CarMax 2007 Annual Report Download - page 60

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50
8. BENEFIT PLANS
(A) Retirement Plans
We have a noncontributory defined benefit pension plan (the “pension plan”) covering the majority of full-time
employees. We also have an unfunded nonqualified plan (the “restoration plan”) that restores retirement benefits for
certain senior executives who are affected by Internal Revenue Code limitations on benefits provided under the
pension plan. We use a fiscal year end measurement date for both the pension plan and the restoration plan.
We adopted SFAS 158 as of February 28, 2007. SFAS 158 was required to be adopted on a prospective basis, and
prior year financial statements and related disclosures were not permitted to be restated. SFAS 158 requires us to:
• Recognize the funded status of postretirement benefit plans – measured as the difference between the fair
value of plan assets and the projected benefit obligation – on our balance sheet.
• Recognize changes in the funded status in accumulated other comprehensive loss (a component of
shareholders’ equity) in the year in which the change occurs.
• Measure postretirement benefit plan assets and obligations as of the date of our fiscal year end. We had
already been using our fiscal year end as our measurement date.
The amounts initially recorded in accumulated other comprehensive loss will be subsequently recognized as net
pension expense in our consolidated statement of earnings. In addition, actuarial gains and losses that arise in
subsequent periods and are not recognized as net pension expense in the same periods will be recognized as a
component of accumulated other comprehensive loss. Those amounts will be subsequently recognized as a
component of net pension expense on the same basis as the amounts recognized in accumulated other
comprehensive loss upon adoption of SFAS 158.
The following table summarizes the incremental effects of the adoption of SFAS 158 on our consolidated balance
sheet at February 28, 2007. SFAS 158 did not change the existing criteria for measurement of periodic benefit costs,
plan assets, or benefit obligations, and the adoption of this statement had no effect on our consolidated statement of
earnings for any period.
EFFECT OF SFAS 158 ADOPTION
At February 28, 2007
Prior to Effect of As
(In thousands) SFAS 158 SFAS 158 Reported
Deferred income tax asset (partnership basis) ............................ $ — $ 11,858 $ 11,858
Accrued expenses and other current liabilities ........................... $ 173 $ 89 $ 262
Deferred revenue and other liabilities......................................... $ 23,593 $ 32,101 $ 55,694
Accumulated other comprehensive loss ..................................... $ — $ 20,332 $ 20,332