CarMax 2015 Annual Report Download - page 40

36
The securitization agreements related to the warehouse facilities include various representations and warranties,
covenants and performance triggers. If these requirements are not met, we could be unable to continue to securitize
receivables through the warehouse facilities. In addition, warehouse facility investors could charge us a higher rate
of interest and could have us replaced as servicer. Further, we could be required to deposit collections on the
securitized receivables with the warehouse facility agents on a daily basis and deliver executed lockbox agreements
to the warehouse facility agents.
We expect that adjusted net cash provided by operations and other funding arrangements, sale-leaseback transactions
and borrowings under existing, new or expanded credit facilities will be sufficient to fund CAF, capital expenditures,
repurchase of stock 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.
Beginning in fiscal 2013, our board of directors authorized the repurchase of our common stock. Purchases may be
made in open market or privately negotiated transactions at management’s discretion, and the timing and amount of
repurchases are determined based on share price, market conditions, legal requirements and other factors. Shares
repurchased are deemed authorized but unissued shares of common stock. As of February 28, 2015, the board had
authorized a total of $3.8 billion of repurchases, including $3.0 billion authorized in fiscal 2015. As of
February 28, 2015, $2.37 billion was available for repurchase under the authorizations, of which $369.3 million
expires on December 31, 2015, and $2.0 billion expires on December 31, 2016. See Note 12 for more information on
share repurchase activity.
Fair Value Measurements. We report money market securities, mutual fund investments and derivative instruments
at fair value. See Note 6 for more information on fair value measurements.
CONTRACTUAL OBLIGATIONS
(1)
As of February 28, 2015
Less Than 1 to 3 3 to 5 More Than
(In millions) Total 1 Year Years Years 5 Years Other
Short-term debt (2) $ 0.8 $ 0.8 $ ― $ ― $ ― $ ―
Long-term debt (2) 310.0 10.0 300.0 ― ― ―
Finance and capital leases (3) 351.9 48.5 79.3 66.6 157.5 ―
Operating leases (3) 442.7 43.2 81.1 75.6 242.8 ―
Purchase obligations (4) 98.3 68.8 19.7 9.8 ― ―
Defined benefit retirement plans (5) 94.0 0.5 ― ― ― 93.5
Unrecognized tax benefits (6) 19.6 0.7 ― ― ― 18.9
Total $ 1,317.3 $ 172.5 $ 480.1 $ 152.0 $ 400.3 $ 112.4
(1) This table excludes the non-recourse notes payable that relate to auto loan receivables funded through term securitizations
and our warehouse facilities. The securitized receivables can only be used as collateral to settle obligations of these
securitization vehicles. In addition, the investors in the non-recourse notes payable have no recourse to our assets beyond
the securitized receivables, the amounts on deposit in reserve accounts and the restricted cash from collections on auto loan
receivables. See Note 2(F).
(2) Due to the uncertainty of forecasting expected variable interest rate payments, those amounts are not included in the table.
See Note 11.
(3) 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.
(4) Includes certain enforceable and legally binding obligations related to real estate purchases and third-party outsourcing
services. Purchase obligations exclude agreements that are cancellable at any time without penalty. See Note 16(C).
(5) Represents the recognized funded status of our retirement plans, of which $93.5 million has no contractual payment schedule
and we expect payments to occur beyond 12 months from February 28, 2015. See Note 10.
(6) Represents the net unrecognized tax benefits related to uncertain tax positions. The timing of payments associated with
$18.9 million of these tax benefits could not be estimated as of February 28, 2015. See Note 9.