AutoNation 2003 Annual Report Download - page 65

Table of Contents
AUTONATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
estimated by management and by actuarial evaluation based on historical claims experience, adjusted for current trends and changes in
claims-handling procedures.
At December 31, 2003 and 2002 current insurance reserves were included in Other Current Liabilities in the Consolidated Balance
Sheets and long-term insurance reserves were included in Other Liabilities in the Consolidated Balance Sheets as follows:
2003 2002
Self-Insurance Reserves
Insurance reserves — current portion $25.2 $21.8
Insurance reserves — long-term portion 27.6 20.5
Total insurance reserves $52.8 $42.3
8. NOTES PAYABLE AND LONG-TERM DEBT
Notes payable and long-term debt at December 31 are as follows:
2003 2002
$450.0 million, 9% senior unsecured notes, net of unamortized
discount of $4.1 million and $4.8 million, respectively $445.9 $445.2
Revolving credit facilities — —
Mortgage facilities 329.7 153.2
Other debt 48.8 52.9
824.4 651.3
Less: current maturities (15.9) (8.6)
$808.5 $642.7
The Company has $450.0 million of 9.0% senior unsecured notes due August 1, 2008 that were issued in August 2001 at a price of
98.731% of face value. The senior unsecured notes are guaranteed by substantially all of the Company’s subsidiaries.
In November 2002, the Company obtained consents from the holders of $450.0 million of 9.0% senior unsecured notes due August 1,
2008 to amend the indenture governing such notes (the “Indenture”), and obtained consents from the lenders to amend its revolving credit
facilities. The principal purpose of the amendments was to modify the restricted payments covenant under the Indenture and the revolving
credit facilities to increase the Company’s share repurchase capacity by $400 million.
The Company has two revolving credit facilities with an aggregate borrowing capacity of $500.0 million. A 364-day revolving credit facility
provides borrowings up to $200.0 million at a LIBOR-based interest rate and was renewed in August 2003 for another 364-day term to
August 2004. A five-year facility, which expires in August 2006, provides borrowings up to $300.0 million at a LIBOR-based interest rate.
These facilities are secured by a pledge of the capital stock of certain subsidiaries, which directly or indirectly own substantially all of the
Company’s stores, and are guaranteed by substantially all of its subsidiaries. No amounts are drawn on these revolving credit facilities. At
December 31, 2003, surety bonds, letters of credit and cash deposits totaled $87.2 million, including $56.4 million in letters of credit
outstanding and have various expiration dates. In the ordinary course of business, the Company is required to post performance and surety
bonds, letters of credit, and/or cash deposits as financial guarantees of the Company’s performance. The Company does not currently
provide cash collateral for outstanding letters of credit. It has negotiated a letter of credit line as part of its multi-year revolving credit facility. The
amount available to be borrowed under the $300 million multi-year revolving credit facility is reduced on a dollar-for-dollar basis by the
cumulative face amount of any outstanding letters of credit.
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