CarMax 2012 Annual Report Download - page 41

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auto loan receivables were funded in the warehouse facilities and unused warehouse capacity totaled $1.05 billion.
Of the combined warehouse facility limit, $800 million will expire in August 2012 and $800 million will expire in
February 2013. The securitization agreements related to the warehouse facilities include various financial
covenants. As of February 29, 2012, we were in compliance with the financial covenants. See Notes 5 and 11 for
additional information on the warehouse facilities.
Finance and capital lease obligations primarily relate to superstores subject to sale-leaseback transactions. Most of
these leases had initial terms ranging from 15 to 20 years with additional optional renewal periods ranging from 5 to
20 years. Certain of the leased assets are accounted for using the financing method where the related sales proceeds
are recognized as finance obligations and a portion of the periodic lease payments reduce the obligations. The
remaining leased assets are accounted for as operating leases.
Cash received on equity issuances, which primarily related to employee stock option exercises, totaled $15.6 million
in fiscal 2012, $38.3 million in fiscal 2011 and $31.3 million in fiscal 2010. In fiscal 2011 and fiscal 2010 the
receipts included exercises prompted by the increase in our stock price during those years.
We expect that cash generated by operations and proceeds from securitization transactions or other funding
arrangements, sale-leaseback transactions and borrowings under existing, new or expanded credit facilities will be
sufficient to fund CAF, capital expenditures and working capital for the foreseeable future. We anticipate that we
will be able to enter into new, or renew or expand existing, funding arrangements to meet our future funding needs.
However, based on conditions in the credit markets, the cost for these arrangements could be materially higher than
historical levels and the timing and capacity of these transactions could be dictated by market availability rather than
our requirements.
Fair Value Measurements. We reported money market securities, mutual fund investments, retained interest in
securitized receivables and derivative instruments at fair value. See Note 7 for more information on fair value
measurements.
CONTRACTUAL OBLIGATIONS
(In millions)
Revolving credit agreement (1) 0.9$ 0.9$ ʊ$ ʊ$ ʊ$ ʊ$
Finance and capital leases (2) 456.2 46.7 96.0 93.1 220.3 ʊ
Operating leases (2) 454.0 40.9 79.6 75.1 258.4 ʊ
Purchase obligations (3) 97.3 85.7 11.6 ʊ ʊ ʊ
Asset retirement obligations (4) 1.1 ʊ ʊ 0.2 0.9 ʊ
Defined benefit retirement plans (5) 67.6 0.4 ʊ ʊ ʊ 67.2
Unrecognized tax benefits (6) 18.2 3.1 ʊ ʊ ʊ 15.1
Total 1,095.3$ 177.7$ 187.2$ 168.4$ 479.6$ 82.3$
Total 1 Year Years Years 5 Years Other
As of February 29, 2012
Less Than 1 to 3 3 to 5 More Than
(1) Due to the uncertainty of forecasting expected variable interest rate payments, those amounts are not included in the table.
See Note 11.
(2) 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. See Note 15.
(3) Includes certain enforceable and legally binding obligations related to third-party outsourcing services.
(4) Represents the liability to retire signage, fixtures and other assets at certain leased locations.
(5) Represents the recognized funded status of our retirement plan, of which $67.2 million has no contractual payment schedule
and we expect payments to occur beyond 12 months from February 29, 2012. See Note 10.
(6) Represents the net unrecognized tax benefits related to uncertain tax positions. The timing of payments associated with
$15.1 million of these tax benefits could not be estimated as of February 29, 2012. See Note 9.