CarMax 2015 Annual Report Download - page 68

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11. DEBT
As of February 28
(In thousands) 2015 2014
Short-term revolving credit facility $ 785 $ 582
Current portion of long-term debt 10,000 ―
Current portion of finance and capital lease obligations 21,554 18,459
Current portion of non-recourse notes payable 258,163 223,938
Total current debt 290,502 242,979
Long-term debt 300,000 ―
Finance and capital lease obligations, excluding current portion 306,284 315,925
N
on-recourse notes payable, excluding current portion 8,212,466 7,024,506
Total debt, excluding current portion 8,818,750 7,340,431
Total debt $ 9,109,252 $ 7,583,410
Revolving Credit Facility. During fiscal 2015, we increased the borrowing capacity under our unsecured revolving
credit facility (the “credit facility”) by $300 million to $1.0 billion. The terms of the credit facility were generally
unchanged and the expiration date remains August 2016. Borrowings under the credit facility are available for
working capital and general corporate purposes. Borrowings accrue interest at variable rates based on LIBOR, the
federal funds rate, or the prime rate, depending on the type of borrowing, and 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 with expected repayments within the next fiscal year
presented as a component of current portion of long-term debt. As of February 28, 2015, the unused capacity of
$989 million was fully available to us.
The weighted average interest rate on outstanding short-term and long-term debt was 1.6% in fiscal 2015 and 1.5% in
fiscal 2014 and 1.8% in fiscal 2013.
Term Loan. In November 2014, we entered into a $300 million term loan with total outstanding principal due in
November 2017. The term loan accrues interest at variable rates (1.67% as of February 28, 2015) based on the LIBOR
rate, the federal funds rate, or the prime rate. As of February 28, 2015, $300 million remained outstanding and no
repayments are anticipated to be made within the next 12 months. Borrowings under the loan are available for working
capital and general corporate purposes. In December 2014, we entered into an interest rate derivative contract to
manage our exposure to variable interest rates associated with this term loan.
Finance and Capital Lease Obligations. Finance and capital lease obligations relate primarily to stores subject to
sale-leaseback transactions that did not qualify for sale accounting, and therefore, are accounted for as financings.
The leases were structured at varying interest rates and generally have initial lease terms ranging from 15 to 20 years
with payments made monthly. Payments on the leases are recognized as interest expense and a reduction of the
obligations. We have not entered into any sale-leaseback transactions since fiscal 2009. During fiscal 2015, finance
lease obligations were increased by $11.7 million related to leases that were modified or extended beyond the original
lease term. See Note 15 for information on future minimum lease obligations.
Non-Recourse Notes Payable. The non-recourse notes payable relate to auto loan receivables funded through term
securitizations and our warehouse facilities. The timing of principal payments on the non-recourse notes payable is
based on the timing of principal collections and defaults on the securitized auto loan receivables. The current portion
of non-recourse notes payable represents principal payments that are due to be distributed in the following period.
As of February 28, 2015, $7.48 billion of non-recourse notes payable was outstanding related to term securitizations.
These notes payable accrue interest predominantly at fixed rates and have scheduled maturities through
September 2021, but may mature earlier, depending upon the repayment rate of the underlying auto loan receivables.