Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Feb. 28, 2018 | Mar. 31, 2018 | Aug. 31, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Feb. 28, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | CARMAX INC | ||
Entity Central Index Key | 1,170,010 | ||
Entity Public Float | $ 12,214,839,459 | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --02-28 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 178,676,159 |
Consolidated Statements Of Earn
Consolidated Statements Of Earnings - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
SALES AND OPERATING REVENUES: | |||
NET SALES AND OPERATING REVENUES | $ 17,120,209 | $ 15,875,118 | $ 15,149,675 |
TOTAL COST OF SALES | 14,791,350 | 13,691,824 | 13,130,915 |
GROSS PROFIT | 2,328,859 | 2,183,294 | 2,018,760 |
CARMAX AUTO FINANCE INCOME | 421,182 | 368,984 | 392,036 |
Selling, general and administrative expenses | 1,617,051 | 1,488,504 | 1,351,935 |
Interest expense | 70,745 | 56,416 | 36,358 |
Other (income) expense | (1,363) | 953 | 12,559 |
Earnings before income taxes | 1,063,608 | 1,006,405 | 1,009,944 |
Income tax provision | 399,496 | 379,435 | 386,516 |
NET EARNINGS | $ 664,112 | $ 626,970 | $ 623,428 |
WEIGHTED AVERAGE COMMON SHARES: | |||
Basic (in shares) | 182,660 | 190,343 | 203,275 |
Diluted (in shares) | 184,470 | 192,215 | 205,540 |
NET EARNINGS PER SHARE: | |||
Basic (in dollars per share) | $ 3.64 | $ 3.29 | $ 3.07 |
Diluted (in dollars per share) | $ 3.60 | $ 3.26 | $ 3.03 |
Used Vehicles | |||
SALES AND OPERATING REVENUES: | |||
NET SALES AND OPERATING REVENUES | $ 14,392,360 | $ 13,270,662 | $ 12,439,401 |
TOTAL COST OF SALES | 12,824,741 | 11,818,951 | 11,100,763 |
Wholesale Vehicles | |||
SALES AND OPERATING REVENUES: | |||
NET SALES AND OPERATING REVENUES | 2,181,156 | 2,082,464 | 2,188,267 |
TOTAL COST OF SALES | 1,788,704 | 1,719,821 | 1,800,167 |
Other | |||
SALES AND OPERATING REVENUES: | |||
NET SALES AND OPERATING REVENUES | 546,693 | 521,992 | 522,007 |
TOTAL COST OF SALES | $ 177,905 | $ 153,052 | $ 229,985 |
NET SALES AND OPERATING REVENUES | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 100.00% | 100.00% | 100.00% |
TOTAL COST OF SALES | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 86.40% | 86.20% | 86.70% |
GROSS PROFIT | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 13.60% | 13.80% | 13.30% |
CARMAX AUTO FINANCE INCOME | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 2.50% | 2.30% | 2.60% |
Selling, general and administrative expenses | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 9.40% | 9.40% | 8.90% |
Interest expense | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 0.40% | 0.40% | 0.20% |
Other (income) expense | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 0.00% | 0.00% | 0.10% |
Earnings before income taxes | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 6.20% | 6.30% | 6.70% |
Income tax provision | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 2.30% | 2.40% | 2.60% |
NET EARNINGS | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 3.90% | 3.90% | 4.10% |
NET SALES AND OPERATING REVENUES | Used Vehicles | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 84.10% | 83.60% | 82.10% |
NET SALES AND OPERATING REVENUES | Wholesale Vehicles | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 12.70% | 13.10% | 14.40% |
NET SALES AND OPERATING REVENUES | Other | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 3.20% | 3.30% | 3.40% |
TOTAL COST OF SALES | Used Vehicles | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 74.90% | 74.40% | 73.30% |
TOTAL COST OF SALES | Wholesale Vehicles | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 10.40% | 10.80% | 11.90% |
TOTAL COST OF SALES | Other | |||
Percentage of Sales | |||
Item as a percent of net sales and operating revenues | 1.00% | 1.00% | 1.50% |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
NET EARNINGS | $ 664,112 | $ 626,970 | $ 623,428 |
Other comprehensive income (loss), net of taxes: | |||
Net change in retirement benefit plan unrecognized actuarial losses | (1,371) | 949 | 2,750 |
Net change in cash flow hedge unrecognized gains | 14,194 | 12,692 | (7,555) |
Other comprehensive income (loss), net of taxes | 12,823 | 13,641 | (4,805) |
TOTAL COMPREHENSIVE INCOME | $ 676,935 | $ 640,611 | $ 618,623 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 44,525 | $ 38,416 |
Restricted cash from collections on auto loan receivables | 399,442 | 380,353 |
Accounts receivable, net | 133,321 | 152,388 |
Inventory | 2,390,694 | 2,260,563 |
Other current assets | 93,462 | 41,910 |
TOTAL CURRENT ASSETS | 3,061,444 | 2,873,630 |
Auto loan receivables, net | 11,535,704 | 10,596,076 |
Property and equipment, net | 2,667,061 | 2,518,393 |
Deferred income taxes | 63,256 | 150,962 |
Other assets | 158,807 | 140,295 |
TOTAL ASSETS | 17,486,272 | 16,279,356 |
CURRENT LIABILITIES: | ||
Accounts payable | 529,733 | 494,989 |
Accrued expenses and other current liabilities | 278,771 | 266,128 |
Accrued income taxes | 0 | 1,404 |
Short-term debt | 127 | 62 |
Current portion of finance and capital lease obligations | 9,994 | 9,491 |
Current portion of non-recourse notes payable | 355,433 | 333,713 |
TOTAL CURRENT LIABILITIES | 1,174,058 | 1,105,787 |
Long-term debt, excluding current portion | 995,479 | 952,562 |
Finance and capital lease obligations, excluding current portion | 490,369 | 486,645 |
Non-recourse notes payable, excluding current portion | 11,266,964 | 10,387,231 |
Other liabilities | 242,553 | 238,551 |
TOTAL LIABILITIES | 14,169,423 | 13,170,776 |
Commitments and contingent liabilities | ||
SHAREHOLDERS’ EQUITY: | ||
Common stock, $0.50 par value; 350,000,000 shares authorized; 179,747,894 and 186,548,602 shares issued and outstanding as of February 28, 2018 and 2017, respectively | 89,874 | 93,274 |
Capital in excess of par value | 1,234,047 | 1,188,578 |
Accumulated other comprehensive loss | (54,312) | (56,555) |
Retained earnings | 2,047,240 | 1,883,283 |
TOTAL SHAREHOLDERS’ EQUITY | 3,316,849 | 3,108,580 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 17,486,272 | $ 16,279,356 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Feb. 28, 2018 | Feb. 28, 2017 |
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 | 179,747,894 | 186,548,602 |
Common Stock, Shares, Outstanding | 179,747,894 | 186,548,602 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
OPERATING ACTIVITIES: | |||
Net earnings | $ 664,112 | $ 626,970 | $ 623,428 |
Adjustments to reconcile net earnings to net cash used in operating activities: | |||
Depreciation and amortization | 179,942 | 168,875 | 137,360 |
Share-based compensation expense | 61,879 | 91,595 | 51,077 |
Provision for loan losses | 137,591 | 150,598 | 101,199 |
Provision for cancellation reserves | 62,749 | 64,120 | 77,118 |
Deferred income tax provision | 81,007 | 2,324 | 17,237 |
Other | 1,298 | 4,169 | 13,136 |
Net decrease (increase) in: | |||
Accounts receivable, net | 19,067 | (20,217) | 5,519 |
Inventory | (130,131) | (328,534) | 154,845 |
Other current assets | (34,620) | (2,781) | 15,229 |
Auto loan receivables, net | (1,077,219) | (1,209,782) | (1,202,587) |
Other assets | (2,361) | 143 | (160) |
Net increase (decrease) in: | |||
Accounts payable, accrued expenses and other current liabilities and accrued income taxes | 38,286 | 74,579 | (23,051) |
Other liabilities | (82,150) | (77,370) | (87,107) |
NET CASH USED IN OPERATING ACTIVITIES | (80,550) | (455,311) | (116,757) |
INVESTING ACTIVITIES: | |||
Capital expenditures | (296,816) | (418,144) | (315,584) |
Proceeds from disposal of property and equipment | 97 | 1,229 | 1,542 |
Increase in restricted cash from collections on auto loan receivables | (19,089) | (36,524) | (49,707) |
Increase in restricted cash in reserve accounts | (22,343) | (17,390) | (12,264) |
Release of restricted cash from reserve accounts | 18,321 | 11,250 | 8,357 |
Purchases of investments | (8,649) | (6,724) | (11,463) |
Sales of investments | 1,692 | 730 | 324 |
NET CASH USED IN INVESTING ACTIVITIES | (326,787) | (465,573) | (378,795) |
FINANCING ACTIVITIES: | |||
Increase (decrease) in short-term debt, net | 65 | (366) | (357) |
Proceeds from issuances of long-term debt | 4,203,150 | 2,974,600 | 2,057,100 |
Payments on long-term debt | (4,160,650) | (2,734,600) | (1,652,100) |
Cash paid for debt issuance costs | (16,261) | (17,118) | (3,104) |
Payments on finance and capital lease obligations | (8,997) | (10,817) | (16,417) |
Issuances of non-recourse notes payable | 10,198,962 | 9,610,035 | 9,553,805 |
Payments on non-recourse notes payable | (9,296,773) | (8,395,360) | (8,496,684) |
Repurchase and retirement of common stock | (579,570) | (564,337) | (983,941) |
Equity issuances | 73,520 | 59,869 | 47,038 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 413,446 | 921,906 | 505,340 |
Increase in cash and cash equivalents | 6,109 | 1,022 | 9,788 |
Cash and cash equivalents at beginning of year | 38,416 | 37,394 | 27,606 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ 44,525 | $ 38,416 | $ 37,394 |
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 | Shareholders' Equity [Member] |
BALANCE at Feb. 28, 2015 | $ 3,156,785 | $ 104,435 | $ 1,123,520 | $ 1,994,221 | $ (65,391) | |
BALANCE, SHARES at Feb. 28, 2015 | 208,870,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 623,428 | 623,428 | ||||
Other comprehensive (loss) income | (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 | |||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | (17,261) | $ 216 | (17,477) | |||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 431,000 | |||||
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 | 194,712,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 626,970 | 626,970 | ||||
Other comprehensive (loss) income | 13,641 | 13,641 | ||||
Share-based compensation expense | 53,356 | 53,356 | ||||
Repurchases of common stock | (557,782) | $ (5,131) | (62,160) | (490,491) | ||
Repurchase of common stock, shares | (10,262,000) | |||||
Exercise of common stock options | 59,869 | $ 943 | 58,926 | |||
Exercise of common stock options, shares | 1,887,000 | |||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | (4,513) | $ 106 | (4,619) | |||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 212,000 | |||||
Tax effect from the exercise/vesting of equity awards | 12,253 | 12,253 | ||||
BALANCE at Feb. 28, 2017 | $ 3,108,580 | $ 93,274 | 1,188,578 | 1,883,283 | (56,555) | |
BALANCE, SHARES at Feb. 28, 2017 | 186,548,602 | 186,549,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | $ 664,112 | 664,112 | ||||
Other comprehensive (loss) income | 12,823 | 12,823 | ||||
Share-based compensation expense | 38,340 | 38,340 | ||||
Repurchases of common stock | (573,638) | $ (4,448) | (58,455) | (510,735) | ||
Repurchase of common stock, shares | (8,897,000) | |||||
Exercise of common stock options | 73,520 | $ 933 | 72,587 | |||
Exercise of common stock options, shares | 1,866,000 | |||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | (6,888) | $ 115 | (7,003) | |||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 230,000 | |||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | 10,580 | (10,580) | $ 0 | |||
BALANCE at Feb. 28, 2018 | $ 3,316,849 | $ 89,874 | $ 1,234,047 | $ 2,047,240 | $ (54,312) | |
BALANCE, SHARES at Feb. 28, 2018 | 179,747,894 | 179,748,000 |
Business And Background
Business And Background | 12 Months Ended |
Feb. 28, 2018 | |
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 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, as well as through carmax.com and our mobile apps. We provide customers with a range of related products and services, including the appraisal and purchase of vehicles directly from consumers; the financing of retail vehicle purchases through CAF and third-party finance 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. 28, 2018 | |
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 connection with our adoption of the Financial Accounting Standards Board's (“FASB”) Accounting Standards Update (“ASU”) 2016-09 during the current fiscal year, cash flows related to excess tax benefits from share-based payment arrangements are now classified as operating activities, rather than financing activities, in the consolidated statements of cash flows. Prior period amounts have been reclassified to conform to the current year's presentation. Additionally, excess tax benefits previously included within capital in excess of par value in the consolidated statement of shareholders’ equity are now recognized directly in income tax expense. In connection with our adoption of the FASB’s ASU 2018-02 during the current fiscal year, we elected to reclassify the income tax effects of the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”) stranded in accumulated other comprehensive loss (“AOCL”) to retained earnings in the consolidated statements of shareholders’ equity as of February 28, 2018. See further discussion at Note 2(X). (B) Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with original maturities of three months or less and are not significant to the consolidated balance sheets as of February 28, 2018 and 2017 . (C) Restricted Cash from Collections on Auto Loan Receivables Cash equivalents totaling $399.4 million as of February 28, 2018 , and $380.4 million as of February 28, 2017 , consisted of collections of principal, interest and fee payments on auto loan receivables that are restricted for payment to holders of non-recourse notes payable pursuant to the applicable agreements. (D) Marketable Securities The company classifies its marketable securities as trading. These securities consisted primarily of mutual funds reported at fair value, as well as investments in equity securities that are reported at cost less any impairment. Gains and losses on these securities are reflected as a component of other expense. (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) Financing and Securitization Transactions We maintain a revolving funding program composed of three warehouse facilities (“warehouse facilities”) that we use to fund auto loan receivables originated by CAF. We typically elect to fund these receivables through an asset-backed term funding transaction, such as a term securitization or alternative funding arrangement, at a later date. We sell the auto loan receivables to one of three 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 related receivables. We typically use term securitizations to provide long-term funding for most of the auto loan receivables initially funded 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 asset-backed term funding transactions, including term securitizations (together, “non-recourse funding vehicles”), as secured borrowings, which result in recording the auto loan receivables and the related non-recourse notes payable on our consolidated balance sheets. These receivables can only be used as collateral to settle obligations of the related non-recourse funding vehicles. The non-recourse funding vehicles and investors have no recourse to our assets beyond the related 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 non-recourse funding 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 non-recourse funding vehicles. See Notes 4 and 11 for additional information on auto loan receivables and non-recourse notes payable. (G) Inventory Inventory is primarily comprised of vehicles held for sale or currently undergoing reconditioning and is stated at the lower of cost or net realizable value (“NRV”). 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. (H) 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 expected to become evident during the following 12 months. The allowance for loan losses is primarily based on the composition of the portfolio of managed receivables, historical loss trends and forecasted forward loss curves. For receivables that have less than 12 months of performance history, the estimate also takes into account the credit grades of the receivables and historical losses by credit grade to supplement actual loss data in estimating future performance. Once the receivables have 12 months of performance history, the estimate reflects actual loss experience of those receivables to date along with forward loss curves to predict future performance. The forward loss curves are constructed using historical performance data and show the average timing of losses over the course of a receivable’s life. We also consider recent trends in delinquencies and defaults, recovery rates and the economic environment in assessing the models used in estimating the allowance for loan losses, and may adjust the allowance for loan losses to reflect factors that may not be captured in the models. In addition, we periodically consider whether the use of additional metrics would result in improved model performance and revise the models when appropriate. 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. (I) 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. (J) 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 related 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 or bank deposit accounts and was $56.8 million as of February 28, 2018 and $52.8 million as of February 28, 2017 . Other Investments. Other investments includes restricted money market securities primarily held to satisfy certain insurance program requirements, investments held in a rabbi trust established to fund informally our executive deferred compensation plan and investments in equity securities. Other investments totaled $80.9 million as of February 28, 2018 and $70.8 million as of February 28, 2017 . (K) 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. (L) Accrued Expenses As of February 28, 2018 and 2017 , accrued expenses and other current liabilities included accrued compensation and benefits of $148.6 million and $140.0 million , respectively; loss reserves for general liability and workers’ compensation insurance of $36.5 million and $35.0 million , respectively; and the current portion of cancellation reserves. See Note 8 for additional information on cancellation reserves. (M) 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 using a number of actuarial assumptions. 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. (N) 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. (O) 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 retail 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, on a net basis, at the time of sale. We also record a reserve for estimated contract cancellations. Periodically, we may receive retrospective commissions based upon the performance of the policies administered by the third parties. 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. (P) 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. (Q) 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. (R) Advertising Expenses Advertising costs are expensed as incurred and substantially all are included in SG&A expenses. Total advertising expenses were $158.6 million in fiscal 2018 , $146.0 million in fiscal 2017 and $142.2 million in fiscal 2016 . (S) Store Opening Expenses Costs related to store openings, including preopening costs, are expensed as incurred and are included in SG&A expenses. (T) 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 income tax expense. See Note 12 for additional information on stock-based compensation. (U) 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 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. (V) 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. (W) 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. (X) Recent Accounting Pronouncements Adopted in the Current Period. 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 NRV test. NRV is calculated as the estimated selling price less reasonably predictable costs of completion, disposal and transportation. We adopted this pronouncement for our fiscal year beginning March 1, 2017, and it did not have a material 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 standard also addresses simplifications related to statement of cash flows classification, accounting for forfeitures, and minimum statutory tax withholding requirements. We adopted this pronouncement for our fiscal year beginning March 1, 2017. The requirements related to the tax consequences of share-based payments were applied prospectively and resulted in $13.8 million recorded as a reduction to the income tax provision, rather than as a component of capital in excess of par value, during the year ended February 28, 2018. The provisions related to the presentation of excess tax benefits on the consolidated statements of cash flows were applied retrospectively, resulting in an increase in cash provided by operating activities and a decrease in cash provided by financing activities of $12.8 million and $32.1 million for the years ended February 28, 2017 and February 29, 2016, respectively. We elected to continue estimating forfeitures of share-based awards, and none of the other provisions of the pronouncement had a material effect on our consolidated financial statements. In January 2017, the FASB issued an accounting pronouncement (FASB ASU 2017-04) related to goodwill impairment. The pronouncement simplifies how an entity tests goodwill for impairment by eliminating the Step 2 requirement to compute the implied fair value of goodwill at the impairment testing date. The entity should compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. We early adopted this pronouncement for our annual goodwill impairment test for fiscal 2018 and it did not have an effect on our consolidated financial statements. In February 2018, the FASB issued an accounting pronouncement (FASB ASU 2018-02) related to income tax effects stranded in accumulated other comprehensive income (“AOCI”) resulting from the 2017 Tax Act. This ASU provides companies the option to reclassify these amounts from AOCI to retained earnings and also requires new disclosures. We early adopted this pronouncement for our fourth quarter of fiscal 2018. The stranded income tax effects related to the 2017 Tax Act have been reclassified to retained earnings in the consolidated statements of shareholders’ equity as of February 28, 2018. See Note 9 for additional information. In March 2018, the FASB issued an accounting pronouncement (FASB ASU 2018-05), which included amendments to SEC paragraphs pursuant to SEC Staff Accounting Bulletin No. 118 (“SAB 118”). The pronouncement addresses certain circumstances that may arise for registrants in accounting for the income tax effects of the 2017 Tax Act, including when certain income tax effects of the Act are incomplete by the time financial statements are issued. We have complied with the amendments related to SAB 118, as discussed further in Note 9. Effective in Future Periods. In May 2014, the FASB issued an accounting pronouncement (FASB ASU 2014-09) related to revenue recognition. This ASU, along with subsequent ASUs issued to clarify certain provisions and the effective date of ASU 2014-09, provides a single, comprehensive revenue recognition model for all contracts with customers. The standard contains principles that an entity will apply to determine the measurement of revenue and the timing of when it is recognized. The entity will recognize revenue to reflect the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. This standard will become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We will adopt this standard for our fiscal year beginning March 1, 2018 and plan to apply the modified retrospective transition method with a cumulative effect adjustment, if any, recognized at the date of adoption. We primarily sell products and recognize revenue at the point of sale or delivery to customers, at which point the earnings process is deemed to be complete. Our performance obligations are clearly identifiable and we do not anticipate significant changes to the assessment of such performance obligations, conclusions related to revenue that is currently recognized on a net basis, or the timing of our revenue recognition, with the exception of certain retrospective commissions earned on the ESP contracts we sell. A portion of the transaction price related to these contracts is considered variable consideration, which may be subject to accelerated recognition under the new standard. This variable consideration is required to be estimated, subject to certain constraints, in determining amounts to be recognized. We are in the process of finalizing our analysis of this variable consideration, which may result in a cumulative effect adjustment to retained earnings as of March 1, 2018. We do not expect any such adjustment to be material to our consolidated balance sheets. In addition, the standard will require us to present our reserve for estimated sales returns on a gross basis on our consolidated balance sheets, with a return asset and a corresponding refund liability. Currently this reserve is presented as a net liability. This change will result in an estimated $10 million to $15 million increase to both assets and liabilities. The standard will require additional financial statement disclosures, the effects of which we do not expect to be significant. We do not expect any material impacts resulting from this standard other than those discussed herein. Our primary business processes are consistent with the principles contained in the ASU, and we do not expect significant changes to those processes, our internal controls or systems. In January 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-01) related to financial instruments (FASB ASC Subtopic 825-10). This pronouncement, along with FASB 2018-03 issued in February 2018, requires that most equity investments be measured at fair value, with subsequent changes in fair value recognized in net earnings. The pronouncements also impact financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The changes are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. We will adopt the pronouncements for our fiscal year beginning March 1, 2018, and we do not expect it to have a material 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, along with subsequent ASUs issued to clarify certain provisions of ASU 2016-02, requires lessees to record most leases on their balance sheet while also disclosing key information about those lease arrangements. Under the new guidance, lease classification as either a finance lease or an operating lease will affect the pattern and classification of expense recognition in the income statement. The classification criteria to distinguish between finance and operating leases are generally consistent with the classification criteria to distinguish between capital and operating leases under existing lease accounting guidance. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. We expect to adopt the new standard for our fiscal year beginning March 1, 2019. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with practical expedients available for election as a package. We expect that this standard will have a material effect on our consolidated balance sheets as a result of recognizing new right-of-use assets and lease liabilities for existing operating leases. To date, we have not completed our comprehensive analysis of those leases and are unable to quantify the impact at this time. We are still evaluating the impact of the standard on our sale-leaseback transactions currently accounted for as direct financings. We believe that the majority of our leases will maintain their current lease classification under the new standard. As a result, we do not expect the new standard to have a material effect on our expense recognition pattern or, in turn, our consolidated statements of operations. We are continuing to evaluate the full impact of the new standard, as well as its impacts on our business processes, systems, and internal controls. In June 2016, the FASB issued an accounting pronounceme |
CarMax Auto Finance
CarMax Auto Finance | 12 Months Ended |
Feb. 28, 2018 | |
CarMax Auto Finance Income [Abstract] | |
CarMax Auto Finance | CARMAX AUTO FINANCE CAF provides financing to qualified retail customers purchasing vehicles from CarMax. 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 28 or 29 (In millions) 2018 % (1) 2017 % (1) 2016 % (1) Interest margin: Interest and fee income $ 856.6 7.6 $ 762.0 7.5 $ 682.9 7.5 Interest expense (215.0 ) (1.9 ) (171.4 ) (1.7 ) (127.7 ) (1.4 ) Total interest margin 641.6 5.7 590.6 5.8 555.2 6.1 Provision for loan losses (137.6 ) (1.2 ) (150.6 ) (1.5 ) (101.2 ) (1.1 ) Total interest margin after provision for loan losses 504.0 4.5 440.0 4.3 454.0 5.0 Total other income (expense) 0.4 — — — (0.4 ) — Direct expenses: Payroll and fringe benefit expense (35.4 ) (0.3 ) (30.8 ) (0.3 ) (28.2 ) (0.3 ) Other direct expenses (47.8 ) (0.4 ) (40.2 ) (0.4 ) (33.4 ) (0.4 ) Total direct expenses (83.2 ) (0.7 ) (71.0 ) (0.7 ) (61.6 ) (0.7 ) CarMax Auto Finance income $ 421.2 3.8 $ 369.0 3.6 $ 392.0 4.3 Total average managed receivables $ 11,210.8 $ 10,158.3 $ 9,092.9 (1) Percent of total average managed receivables. |
Auto Loan Receivables
Auto Loan Receivables | 12 Months Ended |
Feb. 28, 2018 | |
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 an asset-backed term funding transaction. The majority of the auto loan receivables serve as collateral for the related non-recourse notes payable of $11.64 billion as of February 28, 2018 , and $10.74 billion as of February 28, 2017 . See Notes 2(F) and 11 for additional information on securitizations and non-recourse notes payable. Auto Loan Receivables, Net As of February 28 (In millions) 2018 2017 Asset-backed term funding $ 9,455.2 $ 8,784.7 Warehouse facilities 1,834.0 1,624.0 Overcollateralization (1) 269.4 211.4 Other managed receivables (2) 60.3 61.2 Total ending managed receivables 11,618.9 10,681.3 Accrued interest and fees 43.2 38.5 Other 2.2 (0.1 ) Less allowance for loan losses (128.6 ) (123.6 ) Auto loan receivables, net $ 11,535.7 $ 10,596.1 (1) Represents receivables restricted as excess collateral for the non-recourse funding vehicles. (2) Other managed receivables includes receivables not funded through the non-recourse funding vehicles. 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 28 (In millions) 2018 (1) % (2) 2017 (1) % (2) A $ 5,725.1 49.3 $ 5,223.4 48.9 B 4,133.8 35.6 3,739.4 35.0 C and other 1,760.0 15.1 1,718.5 16.1 Total ending managed receivables $ 11,618.9 100.0 $ 10,681.3 100.0 (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 28 (In millions) 2018 % (1) 2017 % (1) Balance as of beginning of year $ 123.6 1.16 $ 94.9 0.99 Charge-offs (254.4 ) (230.7 ) Recoveries 121.8 108.8 Provision for loan losses 137.6 150.6 Balance as of end of year $ 128.6 1.11 $ 123.6 1.16 (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 composition of the portfolio of managed receivables, historical loss trends and forecasted forward loss curves. We also take into account recent trends in delinquencies and defaults, 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 28 (In millions) 2018 % (1) 2017 % (1) Total ending managed receivables $ 11,618.9 100.0 $ 10,681.3 100.0 Delinquent loans: 31-60 days past due $ 246.6 2.1 $ 211.0 2.0 61-90 days past due 116.9 1.0 93.5 0.9 Greater than 90 days past due 29.7 0.3 26.5 0.2 Total past due $ 393.2 3.4 $ 331.0 3.1 (1) Percent of total ending managed receivables. |
Derivative Instruments And Hedg
Derivative Instruments And Hedging Activities | 12 Months Ended |
Feb. 28, 2018 | |
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. For the derivatives associated with our non-recourse funding vehicles, the effective portion of changes in the fair value is initially recorded in 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 $5.9 million will be reclassified from AOCL as an increase to CAF income. As of February 28, 2018 and 2017 , we had interest rate swaps outstanding with a combined notional amount of $2.16 billion and $2.03 billion , respectively, that were designated as cash flow hedges of interest rate risk. See Note 6 for discussion of fair values of financial instruments and Note 14 for the effect on comprehensive income. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Feb. 28, 2018 | |
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 and 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 equity investments in large-, mid- and small-cap domestic and international companies or investment grade debt securities. 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, other 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 28, 2018 (In thousands) Level 1 Level 2 Total Assets: Money market securities $ 276,894 $ — $ 276,894 Mutual fund investments 19,429 — 19,429 Derivative instruments — 12,127 12,127 Total assets at fair value $ 296,323 $ 12,127 $ 308,450 Percent of total assets at fair value 96.1 % 3.9 % 100.0 % Percent of total assets 1.7 % 0.1 % 1.8 % Liabilities: Derivative instruments $ — $ (99 ) $ (99 ) Total liabilities at fair value $ — $ (99 ) $ (99 ) Percent of total liabilities — % — % — % As of February 28, 2017 (In thousands) Level 1 Level 2 Total Assets: Money market securities $ 397,994 $ — $ 397,994 Mutual fund investments 16,519 — 16,519 Derivative instruments — 2,997 2,997 Total assets at fair value $ 414,513 $ 2,997 $ 417,510 Percent of total assets at fair value 99.3 % 0.7 % 100.0 % Percent of total assets 2.5 % — % 2.6 % Liabilities: Derivative instruments $ — $ (509 ) $ (509 ) Total liabilities at fair value $ — $ (509 ) $ (509 ) Percent of total liabilities — % — % — % There were no transfers between Levels 1 and 2 for the years ended February 28, 2018 and 2017 . As of February 28, 2018 and 2017 , we had no Level 3 assets. Fair Value of Financial Instruments The carrying value of our cash and cash equivalents, accounts receivable, other restricted cash deposits and accounts payable approximates fair value due to the short-term nature and/or variable rates associated with these financial instruments. Auto loan receivables are presented net of an allowance for estimated loan losses. We believe that the carrying value of our revolving credit facility and term loan approximates fair value due to the variable rates associated with these obligations. The fair value of our senior unsecured notes, which are not carried at fair value on our consolidated balance sheets, was determined using Level 2 inputs based on quoted market prices. The carrying value and fair value of the senior unsecured notes as of February 28, 2018 and 2017 , respectively, are as follows: (In thousands) As of February 28, 2018 As of February 28, 2017 Carrying value $ 500,000 $ 500,000 Fair value $ 492,163 $ 499,518 |
Property And Equipment
Property And Equipment | 12 Months Ended |
Feb. 28, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property And Equipment | PROPERTY AND EQUIPMENT As of February 28 (In thousands) 2018 2017 Land $ 722,173 $ 627,784 Land held for development 77,145 98,216 Buildings 2,081,785 1,934,730 Leasehold improvements 215,114 193,972 Furniture, fixtures and equipment 600,739 525,177 Construction in progress 134,354 179,891 Total property and equipment 3,831,310 3,559,770 Less accumulated depreciation and amortization 1,164,249 1,041,377 Property and equipment, net $ 2,667,061 $ 2,518,393 Land held for development represents land owned for potential store growth. Depreciation expense was $158.6 million in fiscal 2018 , $140.7 million in fiscal 2017 and $127.0 million in fiscal 2016 . |
Cancellation Reserves
Cancellation Reserves | 12 Months Ended |
Feb. 28, 2018 | |
Cancellation Reserves [Abstract] | |
Cancellation Reserves | CANCELLATION RESERVES We recognize revenue for EPP products, on a net basis, at the time of sale. We also record 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 28 (In millions) 2018 2017 Balance as of beginning of year $ 108.2 $ 110.2 Cancellations (65.7 ) (66.1 ) Provision for future cancellations 62.7 64.1 Balance as of end of year $ 105.2 $ 108.2 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 28, 2018 and 2017 , the current portion of cancellation reserves was $56.0 million and $56.4 million , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 28, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Tax Reform. The 2017 Tax Act was enacted on December 22, 2017. The provision with the most significant impact to CarMax was the reduction of the federal statutory tax rate from 35% to 21%. Due to the complexities involved in the accounting for the 2017 Tax Act, the SEC issued SAB 118, which provides guidance on the application of US GAAP for income taxes in the period of enactment. SAB 118 requires companies to include in their financial statements a reasonable estimate of the impact of the 2017 Tax Act, to the extent such an estimate has been determined. As a result, our financial results reflect the income tax effects of the 2017 Tax Act for which the accounting is complete, as well as provisional amounts for those impacts for which the accounting is incomplete but a reasonable estimate could be determined. We have not identified any items for which the income tax effects of the 2017 Tax Act could not be reasonably estimated. The provision for income taxes and effective tax rate for fiscal 2018 included a provisional $32.7 million increase in tax expense related to the revaluation of our net deferred tax asset at the lower federal statutory tax rate. This increase was partially offset by a $20.8 million benefit from the reduction in the federal statutory tax rate in the fourth quarter of fiscal 2018. We have obtained, prepared and analyzed the information needed to complete the accounting for the effects of the 2017 Tax Act. Additional analysis is necessary for certain aspects of the changes in tax law including accelerated depreciation deductions, and the deductibility of executive compensation and certain entertainment expenses. The amounts recorded were based on the company's initial evaluation of the impacts of the 2017 Tax Act, and these amounts are subject to change as the company continues to refine and update the underlying data, calculations and assumptions used during the measurement period of up to one year under SAB 118. Income Tax Provision Years Ended February 28 or 29 (In thousands) 2018 2017 2016 Current: Federal $ 276,597 $ 332,466 $ 324,096 State 41,892 44,645 45,183 Total 318,489 377,111 369,279 Deferred: Federal 81,486 4,098 16,398 State (479 ) (1,774 ) 839 Total 81,007 2,324 17,237 Income tax provision $ 399,496 $ 379,435 $ 386,516 Effective Income Tax Rate Reconciliation Years Ended February 28 or 29 2018 2017 2016 Federal statutory income tax rate 32.7 % 35.0 % 35.0 % State and local income taxes, net of federal benefit 3.1 2.7 3.2 2017 Tax Act 3.1 — — Share-based compensation (1.3 ) — — Nondeductible and other items 0.2 0.1 0.2 Credits (0.2 ) (0.1 ) (0.1 ) Effective income tax rate 37.6 % 37.7 % 38.3 % The 2017 Tax Act above includes the following impacts: • Revaluation of deferred taxes that existed on December 22, 2017, the enactment date of the 2017 Tax Act. • Deferred taxes that were created after December 22, 2017. These items were recognized in the current period at the federal statutory tax rate of 32.7% but will reverse at the newly enacted 21% federal rate. Temporary Differences Resulting in Deferred Tax Assets and Liabilities As of February 28 (In thousands) 2018 2017 Deferred tax assets: Accrued expenses $ 37,362 $ 59,639 Partnership basis 63,670 106,176 Share-based compensation 45,744 69,621 Derivatives — 408 Capital loss carry forward 682 1,249 Total deferred tax assets 147,458 237,093 Less: valuation allowance (682 ) (1,249 ) Total deferred tax assets after valuation allowance 146,776 235,844 Deferred tax liabilities: Prepaid expenses 16,157 21,148 Property and equipment 43,663 52,266 Inventory 18,625 11,468 Derivatives 5,075 — Total deferred tax liabilities 83,520 84,882 Net deferred tax asset $ 63,256 $ 150,962 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 28, 2018 , 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 28 or 29 (In thousands) 2018 2017 2016 Balance at beginning of year $ 29,955 $ 26,771 $ 24,951 Increases for tax positions of prior years — 2,651 125 Decreases for tax positions of prior years (607 ) (216 ) (853 ) Increases based on tax positions related to the current year 3,342 4,380 5,256 Settlements (304 ) (16 ) (830 ) Lapse of statute (3,701 ) (3,615 ) (1,878 ) Balance at end of year $ 28,685 $ 29,955 $ 26,771 As of February 28, 2018 , we had $28.7 million of gross unrecognized tax benefits, $9.6 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, 2017 , we had $30.0 million of gross unrecognized tax benefits, $9.4 million of which, if recognized, would affect our effective tax rate. 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. Our continuing practice is to recognize interest and penalties related to income tax matters in SG&A expenses. Our accrual for interest and penalties was $2.8 million , $2.7 million and $2.0 million as of February 28, 2018 , February 28, 2017 and February 29, 2016 , respectively. 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 2015 . |
Benefit Plans
Benefit Plans | 12 Months Ended |
Feb. 28, 2018 | |
Defined Benefit Plan [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 28 Pension Plan Restoration Plan Total (In thousands) 2018 2017 2018 2017 2018 2017 Plan assets $ 156,827 $ 139,502 $ — $ — $ 156,827 $ 139,502 Projected benefit obligation 230,861 218,284 11,041 10,822 241,902 229,106 Funded status recognized $ (74,034 ) $ (78,782 ) $ (11,041 ) $ (10,822 ) $ (85,075 ) $ (89,604 ) Amounts recognized in the consolidated balance sheets: Current liability $ — $ — $ (485 ) $ (467 ) $ (485 ) $ (467 ) Noncurrent liability (74,034 ) (78,782 ) (10,556 ) (10,355 ) (84,590 ) (89,137 ) Net amount recognized $ (74,034 ) $ (78,782 ) $ (11,041 ) $ (10,822 ) $ (85,075 ) $ (89,604 ) Years Ended February 28 or 29 Pension Plan Restoration Plan Total (In thousands) 2018 2017 2016 2018 2017 2016 2018 2017 2016 Total net pension expense $ 207 $ 330 $ 847 $ 468 $ 481 $ 456 $ 675 $ 811 $ 1,303 Total net actuarial loss (gain) (1) $ 2,880 $ 17 $ (1,786 ) $ 376 $ 228 $ (428 ) $ 3,256 $ 245 $ (2,214 ) (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, were not material in fiscal 2018 or 2017 ; employer contributions, which increase plan assets, were $6.0 million in fiscal 2018 and were not significant for fiscal 2017. 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 2019 , we anticipate that $1.9 million in estimated actuarial losses of the pension plan will be amortized from accumulated other comprehensive loss. We do not 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 expect to make contributions of $13.8 million to the pension plan in fiscal 2019 . We expect the pension plan to make benefit payments of approximately $4.2 million for each of the next three fiscal years, and $5.2 million for each of the subsequent two fiscal years. For the non-funded restoration plan, we contribute an amount equal to the benefit payments, which we expect to be approximately $0.6 million for each of the next five fiscal years. Assumptions Used to Determine Benefit Obligations As of February 28 Pension Plan Restoration Plan 2018 2017 2018 2017 Discount rate (1) 4.10 % 4.25 % 4.10 % 4.25 % (1) For the restoration plan, the discount rate presented is applied to the pre-2004 annuity amounts and to post-2004 lump sum amounts for fiscal 2018 . A rate of 4.50% is assumed for the post-2004 lump sum amounts paid from the plan for fiscal 2017 . Assumptions Used to Determine Net Pension Expense Years Ended February 28 or 29 Pension Plan Restoration Plan 2018 2017 2016 2018 2017 2016 Discount rate (1) 4.25 % 4.50 % 4.00 % 4.25 % 4.50 % 4.00 % 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 and to post-2004 lump sum amounts for fiscal 2018 . A rate of 4.50% is assumed for post-2004 lump sum amounts paid from the plan for fiscal 2017 and fiscal 2016 . 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. Fair Value of Plan Assets and Fair Value Hierarchy As of February 28 (In thousands) 2018 2017 Mutual funds (Level 1): Equity securities $ 100,422 $ 89,739 Equity securities – international 19,467 17,139 Fixed income securities 36,693 31,700 Collective funds (Level 2): Short-term investments 322 986 Investment payables, net (77 ) (62 ) Total $ 156,827 $ 139,502 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, corporate bonds, mortgage-backed securities and other debt obligations primarily in the United States. We do not expect any plan assets to be returned to us during fiscal 2019 . 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 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. The plan contains a company matching contribution 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 $39.7 million in fiscal 2018 , $32.8 million in fiscal 2017 and $29.8 million in fiscal 2016 . (C) Retirement Restoration Plan We sponsor a 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 an annual discretionary company-funded contribution under the same terms of the 401(k) plan. 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 2018 , fiscal 2017 and fiscal 2016 . (D) Executive Deferred Compensation Plan We sponsor 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 not significant in fiscal 2018 , fiscal 2017 and fiscal 2016 . |
Debt
Debt | 12 Months Ended |
Feb. 28, 2018 | |
Debt [Abstract] | |
Debt Disclosure [Text Block] | DEBT As of February 28 (In thousands) 2018 2017 Revolving credit facility $ 197,627 $ 155,062 Term loan 300,000 300,000 3.86% Senior notes due 2023 100,000 100,000 4.17% Senior notes due 2026 200,000 200,000 4.27% Senior notes due 2028 200,000 200,000 Finance and capital lease obligations 500,363 496,136 Non-recourse notes payable 11,644,615 10,742,425 Total debt 13,142,605 12,193,623 Less: current portion (365,554 ) (343,266 ) Less: unamortized debt issuance costs (24,239 ) (23,919 ) Long-term debt, net $ 12,752,812 $ 11,826,438 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 as no repayments are expected to be made within the next 12 months. As of February 28, 2018 , the unused capacity of $1.00 billion was fully available to us. The weighted average interest rate on outstanding short-term and long-term debt was 2.49% in fiscal 2018 , 1.74% in fiscal 2017 and 1.46% in fiscal 2016 . Term Loan. We have a $300 million unsecured term loan that expires in August 2020 . The term loan accrues interest at variable rates ( 2.57% as of February 28, 2018 ) based on the LIBOR rate, the federal funds rate, or the prime rate and interest is payable monthly. As of February 28, 2018 , $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. Senior Notes. We have senior unsecured notes with outstanding principal totaling $500 million as of February 28, 2018 , which are due in 2023, 2026 and 2028. These notes were classified as long-term debt as no repayments are scheduled to be made within the next 12 months. Borrowings under these notes are available for working capital and general corporate purposes. Interest on the notes is payable semi-annually. 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. In the event the leases are modified or extended beyond their original lease term, the related obligation is increased based on the present value of the revised future minimum lease payments, with a corresponding increase to the assets subject to these transactions. 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 non-recourse funding vehicles. The timing of principal payments on the non-recourse notes payable is based on the timing of principal collections and defaults on the related auto loan receivables. The current portion of non-recourse notes payable represents principal payments that are due to be distributed in the following period. As of February 28, 2018 , $9.81 billion of non-recourse notes payable was outstanding related to asset-backed term funding transactions. These notes payable accrue interest predominantly at fixed rates and have scheduled maturities through July 2024 , but may mature earlier, depending upon the repayment rate of the underlying auto loan receivables. As of February 28, 2018 , $1.83 billion of non-recourse notes payable was outstanding related to our warehouse facilities. As of February 28, 2018 , the combined warehouse facility limit was $3.14 billion , and the unused warehouse capacity totaled $1.31 billion . Of the combined warehouse facility limit, $1.30 billion will expire in August 2018 , $140.0 million will expire in September 2018 and $1.70 billion will expire in February 2019 . 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 auto loan receivables. Capitalized Interest. We capitalize interest in connection with the construction of certain facilities. For fiscal 2018 , fiscal 2017 and fiscal 2016 , we capitalized interest of $6.9 million , $11.2 million , and $9.2 million , respectively. Financial Covenants. The credit facility, term loan and senior note agreements contain representations and warranties, conditions and covenants. We must also meet financial covenants in conjunction with certain of the sale-leaseback transactions. The agreements governing our non-recourse funding vehicles contain representations and warranties, financial covenants and performance triggers. As of February 28, 2018 , we were in compliance with all financial covenants and our non-recourse funding vehicles were in compliance with the related performance triggers. |
Stock And Stock-Based Incentive
Stock And Stock-Based Incentive Plans | 12 Months Ended |
Feb. 28, 2018 | |
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 As of February 28, 2018 , a total of $2.75 billion of board authorizations for repurchases of our common stock were outstanding, with no expiration date. At that date, $1.02 billion remained available for repurchase. Common Stock Repurchases Years Ended February 28 or 29 2018 2017 2016 Number of shares repurchased (in thousands) 8,897.2 10,262.5 16,300.1 Average cost per share $ 64.46 $ 54.34 $ 59.59 Available for repurchase, as of end of year (in millions) $ 1,016.8 $ 1,590.4 $ 1,398.0 (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 28, 2018 , a total of 55,200,000 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 7,068,824 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, stock-settled restricted stock units and/or restricted stock awards. 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 4 years . These options expire 7 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. The initial grant date fair values are based on the volume-weighted average prices of our common stock on the grant dates. 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. The grant date fair values are determined using a Monte-Carlo simulation and are based on the expected market price of our common stock on the vesting date and the expected number of converted common shares. MSUs do not have voting rights. Other Share-Based Incentives 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. The grant date fair values are based on the volume-weighted average prices of our common stock on the grant dates. PSUs do not have voting rights. As of February 28, 2018, 223,126 units were outstanding at a weighted average grant date fair value per share of $60.10 . 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 - to three -year period from date of grant. The grant date fair values are based on the volume-weighted average prices of our common stock on the grant dates. Participants holding restricted stock are entitled to vote on matters submitted to holders of our common stock for a vote. As of February 28, 2018, 48,241 units were outstanding at a weighted average grant date fair value per share of $58.05 . Employee Stock Purchase Plan. We sponsor an employee stock purchase plan for all associates meeting certain eligibility criteria. We have authorized up to 8,000,000 shares of common stock with a total of 2,988,202 shares remaining available under the plan as of February 28, 2018. Associate contributions are limited to 10% of eligible compensation, up to a maximum $7,500 per year. For each $1.00 contributed to the plan by associates, we match $0.15 . Shares are acquired through open-market purchases. We purchased 177,433 shares at an average price per share of $65.11 during fiscal 2018, 198,053 shares at an average price per share of $55.46 during fiscal 2017 and 176,595 shares at an average price per share of $59.93 during fiscal 2016. (D) Share-Based Compensation Composition of Share-Based Compensation Expense Years Ended February 28 or 29 (In thousands) 2018 2017 2016 Cost of sales $ 2,552 $ 4,446 $ 1,243 CarMax Auto Finance income 3,167 3,200 1,458 Selling, general and administrative expenses 57,701 85,393 49,725 Share-based compensation expense, before income taxes $ 63,420 $ 93,039 $ 52,426 Composition of Share-Based Compensation Expense – By Grant Type Years Ended February 28 or 29 (In thousands) 2018 2017 2016 Nonqualified stock options $ 26,461 $ 37,547 $ 25,399 Cash-settled restricted stock units (RSUs) 23,539 38,239 11,913 Stock-settled market stock units (MSUs) 10,032 12,035 10,589 Other share-based incentives: Stock-settled performance stock units (PSUs) 648 2,074 1,919 Restricted stock (RSAs) 1,199 1,701 1,257 Employee stock purchase plan 1,541 1,443 1,349 Total other share-based incentives 3,388 5,218 4,525 Share-based compensation expense, before income taxes $ 63,420 $ 93,039 $ 52,426 Unrecognized Share- Based Compensation Expense – By Grant Type As of February 28, 2018 Weighted Average Unrecognized Remaining Compensation Recognition Life (Costs in millions) Costs (Years) Nonqualified stock options $ 35.7 2.2 Stock-settled market stock units 10.3 1.2 Other share-based incentives: Stock-settled performance stock units 2.4 1.1 Restricted stock 0.6 0.3 Total other share-based incentives 3.0 1.0 Total $ 49.0 1.9 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 28, 2018 , February 28, 2017 or February 29, 2016 . 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, 2017 7,753 $ 50.00 Options granted 1,955 58.56 Options exercised (1,866 ) 39.40 Options forfeited or expired (80 ) 61.00 Outstanding as of February 28, 2018 7,762 $ 54.59 4.4 $ 72,973 Exercisable as of February 28, 2018 3,139 $ 50.98 3.3 $ 42,530 Stock Option Information Years Ended February 28 or 29 2018 2017 2016 Options granted 1,955,117 2,345,528 1,408,427 Weighted average grant date fair value per share $ 16.15 $ 14.25 $ 20.53 Cash received from options exercised (in millions) $ 73.5 $ 59.9 $ 47.0 Intrinsic value of options exercised (in millions) $ 57.1 $ 52.6 $ 70.4 Realized tax benefits (in millions) $ 21.8 $ 21.2 $ 28.2 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 28 or 29 2018 2017 2016 Dividend yield 0.0 % 0.0 % 0.0 % Expected volatility factor (1) 27.3 % - 34.2 % 29.3 % - 34.8 % 25.8 % - 31.8 % Weighted average expected volatility 29.7 % 30.7 % 30.6 % Risk-free interest rate (2) 0.7 % - 2.3 % 0.1 % - 2.4 % — % - 2.1 % Expected term (in years) (3) 4.6 4.6 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, 2017 1,406 $ 55.05 Stock units granted 628 $ 58.39 Stock units vested and converted (469 ) $ 45.30 Stock units cancelled (105 ) $ 58.61 Outstanding as of February 28, 2018 1,460 $ 59.36 Cash-Settled Restricted Stock Unit Information Years Ended February 28 or 29 2018 2017 2016 Stock units granted 628,095 632,261 418,281 Initial weighted average grant date fair value per share $ 58.39 $ 51.63 $ 73.76 Payments (before payroll tax withholdings) upon vesting (in millions) $ 26.6 $ 23.5 $ 33.6 Realized tax benefits (in millions) $ 10.2 $ 9.5 $ 13.5 Expected Cash Settlement Range Upon Restricted Stock Unit Vesting As of February 28, 2018 (In thousands) Minimum (1) Maximum (1) Fiscal 2019 $ 18,326 $ 48,869 Fiscal 2020 19,687 52,498 Fiscal 2021 22,424 59,798 Total expected cash settlements $ 60,437 $ 161,165 (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, 2017 504 $ 65.74 Stock units granted 164 $ 74.09 Stock units vested and converted (232 ) $ 56.13 Stock units cancelled (17 ) $ 72.67 Outstanding as of February 28, 2018 419 $ 74.04 Stock-Settled Market Stock Unit Information Years Ended February 28 or 29 2018 2017 2016 Stock units granted 163,618 174,211 109,956 Weighted average grant date fair value per share $ 74.09 $ 64.30 $ 89.73 Realized tax benefits (in millions) $ 7.0 $ 5.3 $ 17.0 |
Net Earnings Per Share
Net Earnings Per Share | 12 Months Ended |
Feb. 28, 2018 | |
Earnings Per Share [Abstract] | |
Net Earnings Per Share | NET EARNINGS PER SHARE Basic and Dilutive Net Earnings Per Share Reconciliations Years Ended February 28 or 29 (In thousands except per share data) 2018 2017 2016 Net earnings $ 664,112 $ 626,970 $ 623,428 Weighted average common shares outstanding 182,660 190,343 203,275 Dilutive potential common shares: Stock options 1,390 1,379 1,676 Stock-settled restricted stock units 420 493 589 Weighted average common shares and dilutive potential common shares 184,470 192,215 205,540 Basic net earnings per share $ 3.64 $ 3.29 $ 3.07 Diluted net earnings per share $ 3.60 $ 3.26 $ 3.03 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 2018 , fiscal 2017 and fiscal 2016 , options to purchase 2,993,200 shares, 2,874,788 shares and 1,243,383 shares of common stock, respectively, were not included. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Feb. 28, 2018 | |
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 Net Accumulated Unrecognized Unrecognized Other Actuarial Hedge Gains Comprehensive (In thousands, net of income taxes) Losses (Losses) Loss 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 ) Other comprehensive (loss) income before reclassifications (19 ) 5,991 5,972 Amounts reclassified from accumulated other comprehensive loss 968 6,701 7,669 Other comprehensive income 949 12,692 13,641 Balance as of February 28, 2017 (55,521 ) (1,034 ) (56,555 ) Other comprehensive (loss) income before reclassifications (2,546 ) 12,381 9,835 Amounts reclassified from accumulated other comprehensive loss 1,175 1,813 2,988 Other comprehensive (loss) income (1,371 ) 14,194 12,823 Amounts reclassified from accumulated other comprehensive loss to retained earnings (1) (11,605 ) 1,025 (10,580 ) Balance as of February 28, 2018 $ (68,497 ) $ 14,185 $ (54,312 ) (1) Reclassification due to the adoption of ASU 2018-02. See Note 2 for further discussion. Changes In and Reclassifications Out of Accumulated Other Comprehensive Loss Years Ended February 28 or 29 (In thousands) 2018 2017 2016 Retirement Benefit Plans (Note 10): Actuarial (loss) gain arising during the year $ (3,256 ) $ (246 ) $ 2,214 Tax benefit (expense) 710 227 (752 ) Actuarial (loss) gain arising during the year, net of tax (2,546 ) (19 ) 1,462 Actuarial loss amortization reclassifications recognized in net pension expense: Cost of sales 749 637 835 CarMax Auto Finance income 46 37 49 Selling, general and administrative expenses 1,020 872 1,173 Total amortization reclassifications recognized in net pension expense 1,815 1,546 2,057 Tax expense (640 ) (578 ) (769 ) Amortization reclassifications recognized in net pension expense, net of tax 1,175 968 1,288 Net change in retirement benefit plan unrecognized actuarial losses, net of tax (1,371 ) 949 2,750 Cash Flow Hedges (Note 5): Effective portion of changes in fair value 17,953 9,878 (20,715 ) Tax (expense) benefit (5,572 ) (3,887 ) 8,137 Effective portion of changes in fair value, net of tax 12,381 5,991 (12,578 ) Reclassifications to CarMax Auto Finance income 3,009 11,038 8,277 Tax expense (1,196 ) (4,337 ) (3,254 ) Reclassification of hedge losses, net of tax 1,813 6,701 5,023 Net change in cash flow hedge unrecognized gains, net of tax 14,194 12,692 (7,555 ) Total other comprehensive income (loss), net of tax $ 12,823 $ 13,641 $ (4,805 ) 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 $16.6 million as of February 28, 2018 and $33.8 million as of February 28, 2017 . |
Lease Commitments
Lease Commitments | 12 Months Ended |
Feb. 28, 2018 | |
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 for most real property leases is typically 5 to 20 years , with renewal options of 5 to 20 years , and may include rent escalation clauses. 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 $52.4 million in fiscal 2018 , $49.4 million in fiscal 2017 and $46.9 million in fiscal 2016 . See Note 11 for additional information on finance and capital lease obligations. Future Minimum Lease Obligations As of February 28, 2018 Operating Capital Finance Lease (In thousands) Leases (1) Leases (1) Commitments (1) Fiscal 2019 $ 2,789 $ 49,263 $ 51,817 Fiscal 2020 2,838 49,200 50,716 Fiscal 2021 2,926 44,070 47,415 Fiscal 2022 3,005 43,341 44,113 Fiscal 2023 8,315 42,877 42,271 Fiscal 2024 and thereafter 5,059 826,487 611,859 Total minimum lease payments 24,932 $ 1,055,238 $ 848,191 Less amounts representing interest (5,272 ) Present value of net minimum lease payments $ 19,660 (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. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information Supplemental Cash Flow (Notes) | 12 Months Ended |
Feb. 28, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | SUPPLEMENTAL CASH FLOW INFORMATION Supplemental disclosures of cash flow information: Years Ended February 28 or 29 (In thousands) 2018 2017 2016 Cash paid for interest $ 69,431 $ 55,139 $ 34,319 Cash paid for income taxes $ 353,977 $ 371,227 $ 319,978 Non-cash investing and financing activities: Increase (decrease) in accrued capital expenditures $ 1,220 $ (6,280 ) $ 16,222 Increase in finance and capital lease obligations $ 12,051 $ 90,517 $ 103,233 |
Commitments And Contingencies
Commitments And Contingencies | 12 Months Ended |
Feb. 28, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES (A) Litigation CarMax entities are defendants in four proceedings asserting wage and hour claims with respect to CarMax sales consultants in California. The asserted claims include failure to pay minimum wage, provide meal periods and rest breaks, pay statutory/contractual wages, reimburse for work-related expenses and provide accurate itemized wage statements; unfair competition; and Private Attorney General Act claims. On September 4, 2015, Craig Weiss et al., v. CarMax Auto Superstores California, LLC, and CarMax Auto Superstores West Coast, Inc., a putative class action, was filed in the Superior Court of California, County of Placer. The Weiss lawsuit seeks civil penalties, fines, cost of suit, and the recovery of attorneys’ fees. On June 29, 2016, Ryan Gomez et al. v. CarMax Auto Superstores California, LLC, and CarMax Auto Superstores West Coast, Inc., a putative class action, was filed in the Superior Court of the State of California, Los Angeles. The Gomez lawsuit seeks declaratory relief, unspecified damages, restitution, statutory penalties, interest, cost and attorneys’ fees. On September 7, 2016, James Rowland v. CarMax Auto Superstores California, LLC, and CarMax Auto Superstores West Coast, Inc., a putative class action, was filed in the U.S. District Court, Eastern District of California, Sacramento Division. The Rowland lawsuit seeks unspecified damages, restitution, statutory penalties, interest, cost and attorneys’ fees. On October 31, 2017, Joshua Sabanovich v. CarMax Superstores California, LLC et. al., a putative class action, was filed in the Superior Court of California, County of Stanislaus. The Sabanovich lawsuit seeks unspecified damages, restitution, statutory penalties, interest, cost and 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 these matters. On April 25, 2017, the Company met with representatives from multiple California municipality district attorney offices as part of an informal inquiry by those offices into the handling, storage and disposal of certain types of hazardous waste at our store locations in those municipalities. We are unable to make a reasonable estimate of the amount or range of loss that could result from an unfavorable outcome in these matters. 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 28, 2018 and $6.3 million as of February 28, 2017 , 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 28, 2018 , we have material purchase obligations of $175.0 million , of which $78.8 million are expected to be fulfilled in fiscal 2019 . |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Feb. 28, 2018 | |
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) 2018 2018 2018 2018 (1) 2018 Net sales and operating revenues $ 4,542,334 $ 4,386,640 $ 4,107,017 $ 4,084,218 $ 17,120,209 Gross profit $ 648,938 $ 604,005 $ 539,188 $ 536,728 $ 2,328,859 CarMax Auto Finance income $ 109,363 $ 107,936 $ 102,810 $ 101,073 $ 421,182 Selling, general and administrative expenses $ 403,503 $ 405,062 $ 399,672 $ 408,814 $ 1,617,051 Net earnings $ 211,702 $ 181,424 $ 148,840 $ 122,146 $ 664,112 Net earnings per share: Basic $ 1.14 $ 0.99 $ 0.82 $ 0.68 $ 3.64 Diluted $ 1.13 $ 0.98 $ 0.81 $ 0.67 $ 3.60 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Fiscal Year (In thousands, except per share data) 2017 2017 (2) 2017 2017 2017 Net sales and operating revenues $ 4,126,386 $ 3,997,248 $ 3,701,524 $ 4,049,960 $ 15,875,118 Gross profit $ 572,637 $ 545,362 $ 503,135 $ 562,160 $ 2,183,294 CarMax Auto Finance income $ 100,758 $ 95,969 $ 89,359 $ 82,898 $ 368,984 Selling, general and administrative expenses $ 380,230 $ 366,126 $ 356,735 $ 385,413 $ 1,488,504 Net earnings $ 175,360 $ 162,362 $ 136,645 $ 152,603 $ 626,970 Net earnings per share: Basic $ 0.91 $ 0.85 $ 0.72 $ 0.82 $ 3.29 Diluted $ 0.90 $ 0.84 $ 0.72 $ 0.81 $ 3.26 (1) During the fourth quarter of fiscal 2018, net earnings were reduced by $11.9 million in connection with the 2017 Tax Act. See Note 9. Net earnings were also reduced by $8.0 million , before tax, due to a one-time discretionary bonus paid to eligible associates. (2) During the second quarter of fiscal 2017, we increased SG&A expenses by $10.9 million , before tax, due to the modification of certain awards granted to our recently retired chief executive officer. |
Summary Of Significant Accoun26
Summary Of Significant Accounting Policies (Policy) | 12 Months Ended |
Feb. 28, 2018 | |
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 connection with our adoption of the Financial Accounting Standards Board's (“FASB”) Accounting Standards Update (“ASU”) 2016-09 during the current fiscal year, cash flows related to excess tax benefits from share-based payment arrangements are now classified as operating activities, rather than financing activities, in the consolidated statements of cash flows. Prior period amounts have been reclassified to conform to the current year's presentation. Additionally, excess tax benefits previously included within capital in excess of par value in the consolidated statement of shareholders’ equity are now recognized directly in income tax expense. In connection with our adoption of the FASB’s ASU 2018-02 during the current fiscal year, we elected to reclassify the income tax effects of the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”) stranded in accumulated other comprehensive loss (“AOCL”) to retained earnings in the consolidated statements of shareholders’ equity as of February 28, 2018. See further discussion at Note 2(X). |
Cash And Cash Equivalents | Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with original maturities of three months or less and are not significant to the consolidated balance sheets as of February 28, 2018 and 2017 . |
Restricted Cash From Collections On Auto Loan Receivables | Restricted Cash from Collections on Auto Loan Receivables Cash equivalents totaling $399.4 million as of February 28, 2018 , and $380.4 million as of February 28, 2017 , consisted of collections of principal, interest and fee payments on auto loan receivables that are restricted for payment to holders of non-recourse notes payable pursuant to the applicable agreements. |
Marketable Securities | Marketable Securities The company classifies its marketable securities as trading. These securities consisted primarily of mutual funds reported at fair value, as well as investments in equity securities that are reported at cost less any impairment. Gains and losses on these securities are reflected as a component of other expense. |
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 | Financing and Securitization Transactions We maintain a revolving funding program composed of three warehouse facilities (“warehouse facilities”) that we use to fund auto loan receivables originated by CAF. We typically elect to fund these receivables through an asset-backed term funding transaction, such as a term securitization or alternative funding arrangement, at a later date. We sell the auto loan receivables to one of three 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 related receivables. We typically use term securitizations to provide long-term funding for most of the auto loan receivables initially funded 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 asset-backed term funding transactions, including term securitizations (together, “non-recourse funding vehicles”), as secured borrowings, which result in recording the auto loan receivables and the related non-recourse notes payable on our consolidated balance sheets. These receivables can only be used as collateral to settle obligations of the related non-recourse funding vehicles. The non-recourse funding vehicles and investors have no recourse to our assets beyond the related 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 non-recourse funding 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 non-recourse funding vehicles. See Notes 4 and 11 for additional information on auto loan receivables and non-recourse notes payable. |
Inventory | Inventory Inventory is primarily comprised of vehicles held for sale or currently undergoing reconditioning and is stated at the lower of cost or net realizable value (“NRV”). 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 expected to become evident during the following 12 months. The allowance for loan losses is primarily based on the composition of the portfolio of managed receivables, historical loss trends and forecasted forward loss curves. For receivables that have less than 12 months of performance history, the estimate also takes into account the credit grades of the receivables and historical losses by credit grade to supplement actual loss data in estimating future performance. Once the receivables have 12 months of performance history, the estimate reflects actual loss experience of those receivables to date along with forward loss curves to predict future performance. The forward loss curves are constructed using historical performance data and show the average timing of losses over the course of a receivable’s life. We also consider recent trends in delinquencies and defaults, recovery rates and the economic environment in assessing the models used in estimating the allowance for loan losses, and may adjust the allowance for loan losses to reflect factors that may not be captured in the models. In addition, we periodically consider whether the use of additional metrics would result in improved model performance and revise the models when appropriate. 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 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 related 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 or bank deposit accounts and was $56.8 million as of February 28, 2018 and $52.8 million as of February 28, 2017 . Other Investments. Other investments includes restricted money market securities primarily held to satisfy certain insurance program requirements, investments held in a rabbi trust established to fund informally our executive deferred compensation plan and investments in equity securities. Other investments totaled $80.9 million as of February 28, 2018 and $70.8 million as of February 28, 2017 . |
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. |
Other Accrued Expenses | Accrued Expenses As of February 28, 2018 and 2017 , accrued expenses and other current liabilities included accrued compensation and benefits of $148.6 million and $140.0 million , respectively; loss reserves for general liability and workers’ compensation insurance of $36.5 million and $35.0 million , respectively; and the current portion of 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 using a number of actuarial assumptions. 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 retail 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, on a net basis, at the time of sale. We also record a reserve for estimated contract cancellations. Periodically, we may receive retrospective commissions based upon the performance of the policies administered by the third parties. 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 $158.6 million in fiscal 2018 , $146.0 million in fiscal 2017 and $142.2 million in fiscal 2016 . |
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 income tax expense. 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 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 Adopted in the Current Period. 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 NRV test. NRV is calculated as the estimated selling price less reasonably predictable costs of completion, disposal and transportation. We adopted this pronouncement for our fiscal year beginning March 1, 2017, and it did not have a material 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 standard also addresses simplifications related to statement of cash flows classification, accounting for forfeitures, and minimum statutory tax withholding requirements. We adopted this pronouncement for our fiscal year beginning March 1, 2017. The requirements related to the tax consequences of share-based payments were applied prospectively and resulted in $13.8 million recorded as a reduction to the income tax provision, rather than as a component of capital in excess of par value, during the year ended February 28, 2018. The provisions related to the presentation of excess tax benefits on the consolidated statements of cash flows were applied retrospectively, resulting in an increase in cash provided by operating activities and a decrease in cash provided by financing activities of $12.8 million and $32.1 million for the years ended February 28, 2017 and February 29, 2016, respectively. We elected to continue estimating forfeitures of share-based awards, and none of the other provisions of the pronouncement had a material effect on our consolidated financial statements. In January 2017, the FASB issued an accounting pronouncement (FASB ASU 2017-04) related to goodwill impairment. The pronouncement simplifies how an entity tests goodwill for impairment by eliminating the Step 2 requirement to compute the implied fair value of goodwill at the impairment testing date. The entity should compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. We early adopted this pronouncement for our annual goodwill impairment test for fiscal 2018 and it did not have an effect on our consolidated financial statements. In February 2018, the FASB issued an accounting pronouncement (FASB ASU 2018-02) related to income tax effects stranded in accumulated other comprehensive income (“AOCI”) resulting from the 2017 Tax Act. This ASU provides companies the option to reclassify these amounts from AOCI to retained earnings and also requires new disclosures. We early adopted this pronouncement for our fourth quarter of fiscal 2018. The stranded income tax effects related to the 2017 Tax Act have been reclassified to retained earnings in the consolidated statements of shareholders’ equity as of February 28, 2018. See Note 9 for additional information. In March 2018, the FASB issued an accounting pronouncement (FASB ASU 2018-05), which included amendments to SEC paragraphs pursuant to SEC Staff Accounting Bulletin No. 118 (“SAB 118”). The pronouncement addresses certain circumstances that may arise for registrants in accounting for the income tax effects of the 2017 Tax Act, including when certain income tax effects of the Act are incomplete by the time financial statements are issued. We have complied with the amendments related to SAB 118, as discussed further in Note 9. Effective in Future Periods. In May 2014, the FASB issued an accounting pronouncement (FASB ASU 2014-09) related to revenue recognition. This ASU, along with subsequent ASUs issued to clarify certain provisions and the effective date of ASU 2014-09, provides a single, comprehensive revenue recognition model for all contracts with customers. The standard contains principles that an entity will apply to determine the measurement of revenue and the timing of when it is recognized. The entity will recognize revenue to reflect the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. This standard will become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We will adopt this standard for our fiscal year beginning March 1, 2018 and plan to apply the modified retrospective transition method with a cumulative effect adjustment, if any, recognized at the date of adoption. We primarily sell products and recognize revenue at the point of sale or delivery to customers, at which point the earnings process is deemed to be complete. Our performance obligations are clearly identifiable and we do not anticipate significant changes to the assessment of such performance obligations, conclusions related to revenue that is currently recognized on a net basis, or the timing of our revenue recognition, with the exception of certain retrospective commissions earned on the ESP contracts we sell. A portion of the transaction price related to these contracts is considered variable consideration, which may be subject to accelerated recognition under the new standard. This variable consideration is required to be estimated, subject to certain constraints, in determining amounts to be recognized. We are in the process of finalizing our analysis of this variable consideration, which may result in a cumulative effect adjustment to retained earnings as of March 1, 2018. We do not expect any such adjustment to be material to our consolidated balance sheets. In addition, the standard will require us to present our reserve for estimated sales returns on a gross basis on our consolidated balance sheets, with a return asset and a corresponding refund liability. Currently this reserve is presented as a net liability. This change will result in an estimated $10 million to $15 million increase to both assets and liabilities. The standard will require additional financial statement disclosures, the effects of which we do not expect to be significant. We do not expect any material impacts resulting from this standard other than those discussed herein. Our primary business processes are consistent with the principles contained in the ASU, and we do not expect significant changes to those processes, our internal controls or systems. In January 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-01) related to financial instruments (FASB ASC Subtopic 825-10). This pronouncement, along with FASB 2018-03 issued in February 2018, requires that most equity investments be measured at fair value, with subsequent changes in fair value recognized in net earnings. The pronouncements also impact financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The changes are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. We will adopt the pronouncements for our fiscal year beginning March 1, 2018, and we do not expect it to have a material 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, along with subsequent ASUs issued to clarify certain provisions of ASU 2016-02, requires lessees to record most leases on their balance sheet while also disclosing key information about those lease arrangements. Under the new guidance, lease classification as either a finance lease or an operating lease will affect the pattern and classification of expense recognition in the income statement. The classification criteria to distinguish between finance and operating leases are generally consistent with the classification criteria to distinguish between capital and operating leases under existing lease accounting guidance. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. We expect to adopt the new standard for our fiscal year beginning March 1, 2019. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with practical expedients available for election as a package. We expect that this standard will have a material effect on our consolidated balance sheets as a result of recognizing new right-of-use assets and lease liabilities for existing operating leases. To date, we have not completed our comprehensive analysis of those leases and are unable to quantify the impact at this time. We are still evaluating the impact of the standard on our sale-leaseback transactions currently accounted for as direct financings. We believe that the majority of our leases will maintain their current lease classification under the new standard. As a result, we do not expect the new standard to have a material effect on our expense recognition pattern or, in turn, our consolidated statements of operations. We are continuing to evaluate the full impact of the new standard, as well as its impacts on our business processes, systems, and internal controls. In June 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-13) related to the measurement of credit losses on financial instruments. The pronouncement changes the impairment model for most financial assets, and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. We plan to adopt this pronouncement for our fiscal year beginning March 1, 2020. We are currently evaluating the effect on our consolidated financial statements, as well as the impacts on our business processes, systems and internal controls, and expect that the standard will have a material impact on our calculation of the allowance for loan losses. In August 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-15) related to the classification of certain cash receipts and cash payments on the statement of cash flows. The pronouncement provides clarification guidance on eight specific cash flow presentation issues that have developed due to diversity in practice. The issues include, but are not limited to, debt prepayment or extinguishment costs, settlement of zero-coupon debt, proceeds from the settlement of insurance claims, and cash receipts from payments on beneficial interests in securitization transactions. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. We plan to adopt this pronouncement for our fiscal year beginning March 1, 2018, and we do not expect it to have a material effect on our consolidated financial statements based on current operations. In October 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-16) related to the income tax effects of intra-entity transfers of assets other than inventory. The pronouncement requires that entities recognize the income tax effects of intra-entity transfers of assets other than inventory when the transfer occurs. Current GAAP prohibits the recognition of those tax effects until the asset has been sold to an outside party. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. We plan to adopt this pronouncement for our fiscal year beginning March 1, 2018, and we are in the process of completing our evaluation of the effect on our consolidated financial statements. In March 2017, the FASB issued an accounting pronouncement (FASB ASU 2017-07) related to net periodic pension cost and net periodic postretirement benefit cost. The standard provides guidance on the presentation of net benefit cost in an employer’s income statement and on the components eligible for capitalization. This pronouncement requires that an employer report the service cost component in the same line item(s) as other employee compensation costs arising from services rendered during the period, and report the other components of net benefit cost separately from the service cost component and outside a subtotal of operating income. Only the service cost component will be eligible for capitalization. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The updated presentation of net benefit cost in an employer’s income statement should be applied retrospectively. The updated capitalization of the service cost component should be applied prospectively. We will adopt this pronouncement for our interim periods and fiscal year beginning March 1, 2018, and we do not expect it to have a material effect on our consolidated financial statements. In May 2017, the FASB issued an accounting pronouncement (FASB ASU 2017-09) to provide guidance on determining which changes to the terms or conditions of share-based payment awards require an entity to apply modification accounting under Accounting Standards Codification Topic 718. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted, and is applied prospectively to changes in terms or conditions of awards occurring on or after the adoption date. We plan to adopt this pronouncement for our fiscal year beginning March 1, 2018 and will consider the impact that this standard may have on future share-based payment award changes, should they occur. In August 2017, the FASB issued an accounting pronouncement (FASB ASU 2017-12) related to the accounting for derivatives and hedging. The pronouncement expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. It also includes certain targeted improvements to simplify the application of current guidance related to hedge accounting. The pronouncement is effective f or fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. We are currently in the process of evaluating the effects of this pronouncement on our consolidated financial statements, including potential early adoption. |
Summary Of Significant Accoun27
Summary Of Significant Accounting Policies (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
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. 28, 2018 | |
CarMax Auto Finance Income [Abstract] | |
Components Of CarMax Auto Finance Income | Components of CAF Income Years Ended February 28 or 29 (In millions) 2018 % (1) 2017 % (1) 2016 % (1) Interest margin: Interest and fee income $ 856.6 7.6 $ 762.0 7.5 $ 682.9 7.5 Interest expense (215.0 ) (1.9 ) (171.4 ) (1.7 ) (127.7 ) (1.4 ) Total interest margin 641.6 5.7 590.6 5.8 555.2 6.1 Provision for loan losses (137.6 ) (1.2 ) (150.6 ) (1.5 ) (101.2 ) (1.1 ) Total interest margin after provision for loan losses 504.0 4.5 440.0 4.3 454.0 5.0 Total other income (expense) 0.4 — — — (0.4 ) — Direct expenses: Payroll and fringe benefit expense (35.4 ) (0.3 ) (30.8 ) (0.3 ) (28.2 ) (0.3 ) Other direct expenses (47.8 ) (0.4 ) (40.2 ) (0.4 ) (33.4 ) (0.4 ) Total direct expenses (83.2 ) (0.7 ) (71.0 ) (0.7 ) (61.6 ) (0.7 ) CarMax Auto Finance income $ 421.2 3.8 $ 369.0 3.6 $ 392.0 4.3 Total average managed receivables $ 11,210.8 $ 10,158.3 $ 9,092.9 (1) Percent of total average managed receivables. |
Auto Loan Receivables (Tables)
Auto Loan Receivables (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Loans Receivable, Net [Abstract] | |
Auto Loan Receivables, Net | Auto Loan Receivables, Net As of February 28 (In millions) 2018 2017 Asset-backed term funding $ 9,455.2 $ 8,784.7 Warehouse facilities 1,834.0 1,624.0 Overcollateralization (1) 269.4 211.4 Other managed receivables (2) 60.3 61.2 Total ending managed receivables 11,618.9 10,681.3 Accrued interest and fees 43.2 38.5 Other 2.2 (0.1 ) Less allowance for loan losses (128.6 ) (123.6 ) Auto loan receivables, net $ 11,535.7 $ 10,596.1 (1) Represents receivables restricted as excess collateral for the non-recourse funding vehicles. (2) Other managed receivables includes receivables not funded through the non-recourse funding vehicles. |
Ending Managed Receivables By Major Credit Grade | Ending Managed Receivables by Major Credit Grade As of February 28 (In millions) 2018 (1) % (2) 2017 (1) % (2) A $ 5,725.1 49.3 $ 5,223.4 48.9 B 4,133.8 35.6 3,739.4 35.0 C and other 1,760.0 15.1 1,718.5 16.1 Total ending managed receivables $ 11,618.9 100.0 $ 10,681.3 100.0 (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 28 (In millions) 2018 % (1) 2017 % (1) Balance as of beginning of year $ 123.6 1.16 $ 94.9 0.99 Charge-offs (254.4 ) (230.7 ) Recoveries 121.8 108.8 Provision for loan losses 137.6 150.6 Balance as of end of year $ 128.6 1.11 $ 123.6 1.16 (1) Percent of total ending managed receivables. |
Past Due Receivables | Past Due Receivables As of February 28 (In millions) 2018 % (1) 2017 % (1) Total ending managed receivables $ 11,618.9 100.0 $ 10,681.3 100.0 Delinquent loans: 31-60 days past due $ 246.6 2.1 $ 211.0 2.0 61-90 days past due 116.9 1.0 93.5 0.9 Greater than 90 days past due 29.7 0.3 26.5 0.2 Total past due $ 393.2 3.4 $ 331.0 3.1 (1) Percent of total ending managed receivables. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
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 28, 2018 (In thousands) Level 1 Level 2 Total Assets: Money market securities $ 276,894 $ — $ 276,894 Mutual fund investments 19,429 — 19,429 Derivative instruments — 12,127 12,127 Total assets at fair value $ 296,323 $ 12,127 $ 308,450 Percent of total assets at fair value 96.1 % 3.9 % 100.0 % Percent of total assets 1.7 % 0.1 % 1.8 % Liabilities: Derivative instruments $ — $ (99 ) $ (99 ) Total liabilities at fair value $ — $ (99 ) $ (99 ) Percent of total liabilities — % — % — % As of February 28, 2017 (In thousands) Level 1 Level 2 Total Assets: Money market securities $ 397,994 $ — $ 397,994 Mutual fund investments 16,519 — 16,519 Derivative instruments — 2,997 2,997 Total assets at fair value $ 414,513 $ 2,997 $ 417,510 Percent of total assets at fair value 99.3 % 0.7 % 100.0 % Percent of total assets 2.5 % — % 2.6 % Liabilities: Derivative instruments $ — $ (509 ) $ (509 ) Total liabilities at fair value $ — $ (509 ) $ (509 ) Percent of total liabilities — % — % — % |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block] | (In thousands) As of February 28, 2018 As of February 28, 2017 Carrying value $ 500,000 $ 500,000 Fair value $ 492,163 $ 499,518 |
Property And Equipment (Tables)
Property And Equipment (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule Of Property And Equipment | As of February 28 (In thousands) 2018 2017 Land $ 722,173 $ 627,784 Land held for development 77,145 98,216 Buildings 2,081,785 1,934,730 Leasehold improvements 215,114 193,972 Furniture, fixtures and equipment 600,739 525,177 Construction in progress 134,354 179,891 Total property and equipment 3,831,310 3,559,770 Less accumulated depreciation and amortization 1,164,249 1,041,377 Property and equipment, net $ 2,667,061 $ 2,518,393 |
Cancellation Reserves (Tables)
Cancellation Reserves (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Cancellation Reserves [Abstract] | |
Schedule Of Cancellation Reserves Accrual | Cancellation Reserves As of February 28 (In millions) 2018 2017 Balance as of beginning of year $ 108.2 $ 110.2 Cancellations (65.7 ) (66.1 ) Provision for future cancellations 62.7 64.1 Balance as of end of year $ 105.2 $ 108.2 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule Of Income Tax Provision | Income Tax Provision Years Ended February 28 or 29 (In thousands) 2018 2017 2016 Current: Federal $ 276,597 $ 332,466 $ 324,096 State 41,892 44,645 45,183 Total 318,489 377,111 369,279 Deferred: Federal 81,486 4,098 16,398 State (479 ) (1,774 ) 839 Total 81,007 2,324 17,237 Income tax provision $ 399,496 $ 379,435 $ 386,516 |
Schedule Of Effective Income Tax Rate Reconciliation | Effective Income Tax Rate Reconciliation Years Ended February 28 or 29 2018 2017 2016 Federal statutory income tax rate 32.7 % 35.0 % 35.0 % State and local income taxes, net of federal benefit 3.1 2.7 3.2 2017 Tax Act 3.1 — — Share-based compensation (1.3 ) — — Nondeductible and other items 0.2 0.1 0.2 Credits (0.2 ) (0.1 ) (0.1 ) Effective income tax rate 37.6 % 37.7 % 38.3 % |
Schedule Of Temporary Differences Resulting In Deferred Tax Assets And Liabilities | Temporary Differences Resulting in Deferred Tax Assets and Liabilities As of February 28 (In thousands) 2018 2017 Deferred tax assets: Accrued expenses $ 37,362 $ 59,639 Partnership basis 63,670 106,176 Share-based compensation 45,744 69,621 Derivatives — 408 Capital loss carry forward 682 1,249 Total deferred tax assets 147,458 237,093 Less: valuation allowance (682 ) (1,249 ) Total deferred tax assets after valuation allowance 146,776 235,844 Deferred tax liabilities: Prepaid expenses 16,157 21,148 Property and equipment 43,663 52,266 Inventory 18,625 11,468 Derivatives 5,075 — Total deferred tax liabilities 83,520 84,882 Net deferred tax asset $ 63,256 $ 150,962 |
Schedule Of Reconciliation Of Unrecognized Tax Benefits | Reconciliation of Unrecognized Tax Benefits Years Ended February 28 or 29 (In thousands) 2018 2017 2016 Balance at beginning of year $ 29,955 $ 26,771 $ 24,951 Increases for tax positions of prior years — 2,651 125 Decreases for tax positions of prior years (607 ) (216 ) (853 ) Increases based on tax positions related to the current year 3,342 4,380 5,256 Settlements (304 ) (16 ) (830 ) Lapse of statute (3,701 ) (3,615 ) (1,878 ) Balance at end of year $ 28,685 $ 29,955 $ 26,771 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Defined Benefit Plan [Abstract] | |
Benefit Plan Information | Benefit Plan Information As of February 28 Pension Plan Restoration Plan Total (In thousands) 2018 2017 2018 2017 2018 2017 Plan assets $ 156,827 $ 139,502 $ — $ — $ 156,827 $ 139,502 Projected benefit obligation 230,861 218,284 11,041 10,822 241,902 229,106 Funded status recognized $ (74,034 ) $ (78,782 ) $ (11,041 ) $ (10,822 ) $ (85,075 ) $ (89,604 ) Amounts recognized in the consolidated balance sheets: Current liability $ — $ — $ (485 ) $ (467 ) $ (485 ) $ (467 ) Noncurrent liability (74,034 ) (78,782 ) (10,556 ) (10,355 ) (84,590 ) (89,137 ) Net amount recognized $ (74,034 ) $ (78,782 ) $ (11,041 ) $ (10,822 ) $ (85,075 ) $ (89,604 ) |
Components Of Net Pension Expense | Years Ended February 28 or 29 Pension Plan Restoration Plan Total (In thousands) 2018 2017 2016 2018 2017 2016 2018 2017 2016 Total net pension expense $ 207 $ 330 $ 847 $ 468 $ 481 $ 456 $ 675 $ 811 $ 1,303 Total net actuarial loss (gain) (1) $ 2,880 $ 17 $ (1,786 ) $ 376 $ 228 $ (428 ) $ 3,256 $ 245 $ (2,214 ) (1) Changes recognized in Accumulated Other Comprehensive Loss |
Schedule Of Assumptions Used | Assumptions Used to Determine Benefit Obligations As of February 28 Pension Plan Restoration Plan 2018 2017 2018 2017 Discount rate (1) 4.10 % 4.25 % 4.10 % 4.25 % (1) For the restoration plan, the discount rate presented is applied to the pre-2004 annuity amounts and to post-2004 lump sum amounts for fiscal 2018 . A rate of 4.50% is assumed for the post-2004 lump sum amounts paid from the plan for fiscal 2017 . Assumptions Used to Determine Net Pension Expense Years Ended February 28 or 29 Pension Plan Restoration Plan 2018 2017 2016 2018 2017 2016 Discount rate (1) 4.25 % 4.50 % 4.00 % 4.25 % 4.50 % 4.00 % 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 and to post-2004 lump sum amounts for fiscal 2018 . A rate of 4.50% is assumed for post-2004 lump sum amounts paid from the plan for fiscal 2017 and fiscal 2016 . |
Schedule Of Fair Value Of Plan Assets | Fair Value of Plan Assets and Fair Value Hierarchy As of February 28 (In thousands) 2018 2017 Mutual funds (Level 1): Equity securities $ 100,422 $ 89,739 Equity securities – international 19,467 17,139 Fixed income securities 36,693 31,700 Collective funds (Level 2): Short-term investments 322 986 Investment payables, net (77 ) (62 ) Total $ 156,827 $ 139,502 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Debt [Abstract] | |
Schedule of Debt [Table Text Block] | As of February 28 (In thousands) 2018 2017 Revolving credit facility $ 197,627 $ 155,062 Term loan 300,000 300,000 3.86% Senior notes due 2023 100,000 100,000 4.17% Senior notes due 2026 200,000 200,000 4.27% Senior notes due 2028 200,000 200,000 Finance and capital lease obligations 500,363 496,136 Non-recourse notes payable 11,644,615 10,742,425 Total debt 13,142,605 12,193,623 Less: current portion (365,554 ) (343,266 ) Less: unamortized debt issuance costs (24,239 ) (23,919 ) Long-term debt, net $ 12,752,812 $ 11,826,438 |
Stock And Stock-Based Incenti36
Stock And Stock-Based Incentive Plans (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Share-based Compensation [Abstract] | |
Schedule Of Common Stock Repurchases | Common Stock Repurchases Years Ended February 28 or 29 2018 2017 2016 Number of shares repurchased (in thousands) 8,897.2 10,262.5 16,300.1 Average cost per share $ 64.46 $ 54.34 $ 59.59 Available for repurchase, as of end of year (in millions) $ 1,016.8 $ 1,590.4 $ 1,398.0 |
Composition Of Share-Based Compensation Expense | Composition of Share-Based Compensation Expense Years Ended February 28 or 29 (In thousands) 2018 2017 2016 Cost of sales $ 2,552 $ 4,446 $ 1,243 CarMax Auto Finance income 3,167 3,200 1,458 Selling, general and administrative expenses 57,701 85,393 49,725 Share-based compensation expense, before income taxes $ 63,420 $ 93,039 $ 52,426 |
Composition Of Share-Based Compensation Expense - By Grant Type | Composition of Share-Based Compensation Expense – By Grant Type Years Ended February 28 or 29 (In thousands) 2018 2017 2016 Nonqualified stock options $ 26,461 $ 37,547 $ 25,399 Cash-settled restricted stock units (RSUs) 23,539 38,239 11,913 Stock-settled market stock units (MSUs) 10,032 12,035 10,589 Other share-based incentives: Stock-settled performance stock units (PSUs) 648 2,074 1,919 Restricted stock (RSAs) 1,199 1,701 1,257 Employee stock purchase plan 1,541 1,443 1,349 Total other share-based incentives 3,388 5,218 4,525 Share-based compensation expense, before income taxes $ 63,420 $ 93,039 $ 52,426 Unrecognized Share- Based Compensation Expense – By Grant Type As of February 28, 2018 Weighted Average Unrecognized Remaining Compensation Recognition Life (Costs in millions) Costs (Years) Nonqualified stock options $ 35.7 2.2 Stock-settled market stock units 10.3 1.2 Other share-based incentives: Stock-settled performance stock units 2.4 1.1 Restricted stock 0.6 0.3 Total other share-based incentives 3.0 1.0 Total $ 49.0 1.9 |
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, 2017 7,753 $ 50.00 Options granted 1,955 58.56 Options exercised (1,866 ) 39.40 Options forfeited or expired (80 ) 61.00 Outstanding as of February 28, 2018 7,762 $ 54.59 4.4 $ 72,973 Exercisable as of February 28, 2018 3,139 $ 50.98 3.3 $ 42,530 |
Outstanding Stock Options | Stock Option Information Years Ended February 28 or 29 2018 2017 2016 Options granted 1,955,117 2,345,528 1,408,427 Weighted average grant date fair value per share $ 16.15 $ 14.25 $ 20.53 Cash received from options exercised (in millions) $ 73.5 $ 59.9 $ 47.0 Intrinsic value of options exercised (in millions) $ 57.1 $ 52.6 $ 70.4 Realized tax benefits (in millions) $ 21.8 $ 21.2 $ 28.2 |
Assumptions Used To Estimate Option Values | Assumptions Used to Estimate Option Values Years Ended February 28 or 29 2018 2017 2016 Dividend yield 0.0 % 0.0 % 0.0 % Expected volatility factor (1) 27.3 % - 34.2 % 29.3 % - 34.8 % 25.8 % - 31.8 % Weighted average expected volatility 29.7 % 30.7 % 30.6 % Risk-free interest rate (2) 0.7 % - 2.3 % 0.1 % - 2.4 % — % - 2.1 % Expected term (in years) (3) 4.6 4.6 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 | Stock-Settled Market Stock Unit Information Years Ended February 28 or 29 2018 2017 2016 Stock units granted 163,618 174,211 109,956 Weighted average grant date fair value per share $ 74.09 $ 64.30 $ 89.73 Realized tax benefits (in millions) $ 7.0 $ 5.3 $ 17.0 Cash-Settled Restricted Stock Unit Activity Weighted Average Number of Grant Date (Units in thousands) Units Fair Value Outstanding as of February 28, 2017 1,406 $ 55.05 Stock units granted 628 $ 58.39 Stock units vested and converted (469 ) $ 45.30 Stock units cancelled (105 ) $ 58.61 Outstanding as of February 28, 2018 1,460 $ 59.36 Cash-Settled Restricted Stock Unit Information Years Ended February 28 or 29 2018 2017 2016 Stock units granted 628,095 632,261 418,281 Initial weighted average grant date fair value per share $ 58.39 $ 51.63 $ 73.76 Payments (before payroll tax withholdings) upon vesting (in millions) $ 26.6 $ 23.5 $ 33.6 Realized tax benefits (in millions) $ 10.2 $ 9.5 $ 13.5 Stock-Settled Market Stock Unit Activity Weighted Average Number of Grant Date (Units in thousands) Units Fair Value Outstanding as of February 28, 2017 504 $ 65.74 Stock units granted 164 $ 74.09 Stock units vested and converted (232 ) $ 56.13 Stock units cancelled (17 ) $ 72.67 Outstanding as of February 28, 2018 419 $ 74.04 |
Expected Cash Settlement Range Upon Restricted Stock Unit Vesting | Expected Cash Settlement Range Upon Restricted Stock Unit Vesting As of February 28, 2018 (In thousands) Minimum (1) Maximum (1) Fiscal 2019 $ 18,326 $ 48,869 Fiscal 2020 19,687 52,498 Fiscal 2021 22,424 59,798 Total expected cash settlements $ 60,437 $ 161,165 (1) Net of estimated forfeitures. |
Net Earnings Per Share (Tables)
Net Earnings Per Share (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Earnings Per Share [Abstract] | |
Basic And Dilutive Net Earnings Per Share Reconciliations | Basic and Dilutive Net Earnings Per Share Reconciliations Years Ended February 28 or 29 (In thousands except per share data) 2018 2017 2016 Net earnings $ 664,112 $ 626,970 $ 623,428 Weighted average common shares outstanding 182,660 190,343 203,275 Dilutive potential common shares: Stock options 1,390 1,379 1,676 Stock-settled restricted stock units 420 493 589 Weighted average common shares and dilutive potential common shares 184,470 192,215 205,540 Basic net earnings per share $ 3.64 $ 3.29 $ 3.07 Diluted net earnings per share $ 3.60 $ 3.26 $ 3.03 |
Accumulated Other Comprehensi38
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
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 Net Accumulated Unrecognized Unrecognized Other Actuarial Hedge Gains Comprehensive (In thousands, net of income taxes) Losses (Losses) Loss 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 ) Other comprehensive (loss) income before reclassifications (19 ) 5,991 5,972 Amounts reclassified from accumulated other comprehensive loss 968 6,701 7,669 Other comprehensive income 949 12,692 13,641 Balance as of February 28, 2017 (55,521 ) (1,034 ) (56,555 ) Other comprehensive (loss) income before reclassifications (2,546 ) 12,381 9,835 Amounts reclassified from accumulated other comprehensive loss 1,175 1,813 2,988 Other comprehensive (loss) income (1,371 ) 14,194 12,823 Amounts reclassified from accumulated other comprehensive loss to retained earnings (1) (11,605 ) 1,025 (10,580 ) Balance as of February 28, 2018 $ (68,497 ) $ 14,185 $ (54,312 ) (1) Reclassification due to the adoption of ASU 2018-02. See Note 2 for further discussion. |
Changes In And Reclassifications Out Of Accumulated Other Comprehensive Loss | Changes In and Reclassifications Out of Accumulated Other Comprehensive Loss Years Ended February 28 or 29 (In thousands) 2018 2017 2016 Retirement Benefit Plans (Note 10): Actuarial (loss) gain arising during the year $ (3,256 ) $ (246 ) $ 2,214 Tax benefit (expense) 710 227 (752 ) Actuarial (loss) gain arising during the year, net of tax (2,546 ) (19 ) 1,462 Actuarial loss amortization reclassifications recognized in net pension expense: Cost of sales 749 637 835 CarMax Auto Finance income 46 37 49 Selling, general and administrative expenses 1,020 872 1,173 Total amortization reclassifications recognized in net pension expense 1,815 1,546 2,057 Tax expense (640 ) (578 ) (769 ) Amortization reclassifications recognized in net pension expense, net of tax 1,175 968 1,288 Net change in retirement benefit plan unrecognized actuarial losses, net of tax (1,371 ) 949 2,750 Cash Flow Hedges (Note 5): Effective portion of changes in fair value 17,953 9,878 (20,715 ) Tax (expense) benefit (5,572 ) (3,887 ) 8,137 Effective portion of changes in fair value, net of tax 12,381 5,991 (12,578 ) Reclassifications to CarMax Auto Finance income 3,009 11,038 8,277 Tax expense (1,196 ) (4,337 ) (3,254 ) Reclassification of hedge losses, net of tax 1,813 6,701 5,023 Net change in cash flow hedge unrecognized gains, net of tax 14,194 12,692 (7,555 ) Total other comprehensive income (loss), net of tax $ 12,823 $ 13,641 $ (4,805 ) |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Leases [Abstract] | |
Schedule Of Future Minimum Lease Obligations | Future Minimum Lease Obligations As of February 28, 2018 Operating Capital Finance Lease (In thousands) Leases (1) Leases (1) Commitments (1) Fiscal 2019 $ 2,789 $ 49,263 $ 51,817 Fiscal 2020 2,838 49,200 50,716 Fiscal 2021 2,926 44,070 47,415 Fiscal 2022 3,005 43,341 44,113 Fiscal 2023 8,315 42,877 42,271 Fiscal 2024 and thereafter 5,059 826,487 611,859 Total minimum lease payments 24,932 $ 1,055,238 $ 848,191 Less amounts representing interest (5,272 ) Present value of net minimum lease payments $ 19,660 (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. |
Supplemental Cash Flow Inform40
Supplemental Cash Flow Information Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flow, Supplemental Disclosures [Text Block] | Years Ended February 28 or 29 (In thousands) 2018 2017 2016 Cash paid for interest $ 69,431 $ 55,139 $ 34,319 Cash paid for income taxes $ 353,977 $ 371,227 $ 319,978 Non-cash investing and financing activities: Increase (decrease) in accrued capital expenditures $ 1,220 $ (6,280 ) $ 16,222 Increase in finance and capital lease obligations $ 12,051 $ 90,517 $ 103,233 |
Selected Quarterly Financial 41
Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule Of Selected Quarterly Financial Data | 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Fiscal Year (In thousands, except per share data) 2018 2018 2018 2018 (1) 2018 Net sales and operating revenues $ 4,542,334 $ 4,386,640 $ 4,107,017 $ 4,084,218 $ 17,120,209 Gross profit $ 648,938 $ 604,005 $ 539,188 $ 536,728 $ 2,328,859 CarMax Auto Finance income $ 109,363 $ 107,936 $ 102,810 $ 101,073 $ 421,182 Selling, general and administrative expenses $ 403,503 $ 405,062 $ 399,672 $ 408,814 $ 1,617,051 Net earnings $ 211,702 $ 181,424 $ 148,840 $ 122,146 $ 664,112 Net earnings per share: Basic $ 1.14 $ 0.99 $ 0.82 $ 0.68 $ 3.64 Diluted $ 1.13 $ 0.98 $ 0.81 $ 0.67 $ 3.60 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Fiscal Year (In thousands, except per share data) 2017 2017 (2) 2017 2017 2017 Net sales and operating revenues $ 4,126,386 $ 3,997,248 $ 3,701,524 $ 4,049,960 $ 15,875,118 Gross profit $ 572,637 $ 545,362 $ 503,135 $ 562,160 $ 2,183,294 CarMax Auto Finance income $ 100,758 $ 95,969 $ 89,359 $ 82,898 $ 368,984 Selling, general and administrative expenses $ 380,230 $ 366,126 $ 356,735 $ 385,413 $ 1,488,504 Net earnings $ 175,360 $ 162,362 $ 136,645 $ 152,603 $ 626,970 Net earnings per share: Basic $ 0.91 $ 0.85 $ 0.72 $ 0.82 $ 3.29 Diluted $ 0.90 $ 0.84 $ 0.72 $ 0.81 $ 3.26 (1) During the fourth quarter of fiscal 2018, net earnings were reduced by $11.9 million in connection with the 2017 Tax Act. See Note 9. Net earnings were also reduced by $8.0 million , before tax, due to a one-time discretionary bonus paid to eligible associates. (2) During the second quarter of fiscal 2017, we increased SG&A expenses by $10.9 million , before tax, due to the modification of certain awards granted to our recently retired chief executive officer. |
Business And Background (Detail
Business And Background (Details) | 12 Months Ended |
Feb. 28, 2018segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Summary Of Significant Accoun43
Summary Of Significant Accounting Policies (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018USD ($)warehouse | Feb. 28, 2017USD ($) | Feb. 29, 2016USD ($) | |
Excess Tax Benefit from Share-based Compensation, Operating Activities | $ 13,800 | $ 12,800 | $ 32,100 |
Liquid investments, maturity period | three months or less | ||
Restricted cash from collections on auto loan receivables | $ 399,442 | 380,353 | |
Number of warehouses | warehouse | 3 | ||
Required benchmark for account delinquency, in days | 120 days | ||
Restricted cash on deposit in reserve accounts | $ 56,800 | 52,800 | |
Other investments | 80,900 | 70,800 | |
Accrued compensation and benefits | 148,600 | 140,000 | |
General liability and workers' compensation insurance | $ 36,500 | 35,000 | |
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 | $ 158,600 | $ 146,000 | $ 142,200 |
Finance Leases | |||
Estimated useful life average, years | 25 years | ||
Maximum | |||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 15,000 | ||
Minimum | |||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 10,000 |
Summary Of Significant Accoun44
Summary Of Significant Accounting Policies (Schedule Of Estimated Useful Lives) (Details) | 12 Months Ended |
Feb. 28, 2018 | |
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. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Auto Finance Income [Line Items] | |||||||||||
Interest and fee income | $ 856,600 | $ 762,000 | $ 682,900 | ||||||||
Interest expense | (215,000) | (171,400) | (127,700) | ||||||||
Total interest margin | 641,600 | 590,600 | 555,200 | ||||||||
Provision for loan losses | (137,600) | (150,600) | (101,200) | ||||||||
Total interest margin after provision for loan losses | 504,000 | 440,000 | 454,000 | ||||||||
Total other income (expense) | 400 | 0 | (400) | ||||||||
Payroll and fringe benefit expense | (35,400) | (30,800) | (28,200) | ||||||||
Other direct expenses | (47,800) | (40,200) | (33,400) | ||||||||
Total direct expenses | (83,200) | (71,000) | (61,600) | ||||||||
CarMax Auto Finance income | $ 101,073 | $ 102,810 | $ 107,936 | $ 109,363 | $ 82,898 | $ 89,359 | $ 95,969 | $ 100,758 | 421,182 | 368,984 | 392,036 |
Total average managed receivables | $ 11,210,800 | $ 10,158,300 | $ 9,092,900 | ||||||||
Interest And Fee Income, Percent | |||||||||||
Auto Finance Income [Line Items] | |||||||||||
Item as percent of total average managed receivables | 7.60% | 7.50% | 7.50% | ||||||||
Interest Expense, Percent | |||||||||||
Auto Finance Income [Line Items] | |||||||||||
Item as percent of total average managed receivables | (1.90%) | (1.70%) | (1.40%) | ||||||||
Total Interest Margin, Percent | |||||||||||
Auto Finance Income [Line Items] | |||||||||||
Item as percent of total average managed receivables | 5.70% | 5.80% | 6.10% | ||||||||
Provision For Loan Losses, Percent | |||||||||||
Auto Finance Income [Line Items] | |||||||||||
Item as percent of total average managed receivables | (1.20%) | (1.50%) | (1.10%) | ||||||||
Total Interest Margin After Provision For Loan Losses, Percent | |||||||||||
Auto Finance Income [Line Items] | |||||||||||
Item as percent of total average managed receivables | 4.50% | 4.30% | 5.00% | ||||||||
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%) | (0.70%) | ||||||||
CAF Income, Percent | |||||||||||
Auto Finance Income [Line Items] | |||||||||||
Item as percent of total average managed receivables | 3.80% | 3.60% | 4.30% |
Auto Loan Receivables (Auto Loa
Auto Loan Receivables (Auto Loan Receivables, Net) (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 |
Non-recourse notes payable | $ 11,644,615 | $ 10,742,425 | |
Total ending managed receivables | 11,618,900 | 10,681,300 | |
Accrued interest and fees | 43,200 | 38,500 | |
Other | 2,200 | (100) | |
Less allowance for loan losses | (128,600) | (123,600) | $ (94,900) |
Auto loan receivables, net | 11,535,704 | 10,596,076 | |
Asset-backed term funding | |||
Total ending managed receivables | 9,455,200 | 8,784,700 | |
Warehouse facilities | |||
Total ending managed receivables | 1,834,000 | 1,624,000 | |
Overcollateralization | |||
Total ending managed receivables | 269,400 | 211,400 | |
Other Managed Receivables | |||
Total ending managed receivables | $ 60,300 | $ 61,200 |
Auto Loan Receivables (Ending M
Auto Loan Receivables (Ending Managed Receivables By Major Credit Grade) (Details) - USD ($) $ in Millions | Feb. 28, 2018 | Feb. 28, 2017 |
Financing Receivable, By Major Credit Grade [Line Items] | ||
Total ending managed receivables | $ 11,618.9 | $ 10,681.3 |
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 | $ 5,725.1 | $ 5,223.4 |
Total ending managed receivables as percentage by major credit grade | 49.30% | 48.90% |
Credit Grade B | ||
Financing Receivable, By Major Credit Grade [Line Items] | ||
Total ending managed receivables | $ 4,133.8 | $ 3,739.4 |
Total ending managed receivables as percentage by major credit grade | 35.60% | 35.00% |
Credit Grade C And Other | ||
Financing Receivable, By Major Credit Grade [Line Items] | ||
Total ending managed receivables | $ 1,760 | $ 1,718.5 |
Total ending managed receivables as percentage by major credit grade | 15.10% | 16.10% |
Auto Loan Receivables (Allowanc
Auto Loan Receivables (Allowance For Loan Losses) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Balance as of beginning of year | $ 123.6 | $ 94.9 | |
Charge-offs | (254.4) | (230.7) | |
Recoveries | 121.8 | 108.8 | |
Provision for loan losses | 137.6 | 150.6 | $ 101.2 |
Balance as of end of year | $ 128.6 | $ 123.6 | $ 94.9 |
Allowance For Loan Losses | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Item as percent of total ending managed receivables | 1.11% | 1.16% | 0.99% |
Auto Loan Receivables (Past Due
Auto Loan Receivables (Past Due Receivables) (Details) - USD ($) $ in Millions | Feb. 28, 2018 | Feb. 28, 2017 |
Financing Receivable, Past Due [Line Items] | ||
Total ending managed receivables | $ 11,618.9 | $ 10,681.3 |
Total past due | $ 393.2 | $ 331 |
Past due receivables as a percentage of total ending managed receivables | 3.40% | 3.10% |
Managed Receivables | ||
Financing Receivable, Past Due [Line Items] | ||
Item as percent of total ending managed receivables | 100.00% | 100.00% |
Thirty One To Sixty Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | $ 246.6 | $ 211 |
Past due receivables as a percentage of total ending managed receivables | 2.10% | 2.00% |
Sixty One To Ninety Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | $ 116.9 | $ 93.5 |
Past due receivables as a percentage of total ending managed receivables | 1.00% | 0.90% |
Greater Than Ninety Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | $ 29.7 | $ 26.5 |
Past due receivables as a percentage of total ending managed receivables | 0.30% | 0.20% |
Derivative Instruments And He50
Derivative Instruments And Hedging Activities (Narrative) (Details) - Designated As Hedging Instrument - Cash Flow Hedging - USD ($) $ in Millions | 12 Months Ended | |
Feb. 28, 2018 | Feb. 28, 2017 | |
Derivative [Line Items] | ||
Additional reclassification from AOCL to CAF income | $ 5.9 | |
Derivative notional amount | $ 2,160 | $ 2,030 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule Of Items Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market securities | $ 276,894 | $ 397,994 |
Mutual fund investments | 19,429 | 16,519 |
Derivative instruments | 12,127 | 2,997 |
Total assets at fair value | $ 308,450 | $ 417,510 |
Percent of total assets at fair value | 100.00% | 100.00% |
Percent of total assets | 1.80% | 2.60% |
Derivative instruments | $ (99) | $ (509) |
Total liabilities at fair value | $ (99) | $ (509) |
Percent of total liabilities | 0.00% | 0.00% |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market securities | $ 276,894 | $ 397,994 |
Mutual fund investments | 19,429 | 16,519 |
Derivative instruments | 0 | 0 |
Total assets at fair value | $ 296,323 | $ 414,513 |
Percent of total assets at fair value | 96.10% | 99.30% |
Percent of total assets | 1.70% | 2.50% |
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 | 12,127 | 2,997 |
Total assets at fair value | $ 12,127 | $ 2,997 |
Percent of total assets at fair value | 3.90% | 0.70% |
Percent of total assets | 0.10% | 0.00% |
Derivative instruments | $ (99) | $ (509) |
Total liabilities at fair value | $ (99) | $ (509) |
Percent of total liabilities | 0.00% | 0.00% |
Fair Value Measurements Schedul
Fair Value Measurements Schedule of Carrying Values and Estimated Fair Values of Debt Instruments (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Fair Value Disclosures [Abstract] | ||
Senior Notes | $ 500,000 | $ 500,000 |
Debt Instrument, Fair Value Disclosure | $ 492,163 | $ 499,518 |
Property And Equipment (Schedul
Property And Equipment (Schedule Of Property And Equipment) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 3,831,310 | $ 3,559,770 | |
Less accumulated depreciation and amortization | 1,164,249 | 1,041,377 | |
Property and equipment, net | 2,667,061 | 2,518,393 | |
Depreciation expense | 158,600 | 140,700 | $ 127,000 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 722,173 | 627,784 | |
Land held for development | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 77,145 | 98,216 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 2,081,785 | 1,934,730 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 215,114 | 193,972 | |
Furniture, fixtures and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 600,739 | 525,177 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 134,354 | $ 179,891 |
Cancellation Reserves (Narrativ
Cancellation Reserves (Narrative) (Details) - USD ($) $ in Millions | Feb. 28, 2018 | Feb. 28, 2017 |
Cancellation Reserves [Abstract] | ||
Cancellation reserves, current portion | $ 56 | $ 56.4 |
Cancellation Reserves (Schedule
Cancellation Reserves (Schedule Of Cancellation Reserves Accrual) (Details) - Cancellation Reserves - USD ($) $ in Millions | 12 Months Ended | |
Feb. 28, 2018 | Feb. 28, 2017 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Valuation Allowances and Reserves, Balance | $ 108.2 | $ 110.2 |
Cancellations | (65.7) | (66.1) |
Provision for future cancellations | 62.7 | 64.1 |
Valuation Allowances and Reserves, Balance | $ 105.2 | $ 108.2 |
Income Taxes (Schedule Of Incom
Income Taxes (Schedule Of Income Tax Provision) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Income Tax Disclosure [Abstract] | |||
Current, Federal | $ 276,597 | $ 332,466 | $ 324,096 |
Current, State | 41,892 | 44,645 | 45,183 |
Current, Total | 318,489 | 377,111 | 369,279 |
Deferred, Federal | 81,486 | 4,098 | 16,398 |
Deferred, State | (479) | (1,774) | 839 |
Deferred, Total | 81,007 | 2,324 | 17,237 |
Income Tax Expense (Benefit), Total | $ 399,496 | $ 379,435 | $ 386,516 |
Income Taxes (Schedule Of Effec
Income Taxes (Schedule Of Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 32.70% | 35.00% | 35.00% |
State and local income taxes, net of federal benefit | 3.10% | 2.70% | 3.20% |
2017 Tax Act | 3.10% | 0.00% | 0.00% |
Share-based compensation | (1.30%) | 0.00% | 0.00% |
Nondeductible and other items | 0.20% | 0.10% | 0.20% |
Credits | (0.20%) | (0.10%) | (0.10%) |
Effective income tax rate | 37.60% | 37.70% | 38.30% |
Income Taxes (Schedule Of Tempo
Income Taxes (Schedule Of Temporary Differences Resulting In Deferred Tax Assets And Liabilities) (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Income Tax Disclosure [Abstract] | ||
Accrued expenses | $ 37,362 | $ 59,639 |
Partnership basis | 63,670 | 106,176 |
Share-based compensation | 45,744 | 69,621 |
Derivatives | 0 | 408 |
Capital loss carry forward | 682 | 1,249 |
Total deferred tax assets | 147,458 | 237,093 |
Less: valuation allowance | (682) | (1,249) |
Total deferred tax assets after valuation allowance | 146,776 | 235,844 |
Prepaid expenses | 16,157 | 21,148 |
Property and equipment | 43,663 | 52,266 |
Inventory | 18,625 | 11,468 |
Derivatives | 5,075 | 0 |
Total deferred tax liabilities | 83,520 | 84,882 |
Net deferred tax asset | $ 63,256 | $ 150,962 |
Income Taxes (Schedule Of Recon
Income Taxes (Schedule Of Reconciliation Of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of year | $ 29,955 | $ 26,771 | $ 24,951 |
Increases for tax positions of prior years | 0 | 2,651 | 125 |
Decreases for tax positions of prior years | (607) | (216) | (853) |
Increases based on tax positions related to the current year | 3,342 | 4,380 | 5,256 |
Settlements | (304) | (16) | (830) |
Lapse of statute | (3,701) | (3,615) | (1,878) |
Balance at end of year | $ 28,685 | $ 29,955 | $ 26,771 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Federal statutory income tax rate | 32.70% | 35.00% | 35.00% | |
2017 Tax Act Federal Statutory Income Tax Rate | 21.00% | |||
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | $ 32,700 | |||
Unrecognized tax benefits, gross | 28,685 | $ 29,955 | $ 26,771 | $ 24,951 |
Unrecognized tax benefits that would impact effective tax rate, if recognized | 9,600 | 9,400 | 10,300 | |
Accrued interest | 2,800 | $ 2,700 | $ 2,000 | |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | $ 20,800 |
Benefit Plans (Narrative) (Deta
Benefit Plans (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Contributions to the plan in current year | $ 6 | ||
Restoration Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expected contributions to the plan next year | 0.6 | ||
Expected benefit payments to the plan next fiscal year | 0.6 | ||
Expected benefit payments to the plan year two | 0.6 | ||
Expected benefit payments to the plan year three | 0.6 | ||
Expected benefit payments to the plan year four | 0.6 | ||
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Expected Amortization of Gain (Loss), Next Fiscal Year | 1.9 | ||
Expected contributions to the plan next year | 13.8 | ||
Expected benefit payments to the plan next fiscal year | 4.2 | ||
Expected benefit payments to the plan year two | 4.2 | ||
Expected benefit payments to the plan year three | 4.2 | ||
Expected benefit payments to the plan year four | 5.2 | ||
Expected benefit payments to the plan year five | 5.2 | ||
Retirement Savings Plan401k | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total cost for company contributions | $ 39.7 | $ 32.8 | $ 29.8 |
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. 28, 2018 | Feb. 28, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | $ 156,827 | $ 139,502 |
Projected benefit obligation | 241,902 | 229,106 |
Funded status recognized | (85,075) | (89,604) |
Current liability | (485) | (467) |
Noncurrent liability | (84,590) | (89,137) |
Net amount recognized | (85,075) | (89,604) |
Restoration Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 0 | 0 |
Projected benefit obligation | 11,041 | 10,822 |
Funded status recognized | (11,041) | (10,822) |
Current liability | (485) | (467) |
Noncurrent liability | (10,556) | (10,355) |
Net amount recognized | (11,041) | (10,822) |
Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 156,827 | 139,502 |
Projected benefit obligation | 230,861 | 218,284 |
Funded status recognized | (74,034) | (78,782) |
Current liability | 0 | 0 |
Noncurrent liability | (74,034) | (78,782) |
Net amount recognized | $ (74,034) | $ (78,782) |
Benefit Plans (Components Of Ne
Benefit Plans (Components Of Net Pension Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Total net pension expense | $ 675 | $ 811 | $ 1,303 |
Total net actuarial loss (gain) (1) | 3,256 | 245 | (2,214) |
Restoration Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total net pension expense | 468 | 481 | 456 |
Total net actuarial loss (gain) (1) | 376 | 228 | (428) |
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total net pension expense | 207 | 330 | 847 |
Total net actuarial loss (gain) (1) | $ 2,880 | $ 17 | $ (1,786) |
Benefit Plans (Assumptions Used
Benefit Plans (Assumptions Used To Determine Benefit Obligations) (Details) | Feb. 28, 2018 | Feb. 28, 2017 |
Restoration Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate (1) | 4.10% | 4.25% |
Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate (1) | 4.10% | 4.25% |
Post2004 Lump Sum Payment Assumption [Member] | Restoration Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate (1) | 4.50% |
Benefit Plans (Assumptions Us65
Benefit Plans (Assumptions Used To Determine Net Pension Expense) (Details) | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Restoration Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate (1) | 4.25% | 4.50% | 4.00% |
Expected rate of return on plan assets | 0.00% | 0.00% | 0.00% |
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate (1) | 4.25% | 4.50% | 4.00% |
Expected rate of return on plan assets | 7.75% | 7.75% | 7.75% |
Post2004 Lump Sum Payment Assumption [Member] | Restoration Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate (1) | 4.50% | 4.50% |
Benefit Plans (Schedule Of Fair
Benefit Plans (Schedule Of Fair Value Of Plan Assets) (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | $ 156,827 | $ 139,502 |
Investment payables, net | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | (77) | (62) |
Equity securities | Level 1 | Mutual funds (Level 1): | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 100,422 | 89,739 |
Equity securities | Level 2 | Collective funds (Level 2): | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 322 | 986 |
Equity securities – international | Level 1 | Mutual funds (Level 1): | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 19,467 | 17,139 |
Fixed income securities | Level 1 | Mutual funds (Level 1): | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | $ 36,693 | $ 31,700 |
Debt (Schedule Of Debt) (Detail
Debt (Schedule Of Debt) (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Debt Instrument [Line Items] | ||
Finance and capital lease obligations | $ 500,363 | $ 496,136 |
Non-recourse notes payable | 11,644,615 | 10,742,425 |
Total debt | 13,142,605 | 12,193,623 |
Less: current portion | (365,554) | (343,266) |
Unamortized Debt Issuance Expense | (24,239) | (23,919) |
Long-term debt, net | 12,752,812 | 11,826,438 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 197,627 | 155,062 |
Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 300,000 | 300,000 |
3.86% senior notes dues 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 100,000 | 100,000 |
4.17% senior notes due 2026 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 200,000 | 200,000 |
4.27% senior notes due 2028 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 200,000 | $ 200,000 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Debt Instrument [Line Items] | |||
Non-recourse notes payable | $ 11,644,615,000 | $ 10,742,425,000 | |
Interest Paid, Capitalized | 6,900,000 | $ 11,200,000 | $ 9,200,000 |
Credit Facility | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | 1,200,000,000 | ||
Line of Credit Facility, Remaining Borrowing Capacity | $ 1,000,000,000 | ||
Debt, Weighted Average Interest Rate | 2.49% | 1.74% | 1.46% |
Asset-backed term funding transactions | |||
Debt Instrument [Line Items] | |||
Non-recourse notes payable | $ 9,810,000,000 | ||
Debt Instrument, Maturity Date Range, End | Jul. 15, 2024 | ||
Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate | 2.57% | ||
Long-term Debt | $ 300,000,000 | ||
Debt Instrument, Face Amount | 300,000,000 | ||
Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | 500,000,000 | ||
Debt Instrument, Face Amount | 500,000,000 | ||
Warehouse Facilities [Member] | |||
Debt Instrument [Line Items] | |||
Non-recourse notes payable | 1,830,000,000 | ||
Warehouse Facilities Maximum Borrowing Capacity | 3,140,000,000 | ||
Debt Instrument, Unused Borrowing Capacity, Amount | 1,310,000,000 | ||
Warehouse Facility One [Member] | |||
Debt Instrument [Line Items] | |||
Warehouse Facilities Maximum Borrowing Capacity | 1,300,000,000 | ||
Warehouse Facility Two [Member] | |||
Debt Instrument [Line Items] | |||
Warehouse Facilities Maximum Borrowing Capacity | 1,700,000,000 | ||
Warehouse Facility Three [Member] | |||
Debt Instrument [Line Items] | |||
Warehouse Facilities Maximum Borrowing Capacity | $ 140,000,000 | ||
Minimum | Finance And Capital Lease Obligation [Member] | |||
Debt Instrument [Line Items] | |||
Initial Lease Terms | 15 years | ||
Maximum | Finance And Capital Lease Obligation [Member] | |||
Debt Instrument [Line Items] | |||
Initial Lease Terms | 20 years |
Stock And Stock-Based Incenti69
Stock And Stock-Based Incentive Plans (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Aug. 31, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Stock and Stock-Based Incentive Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Incremental Compensation Cost | $ 10,900,000 | |||
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 | ||||
Stock and Stock-Based Incentive Plans | ||||
Share repurchase, authorized amount | $ 2,750,000,000 | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 1,016,800,000 | $ 1,590,400,000 | $ 1,398,000,000 | |
Stock Compensation Plan | ||||
Stock and Stock-Based Incentive Plans | ||||
Common stock, shares authorized (in shares) | 55,200,000 | |||
Common shares reserved for future grants | 7,068,824 | |||
Stock Option | ||||
Stock and Stock-Based Incentive Plans | ||||
Vesting period, in years | 4 years | |||
Years until expiration | 7 years | |||
Cash-Settled Restricted Stock Units | ||||
Stock and Stock-Based Incentive Plans | ||||
Vesting period, in years | 3 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 1,460,000 | 1,406,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 59.36 | $ 55.05 | ||
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 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Conversion Ratio Quotient | 2 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 419,000 | 504,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 74.04 | $ 65.74 | ||
Stock-Settled Market Stock Units | Minimum | ||||
Stock and Stock-Based Incentive Plans | ||||
Stock units converted to common stock | 0 | |||
Stock-Settled Market Stock Units | Maximum | ||||
Stock and Stock-Based Incentive Plans | ||||
Stock units converted to common stock | 2 | |||
Performance Shares | ||||
Stock and Stock-Based Incentive Plans | ||||
Vesting period, in years | 3 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 223,126 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 60.10 | |||
Performance Shares | Minimum | ||||
Stock and Stock-Based Incentive Plans | ||||
Stock units converted to common stock | 0 | |||
PSU EBIT threshold for conversion | 25.00% | |||
Performance Shares | Maximum | ||||
Stock and Stock-Based Incentive Plans | ||||
Stock units converted to common stock | 2 | |||
PSU EBIT threshold for conversion | 200.00% | |||
Restricted Stock Awards | ||||
Stock and Stock-Based Incentive Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 48,241 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 58.05 | |||
Restricted Stock Awards | Minimum | ||||
Stock and Stock-Based Incentive Plans | ||||
Vesting period, in years | 1 year | |||
Restricted Stock Awards | Maximum | ||||
Stock and Stock-Based Incentive Plans | ||||
Vesting period, in years | 3 years | |||
Employee Stock Purchase Plan | ||||
Stock and Stock-Based Incentive Plans | ||||
Shares remained available under the purchase plan (in shares) | 2,988,202 | |||
Common stock, shares authorized (in shares) | 8,000,000 | |||
Associate contribution limit | 10.00% | |||
Associate contribution limit, value | $ 7,500 | |||
Company match | $ 0.15 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award | 177,433 | 198,053 | 176,595 | |
Stock Issued During Period, Value, Employee Stock Purchase Plan | $ 65.11 | $ 55.46 | $ 59.93 |
Stock And Stock-Based Incenti70
Stock And Stock-Based Incentive Plans (Schedule Of Common Stoc Repurchases) (Details) - Share Repurchase Program - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares repurchased | 8,897,200 | 10,262,500 | 16,300,100 |
Average cost per share | $ 64.46 | $ 54.34 | $ 59.59 |
Available for repurchase, as of end of year | $ 1,016.8 | $ 1,590.4 | $ 1,398 |
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. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense, before income taxes | $ 63,420 | $ 93,039 | $ 52,426 |
TOTAL COST OF SALES | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense, before income taxes | 2,552 | 4,446 | 1,243 |
CAF Income | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense, before income taxes | 3,167 | 3,200 | 1,458 |
Selling, general and administrative expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense, before income taxes | $ 57,701 | $ 85,393 | $ 49,725 |
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. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense, before income taxes | $ 63,420 | $ 93,039 | $ 52,426 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense, before income taxes | 26,461 | 37,547 | 25,399 |
Cash-Settled Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense, before income taxes | 23,539 | 38,239 | 11,913 |
Stock-Settled Market Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense, before income taxes | 10,032 | 12,035 | 10,589 |
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense, before income taxes | 648 | 2,074 | 1,919 |
Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense, before income taxes | 1,199 | 1,701 | 1,257 |
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense, before income taxes | 1,541 | 1,443 | 1,349 |
Total other share-based incentives | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense, before income taxes | $ 3,388 | $ 5,218 | $ 4,525 |
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. 28, 2018USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Costs | $ 49 |
Weighted Average Remaining Recognition Life (Years) | 1 year 11 months |
Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Costs | $ 35.7 |
Weighted Average Remaining Recognition Life (Years) | 2 years 2 months |
Stock-Settled Market Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Costs | $ 10.3 |
Weighted Average Remaining Recognition Life (Years) | 1 year 2 months |
Performance Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Costs | $ 2.4 |
Weighted Average Remaining Recognition Life (Years) | 1 year 1 month |
Restricted Stock Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Costs | $ 0.6 |
Weighted Average Remaining Recognition Life (Years) | 4 months |
Total other share-based incentives | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Costs | $ 3 |
Weighted Average Remaining Recognition Life (Years) | 1 year |
Stock And Stock-Based Incenti74
Stock And Stock-Based Incentive Plans (Stock Option Activity) (Details) - Stock Option - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding as of beginning of year, Number of Shares | 7,753,000 | ||
Options granted, Number of Shares | 1,955,117 | 2,345,528 | 1,408,427 |
Options exercised, Number of Shares | 1,866,000 | ||
Options forfeited or expired, Number of Shares | (80,000) | ||
Outstanding as of end of year, Number of Shares | 7,762,000 | 7,753,000 | |
Exercisable as of end of year, Number of Shares | 3,139,000 | ||
Outstanding as of beginning of year, Weighted Average Exercise Price | $ 50 | ||
Options granted, Weighted Average Exercise Price | 58.56 | ||
Options exercised, Weighted Average Exercise Price | 39.40 | ||
Options forfeited or expired, Weighted Average Exercise Price | 61 | ||
Outstanding as of end of year, Weighted Average Exercise Price | 54.59 | $ 50 | |
Exercisable as of end of year, Weighted Average Exercise Price | $ 50.98 | ||
Outstanding as of end of year, Weighted Average Remaining Contractual Life (Years) | 4 years 5 months | ||
Exercisable as of end of year, Weighted Average Remaining Contractual Life (Years) | 3 years 4 months | ||
Outstanding as of end of year, Aggregate Intrinsic Value | $ 72,973 | ||
Exercisable as of end of year, Aggregate Intrinsic Value | $ 42,530 |
Stock And Stock-Based Incenti75
Stock And Stock-Based Incentive Plans Stock And Stock-Based Incentive Plans (Settled) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options granted, Number of Shares | 1,955,117 | 2,345,528 | 1,408,427 |
Weighted average grant date fair value per share | $ 16.15 | $ 14.25 | $ 20.53 |
Cash received from options exercised (in millions) | $ 73.5 | $ 59.9 | $ 47 |
Intrinsic value of options exercised (in millions) | 57.1 | 52.6 | 70.4 |
Realized tax benefits | $ 21.8 | $ 21.2 | $ 28.2 |
Cash-Settled Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock units granted, Number of Units | 628,095 | 632,261 | 418,281 |
Initial weighted average grant date fair value per share | $ 58.39 | $ 51.63 | $ 73.76 |
Payments (before payroll tax withholdings) upon vesting | $ 26.6 | $ 23.5 | $ 33.6 |
Realized tax benefits | $ 10.2 | $ 9.5 | $ 13.5 |
Stock-Settled Market Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock units granted, Number of Units | 163,618 | 174,211 | 109,956 |
Initial weighted average grant date fair value per share | $ 74.09 | $ 64.30 | $ 89.73 |
Realized tax benefits | $ 7 | $ 5.3 | $ 17 |
Stock And Stock-Based Incenti76
Stock And Stock-Based Incentive Plans (Assumptions Used To Estimate Option Values) (Details) | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Share-based Compensation [Abstract] | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility factor, Minimum | 27.30% | 29.30% | 25.80% |
Expected volatility factor, Maximum | 34.20% | 34.80% | 31.80% |
Weighted average expected volatility | 29.70% | 30.70% | 30.60% |
Risk-free interest rate, Minimum | 0.70% | 0.10% | 0.00% |
Risk-free interest rate, Maximum | 2.30% | 2.40% | 2.10% |
Expected term (in years) | 4 years 7 months | 4 years 7 months | 4 years 8 months |
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. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Outstanding at beginning of year, Number of Shares or Units | 1,406,000 | ||
Stock units granted, Number of Units | 628,095 | 632,261 | 418,281 |
Stock units vested and converted, Number of Units | (469,000) | ||
Stock units cancelled, Number of Units | (105,000) | ||
Outstanding at end of year, number of shares or Units | 1,460,000 | 1,406,000 | |
Outstanding as of beginning of year, Weighted Average Grant Date Fair Value | $ 55.05 | ||
Initial weighted average grant date fair value per share | 58.39 | $ 51.63 | $ 73.76 |
Stock units vested and converted, Weighted Average Grant Date Fair Value | 45.30 | ||
Stock units cancelled, Weighted Average Grant Date Fair Value | 58.61 | ||
Outstanding as of end of year, Weighted Average Grant Date Fair Value | $ 59.36 | $ 55.05 |
Stock And Stock-Based Incenti78
Stock And Stock-Based Incentive Plans (Expected Cash Settlement Range Upon Restricted Stock Unit Vesting) (Details) $ in Thousands | Feb. 28, 2018USD ($) |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fiscal 2,019 | $ 18,326 |
Fiscal 2,020 | 19,687 |
Fiscal 2,021 | 22,424 |
Total expected cash settlements | 60,437 |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fiscal 2,019 | 48,869 |
Fiscal 2,020 | 52,498 |
Fiscal 2,021 | 59,798 |
Total expected cash settlements | $ 161,165 |
Stock And Stock-Based Incenti79
Stock And Stock-Based Incentive Plans (Stock-Settled Activity) (Details) - $ / shares | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
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 | 504,000 | ||
Stock units granted, Number of Units | 163,618 | 174,211 | 109,956 |
Stock units vested and converted, Number of Units | (232,000) | ||
Stock units cancelled, Number of Units | (17,000) | ||
Outstanding at end of year, number of shares or Units | 419,000 | 504,000 | |
Outstanding as of beginning of year, Weighted Average Grant Date Fair Value | $ 65.74 | ||
Stock units granted, weighted average grant date fair value | 74.09 | $ 64.30 | $ 89.73 |
Stock units vested and converted, Weighted Average Grant Date Fair Value | 56.13 | ||
Stock units cancelled, Weighted Average Grant Date Fair Value | 72.67 | ||
Outstanding as of end of year, Weighted Average Grant Date Fair Value | $ 74.04 | $ 65.74 | |
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Outstanding at end of year, number of shares or Units | 223,126 | ||
Outstanding as of end of year, Weighted Average Grant Date Fair Value | $ 60.10 | ||
Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Outstanding at end of year, number of shares or Units | 48,241 | ||
Outstanding as of end of year, Weighted Average Grant Date Fair Value | $ 58.05 |
Net Earnings Per Share (Narrati
Net Earnings Per Share (Narrative) (Details) - shares | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Earnings Per Share [Abstract] | |||
Antidilutive securities not included in calculation of dilutive net earnings per share | 2,993,200 | 2,874,788 | 1,243,383 |
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. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Net earnings | $ 122,146 | $ 148,840 | $ 181,424 | $ 211,702 | $ 152,603 | $ 136,645 | $ 162,362 | $ 175,360 | $ 664,112 | $ 626,970 | $ 623,428 |
Weighted average common shares outstanding (in shares) | 182,660 | 190,343 | 203,275 | ||||||||
Weighted average common shares and dilutive potential common shares (in shares) | 184,470 | 192,215 | 205,540 | ||||||||
Basic net earnings per share (in dollars per share) | $ 0.68 | $ 0.82 | $ 0.99 | $ 1.14 | $ 0.82 | $ 0.72 | $ 0.85 | $ 0.91 | $ 3.64 | $ 3.29 | $ 3.07 |
Diluted net earnings per share (in dollars per share) | $ 0.67 | $ 0.81 | $ 0.98 | $ 1.13 | $ 0.81 | $ 0.72 | $ 0.84 | $ 0.90 | $ 3.60 | $ 3.26 | $ 3.03 |
Stock Options | |||||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Dilutive potential common shares (in shares) | 1,390 | 1,379 | 1,676 | ||||||||
Stock-Settled Market Stock Units | |||||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Dilutive potential common shares (in shares) | 420 | 493 | 589 |
Accumulated Other Comprehensi82
Accumulated Other Comprehensive Loss (Narrative) (Details) - USD ($) $ in Millions | Feb. 28, 2018 | Feb. 28, 2017 |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||
Deferred tax | $ 16.6 | $ 33.8 |
Accumulated Other Comprehensi83
Accumulated Other Comprehensive Loss (Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at beginning of year | $ (56,555) | $ (70,196) | $ (65,391) |
Other comprehensive (loss) income before reclassifications | 9,835 | 5,972 | (11,116) |
Amounts reclassified from accumulated other comprehensive loss | 2,988 | 7,669 | 6,311 |
Other comprehensive income (loss) | 12,823 | 13,641 | (4,805) |
Balance at end of year | (54,312) | (56,555) | (70,196) |
Net Unrecognized Actuarial Losses | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at beginning of year | (55,521) | (56,470) | (59,220) |
Other comprehensive (loss) income before reclassifications | (2,546) | (19) | 1,462 |
Amounts reclassified from accumulated other comprehensive loss | 1,175 | 968 | 1,288 |
Other comprehensive income (loss) | (1,371) | 949 | 2,750 |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | (11,605) | ||
Balance at end of year | (68,497) | (55,521) | (56,470) |
Net Unrecognized Hedge Gains (Losses) | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at beginning of year | (1,034) | (13,726) | (6,171) |
Other comprehensive (loss) income before reclassifications | 12,381 | 5,991 | (12,578) |
Amounts reclassified from accumulated other comprehensive loss | 1,813 | 6,701 | 5,023 |
Other comprehensive income (loss) | 14,194 | 12,692 | (7,555) |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | 1,025 | ||
Balance at end of year | 14,185 | (1,034) | (13,726) |
AOCI Attributable to Parent [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss) | 12,823 | $ 13,641 | $ (4,805) |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ (10,580) |
Accumulated Other Comprehensi84
Accumulated Other Comprehensive Loss (Changes In and Reclassifications Out of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Actuarial (loss) gain arising during the year | $ (3,256) | $ (246) | $ 2,214 |
Tax benefit (expense) | 710 | 227 | (752) |
Actuarial (loss) gain arising during the year, net of tax | (2,546) | (19) | 1,462 |
Actuarial loss amortization reclassifications in net pension expense | 1,815 | 1,546 | 2,057 |
Tax expense | (640) | (578) | (769) |
Amortization reclassifications recognized in net pension expense, net of tax | 1,175 | 968 | 1,288 |
Net change in retirement benefit plan unrecognized actuarial losses, net of tax | (1,371) | 949 | 2,750 |
Effective portion of changes in fair value | 17,953 | 9,878 | (20,715) |
Tax (expense) benefit | (5,572) | (3,887) | 8,137 |
Effective portion of changes in fair value, net of tax | 12,381 | 5,991 | (12,578) |
Reclassifications to CarMax Auto Finance income | 3,009 | 11,038 | 8,277 |
Tax expense | (1,196) | (4,337) | (3,254) |
Reclassification of hedge losses, net of tax | 1,813 | 6,701 | 5,023 |
Net change in cash flow hedge unrecognized gains, net of tax | 14,194 | 12,692 | (7,555) |
Other comprehensive income (loss), net of taxes | 12,823 | 13,641 | (4,805) |
TOTAL COST OF SALES | |||
Actuarial loss amortization reclassifications in net pension expense | 749 | 637 | 835 |
CarMax Auto Finance income | |||
Actuarial loss amortization reclassifications in net pension expense | 46 | 37 | 49 |
Selling, general and administrative expenses | |||
Actuarial loss amortization reclassifications in net pension expense | $ 1,020 | $ 872 | $ 1,173 |
Lease Commitments (Narrative) (
Lease Commitments (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Operating Leased Assets [Line Items] | |||
Operating leases rent expense | $ 52.4 | $ 49.4 | $ 46.9 |
Maximum | |||
Operating Leased Assets [Line Items] | |||
Lessee, Operating Lease, Term of Contract | 20 years | ||
Lease renewal term, years | 20 years | ||
Minimum | |||
Operating Leased Assets [Line Items] | |||
Lessee, Operating Lease, Term of Contract | 5 years | ||
Lease renewal term, years | 5 years |
Lease Commitments (Schedule Of
Lease Commitments (Schedule Of Future Minimum Lease Obligations) (Details) $ in Thousands | Feb. 28, 2018USD ($) |
Leases [Abstract] | |
Fiscal 2019, Capital Leases | $ 2,789 |
Fiscal 2020, Capital Leases | 2,838 |
Fiscal 2021, Capital Leases | 2,926 |
Fiscal 2022, Capital Leases | 3,005 |
Fiscal 2023,Capital Leases | 8,315 |
Fiscal 2024 and thereafter, Capital Leases | 5,059 |
Total minimum lease payments, Capital Leases | 24,932 |
Less amounts representing interest, Capital Leases | (5,272) |
Present value of net minimum lease payments, Capital Leases | 19,660 |
Fiscal 2019, Finance Leases | 49,263 |
Fiscal 2020, Finance Leases | 49,200 |
Fiscal 2021, Finance Leases | 44,070 |
Fiscal 2022, Finance Leases | 43,341 |
Fiscal 2023, Finance Leases | 42,877 |
Fiscal 2024 and thereafter, Finance Leases | 826,487 |
Total minimum lease payments, Finance Leases | 1,055,238 |
Fiscal 2019, Operating Lease Commitments | 51,817 |
Fiscal 2020, Operating Lease Commitments | 50,716 |
Fiscal 2021, Operating Lease Commitments | 47,415 |
Fiscal 2022, Operating Lease Commitments | 44,113 |
Fiscal 2023, Operating Lease Commitments | 42,271 |
Fiscal 2024 and thereafter, Operating Lease Commitments | 611,859 |
Total minimum lease payments, Operating Lease Commitments | $ 848,191 |
Supplemental Cash Flow Inform87
Supplemental Cash Flow Information Supplemental Cash Flow (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |||
Cash paid for interest | $ 69,431 | $ 55,139 | $ 34,319 |
Cash paid for income taxes | 353,977 | 371,227 | 319,978 |
(Decrease) increase in accrued capital expenditures | 1,220 | (6,280) | 16,222 |
Increase in finance and capital lease obligations | $ 12,051 | $ 90,517 | $ 103,233 |
Commitments And Contingencies (
Commitments And Contingencies (Details) - USD ($) $ in Millions | 12 Months Ended | |
Feb. 28, 2018 | Feb. 28, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Minimum warranty period, days | 30 days | |
Liability associated with guarantee | $ 6.1 | $ 6.3 |
Purchase obligation | 175 | |
Purchase obligation due next twelve months | $ 78.8 |
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. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Impact of Tax Legislation | $ 11,900 | ||||||||||
One-time discretionary bonus | 8,000 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Incremental Compensation Cost | $ 10,900 | ||||||||||
Net sales and operating revenues | 4,084,218 | $ 4,107,017 | 4,386,640 | $ 4,542,334 | $ 4,049,960 | $ 3,701,524 | $ 3,997,248 | $ 4,126,386 | $ 17,120,209 | $ 15,875,118 | $ 15,149,675 |
Gross profit | 536,728 | 539,188 | 604,005 | 648,938 | 562,160 | 503,135 | 545,362 | 572,637 | 2,328,859 | 2,183,294 | 2,018,760 |
CarMax Auto Finance income | 101,073 | 102,810 | 107,936 | 109,363 | 82,898 | 89,359 | 95,969 | 100,758 | 421,182 | 368,984 | 392,036 |
Selling, general and administrative expenses | 408,814 | 399,672 | 405,062 | 403,503 | 385,413 | 356,735 | 366,126 | 380,230 | 1,617,051 | 1,488,504 | 1,351,935 |
Net earnings | $ 122,146 | $ 148,840 | $ 181,424 | $ 211,702 | $ 152,603 | $ 136,645 | $ 162,362 | $ 175,360 | $ 664,112 | $ 626,970 | $ 623,428 |
Basic net earnings per share (in dollars per share) | $ 0.68 | $ 0.82 | $ 0.99 | $ 1.14 | $ 0.82 | $ 0.72 | $ 0.85 | $ 0.91 | $ 3.64 | $ 3.29 | $ 3.07 |
Diluted net earnings per share (in dollars per share) | $ 0.67 | $ 0.81 | $ 0.98 | $ 1.13 | $ 0.81 | $ 0.72 | $ 0.84 | $ 0.90 | $ 3.60 | $ 3.26 | $ 3.03 |