Financing Agreement

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Financing Agreement

Financing Agreements

The carrying value of financing obligations and the average related interest rates were as follows (in millions):

	Average interest rate as of December 31, 2023	Maturity	December 31, 2023		December 31, 2022
Incremental term loan	—	December 2023	$	—	$	500.0
Revolving loan facility	4.72%	June 2026	228.2		312.9
Term loan facility	6.58%	June 2026	780.0		828.0
Private senior notes	4.23%	July 2028	350.0		350.0
Public senior notes	6.95%	March 2029	500.0		—
Finance lease obligations	5.22%	Various through 2029	10.3		11.4
Notes payable and other	4.26%	Various through 2030	54.2		61.4
Unamortized debt issuance costs and discounts			(14.3)		(5.9)
Total financing obligations			$	1,908.4	$	2,057.8
Less: Current financing obligations			54.0		553.6
Total long-term financing obligations			$	1,854.4	$	1,504.2

The following summarizes activity under the Company’s credit arrangements (in millions):

	2023		2022		2021
Total borrowings as of December 31	$	1,858.2	$	1,990.9	$	1,726.0
Average outstanding borrowings during year	$	2,159.3	$	2,074.9	$	1,500.4
Maximum outstanding borrowings during year	$	2,386.6	$	2,300.0	$	1,903.0
Weighted-average interest rate as of December 31	5.67%		5.33%		1.77%

Debt issuance costs and discounts are recognized as a reduction in the carrying value of the related long-term debt in the consolidated balance sheets and are being amortized to interest expense in the consolidated statements of income over the expected remaining terms of the related debt.

As of December 31, 2023, the Company had open letters of credit totaling $42.6 million. The amounts are primarily related to inventory purchases and are reduced as the purchases are received.

Private senior notes. In December 2010, the Company entered into an unsecured Master Note Purchase Agreement, which has been amended and supplemented, under which it has issued senior notes. In July 2018, the Company issued $350 million of unsecured senior notes that remain outstanding as of December 31, 2023 and are due in full in July 2028.

Unsecured credit facility. The Company maintains an unsecured credit facility which consists of a term loan facility (the “Term Loan Facility”) and a revolving loan facility (the “Revolving Loan Facility”). In July 2018, the Company amended its unsecured credit facility to increase its Term Loan Facility to $1,180 million, of which $780.0 million was outstanding as of December 31, 2023. The Company is required to make principal payments under the Term Loan Facility totaling $45 million over the next 12 months. In June 2021, the Company further amended its unsecured credit facility to increase its Revolving Loan Facility to $1.0 billion, of which $228.2 million was outstanding as of December 31, 2023, and extend the maturity date to June 2026. Interest is charged at rates based on adjusted Term SOFR.

In December 2021, the Company amended the credit facility to provide an unsecured incremental 364-day term loan (the “Incremental Term Loan”) in the amount of $500 million, which was fully drawn on closing. In December 2022, the Company further amended its unsecured credit facility to extend the maturity date of the Incremental Term Loan to December 2023. The Incremental Term Loan was fully repaid in December 2023 using net proceeds from the Company’s sale of senior notes in a public offering completed in November 2023.

In November 2023, the Company amended the credit facility to terminate all guarantees provided by subsidiaries of the Company under the credit facility, remove the requirement for subsidiaries of the Company to provide guarantees of the obligations under the credit facility, and remove certain subsidiaries of the Company as co-borrowers.

The agreements governing the credit facility and the Master Note Purchase Agreement contain covenants that require the Company to maintain certain financial ratios, including minimum interest coverage and maximum leverage ratios. The agreements require the Company to maintain an interest coverage ratio of not less than 3.00 to 1.00 and a leverage ratio of not more than 3.50 to 1.00 on a rolling four quarter basis. The Company was in compliance with all such covenants as of December 31, 2023.

Public senior notes. In November 2023, the Company issued $500 million aggregate principal amount of 6.95% Senior Notes pursuant to a public offering. The Company received approximately $492 million pursuant to the notes after deducting the underwriting discount and other fees and expenses. Net proceeds from the notes, along with cash on hand, were used to repay borrowings due in December 2023 under the Incremental Term Loan. The notes bear interest at a rate of 6.95% per year, with interest payable semi-annually in arrears in March and September of each year. The notes mature in March of 2029. The indenture governing the senior notes is subject to customary covenants and make-whole provisions upon early redemption.

Acquisition-related deferred payments. On July 2, 2018, pursuant to the Agreement and Plan of Merger dated May 29, 2018, the Company completed the acquisition of Boat Holdings, LLC, a privately held Delaware limited liability company, headquartered in Elkhart, Indiana that manufactures boats (“Boat Holdings”). As a component of the Boat Holdings merger agreement, the Company has committed to make a series of deferred payments to the former owners following the closing date of the merger through July 2030. The original discounted payable was for $76.7 million, of which $49.4 million was outstanding as of December 31, 2023. The outstanding balance is included in long-term financing obligations and current financing obligations in the consolidated balance sheets.