CarMax 2013 Annual Report Download - page 62

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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 2010.
9. BENEFIT PLANS
(A) Retirement Benefit Plans
Effective December 31, 2008, we froze both our noncontributory defined benefit 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 that date. In connection with benefits earned prior to
December 31, 2008, we have a continuing obligation to fund the pension plan and will continue to recognize net
periodic pension expense for both plans. We use a fiscal year end measurement date for both the pension plan and
the restoration plan.
BENEFIT PLAN INFORMATION
Years Ended February 28 or 29
Pension Plan Restoration Plan Total
(In thousands) 2013 2012 2013 2012 2013 2012
Change in projected benefit
obligation:
Obligation at beginning of year $ 154,632 $ 118,512 $ 9,892 $ 9,105 $ 164,524 $ 127,617
Interest cost 7,299 6,830 458 518
7,757 7,348
Actuarial loss (gain) 17,766 30,996 (488) 471
17,278 31,467
Benefits paid (2,166) (1,706) (454) (202)
(2,620)
(1,908)
Obligation at end of year 177,531 154,632 9,408 9,892
186,939
164,524
Change in fair value of plan assets:
Plan assets at beginning of year 96,897 91,492 ― ― 96,897 91,492
Actual return on plan assets 8,175 2,551 ― ― 8,175 2,551
Employer contributions 5,062 4,560 454 202
5,516 4,762
Benefits paid (2,166) (1,706) (454) (202)
(2,620)
(1,908)
Plan assets at end of year 107,968 96,897 ― ― 107,968
96,897
Funded status recognized $ (69,563) $ (57,735) $ (9,408) $ (9,892) $ (78,971)
$ (67,627)
Amounts recognized in the
consolidated balance sheets:
Current liability $ ―$ ―$ (453)
$ (409) $ (453)
$ (409)
Noncurrent liability (69,563) (57,735) (8,955) (9,483)
(78,518)
(67,218)
Net amount recognized $ (69,563) $ (57,735) $ (9,408) $ (9,892) $ (78,971)
$ (67,627)
Accumulated benefit obligation $ 177,531 $ 154,632 $ 9,408 $ 9,892 $ 186,939 $ 164,524
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 as of December 31, 2008, the ABO and PBO balances are equal to one another at all
subsequent dates.
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