CarMax 2016 Annual Report Download - page 37
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RECONCILIATION OF ADJUSTED NET CASH FROM OPERATING ACTIVITIES
Years Ended February 29 or 28
(In millions) 2016 2015 2014
Net cash used in operating activities $(148.9)$(968.1) $ (613.2)
Add: Net issuances of non-recourse notes payable (1) 1,057.1 1,222.2 1,393.4
Adjusted net cash provided by operating activities $ 908.2 $ 254.1 $ 780.2
(1) Calculated using the gross issuances less payments on non-recourse notes payable as disclosed on the consolidated statements of cash
flows.
As of February 29, 2016, total inventory was $1.93 billion, representing a decrease of $154.8 million, or 7.4%, compared with the
balance as of the start of the fiscal year. The decrease primarily reflected the net effects of (i) a 13% decrease in used vehicles in
inventory at stores included in the comparable store base in an effort to optimize inventory, (ii) the addition of inventory to support
new store openings in fiscal 2016 and (iii) our disposal of two new car franchises during fiscal 2016.
As of February 28, 2015, total inventory was $2.09 billion, representing an increase of $445.5 million, or 27.1%, compared with
the balance as of the start of the fiscal year. The increase reflected a combination of factors, including an intentional build in
inventories in the fall and winter of 2014 to better position us for seasonal sales opportunities, the 13 new stores opened during
fiscal 2015, added inventories to support our comparable store sales growth, and below-target inventories at the start of the fiscal
year.
Investing Activities. Net cash used in investing activities totaled $378.8 million in fiscal 2016, $360.7 million in fiscal 2015 and
$336.7 million in fiscal 2014. Investing activities primarily consist of capital expenditures, which totaled $315.6 million in fiscal
2016, $309.8 million in fiscal 2015 and $310.3 million in fiscal 2014. Capital expenditures primarily include real estate acquisitions
for planned future store openings, store construction costs and store remodeling expenses. We maintain a multi-year pipeline of
sites to support our store growth, so portions of capital spending in one year may relate to stores that we open in subsequent fiscal
years. We opened 14 stores and relocated 1 store in fiscal 2016 and we opened 13 stores in each of fiscal 2015 and 2014.
Financing Activities. Net cash provided by financing activities totaled $537.5 million in fiscal 2016, $728.6 million in fiscal 2015
and $1.13 billion in fiscal 2014. Included in these amounts were net increases in total non-recourse notes payable of $1.06 billion,
$1.22 billion and $1.39 billion, respectively, which were used to provide the financing for the majority of the increases of
$1.20 billion, $1.37 billion and $1.32 billion, respectively, in auto loan receivables (see Operating Activities). During fiscal 2016,
we increased net borrowings under the revolving credit facility by $404.6 million. During fiscal 2015, we received proceeds of
$300 million from a variable-rate term loan entered into in November 2014. Net cash provided by financing activities was reduced
by stock repurchases of $983.9 million in fiscal 2016, $924.3 million in fiscal 2015 and $313.4 million in fiscal 2014.
TOTAL DEBT AND CASH AND CASH EQUIVALENTS
As of February 29 or 28
(In thousands) 2016 2015
Borrowings under revolving credit facility $ 415,428 $ 10,785
Other long-term debt 300,000 300,000
Finance and capital lease obligations 414,654 327,838
Non-recourse notes payable 9,527,750 8,470,629
Total debt $ 10,657,832 $ 9,109,252
Cash and cash equivalents $ 37,394 $ 27,606
We have a $1.20 billion unsecured revolving credit facility, which expires in August 2020. Borrowings under this credit facility
are available for working capital and general corporate purposes, and the unused portion is fully available to us. We also have a
$300 million variable-rate term loan, which is due in August 2020. The credit facility and term loan agreements contain
representations and warranties, conditions and covenants. If these requirements were not met, all amounts outstanding or otherwise
owed could become due and payable immediately and other limitations could be placed on our ability to use any available borrowing
capacity.