CarMax 2016 Annual Report Download - page 72
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Changes In and Reclassifications Out of Accumulated Other Comprehensive Loss
Years Ended February 29 or 28
(In thousands) 2016 2015 2014
Retirement Benefit Plans (Note 10):
Actuarial gain (loss) arising during the year $ 2,214 $(34,126) $ 15,465
Tax (expense) benefit (752)12,768 (5,752)
Actuarial gain (loss) arising during the year, net of tax 1,462 (21,358) 9,713
Actuarial loss amortization reclassifications recognized in net pension expense:
Cost of sales 835 558 669
CarMax Auto Finance income 49 31 38
Selling, general and administrative expenses 1,173 772 967
Total amortization reclassifications recognized in net pension expense 2,057 1,361 1,674
Tax expense (769)(508)(623)
Amortization reclassifications recognized in net
pension expense, net of tax 1,288 853 1,051
Net change in retirement benefit plan unrecognized
actuarial losses, net of tax 2,750 (20,505) 10,764
Cash Flow Hedges (Note 5):
Effective portion of changes in fair value (20,715)(5,847)(5,286)
Tax benefit 8,137 2,312 2,070
Effective portion of changes in fair value, net of tax (12,578)(3,535)(3,216)
Reclassifications to CarMax Auto Finance income 8,277 8,118 9,872
Tax expense (3,254)(3,198)(3,883)
Reclassification of hedge losses, net of tax 5,023 4,920 5,989
Net change in cash flow hedge unrecognized losses, net of tax (7,555)1,385 2,773
Total other comprehensive (loss) income, net of tax $(4,805)$(19,120) $ 13,537
Changes in the funded status of our retirement plans and the effective portion of changes in the fair value of derivatives that are
designated and qualify as cash flow hedges are recognized in accumulated other comprehensive loss. The cumulative balances
are net of deferred taxes of $42.4 million as of February 29, 2016 and $39.0 million as of February 28, 2015.
15. LEASE COMMITMENTS
Our leases primarily consist of land or land and building leases related to CarMax store locations. Our lease obligations are based
upon contractual minimum rates. Most leases provide that we pay taxes, maintenance, insurance and operating expenses applicable
to the premises. The initial term of most real property leases will expire within the next 20 years; however, most of the leases
have options providing for renewal periods of 5 to 20 years at terms similar to the initial terms. For finance and capital leases, a
portion of the periodic lease payments is recognized as interest expense and the remainder reduces the obligations. For operating
leases, rent is recognized on a straight-line basis over the lease term, including scheduled rent increases and rent holidays. Rent
expense for all operating leases was $46.9 million in fiscal 2016, $44.6 million in fiscal 2015 and $43.6 million in fiscal 2014. See
Note 11 for additional information on finance and capital lease obligations.