Debt

12 Months Ended

Feb. 28, 2022

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

DEBT

(In thousands)		As of February 28
Debt Description (1)	Maturity Date	2022		2021
Revolving credit facility (2)	June 2024	$	1,243,500	$	—
Term loan (2)	June 2024	300,000		300,000
Term loan (2)	October 2026	699,352		—
3.86% Senior notes	April 2023	100,000		100,000
4.17% Senior notes	April 2026	200,000		200,000
4.27% Senior notes	April 2028	200,000		200,000
Financing obligations	Various dates through February 2059	524,766		533,578
Non-recourse notes payable	Various dates through August 2028	15,466,799		13,764,808
Total debt		18,734,417		15,098,386
Less: current portion		(532,272)		(452,579)
Less: unamortized debt issuance costs		(27,126)		(25,888)
Long-term debt, net		$	18,175,019	$	14,619,919

 (1)    Interest is payable monthly, with the exception of our senior notes, which are payable semi-annually.

 (2)    Borrowings accrue interest at variable rates based on the Eurodollar rate (LIBOR), or the successor benchmark rate, the federal funds rate, or the prime rate, depending on the type of borrowing.

Revolving Credit Facility. Borrowings under our $2.00 billion unsecured revolving credit facility (the “credit facility”) are available for working capital and general corporate purposes.  We pay a commitment fee on the unused portions of the available funds.  Borrowings under the credit facility are either due “on demand” or at maturity depending on the type of borrowing.  Borrowings with “on demand” repayment terms are presented as short-term debt while amounts due at maturity are presented as long-term debt.  As of February 28, 2022, the unused capacity of $756.5 million was fully available to us.

The weighted average interest rate on outstanding short-term and long-term debt was 1.97% in fiscal 2022, 1.74% in fiscal 2021 and 3.23% in fiscal 2020.

Term Loans.   On October 15, 2021, we entered into a term loan agreement for an aggregate principal amount of $700 million, which will mature on October 15, 2026. Borrowings under our $300 million and $700 million term loans are available for working capital and general corporate purposes. The interest rate on our term loans was 1.01% as of February 28, 2022, and the loans were classified as long-term debt as no repayments are scheduled to be made within the next 12 months.  

Senior Notes.  Borrowings under our unsecured senior notes totaling $500 million are available for working capital and general corporate purposes. These notes were classified as long-term debt as no repayments are scheduled to be made within the next 12 months.

Financing Obligations.  Financing obligations relate to stores subject to sale-leaseback transactions that do not qualify for sale accounting.  The financing obligations were structured at varying interest rates and generally have initial lease terms ranging from 15 to 20 years with payments made monthly.  We have not entered into any new sale-leaseback transactions since fiscal 2009.  In the event the agreements are modified or extended beyond their original term, the related obligation is adjusted based on the present value of the revised future payments, with a corresponding change to the assets subject to these transactions. Upon modification, the amortization of the obligation is reset, resulting in more of the payments being applied to interest expense in the initial years following the modification.

Future maturities of financing obligations were as follows:

(In thousands)	As of February 28, 2022
Fiscal 2023	$	53,780
Fiscal 2024	56,075
Fiscal 2025	54,747
Fiscal 2026	57,943
Fiscal 2027	48,592
Thereafter	797,328
Total payments	1,068,465
Less: interest	(543,699)
Present value of financing obligations	$	524,766

Non-Recourse Notes Payable.  The non-recourse notes payable relate to auto loans receivable funded through non-recourse funding vehicles.  The timing of principal payments on the non-recourse notes payable is based on the timing of principal collections and defaults on the related auto loans receivable.  The current portion of non-recourse notes payable represents principal payments that are due to be distributed in the following period.

Notes payable related to our asset-backed term funding transactions accrue interest predominantly at fixed rates and have scheduled maturities through August 2028, but may mature earlier, depending upon repayment rate of the underlying auto loans receivable.

Information on our funding vehicles of non-recourse notes payable as of February 28, 2022 are as follows:

(in billions)	Capacity
Warehouse facilities:
August 2022 expiration	$	2.30
December 2022 expiration	0.25
February 2023 expiration	2.50
Combined warehouse facility limit	$	5.05
Unused capacity	$	1.76
Non-recourse notes payable outstanding:
Warehouse facilities	$	3.29
Asset-backed term funding transactions	12.18
Non-recourse notes payable	$	15.47

We generally enter into warehouse facility agreements for one-year terms and typically renew the agreements annually. The return requirements of warehouse facility investors could fluctuate significantly depending on market conditions.  At renewal, the cost, structure and capacity of the facilities could change.  These changes could have a significant impact on our funding costs.

See Notes 1(F) and 5 for additional information on the related auto loans receivable.

Capitalized Interest.  We capitalize interest in connection with the construction of certain facilities. For fiscal 2022, fiscal 2021 and fiscal 2020, we capitalized interest of $5.9 million, $3.3 million, and $7.0 million, respectively.

Financial Covenants.  The credit facility, term loans and senior note agreements contain representations and warranties, conditions and covenants.  We must also meet financial covenants in conjunction with certain financing obligations.  The agreements governing our non-recourse funding vehicles contain representations and warranties, financial covenants and performance triggers.  As of February 28, 2022, we were in compliance with all financial covenants and our non-recourse funding vehicles were in compliance with the related performance triggers.