Debt

3 Months Ended

May 31, 2025

Debt Disclosure [Abstract]

Debt

Debt

(In thousands)		As of May 31		As of February 28
Debt Description (1)	Maturity Date	2025		2025
Revolving credit facility (2)	June 2028	$	—	$	—
Term loan (2)	October 2026	699,808		699,773
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	483,977		487,676
Non-recourse notes payable	Various dates through June 2032	17,202,299		17,119,758
Total debt		18,786,084		18,707,207
Less: current portion		(750,106)		(543,339)
Less: unamortized debt issuance costs		(30,180)		(26,528)
Long-term debt, net		$	18,005,798	$	18,137,340

(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 SOFR, 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 May 31, 2025, the unused capacity of $2.00 billion was fully available to us.

Term Loan. Borrowings under the $700 million term loan are available for working capital and general corporate purposes. The interest rate on our term loan was 5.33% as of May 31, 2025. The term loan was 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 $400 million are available for working capital and general corporate purposes. The 4.17% senior notes mature in April 2026 and were therefore classified as current as of May 31, 2025. The 4.27% senior 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.  

Non-Recourse Notes Payable.  The non-recourse notes payable relate to auto loans held for investment and auto loans held for sale 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. 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 June 2032, but may mature earlier, depending upon the repayment rate of the underlying auto loans.

Information on our funding vehicles of non-recourse notes payable as of May 31, 2025 are as follows:

(In billions)	Capacity
Warehouse facilities:
August 2025 expiration	$	2.30
March 2026 expiration	3.10
May 2026 expiration	0.70
Combined warehouse facility limit	$	6.10
Unused capacity	$	2.48
Non-recourse notes payable outstanding:
Warehouse facilities	$	3.62
Asset-backed term funding transactions	13.58
Non-recourse notes payable	$	17.20

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 Note 4 for additional information on the related auto loans held for investment.

Capitalized Interest.  We capitalize interest in connection with the construction of certain facilities.  For the three months ended May 31, 2025 and 2024, we capitalized interest of $4.0 million and $1.5 million, respectively. 

Financial Covenants.  The credit facility, term loan 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, as well as financial covenants and performance triggers related to events of default.  As of May 31, 2025, we were in compliance with these financial covenants and our non-recourse funding vehicles were in compliance with these performance triggers.