AutoNation 2006 Annual Report Download - page 56

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Table of Contents


At December 31, 2006 and 2005 current insurance accruals were included in Other Current Liabilities in the Consolidated Balance
Sheets and long-term insurance accruals were included in Other Liabilities in the Consolidated Balance Sheets as follows:
 
Insurance accruals — current portion $41.2 $ 43.2
Insurance accruals — long-term portion 47.1 44.4
Total insurance accruals $88.3 $87.6
 
Notes payable and long-term debt at December 31 are as follows:
 
Floating rate senior unsecured notes $ 300.0 $ —
7% senior unsecured notes 300.0 —
Term loan facility 600.0 —
Revolving credit facility 195.0 —
9% senior unsecured notes, net of unamortized discount of $1.8 million at December 31, 2005 14.1 321.7
Mortgage facility 116.0 153.7
Other debt 46.4 49.6
1,571.5 525.0
Less: current maturities (13.6) (40.6)
Long-term debt, net of current maturities $1,557.9 $ 484.4
In April 2006, the Company sold $300.0 million of floating rate senior unsecured notes due April 15, 2013 and $300.0 million of
7% senior unsecured notes due April 15, 2014, in each case at par. The floating rate senior unsecured notes bear interest at a rate equal to
three-month LIBOR plus 2.0% per annum, adjusted quarterly, and may be redeemed by the Company on or after April 15, 2008 at 103%
of principal, on or after April 15, 2009 at 102% of principal, on or after April 15, 2010 at 101% of principal and on or after April 15,
2011 at 100% of principal. The 7% senior unsecured notes may be redeemed by the Company on or after April 15, 2009 at 105.25% of
principal, on or after April 15, 2010 at 103.5% of principal, on or after April 15, 2011 at 101.75% of principal and on or after
April 15, 2012 at 100% of principal.
In connection with the issuance of the new senior unsecured notes, the Company amended its existing credit agreement to provide:
(1) a $675.0 million revolving credit facility that provides for various interest rates on borrowings generally at LIBOR plus .80%, and
(2) a $600.0 million term loan facility that bears interest at a rate equal to LIBOR plus 1.25%. In December 2006, the borrowing capacity
of the revolving credit facility was increased to $700.0 million under the amended credit agreement. The amended credit agreement, which
includes the new term loan facility, terminates on July 14, 2010, and is guaranteed by substantially all of the Company’s subsidiaries.
The credit spread charged for the revolving credit facility is impacted by the Company’s senior unsecured credit ratings. The Company
has negotiated a letter of credit sublimit as part of its revolving credit facility. The amount available to be borrowed under the revolving
credit facility is reduced on a dollar-for-dollar basis by the cumulative amount of any outstanding letters of credit, which totaled
$92.3 million at December 31, 2006.
The proceeds of the new senior unsecured notes and term loan facility, together with cash on hand and borrowings of $80.0 million
under the amended revolving credit facility, were used to: (1) purchase 50 million
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