Inventory Financing Agreements

6 Months Ended

Jun. 30, 2011

Inventory Financing Agreements

Inventory Financing Agreements

3. Inventory Financing Agreements

The Company has entered into agreements with certain financial institutions in order to facilitate the purchase of inventory from various vendors. At June 30, 2011, the agreements allowed for a maximum credit line of $74.5 million collateralized by the inventory purchases financed by the financial institutions and a second lien on the related accounts receivable. The Company does not incur any interest expense associated with these agreements, as balances are paid when they are due. At June 30, 2011 and December 31, 2010, the Company owed the financial institutions $57.7 million and $9.6 million, respectively, which is included in accounts payable-trade on the Company's balance sheet.

Separately, the Company entered into a new senior secured asset-based revolving credit facility as described in Note 4, which incorporates a $300.0 million floorplan sub-facility to facilitate the purchase of inventory from a certain vendor. In connection with the floorplan sub-facility, the Company entered into an inventory financing agreement with a financial institution to facilitate the purchase of inventory from this vendor (the "floorplan"). As of June 30, 2011, the Company owed $12.3 million under the floorplan, which is included in accounts payable – floorplan on the Company's balance sheet.