AutoNation 2000 Annual Report Download - page 30

manufacturers' captive finance subsidiaries to provide mortgage-backed credit
facilities for specific dealership properties.
We finance our vehicle inventory through secured financings, primarily
floorplan facilities, with vehicle manufacturers' captive finance subsidiaries
as well as independent financial institutions and, until recently, a
bank-sponsored commercial paper conduit facility that matured January 19, 2001,
and was not renewed. As of December 31, 2001, committed capacity of the
facilities was approximately $3.5 billion.
We are the lessee under a lease facility that was established to acquire
and develop our former megastores properties. As originally structured, the
facility had been accounted for as an operating lease and included residual
value guarantees. In 1999, certain properties under the facility were reflected
as capital leases. In connection with our 1999 restructuring activities
previously described, as of December 31, 1999, we accrued an estimate of the
liability under the residual value guarantee totaling approximately $103.3
million. In September 2000, we funded the remaining lease residual value
guarantee obligation to the lessor, reduced the facility size from $500.0
million to $210.0 million and amended the terms of the facility through the
notification of our intention to exercise the option to purchase the leased
properties at the end of the term. As a result of the amendment, all of the
leases have now been accounted for as capital leases, with the property and
related debt included in the accompanying 2000 Consolidated Balance Sheet. At
December 31, 2000, $175.8 million was outstanding under this facility and is
included in Long-Term Debt in the accompanying Consolidated Balance Sheet. Of
the $175.8 million outstanding, $115.2 million is associated with operating
properties and $60.6 million is attributable to properties held for sale. The
facility matures April 2002.
We securitize installment loan receivables through a $1.0 billion
commercial paper warehouse facility with certain financial institutions. In
September 2000, we decreased the capacity of the commercial paper warehouse
facility from $1.7 billion to $1.0 billion. During the year ended December 31,
2000, we securitized approximately $580.1 million of loan receivables under
this program, net of retained interests. At December 31, 2000, we have
approximately $576.3 million outstanding under this program, net of retained
interests. We have entered into certain interest rate derivative transactions
with certain financial institutions to manage the impact of interest rate
changes on securitized installment loan receivables. Proceeds from
securitizations are primarily used to repay borrowings under our revolving
credit facilities.
We also securitize installment loan receivables through the issuance of
asset-backed notes through a non-consolidated special purpose entity under a
$2.0 billion shelf registration statement. Through December 31, 2000, $1.48
billion, net of retained interests, has been issued and approximately $521.5
million remains to be issued under this program. Proceeds from these notes are
used to refinance installment loans previously securitized under the warehouse
facility and to securitize additional loans held by us. We provide credit
enhancement related to these notes in the form of over collateralization, a
reserve fund and a third party surety bond. We retain responsibility for
servicing the loans for which we are paid a servicing fee. During 2000,
approximately $691.7 million in additional asset-backed notes were issued, net
of retained interests, and at December 31, 2000, $1.0 billion was outstanding
under this program. We intend to provide for additional capacity through an
additional or subsequent shelf registration.
Installment loans sold under these programs are nonrecourse beyond our
retained interests. See Note 13, Asset Securitizations, of the Notes to
Consolidated Financial Statements for further discussion. We expect to continue
to securitize installment loan receivables under these facilities and/or other
programs.