AutoNation 2015 Annual Report Download - page 56

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Table of Contents
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary market risk exposure is increasing LIBOR-based interest rates. Interest rate derivatives may be used to hedge a portion of our variable rate
debt, when appropriate, based on market conditions.
We had $3.7 billion of variable rate vehicle floorplan payable at December 31, 2015, and $3.1 billion at December 31, 2014. Based on these amounts, a
100 basis point change in interest rates would result in an approximate change of $37.3 million in 2015 and $31.0 million in 2014 to our annual floorplan
interest expense. Our exposure to changes in interest rates with respect to total vehicle floorplan payable is partially mitigated by manufacturers’ floorplan
assistance, which in some cases is based on variable interest rates.
We had $599.5 million of commercial paper notes outstanding at December 31, 2015. Based on the amounts outstanding, a 100 basis point change in
interest rates would result in an approximate change to our annual interest expense of $6.0 million in 2015.
We had no other variable rate debt outstanding at December 31, 2015 and $1.1 billion at December 31, 2014. Based on the amounts outstanding at year-
end, a 100 basis point change in interest rates would result in an approximate change to our annual interest expense of $11.1 million in 2014.
Our fixed rate long-term debt, consisting of amounts outstanding under senior unsecured notes, mortgages, and capital lease and other debt obligations,
totaled $1.8 billion and had a fair value of $1.9 billion as of December 31, 2015, and totaled $1.0 billion and had a fair value of $1.1 billion as of
December 31, 2014.
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