Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Feb. 29, 2016 | Mar. 31, 2016 | Aug. 31, 2015 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Feb. 29, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | CARMAX INC | ||
Entity Central Index Key | 1,170,010 | ||
Entity Public Float | $ 12,500,766,966 | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --02-29 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 193,829,168 |
Consolidated Statements Of Earn
Consolidated Statements Of Earnings - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
SALES AND OPERATING REVENUES: | |||
NET SALES AND OPERATING REVENUES | $ 15,149,675 | $ 14,268,716 | $ 12,574,299 |
Cost of sales | 13,130,915 | 12,381,189 | 10,925,598 |
GROSS PROFIT | 2,018,760 | 1,887,527 | 1,648,701 |
CARMAX AUTO FINANCE INCOME | 392,036 | 367,294 | 336,167 |
Selling, general and administrative expenses | 1,351,935 | 1,257,725 | 1,155,215 |
Interest expense | 36,358 | 24,473 | 30,834 |
Other expense | 12,559 | 3,292 | 1,497 |
Earnings before income taxes | 1,009,944 | 969,331 | 797,322 |
Income tax provision | 386,516 | 371,973 | 304,736 |
NET EARNINGS | $ 623,428 | $ 597,358 | $ 492,586 |
WEIGHTED AVERAGE COMMON SHARES: | |||
Basic (in shares) | 203,275 | 215,617 | 223,589 |
Diluted (in shares) | 205,540 | 218,691 | 227,584 |
NET EARNINGS PER SHARE: | |||
Basic (in dollars per share) | $ 3.07 | $ 2.77 | $ 2.20 |
Diluted (in dollars per share) | $ 3.03 | $ 2.73 | $ 2.16 |
Used vehicle sales | |||
SALES AND OPERATING REVENUES: | |||
Used vehicle sales | $ 12,439,401 | $ 11,674,520 | $ 10,306,256 |
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 82.10% | 81.80% | 82.00% |
Wholesale vehicle sales | |||
SALES AND OPERATING REVENUES: | |||
Wholesale vehicle sales | $ 2,188,267 | $ 2,049,133 | $ 1,823,425 |
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 14.40% | 14.40% | 14.50% |
Other sales and revenues | |||
SALES AND OPERATING REVENUES: | |||
Other sales and revenues | $ 522,007 | $ 545,063 | $ 444,618 |
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 3.40% | 3.80% | 3.50% |
NET SALES AND OPERATING REVENUES | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 100.00% | 100.00% | 100.00% |
Cost of sales | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 86.70% | 86.80% | 86.90% |
GROSS PROFIT | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 13.30% | 13.20% | 13.10% |
CARMAX AUTO FINANCE INCOME | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 2.60% | 2.60% | 2.70% |
Selling, general and administrative expenses | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 8.90% | 8.80% | 9.20% |
Interest expense | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 0.20% | 0.20% | 0.20% |
Other expense | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 0.10% | 0.00% | 0.00% |
Earnings before income taxes | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 6.70% | 6.80% | 6.30% |
Income tax provision | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 2.60% | 2.60% | 2.40% |
NET EARNINGS | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 4.10% | 4.20% | 3.90% |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
NET EARNINGS | $ 623,428 | $ 597,358 | $ 492,586 |
Other comprehensive income (loss), net of taxes: | |||
Net change in retirement benefit plan unrecognized actuarial losses | 2,750 | (20,505) | 10,764 |
Net change in cash flow hedge unrecognized losses | (7,555) | 1,385 | 2,773 |
Other comprehensive (loss) income, net of taxes | (4,805) | (19,120) | 13,537 |
TOTAL COMPREHENSIVE INCOME | $ 618,623 | $ 578,238 | $ 506,123 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Feb. 29, 2016 | Feb. 28, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 37,394 | $ 27,606 |
Restricted cash from collections on auto loan receivables | 343,829 | 294,122 |
Accounts receivable, net | 132,171 | 137,690 |
Inventory | 1,932,029 | 2,086,874 |
Other current assets | 26,358 | 44,646 |
TOTAL CURRENT ASSETS | 2,471,781 | 2,590,938 |
Auto loan receivables, net | 9,536,892 | 8,435,504 |
Property and equipment, net | 2,161,698 | 1,862,538 |
Deferred income taxes | 161,862 | 175,738 |
Other assets | 149,343 | 133,483 |
TOTAL ASSETS | 14,481,576 | 13,198,201 |
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
Accounts payable | 441,746 | 454,810 |
Accrued expenses and other current liabilities | 245,909 | 250,307 |
Accrued income taxes | 2,029 | 1,554 |
Short-term debt | 428 | 785 |
Current portion of long-term debt | 0 | 10,000 |
Current portion of finance and capital lease obligations | 14,331 | 21,554 |
Current portion of non-recourse notes payable | 300,750 | 258,163 |
TOTAL CURRENT LIABILITIES | 1,005,193 | 997,173 |
Long-term debt, excluding current portion | 715,000 | 300,000 |
Finance and capital lease obligations, excluding current portion | 400,323 | 306,284 |
Non-recourse notes payable, excluding current portion | 9,227,000 | 8,212,466 |
Other liabilities | 229,274 | 225,493 |
TOTAL LIABILITIES | $ 11,576,790 | $ 10,041,416 |
Commitments and contingent liabilities | ||
SHAREHOLDERS’ EQUITY: | ||
Common stock, $0.50 par value; 350,000,000 shares authorized; 194,712,234 and 208,869,688 shares issued and outstanding as of February 29, 2016 and February 28, 2015, respectively | $ 97,356 | $ 104,435 |
Capital in excess of par value | 1,130,822 | 1,123,520 |
Accumulated other comprehensive loss | (70,196) | (65,391) |
Retained earnings | 1,746,804 | 1,994,221 |
TOTAL SHAREHOLDERS’ EQUITY | 2,904,786 | 3,156,785 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 14,481,576 | $ 13,198,201 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Feb. 29, 2016 | Feb. 28, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.5 | $ 0.5 |
Common stock, shares authorized | 350,000,000 | 350,000,000 |
Common stock, shares issued | 194,712,234 | 208,869,688 |
Common Stock, Shares, Outstanding | 194,712,234 | 208,869,688 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
OPERATING ACTIVITIES: | |||
Net earnings | $ 623,428 | $ 597,358 | $ 492,586 |
Adjustments to reconcile net earnings to net cash used in operating activities: | |||
Depreciation and amortization | 137,360 | 115,173 | 101,911 |
Share-based compensation expense | 51,077 | 81,880 | 66,480 |
Provision for loan losses | 101,199 | 82,343 | 72,212 |
Provision for cancellation reserves | 77,118 | 70,987 | 76,746 |
Deferred income tax provision (benefit) | 17,237 | (4,299) | (17,185) |
Loss on disposition of assets and other | 13,136 | 3,852 | 2,707 |
Net decrease (increase) in: | |||
Accounts receivable, net | 5,519 | (57,767) | 12,038 |
Inventory | 154,845 | (445,450) | (123,611) |
Other current assets | 15,229 | (16,947) | (3,019) |
Auto loan receivables, net | (1,202,587) | (1,369,999) | (1,324,142) |
Other assets | (160) | 825 | (6,754) |
Net (decrease) increase in: | |||
Accounts payable, accrued expenses and other current liabilities and accrued income taxes | (55,187) | 51,960 | 117,405 |
Other liabilities | (87,107) | (78,046) | (80,537) |
NET CASH USED IN OPERATING ACTIVITIES | (148,893) | (968,130) | (613,163) |
INVESTING ACTIVITIES: | |||
Capital expenditures | (315,584) | (309,817) | (310,317) |
Proceeds from sales of assets | 1,542 | 5,869 | 5,095 |
Increase in restricted cash from collections on auto loan receivables | (49,707) | (34,823) | (35,012) |
Increase in restricted cash in reserve accounts | (12,264) | (16,556) | (10,403) |
Release of restricted cash from reserve accounts | 8,357 | 6,346 | 19,202 |
Purchases of money market securities, net | (6,168) | (8,604) | (3,661) |
Purchases of money market securities, net | (5,295) | (3,814) | (2,051) |
Sales of trading securities | 324 | 655 | 466 |
NET CASH USED IN INVESTING ACTIVITIES | (378,795) | (360,744) | (336,681) |
FINANCING ACTIVITIES: | |||
(Decrease) increase in short-term debt, net | (357) | 203 | 227 |
Proceeds from issuances of long-term debt | 2,057,100 | 985,000 | 0 |
Payments on long-term debt | (1,652,100) | (675,000) | 0 |
Cash paid for debt issuance costs | (3,104) | (1,190) | 0 |
Payments on finance and capital lease obligations | (16,417) | (18,243) | (19,596) |
Issuances of non-recourse notes payable | 9,553,805 | 7,783,000 | 6,907,000 |
Payments on non-recourse notes payable | (8,496,684) | (6,560,815) | (5,513,646) |
Repurchase and retirement of common stock | (983,941) | (924,328) | (313,394) |
Equity issuances | 47,038 | 89,810 | 45,146 |
Excess tax benefits from share-based payment arrangements | 32,136 | 50,142 | 22,644 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 537,476 | 728,579 | 1,128,381 |
Increase (decrease) in cash and cash equivalents | 9,788 | (600,295) | 178,537 |
Cash and cash equivalents at beginning of year | 27,606 | 627,901 | 449,364 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 37,394 | 27,606 | 627,901 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||
Cash paid for interest | 43,526 | 33,043 | 30,991 |
Cash paid for income taxes | 319,978 | 346,865 | 287,000 |
Non-cash investing and financing activities: | |||
Increase in accrued capital expenditures | 16,222 | 3,698 | 11,468 |
Increase in finance and capital lease obligations | $ 103,233 | $ 11,697 | $ 0 |
Consolidated Statements Of Shar
Consolidated Statements Of Shareholders’ Equity - USD ($) $ in Thousands | Total | Common Stock | Capital In Excess Of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss |
BALANCE at Feb. 28, 2013 | $ 3,019,167 | $ 112,953 | $ 972,250 | $ 1,993,772 | $ (59,808) |
BALANCE, SHARES at Feb. 28, 2013 | 225,906,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | 492,586 | 492,586 | |||
Other comprehensive income (loss) | 13,537 | 13,537 | |||
Share-based compensation expense | 36,429 | 36,429 | |||
Repurchases of common stock | (306,138) | $ (3,430) | (30,566) | (272,142) | |
Repurchase of common stock, shares | (6,860,000) | ||||
Exercise of common stock options | 45,145 | $ 1,168 | 43,977 | ||
Exercise of common stock options, shares | 2,337,000 | ||||
Shares issued under stock incentive plans | 500 | $ 227 | 273 | ||
Shares issued under stock incentive plans, shares | 453,000 | ||||
Shares cancelled under stock incentive plans | (6,146) | $ (75) | (6,071) | ||
Shares cancelled under stock incentive plans, shares | (150,000) | ||||
Tax effect from the exercise/vesting of equity awards | 21,917 | 21,917 | |||
BALANCE at Feb. 28, 2014 | 3,316,997 | $ 110,843 | 1,038,209 | 2,214,216 | (46,271) |
BALANCE, SHARES at Feb. 28, 2014 | 221,686,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | 597,358 | 597,358 | |||
Other comprehensive income (loss) | (19,120) | (19,120) | |||
Share-based compensation expense | 43,341 | 43,341 | |||
Repurchases of common stock | (913,042) | $ (8,756) | (86,933) | (817,353) | |
Repurchase of common stock, shares | (17,511,000) | ||||
Exercise of common stock options | 89,811 | $ 2,195 | 87,616 | 0 | |
Exercise of common stock options, shares | 4,390,000 | ||||
Shares issued under stock incentive plans | $ 231 | (231) | |||
Shares issued under stock incentive plans, shares | 461,000 | ||||
Shares cancelled under stock incentive plans | (7,346) | $ (78) | (7,268) | ||
Shares cancelled under stock incentive plans, shares | (156,000) | ||||
Tax effect from the exercise/vesting of equity awards | 48,786 | 48,786 | |||
BALANCE at Feb. 28, 2015 | $ 3,156,785 | $ 104,435 | 1,123,520 | 1,994,221 | (65,391) |
BALANCE, SHARES at Feb. 28, 2015 | 208,869,688 | 208,870,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | $ 623,428 | 623,428 | |||
Other comprehensive income (loss) | (4,805) | (4,805) | |||
Share-based compensation expense | 39,164 | 39,164 | |||
Repurchases of common stock | (971,447) | $ (8,150) | (92,452) | (870,845) | |
Repurchase of common stock, shares | (16,300,000) | ||||
Exercise of common stock options | 47,038 | $ 855 | 46,183 | ||
Exercise of common stock options, shares | 1,711,000 | ||||
Shares issued under stock incentive plans | $ 337 | (337) | |||
Shares issued under stock incentive plans, shares | 673,000 | ||||
Shares cancelled under stock incentive plans | (17,261) | $ (121) | (17,140) | ||
Shares cancelled under stock incentive plans, shares | (242,000) | ||||
Tax effect from the exercise/vesting of equity awards | 31,884 | 31,884 | |||
BALANCE at Feb. 29, 2016 | $ 2,904,786 | $ 97,356 | $ 1,130,822 | $ 1,746,804 | $ (70,196) |
BALANCE, SHARES at Feb. 29, 2016 | 194,712,234 | 194,712,000 |
Business And Background
Business And Background | 12 Months Ended |
Feb. 29, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business And Background | BUSINESS AND BACKGROUND CarMax, Inc. (“we,” “our,” “us,” “CarMax” and “the company”), including its wholly owned subsidiaries, is the largest retailer of used vehicles in the United States. We operate in two reportable segments: CarMax Sales Operations and CarMax Auto Finance (“CAF”). Our CarMax Sales Operations segment consists of all aspects of our auto merchandising and service operations, excluding financing provided by CAF. Our CAF segment consists solely of our own finance operation that provides financing to customers buying retail vehicles from CarMax. We seek to deliver an unrivaled customer experience by offering a broad selection of high quality used vehicles and related products and services at low, no-haggle prices using a customer-friendly sales process in an attractive, modern sales facility. We provide customers with a full range of related products and services, including the appraisal and purchase of vehicles directly from consumers; the financing of vehicle purchases through CAF and third-party financing providers; the sale of extended protection plan (“EPP”) products, which include extended service plans (“ESPs”) and guaranteed asset protection (“GAP”); and vehicle repair service. Vehicles purchased through the appraisal process that do not meet our retail standards are sold to licensed dealers through on-site wholesale auctions. |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 12 Months Ended |
Feb. 29, 2016 | |
Accounting Policies [Abstract] | |
Summary Of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (A) Basis of Presentation and Use of Estimates The consolidated financial statements include the accounts of CarMax and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Certain prior year amounts have been reclassified to conform to the current year’s presentation. Amounts and percentages may not total due to rounding. In fiscal 2016, we reclassified New Vehicle Sales to Other Sales and Revenues and no longer separately present New Vehicle Sales. New Vehicle Sales represented approximately 1% of total sales in fiscal 2016. All periods presented have been revised for this new presentation. (B) Cash and Cash Equivalents Cash equivalents of approximately $109,000 as of February 29, 2016 , and $48,000 as of February 28, 2015 , consisted of highly liquid investments with original maturities of three months or less . (C) Restricted Cash from Collections on Auto Loan Receivables Cash equivalents totaling $343.8 million as of February 29, 2016 , and $294.1 million as of February 28, 2015 , consisted of collections of principal, interest and fee payments on securitized auto loan receivables that are restricted for payment to the securitization investors pursuant to the applicable securitization agreements. (D) Marketable Securities The Company classifies its marketable securities as trading. These securities consisted primarily of mutual funds reported at fair value with unrealized gains and losses reflected as a component of other expense. Marketable securities as of February 29, 2016 and February 28, 2015 pertain to the Company’s restricted investments held in a rabbi trust and are reported in other assets. (E) Accounts Receivable, Net Accounts receivable, net of an allowance for doubtful accounts, includes certain amounts due from third-party finance providers and customers and other miscellaneous receivables. The allowance for doubtful accounts is estimated based on historical experience and trends. (F) Securitizations We maintain a revolving securitization program composed of two warehouse facilities (“warehouse facilities”) that we use to fund auto loan receivables originated by CAF until we elect to fund them through a term securitization or alternative funding arrangement. We sell the auto loan receivables to one of two wholly owned, bankruptcy-remote, special purpose entities that transfer an undivided percentage ownership interest in the receivables, but not the receivables themselves, to entities formed by third-party investors. These entities issue asset-backed commercial paper or utilize other funding sources supported by the transferred receivables, and the proceeds are used to finance the securitized receivables. We typically use term securitizations to provide long-term funding for most of the auto loan receivables initially securitized through the warehouse facilities. In these transactions, a pool of auto loan receivables is sold to a bankruptcy-remote, special purpose entity that, in turn, transfers the receivables to a special purpose securitization trust. The securitization trust issues asset-backed securities, secured or otherwise supported by the transferred receivables, and the proceeds from the sale of the asset-backed securities are used to finance the securitized receivables. We are required to evaluate term securitization trusts for consolidation. In our capacity as servicer, we have the power to direct the activities of the trusts that most significantly impact the economic performance of the trusts. In addition, we have the obligation to absorb losses (subject to limitations) and the rights to receive any returns of the trusts, which could be significant. Accordingly, we are the primary beneficiary of the trusts and are required to consolidate them. We recognize transfers of auto loan receivables into the warehouse facilities and term securitizations (“securitization vehicles”) as secured borrowings, which result in recording the auto loan receivables and the related non-recourse notes payable on our consolidated balance sheets. The securitized receivables can only be used as collateral to settle obligations of the securitization vehicles. The securitization vehicles and investors have no recourse to our assets beyond the securitized receivables, the amounts on deposit in reserve accounts and the restricted cash from collections on auto loan receivables. We have not provided financial or other support to the securitization vehicles that was not previously contractually required, and there are no additional arrangements, guarantees or other commitments that could require us to provide financial support to the securitization vehicles. See Notes 4 and 11 for additional information on auto loan receivables and non-recourse notes payable. (G) Fair Value of Financial Instruments Due to the short-term nature and/or variable rates associated with these financial instruments, the carrying value of our cash and cash equivalents, restricted cash, accounts receivable, money market securities, accounts payable, short-term debt and long-term debt approximates fair value. Our derivative instruments and mutual funds are recorded at fair value. Auto loan receivables are presented net of an allowance for estimated loan losses. See Note 6 for additional information on fair value measurements. (H) Inventory Inventory is primarily comprised of vehicles held for sale or currently undergoing reconditioning and is stated at the lower of cost or market. Vehicle inventory cost is determined by specific identification. Parts, labor and overhead costs associated with reconditioning vehicles, as well as transportation and other incremental expenses associated with acquiring and reconditioning vehicles, are included in inventory. (I) Auto Loan Receivables, Net Auto loan receivables include amounts due from customers related to retail vehicle sales financed through CAF. The receivables are presented net of an allowance for estimated loan losses. The allowance for loan losses represents an estimate of the amount of net losses inherent in our portfolio of managed receivables as of the applicable reporting date and anticipated to occur during the following 12 months. The allowance is primarily based on the credit quality of the underlying receivables, historical loss trends and forecasted forward loss curves. We also take into account recent trends in delinquencies and losses, recovery rates and the economic environment. The provision for loan losses is the periodic expense of maintaining an adequate allowance. An account is considered delinquent when the related customer fails to make a substantial portion of a scheduled payment on or before the due date. In general, accounts are charged-off on the last business day of the month during which the earliest of the following occurs: the receivable is 120 days or more delinquent as of the last business day of the month, the related vehicle is repossessed and liquidated, or the receivable is otherwise deemed uncollectible. For purposes of determining impairment, auto loans are evaluated collectively, as they represent a large group of smaller-balance homogeneous loans, and therefore, are not individually evaluated for impairment. See Note 4 for additional information on auto loan receivables. Interest income and expenses related to auto loans are included in CAF income. Interest income on auto loan receivables is recognized when earned based on contractual loan terms. All loans continue to accrue interest until repayment or charge-off. Direct costs associated with loan originations are not considered material, and thus, are expensed as incurred. See Note 3 for additional information on CAF income. (J) Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the shorter of the asset’s estimated useful life or the lease term, if applicable. Costs incurred during new store construction are capitalized as construction-in-progress and reclassified to the appropriate fixed asset categories when the store is completed. Estimated Useful Lives Life Buildings 25 years Leasehold improvements 15 years Furniture, fixtures and equipment 3 – 15 years We review long-lived assets for impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We recognize impairment when the sum of undiscounted estimated future cash flows expected to result from the use of the asset is less than the carrying value of the asset. See Note 7 for additional information on property and equipment. (K) Other Assets Restricted Cash on Deposit in Reserve Accounts. The restricted cash on deposit in reserve accounts is for the benefit of holders of non-recourse notes payable, and these funds are not expected to be available to the company or its creditors. In the event that the cash generated by the securitized receivables in a given period was insufficient to pay the interest, principal and other required payments, the balances on deposit in the reserve accounts would be used to pay those amounts. Restricted cash on deposit in reserve accounts is invested in money market securities and was $46.6 million as of February 29, 2016 and $42.7 million as of February 28, 2015 . Restricted Investments. Restricted investments includes money market securities primarily held to satisfy certain insurance program requirements, as well as mutual funds held in a rabbi trust established to fund informally our executive deferred compensation plan. Restricted investments totaled $63.0 million as of February 29, 2016 and $52.4 million as of February 28, 2015 . (L) Finance Lease Obligations We generally account for sale-leaseback transactions as financings. Accordingly, we record certain of the assets subject to these transactions on our consolidated balance sheets in property and equipment and the related sales proceeds as finance lease obligations. Depreciation is recognized on the assets over their estimated useful lives, generally 25 years . A portion of the periodic lease payments is recognized as interest expense and the remainder reduces the obligation. In the event the leases are modified or extended beyond their original lease term, the related finance lease obligation is increased based on the present value of the revised future minimum lease payments on the date of the modification, with a corresponding increase to the net carrying amount of the assets subject to these transactions. See Notes 11 and 15 for additional information on finance lease obligations. (M) Accrued Expenses As of February 29, 2016 and February 28, 2015 , accrued expenses and other current liabilities included accrued compensation and benefits of $128.9 million and $148.4 million , respectively; loss reserves for general liability and workers’ compensation insurance of $39.6 million and $36.7 million , respectively; and the current portion of cancellation reserves. See Note 8 for additional information on cancellation reserves. (N) Defined Benefit Plan Obligations The recognized funded status of defined benefit retirement plan obligations is included both in accrued expenses and other current liabilities and in other liabilities. The current portion represents benefits expected to be paid from our benefit restoration plan over the next 12 months. The defined benefit retirement plan obligations are determined by independent actuaries using a number of assumptions provided by CarMax. Key assumptions used in measuring the plan obligations include the discount rate, rate of return on plan assets and mortality rate. See Note 10 for additional information on our benefit plans. (O) Insurance Liabilities Insurance liabilities are included in accrued expenses and other current liabilities. We use a combination of insurance and self-insurance for a number of risks including workers’ compensation, general liability and employee-related health care costs, a portion of which is paid by associates. Estimated insurance liabilities are determined by considering historical claims experience, demographic factors and other actuarial assumptions. (P) Revenue Recognition We recognize revenue when the earnings process is complete, generally either at the time of sale to a customer or upon delivery to a customer. As part of our customer service strategy, we guarantee the retail vehicles we sell with a 5 -day, money-back guarantee. We record a reserve for estimated returns based on historical experience and trends. We also sell ESP and GAP products on behalf of unrelated third parties, who are the primary obligors, to customers who purchase a vehicle. The ESPs we currently offer on all used vehicles provide coverage up to 60 months (subject to mileage limitations), while GAP covers the customer for the term of their finance contract. We recognize revenue at the time of sale, net of a reserve for estimated contract cancellations. Periodically, we may receive additional revenue based upon the level of underwriting profits of the third parties who administer the products. These additional amounts are recognized as revenue when received. The reserve for cancellations is evaluated for each product, and is based on forecasted forward cancellation curves utilizing historical experience, recent trends and credit mix of the customer base. Our risk related to contract cancellations is limited to the revenue that we receive. Cancellations fluctuate depending on the volume of EPP sales, customer financing default or prepayment rates, and shifts in customer behavior, including those related to changes in the coverage or term of the product. The current portion of estimated cancellation reserves is recognized as a component of accrued expenses and other current liabilities with the remaining amount recognized in other liabilities. See Note 8 for additional information on cancellation reserves. Customers applying for financing who are not approved or are conditionally approved by CAF are generally evaluated by other third-party finance providers. These providers generally either pay us or are paid a fixed, pre-negotiated fee per contract. We recognize these fees at the time of sale. We collect sales taxes and other taxes from customers on behalf of governmental authorities at the time of sale. These taxes are accounted for on a net basis and are not included in net sales and operating revenues or cost of sales. (Q) Cost of Sales Cost of sales includes the cost to acquire vehicles and the reconditioning and transportation costs associated with preparing the vehicles for resale. It also includes payroll, fringe benefits and parts, labor and overhead costs associated with reconditioning and vehicle repair services. The gross profit earned by our service department for used vehicle reconditioning service is a reduction of cost of sales. We maintain a reserve to eliminate the internal profit on vehicles that have not been sold. (R) Selling, General and Administrative Expenses Selling, general and administrative (“SG&A”) expenses primarily include compensation and benefits, other than payroll related to reconditioning and vehicle repair services; depreciation, rent and other occupancy costs; advertising; and IT expenses, insurance, bad debt, travel, preopening and relocation costs, charitable contributions and other administrative expenses. (S) Advertising Expenses Advertising costs are expensed as incurred and substantially all are included in SG&A expenses. Total advertising expenses were $142.2 million in fiscal 2016 , $124.3 million in fiscal 2015 and $114.6 million in fiscal 2014 . (T) Store Opening Expenses Costs related to store openings, including preopening costs, are expensed as incurred and are included in SG&A expenses. (U) Share-Based Compensation Share-based compensation represents the cost related to share-based awards granted to employees and non-employee directors. We measure share-based compensation cost at the grant date, based on the estimated fair value of the award, and we recognize the cost on a straight-line basis (net of estimated forfeitures) over the grantee’s requisite service period, which is generally the vesting period of the award. We estimate the fair value of stock options using a binomial valuation model. Key assumptions used in estimating the fair value of options are dividend yield, expected volatility, risk-free interest rate and expected term. The fair values of restricted stock and stock-settled performance stock units are based on the volume-weighted average market value on the date of the grant. The fair value of stock-settled restricted stock units is determined using a Monte-Carlo simulation based on the expected market price of our common stock on the vesting date and the expected number of converted common shares. Cash-settled restricted stock units are liability awards with fair value measurement based on the market price of CarMax common stock as of the end of each reporting period. Share-based compensation expense is recorded in either cost of sales, CAF income or SG&A expenses based on the recipients’ respective function. We record deferred tax assets for awards that result in deductions on our income tax returns, based on the amount of compensation expense recognized and the statutory tax rate in the jurisdiction in which we will receive a deduction. Differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the income tax return are recorded in capital in excess of par value (if the tax deduction exceeds the deferred tax asset) or in the consolidated statements of earnings (if the deferred tax asset exceeds the tax deduction and no capital in excess of par value exists from previous awards). See Note 12 for additional information on stock-based compensation. (V) Derivative Instruments and Hedging Activities We enter into derivative instruments to manage certain risks arising from both our business operations and economic conditions that result in the future known receipt or payment of uncertain cash amounts, the values of which are impacted by interest rates. We recognize the derivatives at fair value as either current assets or current liabilities on the consolidated balance sheets, and where applicable, such contracts covered by master netting agreements are reported net. Gross positive fair values are netted with gross negative fair values by counterparty. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. We may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting may not apply or we do not elect to apply hedge accounting. See Note 5 for additional information on derivative instruments and hedging activities. (W) Income Taxes We file a consolidated federal income tax return for a majority of our subsidiaries. Certain subsidiaries are required to file separate partnership or corporate federal income tax returns. Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax purposes, measured by applying currently enacted tax laws. A deferred tax asset is recognized if it is more likely than not that a benefit will be realized. Changes in tax laws and tax rates are reflected in the income tax provision in the period in which the changes are enacted. We evaluate the need to record valuation allowances that would reduce deferred tax assets to the amount that will more likely than not be realized. When assessing the need for valuation allowances, we consider available loss carrybacks, tax planning strategies, future reversals of existing temporary differences and future taxable income. We recognize tax liabilities when, despite our belief that our tax return positions are supportable, we believe that certain positions may not be fully sustained upon review by tax authorities. Benefits from tax positions are measured at the highest tax benefit that is greater than 50% likely of being realized upon settlement. The current portion of these tax liabilities is included in accrued income taxes and any noncurrent portion is included in other liabilities. To the extent that the final tax outcome of these matters is different from the amounts recorded, the differences impact income tax expense in the period in which the determination is made. Interest and penalties related to income tax matters are included in SG&A expenses. See Note 9 for additional information on income taxes. (X) Net Earnings Per Share Basic net earnings per share is computed by dividing net earnings available for basic common shares by the weighted average number of shares of common stock outstanding. Diluted net earnings per share is computed by dividing net earnings available for diluted common shares by the sum of the weighted average number of shares of common stock outstanding and dilutive potential common stock. Diluted net earnings per share is calculated using the “if-converted” treasury stock method. See Note 13 for additional information on net earnings per share. (Y) Recent Accounting Pronouncements In April 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting pronouncement (FASB ASU 2014-8) related to discontinued operations (FASB ASC Topic 205). The standard raises the threshold for disposals to qualify as a discontinued operation by focusing on strategic shifts that have or will have a major effect on an entity’s operations and financial results. The standard also requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of discontinued operations. We adopted this pronouncement for our fiscal year beginning March 1, 2015 and there was no effect on our consolidated financial statements. In November 2015, the FASB issued an accounting pronouncement (FASB ASU 2015-17), which simplifies the balance sheet classification of deferred taxes. This pronouncement requires that all deferred tax assets and liabilities be classified as noncurrent in the classified balance sheet, rather than separating such deferred taxes into current and noncurrent amounts, as is required under current guidance. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016, and may be applied either prospectively or retrospectively. We early adopted this pronouncement, on a retrospective basis, for our fiscal year ending February 29, 2016. As a result, we have reclassified $8.1 million of deferred taxes from current assets to noncurrent assets for the fiscal year ended February 28, 2015 to conform to the current year presentation. In February 2015, the FASB issued an accounting pronouncement (FASB ASU 2015-2) related to the elimination of guidance which has allowed entities with interests in certain investment funds to follow earlier consolidation guidance and makes changes to both the variable interest model and the voting model (FASB ASC 810). This standard will require all entities to re-evaluate consolidation conclusions regarding variable interest entities. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. We will adopt this pronouncement for our fiscal year beginning March 1, 2016. We do not expect this pronouncement to have a material effect on our consolidated financial statements. In May 2015, the FASB issued an accounting pronouncement (FASB ASU 2015-7), which eliminates the requirement for entities to categorize within the fair value hierarchy investments for which fair values are measured at net asset value (“NAV”) per share (FASB ASC Subtopic 820-10). This standard also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the NAV per share practical expedient, instead limiting disclosures to investments for which the entity has elected the expedient. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015, and retrospective adoption is required. We will adopt this pronouncement for our fiscal year beginning March 1, 2016. We do not expect this pronouncement to have a material effect on our consolidated financial statements. In July 2015, the FASB issued an accounting pronouncement (FASB ASU 2015-11), which simplifies the subsequent measurement of inventory by replacing the lower of cost or market test with a lower of cost or net realizable value (“NRV”) test. NRV is calculated as the estimated selling price less reasonably predictable costs of completion, disposal and transportation. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016, and prospective adoption is required. We will adopt this pronouncement for our fiscal year beginning March 1, 2017. We do not expect this pronouncement to have a material effect on our consolidated financial statements. In August 2015, the FASB issued an accounting pronouncement (FASB ASU 2015-14), which deferred the effective date of FASB ASU 2014-09, Revenue from Contracts with Customers , for all entities by one year. As a result, that accounting standard is now effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Based on this amendment, we will adopt FASB ASU 2014-09 for our fiscal year beginning March 1, 2018. We do not expect this pronouncement to have a material effect on our consolidated financial statements. In August 2015, the FASB issued an accounting pronouncement (FASB ASU 2015-15) related to the presentation of debt issuance costs. This standard clarifies the guidance set forth in FASB ASU 2015-03, which required that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the debt liability rather than as an asset. The new pronouncement clarifies that debt issuance costs related to line-of-credit arrangements could continue to be presented as an asset and be subsequently amortized over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the arrangement. We will consider this clarification in conjunction with our adoption of FASB ASU 2015-03, which will occur for our fiscal year beginning March 1, 2016 and do not expect it to have a material impact on our consolidated financial statements. In January 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-01) related to financial instruments (FASB ASC Subtopic 825-10). This pronouncement requires that most equity investments be measured at fair value, with subsequent changes in fair value recognized in net income. The pronouncement also impacts financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. We will adopt this pronouncement for our fiscal year beginning March 1, 2018 and are currently evaluating the effect on our consolidated financial statements. In February 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-02) related to the accounting for leases. This pronouncement requires lessees to record most leases on their balance sheet, while expense recognition on the income statement remains similar to current lease accounting guidance. The guidance also eliminates real estate-specific provisions and modifies certain aspects of lessor accounting. Under the new guidance, lease classification as either a finance lease or an operating lease will determine how lease-related revenue and expense are recognized. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. We will adopt this pronouncement for our fiscal year beginning March 1, 2019 and are currently evaluating the effect on our consolidated financial statements. In March 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-06) related to the embedded derivative analysis for debt instruments with contingent call or put options. This pronouncement clarifies that an exercise contingency does not need to be evaluated to determine whether it relates only to interest rates or credit risk. Instead, the contingent put or call option should be evaluated for possible bifurcation as a derivative in accordance with the four-step decision sequence detailed in FASB ASC 815-15, without regard to the nature of the exercise contingency. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. We are currently in the process of evaluating the effects of this pronouncement on our consolidated financial statements, including potential early adoption. In March 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-08) related to reporting revenue gross versus net, or principal versus agent considerations. This pronouncement is meant to clarify the guidance in FASB ASU 2014-09, Revenue from Contracts with Customers , as it pertains to principal versus agent considerations. Specifically, the guidance addresses how entities should identify goods and services being provided to a customer, the unit of account for a principal versus agent assessment, how to evaluate whether a good or service is controlled before being transferred to a customer, and how to assess whether an entity controls services performed by another party. The pronouncement has the same effective date as the new revenue standard, which is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. We will adopt this pronouncement for our fiscal year beginning March 1, 2018 and are currently evaluating the effect on our consolidated financial statements. In March 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-09) related to simplifications of employee share-based payment accounting. This pronouncement eliminates the APIC pool concept and requires that excess tax benefits and tax deficiencies be recorded in the income statement when awards are settled. The pronouncement also addresses simplifications related to statement of cash flows classification, accounting for forfeitures, and minimum statutory tax withholding requirements. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. We will adopt this pronouncement for our fiscal year beginning March 1, 2017 and are currently evaluating the effect on our consolidated financial statements. In April 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-10) related to identifying performance obligations and licensing. This pronouncement is meant to clarify the guidance in FASB ASU 2014-09, Revenue from Contracts with Customers . Specifically, the guidance addresses an entity’s identification of its performance obligations in a contract, as well as an entity’s evaluation of the nature of its promise to grant a license of intellectual property and whether or not that revenue is recognized over time or at a point in time. The pronouncement has the same effective date as the new revenue standard, which is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. We will adopt this pronouncement for our fiscal year beginning March 1, 2018 and do not expect it to have a material impa |
CarMax Auto Finance
CarMax Auto Finance | 12 Months Ended |
Feb. 29, 2016 | |
CarMax Auto Finance Income [Abstract] | |
CarMax Auto Finance | CARMAX AUTO FINANCE CAF provides financing to qualified retail customers purchasing vehicles at CarMax stores. CAF provides us the opportunity to capture additional profits, cash flows and sales while managing our reliance on third-party finance sources. Management regularly analyzes CAF’s operating results by assessing profitability, the performance of the auto loan receivables including trends in credit losses and delinquencies, and CAF direct expenses. This information is used to assess CAF’s performance and make operating decisions including resource allocation. We typically use securitizations to fund loans originated by CAF, as discussed in Note 2(F). CAF income primarily reflects the interest and fee income generated by the auto loan receivables less the interest expense associated with the debt issued to fund these receivables, a provision for estimated loan losses and direct CAF expenses. CAF income does not include any allocation of indirect costs. Although CAF benefits from certain indirect overhead expenditures, we have not allocated indirect costs to CAF to avoid making subjective allocation decisions. Examples of indirect costs not allocated to CAF include retail store expenses and corporate expenses. In addition, except for auto loan receivables, which are disclosed in Note 4, CAF assets are not separately reported nor do we allocate assets to CAF because such allocation would not be useful to management in making operating decisions. Components of CAF Income Years Ended February 29 or 28 (In millions) 2016 % (1) 2015 % (1) 2014 % (1) Interest margin: Interest and fee income $ 682.9 7.5 $ 604.9 7.7 $ 548.0 8.3 Interest expense (127.7 ) (1.4 ) (96.6 ) (1.2 ) (90.0 ) (1.4 ) Total interest margin 555.2 6.1 508.3 6.5 458.0 6.9 Provision for loan losses (101.2 ) (1.1 ) (82.3 ) (1.0 ) (72.2 ) (1.1 ) Total interest margin after provision for loan losses 454.0 5.0 426.0 5.4 385.8 5.8 Total other (expense) income (0.4 ) — — — 0.1 — Direct expenses: Payroll and fringe benefit expense (28.2 ) (0.3 ) (25.3 ) (0.3 ) (22.6 ) (0.3 ) Other direct expenses (33.4 ) (0.4 ) (33.4 ) (0.4 ) (27.1 ) (0.4 ) Total direct expenses (61.6 ) (0.7 ) (58.7 ) (0.7 ) (49.7 ) (0.8 ) CarMax Auto Finance income $ 392.0 4.3 $ 367.3 4.7 $ 336.2 5.1 Total average managed receivables $ 9,092.9 $ 7,859.9 $ 6,629.5 (1) Percent of total average managed receivables. |
Auto Loan Receivables
Auto Loan Receivables | 12 Months Ended |
Feb. 29, 2016 | |
Loans Receivable, Net [Abstract] | |
Auto Loan Receivables | AUTO LOAN RECEIVABLES Auto loan receivables include amounts due from customers related to retail vehicle sales financed through CAF and are presented net of an allowance for estimated loan losses. We generally use warehouse facilities to fund auto loan receivables originated by CAF until we elect to fund them through a term securitization or alternative funding arrangement. The majority of the auto loan receivables serve as collateral for the related non-recourse notes payable of $9.53 billion as of February 29, 2016 , and $8.47 billion as of February 28, 2015 . See Notes 2(F) and 11 for additional information on securitizations and non-recourse notes payable. Auto Loans Receivable, Net As of February 29 or 28 (In millions) 2016 2015 Term securitizations $ 7,828.0 $ 7,226.5 Warehouse facilities 1,399.0 986.0 Other receivables (1) 366.6 246.2 Total ending managed receivables 9,593.6 8,458.7 Accrued interest and fees 35.0 31.2 Other 3.2 27.3 Less allowance for loan losses (94.9 ) (81.7 ) Auto loan receivables, net $ 9,536.9 $ 8,435.5 (1) Other receivables includes receivables not funded through the warehouse facilities or term securitizations, including receivables restricted as excess collateral for those funding arrangements. Credit Quality. When customers apply for financing, CAF’s proprietary scoring models rely on the customers’ credit history and certain application information to evaluate and rank their risk. We obtain credit histories and other credit data that includes information such as number, age, type of and payment history for prior or existing credit accounts. The application information that is used includes income, collateral value and down payment. The scoring models yield credit grades that represent the relative likelihood of repayment. Customers assigned a grade of “A” are determined to have the highest probability of repayment, and customers assigned a lower grade are determined to have a lower probability of repayment. For loans that are approved, the credit grade influences the terms of the agreement, such as the required loan-to-value ratio and interest rate. CAF uses a combination of the initial credit grades and historical performance to monitor the credit quality of the auto loan receivables on an ongoing basis. We validate the accuracy of the scoring models periodically. Loan performance is reviewed on a recurring basis to identify whether the assigned grades adequately reflect the customers’ likelihood of repayment. Ending Managed Receivables by Major Credit Grade As of February 29 or 28 (In millions) 2016 (1) % (2 ) 2015 (1) % ( 2) A $ 4,666.6 48.6 $ 4,135.6 48.9 B 3,400.1 35.4 3,055.3 36.1 C and other 1,526.9 16.0 1,267.8 15.0 Total ending managed receivables $ 9,593.6 100.0 $ 8,458.7 100.0 (1) Classified based on credit grade assigned when customers were initially approved for financing. (2) Percent of total ending managed receivables. Allowance for Loan Losses As of February 29 or 28 (In millions) 2016 % (1 ) 2015 % (1 ) Balance as of beginning of year $ 81.7 0.97 $ 69.9 0.97 Charge-offs (180.6 ) (155.9 ) Recoveries 92.6 85.4 Provision for loan losses 101.2 82.3 Balance as of end of year $ 94.9 0.99 $ 81.7 0.97 (1) Percent of total ending managed receivables. The allowance for loan losses represents an estimate of the amount of net losses inherent in our portfolio of managed receivables as of the applicable reporting date and anticipated to occur during the following 12 months. The allowance is primarily based on the credit quality of the underlying receivables, historical loss trends and forecasted forward loss curves. We also take into account recent trends in delinquencies and losses, recovery rates and the economic environment. The provision for loan losses is the periodic expense of maintaining an adequate allowance. Past Due Receivables As of February 29 or 28 (In millions) 2016 % (1 ) 2015 % ( 1) Total ending managed receivables $ 9,593.6 100.0 $ 8,458.7 100.0 Delinquent loans: 31-60 days past due $ 171.0 1.8 $ 152.1 1.8 61-90 days past due 69.1 0.7 52.5 0.6 Greater than 90 days past due 22.7 0.2 16.8 0.2 Total past due $ 262.8 2.7 $ 221.4 2.6 (1) Percent of total ending managed receivables. |
Derivative Instruments And Hedg
Derivative Instruments And Hedging Activities | 12 Months Ended |
Feb. 29, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments And Hedging Activities | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES We use derivatives to manage certain risks arising from both our business operations and economic conditions, particularly with regard to issuances of debt. Primary exposures include LIBOR and other rates used as benchmarks in our securitizations and other debt financing. We enter into derivative instruments to manage exposures related to the future known receipt or payment of uncertain cash amounts, the values of which are impacted by interest rates, and designate these derivative instruments as cash flow hedges for accounting purposes. Our derivative instruments are used to manage (i) differences in the amount of our known or expected cash receipts and our known or expected cash payments principally related to the funding of our auto loan receivables, and (ii) exposure to variable interest rates associated with our term loan, as further discussed in Note 11. For the derivatives associated with our securitization program, the effective portion of changes in the fair value is initially recorded in accumulated other comprehensive loss (“AOCL”). For the majority of these derivatives, the amounts are subsequently reclassified into CAF income in the period that the hedged forecasted transaction affects earnings, which occurs as interest expense is recognized on those future issuances of debt. During the next 12 months, we estimate that an additional $10.5 million will be reclassified from AOCL as a decrease to CAF income. As of February 29, 2016 and February 28, 2015 , we had interest rate swaps outstanding with a combined notional amount of $2.42 billion and $1.40 billion , respectively, that were designated as cash flow hedges of interest rate risk. Fair Values of Derivative Instruments As of February 29 or 28 2016 2015 (In thousands) Assets (1) Liabilities (2) Assets (1) Liabilities (2) Derivatives designated as accounting hedges: Interest rate swaps $ 587 $ (8,024 ) $ 1,201 $ (1,064 ) (1) Reported in other current assets on the consolidated balance sheets. (2) Reported in accounts payable on the consolidated balance sheets. Effect of Derivative Instruments on Comprehensive Income Years Ended February 29 or 28 (In thousands) 2016 2015 2014 Derivatives designated as accounting hedges: Loss recognized in AOCL (1) $ (20,715 ) $ (5,847 ) $ (5,286 ) Loss reclassified from AOCL into CAF income (1) $ (8,277 ) $ (8,118 ) $ (9,872 ) (Loss) gain recognized in CAF income (2) $ (439 ) $ — $ 76 (1) Represents the effective portion. (2) Represents the ineffective portion. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Feb. 29, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market or, if none exists, the most advantageous market, for the specific asset or liability at the measurement date (referred to as the “exit price”). The fair value should be based on assumptions that market participants would use, including a consideration of nonperformance risk. We assess the inputs used to measure fair value using the three-tier hierarchy. The hierarchy indicates the extent to which inputs used in measuring fair value are observable in the market. Level 1 Inputs include unadjusted quoted prices in active markets for identical assets or liabilities that we can access at the measurement date. Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets in active markets, quoted prices from identical or similar assets in inactive markets and observable inputs such as interest rates and yield curves. Level 3 Inputs that are significant to the measurement that are not observable in the market and include management's judgments about the assumptions market participants would use in pricing the asset or liability (including assumptions about risk). Our fair value processes include controls that are designed to ensure that fair values are appropriate. Such controls include model validation, review of key model inputs, analysis of period-over-period fluctuations and reviews by senior management. Valuation Methodologies Money Market Securities. Money market securities are cash equivalents, which are included in cash and cash equivalents, restricted cash from collections on auto loan receivables or other assets. They consist of highly liquid investments with original maturities of three months or less and are classified as Level 1. Mutual Fund Investments. Mutual fund investments consist of publicly traded mutual funds that primarily include diversified investments in large-, mid- and small-cap domestic and international companies. The investments, which are included in other assets, are held in a rabbi trust established to fund informally our executive deferred compensation plan and are classified as Level 1. Derivative Instruments. The fair values of our derivative instruments are included in either other current assets or accounts payable. As described in Note 5, as part of our risk management strategy, we utilize derivative instruments to manage differences in the amount of our known or expected cash receipts and our known or expected cash payments principally related to the funding of our auto loan receivables as well as to manage exposure to variable interest rates on our term loan. Our derivatives are not exchange-traded and are over-the-counter customized derivative instruments. All of our derivative exposures are with highly rated bank counterparties. We measure derivative fair values assuming that the unit of account is an individual derivative instrument and that derivatives are sold or transferred on a stand-alone basis. We estimate the fair value of our derivatives using quotes determined by the derivative counterparties and third-party valuation services. Quotes from third-party valuation services and quotes received from bank counterparties project future cash flows and discount the future amounts to a present value using market-based expectations for interest rates and the contractual terms of the derivative instruments. The models do not require significant judgment and model inputs can typically be observed in a liquid market; however, because the models include inputs other than quoted prices in active markets, all derivatives are classified as Level 2. Our derivative fair value measurements consider assumptions about counterparty and our own nonperformance risk. We monitor counterparty and our own nonperformance risk and, in the event that we determine that a party is unlikely to perform under terms of the contract, we would adjust the derivative fair value to reflect the nonperformance risk. Items Measured at Fair Value on a Recurring Basis As of February 29, 2016 (In thousands) Level 1 Level 2 Total Assets: Money market securities $ 439,943 $ — $ 439,943 Mutual fund investments 13,622 — 13,622 Derivative instruments — 587 587 Total assets at fair value $ 453,565 $ 587 $ 454,152 Percent of total assets at fair value 99.9 % 0.1 % 100.0 % Percent of total assets 3.1 % — % 3.1 % Liabilities: Derivative instruments $ — $ (8,024 ) $ (8,024 ) Total liabilities at fair value $ — $ (8,024 ) $ (8,024 ) Percent of total liabilities — % 0.1 % 0.1 % As of February 28, 2015 (In thousands) Level 1 Level 2 Total Assets: Money market securities $ 380,100 $ — $ 380,100 Mutual fund investments 9,242 — 9,242 Derivative instruments — 1,201 1,201 Total assets at fair value $ 389,342 $ 1,201 $ 390,543 Percent of total assets at fair value 99.7 % 0.3 % 100.0 % Percent of total assets 2.9 % — % 3.0 % Liabilities: Derivative instruments $ — $ (1,064 ) $ (1,064 ) Total liabilities at fair value $ — $ (1,064 ) $ (1,064 ) Percent of total liabilities — % — % — % There were no transfers between Levels 1 and 2, and we had no Level 3 assets for the years ended February 29, 2016 and February 28, 2015 . |
Property And Equipment
Property And Equipment | 12 Months Ended |
Feb. 29, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property And Equipment | PROPERTY AND EQUIPMENT As of February 29 or 28 (In thousands) 2016 2015 Land $ 510,068 $ 398,288 Land held for development 85,127 151,306 Buildings 1,650,168 1,390,802 Leasehold improvements 174,495 146,140 Furniture, fixtures and equipment 443,050 389,650 Construction in progress 224,109 209,058 Total property and equipment 3,087,017 2,685,244 Less accumulated depreciation and amortization 925,319 822,706 Property and equipment, net $ 2,161,698 $ 1,862,538 Land held for development represents land owned for potential store growth. Depreciation expense was $127.0 million in fiscal 2016 , $105.7 million in fiscal 2015 and $90.4 million in fiscal 2014 . |
Cancellation Reserves
Cancellation Reserves | 12 Months Ended |
Feb. 29, 2016 | |
Cancellation Reserves [Abstract] | |
Cancellation Reserves | CANCELLATION RESERVES We recognize revenue for EPP products at the time of sale, net of a reserve for estimated contract cancellations. Cancellations of these services may result from early termination by the customer, or default or prepayment on the finance contract. The reserve for cancellations is evaluated for each product, and is based on forecasted forward cancellation curves utilizing historical experience, recent trends and credit mix of the customer base. Cancellation Reserves As of February 29 or 28 (In millions) 2016 2015 Balance as of beginning of year $ 94.4 $ 72.5 Cancellations (61.3 ) (49.1 ) Provision for future cancellations 77.1 71.0 Balance as of end of year $ 110.2 $ 94.4 The current portion of estimated cancellation reserves is recognized as a component of accrued expenses and other current liabilities with the remaining amount recognized in other liabilities. As of February 29, 2016 and February 28, 2015 , the current portion of cancellation reserves was $54.4 million and $44.8 million , respectively. In fiscal 2014, the company reviewed the assumptions used in developing its cancellation reserves for EPP products and incorporated additional data into a more sophisticated model as part of our evaluation of the cancellation rates. This additional data included changes in the product and administration of the product by the company and changes in the credit mix of the customer base. Based on our evaluation, we determined that this additional data should have been considered in our previous assessments of cancellation reserves. We corrected this accounting error by increasing the cancellation reserves and reducing other sales and revenues. Fiscal 2014 net earnings were reduced by $11.9 million (net of tax of $7.6 million ), or $0.05 per share, pertaining to fiscal 2013 and fiscal 2012. The out of period error was not material to fiscal 2014 or any previously reported interim or annual period. |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 29, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income Tax Provision Years Ended February 29 or 28 (In thousands) 2016 2015 2014 Current: Federal $ 324,096 $ 329,211 $ 283,174 State 45,183 47,061 38,747 Total 369,279 376,272 321,921 Deferred: Federal 16,398 (3,499 ) (15,129 ) State 839 (800 ) (2,056 ) Total 17,237 (4,299 ) (17,185 ) Income tax provision $ 386,516 $ 371,973 $ 304,736 Effective Income Tax Rate Reconciliation Years Ended February 29 or 28 2016 2015 2014 Federal statutory income tax rate 35.0 % 35.0 % 35.0 % State and local income taxes, net of federal benefit 3.2 3.4 3.1 Nondeductible and other items 0.2 0.2 0.2 Credits (0.1 ) (0.2 ) (0.1 ) Effective income tax rate 38.3 % 38.4 % 38.2 % Temporary Differences Resulting in Deferred Tax Assets and Liabilities As of February 29 or 28 (In thousands) 2016 2015 Deferred tax assets: Accrued expenses $ 60,341 $ 52,933 Partnership basis 97,586 95,443 Stock compensation 56,606 63,148 Derivatives 8,320 4,010 Capital loss carry forward 1,807 1,597 Total deferred tax assets 224,660 217,131 Less: valuation allowance (1,807 ) (1,597 ) Total deferred tax assets after valuation allowance 222,853 215,534 Deferred tax liabilities: Prepaid expenses 19,496 17,935 Property and equipment 32,691 14,816 Inventory 8,804 7,045 Total deferred tax liabilities 60,991 39,796 Net deferred tax asset $ 161,862 $ 175,738 Except for amounts for which a valuation allowance has been provided, we believe it is more likely than not that the availability of loss carrybacks and the results of future operations will generate sufficient taxable income to realize the deferred tax assets. The valuation allowance as of February 29, 2016 , relates to capital loss carryforwards that are not more likely than not to be utilized prior to their expiration. Reconciliation of Unrecognized Tax Benefits Years Ended February 29 or 28 (In thousands) 2016 2015 2014 Balance at beginning of year $ 24,951 $ 26,330 $ 25,059 Increases for tax positions of prior years 125 1,549 1,523 Decreases for tax positions of prior years (853 ) (5,999 ) (4,658 ) Increases based on tax positions related to the current year 5,256 5,467 5,960 Settlements (830 ) (612 ) (809 ) Lapse of statute (1,878 ) (1,784 ) (745 ) Balance at end of year $ 26,771 $ 24,951 $ 26,330 As of February 29, 2016 , we had $26.8 million of gross unrecognized tax benefits, $10.3 million of which, if recognized, would affect our effective tax rate. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of our uncertain tax positions will increase or decrease during the next 12 months; however, we do not expect the change to have a significant effect on our results of operations, financial condition or cash flows. As of February 28, 2015 , we had $25.0 million of gross unrecognized tax benefits, $9.6 million of which, if recognized, would affect our effective tax rate. As of February 28, 2014 , we had $26.3 million of gross unrecognized tax benefits, $7.6 million of which, if recognized, would affect our effective tax rate. Our continuing practice is to recognize interest and penalties related to income tax matters in SG&A expenses. Our accrual for interest and penalties increased $0.6 million to $2.0 million as of February 29, 2016 , from $1.4 million as of February 28, 2015 . Our accrual for interest and penalties decreased $0.2 million to $1.4 million as of February 28, 2015 , from $1.6 million as of February 28, 2014 . CarMax is subject to U.S. federal income tax as well as income tax of multiple states and local jurisdictions. With a few insignificant exceptions, we are no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to fiscal 2013 . |
Benefit Plans
Benefit Plans | 12 Months Ended |
Feb. 29, 2016 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Benefit Plans | BENEFIT PLANS (A) Retirement Benefit Plans We have two frozen noncontributory defined benefit plans: our pension plan (the “pension plan”) and our unfunded, nonqualified plan (the “restoration plan”), which restores retirement benefits for certain associates who are affected by Internal Revenue Code limitations on benefits provided under the pension plan. No additional benefits have accrued under these plans since they were frozen; however, we have a continuing obligation to fund the pension plan and will continue to recognize net periodic pension expense for both plans for benefits earned prior to being frozen. We use a fiscal year end measurement date for both the pension plan and the restoration plan. Benefit Plan Information As of February 29 or 28 Pension Plan Restoration Plan Total (In thousands) 2016 2015 2016 2015 2016 2015 Plan assets $ 121,746 $ 135,249 $ — $ — $ 121,746 $ 135,249 Projected benefit obligation 201,715 218,189 10,662 11,052 212,377 229,241 Funded status recognized $ (79,969 ) $ (82,940 ) $ (10,662 ) $ (11,052 ) $ (90,631 ) $ (93,992 ) Amounts recognized in the consolidated balance sheets: Current liability $ — $ — $ (459 ) $ (462 ) $ (459 ) $ (462 ) Noncurrent liability (79,969 ) (82,940 ) (10,203 ) (10,590 ) (90,172 ) (93,530 ) Net amount recognized $ (79,969 ) $ (82,940 ) $ (10,662 ) $ (11,052 ) $ (90,631 ) $ (93,992 ) Years Ended February 29 or 28 Pension Plan Restoration Plan Total (In thousands) 2016 2015 2014 2016 2015 2014 2016 2015 2014 Total net pension expense $ 847 $ 363 $ 1,341 $ 456 $ 453 $ 433 $ 1,303 $ 816 $ 1,774 Total net actuarial (gain) loss (1) $ (1,786 ) $ 33,286 $ (16,268 ) $ (428 ) $ 840 $ 803 $ (2,214 ) $ 34,126 $ (15,465 ) (1) Changes recognized in Accumulated Other Comprehensive Loss The projected benefit obligation (“PBO”) will change primarily due to interest cost and total net actuarial (gain) loss, and plan assets will change primarily as a result of the actual return on plan assets. Benefit payments, which reduce the PBO and plan assets, and employer contributions, which increase plan assets, were not material in fiscal 2016 or 2015. The net actuarial (gain) loss in a fiscal year is recognized in accumulated other comprehensive loss and may later be recognized as a component of future pension expense. In fiscal 2017 , we anticipate that $1.5 million in estimated actuarial losses of the pension plan will be amortized from accumulated other comprehensive loss. We do no t anticipate that any appreciable estimated actuarial losses will be amortized from accumulated other comprehensive loss for the restoration plan. Benefit Obligations. Accumulated and projected benefit obligations (“ABO” and “PBO”) represent the obligations of the benefit plans for past service as of the measurement date. ABO is the present value of benefits earned to date with benefits computed based on current service and compensation levels. PBO is ABO increased to reflect expected future service and increased compensation levels. As a result of the freeze of plan benefits under our pension and restoration plans, the ABO and PBO balances are equal to one another at all subsequent dates. Funding Policy. For the pension plan, we contribute amounts sufficient to meet minimum funding requirements as set forth in the employee benefit and tax laws, plus any additional amounts as we may determine to be appropriate. We do no t expect to make any contributions to the pension plan in fiscal 2017 ; however, conditions may change where we may elect to make contributions. We expect the pension plan to make benefit payments of approximately $3.0 million for each of the next two fiscal years, and $4.0 million for each of the subsequent three fiscal years. For the non-funded restoration plan, we contribute an amount equal to the benefit payments, which we expect to be approximately $0.5 million for each of the next five fiscal years. Assumptions Used to Determine Benefit Obligations As of February 29 or 28 Pension Plan Restoration Plan 2016 2015 2016 2015 Discount rate (1) 4.50 % 4.00 % 4.50 % 4.00 % (1) For the restoration plan, the discount rate presented is applied to the pre-2004 annuity amounts. A rate of 4.50% is assumed for the post-2004 lump sum amounts paid from the plan for fiscal 2016 and fiscal 2015 . Assumptions Used to Determine Net Pension Expense Years Ended February 29 or 28 Pension Plan Restoration Plan 2016 2015 2014 2016 2015 2014 Discount rate (1) 4.00 % 4.55 % 4.30 % 4.00 % 4.55 % 4.30 % Expected rate of return on plan assets 7.75 % 7.75 % 7.75 % — % — % — % (1) For the restoration plan, the discount rate presented is applied to the pre-2004 annuity amounts. A rate of 4.50% is assumed for post-2004 lump sum amounts paid from the plan for fiscal 2016 , fiscal 2015 and fiscal 2014 . Assumptions. Underlying both the calculation of the PBO and the net pension expense are actuarial calculations of each plan’s liability. These calculations use participant-specific information such as salary, age and years of service, as well as certain assumptions, the most significant being the discount rate, rate of return on plan assets and mortality rate. We evaluate these assumptions at least once a year and make changes as necessary. The discount rate used for retirement benefit plan accounting reflects the yields available on high-quality, fixed income debt instruments. For our plans, we review high quality corporate bond indices in addition to a hypothetical portfolio of corporate bonds with maturities that approximate the expected timing of the anticipated benefit payments. To determine the expected long-term return on plan assets, we consider the current and anticipated asset allocations, as well as historical and estimated returns on various categories of plan assets. We apply the estimated rate of return to a market-related value of assets, which reduces the underlying variability in the asset values. The use of expected long-term rates of return on pension plan assets could result in recognized asset returns that are greater or less than the actual returns of those pension plan assets in any given year. Over time, however, the expected long-term returns are anticipated to approximate the actual long-term returns, and therefore, result in a pattern of income and expense recognition that more closely matches the pattern of the services provided by the employees. Differences between actual and expected returns, which are a component of unrecognized actuarial gains/losses, are recognized over the average life expectancy of all plan participants. Given the frozen status of the pension and benefit restoration plans, the rate of compensation increases is not applicable for periods subsequent to December 31, 2008. Mortality rate assumptions are based on the life expectancy of the population and were updated in fiscal 2015 to account for increases in life expectancy. This change increased the PBO and ABO. Fair Value of Plan Assets And Fair Value Hierarchy As of February 29 or 28 (In thousands) 2016 2015 Mutual funds (Level 1): Equity securities $ 78,951 $ 84,303 Equity securities – international 15,771 17,114 Fixed income securities 25,978 32,549 Collective funds (Level 2): Short-term investments 1,096 1,341 Investment payables, net (50 ) (58 ) Total $ 121,746 $ 135,249 Plan Assets. Our pension plan assets are held in trust and a fiduciary committee sets the investment policies and strategies. Long-term strategic investment objectives include achieving reasonable returns while prudently balancing risk and return, and controlling costs. We target allocating approximately 75% of plan assets to equity and equity-related instruments and approximately 25% to fixed income securities. Equity securities are currently composed of mutual funds that include highly diversified investments in large-, mid- and small-cap companies located in the United States and internationally. The fixed income securities are composed of mutual funds that include investments in debt securities, mortgage-backed securities, corporate bonds and other debt obligations primarily in the United States. We do not expect any plan assets to be returned to us during fiscal 2017 . The fair values of the plan’s assets are provided by the plan’s trustee and the investment managers. Within the fair value hierarchy (see Note 6), the mutual funds are classified as Level 1 as quoted active market prices for identical assets are used to measure fair value. The collective funds are public investment vehicles valued using a net asset value (“NAV”). The collective funds may be liquidated with minimal restrictions and are classified as Level 2. (B) Retirement Savings 401(k) Plan We sponsor a 401(k) plan for all associates meeting certain eligibility criteria. In conjunction with the pension plan curtailments, enhancements were made to the 401(k) plan effective January 1, 2009. The enhancements increased the maximum salary contribution for eligible associates and increased our matching contribution. Additionally, an annual discretionary company-funded contribution regardless of associate participation was implemented, as well as an additional discretionary company-funded contribution to those associates meeting certain age and service requirements. The total cost for company contributions was $29.8 million in fiscal 2016 , $27.9 million in fiscal 2015 and $25.0 million in fiscal 2014 . (C) Retirement Restoration Plan Effective January 1, 2009, we replaced the frozen restoration plan with a new non-qualified retirement plan for certain senior executives who are affected by Internal Revenue Code limitations on benefits provided under the Retirement Savings 401(k) Plan. Under this plan, these associates may continue to defer portions of their compensation for retirement savings. We match the associates’ contributions at the same rate provided under the 401(k) plan, and also may provide the annual discretionary company-funded contribution made regardless of associate participation, as well as the additional discretionary company-funded contribution to the associates meeting the same age and service requirements. This plan is unfunded with lump sum payments to be made upon the associate’s retirement. The total cost for this plan was not significant in fiscal 2016 , fiscal 2015 and fiscal 2014 . (D) Executive Deferred Compensation Plan Effective January 1, 2011, we established an unfunded nonqualified deferred compensation plan to permit certain eligible associates to defer receipt of a portion of their compensation to a future date. This plan also includes a restorative company contribution designed to compensate the plan participants for any loss of company contributions under the Retirement Savings 401(k) Plan and the Retirement Restoration Plan due to a reduction in their eligible compensation resulting from deferrals into the Executive Deferred Compensation Plan. The total cost for this plan was no t significant in fiscal 2016 , fiscal 2015 and fiscal 2014 . |
Debt
Debt | 12 Months Ended |
Feb. 29, 2016 | |
Debt Disclosure [Abstract] | |
Debt | DEBT As of February 29 or 28 (In thousands) 2016 2015 Revolving credit facility $ 415,428 $ 10,785 Term loan 300,000 300,000 Finance and capital lease obligations 414,654 327,838 Non-recourse notes payable 9,527,750 8,470,629 Total debt 10,657,832 9,109,252 Less: current portion (315,509 ) (290,502 ) Long-term debt, net of current portion $ 10,342,323 $ 8,818,750 Revolving Credit Facility. We have a $1.20 billion unsecured revolving credit facility (the “credit facility”) with various financial institutions that expires in August 2020 . 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 twelve months presented as a component of current portion of long-term debt. Outstanding borrowings of $415.0 million at February 29, 2016 are classified as long-term debt as no repayments are scheduled to be made within the next 12 months. However, conditions may change and we may elect to make repayments. As of February 29, 2016 , the unused capacity of $784.6 million was fully available to us. The weighted average interest rate on outstanding short-term and long-term debt was 1.46% in fiscal 2016 , 1.56% in fiscal 2015 and 1.52% in fiscal 2014 . Term Loan. We have a $300 million term loan that expires in August 2020 . The term loan accrues interest at variable rates ( 1.43% as of February 29, 2016 ) based on the LIBOR rate, the federal funds rate, or the prime rate. As of February 29, 2016 , $300 million remained outstanding and was classified as long-term debt as no repayments are scheduled to be made within the next 12 months. Borrowings under the term loan are available for working capital and general corporate purposes. We have 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 new sale-leaseback transactions since fiscal 2009. During fiscal 2016 , finance lease obligations were increased by $103.2 million related to leases that were modified or extended beyond their original lease term. Upon modification, the amortization of the obligation is reset, resulting in more of the lease payments being applied to interest expense in the initial years following the modification. 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 29, 2016 , $8.13 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 August 2022 , but may mature earlier, depending upon the repayment rate of the underlying auto loan receivables. As of February 29, 2016 , $1.40 billion of non-recourse notes payable was outstanding related to our warehouse facilities. During fiscal 2016 , we increased the combined limit of our warehouse facilities by $200 million to $2.50 billion . As of February 29, 2016 , the unused warehouse capacity totaled $1.10 billion . Of the combined warehouse facility limit, $1.00 billion will expire in August 2016 and $1.50 billion will expire in February 2017 . The return requirements of warehouse facility investors could fluctuate significantly depending on market conditions. At renewal, the cost, structure and capacity of the facilities could change. These changes could have a significant impact on our funding costs. See Notes 2(F) and 4 for additional information on the related securitized auto loan receivables. We capitalize interest in connection with the construction of certain facilities. Cash paid for interest of $34.3 million in fiscal 2016 excludes capitalized interest of $9.2 million . Cash paid for interest of $24.2 million in fiscal 2015 excludes capitalized interest of $8.9 million . No interest was capitalized in fiscal 2014 . Financial Covenants. The credit facility and term loan agreements contain representations and warranties, conditions and covenants. We must also meet financial covenants in conjunction with certain of the sale-leaseback transactions. Our securitization agreements contain representations and warranties, financial covenants and performance triggers. As of February 29, 2016 , we were in compliance with all financial covenants and our securitized receivables were in compliance with the related performance triggers. |
Stock And Stock-Based Incentive
Stock And Stock-Based Incentive Plans | 12 Months Ended |
Feb. 29, 2016 | |
Share-based Compensation [Abstract] | |
Stock And Stock-Based Incentive Plans | STOCK AND STOCK-BASED INCENTIVE PLANS (A) Preferred Stock Under the terms of our Articles of Incorporation, the board of directors may determine the rights, preferences and terms of our authorized but unissued shares of preferred stock. We have authorized 20,000,000 shares of preferred stock, $20 par value. No shares of preferred stock are currently outstanding. (B) Share Repurchase Program In fiscal 2013, our board of directors authorized the repurchase of up to $800 million of our common stock which was exhausted in fiscal 2015. In fiscal 2015, our board of directors authorized the repurchase of up to an additional $3 billion of our common stock of which $1 billion was exhausted during fiscal 2016, and $2 billion expires on December 31, 2016 . Common Stock Repurchases Years Ended February 29 or 28 2016 2015 2014 Number of shares repurchased (in thousands) 16,300.1 17,511.0 6,859.5 Average cost per share $ 59.59 $ 52.13 $ 44.61 Available for repurchase, as of end of year (in millions) $ 1,398.0 $ 2,369.3 $ 282.1 (C) Stock Incentive Plans We maintain long-term incentive plans for management, certain employees and the nonemployee members of our board of directors. The plans allow for the granting of equity-based compensation awards, including nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, stock- and cash-settled restricted stock units, stock grants or a combination of awards. To date, we have no t awarded any incentive stock options. As of February 29, 2016 , a total of 50,200,000 shares of our common stock had been authorized to be issued under the long-term incentive plans. The number of unissued common shares reserved for future grants under the long-term incentive plans was 6,738,122 as of that date. The majority of associates who receive share-based compensation awards primarily receive cash-settled restricted stock units. Senior management and other key associates receive awards of nonqualified stock options and stock-settled restricted stock units. Nonemployee directors receive awards of nonqualified stock options, stock grants and/or restricted stock awards. Excluding stock grants, all share-based compensation awards, including any associated dividend rights, are subject to forfeiture. Nonqualified Stock Options. Nonqualified stock options are awards that allow the recipient to purchase shares of our common stock at a fixed price. Stock options are granted at an exercise price equal to the fair market value of our common stock on the grant date. The stock options generally vest annually in equal amounts over periods of one to four years . These options expire no later than ten years after the date of the grant. Cash-Settled Restricted Stock Units. Also referred to as restricted stock units, or RSUs, these are restricted stock unit awards that entitle the holder to a cash payment equal to the fair market value of a share of our common stock for each unit granted. Conversion generally occurs at the end of a three -year vesting period. However, the cash payment per RSU will not be greater than 200% or less than 75% of the fair market value of a share of our common stock on the grant date. RSUs are liability awards and do not have voting rights. Stock-Settled Market Stock Units. Also referred to as market stock units, or MSUs, these are restricted stock unit awards with market conditions granted to eligible key associates that are converted into between zero and two shares of common stock for each unit granted. Conversion generally occurs at the end of a three-year vesting period. The conversion ratio is calculated by dividing the average closing price of our stock during the final 40 trading days of the three -year vesting period by our stock price on the grant date, with the resulting quotient capped at two . This quotient is then multiplied by the number of MSUs granted to yield the number of shares awarded. MSUs do not have voting rights. Stock-Settled Performance Stock Units. Also referred to as performance stock units, or PSUs, these are restricted stock unit awards with performance conditions granted to eligible key associates that are converted into between zero and two shares of common stock for each unit granted. Conversion generally occurs at the end of a three -year vesting period. The conversion ratio is based on the company reaching certain target levels set by the board of directors for cumulative three-year earnings before interest and taxes at the end of the three-year period, with the resulting quotient subject to meeting a minimum 25% threshold and capped at 200% . This quotient is then multiplied by the number of PSUs granted to yield the number of shares awarded. PSUs do not have voting rights. Restricted Stock Awards. Restricted stock awards (RSAs) are awards of our common stock that are subject to specified restrictions that generally lapse after a one -year period from date of grant. Participants holding restricted stock are entitled to vote on matters submitted to holders of our common stock for a vote. (D) Share-Based Compensation Composition of Share-Based Compensation Expense Years Ended February 29 or 28 (In thousands) 2016 2015 2014 Cost of sales $ 1,243 $ 4,236 $ 3,200 CarMax Auto Finance income 1,458 5,898 2,983 Selling, general and administrative expenses 49,725 73,020 61,487 Share-based compensation expense, before income taxes $ 52,426 $ 83,154 $ 67,670 Composition of Share-Based Compensation Expense – By Grant Type Years Ended February 29 or 28 (In thousands) 2016 2015 2014 Nonqualified stock options $ 25,399 $ 28,954 $ 23,914 Cash-settled restricted stock units 11,913 38,539 29,551 Stock-settled market stock units 10,589 13,299 12,515 Stock-settled performance stock units 1,919 — — Employee stock purchase plan 1,349 1,274 1,190 Stock grants to non-employee directors — — 500 Restricted stock to non-employee directors 1,257 1,088 — Share-based compensation expense, before income taxes $ 52,426 $ 83,154 $ 67,670 Unrecognized Share- Based Compensation Expense – By Grant Type As of February 29, 2016 (Costs in millions) Unrecognized Compensation Costs Weighted Average Remaining Recognition Life (Years) Nonqualified stock options $ 34.3 2.0 Stock-settled market stock units 11.7 0.9 Stock-settled performance stock units 2.9 2.1 Restricted stock to non-employee directors 0.1 0.3 Total $ 49.0 1.7 We recognize compensation expense for stock options, MSUs, PSUs and RSAs on a straight-line basis (net of estimated forfeitures) over the requisite service period, which is generally the vesting period of the award. The PSU expense is adjusted for any change in management’s assessment of the performance target level that is probable of being achieved. The variable expense associated with RSUs is recognized over their vesting period (net of estimated forfeitures) and is calculated based on the volume-weighted average price of our common stock on the last trading day of each reporting period. The total costs for matching contributions for our employee stock purchase plan are included in share-based compensation expense. There were no capitalized share-based compensation costs as of or for the years ended February 29, 2016 or February 28, 2015 or 2014 . Stock Option Activity Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic (Shares and intrinsic value in thousands) Shares Price Life (Years) Value Outstanding as of February 28, 2015 7,645 $ 35.59 Options granted 1,408 73.43 Options exercised (1,711 ) 27.49 Options forfeited or expired (20 ) 69.68 Outstanding as of February 29, 2016 7,322 $ 44.67 4.2 $ 49,575 Exercisable as of February 29, 2016 3,501 $ 35.02 3.2 $ 39,561 Stock Option Information Years Ended February 29 or 28 2016 2015 2014 Options granted 1,408,427 2,056,789 1,605,149 Weighted average grant date fair value per share $ 20.53 $ 13.28 $ 15.59 Cash received from options exercised (in millions) $ 47.0 $ 89.8 $ 45.1 Intrinsic value of options exercised (in millions) $ 70.4 $ 153.3 $ 62.5 Realized tax benefits from exercises (in millions) $ 28.2 $ 61.7 $ 25.1 For stock options, the fair value of each award is estimated as of the date of grant using a binomial valuation model. In computing the value of the option, the binomial model considers characteristics of fair-value option pricing that are not available for consideration under a closed-form valuation model (for example, the Black-Scholes model), such as the contractual term of the option, the probability that the option will be exercised prior to the end of its contractual life and the probability of termination or retirement of the option holder. For this reason, we believe that the binomial model provides a fair value that is more representative of actual experience and future expected experience than the value calculated using a closed-form model. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by the recipients of share-based awards. Assumptions Used to Estimate Option Values Years Ended February 29 or 28 2016 2015 2014 Dividend yield 0.0 % 0.0 % 0.0 % Expected volatility factor (1) 25.8 % - 31.8 % 25.2 % - 32.7 % 27.9 % - 46.8 % Weighted average expected volatility 30.6 % 31.8 % 44.7 % Risk-free interest rate (2) — % - 2.1 % 0.01 % - 2.7 % 0.02 % - 2.6 % Expected term (in years) (3) 4.7 4.7 4.7 (1) Measured using historical daily price changes of our stock for a period corresponding to the term of the options and the implied volatility derived from the market prices of traded options on our stock. (2) Based on the U.S. Treasury yield curve at the time of grant. (3) Represents the estimated number of years that options will be outstanding prior to exercise. Cash-Settled Restricted Stock Unit Activity Weighted Average Number of Grant Date (Units in thousands) Units Fair Value Outstanding as of February 28, 2015 1,530 $ 39.81 Stock units granted 418 $ 73.76 Stock units vested and converted (529 ) $ 32.35 Stock units cancelled (99 ) $ 51.29 Outstanding as of February 29, 2016 1,320 $ 52.70 Cash-Settled Restricted Stock Unit Information Years Ended February 29 or 28 2016 2015 2014 Stock units granted 418,281 587,990 541,819 Initial grant date fair value per share $ 73.76 $ 44.96 $ 42.68 Payments (before payroll tax withholdings) upon vesting (in millions) $ 33.6 $ 21.8 $ 23.3 Realized tax benefits from vesting (in millions) $ 13.5 $ 8.8 $ 9.3 Expected Cash Settlement Range Upon Restricted Stock Unit Vesting As of February 29, 2016 (In thousands) Minimum (1) Maximum (1) Fiscal 2017 $ 13,679 $ 36,477 Fiscal 2018 15,947 42,524 Fiscal 2019 18,822 50,193 Total expected cash settlements $ 48,448 $ 129,194 (1) Net of estimated forfeitures. Stock-Settled Market Stock Unit Activity Weighted Average Number of Grant Date (Units in thousands) Units Fair Value Outstanding as of February 28, 2015 774 $ 48.30 Stock units granted 110 $ 89.73 Stock units vested and converted (339 ) $ 41.33 Stock units cancelled (2 ) $ 90.46 Outstanding as of February 29, 2016 543 $ 60.90 Stock-Settled Market Stock Unit Information Years Ended February 29 or 28 2016 2015 2014 Stock units granted 109,956 249,801 237,660 Weighted average grant date fair value per share $ 89.73 $ 55.48 $ 52.02 Realized tax benefits from vesting (in millions) $ 17.0 $ 8.1 $ 7.9 Stock-Settled Performance Stock Unit Activity Weighted Average Number of Grant Date (Units in thousands) Units Fair Value Outstanding as of February 28, 2015 — $ — Stock units granted 66 $ 72.58 Stock units vested and converted — $ — Stock units cancelled — $ — Outstanding as of February 29, 2016 66 $ 72.58 Stock-Settled Performance Stock Unit Information Years Ended February 29 or 28 2016 2015 2014 Stock units granted 66,446 — — Weighted average grant date fair value per share $ 72.58 $ — $ — Restricted Stock Awards Activity Weighted Average Number of Grant Date (Units in thousands) Units Fair Value Outstanding as of February 28, 2015 23 $ 51.18 Stock units granted 19 $ 68.16 Stock units vested and converted (25 ) $ 52.49 Stock units cancelled — — Outstanding as of February 29, 2016 17 $ 68.16 Restricted Stock Awards Information Years Ended February 29 or 28 2016 2015 2014 Restricted stock granted 19,070 22,860 — Weighted average grant date fair value per share $ 68.16 $ 51.18 $ — Realized tax benefits from vesting (in millions) $ 0.7 $ — $ — (E) Employee Stock Purchase Plan We sponsor an employee stock purchase plan for all associates meeting certain eligibility criteria. Associate contributions are limited to 10% of eligible compensation, up to a maximum of $7,500 per year. For each $1.00 contributed to the plan by associates, we match $0.15 . We have authorized up to 8,000,000 shares of common stock for the employee stock purchase plan. Shares are acquired through open-market purchases. Years Ended February 29 or 28 2016 2015 2014 Shares purchased on the open market 176,595 184,390 188,797 Average purchase price per share $ 59.93 $ 52.18 $ 47.35 As of February 29, 2016 , a total of 3,363,688 shares remained available under the plan. The total costs for matching contributions are included in share-based compensation expense. |
Net Earnings Per Share
Net Earnings Per Share | 12 Months Ended |
Feb. 29, 2016 | |
Earnings Per Share [Abstract] | |
Net Earnings Per Share | NET EARNINGS PER SHARE Basic and Dilutive Net Earnings Per Share Reconciliations Years Ended February 29 or 28 (In thousands except per share data) 2016 2015 2014 Net earnings $ 623,428 $ 597,358 $ 492,586 Weighted average common shares outstanding 203,275 215,617 223,589 Dilutive potential common shares: Stock options 1,676 2,369 3,255 Stock-settled restricted stock units 589 705 740 Weighted average common shares and dilutive potential common shares 205,540 218,691 227,584 Basic net earnings per share $ 3.07 $ 2.77 $ 2.20 Diluted net earnings per share $ 3.03 $ 2.73 $ 2.16 Certain options to purchase shares of common stock were outstanding and not included in the calculation of diluted net earnings per share because their inclusion would have been antidilutive. On a weighted average basis, for fiscal 2016 , fiscal 2015 and fiscal 2014 , options to purchase 1,243,383 shares, 1,409,809 shares and 1,231,382 shares of common stock, respectively, were not included. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Feb. 29, 2016 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Accumulated Other Comprehensive Loss | ACCUMULATED OTHER COMPREHENSIVE LOSS Changes in Accumulated Other Comprehensive Loss By Component Total Net Accumulated Unrecognized Net Other Actuarial Unrecognized Comprehensive (In thousands, net of income taxes) Losses Hedge Losses Loss Balance as of February 28, 2013 $ (49,479 ) $ (10,329 ) $ (59,808 ) Other comprehensive income (loss) before reclassifications 9,713 (3,216 ) 6,497 Amounts reclassified from accumulated other comprehensive loss 1,051 5,989 7,040 Other comprehensive income 10,764 2,773 13,537 Balance as of February 28, 2014 (38,715 ) (7,556 ) (46,271 ) Other comprehensive loss before reclassifications (21,358 ) (3,535 ) (24,893 ) Amounts reclassified from accumulated other comprehensive loss 853 4,920 5,773 Other comprehensive (loss) income (20,505 ) 1,385 (19,120 ) Balance as of February 28, 2015 (59,220 ) (6,171 ) (65,391 ) Other comprehensive income (loss) before reclassifications 1,462 (12,578 ) (11,116 ) Amounts reclassified from accumulated other comprehensive loss 1,288 5,023 6,311 Other comprehensive income (loss) 2,750 (7,555 ) (4,805 ) Balance as of February 29, 2016 $ (56,470 ) $ (13,726 ) $ (70,196 ) Changes In and Reclassifications Out of Accumulated Other Comprehensive Loss Years Ended February 29 or 28 (In thousands) 2016 2015 2014 Retirement Benefit Plans (Note 10): Actuarial gain (loss) arising during the year $ 2,214 $ (34,126 ) $ 15,465 Tax (expense) benefit (752 ) 12,768 (5,752 ) Actuarial gain (loss) arising during the year, net of tax 1,462 (21,358 ) 9,713 Actuarial loss amortization reclassifications recognized in net pension expense: Cost of sales 835 558 669 CarMax Auto Finance income 49 31 38 Selling, general and administrative expenses 1,173 772 967 Total amortization reclassifications recognized in net pension expense 2,057 1,361 1,674 Tax expense (769 ) (508 ) (623 ) Amortization reclassifications recognized in net pension expense, net of tax 1,288 853 1,051 Net change in retirement benefit plan unrecognized actuarial losses, net of tax 2,750 (20,505 ) 10,764 Cash Flow Hedges (Note 5): Effective portion of changes in fair value (20,715 ) (5,847 ) (5,286 ) Tax benefit 8,137 2,312 2,070 Effective portion of changes in fair value, net of tax (12,578 ) (3,535 ) (3,216 ) Reclassifications to CarMax Auto Finance income 8,277 8,118 9,872 Tax expense (3,254 ) (3,198 ) (3,883 ) Reclassification of hedge losses, net of tax 5,023 4,920 5,989 Net change in cash flow hedge unrecognized losses, net of tax (7,555 ) 1,385 2,773 Total other comprehensive (loss) income, net of tax $ (4,805 ) $ (19,120 ) $ 13,537 Changes in the funded status of our retirement plans and the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in accumulated other comprehensive loss. The cumulative balances are net of deferred taxes of $42.4 million as of February 29, 2016 and $39.0 million as of February 28, 2015 . |
Lease Commitments
Lease Commitments | 12 Months Ended |
Feb. 29, 2016 | |
Leases [Abstract] | |
Lease Commitments | LEASE COMMITMENTS Our leases primarily consist of land or land and building leases related to CarMax store locations. Our lease obligations are based upon contractual minimum rates. Most leases provide that we pay taxes, maintenance, insurance and operating expenses applicable to the premises. The initial term of most real property leases will expire within the next 20 years ; however, most of the leases have options providing for renewal periods of 5 to 20 years at terms similar to the initial terms. For finance and capital leases, a portion of the periodic lease payments is recognized as interest expense and the remainder reduces the obligations. For operating leases, rent is recognized on a straight-line basis over the lease term, including scheduled rent increases and rent holidays. Rent expense for all operating leases was $46.9 million in fiscal 2016 , $44.6 million in fiscal 2015 and $43.6 million in fiscal 2014 . See Note 11 for additional information on finance and capital lease obligations. Future Minimum Lease Obligations As of February 29, 2016 Operating Capital Finance Lease (In thousands) Lease (1) Leases (1) Commitments (1) Fiscal 2017 $ 354 $ 48,390 $ 44,430 Fiscal 2018 354 47,199 44,853 Fiscal 2019 354 45,394 45,975 Fiscal 2020 354 44,876 44,221 Fiscal 2021 393 36,404 39,778 Fiscal 2022 and thereafter 4,417 556,774 469,694 Total minimum lease payments 6,226 $ 779,037 $ 688,951 Less amounts representing interest (3,451 ) Present value of net minimum lease payments $ 2,775 (1) Excludes taxes, insurance and other costs payable directly by us. These costs vary from year to year and are incurred in the ordinary course of business. |
Commitments And Contingencies
Commitments And Contingencies | 12 Months Ended |
Feb. 29, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES (A) Litigation On April 2, 2008, Mr. John Fowler filed a putative class action lawsuit against CarMax Auto Superstores California, LLC and CarMax Auto Superstores West Coast, Inc. in the Superior Court of California, County of Los Angeles. Subsequently, two other lawsuits, Leena Areso et al. v. CarMax Auto Superstores California, LLC and Justin Weaver v. CarMax Auto Superstores California, LLC, were consolidated as part of the Fowler case. The allegations in the consolidated case involved: (1) failure to provide meal and rest breaks or compensation in lieu thereof; (2) failure to pay wages of terminated or resigned employees related to meal and rest breaks and overtime; (3) failure to pay overtime; (4) failure to comply with itemized employee wage statement provisions; (5) unfair competition; and (6) California’s Labor Code Private Attorney General Act. The putative class consisted of sales consultants, sales managers, and other hourly employees who worked for the company in California from April 2, 2004, to the present. On May 12, 2009, the court dismissed all of the class claims with respect to the sales manager putative class. On June 16, 2009, the court dismissed all claims related to the failure to comply with the itemized employee wage statement provisions. The court also granted CarMax’s motion for summary adjudication with regard to CarMax’s alleged failure to pay overtime to the sales consultant putative class. The claims currently remaining in the lawsuit regarding the sales consultant putative class are: (1) failure to provide meal and rest breaks or compensation in lieu thereof; (2) failure to pay wages of terminated or resigned employees related to meal and rest breaks; (3) unfair competition; and (4) California’s Labor Code Private Attorney General Act. On November 21, 2011, the court granted CarMax’s motion to compel the plaintiffs’ remaining claims into arbitration on an individual basis. The plaintiffs appealed the court’s ruling and on March 26, 2013, the California Court of Appeal reversed the trial court’s order granting CarMax’s motion to compel arbitration. On October 8, 2013, CarMax filed a petition for a writ of certiorari seeking review in the United States Supreme Court. On February 24, 2014, the United States Supreme Court granted CarMax’s petition for certiorari, vacated the California Court of Appeal decision and remanded the case to the California Court of Appeal for further consideration. The California Court of Appeal determined that the plaintiffs’ Labor Code Private Attorney General Act claim is not subject to arbitration, but the remaining claims are subject to arbitration on an individual basis. CarMax appealed this decision with respect to the Private Attorney General Act claim on March 9, 2015 by filing a petition for review with the California Supreme Court. On April 22, 2015, the California Supreme Court denied the petition for review. On August 20, 2015, CarMax filed a petition for a writ of certiorari seeking review in the United States Supreme Court, which was denied. On March 30, 2016, the remaining claims asserted by Fowler were settled for an immaterial amount. The non-Private Attorney General Act claims asserted by Areso are subject to arbitration. Areso’s Private Attorney General Act claim is stayed in the California state court, pending arbitration. Once the stay is removed, the Private Attorney General Act claim, now asserted solely by Areso, may proceed in the California state court. The Areso lawsuit seeks compensatory and special damages, wages, interest, civil and statutory penalties, restitution, injunctive relief and the recovery of attorneys’ fees. We are unable to make a reasonable estimate of the amount or range of loss that could result from an unfavorable outcome in this matter. On October 15, 2015, CarMax Superstores California, LLC, and CarMax Auto Superstores West Coast, Inc. were served with a complaint filed on behalf of Mr. Craig Weiss in the Superior Court of California, County of Placer, asserting Private Attorney General Act violations. The Private Attorney General Act action is based on the following allegations with respect to CarMax sales consultants in California: (1) failure to compensate at least the minimum wage for all hours worked; (2) not providing accurate wage statements that showed all wages earned, all hours worked, all applicable pay rates, all applicable piece rates, all units earned, and applicable commission rates; (3) not indemnifying for employment-related expenses, including the cost of using personal cell phones to perform business tasks; (4) not maintaining documentation of the actual hours worked each day, all wages earned and meal breaks taken; and (5) not paying all wages due and owing upon termination of employment. The Weiss lawsuit seeks civil penalties, fines, cost of suit, and the recovery of attorneys’ fees. We are unable to make a reasonable estimate of the amount or range of loss that could result from an unfavorable outcome in this matter. We are involved in various other legal proceedings in the normal course of business. Based upon our evaluation of information currently available, we believe that the ultimate resolution of any such proceedings will not have a material adverse effect, either individually or in the aggregate, on our financial condition, results of operations or cash flows. (B) Other Matters In accordance with the terms of real estate lease agreements, we generally agree to indemnify the lessor from certain liabilities arising as a result of the use of the leased premises, including environmental liabilities and repairs to leased property upon termination of the lease. Additionally, in accordance with the terms of agreements entered into for the sale of properties, we generally agree to indemnify the buyer from certain liabilities and costs arising subsequent to the date of the sale, including environmental liabilities and liabilities resulting from the breach of representations or warranties made in accordance with the agreements. We do not have any known material environmental commitments, contingencies or other indemnification issues arising from these arrangements. As part of our customer service strategy, we guarantee the used vehicles we retail with at least a 30 -day limited warranty. A vehicle in need of repair within this period will be repaired free of charge. As a result, each vehicle sold has an implied liability associated with it. Accordingly, based on historical trends, we record a provision for estimated future repairs during the guarantee period for each vehicle sold. The liability for this guarantee was $6.1 million as of February 29, 2016 and $6.2 million as of February 28, 2015 , and is included in accrued expenses and other current liabilities. At various times we may have certain purchase obligations that are enforceable and legally binding primarily related to real estate purchases, advertising and third-party outsourcing services. As of February 29, 2016 we have material purchase obligations of $171.7 million , of which $122.1 million are expected to be fulfilled in fiscal 2017 . |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Feb. 29, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Fiscal Year (In thousands, except per share data) 2016 2016 (1) 2016 2016 2016 Net sales and operating revenues $ 4,014,888 $ 3,884,913 $ 3,544,069 $ 3,705,805 $ 15,149,675 Gross profit $ 543,794 $ 521,370 $ 464,331 $ 489,265 $ 2,018,760 CarMax Auto Finance income $ 109,108 $ 98,279 $ 92,316 $ 92,333 $ 392,036 Selling, general and administrative expenses $ 349,779 $ 330,784 $ 337,512 $ 333,860 $ 1,351,935 Net earnings $ 181,974 $ 172,228 $ 128,199 $ 141,027 $ 623,428 Net earnings per share: Basic $ 0.87 $ 0.83 $ 0.64 $ 0.72 $ 3.07 Diluted $ 0.86 $ 0.82 $ 0.63 $ 0.71 $ 3.03 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Fiscal Year (In thousands, except per share data) 2015 2015 (2) 2015 2015 (3) 2015 Net sales and operating revenues $ 3,750,196 $ 3,599,194 $ 3,405,234 $ 3,514,092 $ 14,268,716 Gross profit $ 501,731 $ 463,339 $ 446,620 $ 475,837 $ 1,887,527 CarMax Auto Finance income $ 94,615 $ 92,574 $ 89,722 $ 90,383 $ 367,294 Selling, general and administrative expenses $ 313,446 $ 297,638 $ 316,632 $ 330,009 $ 1,257,725 Net earnings $ 169,653 $ 154,518 $ 130,049 $ 143,138 $ 597,358 Net earnings per share: Basic $ 0.77 $ 0.71 $ 0.61 $ 0.68 $ 2.77 Diluted $ 0.76 $ 0.70 $ 0.60 $ 0.67 $ 2.73 (1) During the second quarter of fiscal 2016, we increased service department gross profits by $10.4 million , before tax, or $0.03 per share, due to a change in the timing of our recognition of reconditioning overhead costs. (2) During the second quarter of fiscal 2015, we reduced SG&A expenses by $20.9 million , before tax, or $0.06 per share, due to the receipt of settlement proceeds from a class action lawsuit. (3) During the fourth quarter of fiscal 2015, we reduced interest expense by $6.9 million , before tax, or $0.02 per share, for capitalized interest related to earlier quarters in fiscal 2015. |
Summary Of Significant Accoun25
Summary Of Significant Accounting Policies (Policy) | 12 Months Ended |
Feb. 29, 2016 | |
Accounting Policies [Abstract] | |
Basis Of Presentation And Use Of Estimates | Basis of Presentation and Use of Estimates The consolidated financial statements include the accounts of CarMax and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Certain prior year amounts have been reclassified to conform to the current year’s presentation. Amounts and percentages may not total due to rounding. In fiscal 2016, we reclassified New Vehicle Sales to Other Sales and Revenues and no longer separately present New Vehicle Sales. New Vehicle Sales represented approximately 1% of total sales in fiscal 2016. All periods presented have been revised for this new presentation. |
Cash And Cash Equivalents | Cash and Cash Equivalents Cash equivalents of approximately $109,000 as of February 29, 2016 , and $48,000 as of February 28, 2015 , consisted of highly liquid investments with original maturities of three months or less . |
Restricted Cash From Collections On Auto Loan Receivables | Restricted Cash from Collections on Auto Loan Receivables Cash equivalents totaling $343.8 million as of February 29, 2016 , and $294.1 million as of February 28, 2015 , consisted of collections of principal, interest and fee payments on securitized auto loan receivables that are restricted for payment to the securitization investors pursuant to the applicable securitization agreements. |
Marketable Securities | Marketable Securities The Company classifies its marketable securities as trading. These securities consisted primarily of mutual funds reported at fair value with unrealized gains and losses reflected as a component of other expense. Marketable securities as of February 29, 2016 and February 28, 2015 pertain to the Company’s restricted investments held in a rabbi trust and are reported in other assets. |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net of an allowance for doubtful accounts, includes certain amounts due from third-party finance providers and customers and other miscellaneous receivables. The allowance for doubtful accounts is estimated based on historical experience and trends. |
Securitizations | Securitizations We maintain a revolving securitization program composed of two warehouse facilities (“warehouse facilities”) that we use to fund auto loan receivables originated by CAF until we elect to fund them through a term securitization or alternative funding arrangement. We sell the auto loan receivables to one of two wholly owned, bankruptcy-remote, special purpose entities that transfer an undivided percentage ownership interest in the receivables, but not the receivables themselves, to entities formed by third-party investors. These entities issue asset-backed commercial paper or utilize other funding sources supported by the transferred receivables, and the proceeds are used to finance the securitized receivables. We typically use term securitizations to provide long-term funding for most of the auto loan receivables initially securitized through the warehouse facilities. In these transactions, a pool of auto loan receivables is sold to a bankruptcy-remote, special purpose entity that, in turn, transfers the receivables to a special purpose securitization trust. The securitization trust issues asset-backed securities, secured or otherwise supported by the transferred receivables, and the proceeds from the sale of the asset-backed securities are used to finance the securitized receivables. We are required to evaluate term securitization trusts for consolidation. In our capacity as servicer, we have the power to direct the activities of the trusts that most significantly impact the economic performance of the trusts. In addition, we have the obligation to absorb losses (subject to limitations) and the rights to receive any returns of the trusts, which could be significant. Accordingly, we are the primary beneficiary of the trusts and are required to consolidate them. We recognize transfers of auto loan receivables into the warehouse facilities and term securitizations (“securitization vehicles”) as secured borrowings, which result in recording the auto loan receivables and the related non-recourse notes payable on our consolidated balance sheets. The securitized receivables can only be used as collateral to settle obligations of the securitization vehicles. The securitization vehicles and investors have no recourse to our assets beyond the securitized receivables, the amounts on deposit in reserve accounts and the restricted cash from collections on auto loan receivables. We have not provided financial or other support to the securitization vehicles that was not previously contractually required, and there are no additional arrangements, guarantees or other commitments that could require us to provide financial support to the securitization vehicles. See Notes 4 and 11 for additional information on auto loan receivables and non-recourse notes payable. |
Fair Value Of Financial Instruments | Fair Value of Financial Instruments Due to the short-term nature and/or variable rates associated with these financial instruments, the carrying value of our cash and cash equivalents, restricted cash, accounts receivable, money market securities, accounts payable, short-term debt and long-term debt approximates fair value. Our derivative instruments and mutual funds are recorded at fair value. Auto loan receivables are presented net of an allowance for estimated loan losses. See Note 6 for additional information on fair value measurements. |
Inventory | Inventory Inventory is primarily comprised of vehicles held for sale or currently undergoing reconditioning and is stated at the lower of cost or market. Vehicle inventory cost is determined by specific identification. Parts, labor and overhead costs associated with reconditioning vehicles, as well as transportation and other incremental expenses associated with acquiring and reconditioning vehicles, are included in inventory. |
Auto Loan Receivables, Net | Auto Loan Receivables, Net Auto loan receivables include amounts due from customers related to retail vehicle sales financed through CAF. The receivables are presented net of an allowance for estimated loan losses. The allowance for loan losses represents an estimate of the amount of net losses inherent in our portfolio of managed receivables as of the applicable reporting date and anticipated to occur during the following 12 months. The allowance is primarily based on the credit quality of the underlying receivables, historical loss trends and forecasted forward loss curves. We also take into account recent trends in delinquencies and losses, recovery rates and the economic environment. The provision for loan losses is the periodic expense of maintaining an adequate allowance. An account is considered delinquent when the related customer fails to make a substantial portion of a scheduled payment on or before the due date. In general, accounts are charged-off on the last business day of the month during which the earliest of the following occurs: the receivable is 120 days or more delinquent as of the last business day of the month, the related vehicle is repossessed and liquidated, or the receivable is otherwise deemed uncollectible. For purposes of determining impairment, auto loans are evaluated collectively, as they represent a large group of smaller-balance homogeneous loans, and therefore, are not individually evaluated for impairment. See Note 4 for additional information on auto loan receivables. Interest income and expenses related to auto loans are included in CAF income. Interest income on auto loan receivables is recognized when earned based on contractual loan terms. All loans continue to accrue interest until repayment or charge-off. Direct costs associated with loan originations are not considered material, and thus, are expensed as incurred. See Note 3 for additional information on CAF income. |
Property And Equipment | Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the shorter of the asset’s estimated useful life or the lease term, if applicable. Costs incurred during new store construction are capitalized as construction-in-progress and reclassified to the appropriate fixed asset categories when the store is completed. Estimated Useful Lives Life Buildings 25 years Leasehold improvements 15 years Furniture, fixtures and equipment 3 – 15 years We review long-lived assets for impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We recognize impairment when the sum of undiscounted estimated future cash flows expected to result from the use of the asset is less than the carrying value of the asset. See Note 7 for additional information on property and equipment. |
Other Assets, Restricted | Other Assets Restricted Cash on Deposit in Reserve Accounts. The restricted cash on deposit in reserve accounts is for the benefit of holders of non-recourse notes payable, and these funds are not expected to be available to the company or its creditors. In the event that the cash generated by the securitized receivables in a given period was insufficient to pay the interest, principal and other required payments, the balances on deposit in the reserve accounts would be used to pay those amounts. Restricted cash on deposit in reserve accounts is invested in money market securities and was $46.6 million as of February 29, 2016 and $42.7 million as of February 28, 2015 . Restricted Investments. Restricted investments includes money market securities primarily held to satisfy certain insurance program requirements, as well as mutual funds held in a rabbi trust established to fund informally our executive deferred compensation plan. Restricted investments totaled $63.0 million as of February 29, 2016 and $52.4 million as of February 28, 2015 . |
Finance Lease Obligations | Finance Lease Obligations We generally account for sale-leaseback transactions as financings. Accordingly, we record certain of the assets subject to these transactions on our consolidated balance sheets in property and equipment and the related sales proceeds as finance lease obligations. Depreciation is recognized on the assets over their estimated useful lives, generally 25 years . A portion of the periodic lease payments is recognized as interest expense and the remainder reduces the obligation. In the event the leases are modified or extended beyond their original lease term, the related finance lease obligation is increased based on the present value of the revised future minimum lease payments on the date of the modification, with a corresponding increase to the net carrying amount of the assets subject to these transactions. See Notes 11 and 15 for additional information on finance lease obligations. |
Accrued Expenses | Accrued Expenses As of February 29, 2016 and February 28, 2015 , accrued expenses and other current liabilities included accrued compensation and benefits of $128.9 million and $148.4 million , respectively; loss reserves for general liability and workers’ compensation insurance of $39.6 million and $36.7 million , respectively; and the current portion of cancellation reserves. See Note 8 for additional information on cancellation reserves. |
Defined Benefit Plan Obligations | Defined Benefit Plan Obligations The recognized funded status of defined benefit retirement plan obligations is included both in accrued expenses and other current liabilities and in other liabilities. The current portion represents benefits expected to be paid from our benefit restoration plan over the next 12 months. The defined benefit retirement plan obligations are determined by independent actuaries using a number of assumptions provided by CarMax. Key assumptions used in measuring the plan obligations include the discount rate, rate of return on plan assets and mortality rate. See Note 10 for additional information on our benefit plans. |
Insurance Liabilities | Insurance Liabilities Insurance liabilities are included in accrued expenses and other current liabilities. We use a combination of insurance and self-insurance for a number of risks including workers’ compensation, general liability and employee-related health care costs, a portion of which is paid by associates. Estimated insurance liabilities are determined by considering historical claims experience, demographic factors and other actuarial assumptions. |
Revenue Recognition | Revenue Recognition We recognize revenue when the earnings process is complete, generally either at the time of sale to a customer or upon delivery to a customer. As part of our customer service strategy, we guarantee the retail vehicles we sell with a 5 -day, money-back guarantee. We record a reserve for estimated returns based on historical experience and trends. We also sell ESP and GAP products on behalf of unrelated third parties, who are the primary obligors, to customers who purchase a vehicle. The ESPs we currently offer on all used vehicles provide coverage up to 60 months (subject to mileage limitations), while GAP covers the customer for the term of their finance contract. We recognize revenue at the time of sale, net of a reserve for estimated contract cancellations. Periodically, we may receive additional revenue based upon the level of underwriting profits of the third parties who administer the products. These additional amounts are recognized as revenue when received. The reserve for cancellations is evaluated for each product, and is based on forecasted forward cancellation curves utilizing historical experience, recent trends and credit mix of the customer base. Our risk related to contract cancellations is limited to the revenue that we receive. Cancellations fluctuate depending on the volume of EPP sales, customer financing default or prepayment rates, and shifts in customer behavior, including those related to changes in the coverage or term of the product. The current portion of estimated cancellation reserves is recognized as a component of accrued expenses and other current liabilities with the remaining amount recognized in other liabilities. See Note 8 for additional information on cancellation reserves. Customers applying for financing who are not approved or are conditionally approved by CAF are generally evaluated by other third-party finance providers. These providers generally either pay us or are paid a fixed, pre-negotiated fee per contract. We recognize these fees at the time of sale. We collect sales taxes and other taxes from customers on behalf of governmental authorities at the time of sale. These taxes are accounted for on a net basis and are not included in net sales and operating revenues or cost of sales. |
Cost Of Sales | Cost of Sales Cost of sales includes the cost to acquire vehicles and the reconditioning and transportation costs associated with preparing the vehicles for resale. It also includes payroll, fringe benefits and parts, labor and overhead costs associated with reconditioning and vehicle repair services. The gross profit earned by our service department for used vehicle reconditioning service is a reduction of cost of sales. We maintain a reserve to eliminate the internal profit on vehicles that have not been sold. |
Selling, General And Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative (“SG&A”) expenses primarily include compensation and benefits, other than payroll related to reconditioning and vehicle repair services; depreciation, rent and other occupancy costs; advertising; and IT expenses, insurance, bad debt, travel, preopening and relocation costs, charitable contributions and other administrative expenses. |
Advertising Expenses | Advertising Expenses Advertising costs are expensed as incurred and substantially all are included in SG&A expenses. Total advertising expenses were $142.2 million in fiscal 2016 , $124.3 million in fiscal 2015 and $114.6 million in fiscal 2014 . |
Store Opening Expenses | Store Opening Expenses Costs related to store openings, including preopening costs, are expensed as incurred and are included in SG&A expenses. |
Share-Based Compensation | Share-Based Compensation Share-based compensation represents the cost related to share-based awards granted to employees and non-employee directors. We measure share-based compensation cost at the grant date, based on the estimated fair value of the award, and we recognize the cost on a straight-line basis (net of estimated forfeitures) over the grantee’s requisite service period, which is generally the vesting period of the award. We estimate the fair value of stock options using a binomial valuation model. Key assumptions used in estimating the fair value of options are dividend yield, expected volatility, risk-free interest rate and expected term. The fair values of restricted stock and stock-settled performance stock units are based on the volume-weighted average market value on the date of the grant. The fair value of stock-settled restricted stock units is determined using a Monte-Carlo simulation based on the expected market price of our common stock on the vesting date and the expected number of converted common shares. Cash-settled restricted stock units are liability awards with fair value measurement based on the market price of CarMax common stock as of the end of each reporting period. Share-based compensation expense is recorded in either cost of sales, CAF income or SG&A expenses based on the recipients’ respective function. We record deferred tax assets for awards that result in deductions on our income tax returns, based on the amount of compensation expense recognized and the statutory tax rate in the jurisdiction in which we will receive a deduction. Differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the income tax return are recorded in capital in excess of par value (if the tax deduction exceeds the deferred tax asset) or in the consolidated statements of earnings (if the deferred tax asset exceeds the tax deduction and no capital in excess of par value exists from previous awards). See Note 12 for additional information on stock-based compensation. |
Derivative Instruments And Hedging Activities | Derivative Instruments and Hedging Activities We enter into derivative instruments to manage certain risks arising from both our business operations and economic conditions that result in the future known receipt or payment of uncertain cash amounts, the values of which are impacted by interest rates. We recognize the derivatives at fair value as either current assets or current liabilities on the consolidated balance sheets, and where applicable, such contracts covered by master netting agreements are reported net. Gross positive fair values are netted with gross negative fair values by counterparty. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. We may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting may not apply or we do not elect to apply hedge accounting. See Note 5 for additional information on derivative instruments and hedging activities. |
Income Taxes | Income Taxes We file a consolidated federal income tax return for a majority of our subsidiaries. Certain subsidiaries are required to file separate partnership or corporate federal income tax returns. Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax purposes, measured by applying currently enacted tax laws. A deferred tax asset is recognized if it is more likely than not that a benefit will be realized. Changes in tax laws and tax rates are reflected in the income tax provision in the period in which the changes are enacted. We evaluate the need to record valuation allowances that would reduce deferred tax assets to the amount that will more likely than not be realized. When assessing the need for valuation allowances, we consider available loss carrybacks, tax planning strategies, future reversals of existing temporary differences and future taxable income. We recognize tax liabilities when, despite our belief that our tax return positions are supportable, we believe that certain positions may not be fully sustained upon review by tax authorities. Benefits from tax positions are measured at the highest tax benefit that is greater than 50% likely of being realized upon settlement. The current portion of these tax liabilities is included in accrued income taxes and any noncurrent portion is included in other liabilities. To the extent that the final tax outcome of these matters is different from the amounts recorded, the differences impact income tax expense in the period in which the determination is made. Interest and penalties related to income tax matters are included in SG&A expenses. See Note 9 for additional information on income taxes. |
Net Earnings Per Share | Net Earnings Per Share Basic net earnings per share is computed by dividing net earnings available for basic common shares by the weighted average number of shares of common stock outstanding. Diluted net earnings per share is computed by dividing net earnings available for diluted common shares by the sum of the weighted average number of shares of common stock outstanding and dilutive potential common stock. Diluted net earnings per share is calculated using the “if-converted” treasury stock method. See Note 13 for additional information on net earnings per share. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In April 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting pronouncement (FASB ASU 2014-8) related to discontinued operations (FASB ASC Topic 205). The standard raises the threshold for disposals to qualify as a discontinued operation by focusing on strategic shifts that have or will have a major effect on an entity’s operations and financial results. The standard also requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of discontinued operations. We adopted this pronouncement for our fiscal year beginning March 1, 2015 and there was no effect on our consolidated financial statements. In November 2015, the FASB issued an accounting pronouncement (FASB ASU 2015-17), which simplifies the balance sheet classification of deferred taxes. This pronouncement requires that all deferred tax assets and liabilities be classified as noncurrent in the classified balance sheet, rather than separating such deferred taxes into current and noncurrent amounts, as is required under current guidance. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016, and may be applied either prospectively or retrospectively. We early adopted this pronouncement, on a retrospective basis, for our fiscal year ending February 29, 2016. As a result, we have reclassified $8.1 million of deferred taxes from current assets to noncurrent assets for the fiscal year ended February 28, 2015 to conform to the current year presentation. In February 2015, the FASB issued an accounting pronouncement (FASB ASU 2015-2) related to the elimination of guidance which has allowed entities with interests in certain investment funds to follow earlier consolidation guidance and makes changes to both the variable interest model and the voting model (FASB ASC 810). This standard will require all entities to re-evaluate consolidation conclusions regarding variable interest entities. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. We will adopt this pronouncement for our fiscal year beginning March 1, 2016. We do not expect this pronouncement to have a material effect on our consolidated financial statements. In May 2015, the FASB issued an accounting pronouncement (FASB ASU 2015-7), which eliminates the requirement for entities to categorize within the fair value hierarchy investments for which fair values are measured at net asset value (“NAV”) per share (FASB ASC Subtopic 820-10). This standard also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the NAV per share practical expedient, instead limiting disclosures to investments for which the entity has elected the expedient. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015, and retrospective adoption is required. We will adopt this pronouncement for our fiscal year beginning March 1, 2016. We do not expect this pronouncement to have a material effect on our consolidated financial statements. In July 2015, the FASB issued an accounting pronouncement (FASB ASU 2015-11), which simplifies the subsequent measurement of inventory by replacing the lower of cost or market test with a lower of cost or net realizable value (“NRV”) test. NRV is calculated as the estimated selling price less reasonably predictable costs of completion, disposal and transportation. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016, and prospective adoption is required. We will adopt this pronouncement for our fiscal year beginning March 1, 2017. We do not expect this pronouncement to have a material effect on our consolidated financial statements. In August 2015, the FASB issued an accounting pronouncement (FASB ASU 2015-14), which deferred the effective date of FASB ASU 2014-09, Revenue from Contracts with Customers , for all entities by one year. As a result, that accounting standard is now effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Based on this amendment, we will adopt FASB ASU 2014-09 for our fiscal year beginning March 1, 2018. We do not expect this pronouncement to have a material effect on our consolidated financial statements. In August 2015, the FASB issued an accounting pronouncement (FASB ASU 2015-15) related to the presentation of debt issuance costs. This standard clarifies the guidance set forth in FASB ASU 2015-03, which required that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the debt liability rather than as an asset. The new pronouncement clarifies that debt issuance costs related to line-of-credit arrangements could continue to be presented as an asset and be subsequently amortized over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the arrangement. We will consider this clarification in conjunction with our adoption of FASB ASU 2015-03, which will occur for our fiscal year beginning March 1, 2016 and do not expect it to have a material impact on our consolidated financial statements. In January 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-01) related to financial instruments (FASB ASC Subtopic 825-10). This pronouncement requires that most equity investments be measured at fair value, with subsequent changes in fair value recognized in net income. The pronouncement also impacts financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. We will adopt this pronouncement for our fiscal year beginning March 1, 2018 and are currently evaluating the effect on our consolidated financial statements. In February 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-02) related to the accounting for leases. This pronouncement requires lessees to record most leases on their balance sheet, while expense recognition on the income statement remains similar to current lease accounting guidance. The guidance also eliminates real estate-specific provisions and modifies certain aspects of lessor accounting. Under the new guidance, lease classification as either a finance lease or an operating lease will determine how lease-related revenue and expense are recognized. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. We will adopt this pronouncement for our fiscal year beginning March 1, 2019 and are currently evaluating the effect on our consolidated financial statements. In March 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-06) related to the embedded derivative analysis for debt instruments with contingent call or put options. This pronouncement clarifies that an exercise contingency does not need to be evaluated to determine whether it relates only to interest rates or credit risk. Instead, the contingent put or call option should be evaluated for possible bifurcation as a derivative in accordance with the four-step decision sequence detailed in FASB ASC 815-15, without regard to the nature of the exercise contingency. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. We are currently in the process of evaluating the effects of this pronouncement on our consolidated financial statements, including potential early adoption. In March 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-08) related to reporting revenue gross versus net, or principal versus agent considerations. This pronouncement is meant to clarify the guidance in FASB ASU 2014-09, Revenue from Contracts with Customers , as it pertains to principal versus agent considerations. Specifically, the guidance addresses how entities should identify goods and services being provided to a customer, the unit of account for a principal versus agent assessment, how to evaluate whether a good or service is controlled before being transferred to a customer, and how to assess whether an entity controls services performed by another party. The pronouncement has the same effective date as the new revenue standard, which is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. We will adopt this pronouncement for our fiscal year beginning March 1, 2018 and are currently evaluating the effect on our consolidated financial statements. In March 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-09) related to simplifications of employee share-based payment accounting. This pronouncement eliminates the APIC pool concept and requires that excess tax benefits and tax deficiencies be recorded in the income statement when awards are settled. The pronouncement also addresses simplifications related to statement of cash flows classification, accounting for forfeitures, and minimum statutory tax withholding requirements. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. We will adopt this pronouncement for our fiscal year beginning March 1, 2017 and are currently evaluating the effect on our consolidated financial statements. In April 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-10) related to identifying performance obligations and licensing. This pronouncement is meant to clarify the guidance in FASB ASU 2014-09, Revenue from Contracts with Customers . Specifically, the guidance addresses an entity’s identification of its performance obligations in a contract, as well as an entity’s evaluation of the nature of its promise to grant a license of intellectual property and whether or not that revenue is recognized over time or at a point in time. The pronouncement has the same effective date as the new revenue standard, which is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. We will adopt this pronouncement for our fiscal year beginning March 1, 2018 and do not expect it to have a material impact on our consolidated financial statements. |
Summary Of Significant Accoun26
Summary Of Significant Accounting Policies (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Accounting Policies [Abstract] | |
Schedule Of Estimated Useful Lives Of Property And Equipment | Estimated Useful Lives Life Buildings 25 years Leasehold improvements 15 years Furniture, fixtures and equipment 3 – 15 years |
CarMax Auto Finance (Tables)
CarMax Auto Finance (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
CarMax Auto Finance Income [Abstract] | |
Components Of CarMax Auto Finance Income | Components of CAF Income Years Ended February 29 or 28 (In millions) 2016 % (1) 2015 % (1) 2014 % (1) Interest margin: Interest and fee income $ 682.9 7.5 $ 604.9 7.7 $ 548.0 8.3 Interest expense (127.7 ) (1.4 ) (96.6 ) (1.2 ) (90.0 ) (1.4 ) Total interest margin 555.2 6.1 508.3 6.5 458.0 6.9 Provision for loan losses (101.2 ) (1.1 ) (82.3 ) (1.0 ) (72.2 ) (1.1 ) Total interest margin after provision for loan losses 454.0 5.0 426.0 5.4 385.8 5.8 Total other (expense) income (0.4 ) — — — 0.1 — Direct expenses: Payroll and fringe benefit expense (28.2 ) (0.3 ) (25.3 ) (0.3 ) (22.6 ) (0.3 ) Other direct expenses (33.4 ) (0.4 ) (33.4 ) (0.4 ) (27.1 ) (0.4 ) Total direct expenses (61.6 ) (0.7 ) (58.7 ) (0.7 ) (49.7 ) (0.8 ) CarMax Auto Finance income $ 392.0 4.3 $ 367.3 4.7 $ 336.2 5.1 Total average managed receivables $ 9,092.9 $ 7,859.9 $ 6,629.5 (1) Percent of total average managed receivables. |
Auto Loan Receivables (Tables)
Auto Loan Receivables (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Loans Receivable, Net [Abstract] | |
Auto Loan Receivables, Net | Auto Loans Receivable, Net As of February 29 or 28 (In millions) 2016 2015 Term securitizations $ 7,828.0 $ 7,226.5 Warehouse facilities 1,399.0 986.0 Other receivables (1) 366.6 246.2 Total ending managed receivables 9,593.6 8,458.7 Accrued interest and fees 35.0 31.2 Other 3.2 27.3 Less allowance for loan losses (94.9 ) (81.7 ) Auto loan receivables, net $ 9,536.9 $ 8,435.5 (1) Other receivables includes receivables not funded through the warehouse facilities or term securitizations, including receivables restricted as excess collateral for those funding arrangements. |
Ending Managed Receivables By Major Credit Grade | Ending Managed Receivables by Major Credit Grade As of February 29 or 28 (In millions) 2016 (1) % (2 ) 2015 (1) % ( 2) A $ 4,666.6 48.6 $ 4,135.6 48.9 B 3,400.1 35.4 3,055.3 36.1 C and other 1,526.9 16.0 1,267.8 15.0 Total ending managed receivables $ 9,593.6 100.0 $ 8,458.7 100.0 (1) Classified based on credit grade assigned when customers were initially approved for financing. (2) Percent of total ending managed receivables. |
Allowance For Loan Losses | Allowance for Loan Losses As of February 29 or 28 (In millions) 2016 % (1 ) 2015 % (1 ) Balance as of beginning of year $ 81.7 0.97 $ 69.9 0.97 Charge-offs (180.6 ) (155.9 ) Recoveries 92.6 85.4 Provision for loan losses 101.2 82.3 Balance as of end of year $ 94.9 0.99 $ 81.7 0.97 (1) Percent of total ending managed receivables. |
Past Due Receivables | Past Due Receivables As of February 29 or 28 (In millions) 2016 % (1 ) 2015 % ( 1) Total ending managed receivables $ 9,593.6 100.0 $ 8,458.7 100.0 Delinquent loans: 31-60 days past due $ 171.0 1.8 $ 152.1 1.8 61-90 days past due 69.1 0.7 52.5 0.6 Greater than 90 days past due 22.7 0.2 16.8 0.2 Total past due $ 262.8 2.7 $ 221.4 2.6 (1) Percent of total ending managed receivables. |
Derivative Instruments And He29
Derivative Instruments And Hedging Activities (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Values Of Derivative Instruments On The Consolidated Balance Sheets | Fair Values of Derivative Instruments As of February 29 or 28 2016 2015 (In thousands) Assets (1) Liabilities (2) Assets (1) Liabilities (2) Derivatives designated as accounting hedges: Interest rate swaps $ 587 $ (8,024 ) $ 1,201 $ (1,064 ) (1) Reported in other current assets on the consolidated balance sheets. (2) Reported in accounts payable on the consolidated balance sheets. |
Schedule Of Effect Of Derivative Instruments On The Consolidated Statements Of Earnings | Effect of Derivative Instruments on Comprehensive Income Years Ended February 29 or 28 (In thousands) 2016 2015 2014 Derivatives designated as accounting hedges: Loss recognized in AOCL (1) $ (20,715 ) $ (5,847 ) $ (5,286 ) Loss reclassified from AOCL into CAF income (1) $ (8,277 ) $ (8,118 ) $ (9,872 ) (Loss) gain recognized in CAF income (2) $ (439 ) $ — $ 76 (1) Represents the effective portion. (2) Represents the ineffective portion. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule Of Items Measured At Fair Value On A Recurring Basis | Items Measured at Fair Value on a Recurring Basis As of February 29, 2016 (In thousands) Level 1 Level 2 Total Assets: Money market securities $ 439,943 $ — $ 439,943 Mutual fund investments 13,622 — 13,622 Derivative instruments — 587 587 Total assets at fair value $ 453,565 $ 587 $ 454,152 Percent of total assets at fair value 99.9 % 0.1 % 100.0 % Percent of total assets 3.1 % — % 3.1 % Liabilities: Derivative instruments $ — $ (8,024 ) $ (8,024 ) Total liabilities at fair value $ — $ (8,024 ) $ (8,024 ) Percent of total liabilities — % 0.1 % 0.1 % As of February 28, 2015 (In thousands) Level 1 Level 2 Total Assets: Money market securities $ 380,100 $ — $ 380,100 Mutual fund investments 9,242 — 9,242 Derivative instruments — 1,201 1,201 Total assets at fair value $ 389,342 $ 1,201 $ 390,543 Percent of total assets at fair value 99.7 % 0.3 % 100.0 % Percent of total assets 2.9 % — % 3.0 % Liabilities: Derivative instruments $ — $ (1,064 ) $ (1,064 ) Total liabilities at fair value $ — $ (1,064 ) $ (1,064 ) Percent of total liabilities — % — % — % |
Property And Equipment (Tables)
Property And Equipment (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule Of Property And Equipment | As of February 29 or 28 (In thousands) 2016 2015 Land $ 510,068 $ 398,288 Land held for development 85,127 151,306 Buildings 1,650,168 1,390,802 Leasehold improvements 174,495 146,140 Furniture, fixtures and equipment 443,050 389,650 Construction in progress 224,109 209,058 Total property and equipment 3,087,017 2,685,244 Less accumulated depreciation and amortization 925,319 822,706 Property and equipment, net $ 2,161,698 $ 1,862,538 |
Cancellation Reserves (Tables)
Cancellation Reserves (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Cancellation Reserves [Abstract] | |
Schedule Of Cancellation Reserves Accrual | Cancellation Reserves As of February 29 or 28 (In millions) 2016 2015 Balance as of beginning of year $ 94.4 $ 72.5 Cancellations (61.3 ) (49.1 ) Provision for future cancellations 77.1 71.0 Balance as of end of year $ 110.2 $ 94.4 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule Of Income Tax Provision | Income Tax Provision Years Ended February 29 or 28 (In thousands) 2016 2015 2014 Current: Federal $ 324,096 $ 329,211 $ 283,174 State 45,183 47,061 38,747 Total 369,279 376,272 321,921 Deferred: Federal 16,398 (3,499 ) (15,129 ) State 839 (800 ) (2,056 ) Total 17,237 (4,299 ) (17,185 ) Income tax provision $ 386,516 $ 371,973 $ 304,736 |
Schedule Of Effective Income Tax Rate Reconciliation | Effective Income Tax Rate Reconciliation Years Ended February 29 or 28 2016 2015 2014 Federal statutory income tax rate 35.0 % 35.0 % 35.0 % State and local income taxes, net of federal benefit 3.2 3.4 3.1 Nondeductible and other items 0.2 0.2 0.2 Credits (0.1 ) (0.2 ) (0.1 ) Effective income tax rate 38.3 % 38.4 % 38.2 % |
Schedule Of Temporary Differences Resulting In Deferred Tax Assets And Liabilities | Temporary Differences Resulting in Deferred Tax Assets and Liabilities As of February 29 or 28 (In thousands) 2016 2015 Deferred tax assets: Accrued expenses $ 60,341 $ 52,933 Partnership basis 97,586 95,443 Stock compensation 56,606 63,148 Derivatives 8,320 4,010 Capital loss carry forward 1,807 1,597 Total deferred tax assets 224,660 217,131 Less: valuation allowance (1,807 ) (1,597 ) Total deferred tax assets after valuation allowance 222,853 215,534 Deferred tax liabilities: Prepaid expenses 19,496 17,935 Property and equipment 32,691 14,816 Inventory 8,804 7,045 Total deferred tax liabilities 60,991 39,796 Net deferred tax asset $ 161,862 $ 175,738 |
Schedule Of Reconciliation Of Unrecognized Tax Benefits | Reconciliation of Unrecognized Tax Benefits Years Ended February 29 or 28 (In thousands) 2016 2015 2014 Balance at beginning of year $ 24,951 $ 26,330 $ 25,059 Increases for tax positions of prior years 125 1,549 1,523 Decreases for tax positions of prior years (853 ) (5,999 ) (4,658 ) Increases based on tax positions related to the current year 5,256 5,467 5,960 Settlements (830 ) (612 ) (809 ) Lapse of statute (1,878 ) (1,784 ) (745 ) Balance at end of year $ 26,771 $ 24,951 $ 26,330 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Benefit Plan Information | Benefit Plan Information As of February 29 or 28 Pension Plan Restoration Plan Total (In thousands) 2016 2015 2016 2015 2016 2015 Plan assets $ 121,746 $ 135,249 $ — $ — $ 121,746 $ 135,249 Projected benefit obligation 201,715 218,189 10,662 11,052 212,377 229,241 Funded status recognized $ (79,969 ) $ (82,940 ) $ (10,662 ) $ (11,052 ) $ (90,631 ) $ (93,992 ) Amounts recognized in the consolidated balance sheets: Current liability $ — $ — $ (459 ) $ (462 ) $ (459 ) $ (462 ) Noncurrent liability (79,969 ) (82,940 ) (10,203 ) (10,590 ) (90,172 ) (93,530 ) Net amount recognized $ (79,969 ) $ (82,940 ) $ (10,662 ) $ (11,052 ) $ (90,631 ) $ (93,992 ) |
Components Of Net Pension Expense | Years Ended February 29 or 28 Pension Plan Restoration Plan Total (In thousands) 2016 2015 2014 2016 2015 2014 2016 2015 2014 Total net pension expense $ 847 $ 363 $ 1,341 $ 456 $ 453 $ 433 $ 1,303 $ 816 $ 1,774 Total net actuarial (gain) loss (1) $ (1,786 ) $ 33,286 $ (16,268 ) $ (428 ) $ 840 $ 803 $ (2,214 ) $ 34,126 $ (15,465 ) (1) Changes recognized in Accumulated Other Comprehensive Loss |
Schedule Of Assumptions Used | Assumptions Used to Determine Benefit Obligations As of February 29 or 28 Pension Plan Restoration Plan 2016 2015 2016 2015 Discount rate (1) 4.50 % 4.00 % 4.50 % 4.00 % (1) For the restoration plan, the discount rate presented is applied to the pre-2004 annuity amounts. A rate of 4.50% is assumed for the post-2004 lump sum amounts paid from the plan for fiscal 2016 and fiscal 2015 . Assumptions Used to Determine Net Pension Expense Years Ended February 29 or 28 Pension Plan Restoration Plan 2016 2015 2014 2016 2015 2014 Discount rate (1) 4.00 % 4.55 % 4.30 % 4.00 % 4.55 % 4.30 % Expected rate of return on plan assets 7.75 % 7.75 % 7.75 % — % — % — % (1) For the restoration plan, the discount rate presented is applied to the pre-2004 annuity amounts. A rate of 4.50% is assumed for post-2004 lump sum amounts paid from the plan for fiscal 2016 , fiscal 2015 and fiscal 2014 . |
Schedule Of Fair Value Of Plan Assets | Fair Value of Plan Assets And Fair Value Hierarchy As of February 29 or 28 (In thousands) 2016 2015 Mutual funds (Level 1): Equity securities $ 78,951 $ 84,303 Equity securities – international 15,771 17,114 Fixed income securities 25,978 32,549 Collective funds (Level 2): Short-term investments 1,096 1,341 Investment payables, net (50 ) (58 ) Total $ 121,746 $ 135,249 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Debt Disclosure [Abstract] | |
Schedule Of Debt | As of February 29 or 28 (In thousands) 2016 2015 Revolving credit facility $ 415,428 $ 10,785 Term loan 300,000 300,000 Finance and capital lease obligations 414,654 327,838 Non-recourse notes payable 9,527,750 8,470,629 Total debt 10,657,832 9,109,252 Less: current portion (315,509 ) (290,502 ) Long-term debt, net of current portion $ 10,342,323 $ 8,818,750 |
Stock And Stock-Based Incenti36
Stock And Stock-Based Incentive Plans (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Share-based Compensation [Abstract] | |
Schedule Of Common Stock Repurchases | Common Stock Repurchases Years Ended February 29 or 28 2016 2015 2014 Number of shares repurchased (in thousands) 16,300.1 17,511.0 6,859.5 Average cost per share $ 59.59 $ 52.13 $ 44.61 Available for repurchase, as of end of year (in millions) $ 1,398.0 $ 2,369.3 $ 282.1 |
Composition Of Share-Based Compensation Expense | Composition of Share-Based Compensation Expense Years Ended February 29 or 28 (In thousands) 2016 2015 2014 Cost of sales $ 1,243 $ 4,236 $ 3,200 CarMax Auto Finance income 1,458 5,898 2,983 Selling, general and administrative expenses 49,725 73,020 61,487 Share-based compensation expense, before income taxes $ 52,426 $ 83,154 $ 67,670 |
Composition Of Share-Based Compensation Expense - By Grant Type | Composition of Share-Based Compensation Expense – By Grant Type Years Ended February 29 or 28 (In thousands) 2016 2015 2014 Nonqualified stock options $ 25,399 $ 28,954 $ 23,914 Cash-settled restricted stock units 11,913 38,539 29,551 Stock-settled market stock units 10,589 13,299 12,515 Stock-settled performance stock units 1,919 — — Employee stock purchase plan 1,349 1,274 1,190 Stock grants to non-employee directors — — 500 Restricted stock to non-employee directors 1,257 1,088 — Share-based compensation expense, before income taxes $ 52,426 $ 83,154 $ 67,670 Unrecognized Share- Based Compensation Expense – By Grant Type As of February 29, 2016 (Costs in millions) Unrecognized Compensation Costs Weighted Average Remaining Recognition Life (Years) Nonqualified stock options $ 34.3 2.0 Stock-settled market stock units 11.7 0.9 Stock-settled performance stock units 2.9 2.1 Restricted stock to non-employee directors 0.1 0.3 Total $ 49.0 1.7 |
Stock Option Activity | Stock Option Activity Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic (Shares and intrinsic value in thousands) Shares Price Life (Years) Value Outstanding as of February 28, 2015 7,645 $ 35.59 Options granted 1,408 73.43 Options exercised (1,711 ) 27.49 Options forfeited or expired (20 ) 69.68 Outstanding as of February 29, 2016 7,322 $ 44.67 4.2 $ 49,575 Exercisable as of February 29, 2016 3,501 $ 35.02 3.2 $ 39,561 |
Outstanding Stock Options | Stock Option Information Years Ended February 29 or 28 2016 2015 2014 Options granted 1,408,427 2,056,789 1,605,149 Weighted average grant date fair value per share $ 20.53 $ 13.28 $ 15.59 Cash received from options exercised (in millions) $ 47.0 $ 89.8 $ 45.1 Intrinsic value of options exercised (in millions) $ 70.4 $ 153.3 $ 62.5 Realized tax benefits from exercises (in millions) $ 28.2 $ 61.7 $ 25.1 |
Assumptions Used To Estimate Option Values | Assumptions Used to Estimate Option Values Years Ended February 29 or 28 2016 2015 2014 Dividend yield 0.0 % 0.0 % 0.0 % Expected volatility factor (1) 25.8 % - 31.8 % 25.2 % - 32.7 % 27.9 % - 46.8 % Weighted average expected volatility 30.6 % 31.8 % 44.7 % Risk-free interest rate (2) — % - 2.1 % 0.01 % - 2.7 % 0.02 % - 2.6 % Expected term (in years) (3) 4.7 4.7 4.7 (1) Measured using historical daily price changes of our stock for a period corresponding to the term of the options and the implied volatility derived from the market prices of traded options on our stock. (2) Based on the U.S. Treasury yield curve at the time of grant. (3) Represents the estimated number of years that options will be outstanding prior to exercise. |
Restricted Stock Awards And Restricted Stock Unit Activity | Restricted Stock Awards Activity Weighted Average Number of Grant Date (Units in thousands) Units Fair Value Outstanding as of February 28, 2015 23 $ 51.18 Stock units granted 19 $ 68.16 Stock units vested and converted (25 ) $ 52.49 Stock units cancelled — — Outstanding as of February 29, 2016 17 $ 68.16 Stock-Settled Performance Stock Unit Information Years Ended February 29 or 28 2016 2015 2014 Stock units granted 66,446 — — Weighted average grant date fair value per share $ 72.58 $ — $ — Cash-Settled Restricted Stock Unit Activity Weighted Average Number of Grant Date (Units in thousands) Units Fair Value Outstanding as of February 28, 2015 1,530 $ 39.81 Stock units granted 418 $ 73.76 Stock units vested and converted (529 ) $ 32.35 Stock units cancelled (99 ) $ 51.29 Outstanding as of February 29, 2016 1,320 $ 52.70 Cash-Settled Restricted Stock Unit Information Years Ended February 29 or 28 2016 2015 2014 Stock units granted 418,281 587,990 541,819 Initial grant date fair value per share $ 73.76 $ 44.96 $ 42.68 Payments (before payroll tax withholdings) upon vesting (in millions) $ 33.6 $ 21.8 $ 23.3 Realized tax benefits from vesting (in millions) $ 13.5 $ 8.8 $ 9.3 Stock-Settled Market Stock Unit Activity Weighted Average Number of Grant Date (Units in thousands) Units Fair Value Outstanding as of February 28, 2015 774 $ 48.30 Stock units granted 110 $ 89.73 Stock units vested and converted (339 ) $ 41.33 Stock units cancelled (2 ) $ 90.46 Outstanding as of February 29, 2016 543 $ 60.90 Stock-Settled Performance Stock Unit Activity Weighted Average Number of Grant Date (Units in thousands) Units Fair Value Outstanding as of February 28, 2015 — $ — Stock units granted 66 $ 72.58 Stock units vested and converted — $ — Stock units cancelled — $ — Outstanding as of February 29, 2016 66 $ 72.58 Stock-Settled Market Stock Unit Information Years Ended February 29 or 28 2016 2015 2014 Stock units granted 109,956 249,801 237,660 Weighted average grant date fair value per share $ 89.73 $ 55.48 $ 52.02 Realized tax benefits from vesting (in millions) $ 17.0 $ 8.1 $ 7.9 Restricted Stock Awards Information Years Ended February 29 or 28 2016 2015 2014 Restricted stock granted 19,070 22,860 — Weighted average grant date fair value per share $ 68.16 $ 51.18 $ — Realized tax benefits from vesting (in millions) $ 0.7 $ — $ — |
Expected Cash Settlement Range Upon Restricted Stock Unit Vesting | Expected Cash Settlement Range Upon Restricted Stock Unit Vesting As of February 29, 2016 (In thousands) Minimum (1) Maximum (1) Fiscal 2017 $ 13,679 $ 36,477 Fiscal 2018 15,947 42,524 Fiscal 2019 18,822 50,193 Total expected cash settlements $ 48,448 $ 129,194 (1) Net of estimated forfeitures. |
Employee Stock Purchase Plan | Years Ended February 29 or 28 2016 2015 2014 Shares purchased on the open market 176,595 184,390 188,797 Average purchase price per share $ 59.93 $ 52.18 $ 47.35 |
Net Earnings Per Share (Tables)
Net Earnings Per Share (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Earnings Per Share [Abstract] | |
Basic And Dilutive Net Earnings Per Share Reconciliations | Basic and Dilutive Net Earnings Per Share Reconciliations Years Ended February 29 or 28 (In thousands except per share data) 2016 2015 2014 Net earnings $ 623,428 $ 597,358 $ 492,586 Weighted average common shares outstanding 203,275 215,617 223,589 Dilutive potential common shares: Stock options 1,676 2,369 3,255 Stock-settled restricted stock units 589 705 740 Weighted average common shares and dilutive potential common shares 205,540 218,691 227,584 Basic net earnings per share $ 3.07 $ 2.77 $ 2.20 Diluted net earnings per share $ 3.03 $ 2.73 $ 2.16 |
Accumulated Other Comprehensi38
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Changes In Accumulated Other Comprehensive Loss By Component | Changes in Accumulated Other Comprehensive Loss By Component Total Net Accumulated Unrecognized Net Other Actuarial Unrecognized Comprehensive (In thousands, net of income taxes) Losses Hedge Losses Loss Balance as of February 28, 2013 $ (49,479 ) $ (10,329 ) $ (59,808 ) Other comprehensive income (loss) before reclassifications 9,713 (3,216 ) 6,497 Amounts reclassified from accumulated other comprehensive loss 1,051 5,989 7,040 Other comprehensive income 10,764 2,773 13,537 Balance as of February 28, 2014 (38,715 ) (7,556 ) (46,271 ) Other comprehensive loss before reclassifications (21,358 ) (3,535 ) (24,893 ) Amounts reclassified from accumulated other comprehensive loss 853 4,920 5,773 Other comprehensive (loss) income (20,505 ) 1,385 (19,120 ) Balance as of February 28, 2015 (59,220 ) (6,171 ) (65,391 ) Other comprehensive income (loss) before reclassifications 1,462 (12,578 ) (11,116 ) Amounts reclassified from accumulated other comprehensive loss 1,288 5,023 6,311 Other comprehensive income (loss) 2,750 (7,555 ) (4,805 ) Balance as of February 29, 2016 $ (56,470 ) $ (13,726 ) $ (70,196 ) |
Changes In And Reclassifications Out Of Accumulated Other Comprehensive Loss | Changes In and Reclassifications Out of Accumulated Other Comprehensive Loss Years Ended February 29 or 28 (In thousands) 2016 2015 2014 Retirement Benefit Plans (Note 10): Actuarial gain (loss) arising during the year $ 2,214 $ (34,126 ) $ 15,465 Tax (expense) benefit (752 ) 12,768 (5,752 ) Actuarial gain (loss) arising during the year, net of tax 1,462 (21,358 ) 9,713 Actuarial loss amortization reclassifications recognized in net pension expense: Cost of sales 835 558 669 CarMax Auto Finance income 49 31 38 Selling, general and administrative expenses 1,173 772 967 Total amortization reclassifications recognized in net pension expense 2,057 1,361 1,674 Tax expense (769 ) (508 ) (623 ) Amortization reclassifications recognized in net pension expense, net of tax 1,288 853 1,051 Net change in retirement benefit plan unrecognized actuarial losses, net of tax 2,750 (20,505 ) 10,764 Cash Flow Hedges (Note 5): Effective portion of changes in fair value (20,715 ) (5,847 ) (5,286 ) Tax benefit 8,137 2,312 2,070 Effective portion of changes in fair value, net of tax (12,578 ) (3,535 ) (3,216 ) Reclassifications to CarMax Auto Finance income 8,277 8,118 9,872 Tax expense (3,254 ) (3,198 ) (3,883 ) Reclassification of hedge losses, net of tax 5,023 4,920 5,989 Net change in cash flow hedge unrecognized losses, net of tax (7,555 ) 1,385 2,773 Total other comprehensive (loss) income, net of tax $ (4,805 ) $ (19,120 ) $ 13,537 |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Leases [Abstract] | |
Schedule Of Future Minimum Lease Obligations | Future Minimum Lease Obligations As of February 29, 2016 Operating Capital Finance Lease (In thousands) Lease (1) Leases (1) Commitments (1) Fiscal 2017 $ 354 $ 48,390 $ 44,430 Fiscal 2018 354 47,199 44,853 Fiscal 2019 354 45,394 45,975 Fiscal 2020 354 44,876 44,221 Fiscal 2021 393 36,404 39,778 Fiscal 2022 and thereafter 4,417 556,774 469,694 Total minimum lease payments 6,226 $ 779,037 $ 688,951 Less amounts representing interest (3,451 ) Present value of net minimum lease payments $ 2,775 (1) Excludes taxes, insurance and other costs payable directly by us. These costs vary from year to year and are incurred in the ordinary course of business. |
Selected Quarterly Financial 40
Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule Of Selected Quarterly Financial Data (Unaudited) | 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Fiscal Year (In thousands, except per share data) 2016 2016 (1) 2016 2016 2016 Net sales and operating revenues $ 4,014,888 $ 3,884,913 $ 3,544,069 $ 3,705,805 $ 15,149,675 Gross profit $ 543,794 $ 521,370 $ 464,331 $ 489,265 $ 2,018,760 CarMax Auto Finance income $ 109,108 $ 98,279 $ 92,316 $ 92,333 $ 392,036 Selling, general and administrative expenses $ 349,779 $ 330,784 $ 337,512 $ 333,860 $ 1,351,935 Net earnings $ 181,974 $ 172,228 $ 128,199 $ 141,027 $ 623,428 Net earnings per share: Basic $ 0.87 $ 0.83 $ 0.64 $ 0.72 $ 3.07 Diluted $ 0.86 $ 0.82 $ 0.63 $ 0.71 $ 3.03 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Fiscal Year (In thousands, except per share data) 2015 2015 (2) 2015 2015 (3) 2015 Net sales and operating revenues $ 3,750,196 $ 3,599,194 $ 3,405,234 $ 3,514,092 $ 14,268,716 Gross profit $ 501,731 $ 463,339 $ 446,620 $ 475,837 $ 1,887,527 CarMax Auto Finance income $ 94,615 $ 92,574 $ 89,722 $ 90,383 $ 367,294 Selling, general and administrative expenses $ 313,446 $ 297,638 $ 316,632 $ 330,009 $ 1,257,725 Net earnings $ 169,653 $ 154,518 $ 130,049 $ 143,138 $ 597,358 Net earnings per share: Basic $ 0.77 $ 0.71 $ 0.61 $ 0.68 $ 2.77 Diluted $ 0.76 $ 0.70 $ 0.60 $ 0.67 $ 2.73 (1) During the second quarter of fiscal 2016, we increased service department gross profits by $10.4 million , before tax, or $0.03 per share, due to a change in the timing of our recognition of reconditioning overhead costs. (2) During the second quarter of fiscal 2015, we reduced SG&A expenses by $20.9 million , before tax, or $0.06 per share, due to the receipt of settlement proceeds from a class action lawsuit. (3) During the fourth quarter of fiscal 2015, we reduced interest expense by $6.9 million , before tax, or $0.02 per share, for capitalized interest related to earlier quarters in fiscal 2015. |
Business And Background (Detail
Business And Background (Details) | 12 Months Ended |
Feb. 29, 2016segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Summary Of Significant Accoun42
Summary Of Significant Accounting Policies (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2016USD ($)warehouse | Feb. 28, 2015USD ($) | Feb. 28, 2014USD ($) | |
Cash equivalents | $ 109 | $ 48 | |
Liquid investments, maturity period | three months or less | ||
Restricted cash from collections on auto loan receivables | $ 343,829 | 294,122 | |
Number of warehouses | warehouse | 2 | ||
Required benchmark for account delinquency, in days | 120 days | ||
Restricted cash on deposit in reserve accounts | $ 46,600 | 42,700 | |
Restricted investments | 63,000 | 52,400 | |
Accrued compensation and benefits | 128,900 | 148,400 | |
General liability and workers' compensation insurance | $ 39,600 | 36,700 | |
Retail vehicle sales money-back guarantee period, in days | 5 days | ||
ESPs offered on all used vehicles provide coverage for a period of time, in months | 60 months | ||
Advertising expenses | $ 142,200 | 124,300 | $ 114,600 |
Finance Leases | |||
Estimated useful life average, years | 25 years | ||
New Accounting Pronouncement, Early Adoption, Effect | |||
Deferred taxes | $ 8,100 | ||
New Vehicles | New Vehicle Sales Risk | Sales Revenue, Net | |||
Percent of total sales | 1.00% |
Summary Of Significant Accoun43
Summary Of Significant Accounting Policies (Schedule Of Estimated Useful Lives) (Details) | 12 Months Ended |
Feb. 29, 2016 | |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life average, years | 25 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life average, years | 15 years |
Minimum | Furniture, fixtures and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life average, years | 3 years |
Maximum | Furniture, fixtures and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life average, years | 15 years |
CarMax Auto Finance (Components
CarMax Auto Finance (Components Of CarMax Auto Finance Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 29, 2016 | Nov. 30, 2015 | Aug. 31, 2015 | May. 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2014 | Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Auto Finance Income [Line Items] | |||||||||||
Interest and fee income | $ 682,900 | $ 604,900 | $ 548,000 | ||||||||
Interest expense | (127,700) | (96,600) | (90,000) | ||||||||
Total interest margin | 555,200 | 508,300 | 458,000 | ||||||||
Provision for loan losses | (101,200) | (82,300) | (72,200) | ||||||||
Total interest margin after provision for loan losses | 454,000 | 426,000 | 385,800 | ||||||||
Total other (expense) income | (400) | 0 | 100 | ||||||||
Payroll and fringe benefit expense | (28,200) | (25,300) | (22,600) | ||||||||
Other direct expenses | (33,400) | (33,400) | (27,100) | ||||||||
Total direct expenses | (61,600) | (58,700) | (49,700) | ||||||||
CarMax Auto Finance income | $ 92,333 | $ 92,316 | $ 98,279 | $ 109,108 | $ 90,383 | $ 89,722 | $ 92,574 | $ 94,615 | 392,036 | 367,294 | 336,167 |
Total average managed receivables | $ 9,092,900 | $ 7,859,900 | $ 6,629,500 | ||||||||
Interest And Fee Income, Percent | |||||||||||
Auto Finance Income [Line Items] | |||||||||||
Item as percent of total average managed receivables | 7.50% | 7.70% | 8.30% | ||||||||
Interest Expense, Percent | |||||||||||
Auto Finance Income [Line Items] | |||||||||||
Item as percent of total average managed receivables | (1.40%) | (1.20%) | (1.40%) | ||||||||
Total Interest Margin, Percent | |||||||||||
Auto Finance Income [Line Items] | |||||||||||
Item as percent of total average managed receivables | 6.10% | 6.50% | 6.90% | ||||||||
Provision For Loan Losses, Percent | |||||||||||
Auto Finance Income [Line Items] | |||||||||||
Item as percent of total average managed receivables | (1.10%) | (1.00%) | (1.10%) | ||||||||
Total Interest Margin After Provision For Loan Losses, Percent | |||||||||||
Auto Finance Income [Line Items] | |||||||||||
Item as percent of total average managed receivables | 5.00% | 5.40% | 5.80% | ||||||||
Other Income, Percent | |||||||||||
Auto Finance Income [Line Items] | |||||||||||
Item as percent of total average managed receivables | 0.00% | 0.00% | 0.00% | ||||||||
Payroll And Fringe Benefit Expense, Percent | |||||||||||
Auto Finance Income [Line Items] | |||||||||||
Item as percent of total average managed receivables | (0.30%) | (0.30%) | (0.30%) | ||||||||
Other Direct Expenses, Percent | |||||||||||
Auto Finance Income [Line Items] | |||||||||||
Item as percent of total average managed receivables | (0.40%) | (0.40%) | (0.40%) | ||||||||
Total Direct Expenses, Percent | |||||||||||
Auto Finance Income [Line Items] | |||||||||||
Item as percent of total average managed receivables | (0.70%) | (0.70%) | (0.80%) | ||||||||
CAF Income, Percent | |||||||||||
Auto Finance Income [Line Items] | |||||||||||
Item as percent of total average managed receivables | 4.30% | 4.70% | 5.10% |
Auto Loan Receivables (Auto Loa
Auto Loan Receivables (Auto Loan Receivables, Net) (Details) - USD ($) $ in Thousands | Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 |
Non-recourse notes payable | $ 9,527,750 | $ 8,470,629 | |
Total ending managed receivables | 9,593,600 | 8,458,700 | |
Accrued interest and fees | 35,000 | 31,200 | |
Other | 3,200 | 27,300 | |
Less allowance for loan losses | (94,900) | (81,700) | $ (69,900) |
Auto loan receivables, net | 9,536,892 | 8,435,504 | |
Term securitizations | |||
Total ending managed receivables | 7,828,000 | 7,226,500 | |
Warehouse facilities | |||
Total ending managed receivables | 1,399,000 | 986,000 | |
Other Receivables | |||
Total ending managed receivables | $ 366,600 | $ 246,200 |
Auto Loan Receivables (Ending M
Auto Loan Receivables (Ending Managed Receivables By Major Credit Grade) (Details) - USD ($) $ in Millions | Feb. 29, 2016 | Feb. 28, 2015 |
Financing Receivable, By Major Credit Grade [Line Items] | ||
Total ending managed receivables | $ 9,593.6 | $ 8,458.7 |
Total ending managed receivables as percentage by major credit grade | 100.00% | 100.00% |
Credit Grade A | ||
Financing Receivable, By Major Credit Grade [Line Items] | ||
Total ending managed receivables | $ 4,666.6 | $ 4,135.6 |
Total ending managed receivables as percentage by major credit grade | 48.60% | 48.90% |
Credit Grade B | ||
Financing Receivable, By Major Credit Grade [Line Items] | ||
Total ending managed receivables | $ 3,400.1 | $ 3,055.3 |
Total ending managed receivables as percentage by major credit grade | 35.40% | 36.10% |
Credit Grade C And Other | ||
Financing Receivable, By Major Credit Grade [Line Items] | ||
Total ending managed receivables | $ 1,526.9 | $ 1,267.8 |
Total ending managed receivables as percentage by major credit grade | 16.00% | 15.00% |
Auto Loan Receivables (Allowanc
Auto Loan Receivables (Allowance For Loan Losses) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Balance as of beginning of year | $ 81.7 | $ 69.9 | |
Charge-offs | (180.6) | (155.9) | |
Recoveries | 92.6 | 85.4 | |
Provision for loan losses | 101.2 | 82.3 | $ 72.2 |
Balance as of end of year | $ 94.9 | $ 81.7 | $ 69.9 |
Allowance For Loan Losses | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Item as percent of total ending managed receivables | 0.99% | 0.97% | 0.97% |
Auto Loan Receivables (Past Due
Auto Loan Receivables (Past Due Receivables) (Details) - USD ($) $ in Millions | Feb. 29, 2016 | Feb. 28, 2015 |
Financing Receivable, Past Due [Line Items] | ||
Total ending managed receivables | $ 9,593.6 | $ 8,458.7 |
Total past due | $ 262.8 | $ 221.4 |
Past due receivables as a percentage of total ending managed receivables | 2.70% | 2.60% |
Managed Receivables | ||
Financing Receivable, Past Due [Line Items] | ||
Item as percent of total ending managed receivables | 100.00% | 100.00% |
31-60 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due receivables as a percentage of total ending managed receivables | 1.80% | 1.80% |
61-90 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due receivables as a percentage of total ending managed receivables | 0.70% | 0.60% |
Greater than 90 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due receivables as a percentage of total ending managed receivables | 0.20% | 0.20% |
31-60 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | $ 171 | $ 152.1 |
61-90 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 69.1 | 52.5 |
Greater than 90 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | $ 22.7 | $ 16.8 |
Derivative Instruments And He49
Derivative Instruments And Hedging Activities (Narrative) (Details) - Designated As Hedging Instrument - Cash Flow Hedging - USD ($) $ in Millions | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Derivative [Line Items] | ||
Additional reclassification as decrease from AOCL to CAF income | $ 10.5 | |
Derivative notional amount | $ 2,420 | $ 1,400 |
Derivative Instruments And He50
Derivative Instruments And Hedging Activities (Fair Values Of Derivative Instruments On The Consolidated Balance Sheets) (Details) - Designated As Hedging Instrument - Interest rate swaps - USD ($) $ in Thousands | Feb. 29, 2016 | Feb. 28, 2015 |
Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Assets | $ 587 | $ 1,201 |
Accounts Payable | ||
Derivatives, Fair Value [Line Items] | ||
Liabilities | $ (8,024) | $ (1,064) |
Derivative Instruments And He51
Derivative Instruments And Hedging Activities (Schedule Of Effect Of Derivative Instruments On The Consolidated Statements Of Comprehensive Income) (Details) - Designated As Hedging Instrument - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Derivative [Line Items] | |||
Gain (loss) recognized in AOCL | $ (20,715) | $ (5,847) | $ (5,286) |
Loss reclassified from AOCL into CAF Income | (8,277) | (8,118) | (9,872) |
(Loss) gain recognized in CAF income | $ (439) | $ 0 | $ 76 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule Of Items Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Thousands | Feb. 29, 2016 | Feb. 28, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market securities | $ 439,943 | $ 380,100 |
Mutual fund investments | 13,622 | 9,242 |
Derivative instruments | 587 | 1,201 |
Total assets at fair value | $ 454,152 | $ 390,543 |
Percent of total assets at fair value | 100.00% | 100.00% |
Percent of total assets | 3.10% | 3.00% |
Derivative instruments | $ (8,024) | $ (1,064) |
Total liabilities at fair value | $ (8,024) | $ (1,064) |
Percent of total liabilities | 0.10% | 0.00% |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market securities | $ 439,943 | $ 380,100 |
Mutual fund investments | 13,622 | 9,242 |
Derivative instruments | 0 | 0 |
Total assets at fair value | $ 453,565 | $ 389,342 |
Percent of total assets at fair value | 99.90% | 99.70% |
Percent of total assets | 3.10% | 2.90% |
Derivative instruments | $ 0 | $ 0 |
Total liabilities at fair value | $ 0 | $ 0 |
Percent of total liabilities | 0.00% | 0.00% |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market securities | $ 0 | $ 0 |
Mutual fund investments | 0 | 0 |
Derivative instruments | 587 | 1,201 |
Total assets at fair value | $ 587 | $ 1,201 |
Percent of total assets at fair value | 0.10% | 0.30% |
Percent of total assets | 0.00% | 0.00% |
Derivative instruments | $ (8,024) | $ (1,064) |
Total liabilities at fair value | $ (8,024) | $ (1,064) |
Percent of total liabilities | 0.10% | 0.00% |
Property And Equipment (Schedul
Property And Equipment (Schedule Of Property And Equipment) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 3,087,017 | $ 2,685,244 | |
Less accumulated depreciation and amortization | 925,319 | 822,706 | |
Property and equipment, net | 2,161,698 | 1,862,538 | |
Depreciation expense | 127,000 | 105,700 | $ 90,400 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 510,068 | 398,288 | |
Land held for development | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 85,127 | 151,306 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 1,650,168 | 1,390,802 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 174,495 | 146,140 | |
Furniture, fixtures and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 443,050 | 389,650 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 224,109 | $ 209,058 |
Cancellation Reserves (Narrativ
Cancellation Reserves (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Cancellation Reserves [Abstract] | |||
Cancellation reserves, current portion | $ 54.4 | $ 44.8 | |
Error correction, impact to earnings | $ (11.9) | ||
Error correction, tax effect | $ (7.6) | ||
Error correction, impact to EPS | $ (0.05) |
Cancellation Reserves (Schedule
Cancellation Reserves (Schedule Of Cancellation Reserves Accrual) (Details) - Cancellation Reserves - USD ($) $ in Millions | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance as of beginning of year | $ 94.4 | $ 72.5 |
Cancellations | (61.3) | (49.1) |
Provision for future cancellations | 77.1 | 71 |
Balance as of end of year | $ 110.2 | $ 94.4 |
Income Taxes (Schedule Of Incom
Income Taxes (Schedule Of Income Tax Provision) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Income Tax Disclosure [Abstract] | |||
Current, Federal | $ 324,096 | $ 329,211 | $ 283,174 |
Current, State | 45,183 | 47,061 | 38,747 |
Current, Total | 369,279 | 376,272 | 321,921 |
Deferred, Federal | 16,398 | (3,499) | (15,129) |
Deferred, State | 839 | (800) | (2,056) |
Deferred, Total | 17,237 | (4,299) | (17,185) |
Income tax provision | $ 386,516 | $ 371,973 | $ 304,736 |
Income Taxes (Schedule Of Effec
Income Taxes (Schedule Of Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 35.00% | 35.00% | 35.00% |
State and local income taxes, net of federal benefit | 3.20% | 3.40% | 3.10% |
Nondeductible and other items | 0.20% | 0.20% | 0.20% |
Credits | (0.10%) | (0.20%) | (0.10%) |
Effective income tax rate | 38.30% | 38.40% | 38.20% |
Income Taxes (Schedule Of Tempo
Income Taxes (Schedule Of Temporary Differences Resulting In Deferred Tax Assets And Liabilities) (Details) - USD ($) $ in Thousands | Feb. 29, 2016 | Feb. 28, 2015 |
Income Tax Disclosure [Abstract] | ||
Accrued expenses | $ 60,341 | $ 52,933 |
Partnership basis | 97,586 | 95,443 |
Stock compensation | 56,606 | 63,148 |
Derivatives | 8,320 | 4,010 |
Capital loss carry forward | 1,807 | 1,597 |
Total deferred tax assets | 224,660 | 217,131 |
Less: valuation allowance | (1,807) | (1,597) |
Total deferred tax assets after valuation allowance | 222,853 | 215,534 |
Prepaid expenses | 19,496 | 17,935 |
Property and equipment | 32,691 | 14,816 |
Inventory | 8,804 | 7,045 |
Total deferred tax liabilities | 60,991 | 39,796 |
Net deferred tax asset | $ 161,862 | $ 175,738 |
Income Taxes (Schedule Of Recon
Income Taxes (Schedule Of Reconciliation Of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of year | $ 24,951 | $ 26,330 | $ 25,059 |
Increases for tax positions of prior years | 125 | 1,549 | 1,523 |
Decreases for tax positions of prior years | (853) | (5,999) | (4,658) |
Increases based on tax positions related to the current year | 5,256 | 5,467 | 5,960 |
Settlements | (830) | (612) | (809) |
Lapse of statute | (1,878) | (1,784) | (745) |
Balance at end of year | $ 26,771 | $ 24,951 | $ 26,330 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | |
Income Tax Disclosure [Abstract] | ||||
Unrecognized tax benefits, gross | $ 26,771 | $ 24,951 | $ 26,330 | $ 25,059 |
Unrecognized tax benefits that would impact effective tax rate, if recognized | 10,300 | 9,600 | 7,600 | |
Increase (decrease) in accrued interest | 600 | (200) | ||
Accrued interest | $ 2,000 | $ 1,400 | $ 1,600 |
Benefit Plans (Narrative) (Deta
Benefit Plans (Narrative) (Details) | 12 Months Ended | ||
Feb. 29, 2016USD ($)defined_benefit_plan | Feb. 28, 2015USD ($) | Feb. 28, 2014USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Number of frozen noncontributory plans | defined_benefit_plan | 2 | ||
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Estimated future amortization of actuarial losses | $ 1,500,000 | ||
Expected contributions to the pension plan next year | 0 | ||
Benefit payments next twelve months | $ 3,000,000 | ||
Benefit payments year two | 3,000,000 | ||
Benefit payments year three | 4,000,000 | ||
Benefit payments year four | 4,000,000 | ||
Benefit payments year five | 4,000,000 | ||
Restoration Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Estimated future amortization of actuarial losses | 0 | ||
Expected contributions to the pension plan next year | 500,000 | ||
Expected contributions to the pension plan year two | 500,000 | ||
Expected contributions to the pension plan year three | 500,000 | ||
Expected contributions to the pension plan year four | 500,000 | ||
Expected contributions to the pension plan year five | 500,000 | ||
Retirement Savings Plan401k | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total cost for company contributions | $ 29,800,000 | $ 27,900,000 | $ 25,000,000 |
Equity securities | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets target allocation | 75.00% | ||
Fixed income securities | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets target allocation | 25.00% |
Benefit Plans (Benefit Plan Inf
Benefit Plans (Benefit Plan Information) (Details) - USD ($) $ in Thousands | Feb. 29, 2016 | Feb. 28, 2015 |
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | $ 121,746 | $ 135,249 |
Projected benefit obligation | 212,377 | 229,241 |
Funded status recognized | (90,631) | (93,992) |
Current liability | (459) | (462) |
Noncurrent liability | (90,172) | (93,530) |
Net amount recognized | (90,631) | (93,992) |
Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 121,746 | 135,249 |
Projected benefit obligation | 201,715 | 218,189 |
Funded status recognized | (79,969) | (82,940) |
Current liability | 0 | 0 |
Noncurrent liability | (79,969) | (82,940) |
Net amount recognized | (79,969) | (82,940) |
Restoration Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 0 | 0 |
Projected benefit obligation | 10,662 | 11,052 |
Funded status recognized | (10,662) | (11,052) |
Current liability | (459) | (462) |
Noncurrent liability | (10,203) | (10,590) |
Net amount recognized | $ (10,662) | $ (11,052) |
Benefit Plans (Components Of Ne
Benefit Plans (Components Of Net Pension Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total net pension expense | $ 1,303 | $ 816 | $ 1,774 |
Total net actuarial (gain) loss (1) | (2,214) | 34,126 | (15,465) |
Pension Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total net pension expense | 847 | 363 | 1,341 |
Total net actuarial (gain) loss (1) | (1,786) | 33,286 | (16,268) |
Restoration Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total net pension expense | 456 | 453 | 433 |
Total net actuarial (gain) loss (1) | $ (428) | $ 840 | $ 803 |
Benefit Plans (Assumptions Used
Benefit Plans (Assumptions Used To Determine Benefit Obligations) (Details) | Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 |
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate (1) | 4.50% | 4.00% | |
Restoration Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate (1) | 4.50% | 4.00% | |
Post2004 Lump Sum Payment Assumption | Restoration Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate (1) | 4.50% | 4.50% | 4.50% |
Benefit Plans (Assumptions Us65
Benefit Plans (Assumptions Used To Determine Net Pension Expense) (Details) | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate (1) | 4.00% | 4.55% | 4.30% |
Expected rate of return on plan assets | 7.75% | 7.75% | 7.75% |
Discount rate (1) | 4.50% | 4.00% | |
Restoration Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate (1) | 4.00% | 4.55% | 4.30% |
Expected rate of return on plan assets | 0.00% | 0.00% | 0.00% |
Discount rate (1) | 4.50% | 4.00% | |
Post2004 Lump Sum Payment Assumption | Restoration Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate (1) | 4.50% | 4.50% | 4.50% |
Benefit Plans (Schedule Of Fair
Benefit Plans (Schedule Of Fair Value Of Plan Assets) (Details) - USD ($) $ in Thousands | Feb. 29, 2016 | Feb. 28, 2015 |
Defined Benefit Plan Disclosure [Line Items] | ||
Total | $ 121,746 | $ 135,249 |
Level 1 | Investment payables, net | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | (50) | (58) |
Equity securities | Level 1 | Mutual funds (Level 1): | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 78,951 | 84,303 |
Equity securities | Level 2 | Collective funds (Level 2): | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 1,096 | 1,341 |
Equity securities – international | Level 1 | Mutual funds (Level 1): | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 15,771 | 17,114 |
Fixed income securities | Level 1 | Mutual funds (Level 1): | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | $ 25,978 | $ 32,549 |
Debt (Schedule Of Debt) (Detail
Debt (Schedule Of Debt) (Details) - USD ($) $ in Thousands | Feb. 29, 2016 | Feb. 28, 2015 |
Debt Instrument [Line Items] | ||
Finance and capital lease obligations | $ 414,654 | $ 327,838 |
Non-recourse notes payable | 9,527,750 | 8,470,629 |
Total debt | 10,657,832 | 9,109,252 |
Less: current portion | (315,509) | (290,502) |
Long-term debt, net of current portion | 10,342,323 | 8,818,750 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Revolving credit facility, Term loan | 415,428 | 10,785 |
Term loan | ||
Debt Instrument [Line Items] | ||
Revolving credit facility, Term loan | $ 300,000 | $ 300,000 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Debt Instrument [Line Items] | |||
Non-recourse notes payable | $ 9,527,750,000 | $ 8,470,629,000 | |
Cash paid for interest | 34,300,000 | 24,200,000 | |
Capitalized interest | 9,200,000 | $ 8,900,000 | $ 0 |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity of revolving credit facility | 1,200,000,000 | ||
Outstanding borrowing | 415,000,000 | ||
Unused capacity | $ 784,600,000 | ||
Interest rate | 1.46% | 1.56% | 1.52% |
Term loan | |||
Debt Instrument [Line Items] | |||
Outstanding borrowing | $ 300,000,000 | $ 300,000,000 | |
Loan amount | $ 300,000,000 | ||
Variable rates | 1.43% | ||
Amount remained outstanding | $ 300,000,000 | ||
Finance And Capital Lease Obligation | |||
Debt Instrument [Line Items] | |||
Finance lease modifications | 103,200,000 | ||
Term Securitizations Debt | |||
Debt Instrument [Line Items] | |||
Non-recourse notes payable | $ 8,130,000,000 | ||
Debt maturity, end | Aug. 15, 2022 | ||
Warehouse Facilities | |||
Debt Instrument [Line Items] | |||
Non-recourse notes payable | $ 1,400,000,000 | ||
Warehouse facility increase | 200,000,000 | ||
Warehouse facilities maximum borrowing capacity | 2,500,000,000 | ||
Warehouse facility unused capacity | 1,100,000,000 | ||
Warehouse Facility Expiring August 2016 | |||
Debt Instrument [Line Items] | |||
Warehouse facilities maximum borrowing capacity | 1,000,000,000 | ||
Warehouse Facility Expiring February 2017 | |||
Debt Instrument [Line Items] | |||
Warehouse facilities maximum borrowing capacity | $ 1,500,000,000 | ||
Minimum | Finance And Capital Lease Obligation | |||
Debt Instrument [Line Items] | |||
Initial lease terms, in years | 15 years | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Initial lease terms, in years | 20 years | ||
Maximum | Finance And Capital Lease Obligation | |||
Debt Instrument [Line Items] | |||
Initial lease terms, in years | 20 years |
Stock And Stock-Based Incenti69
Stock And Stock-Based Incentive Plans (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | |
Stock and Stock-Based Incentive Plans | ||||
Capitalized share-based compensation | $ 0 | $ 0 | $ 0 | |
October 2014 Authorization | ||||
Stock and Stock-Based Incentive Plans | ||||
Share repurchase, authorization expiration | Dec. 31, 2016 | |||
Preferred Stock | ||||
Stock and Stock-Based Incentive Plans | ||||
Preferred shares authorized (in shares) | 20,000,000 | |||
Preferred Stock, par value (in dollars per share) | $ 20 | |||
Preferred stock shares outstanding (in shares) | 0 | |||
Share Repurchase Program | FY 2013 Share Repurchase Authorizations Member | ||||
Stock and Stock-Based Incentive Plans | ||||
Share repurchase, authorized amount | $ 800,000,000 | |||
Share Repurchase Program | FY 2015 Share Repurchase Authorization Member | ||||
Stock and Stock-Based Incentive Plans | ||||
Share repurchase, authorized amount | $ 3,000,000,000 | |||
Share Repurchase Program | March 2014 Authorization | ||||
Stock and Stock-Based Incentive Plans | ||||
Share repurchase, authorized amount | $ 1,000,000,000 | |||
Share Repurchase Program | October 2014 Authorization | ||||
Stock and Stock-Based Incentive Plans | ||||
Share repurchase, authorized amount | $ 2,000,000,000 | |||
Stock Incentive Plan | ||||
Stock and Stock-Based Incentive Plans | ||||
Common stock, shares authorized (in shares) | 50,200,000 | |||
Common shares reserved for future grants | 6,738,122 | |||
Stock Option | Minimum | ||||
Stock and Stock-Based Incentive Plans | ||||
Vesting period, in years | 1 year | |||
Stock Option | Maximum | ||||
Stock and Stock-Based Incentive Plans | ||||
Vesting period, in years | 4 years | |||
Years until expiration | 10 years | |||
Cash-Settled Restricted Stock Units | ||||
Stock and Stock-Based Incentive Plans | ||||
Vesting period, in years | 3 years | |||
Cash-Settled Restricted Stock Units | Minimum | ||||
Stock and Stock-Based Incentive Plans | ||||
Cash payment per RSU, percentage | 75.00% | |||
Cash-Settled Restricted Stock Units | Maximum | ||||
Stock and Stock-Based Incentive Plans | ||||
Cash payment per RSU, percentage | 200.00% | |||
Stock-Settled Market Stock Units | ||||
Stock and Stock-Based Incentive Plans | ||||
Vesting period, in years | 3 years | |||
Conversion ratio, number of final trading days in vesting period | 40 days | |||
Stock-Settled Market Stock Units | Minimum | ||||
Stock and Stock-Based Incentive Plans | ||||
MSUs converted to common stock, shares | 0 | |||
Stock-Settled Market Stock Units | Maximum | ||||
Stock and Stock-Based Incentive Plans | ||||
Quotient cap | 2 | |||
MSUs converted to common stock, shares | 2 | |||
Restricted Stock Awards | ||||
Stock and Stock-Based Incentive Plans | ||||
Vesting period, in years | 1 year | |||
Employee Stock Purchase Plan | ||||
Stock and Stock-Based Incentive Plans | ||||
Common stock, shares authorized (in shares) | 8,000,000 | |||
Associate contribution limit | 10.00% | |||
Associate contribution limit, value | $ 7,500 | |||
Company match | $ 0.15 | |||
Shares remained available under the purchase plan (in shares) | 3,363,688 | |||
Performance Shares | ||||
Stock and Stock-Based Incentive Plans | ||||
Vesting period, in years | 3 years | |||
Performance Shares | Minimum | ||||
Stock and Stock-Based Incentive Plans | ||||
PSU EBIT threshold for conversion | 25.00% | |||
Performance Shares | Maximum | ||||
Stock and Stock-Based Incentive Plans | ||||
PSU EBIT threshold for conversion | 200.00% |
Stock And Stock-Based Incenti70
Stock And Stock-Based Incentive Plans (Schedule Of Common Stock Repurchases) (Details) - Share Repurchase Program - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares repurchased | 16,300,100 | 17,511,000 | 6,859,500 |
Average cost per share (in dollars per share) | $ 59.59 | $ 52.13 | $ 44.61 |
Available for repurchase, as of end of year (in millions) | $ 1,398 | $ 2,369.3 | $ 282.1 |
Stock And Stock-Based Incenti71
Stock And Stock-Based Incentive Plans (Composition Of Share-Based Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense, before income taxes | $ 52,426 | $ 83,154 | $ 67,670 |
Cost of sales | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense, before income taxes | 1,243 | 4,236 | 3,200 |
CAF Income | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense, before income taxes | 1,458 | 5,898 | 2,983 |
Selling, general and administrative expenses | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense, before income taxes | $ 49,725 | $ 73,020 | $ 61,487 |
Stock And Stock-Based Incenti72
Stock And Stock-Based Incentive Plans (Composition Of Share-Based Compensation Expense - By Grant Type) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense, before income taxes | $ 52,426 | $ 83,154 | $ 67,670 |
Nonqualified stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense, before income taxes | 25,399 | 28,954 | 23,914 |
Cash-settled restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense, before income taxes | 11,913 | 38,539 | 29,551 |
Stock-settled market stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense, before income taxes | 10,589 | 13,299 | 12,515 |
Stock-settled performance stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense, before income taxes | 1,919 | 0 | 0 |
Employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense, before income taxes | 1,349 | 1,274 | 1,190 |
Stock grants to non-employee directors | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense, before income taxes | 0 | 0 | 500 |
Restricted stock to non-employee directors | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense, before income taxes | $ 1,257 | $ 1,088 | $ 0 |
Stock And Stock-Based Incenti73
Stock And Stock-Based Incentive Plans Stock And Stock-Based Incentive Plans (Unrecognized Compensation Expense) (Details) $ in Millions | 12 Months Ended |
Feb. 29, 2016USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Costs | $ 49 |
Weighted Average Remaining Recognition Life (Years) | 1 year 8 months 12 days |
Nonqualified stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Costs | $ 34.3 |
Weighted Average Remaining Recognition Life (Years) | 2 years |
Stock-settled market stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Costs | $ 11.7 |
Weighted Average Remaining Recognition Life (Years) | 10 months 24 days |
Stock-settled performance stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Costs | $ 2.9 |
Weighted Average Remaining Recognition Life (Years) | 2 years 1 month 6 days |
Restricted stock to non-employee directors | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Costs | $ 0.1 |
Weighted Average Remaining Recognition Life (Years) | 3 months 18 days |
Stock And Stock-Based Incenti74
Stock And Stock-Based Incentive Plans (Stock Option Activity) (Details) - Stock Option $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Feb. 29, 2016USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding as of February 28, 2015, Number of Shares | shares | 7,645 |
Options granted, Number of Shares | shares | 1,408 |
Options exercised, Number of Shares | shares | (1,711) |
Options forfeited or expired, Number of Shares | shares | (20) |
Outstanding as of February 29, 2016, Number of Shares | shares | 7,322 |
Exercisable as of February 29, 2016, Number of Shares | shares | 3,501 |
Outstanding as of February 28, 2015, Weighted Average Exercise Price | $ / shares | $ 35.59 |
Options granted, Weighted Average Exercise Price | $ / shares | 73.43 |
Options exercised, Weighted Average Exercise Price | $ / shares | 27.49 |
Options forfeited or expired, Weighted Average Exercise Price | $ / shares | 69.68 |
Outstanding as of February 29, 2016, Weighted Average Exercise Price | $ / shares | 44.67 |
Exercisable as of February 29, 2016, Weighted Average Exercise Price | $ / shares | $ 35.02 |
Outstanding as of February 29, 2016, Weighted Average Remaining Contractual Life (Years) | 4 years 2 months 12 days |
Exercisable as of February 29, 2016, Weighted Average Remaining Contractual Life (Years) | 3 years 2 months 12 days |
Outstanding as of February 29, 2016, Aggregate Intrinsic Value | $ | $ 49,575 |
Exercisable as of February 29, 2016, Aggregate Intrinsic Value | $ | $ 39,561 |
Stock And Stock-Based Incenti75
Stock And Stock-Based Incentive Plans (Assumptions Used To Estimate Option Values) (Details) | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Share-based Compensation [Abstract] | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility factor, Minimum | 25.80% | 25.20% | 27.90% |
Expected volatility factor, Maximum | 31.80% | 32.70% | 46.80% |
Weighted average expected volatility | 30.60% | 31.80% | 44.70% |
Risk-free interest rate, Minimum | 0.00% | 0.01% | 0.02% |
Risk-free interest rate, Maximum | 2.10% | 2.70% | 2.60% |
Expected term (in years) | 4 years 8 months 12 days | 4 years 8 months 12 days | 4 years 8 months 12 days |
Stock And Stock-Based Incenti76
Stock And Stock-Based Incentive Plans Stock And Stock-Based Incentive Plans (Settled) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options granted, Number of Shares | 1,408,427 | 2,056,789 | 1,605,149 |
Weighted average grant date fair value per share | $ 20.53 | $ 13.28 | $ 15.59 |
Cash received from options exercised (in millions) | $ 47 | $ 89.8 | $ 45.1 |
Intrinsic value of options exercised (in millions) | 70.4 | 153.3 | 62.5 |
Realized tax benefits from exercises (in millions) | $ 28.2 | $ 61.7 | $ 25.1 |
Cash-Settled Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock units granted, Number of Units | 418,281 | 587,990 | 541,819 |
Initial weighted average grant date fair value per share | $ 73.76 | $ 44.96 | $ 42.68 |
Payments (before payroll tax withholdings) upon vesting | $ 33.6 | $ 21.8 | $ 23.3 |
Realized tax benefits from exercises (in millions) | $ 13.5 | $ 8.8 | $ 9.3 |
Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock units granted, Number of Units | 19,070 | 22,860 | 0 |
Initial weighted average grant date fair value per share | $ 68.16 | $ 51.18 | $ 0 |
Realized tax benefits from exercises (in millions) | $ 0.7 | $ 0 | $ 0 |
Stock-Settled Market Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock units granted, Number of Units | 109,956 | 249,801 | 237,660 |
Initial weighted average grant date fair value per share | $ 89.73 | $ 55.48 | $ 52.02 |
Realized tax benefits from exercises (in millions) | $ 17 | $ 8.1 | $ 7.9 |
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock units granted, Number of Units | 66,446 | 0 | 0 |
Initial weighted average grant date fair value per share | $ 72.58 | $ 0 | $ 0 |
Stock And Stock-Based Incenti77
Stock And Stock-Based Incentive Plans (Cash-Settled Restricted Stock Unit Activity) (Details) - Cash-Settled Restricted Stock Units - $ / shares | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Outstanding at beginning of year, Number of Shares or Units | 1,530,000 | ||
Stock units granted, Number of Units | 418,281 | 587,990 | 541,819 |
Stock units vested and converted, Number of Units | (529,000) | ||
Stock units cancelled, Number of Units | (99,000) | ||
Outstanding at end of year, number of shares or Units | 1,320,000 | 1,530,000 | |
Outstanding as of February 28, 2015, Weighted Average Grant Date Fair Value | $ 39.81 | ||
Initial weighted average grant date fair value per share | 73.76 | $ 44.96 | $ 42.68 |
Stock units vested and converted, Weighted Average Grant Date Fair Value | 32.35 | ||
Stock units cancelled, Weighted Average Grant Date Fair Value | 51.29 | ||
Outstanding as of February 29, 2016, Weighted Average Grant Date Fair Value | $ 52.70 | $ 39.81 |
Stock And Stock-Based Incenti78
Stock And Stock-Based Incentive Plans (Expected Cash Settlement Range Upon Restricted Stock Unit Vesting) (Details) $ in Thousands | Feb. 29, 2016USD ($) |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fiscal 2,017 | $ 13,679 |
Fiscal 2,018 | 15,947 |
Fiscal 2,019 | 18,822 |
Total expected cash settlements | 48,448 |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fiscal 2,017 | 36,477 |
Fiscal 2,018 | 42,524 |
Fiscal 2,019 | 50,193 |
Total expected cash settlements | $ 129,194 |
Stock And Stock-Based Incenti79
Stock And Stock-Based Incentive Plans (Stock-Settled Activity) (Details) - $ / shares | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Outstanding at beginning of year, Number of Shares or Units | 0 | ||
Stock units granted, Number of Units | 66,446 | 0 | 0 |
Stock units vested and converted, Number of Units | 0 | ||
Stock units cancelled, Number of Units | 0 | ||
Outstanding at end of year, number of shares or Units | 66,000 | 0 | |
Outstanding as of February 28, 2015, Weighted Average Grant Date Fair Value | $ 0 | ||
Restricted stock granted, weighted average grant date fair value | 72.58 | $ 0 | $ 0 |
Stock units vested and converted, Weighted Average Grant Date Fair Value | 0 | ||
Stock units cancelled, Weighted Average Grant Date Fair Value | 0 | ||
Outstanding as of February 29, 2016, Weighted Average Grant Date Fair Value | $ 72.58 | $ 0 | |
Stock-Settled Market Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Outstanding at beginning of year, Number of Shares or Units | 774,000 | ||
Stock units granted, Number of Units | 109,956 | 249,801 | 237,660 |
Stock units vested and converted, Number of Units | (339,000) | ||
Stock units cancelled, Number of Units | (2,000) | ||
Outstanding at end of year, number of shares or Units | 543,000 | 774,000 | |
Outstanding as of February 28, 2015, Weighted Average Grant Date Fair Value | $ 48.30 | ||
Restricted stock granted, weighted average grant date fair value | 89.73 | $ 55.48 | $ 52.02 |
Stock units vested and converted, Weighted Average Grant Date Fair Value | 41.33 | ||
Stock units cancelled, Weighted Average Grant Date Fair Value | 90.46 | ||
Outstanding as of February 29, 2016, Weighted Average Grant Date Fair Value | $ 60.90 | $ 48.30 | |
Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Outstanding at beginning of year, Number of Shares or Units | 23,000 | ||
Stock units granted, Number of Units | 19,070 | 22,860 | 0 |
Stock units vested and converted, Number of Units | (25,000) | ||
Stock units cancelled, Number of Units | 0 | ||
Outstanding at end of year, number of shares or Units | 17,000 | 23,000 | |
Outstanding as of February 28, 2015, Weighted Average Grant Date Fair Value | $ 51.18 | ||
Restricted stock granted, weighted average grant date fair value | 68.16 | $ 51.18 | $ 0 |
Stock units vested and converted, Weighted Average Grant Date Fair Value | 52.49 | ||
Stock units cancelled, Weighted Average Grant Date Fair Value | 0 | ||
Outstanding as of February 29, 2016, Weighted Average Grant Date Fair Value | $ 68.16 | $ 51.18 |
Stock And Stock-Based Incenti80
Stock And Stock-Based Incentive Plans Stock And Stock-Based Incentive Plans (Employee Stock Purchase Plan) (Details) - Employee Stock Purchase Plan - $ / shares | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares purchased on the open market (shares) | 176,595 | 184,390 | 188,797 |
Average purchase price per share (in dollars per share) | $ 59.93 | $ 52.18 | $ 47.35 |
Net Earnings Per Share (Narrati
Net Earnings Per Share (Narrative) (Details) - shares | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Earnings Per Share [Abstract] | |||
Number of shares, options to purchase | 1,243,383 | 1,409,809 | 1,231,382 |
Net Earnings Per Share (Basic A
Net Earnings Per Share (Basic And Dilutive Net Earnings Per Share Reconciliations) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 29, 2016 | Nov. 30, 2015 | Aug. 31, 2015 | May. 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2014 | Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Net earnings | $ 141,027 | $ 128,199 | $ 172,228 | $ 181,974 | $ 143,138 | $ 130,049 | $ 154,518 | $ 169,653 | $ 623,428 | $ 597,358 | $ 492,586 |
Weighted average common shares outstanding (in shares) | 203,275 | 215,617 | 223,589 | ||||||||
Weighted average common shares and dilutive potential common shares (in shares) | 205,540 | 218,691 | 227,584 | ||||||||
Basic net earnings per share (in dollars per share) | $ 0.72 | $ 0.64 | $ 0.83 | $ 0.87 | $ 0.68 | $ 0.61 | $ 0.71 | $ 0.77 | $ 3.07 | $ 2.77 | $ 2.20 |
Diluted net earnings per share (in dollars per share) | $ 0.71 | $ 0.63 | $ 0.82 | $ 0.86 | $ 0.67 | $ 0.60 | $ 0.70 | $ 0.76 | $ 3.03 | $ 2.73 | $ 2.16 |
Employee Stock Option | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Dilutive potential common shares (in shares) | 1,676 | 2,369 | 3,255 | ||||||||
Stock-Settled Market Stock Units | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Dilutive potential common shares (in shares) | 589 | 705 | 740 |
Accumulated Other Comprehensi83
Accumulated Other Comprehensive Loss (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||
Deferred tax | $ 42.4 | $ 39 |
Accumulated Other Comprehensi84
Accumulated Other Comprehensive Loss (Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance | $ (65,391) | $ (46,271) | $ (59,808) |
Other comprehensive income (loss) before reclassifications | (11,116) | (24,893) | 6,497 |
Amounts reclassified from accumulated other comprehensive loss | 6,311 | 5,773 | 7,040 |
Other comprehensive income | (4,805) | (19,120) | 13,537 |
Balance | (70,196) | (65,391) | (46,271) |
Net Unrecognized Actuarial Losses | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance | (59,220) | (38,715) | (49,479) |
Other comprehensive income (loss) before reclassifications | 1,462 | (21,358) | 9,713 |
Amounts reclassified from accumulated other comprehensive loss | 1,288 | 853 | 1,051 |
Other comprehensive income | 2,750 | (20,505) | 10,764 |
Balance | (56,470) | (59,220) | (38,715) |
Net Unrecognized Hedge Losses | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance | (6,171) | (7,556) | (10,329) |
Other comprehensive income (loss) before reclassifications | (12,578) | (3,535) | (3,216) |
Amounts reclassified from accumulated other comprehensive loss | 5,023 | 4,920 | 5,989 |
Other comprehensive income | (7,555) | 1,385 | 2,773 |
Balance | $ (13,726) | $ (6,171) | $ (7,556) |
Accumulated Other Comprehensi85
Accumulated Other Comprehensive Loss (Changes In and Reclassifications Out of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Actuarial gain (loss) arising during the year | $ 2,214 | $ (34,126) | $ 15,465 |
Tax (expense) benefit | (752) | 12,768 | (5,752) |
Actuarial gain (loss) arising during the year, net of tax | 1,462 | (21,358) | 9,713 |
Actuarial loss amortization reclassifications recognized in net pension expense | 2,057 | 1,361 | 1,674 |
Tax expense | (769) | (508) | (623) |
Amortization reclassifications recognized in net pension expense, net of tax | 1,288 | 853 | 1,051 |
Net change in retirement benefit plan unrecognized actuarial losses, net of tax | 2,750 | (20,505) | 10,764 |
Effective portion of changes in fair value | (20,715) | (5,847) | (5,286) |
Tax benefit | 8,137 | 2,312 | 2,070 |
Effective portion of changes in fair value, net of tax | (12,578) | (3,535) | (3,216) |
Reclassifications to CarMax Auto Finance income | 8,277 | 8,118 | 9,872 |
Tax expense | (3,254) | (3,198) | (3,883) |
Reclassification of hedge losses, net of tax | 5,023 | 4,920 | 5,989 |
Net change in cash flow hedge unrecognized losses, net of tax | (7,555) | 1,385 | 2,773 |
Other comprehensive (loss) income, net of taxes | (4,805) | (19,120) | 13,537 |
Cost of sales | |||
Actuarial loss amortization reclassifications recognized in net pension expense | 835 | 558 | 669 |
CarMax Auto Finance income | |||
Actuarial loss amortization reclassifications recognized in net pension expense | 49 | 31 | 38 |
Selling, general and administrative expenses | |||
Actuarial loss amortization reclassifications recognized in net pension expense | $ 1,173 | $ 772 | $ 967 |
Lease Commitments (Narrative) (
Lease Commitments (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Operating Leased Assets [Line Items] | |||
Operating leases rent expense | $ 46.9 | $ 44.6 | $ 43.6 |
Maximum | |||
Operating Leased Assets [Line Items] | |||
Initial lease terms, in years | 20 years | ||
Lease renewal term, years | 20 years | ||
Minimum | |||
Operating Leased Assets [Line Items] | |||
Lease renewal term, years | 5 years |
Lease Commitments (Schedule Of
Lease Commitments (Schedule Of Future Minimum Lease Obligations) (Details) $ in Thousands | Feb. 29, 2016USD ($) |
Leases [Abstract] | |
Fiscal 2017, Capital Leases | $ 354 |
Fiscal 2018, Capital Leases | 354 |
Fiscal 2019, Capital Leases | 354 |
Fiscal 2020, Capital Leases | 354 |
Fiscal 2021,Capital Leases | 393 |
Fiscal 2022 and thereafter, Capital Leases | 4,417 |
Total minimum lease payments, Capital Leases | 6,226 |
Less amounts representing interest, Capital Leases | (3,451) |
Present value of net minimum lease payments, Capital Leases | 2,775 |
Fiscal 2017, Finance Leases | 48,390 |
Fiscal 2018, Finance Leases | 47,199 |
Fiscal 2019, Finance Leases | 45,394 |
Fiscal 2020, Finance Leases | 44,876 |
Fiscal 2021, Finance Leases | 36,404 |
Fiscal 2022 and thereafter, Finance Leases | 556,774 |
Total minimum lease payments, Finance Leases | 779,037 |
Fiscal 2017, Operating Lease Commitments | 44,430 |
Fiscal 2018, Operating Lease Commitments | 44,853 |
Fiscal 2019, Operating Lease Commitments | 45,975 |
Fiscal 2020, Operating Lease Commitments | 44,221 |
Fiscal 2021, Operating Lease Commitments | 39,778 |
Fiscal 2022 and thereafter, Operating Lease Commitments | 469,694 |
Total minimum lease payments, Operating Lease Commitments | $ 688,951 |
Commitments And Contingencies (
Commitments And Contingencies (Details) $ in Millions | 12 Months Ended | |
Feb. 29, 2016USD ($)claim | Feb. 28, 2015USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Number of claims | claim | 2 | |
Minimum warranty period, days | 30 days | |
Liability associated with guarantee | $ 6.1 | $ 6.2 |
Purchase obligation | 171.7 | |
Purchase obligation due next twelve months | $ 122.1 |
Selected Quarterly Financial 89
Selected Quarterly Financial Data (Schedule Of Selected Quarterly Financial Data) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 29, 2016 | Nov. 30, 2015 | Aug. 31, 2015 | May. 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2014 | Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Change in Accounting Estimate [Line Items] | |||||||||||
Net sales and operating revenues | $ 3,705,805 | $ 3,544,069 | $ 3,884,913 | $ 4,014,888 | $ 3,514,092 | $ 3,405,234 | $ 3,599,194 | $ 3,750,196 | $ 15,149,675 | $ 14,268,716 | $ 12,574,299 |
Gross profit | 489,265 | 464,331 | 521,370 | 543,794 | 475,837 | 446,620 | 463,339 | 501,731 | 2,018,760 | 1,887,527 | 1,648,701 |
CarMax Auto Finance income | 92,333 | 92,316 | 98,279 | 109,108 | 90,383 | 89,722 | 92,574 | 94,615 | 392,036 | 367,294 | 336,167 |
Selling, general and administrative expenses | 333,860 | 337,512 | 330,784 | 349,779 | 330,009 | 316,632 | 297,638 | 313,446 | 1,351,935 | 1,257,725 | 1,155,215 |
Net earnings | $ 141,027 | $ 128,199 | $ 172,228 | $ 181,974 | $ 143,138 | $ 130,049 | $ 154,518 | $ 169,653 | $ 623,428 | $ 597,358 | $ 492,586 |
Basic net earnings per share (in dollars per share) | $ 0.72 | $ 0.64 | $ 0.83 | $ 0.87 | $ 0.68 | $ 0.61 | $ 0.71 | $ 0.77 | $ 3.07 | $ 2.77 | $ 2.20 |
Diluted net earnings per share (in dollars per share) | $ 0.71 | $ 0.63 | $ 0.82 | $ 0.86 | $ 0.67 | $ 0.60 | $ 0.70 | $ 0.76 | $ 3.03 | $ 2.73 | $ 2.16 |
Interest costs capitalized | $ 6,900 | ||||||||||
Interest costs capitalized (in dollars per share) | $ 0.02 | ||||||||||
Timing of Cost Recognition | |||||||||||
Change in Accounting Estimate [Line Items] | |||||||||||
Gross profit | $ 10,400 | ||||||||||
Increase in service department gross profits (in dollars per share) | $ 0.03 | ||||||||||
Selling, general and administrative expenses | |||||||||||
Change in Accounting Estimate [Line Items] | |||||||||||
Decrease in SG&A | $ 20,900 | ||||||||||
Decrease in SG&A (in dollars per share) | $ 0.06 |