

Other Lines of Credit

We have other lines of credit with a total financing commitment of

$38.5

million for general corporate purposes, including acquisitions and working capital. Substantially all of these other lines of credit mature in

2018

and have interest rates ranging up to

2.77%.

As of

December

31,

2016,

we had outstanding debt of

$36.5

million on these other lines of credit.

Floor Plan Notes Payable

We have floor plan agreements with manufacturer-affiliated finance companies for certain new vehicles and vehicles that are designated for use as service loaners. The interest rates on these floor plan notes payable commitments vary by manufacturer and are variable rates. At

December

31,

2016,

$94.6

million was outstanding on these agreements at interest rates ranging up to

3.25%.

Borrowings from, and repayments to, manufacturer-affiliated finance companies are classified as operating activities in the Consolidated Statements of Cash Flows.

Real Estate Mortgages and Other Debt

We have mortgages associated with our owned real estate. Interest rates related to this debt ranged from

2.1%

5.0%

December

31,

2016.

The mortgages are payable in various installments through

October

2034.

As of

December

31,

2016,

we had fixed interest rates on

64.3%

of our outstanding mortgage debt.

Our other debt includes capital leases and sellers’ notes. The interest rates associated with our other debt ranged from

4.3%

9.7%

December

31,

2016.

This debt, which totaled

$11.2

million at

December

31,

2016,

is due in various installments through

December

2050.

Future Principal Payments

The schedule of future principal payments associated with real estate mortgages and other debt as of

December

31,

2016

was as follows (in thousands):

Year Ending December 31,
2017	$	20,608
2018		38,150
2019		45,189
2020		37,504
2021		34,897
Thereafter		263,210
Total principal payments	$	439,558