10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended August 31, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number:  1-31420

CARMAX, INC.

(Exact name of registrant as specified in its charter)

Virginia		54-1821055
(State or other jurisdiction of incorporation)		(I.R.S. Employer Identification No.)
12800 Tuckahoe Creek Parkway		23238
Richmond,	Virginia
(Address of Principal Executive Offices)		(Zip Code)

(804) 747-0422

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	KMX	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  ☒    No  ☐ 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ☐     No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding as of September 28, 2022
Common Stock, par value $0.50	158,015,491

Page 1

CARMAX, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

			Page No.
PART I.	FINANCIAL INFORMATION
	Item 1.	Financial Statements:
		Consolidated Statements of Earnings (Unaudited) –
		Three and Six Months Ended August 31, 2022 and 2021	3
		Consolidated Statements of Comprehensive Income (Unaudited) –
		Three and Six Months Ended August 31, 2022 and 2021	4
		Consolidated Balance Sheets (Unaudited) –
		August 31, 2022 and February 28, 2022	5
		Consolidated Statements of Cash Flows (Unaudited) –
		Six Months Ended August 31, 2022 and 2021	6
		Consolidated Statements of Shareholders’ Equity (Unaudited) –
		Three and Six Months Ended August 31, 2022 and 2021	7
		Notes to Consolidated Financial Statements (Unaudited)	9
	Item 2.	Management’s Discussion and Analysis of Financial Condition and
		Results of Operations	31
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
	Item 4.	Controls and Procedures	48
PART II.	OTHER INFORMATION
	Item 1.	Legal Proceedings	49
	Item 1A.	Risk Factors	49
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
	Item 6.	Exhibits	50
SIGNATURES			51

Page 2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Earnings

(Unaudited)

	Three Months Ended August 31						Six Months Ended August 31
(In thousands except per share data)	2022		%(1)	2021		%(1)	2022		%(1)	2021		%(1)
SALES AND OPERATING REVENUES:
Used vehicle sales	$	6,284,085	77.2	$	6,104,366	76.4	$	13,298,575	76.2	$	12,261,710	78.2
Wholesale vehicle sales	1,690,326		20.8	1,701,572		21.3	3,806,843		21.8	3,075,929		19.6
Other sales and revenues	170,392		2.1	182,421		2.3	351,006		2.0	348,319		2.2
NET SALES AND OPERATING REVENUES	8,144,803		100.0	7,988,359		100.0	17,456,424		100.0	15,685,958		100.0
COST OF SALES:
Used vehicle cost of sales	5,789,098		71.1	5,597,842		70.1	12,240,108		70.1	11,158,179		71.1
Wholesale vehicle cost of sales	1,549,669		19.0	1,512,559		18.9	3,474,519		19.9	2,701,072		17.2
Other cost of sales	68,891		0.8	62,474		0.8	129,261		0.7	86,714		0.6
TOTAL COST OF SALES	7,407,658		90.9	7,172,875		89.8	15,843,888		90.8	13,945,965		88.9
GROSS PROFIT	737,145		9.1	815,484		10.2	1,612,536		9.2	1,739,993		11.1
CARMAX AUTO FINANCE INCOME	182,869		2.2	200,033		2.5	387,342		2.2	441,764		2.8
Selling, general and administrative expenses	666,041		8.2	574,286		7.2	1,322,781		7.6	1,128,355		7.2
Depreciation and amortization	57,692		0.7	52,789		0.7	113,340		0.6	102,679		0.7
Interest expense	32,745		0.4	22,410		0.3	61,520		0.4	42,944		0.3
Other income	(4,039)		—	(1,782)		—	(1,940)		—	(27,359)		(0.2)
Earnings before income taxes	167,575		2.1	367,814		4.6	504,177		2.9	935,138		6.0
Income tax provision	41,670		0.5	82,547		1.0	126,007		0.7	213,115		1.4
NET EARNINGS	$	125,905	1.5	$	285,267	3.6	$	378,170	2.2	$	722,023	4.6
WEIGHTED AVERAGE COMMON SHARES:
Basic	158,801			162,966			159,556			163,058
Diluted	160,218			165,643			161,015			165,969
NET EARNINGS PER SHARE:
Basic	$	0.79		$	1.75		$	2.37		$	4.43
Diluted	$	0.79		$	1.72		$	2.35		$	4.35

(1)    Percents are calculated as a percentage of net sales and operating revenues and may not total due to rounding. 

See accompanying notes to consolidated financial statements.

Page 3

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended August 31				Six Months Ended August 31
(In thousands)	2022		2021		2022		2021
NET EARNINGS	$	125,905	$	285,267	$	378,170	$	722,023
Other comprehensive income, net of taxes:
Net change in retirement benefit plan unrecognized actuarial losses	481		658		962		1,317
Net change in cash flow hedge unrecognized gains	25,626		2,753		77,459		5,031
Other comprehensive income, net of taxes	26,107		3,411		78,421		6,348
TOTAL COMPREHENSIVE INCOME	$	152,012	$	288,678	$	456,591	$	728,371

See accompanying notes to consolidated financial statements.

Page 4

CARMAX, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

	As of August 31		As of February 28
(In thousands except share data)	2022		2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	56,772	$	102,716
Restricted cash from collections on auto loans receivable	533,253		548,099
Accounts receivable, net	402,452		560,984
Inventory	4,671,685		5,124,569
Other current assets	208,297		212,922
TOTAL CURRENT ASSETS	5,872,459		6,549,290
Auto loans receivable, net of allowance for loan losses of $477,543 and $433,030 as of August 31, 2022 and February 28, 2022, respectively	15,961,213		15,289,701
Property and equipment, net of accumulated depreciation of $1,544,765 and $1,437,548 as of August 31, 2022 and February 28, 2022, respectively	3,312,605		3,209,068
Deferred income taxes	93,057		120,931
Operating lease assets	530,285		537,357
Goodwill	141,258		141,258
Other assets	559,666		490,659
TOTAL ASSETS	$	26,470,543	$	26,338,264
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	928,749	$	937,717
Accrued expenses and other current liabilities	482,361		533,271
Current portion of operating lease liabilities	48,783		44,197
Current portion of long-term debt	112,504		11,203
Current portion of non-recourse notes payable	559,792		521,069
TOTAL CURRENT LIABILITIES	2,132,189		2,047,457
Long-term debt, excluding current portion	2,511,417		3,255,304
Non-recourse notes payable, excluding current portion	15,534,801		14,919,715
Operating lease liabilities, excluding current portion	512,542		523,269
Other liabilities	365,367		357,080
TOTAL LIABILITIES	21,056,316		21,102,825
Commitments and contingent liabilities
SHAREHOLDERS’ EQUITY:
Common stock, $0.50 par value; 350,000,000 shares authorized; 158,043,981 and 161,053,983 shares issued and outstanding as of August 31, 2022 and February 28, 2022, respectively	79,022		80,527
Capital in excess of par value	1,684,408		1,677,268
Accumulated other comprehensive income (loss)	31,999		(46,422)
Retained earnings	3,618,798		3,524,066
TOTAL SHAREHOLDERS’ EQUITY	5,414,227		5,235,439
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	26,470,543	$	26,338,264

See accompanying notes to consolidated financial statements.

Page 5

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended August 31
(In thousands)	2022		2021
OPERATING ACTIVITIES:
Net earnings	$	378,170	$	722,023
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	137,903		129,300
Share-based compensation expense	47,010		72,780
Provision for loan losses	133,343		11,107
Provision for cancellation reserves	59,208		62,886
Deferred income tax provision	800		32,502
Other	9,713		(19,883)
Net decrease (increase) in:
Accounts receivable, net	158,532		(244,471)
Inventory	452,884		(948,299)
Other current assets	79,188		(26,496)
Auto loans receivable, net	(804,855)		(1,177,458)
Other assets	(31,703)		(9,745)
Net (decrease) increase in:
Accounts payable, accrued expenses and other
current liabilities and accrued income taxes	(74,986)		115,542
Other liabilities	(65,618)		(105,109)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	479,589		(1,385,321)
INVESTING ACTIVITIES:
Capital expenditures	(204,463)		(137,838)
Proceeds from disposal of property and equipment	84		260
Proceeds from sale of business	—		602
Purchases of investments	(5,428)		(12,651)
Sales and returns of investments	2,492		10,954
Business acquisition, net of cash acquired	—		(241,563)
NET CASH USED IN INVESTING ACTIVITIES	(207,315)		(380,236)
FINANCING ACTIVITIES:
Increase in short-term debt, net	—		167
Proceeds from issuances of long-term debt	2,412,900		3,035,601
Payments on long-term debt	(3,057,565)		(2,168,411)
Cash paid for debt issuance costs	(10,240)		(9,547)
Payments on finance lease obligations	(9,883)		(5,709)
Issuances of non-recourse notes payable	8,230,501		7,414,283
Payments on non-recourse notes payable	(7,576,056)		(6,201,801)
Repurchase and retirement of common stock	(325,168)		(355,495)
Equity issuances	13,282		60,087
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES	(322,229)		1,769,175
(Decrease) increase in cash, cash equivalents, and restricted cash	(49,955)		3,618
Cash, cash equivalents, and restricted cash at beginning of year	803,618		771,947
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	753,663	$	775,565
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents	$	56,772	$	58,095
Restricted cash from collections on auto loans receivable	533,253		570,567
Restricted cash included in other assets	163,638		146,903
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	753,663	$	775,565

See accompanying notes to consolidated financial statements.

Page 6

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity

(Unaudited)

	Six Months Ended August 31, 2022
								Accumulated
	Common			Capital in				Other
	Shares	Common		Excess of		Retained		Comprehensive
(In thousands)	Outstanding	Stock		Par Value		Earnings		Income (Loss)		Total
Balance as of February 28, 2022	161,054	$	80,527	$	1,677,268	$	3,524,066	$	(46,422)	$	5,235,439
Net earnings	—	—		—		252,265		—		252,265
Other comprehensive income	—	—		—		—		52,314		52,314
Share-based compensation expense	—	—		21,594		—		—		21,594
Repurchases of common stock	(1,644)	(822)		(17,207)		(139,565)		—		(157,594)
Exercise of common stock options	49	24		3,418		—		—		3,442
Stock incentive plans, net shares issued	155	78		(6,901)		—		—		(6,823)
Balance as of May 31, 2022	159,614	$	79,807	$	1,678,172	$	3,636,766	$	5,892	$	5,400,637
Net earnings	—	—		—		125,905		—		125,905
Other comprehensive income	—	—		—		—		26,107		26,107
Share-based compensation expense	—	—		15,062		—		—		15,062
Repurchases of common stock	(1,730)	(865)		(18,279)		(143,873)		—		(163,017)
Exercise of common stock options	155	78		9,762		—		—		9,840
Stock incentive plans, net shares issued	5	2		(309)		—		—		(307)
Balance as of August 31, 2022	158,044	$	79,022	$	1,684,408	$	3,618,798	$	31,999	$	5,414,227

See accompanying notes to consolidated financial statements.

Page 7

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity

(Unaudited)

	Six Months Ended August 31, 2021
								Accumulated
	Common			Capital in				Other
	Shares	Common		Excess of		Retained		Comprehensive
(In thousands)	Outstanding	Stock		Par Value		Earnings		Loss		Total
Balance as of February 28, 2021	163,172	$	81,586	$	1,513,821	$	2,887,897	$	(118,691)	$	4,364,613
Net earnings	—	—		—		436,756		—		436,756
Other comprehensive income	—	—		—		—		2,937		2,937
Share-based compensation expense	—	—		20,102		—		—		20,102
Repurchases of common stock	(998)	(499)		(9,348)		(114,695)		—		(124,542)
Exercise of common stock options	375	187		21,403		—		—		21,590
Stock incentive plans, net shares issued	254	127		(18,102)		—		—		(17,975)
Balance as of May 31, 2021	162,803	$	81,401	$	1,527,876	$	3,209,958	$	(115,754)	$	4,703,481
Net earnings	—	—		—		285,267		—		285,267
Other comprehensive income	—	—		—		—		3,411		3,411
Share-based compensation expense	—	—		14,116		—		—		14,116
Shares issued for acquisition	776	388		90,183		—		—		90,571
Repurchases of common stock	(1,754)	(877)		(17,164)		(202,004)		—		(220,045)
Exercise of common stock options	621	311		38,185		—		—		38,496
Stock incentive plans, net shares issued	24	12		(130)		—		—		(118)
Balance as of August 31, 2021	162,470	$	81,235	$	1,653,066	$	3,293,221	$	(112,343)	$	4,915,179

See accompanying notes to consolidated financial statements.

Page 8

CARMAX, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

1.Background

Business. CarMax, Inc. (“we,” “our,” “us,” “CarMax” and “the company”), including its wholly owned subsidiaries, is the nation’s largest retailer of used vehicles.  We operate in two reportable segments:  CarMax Sales Operations and CarMax Auto Finance (“CAF”).  Our CarMax Sales Operations segment consists of all aspects of our auto merchandising and service operations, excluding financing provided by CAF.  Our CAF segment consists solely of our own finance operation that provides financing to customers buying retail vehicles from CarMax. On June 1, 2021, we completed the acquisition of Edmunds Holding Company (“Edmunds”), which does not meet the quantitative thresholds to be considered a reportable segment. See Note 17 for additional information on our reportable segments and Note 2 for additional information regarding our acquisition of Edmunds.

We deliver an unrivaled customer experience by offering a broad selection of quality used vehicles and related products and services at competitive, no-haggle prices using a customer-friendly sales process.  Our omni-channel platform, which gives us the largest addressable market in the used car industry, empowers our retail customers to buy a car on their terms – online, in-store or an integrated combination of both. Customers can choose to complete the car-buying experience in-person at one of our stores; or buy the car online and receive delivery through express pickup, available nationwide, or home delivery, available to most customers. We offer customers a range of related products and services, including the appraisal and purchase of vehicles directly from consumers; the financing of retail vehicle purchases through CAF and third-party finance providers; the sale of extended protection plan (“EPP”) products, which include extended service plans (“ESPs”) and guaranteed asset protection (“GAP”); and vehicle repair service.  Vehicles purchased through the appraisal process that do not meet our retail standards are sold to licensed dealers through on-site or virtual wholesale auctions.

Basis of Presentation and Use of Estimates. The accompanying interim unaudited consolidated financial statements include the accounts of CarMax and our wholly owned subsidiaries.  All significant intercompany balances and transactions have been eliminated in consolidation.  These interim unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  In the opinion of management, such interim consolidated financial statements reflect all normal recurring adjustments considered necessary to present fairly the financial position and the results of operations and cash flows for the interim periods presented.  The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year.  

The accounting policies followed in the presentation of our interim financial results are consistent with those included in the company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2022 (the “2022 Annual Report”), with the exception of those related to recent accounting pronouncements adopted in the current fiscal year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in our 2022 Annual Report.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities.  Actual results could differ from those estimates.  In particular, the novel coronavirus (“COVID-19”) pandemic and the resulting adverse impacts to global economic conditions, as well as our operations, may impact future estimates including, but not limited to, our allowance for loan losses, inventory valuations, fair value measurements, downward adjustments to investments in equity securities, asset impairment charges, the effectiveness of the company’s hedging instruments, deferred tax valuation allowances, cancellation reserves, actuarial losses on our retirement benefit plans and discount rate assumptions. Certain prior year amounts have been reclassified to conform to the current year’s presentation.  Amounts and percentages may not total due to rounding.

Page 9

Recent Accounting Pronouncements.

Effective in Future Periods

In June 2022, the Financial Accounting Standards Board (“FASB”) issued an accounting pronouncement (ASU 2022-03) related to accounting for equity securities. The amendments in the update clarify the guidance for measuring the fair value of equity securities subject to contractual restrictions that prohibit the sale of the equity securities, as well as introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. This update is effective for annual periods beginning after December 15, 2023, and interim periods within those fiscal years. We plan to adopt this pronouncement for our fiscal year beginning March 1, 2024, and we do not expect it to have a material effect on our consolidated financial statements.

2. Acquisition of Edmunds

On June 1, 2021, we completed the acquisition of Edmunds Holding Company, one of the most well established and trusted online guides for automotive information and a recognized leader in digital car shopping innovations. With this acquisition, CarMax has enhanced its digital capabilities and further strengthened its role and reach across the used auto ecosystem while adding exceptional technology and creative talent. Edmunds continues to operate independently and remains focused on delivering confidence to consumers and excellent value to its dealer and Original Equipment Manufacturer (“OEM”) clients. Additionally, this acquisition allows both businesses to accelerate their respective capabilities to deliver an enhanced digital experience to their customers by leveraging Edmunds’ compelling content and technology, CarMax’s unparalleled national scale and infrastructure, and the combined talent of both businesses.

The acquisition was accounted for in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, and, accordingly, Edmunds’ results of operations have been consolidated in our financial statements since the date of acquisition. We recorded a preliminary allocation of the purchase price to assets acquired and liabilities assumed based on their estimated fair values as of June 1, 2021. The transaction costs associated with the acquisition were approximately $8.0 million and were expensed as incurred within selling, general and administrative expenses.

The following table summarizes the total purchase consideration:

(In thousands)
Total cash consideration for outstanding shares	$	251,047
Fair value of common stock (1)	90,571
Fair value of preexisting relationship	60,200
Total	$	401,818

(1)     Represents the issuance of 776,097 shares of CarMax common stock to Edmunds equity holders, the fair value of which was based on the market value of CarMax common stock as of market close on the acquisition date (June 1, 2021).

In January 2020, we acquired a minority stake in Edmunds for $50 million. The noncontrolling equity investment in Edmunds was remeasured at a fair value of $60.2 million prior to the acquisition of the remaining ownership stake on June 1, 2021, which resulted in the recognition of a gain of $8.7 million. The gain was included in other income in the consolidated statements of earnings for the second quarter of fiscal 2022.

Page 10

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition:

(In thousands)	Fair Value
Cash	$	9,484
Accounts receivable, net	33,719
Other current assets	2,397
Property and equipment, net	20,741
Goodwill (1)	141,258
Intangible assets	218,000
Operating lease assets	97,250
Other assets	191
Total assets acquired	523,040
Accounts payable	5,063
Accrued expenses and other current liabilities	11,277
Current portion of operating lease liabilities	12,795
Deferred income taxes (1)	3,823
Operating lease liabilities, excluding current portion	88,264
Total liabilities assumed	121,222
Net assets acquired	$	401,818

(1)     During the third quarter of fiscal 2022, we obtained new information about facts and circumstances that existed as of the acquisition date, which resulted in a change in the fair value of assets and liabilities recognized. The adjustments were primarily related to research and development tax credits, which resulted in a decrease in goodwill and a decrease in deferred income taxes of $8.4 million.

The excess of purchase consideration over the fair value of net identifiable assets acquired and liabilities assumed was recorded as goodwill, which was primarily attributed to expected synergies and the assembled workforce of the acquired business and was not deductible for tax purposes. The fair values assigned to the net identifiable assets and liabilities assumed were based on management’s estimates and assumptions.

Identifiable intangible assets were recognized at their estimated acquisition date fair values. The fair value of identifiable intangible assets was determined by using certain estimates and assumptions that were not observable in the market. The fair values of the trade name asset and the internally developed software asset were determined using the relief-from-royalty method, and the fair value of the customer relationships asset was determined using the excess earnings method. These income-based approaches included significant assumptions such as the amount and timing of projected cash flows, growth rates, customer attrition rates, discount rates, and the assessment of the asset’s life cycle. The estimated fair value and estimated remaining useful lives of identifiable intangible assets as of the acquisition date were as follows:

(In thousands)	Useful Life (Years)	Fair Value
Trade name	Indefinite	$	31,900
Internally developed software	7	52,900
Customer relationships	17	133,200
Identifiable intangible assets		$	218,000

The operating results of Edmunds have been included in our consolidated financial statements since the date of the acquisition. Net sales and operating revenues and net earnings attributable to Edmunds were not material for the reporting periods presented. Our pro forma results as if the acquisition had taken place on the first day of fiscal 2021 would not be materially different from the amounts reflected in the accompanying consolidated financial statements, and therefore were not presented.

Page 11

3. Revenue

We recognize revenue when control of the good or service has been transferred to the customer, generally either at the time of sale or upon delivery to a customer.  Our contracts have a fixed contract price and revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. We collect sales taxes and other taxes from customers on behalf of governmental authorities at the time of sale.  These taxes are accounted for on a net basis and are not included in net sales and operating revenues or cost of sales. We generally expense sales commissions when incurred because the amortization period would have been less than one year. These costs are recorded within selling, general and administrative expenses. We do not have any significant payment terms as payment is received at or shortly after the point of sale.

Disaggregation of Revenue

	Three Months Ended August 31				Six Months Ended August 31
(In millions)	2022		2021		2022		2021
Used vehicle sales	$	6,284.1	$	6,104.4	$	13,298.6	$	12,261.7
Wholesale vehicle sales	1,690.3		1,701.6		3,806.8		3,075.9
Other sales and revenues:
Extended protection plan revenues	109.8		113.0		226.3		247.3
Third-party finance income, net	2.7		2.8		6.1		(1.8)
Advertising & subscription revenues (1)	34.3		34.5		68.7		34.5
Service revenues	19.4		21.0		41.2		43.2
Other	4.2		11.1		8.7		25.1
Total other sales and revenues	170.4		182.4		351.0		348.3
Total net sales and operating revenues	$	8,144.8	$	7,988.4	$	17,456.4	$	15,686.0

(1)     Excludes intersegment sales and operating revenues that have been eliminated in consolidation. See Note 17 for further details.

Used Vehicle Sales. Revenue from the sale of used vehicles is recognized upon transfer of control of the vehicle to the customer. As part of our customer service strategy, we guarantee the retail vehicles we sell with a 30-day/1,500 mile, money-back guarantee.  We record a reserve for estimated returns based on historical experience and trends. The reserve for estimated returns is presented gross on the consolidated balance sheets, with a return asset recorded in other current assets and a refund liability recorded in accrued expenses and other current liabilities. We also guarantee the used vehicles we sell with a 90-day/4,000-mile limited warranty. These warranties are deemed assurance-type warranties and are accounted for as warranty obligations. See Note 16 for additional information on this warranty and its related obligation.

Wholesale Vehicle Sales. Wholesale vehicles are sold at our auctions, and revenue from the sale of these vehicles is recognized upon transfer of control of the vehicle to the customer. Dealers also pay a fee to us based on the sale price of the vehicles they purchase. This fee is recognized as revenue at the time of sale. While we provide condition disclosures on each wholesale vehicle sold, the vehicles are subject to a limited right of return. We record a reserve for estimated returns based on historical experience and trends. The reserve for estimated returns is presented gross on the consolidated balance sheets, with a return asset recorded in other current assets and a refund liability recorded in accrued expenses and other current liabilities.

EPP Revenues. We also sell ESP and GAP products on behalf of unrelated third parties, who are primarily responsible for fulfilling the contract, to customers who purchase a retail vehicle.  The ESPs we currently offer on all used vehicles provide coverage up to 60 months (subject to mileage limitations), while GAP covers the customer for the term of their finance contract. We recognize revenue, on a net basis, at the time of sale. We also record a reserve, or refund liability, for estimated contract cancellations. The reserve for cancellations is evaluated for each product and is based on forecasted forward cancellation curves utilizing historical experience, recent trends and credit mix of the customer base.  Our risk related to contract cancellations is limited to the revenue that we receive.  Cancellations fluctuate depending on the volume of EPP sales, customer financing default or prepayment rates, and shifts in customer behavior, including those related to changes in the coverage or term of the product.  The current portion of estimated cancellation reserves is recognized as a component of accrued expenses and other current liabilities with the remaining amount recognized in other liabilities.  See Note 8 for additional information on cancellation reserves.

We are contractually entitled to receive profit-sharing revenues based on the performance of the ESPs administered by third parties. These revenues are a form of variable consideration included in EPP revenues to the extent that it is probable that it

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will not result in a significant revenue reversal. An estimate of the amount to which we expect to be entitled, subject to various constraints, is recognized upon satisfying the performance obligation of selling the ESP. These constraints include factors that are outside of the company’s influence or control and the length of time until settlement. We apply the expected value method, utilizing historical claims and cancellation data from CarMax customers, as well as external data and other qualitative assumptions. This estimate is reassessed each reporting period with changes reflected in other sales and revenues on our consolidated statements of earnings and other assets on our consolidated balance sheets. As of August 31, 2022 and February 28, 2022, no current or long-term contract asset was recognized related to cumulative profit-sharing payments to which we expect to be entitled.

Third-Party Finance Income/(Fees). Customers applying for financing who are not approved or are conditionally approved by CAF are generally evaluated by other third-party finance providers.  These providers generally either pay us or are paid a fixed, pre-negotiated fee per contract.  We recognize these fees at the time of sale.

Advertising and Subscription Revenues. Advertising and subscription revenues consist of revenues earned by our Edmunds business. Advertising revenues are derived from advertising contracts with automotive manufacturers based on fixed fees per impression and fees for certain activities completed by customers on the manufacturers' websites. These fees are recognized in the period the impressions are delivered or certain activities occurred. Subscription revenues are derived from packages sold to automotive dealers that include car leads, inventory listings and enhanced placement in Edmunds' dealer locator and are recognized over the period that the services are made available to the dealers. Subscription revenues also include a digital marketing subscription service, which allows dealers to gain exposure on third party partner websites. Revenues for this service are recognized on a net basis.

Service Revenues. Service revenue consists of labor and parts income related to vehicle repair service, including repairs of vehicles covered under an ESP we sell or warranty program. Service revenue is recognized at the time the work is completed.

Other Revenues. Other revenues consist primarily of new vehicle sales and sales of accessories. Revenue in this category is recognized upon transfer of control to the customer.

4. CarMax Auto Finance

CAF provides financing to qualified retail customers purchasing vehicles from CarMax.  CAF provides us the opportunity to capture additional profits, cash flows and sales while managing our reliance on third-party finance sources.  Management regularly analyzes CAF’s operating results by assessing profitability, the performance of the auto loans receivable, including trends in credit losses and delinquencies, and CAF direct expenses.  This information is used to assess CAF’s performance and make operating decisions, including resource allocation.

We typically use securitizations or other funding arrangements to fund loans originated by CAF.  CAF income primarily reflects the interest and fee income generated by the auto loans receivable less the interest expense associated with the debt issued to fund these receivables, a provision for estimated loan losses and direct CAF expenses.

CAF income does not include any allocation of indirect costs.  Although CAF benefits from certain indirect overhead expenditures, we have not allocated indirect costs to CAF to avoid making subjective allocation decisions.  Examples of indirect costs not allocated to CAF include retail store expenses and corporate expenses.  In addition, except for auto loans receivable, which are disclosed in Note 5, CAF assets are not separately reported nor do we allocate assets to CAF because such allocation would not be useful to management in making operating decisions.

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Components of CAF Income

	Three Months Ended August 31						Six Months Ended August 31
(In millions)	2022		% (1)	2021		% (1)	2022		% (1)	2021		% (1)
Interest margin:
Interest and fee income	$	357.2	8.8	$	324.1	8.8	$	703.9	8.8	$	634.4	8.8
Interest expense	(62.5)		(1.5)	(60.6)		(1.7)	(111.3)		(1.4)	(126.4)		(1.8)
Total interest margin	294.7		7.3	263.5		7.2	592.6		7.4	508.0		7.0
Provision for loan losses	(75.5)		(1.9)	(35.5)		(1.0)	(133.3)		(1.7)	(11.1)		(0.2)
Total interest margin after provision for loan losses	219.2		5.4	228.0		6.2	459.3		5.7	496.9		6.9
Direct expenses:
Payroll and fringe benefit expense	(15.9)		(0.4)	(12.4)		(0.3)	(30.6)		(0.4)	(25.0)		(0.3)
Depreciation and amortization	(3.8)		(0.1)	(0.2)		—	(7.6)		(0.1)	(0.4)		—
Other direct expenses	(16.6)		(0.4)	(15.3)		(0.4)	(33.7)		(0.4)	(29.7)		(0.4)
Total direct expenses	(36.3)		(0.9)	(27.9)		(0.8)	(71.9)		(0.9)	(55.1)		(0.8)
CarMax Auto Finance income	$	182.9	4.5	$	200.0	5.4	$	387.3	4.8	$	441.8	6.1
Total average managed receivables	$	16,176.2		$	14,683.3		$	15,996.6		$	14,416.0

(1)     Annualized percentage of total average managed receivables.     

5. Auto Loans Receivable

Auto loans receivable include amounts due from customers related to retail vehicle sales financed through CAF and are presented net of an allowance for estimated loan losses.  These auto loans represent a large group of smaller-balance homogeneous loans, which we consider to be part of one class of financing receivable and one portfolio segment for purposes of determining our allowance for loan losses. We generally use warehouse facilities to fund auto loans receivable originated by CAF until we elect to fund them through an asset-backed term funding transaction, such as a term securitization or alternative funding arrangement.  We recognize transfers of auto loans receivable into the warehouse facilities and asset-backed term funding transactions (together, “non-recourse funding vehicles”) as secured borrowings, which result in recording the auto loans receivable and the related non-recourse notes payable on our consolidated balance sheets. The majority of the auto loans receivable serve as collateral for the related non-recourse notes payable of $16.12 billion as of August 31, 2022, and $15.47 billion as of February 28, 2022. See Note 10 for additional information on securitizations and non-recourse notes payable.

Interest income and expenses related to auto loans are included in CAF income.  Interest income on auto loans receivable is recognized when earned based on contractual loan terms.  All loans continue to accrue interest until repayment or charge-off.  When a charge-off occurs, accrued interest is written off by reversing interest income. Direct costs associated with loan originations are not considered material, and thus, are expensed as incurred.  See Note 4 for additional information on CAF income.

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Auto Loans Receivable, Net

	As of August 31		As of February 28
(In millions)	2022		2022
Asset-backed term funding	$	12,563.5	$	11,653.8
Warehouse facilities	2,997.9		3,291.9
Overcollateralization (1)	629.0		489.1
Other managed receivables (2)	158.9		217.5
Total ending managed receivables	16,349.3		15,652.3
Accrued interest and fees	81.7		67.3
Other	7.7		3.1
Less: allowance for loan losses	(477.5)		(433.0)
Auto loans receivable, net	$	15,961.2	$	15,289.7

(1)     Represents receivables restricted as excess collateral for the non-recourse funding vehicles.

(2)     Other managed receivables includes receivables not funded through the non-recourse funding vehicles.

Credit Quality.  When customers apply for financing, CAF’s proprietary scoring models utilize the customers’ credit history and certain application information to evaluate and rank their risk.  We obtain credit histories and other credit data that includes information such as number, age, type of and payment history for prior or existing credit accounts.  The application information that is used includes income, collateral value and down payment.  The scoring models yield credit grades that represent the relative likelihood of repayment.  Customers with the highest probability of repayment are A-grade customers. Customers assigned a lower grade are determined to have a lower probability of repayment.  For loans that are approved, the credit grade influences the terms of the agreement, such as the required loan-to-value ratio and interest rate. After origination, credit grades are generally not updated.

CAF uses a combination of the initial credit grades and historical performance to monitor the credit quality of the auto loans receivable on an ongoing basis.  We validate the accuracy of the scoring models periodically.  Loan performance is reviewed on a recurring basis to identify whether the assigned grades adequately reflect the customers’ likelihood of repayment.

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Ending Managed Receivables by Major Credit Grade

	As of August 31, 2022
	Fiscal Year of Origination (1)
(In millions)	2023		2022		2021		2020		2019		Prior to 2019		Total		% (2)
Core managed receivables (3):
A	$	2,242.3	$	3,097.9	$	1,405.5	$	934.1	$	369.8	$	102.7	$	8,152.3	49.8
B	1,533.9		2,227.8		1,010.7		645.1		326.3		128.2		5,872.0		35.9
C and other	439.1		739.7		390.2		222.0		109.3		54.2		1,954.5		12.0
Total core managed receivables	4,215.3		6,065.4		2,806.4		1,801.2		805.4		285.1		15,978.8		97.7
Other managed receivables (4):
C and other	155.0		143.2		18.9		26.8		17.9		8.7		370.5		2.3
Total ending managed receivables	$	4,370.3	$	6,208.6	$	2,825.3	$	1,828.0	$	823.3	$	293.8	$	16,349.3	100.0

	As of February 28, 2022
	Fiscal Year of Origination (1)
(In millions)	2022		2021		2020		2019		2018		Prior to 2018		Total		% (2)
Core managed receivables (3):
A	$	3,885.5	$	1,788.3	$	1,266.1	$	574.1	$	203.4	$	32.3	$	7,749.7	49.5
B	2,795.2		1,288.5		857.7		473.1		205.2		50.4		5,670.1		36.2
C and other	919.1		496.2		294.8		156.7		73.8		29.6		1,970.2		12.6
Total core managed receivables	7,599.8		3,573.0		2,418.6		1,203.9		482.4		112.3		15,390.0		98.3
Other managed receivables (4):
C and other	165.2		23.9		34.7		23.8		10.0		4.7		262.3		1.7
Total ending managed receivables	$	7,765.0	$	3,596.9	$	2,453.3	$	1,227.7	$	492.4	$	117.0	$	15,652.3	100.0

(1)     Classified based on credit grade assigned when customers were initially approved for financing.

(2)     Percent of total ending managed receivables.

(3)     Represents CAF's Tier 1 originations.

(4)     Represents CAF's Tier 2 and Tier 3 originations.

Allowance for Loan Losses.  The allowance for loan losses at August 31, 2022 represents the net credit losses expected over the remaining contractual life of our managed receivables. The allowance for loan losses is determined using a net loss timing curve, primarily based on the composition of the portfolio of managed receivables and historical gross loss and recovery trends. Due to the fact that losses for receivables with less than 18 months of performance history can be volatile, our net loss estimate weights both historical losses by credit grade at origination and actual loss data on the receivables to-date, along with forward loss curves, in estimating future performance. Once the receivables have 18 months of performance history, the net loss estimate reflects actual loss experience of those receivables to date, along with forward loss curves, to predict future performance. The forward loss curves are constructed using historical performance data and show the average timing of losses over the course of a receivable’s life. The net loss estimate is calculated by applying the loss rates developed using the methods described above to the amortized cost basis of the managed receivables at inception of the loan.

The output of the net loss timing curve is adjusted to take into account reasonable and supportable forecasts about the future. Specifically, the change in U.S. unemployment rates and the National Automobile Dealers Association used vehicle price index are used to predict changes in gross loss and recovery rates, respectively. An economic adjustment factor, based upon a single macroeconomic scenario, is developed to capture the relationship between changes in these forecasts and changes in gross loss and recovery rates. This factor is applied to the output of the net loss timing curve for the reasonable and supportable forecast period of two years. After the end of this two-year period, we revert to historical experience on a straight-line basis over a period of 12 months. We periodically consider whether the use of alternative metrics would result in improved model performance and revise the models when appropriate. We also consider whether qualitative adjustments are necessary for factors that are not reflected in the quantitative methods but impact the measurement of estimated credit losses. Such

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adjustments include the uncertainty of the impacts of recent economic trends on customer behavior. The change in the allowance for loan losses is recognized through an adjustment to the provision for loan losses.

Allowance for Loan Losses

	Three Months Ended August 31, 2022
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	390.4	$	67.8	$	458.2	2.85
Charge-offs	(84.2)		(11.9)		(96.1)
Recoveries	35.9		4.0		39.9
Provision for loan losses	54.0		21.5		75.5
Balance as of end of period	$	396.1	$	81.4	$	477.5	2.92

	Three Months Ended August 31, 2021
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	348.1	$	31.4	$	379.5	2.62
Charge-offs	(40.3)		(3.4)		(43.7)
Recoveries	25.1		1.7		26.8
Provision for loan losses	27.1		8.4		35.5
Balance as of end of period	$	360.0	$	38.1	$	398.1	2.66

	Six Months Ended August 31, 2022
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	377.5	$	55.5	$	433.0	2.77	%
Charge-offs	(145.6)		(18.7)		(164.3)
Recoveries	69.0		6.5		75.5
Provision for loan losses	95.2		38.1		133.3
Balance as of end of period	$	396.1	$	81.4	$	477.5	2.92	%

	Six Months Ended August 31, 2021
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	379.4	$	31.7	$	411.1	2.97	%
Charge-offs	(79.0)		(6.5)		(85.5)
Recoveries	57.3		4.1		61.4
Provision for loan losses	2.3		8.8		11.1
Balance as of end of period	$	360.0	$	38.1	$	398.1	2.66	%

(1)     Percent of total ending managed receivables.

(2)     Net of costs incurred to recover vehicle.

During the first six months of fiscal 2023, the allowance for loan losses increased $44.5 million, primarily reflecting growth in receivables. The previously disclosed expansion of our Tier 2 and Tier 3 originations within CAF's portfolio resulted in a 10 basis point increase in the allowance as a percent of total ending managed receivables during the period. While loss performance was unfavorable compared to the prior year period, the prior year performance fluctuated outside normal expectations. The allowance for loan losses as of August 31, 2022 reflects the historical loss performance experienced prior to the pandemic as well as increases for our Tier 3 expansion and growing Tier 2 portfolio.

Past Due Receivables. An account is considered delinquent when the related customer fails to make a substantial portion of a scheduled payment on or before the due date. In general, accounts are charged-off on the last business day of the month during

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which the earliest of the following occurs: the receivable is 120 days or more delinquent as of the last business day of the month, the related vehicle is repossessed and liquidated, or the receivable is otherwise deemed uncollectible. For purposes of determining impairment, auto loans are evaluated collectively, as they represent a large group of smaller-balance homogeneous loans, and therefore, are not individually evaluated for impairment.

Past Due Receivables

	As of August 31, 2022
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	8,119.0	$	5,548.4	$	1,644.0	$	15,311.4	$	279.4	$	15,590.8	95.36
Delinquent loans:
31-60 days past due	20.8		199.0		173.0		392.8		48.4		441.2		2.70
61-90 days past due	9.8		100.7		113.8		224.3		34.2		258.5		1.58
Greater than 90 days past due	2.7		23.9		23.7		50.3		8.5		58.8		0.36
Total past due	33.3		323.6		310.5		667.4		91.1		758.5		4.64
Total ending managed receivables	$	8,152.3	$	5,872.0	$	1,954.5	$	15,978.8	$	370.5	$	16,349.3	100.00

	As of February 28, 2022
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	7,711.9	$	5,401.3	$	1,702.7	$	14,815.9	$	206.4	$	15,022.3	95.98
Delinquent loans:
31-60 days past due	25.4		173.3		160.4		359.1		33.0		392.1		2.50
61-90 days past due	9.2		75.6		85.2		170.0		19.1		189.1		1.21
Greater than 90 days past due	3.2		19.9		21.9		45.0		3.8		48.8		0.31
Total past due	37.8		268.8		267.5		574.1		55.9		630.0		4.02
Total ending managed receivables	$	7,749.7	$	5,670.1	$	1,970.2	$	15,390.0	$	262.3	$	15,652.3	100.00

(1)     Percent of total ending managed receivables. 

6. Derivative Instruments and Hedging Activities

We use derivatives to manage certain risks arising from both our business operations and economic conditions, particularly with regard to issuances of debt.  Primary exposures include LIBOR and other rates used as benchmarks in our securitizations and other debt financing.  We enter into derivative instruments to manage exposures related to the future known receipt or payment of uncertain cash amounts, the values of which are impacted by interest rates, and generally designate these derivative instruments as cash flow hedges for accounting purposes.  In certain cases, we may choose not to designate a derivative instrument as a cash flow hedge for accounting purposes due to uncertainty around the probability that future hedged transactions will occur. Our derivative instruments are used to manage (i) differences in the amount of our known or expected cash receipts and our known or expected cash payments principally related to the funding of our auto loans receivable, and (ii) exposure to variable interest rates associated with our term loans.

For the derivatives associated with our non-recourse funding vehicles that are designated as cash flow hedges, the changes in fair value are initially recorded in accumulated other comprehensive income (loss) (“AOCI”).  For the majority of these derivatives, the amounts are subsequently reclassified into CAF income in the period that the hedged forecasted transaction affects earnings, which occurs as interest expense is recognized on those future issuances of debt. During the next 12 months, we estimate that an additional $36.6 million will be reclassified from AOCI as an increase to CAF income. Changes in fair value related to derivatives that have not been designated as cash flow hedges for accounting purposes are recognized in the income statement in the period in which the change occurs. For the three and six months ended August 31, 2022, we recognized income of $9.4 million and $18.6 million, respectively, in CAF income representing these changes in fair value.

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As of August 31, 2022 and February 28, 2022, we had interest rate swaps outstanding with a combined notional amount of $4.49 billion and $3.64 billion, respectively, that were designated as cash flow hedges of interest rate risk. As of August 31, 2022 and February 28, 2022, we had interest rate swaps with a combined notional amount of $1.01 billion and $578.3 million, respectively, outstanding that were not designated as cash flow hedges for accounting purposes.

See Note 7 for discussion of fair values of financial instruments and Note 13 for the effect on comprehensive income.

7. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market or, if none exists, the most advantageous market, for the specific asset or liability at the measurement date (referred to as the “exit price”).  The fair value should be based on assumptions that market participants would use, including a consideration of nonperformance risk.

We assess the inputs used to measure fair value using the three-tier hierarchy.  The hierarchy indicates the extent to which inputs used in measuring fair value are observable in the market.

Level 1     Inputs include unadjusted quoted prices in active markets for identical assets or liabilities that we can access at the measurement date.

Level 2     Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets in active markets, quoted prices from identical or similar assets in inactive markets, observable inputs, such as interest rates and yield curves, and assumptions about risk.

Level 3     Inputs that are significant to the measurement that are not observable in the market and include management’s judgments about the assumptions market participants would use in pricing the asset or liability (including assumptions about risk).

Our fair value processes include controls that are designed to ensure that fair values are appropriate.  Such controls include model validation, review of key model inputs, analysis of period-over-period fluctuations and reviews by senior management.

Valuation Methodologies

Money Market Securities.  Money market securities are cash equivalents, which are included in cash and cash equivalents, restricted cash from collections on auto loans receivable and other assets.  They consist of highly liquid investments with original maturities of three months or less and are classified as Level 1.

Mutual Fund Investments.  Mutual fund investments consist of publicly traded mutual funds that primarily include diversified equity investments in large-, mid- and small-cap domestic and international companies or investment grade debt securities.  The investments, which are included in other assets, are held in a rabbi trust established to fund informally our executive deferred compensation plan and are classified as Level 1.

Derivative Instruments.  The fair values of our derivative instruments are included in either other current assets, other assets, accounts payable or other liabilities.  Our derivatives are not exchange-traded and are over-the-counter customized derivative instruments.  All of our derivative exposures are with highly rated bank counterparties.

We measure derivative fair values assuming that the unit of account is an individual derivative instrument and that derivatives are sold or transferred on a stand-alone basis.  We estimate the fair value of our derivatives using quotes determined by the derivative counterparties and third-party valuation services.  Quotes from third-party valuation services and quotes received from bank counterparties project future cash flows and discount the future amounts to a present value using market-based expectations for interest rates and the contractual terms of the derivative instruments.  The models do not require significant judgment and model inputs can typically be observed in a liquid market; however, because the models include inputs other than quoted prices in active markets, all derivatives are classified as Level 2.

Our derivative fair value measurements consider assumptions about counterparty and our own nonperformance risk.  We monitor counterparty and our own nonperformance risk and, in the event that we determine that a party is unlikely to perform under terms of the contract, we would adjust the derivative fair value to reflect the nonperformance risk.

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Items Measured at Fair Value on a Recurring Basis

	As of August 31, 2022
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	698,000		$	—		$	698,000
Mutual fund investments	23,809			—			23,809
Derivative instruments designated as hedges	—			76,580			76,580
Derivative instruments not designated as hedges	—			27,946			27,946
Total assets at fair value	$	721,809		$	104,526		$	826,335
Percent of total assets at fair value	87.4		%	12.6		%	100.0		%
Percent of total assets	2.7		%	0.4		%	3.1		%
Liabilities:
Total liabilities at fair value	$	—		$	—		$	—
Percent of total liabilities	—		%	—		%	—		%

	As of February 28, 2022
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	701,865		$	—		$	701,865
Mutual fund investments	24,022			—			24,022
Derivative instruments designated as hedges	—			39,452			39,452
Derivative instruments not designated as hedges	—			9,339			9,339
Total assets at fair value	$	725,887		$	48,791		$	774,678
Percent of total assets at fair value	93.7		%	6.3		%	100.0		%
Percent of total assets	2.8		%	0.2		%	2.9		%
Liabilities:
Derivative instruments designated as hedges	$	—		$	(1,379)		$	(1,379)
Total liabilities at fair value	$	—		$	(1,379)		$	(1,379)
Percent of total liabilities	—		%	—		%	—		%

Fair Value of Financial Instruments

The carrying value of our cash and cash equivalents, accounts receivable, other restricted cash deposits and accounts payable approximates fair value due to the short-term nature and/or variable rates associated with these financial instruments. Auto loans receivable are presented net of an allowance for estimated loan losses, which we believe approximates fair value. We believe that the carrying value of our revolving credit facility and term loans approximates fair value due to the variable rates associated with these obligations. The fair value of our senior unsecured notes, which are not carried at fair value on our consolidated balance sheets, was determined using Level 2 inputs based on quoted market prices. The carrying value and fair value of the senior unsecured notes as of August 31, 2022 and February 28, 2022, respectively, are as follows:

(In thousands)	As of August 31, 2022		As of February 28, 2022
Carrying value	$	500,000	$	500,000
Fair value	$	479,642	$	517,396

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8. Cancellation Reserves

We recognize revenue for EPP products, on a net basis, at the time of sale. We also record a reserve, or refund liability, for estimated contract cancellations.  Cancellations of these services may result from early termination by the customer, or default or prepayment on the finance contract.  The reserve for cancellations is evaluated for each product and is based on forecasted forward cancellation curves utilizing historical experience, recent trends and credit mix of the customer base. 

Cancellation Reserves

	Three Months Ended August 31				Six Months Ended August 31
(In millions)	2022		2021		2022		2021
Balance as of beginning of period	$	148.7	$	138.4	$	144.7	$	124.5
Cancellations	(27.4)		(22.9)		(55.1)		(43.1)
Provision for future cancellations	27.5		28.8		59.2		62.9
Balance as of end of period	$	148.8	$	144.3	$	148.8	$	144.3

The current portion of estimated cancellation reserves is recognized as a component of accrued expenses and other current liabilities with the remaining amount recognized in other liabilities. As of August 31, 2022 and February 28, 2022, the current portion of cancellation reserves was $82.1 million and $78.7 million, respectively.

9. Income Taxes

We had $26.3 million of gross unrecognized tax benefits as of August 31, 2022, and $24.8 million as of February 28, 2022.  There were no significant changes to the gross unrecognized tax benefits as reported for the fiscal year ended February 28, 2022.

On August 16, 2022, federal legislation commonly referred to as the Inflation Reduction Act of 2022 (“IRA”), was enacted. We have evaluated the tax provisions of the IRA, the most significant of which are the corporate alternative minimum tax and the share repurchase tax. We do not expect the legislation to have a material impact on our results of operations. As the IRS issues additional guidance related to the IRA, we will evaluate any impact to our consolidated financial statements.

10. Debt

(In thousands)		As of August 31		As of February 28
Debt Description (1)	Maturity Date	2022		2022
Revolving credit facility (2)	June 2024	$	605,450	$	1,243,500
Term loan (2)	June 2024	300,000		300,000
Term loan (2)	October 2026	699,422		699,352
3.86% Senior notes	April 2023	100,000		100,000
4.17% Senior notes	April 2026	200,000		200,000
4.27% Senior notes	April 2028	200,000		200,000
Financing obligations	Various dates through February 2059	520,005		524,766
Non-recourse notes payable	Various dates through February 2029	16,121,244		15,466,799
Total debt		18,746,121		18,734,417
Less: current portion		(672,296)		(532,272)
Less: unamortized debt issuance costs		(27,607)		(27,126)
Long-term debt, net		$	18,046,218	$	18,175,019

 (1)    Interest is payable monthly, with the exception of our senior notes, which are payable semi-annually.

 (2)    Borrowings accrue interest at variable rates based on the Eurodollar rate (LIBOR), or the successor benchmark rate, the federal funds rate, or the prime rate, depending on the type of borrowing.

Revolving Credit Facility. Borrowings under our $2.00 billion unsecured revolving credit facility (the “credit facility”) are available for working capital and general corporate purposes.  We pay a commitment fee on the unused portions of the available funds. Borrowings under the credit facility are either due “on demand” or at maturity depending on the type of

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borrowing.  Borrowings with “on demand” repayment terms are presented as short-term debt, while amounts due at maturity are presented as long-term debt.  As of August 31, 2022, the unused capacity of $1.39 billion was fully available to us.

Term Loans. Borrowings under our $300 million and $700 million term loans are available for working capital and general corporate purposes. The interest rate on our term loans was 3.27% as of August 31, 2022, and the loans were classified as long-term debt as no repayments are scheduled to be made within the next 12 months.

Senior Notes. Borrowings under our unsecured senior notes totaling $500 million are available for working capital and general corporate purposes. The 3.86% senior note matures in April 2023 and is therefore classified as current. The remaining notes were classified as long-term debt as no repayments are scheduled to be made within the next 12 months.

Financing Obligations.  Financing obligations relate to stores subject to sale-leaseback transactions that do not qualify for sale accounting.  The financing obligations were structured at varying interest rates and generally have initial lease terms ranging from 15 to 20 years with payments made monthly.  We have not entered into any new sale-leaseback transactions since fiscal 2009. In the event the agreements are modified or extended beyond their original term, the related obligation is adjusted based on the present value of the revised future payments, with a corresponding change to the assets subject to these transactions. Upon modification, the amortization of the obligation is reset, resulting in more of the payments being applied to interest expense in the initial years following the modification.

Non-Recourse Notes Payable.  The non-recourse notes payable relate to auto loans receivable funded through non-recourse funding vehicles.  The timing of principal payments on the non-recourse notes payable is based on the timing of principal collections and defaults on the related auto loans receivable. The current portion of non-recourse notes payable represents principal payments that are due to be distributed in the following period.

Notes payable related to our asset-backed term funding transactions accrue interest predominantly at fixed rates and have scheduled maturities through February 2029, but may mature earlier, depending upon the repayment rate of the underlying auto loans receivable. 

Information on our funding vehicles of non-recourse notes payable as of August 31, 2022 are as follows:

(In billions)	Capacity
Warehouse facilities:
December 2022 expiration	$	0.25
February 2023 expiration	2.85
August 2023 expiration	2.30
Combined warehouse facility limit	$	5.40
Unused capacity	$	2.40
Non-recourse notes payable outstanding:
Warehouse facilities	$	3.00
Asset-backed term funding transactions	13.12
Non-recourse notes payable	$	16.12

We generally enter into warehouse facility agreements for one-year terms and typically renew the agreements annually. The return requirements of warehouse facility investors could fluctuate significantly depending on market conditions.  At renewal, the cost, structure and capacity of the facilities could change.  These changes could have a significant impact on our funding costs.

See Note 5 for additional information on the related auto loans receivable.

Capitalized Interest.  We capitalize interest in connection with the construction of certain facilities.  For the six months ended August 31, 2022 and 2021, we capitalized interest of $2.1 million and $3.5 million, respectively.

Financial Covenants.  The credit facility, term loans and senior note agreements contain representations and warranties, conditions and covenants.  We must also meet financial covenants in conjunction with certain financing obligations.  The agreements governing our non-recourse funding vehicles contain representations and warranties, financial covenants and

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performance triggers.  As of August 31, 2022, we were in compliance with all financial covenants and our non-recourse funding vehicles were in compliance with the related performance triggers.

11. Stock and Stock-Based Incentive Plans

(A)Share Repurchase Program

In April 2022, our board of directors (“board”) increased our share repurchase authorization by $2.0 billion. As of August 31, 2022, a total of $4.0 billion of board authorizations for repurchases of our common stock was outstanding, with no expiration date, of which $2.45 billion remained available for repurchase.

Common Stock Repurchases

	Three Months Ended				Six Months Ended
	August 31				August 31
	2022		2021		2022		2021
Number of shares repurchased (in thousands)	1,729.6		1,754.1		3,373.9		2,751.7
Average cost per share	$	94.24	$	125.44	$	95.01	$	125.22
Available for repurchase, as of end of period (in millions)	$	2,453.9	$	991.5	$	2,453.9	$	991.5

(B)Share-Based Compensation

Composition of Share-Based Compensation Expense

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands)	2022		2021		2022		2021
Cost of sales	$	901	$	2,094	$	1,141	$	3,823
CarMax Auto Finance income	(295)		1,481		413		3,189
Selling, general and administrative expenses	24,534		28,705		46,770		67,125
Share-based compensation expense, before income taxes	$	25,140	$	32,280	$	48,324	$	74,137

Composition of Share-Based Compensation Expense – By Grant Type

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands)	2022		2021		2022		2021
Nonqualified stock options	$	9,468	$	7,708	$	20,680	$	19,529
Cash-settled restricted stock units (RSUs)	9,505		17,590		10,354		38,562
Stock-settled market stock units (MSUs)	3,529		3,244		8,876		8,089
Other share-based incentives:
Stock-settled performance stock units (PSUs)	250		976		4,941		4,370
Restricted stock (RSAs)	(35)		263		309		305
Stock-settled deferred stock units (DSUs)	1,850		1,925		1,850		1,925
Employee stock purchase plan	573		574		1,314		1,357
Total other share-based incentives	$	2,638	$	3,738	$	8,414	$	7,957
Share-based compensation expense, before income taxes	$	25,140	$	32,280	$	48,324	$	74,137

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(C)Stock Incentive Plan Information

Share/Unit Activity

	Six Months Ended August 31, 2022
	Equity Classified						Liability Classified
(Shares/units in thousands)	Options		MSUs		Other		RSUs
Outstanding as of February 28, 2022	5,796		393		170		1,163
Granted	1,282		136		50		677
Exercised or vested and converted	(204)		(120)		(80)		(740)
Cancelled	(44)		(5)		(5)		(46)
Outstanding as of August 31, 2022	6,830		404		135		1,054
Weighted average grant date fair value per share/unit:
Granted	$	33.26	$	126.73	$	95.58	$	91.20
Ending outstanding	$	25.69	$	120.95	$	99.04	$	97.36
	As of August 31, 2022
Unrecognized compensation (in millions)	$	68.0	$	21.5	$	3.5

12. Net Earnings Per Share

Basic net earnings per share is computed by dividing net earnings available for basic common shares by the weighted average number of shares of common stock outstanding.  Diluted net earnings per share is computed by dividing net earnings available for diluted common shares by the sum of weighted average number of shares of common stock outstanding and dilutive potential common stock.  Diluted net earnings per share is calculated using the “if-converted” treasury stock method.

Basic and Dilutive Net Earnings Per Share Reconciliations

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands except per share data)	2022		2021		2022		2021
Net earnings	$	125,905	$	285,267	$	378,170	$	722,023
Weighted average common shares outstanding	158,801		162,966		159,556		163,058
Dilutive potential common shares:
Stock options	1,125		2,271		1,151		2,400
Stock-settled stock units and awards	292		406		308		511
Weighted average common shares and dilutive potential common shares	160,218		165,643		161,015		165,969
Basic net earnings per share	$	0.79	$	1.75	$	2.37	$	4.43
Diluted net earnings per share	$	0.79	$	1.72	$	2.35	$	4.35

Certain options to purchase shares of common stock were outstanding and not included in the calculation of diluted net earnings per share because their inclusion would have been antidilutive.  On a weighted average basis, for the three months ended August 31, 2022 and 2021, options to purchase 2,098,895 shares and 912,093 shares of common stock, respectively, were not included. For the six months ended August 31, 2022 and 2021, options to purchase 1,767,906 shares and 600,617 shares of common stock, respectively, were not included.

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13. Accumulated Other Comprehensive Income (Loss)

Changes in Accumulated Other Comprehensive Income (Loss) By Component

					Total
	Net		Net		Accumulated
	Unrecognized		Unrecognized		Other
	Actuarial		Hedge		Comprehensive
(In thousands, net of income taxes)	Losses		Gains		Income (Loss)
Balance as of February 28, 2022	$	(73,001)	$	26,579	$	(46,422)
Other comprehensive income before reclassifications	—		81,908		81,908
Amounts reclassified from accumulated other comprehensive income (loss)	962		(4,449)		(3,487)
Other comprehensive income	962		77,459		78,421
Balance as of August 31, 2022	$	(72,039)	$	104,038	$	31,999

Changes In and Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

	Three Months Ended August 31				Six Months Ended August 31
(In thousands)	2022		2021		2022		2021
Retirement Benefit Plans:
Actuarial loss amortization reclassifications recognized in net pension expense:
Cost of sales	$	273	$	359	$	538	$	716
CarMax Auto Finance income	16		21		32		43
Selling, general and administrative expenses	347		488		702		977
Total amortization reclassifications recognized in net pension expense	636		868		1,272		1,736
Tax expense	(155)		(210)		(310)		(419)
Amortization reclassifications recognized in net pension expense, net of tax	481		658		962		1,317
Net change in retirement benefit plan unrecognized actuarial losses, net of tax	481		658		962		1,317
Cash Flow Hedges (Note 6):
Changes in fair value	40,168		(665)		110,210		(2,671)
Tax (expense) benefit	(10,315)		175		(28,302)		703
Changes in fair value, net of tax	29,853		(490)		81,908		(1,968)
Reclassifications to CarMax Auto Finance income	(5,687)		4,401		(5,986)		9,499
Tax benefit (expense)	1,460		(1,158)		1,537		(2,500)
Reclassification of hedge (losses) gains, net of tax	(4,227)		3,243		(4,449)		6,999
Net change in cash flow hedge unrecognized gains, net of tax	25,626		2,753		77,459		5,031
Total other comprehensive income, net of tax	$	26,107	$	3,411	$	78,421	$	6,348

Changes in the funded status of our retirement plans and changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in accumulated other comprehensive income (loss).  The cumulative balances are net of deferred taxes of $12.9 million as of August 31, 2022 and $14.2 million as of February 28, 2022.

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14. Leases

Our leases primarily consist of operating and finance leases related to retail stores, office space, land and equipment. We also have stores subject to sale-leaseback transactions that do not qualify for sale accounting and are accounted for as financing obligations. For more information on these financing obligations see Note 10.

The initial term for real property leases is typically 5 to 20 years. For equipment leases, the initial term generally ranges from 3 to 8 years. Most leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 20 years or more. We include options to renew (or terminate) in our lease term, and as part of our right-of-use (“ROU”) assets and lease liabilities, when it is reasonably certain that we will exercise that option.

ROU assets and the related lease liabilities are initially measured at the present value of future lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our collateralized incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. We include variable lease payments in the initial measurement of ROU assets and lease liabilities only to the extent they depend on an index or rate. Changes in such indices or rates are accounted for in the period the change occurs, and do not result in the remeasurement of the ROU asset or liability. We are also responsible for payment of certain real estate taxes, insurance and other expenses on our leases. These amounts are generally considered to be variable and are not included in the measurement of the ROU asset and lease liability. We generally account for non-lease components, such as maintenance, separately from lease components. For certain equipment leases, we apply a portfolio approach to account for the lease assets and liabilities.

Our lease agreements do not contain any material residual value guarantees or material restricted covenants. Leases with a term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

The components of lease expense were as follows:

	Three Months Ended August 31				Six Months Ended August 31
(In thousands)	2022		2021		2022		2021
Operating lease cost (1)	$	22,911	$	18,698	$	45,931	$	33,050
Finance lease cost:
Depreciation of lease assets	4,017		3,258		7,523		6,400
Interest on lease liabilities	5,467		4,167		10,401		8,274
Total finance lease cost	9,484		7,425		17,924		14,674
Total lease cost	$	32,395	$	26,123	$	63,855	$	47,724

(1) Includes short-term leases and variable lease costs, which are immaterial.

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Supplemental balance sheet information related to leases was as follows:

		As of August 31		As of February 28
(In thousands)	Classification	2022		2022
Assets:
Operating lease assets	Operating lease assets	$	530,285	$	537,357
Finance lease assets	Property and equipment, net (1)	142,232		127,183
Total lease assets		$	672,517	$	664,540
Liabilities:
Current:
Operating leases	Current portion of operating lease liabilities	$	48,783	$	44,197
Finance leases	Accrued expenses and other current liabilities	17,007		10,290
Long-term:
Operating leases	Operating lease liabilities, excluding current portion	512,542		523,269
Finance leases	Other liabilities	157,320		145,179
Total lease liabilities		$	735,652	$	722,935

(1)    Finance lease assets are recorded net of accumulated depreciation of $38.2 million as of August 31, 2022 and $30.7 million as of February 28, 2022.

Lease term and discount rate information related to leases was as follows:

	As of August 31		As of February 28
Lease Term and Discount Rate	2022		2022
Weighted Average Remaining Lease Term (in years)
Operating leases	16.91		17.31
Finance leases	11.36		12.42
Weighted Average Discount Rate
Operating leases	4.81	%	4.80	%
Finance leases	19.80	%	14.35	%

Supplemental cash flow information related to leases was as follows:

	Six Months Ended August 31
(In thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	44,725	$	31,656
Operating cash flows from finance leases	$	4,508	$	5,383
Financing cash flows from finance leases	$	9,883	$	5,709
Lease assets obtained in exchange for lease obligations:
Operating leases	$	16,837	$	44,059
Finance leases	$	22,572	$	12,404

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Maturities of lease liabilities were as follows:

	As of August 31, 2022
(In thousands)	Operating Leases (1)		Finance Leases (1)
Fiscal 2023, remaining	$	37,495	$	16,682
Fiscal 2024	73,538		39,188
Fiscal 2025	71,693		36,222
Fiscal 2026	66,355		37,330
Fiscal 2027	60,313		33,211
Thereafter	575,478		214,012
Total lease payments	884,872		376,645
Less: interest	(323,547)		(202,318)
Present value of lease liabilities	$	561,325	$	174,327

(1)    Lease payments exclude $30.5 million of legally binding minimum lease payments for leases signed but not yet commenced.

15. Supplemental Cash Flow Information

Supplemental disclosures of cash flow information:

	Six Months Ended August 31
(In thousands)	2022		2021
Non-cash investing and financing activities:
(Decrease) increase in accrued capital expenditures	$	(352)	$	6,038

See Note 14 for supplemental cash flow information related to leases.

16. Contingent Liabilities

Litigation.  CarMax entities are defendants in two proceedings asserting wage and hour claims with respect to non-exempt CarMax employees in California. The asserted claims include failure to provide meal periods and rest breaks; pay statutory or contractual wages; reimburse for work-related expenses; and Private Attorneys General Act (“PAGA”) claims. On July 9, 2021, Daniel Bendure v. CarMax Auto Superstores California, LLC et al., a putative class action, was filed in the Superior Court of California, County of San Bernardino. The Bendure lawsuit seeks civil penalties for violation of the Labor Code, attorneys’ fees, costs, restitution of unpaid wages, interest, injunctive and equitable relief, general damages, and special damages. Bendure subsequently decided not to proceed with an individual or putative class claim, but rather filed and served a PAGA-only complaint in the Superior Court of California for the County of San Bernardino on December 7, 2021, based on the same allegations pled in the original complaint. CarMax filed a motion to compel arbitration. The Court has stayed all discovery until after it rules on CarMax’s motion to compel arbitration. On August 12, 2021, Jordon Miller v. CarMax Auto Superstores California, LLC et al., a putative class action, was filed in the Superior Court of California, County of Riverside. The Miller lawsuit also seeks civil penalties for violation of the Labor Code, attorneys’ fees, costs, restitution of unpaid wages, interest, injunctive and equitable relief, general damages, and special damages.

On June 15, 2022, the United States Supreme Court issued its decision in Viking River Cruises v. Moriana, holding that an individual who signs an arbitration agreement cannot circumvent that agreement by filing a related PAGA claim in court. The U.S. Supreme Court further held that, based on California law, an individual who pursues his PAGA claim in arbitration does not have standing to pursue a representative PAGA claim. However, the U.S. Supreme Court indicated that the issue of whether an individual has standing to pursue a representative PAGA claim is a question of state law. The California Supreme Court has agreed to hear a new case, Adolph v. Uber, to address this issue of state law, which is expected to be decided in 2023.

In light of the Viking River decision, CarMax has filed a motion to compel arbitration of the individual Bendure claim and to dismiss Bendure’s representative PAGA claims. The Court is scheduled to hear this motion on November 17, 2022. CarMax also intends to move to compel arbitration of the Miller individual PAGA claims noted above and will seek to dismiss any representative PAGA claims.

We are unable to make a reasonable estimate of the amount or range of loss that could result from an unfavorable outcome in these matters.

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We are involved in various other legal proceedings in the normal course of business. Based upon our evaluation of information currently available, we believe that the ultimate resolution of any such proceedings will not have a material adverse effect, either individually or in the aggregate, on our financial condition, results of operations or cash flows.

Other Matters.  In accordance with the terms of real estate lease agreements, we generally agree to indemnify the lessor from certain liabilities arising as a result of the use of the leased premises, including environmental liabilities and repairs to leased property upon termination of the lease.  Additionally, in accordance with the terms of agreements entered into for the sale of properties, we generally agree to indemnify the buyer from certain liabilities and costs arising subsequent to the date of the sale, including environmental liabilities and liabilities resulting from the breach of representations or warranties made in accordance with the agreements.  We do not have any known material environmental commitments, contingencies or other indemnification issues arising from these arrangements.

As part of our customer service strategy, we guarantee the used vehicles we retail with a 90-day/4,000 mile limited warranty.  A vehicle in need of repair within this period will be repaired free of charge.  As a result, each vehicle sold has an implied liability associated with it.  Accordingly, based on historical trends, we record a provision for estimated future repairs during the guarantee period for each vehicle sold.  The liability for this guarantee was $26.3 million as of August 31, 2022, and $18.5 million as of February 28, 2022, and is included in accrued expenses and other current liabilities.

17. Segment Information

We operate in two reportable segments: CarMax Sales Operations and CAF. Our CarMax Sales Operations segment consists of all aspects of our auto merchandising and service operations, excluding financing provided by CAF. Our CAF segment consists solely of our own finance operation that provides financing to customers buying retail vehicles from CarMax.

We also have a non-reportable operating segment related to our recently acquired Edmunds business, which is reflected as “Other” in the segment tables below. Revenue generated by Edmunds primarily represents advertising and subscription revenues as discussed in Note 3. Edmunds also generates intersegment revenue as a result of transactions between Edmunds and CarMax Sales Operations, which represent arm’s length transactions at prevailing market prices. Such amounts are eliminated in consolidation.

The performance of our CarMax Sales Operations segment is reviewed by our chief operating decision maker at the gross profit level, the components of which are presented in the tables below. Required segment information related to our CAF segment is presented in Note 4. Additionally, asset information by segment is not utilized for purposes of assessing performance or allocating resources and, as a result, such information has not been presented.

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Segment Information

	Three Months Ended August 31, 2022
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	8,110,524	$	34,279	$	—	$	8,144,803
Intersegment sales and operating revenues	—		6,929		(6,929)		—
Total sales and operating revenues	$	8,110,524	$	41,208	$	(6,929)	$	8,144,803
Depreciation and amortization (1)	$	376	$	3,389	$	—	$	3,765
Gross profit	$	712,284	$	26,362	$	(1,501)	$	737,145
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							182,869
Selling, general and administrative expenses							(666,041)
Depreciation and amortization (2)							(57,692)
Interest expense							(32,745)
Other income (expense)							4,039
Earnings before income taxes							$	167,575

	Six Months Ended August 31, 2022
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	17,387,760	$	68,664	$	—	$	17,456,424
Intersegment sales and operating revenues	—		14,670		(14,670)		—
Total sales and operating revenues	$	17,387,760	$	83,334	$	(14,670)	$	17,456,424
Depreciation and amortization (1)	$	688	$	6,463	$	—	$	7,151
Gross profit	$	1,561,573	$	54,090	$	(3,127)	$	1,612,536
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							387,342
Selling, general and administrative expenses							(1,322,781)
Depreciation and amortization (2)							(113,340)
Interest expense							(61,520)
Other income (expense)							1,940
Earnings before income taxes							$	504,177

(1)    Represents only the portion of depreciation and amortization recorded within Cost of sales, and thus included in the calculation of Gross profit.

(2)    Exclusive of depreciation and amortization recorded within Cost of sales.

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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements, the accompanying notes and the MD&A included in our Annual Report on Form 10-K for the fiscal year ended February 28, 2022 (“fiscal 2022”), as well as our unaudited interim consolidated financial statements and the accompanying notes included in Item 1 of this Form 10-Q.  Note references are to the notes to unaudited interim consolidated financial statements included in Item 1.  All references to net earnings per share are to diluted net earnings per share.  Certain prior year amounts have been reclassified to conform to the current year’s presentation.  Amounts and percentages may not total due to rounding.

OVERVIEW

CarMax is the nation’s largest retailer of used vehicles.  We operate in two reportable segments:  CarMax Sales Operations and CarMax Auto Finance (“CAF”).  Our CarMax Sales Operations segment consists of all aspects of our auto merchandising and service operations, excluding financing provided by CAF.  Our CAF segment consists solely of our own finance operation that provides financing to customers buying retail vehicles from CarMax. Our consolidated financial statements include the financial results related to our Edmunds Holding Company (“Edmunds”) business, which does not meet the definition of a reportable segment. For purposes of our MD&A discussion, amounts related to that business are discussed in combination with our CarMax Sales Operations segment. Separate discussion of these amounts is not considered meaningful for the purpose of gaining an understanding of our business, as the significant drivers of these operations in total are consistent with those of our CarMax Sales Operations segment. Where appropriate, specific amounts related to non-reportable segments have been disclosed for informational purposes.

CarMax Sales Operations

Our sales operations segment consists of retail sales of used vehicles and related products and services, such as wholesale vehicle sales; the sale of extended protection plan (“EPP”) products, which include extended service plans (“ESPs”) and guaranteed asset protection (“GAP”); and vehicle repair service. We offer competitive, no-haggle prices; a broad selection of CarMax Quality Certified used vehicles; value-added EPP products; and superior customer service. Our omni-channel platform, which gives us the largest addressable market in the used car industry, empowers our retail customers to buy a car on their terms – online, in-store or an integrated combination of both. Customers can choose to complete the car-buying experience in-person at one of our stores; or buy the car online and receive delivery through express pickup, available nationwide, or home delivery, available to most customers.

Our customers finance the majority of the retail vehicles purchased from us, and availability of on-the-spot financing is a critical component of the sales process.  We provide financing to qualified retail customers through CAF and our arrangements with industry-leading third-party finance providers.  All of the finance offers, whether by CAF or our third-party providers, are backed by a 3-day payoff option. 

As of August 31, 2022, we operated 234 used car stores in 108 U.S. television markets. As of that date, wholesale auctions previously held at many of our used car stores were being conducted virtually.

CarMax Auto Finance

In addition to third-party finance providers, we provide vehicle financing through CAF, which offers financing solely to customers buying retail vehicles from CarMax.  CAF allows us to manage our reliance on third-party finance providers and to leverage knowledge of our business to provide qualifying customers a competitive financing option.  As a result, we believe CAF enables us to capture additional profits, cash flows and sales.  CAF income primarily reflects the interest and fee income generated by the auto loans receivable less the interest expense associated with the debt issued to fund these receivables, a provision for estimated loan losses and direct expenses.  CAF income does not include any allocation of indirect costs.  After the effect of 3-day payoffs and vehicle returns, CAF financed 40.2% of our retail used vehicle unit sales in the first six months of fiscal 2023.  As of August 31, 2022, CAF serviced approximately 1.1 million customer accounts in its $16.35 billion portfolio of managed receivables. 

Management regularly analyzes CAF’s operating results by assessing the competitiveness of our consumer offer, profitability, the performance of the auto loans receivable, including trends in credit losses and delinquencies, and CAF direct expenses.

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Revenues and Profitability

The sources of revenue and gross profit from the CarMax Sales Operations segment and other non-reportable segments for the first six months of fiscal 2023 are as follows:

Net Sales and
Operating Revenues Gross Profit

A high-level summary of our financial results for the second quarter and first six months of fiscal 2023 as compared to the second quarter and first six months of fiscal 2022 is as follows (1):

(Dollars in millions except per share or per unit data)	Three Months Ended August 31, 2022			Change from Three Months Ended August 31, 2021		Six Months Ended August 31, 2022			Change from Six Months Ended August 31, 2021
Income statement information
Net sales and operating revenues	$	8,144.8		2.0	%	$	17,456.4		11.3	%
Gross profit	$	737.1		(9.6)	%	$	1,612.5		(7.3)	%
CAF income	$	182.9		(8.6)	%	$	387.3		(12.3)	%
Selling, general and administrative expenses	$	666.0		16.0	%	$	1,322.8		17.2	%
Net earnings	$	125.9		(55.9)	%	$	378.2		(47.6)	%
Unit sales information
Used unit sales	216,939			(6.4)	%	457,889			(8.9)	%
Change in used unit sales in comparable stores	(8.3)		%	N/A		(10.6)		%	N/A
Wholesale unit sales	159,677			(15.1)	%	345,984			(6.4)	%
Per unit information
Used gross profit per unit	$	2,282		4.4	%	$	2,312		5.3	%
Wholesale gross profit per unit	$	881		(12.3)	%	$	961		(5.3)	%
SG&A as a % of gross profit	90.4		%	20.0	%	82.0		%	17.2	%
Per share information
Net earnings per diluted share	$	0.79		(54.1)	%	$	2.35		(46.0)	%
Online sales metrics
Online retail sales (2)	11		%	2	%	11		%	3	%
Omni sales (3)	53		%	(2)	%	54		%	(2)	%
Revenue from online transactions (4)	30		%	2	%	30		%	4	%

(1)    Where applicable, amounts are net of intercompany eliminations.

(2)    An online retail sale is defined as a sale where the customer completes all four of the following activities remotely: reserving the vehicle; financing the vehicle, if needed; trading-in or opting out of a trade-in; and creating an online sales order.

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(3)    An omni sale is defined as a sale where customers complete at least one of the four activities listed above online.

(4)    Revenue from online transactions is defined as revenue from retail sales that qualify as an online retail sale, as well as any related EPP and third-party finance contribution, wholesale sales where the winning bid was taken from an online bid and all revenue earned by Edmunds.

Refer to “Results of Operations” for further details on our revenues and profitability.

Liquidity

Our primary ongoing sources of liquidity include funds provided by operations, proceeds from non-recourse funding vehicles, and borrowings under our revolving credit facility or through other financing sources.  In addition to funding our operations, this liquidity was used to fund the repurchase of common stock under our share repurchase program, our store growth and the Edmunds acquisition, which was completed during the second quarter of fiscal 2022.

Our current capital allocation strategy is to focus on our core business, including investing in digital capabilities and the strategic expansion of our store footprint, pursue new growth opportunities through investments, partnerships and acquisitions and return excess capital to shareholders. We believe we have the appropriate liquidity, access to capital and financial strength to support our operations and continue investing in our strategic initiatives for the foreseeable future.

Strategic Update and Future Outlook

Our omni-channel experience provides a common platform across all of CarMax that leverages our scale, nationwide footprint and infrastructure and empowers our customers to buy a vehicle on their terms. Customers are seeking personalization, convenience and safety in how they shop for and buy a vehicle more than ever. Our omni-channel platform empowers customers to buy a car on their own terms, whether completely from home, in-store or through an integrated combination of online and in-store experiences. Our diversified business model, combined with our omni-channel experience, is a unique advantage in the used car industry that firmly positions us to continue growing our market share while creating shareholder value over the long-term.

We continue to focus our efforts on optimizing and enhancing the customer experience. During the first quarter of fiscal 2023, we enabled online self-progression for all of our retail customers. All customers are now eligible to complete an online retail sale independently if they choose. In the second quarter of fiscal 2023, online retail sales accounted for 11% of retail unit sales, consistent with the previous quarter and up from 9% in the prior year quarter. Omni sales represented approximately 53% of retail sales, down slightly from the previous quarter as well as the prior year quarter. Online, omni and in-person sales can vary from quarter to quarter depending on consumer preferences and how they choose to interact with us. While we expect our online and omni sales to grow over time, our goal is to provide the best experience whether in-store, online or a combination of the two.

Revenue from online transactions was $2.4 billion, or approximately 30% of net revenues in the second quarter of fiscal 2023, down slightly from 31% in the previous quarter and up from 28% in the prior year quarter.

We purchased approximately 343,000 vehicles from consumers and dealers during the second quarter of fiscal 2023, down 8% from the prior year quarter and up approximately 50% from the second quarter of fiscal 2021. This reflects customers’ responsiveness to both our nation-wide online instant offer tool that we launched last year and our offers. Of the vehicles purchased from dealers, approximately 20,000 were purchased through MaxOffer, our digital appraisal product for dealers, up 130% from the prior year quarter and up 18% from the prior quarter. We leverage the Edmunds sales team to open new markets and sign up new dealers for MaxOffer. For the second quarter of fiscal 2023, our self-sufficiency rate remained above 70%. The success of our online instant appraisal offer continues to strengthen our leadership position as the largest used vehicle buyer from consumers.

Our investments in the near term will focus on our customer experience, vehicle acquisition and marketing. Our plans to grow vehicle acquisition include attracting new customers and pursuing partnerships as we expand our appraisal offerings to dealers. As we continue enhancing our online experience and offerings, we believe it is important to educate customers about our omni-channel platform and to differentiate and elevate our brand. For fiscal 2023, we expect our marketing spend per unit to be at least as much as fiscal 2022. We believe we are well positioned to continue gaining market share through our marketing strategies, which are focused on driving customer growth through building awareness and affinity for the brand and acquiring in-market shoppers and sellers.

In order to execute our long-term strategy, we plan to continue investing in various strategic initiatives to increase innovation, specifically to enhance the seamlessness of our online and in-store offerings to improve the customer experience. Given the current macroeconomic environment, our nearer-term priority will be on allocating resources toward those initiatives that will

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further drive efficiency and effectiveness across our omni platform. We are also focused on ensuring we are efficient in our spend, actively taking steps to further align our expenses to our sales levels. This included reducing staffing in our stores and CECs through attrition, pausing on a portion of the hiring and contractor utilization in our corporate offices, and better aligning marketing spend to sales.

We remain focused on several key initiatives to enhance the customer experience. We are deploying a more sophisticated version of our finance-based shopping product which will allow customers to shop by monthly payment across multiple lenders and will provide access to credit terms on cars within our retail inventory as well as automated payoff verification for trade-ins. As of the end of the second quarter, this product was available to over 50% of our customers, and we anticipate the nationwide rollout to be completed during the third quarter of fiscal 2023. These tools seamlessly provide consumers with all the information they need to secure the best financing option for them, creating a differentiated experience in the industry. We are also focused on leveraging data science, automation and artificial intelligence to improve efficiency and effectiveness within our CECs. Over time, we anticipate these tools will enable us to reduce associate time spent per customer as we enhance our ability to provide live interactions at the highest value moments.

In addition, we are upgrading our auction experience to be even more user friendly. We are testing a modernized vehicle detail page to be mobile friendly and efficiently display the most relevant information dealers need to preview our wholesale inventory, similar to how customers shop our retail inventory. We are also testing AI-generated online vehicle condition photos and self-service check-out capabilities. These tools will enable us to drive incremental operational efficiencies as we continue to scale our wholesale volume, all while providing an even better experience to our wholesale dealers.

For fiscal 2023, we would expect to require an increase beyond the 5% to 8% range of gross profit growth to lever SG&A as a percentage of gross profit. This is primarily driven by the timing of strategic investments and growth-related costs, as well as heightened inflationary pressures. While we expect to remain in investment mode over the next few years, we expect our leverage point to be lower after fiscal 2023.

We expect our diversified model, the scale of our operations, our investments and omni-channel strategy to provide a solid foundation for further growth. As a result, we have set the following long-term targets, which were disclosed in our Annual Report on Form 10-K for fiscal 2022:

•Sell between 2 million and 2.4 million vehicles through our combined retail and wholesale channels by fiscal 2026.

•Generate between $33 billion and $45 billion in revenue by fiscal 2026.

•Grow our nationwide share of the age 0- to 10 used vehicle market to more than 5% by the end of calendar 2025.

These ranges include our assessment of macroeconomic factors that could result in ongoing volatility in consumer demand.

In calendar 2021, we estimate we sold approximately 4.0% of the age 0- to 10-year old vehicles sold on a nationwide basis, an increase from 3.5% in calendar 2020. We estimate we sold approximately 4.9% of the age 0- to 10-year old vehicles sold in the current comparable store markets in which we operate in calendar 2021, an increase from 4.3% in 2020. Based on external data, we continued to gain market share through July, the latest period for which title data is available. We believe we are well positioned to deliver profitable market share gains in any environment. Our strategy to increase our market share includes focusing on:

•Delivering a customer-driven, omni-channel buying and selling experience that is a unique and powerful integration of our in-store and online capabilities.

•Opening stores in new markets and expanding our presence in existing markets.

•Hiring, developing and retaining an engaged and skilled workforce.

•Improving efficiency in our stores and CECs and our logistics operations to reduce waste.

•Leveraging data and advanced analytics to continuously improve the customer experience as well as our processes and systems.

•Utilizing advertising to drive customer growth, educate customers about our omni-channel platform and to differentiate and elevate our brand.

As of August 31, 2022, we had used car stores located in 108 U.S. television markets, which covered approximately 86% of the U.S. population.  The format and operating models utilized in our stores are continuously evaluated and may change or evolve over time based upon market and consumer expectations. During the first six months of fiscal 2023, we opened four stores, and during the remainder of the fiscal year we plan to open six stores.

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While we execute both our short- and long-term strategy, there are trends and factors that could impact our strategic approach or our results in the short and medium term. For additional information about risks and uncertainties facing our company, see “Risk Factors,” included in Part I. Item 1A of the Annual Report on Form 10-K for the fiscal year ended February 28, 2022.

CRITICAL ACCOUNTING ESTIMATES

For information on critical accounting policies, see "Critical Accounting Estimates" in the MD&A included in Item 7 of the Annual Report on Form 10-K for the fiscal year ended February 28, 2022.

RESULTS OF OPERATIONS – CARMAX SALES OPERATIONS AND OTHER NON-REPORTABLE SEGMENTS

NET SALES AND OPERATING REVENUES

	Three Months Ended August 31						Six Months Ended August 31
(In millions)	2022		2021		Change		2022		2021		Change
Used vehicle sales	$	6,284.1	$	6,104.4	2.9	%	$	13,298.6	$	12,261.7	8.5	%
Wholesale vehicle sales	1,690.3		1,701.6		(0.7)	%	3,806.8		3,075.9		23.8	%
Other sales and revenues:
Extended protection plan revenues	109.8		113.0		(2.9)	%	226.3		247.3		(8.5)	%
Third-party finance income/(fees), net	2.7		2.8		(1.8)	%	6.1		(1.8)		437.5	%
Advertising & subscription revenues (1)	34.3		34.5		(0.8)	%	68.7		34.5		98.7	%
Other	23.6		32.1		(26.4)	%	49.9		68.3		(26.9)	%
Total other sales and revenues	170.4		182.4		(6.6)	%	351.0		348.3		0.8	%
Total net sales and operating revenues	$	8,144.8	$	7,988.4	2.0	%	$	17,456.4	$	15,686.0	11.3	%

(1)    Excludes intersegment sales and operating revenues that have been eliminated in consolidation. See Note 17 for further details.

UNIT SALES

	Three Months Ended August 31				Six Months Ended August 31
	2022	2021	Change		2022	2021	Change
Used vehicles	216,939	231,797	(6.4)	%	457,889	502,596	(8.9)	%
Wholesale vehicles	159,677	188,098	(15.1)	%	345,984	369,487	(6.4)	%

AVERAGE SELLING PRICES

	Three Months Ended August 31						Six Months Ended August 31
	2022		2021		Change		2022		2021		Change
Used vehicles	$	28,657	$	26,141	9.6	%	$	28,755	$	24,197	18.8	%
Wholesale vehicles	$	10,179	$	8,701	17.0	%	$	10,619	$	7,997	32.8	%

COMPARABLE STORE USED VEHICLE SALES CHANGES

	Three Months Ended August 31 (1)				Six Months Ended August 31 (1)
	2022		2021		2022		2021
Used vehicle units	(8.3)	%	6.2	%	(10.6)	%	41.8	%
Used vehicle revenues	0.4	%	38.8	%	6.0	%	70.4	%

(1)    Stores are added to the comparable store base beginning in their fourteenth full month of operation. We do not remove renovated stores from our comparable store base. Comparable store calculations include results for a set of stores that were included in our comparable store base in both the current and corresponding prior year periods.

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VEHICLE SALES CHANGES

	Three Months Ended August 31				Six Months Ended August 31
	2022		2021		2022		2021
Used vehicle units	(6.4)	%	6.7	%	(8.9)	%	42.6	%
Used vehicle revenues	2.9	%	39.1	%	8.5	%	70.9	%
Wholesale vehicle units	(15.1)	%	41.4	%	(6.4)	%	88.2	%
Wholesale vehicle revenues	(0.7)	%	107.7	%	23.8	%	164.7	%

USED VEHICLE FINANCING PENETRATION BY CHANNEL (BEFORE THE IMPACT OF 3-DAY PAYOFFS)

	Three Months Ended August 31 (1)				Six Months Ended August 31 (1)
	2022		2021		2022		2021
CAF (2)	44.8	%	47.1	%	44.0	%	46.9	%
Tier 2 (3)	21.6	%	21.6	%	23.5	%	22.2	%
Tier 3 (4)	6.0	%	7.2	%	6.6	%	8.7	%
Other (5)	27.6	%	24.1	%	25.9	%	22.2	%
Total	100.0	%	100.0	%	100.0	%	100.0	%

(1)     Calculated as used vehicle units financed for respective channel as a percentage of total used units sold.

(2)    Includes CAF’s Tier 2 and Tier 3 loan originations, which represent approximately 1% of total used units sold.

(3)     Third-party finance providers who generally pay us a fee or to whom no fee is paid.

(4)     Third-party finance providers to whom we pay a fee.

(5)     Represents customers arranging their own financing and customers that do not require financing.

CHANGE IN USED CAR STORE BASE

	Three Months Ended August 31		Six Months Ended August 31
	2022	2021	2022	2021
Used car stores, beginning of period	231	222	230	220
Store openings	3	3	4	5
Used car stores, end of period	234	225	234	225

During the first six months of fiscal 2023, we opened four stores, including our entry into the New York metro market (Edison, NJ; Stockton, CA; Wayne, NJ; and East Meadow, NY).

Used Vehicle Sales.  The 2.9% increase in used vehicle revenues in the second quarter of fiscal 2023 was primarily driven by a 9.6% increase in average retail selling price, partially offset by a 6.4% decrease in used unit sales. The decrease in used units included an 8.3% decrease in comparable store used unit sales. Comparable store sales saw a low single-digit decline in June and then fell sharply through the end of the quarter, a trend that continued into September. For the first six months of fiscal 2023, used vehicle revenues increased 8.5%, driven by an 18.8% increase in average selling price, partially offset by an 8.9% decrease in used unit sales. The decrease in used units included a 10.6% decrease in comparable store used unit sales. Online retail sales, as defined previously, accounted for 11% of used unit sales for both the second quarter and first six months of fiscal 2023, compared with 9% and 8% for the second quarter and first six months of fiscal 2022, respectively.

During the second quarter and first six months of fiscal 2023, we believe a number of macroeconomic factors impacted our used unit sales performance, including challenges to vehicle affordability that stem from broad inflation, lapping stimulus benefits paid in the prior year, rising interest rates and low consumer confidence.

The increase in average retail selling price in both the second quarter and first six months of fiscal 2023 reflected higher vehicle acquisition costs resulting from strong wholesale industry valuations.

Wholesale Vehicle Sales. Vehicles sold at our wholesale auctions are, on average, approximately 10 years old with more than 100,000 miles and are primarily comprised of vehicles purchased through our appraisal process that do not meet our retail standards. Our wholesale auction prices usually reflect trends in the general wholesale market for the types of vehicles we sell,

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although they can also be affected by changes in vehicle mix or the average age, mileage or condition of the vehicles being sold. During fiscal 2021, our wholesale auctions were moved to an online format and continue to operate completely online.

The 0.7% decrease in wholesale vehicle revenues in the second quarter of fiscal 2023 was primarily due to a 15.1% decrease in unit sales, partially offset by a 17.0% increase in average selling price. For the first six months of fiscal 2023, wholesale vehicle revenues increased 23.8%, driven by a 32.8% increase in average selling price, partially offset by a 6.4% decrease in unit sales. Wholesale volume was negatively impacted by our decision to shift some units from wholesale to retail to meet consumer demand for lower priced vehicles. We estimate that without this shift, our second quarter wholesale unit sales would have decreased from the prior year quarter by less than 10%. Wholesale performance during the second quarter was also impacted by depreciation of approximately $2,500 and the fact that we intentionally slowed buys in reaction to rapidly changing market conditions. This steep depreciation environment continued into September. The increase in average selling price in both the second quarter and first six months of fiscal 2023 was primarily due to increased acquisition costs resulting from continued strong industry valuations.

Other Sales and Revenues.  Other sales and revenues include revenue from the sale of ESPs and GAP (collectively reported in EPP revenues, net of a reserve for estimated contract cancellations), net third-party finance income/(fees), advertising and subscription revenues earned by our Edmunds business, and other revenues, which are predominantly comprised of service department sales. The fees we pay to the Tier 3 providers are reflected as an offset to finance fee revenues received from the Tier 2 providers. The mix of our retail vehicles financed by CAF, Tier 2 and Tier 3 providers, or customers that arrange their own financing, may vary from quarter to quarter depending on several factors, including the credit quality of applicants, changes in providers’ credit decisioning and external market conditions. Changes in originations by one tier of credit providers may also affect the originations made by providers in other tiers.

Other sales and revenues decreased 6.6% in the second quarter of fiscal 2023, reflecting the decline in new vehicle sales and EPP revenues. The decline in new car sales was driven by the divestiture of our remaining new car franchise in the third quarter of fiscal 2022. EPP revenues decreased 2.9%, largely reflecting the combined effects of the decline in our retail unit sales, stable penetration and increased margins.

Other sales and revenues increased 0.8% in the first six months of fiscal 2023, reflecting the addition of Edmunds' revenue and an improvement in net third-party finance income, partially offset by a decrease in EPP revenue and a decline in new vehicle sales. Net third-party finance income improved as a result of lower Tier 3 originations. The decline in new car sales was driven by the divestiture of our remaining new car franchise in the third quarter of fiscal 2022. EPP revenues decreased 8.5%, reflecting the decline in our retail unit volume.

Seasonality.  Historically, our business has been seasonal.  Our stores typically experience their strongest traffic and sales in the spring and summer, with an increase in traffic and sales in February and March, coinciding with federal income tax refund season. Sales are typically slowest in the fall.

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GROSS PROFIT

	Three Months Ended August 31 (1)						Six Months Ended August 31 (1)
(In millions)	2022		2021		Change		2022		2021		Change
Used vehicle gross profit	$	495.0	$	506.5	(2.3)	%	$	1,058.5	$	1,103.5	(4.1)	%
Wholesale vehicle gross profit	140.7		189.0		(25.6)	%	332.3		374.9		(11.3)	%
Other gross profit	101.4		120.0		(15.4)	%	221.7		261.6		(15.2)	%
Total	$	737.1	$	815.5	(9.6)	%	$	1,612.5	$	1,740.0	(7.3)	%

(1)     Amounts are net of intercompany eliminations.

GROSS PROFIT PER UNIT

	Three Months Ended August 31 (1)						Six Months Ended August 31 (1)
	2022			2021			2022			2021
	$ per unit(2)		%(3)	$ per unit(2)		%(3)	$ per unit(2)		%(3)	$ per unit(2)		%(3)
Used vehicle gross profit	$	2,282	7.9	$	2,185	8.3	$	2,312	8.0	$	2,196	9.0
Wholesale vehicle gross profit	$	881	8.3	$	1,005	11.1	$	961	8.7	$	1,015	12.2
Other gross profit	$	468	59.6	$	517	65.8	$	484	63.2	$	521	75.1

(1)     Amounts are net of intercompany eliminations. Those eliminations had the effect of increasing used vehicle gross profit per unit and wholesale vehicle gross profit per unit and decreasing other gross profit per unit by immaterial amounts.

(2)     Calculated as category gross profit divided by its respective units sold, except the other category, which is divided by total used units sold.

(3)     Calculated as a percentage of its respective sales or revenue.

Used Vehicle Gross Profit.  We target a dollar range of gross profit per used unit sold.  The gross profit dollar target for an individual vehicle is based on a variety of factors, including its probability of sale and its mileage relative to its age; however, it is not primarily based on the vehicle’s selling price.  Our ability to quickly adjust appraisal offers to be consistent with the broader market trade-in trends and the pace of our inventory turns reduce our exposure to the inherent continual fluctuation in used vehicle values and contribute to our ability to manage gross profit dollars per unit. Gross profit per used unit is consistent across our omni-channel platform.

We systematically adjust individual vehicle prices based on proprietary pricing algorithms in order to appropriately balance sales trends, inventory turns and gross profit achievement.  Other factors that may influence gross profit include the wholesale and retail vehicle pricing environments, vehicle reconditioning and logistics costs, and the percentage of vehicles sourced directly from consumers through our appraisal process.  Vehicles purchased directly from consumers generally have a lower cost per unit compared with vehicles purchased at auction or through other channels, which may generate more gross profit per unit. In any given period, our gross profit may also be impacted by the age mix of vehicles sold, as older vehicles are generally more profitable. We monitor macroeconomic factors and pricing elasticity and adjust our pricing accordingly to optimize unit sales and profitability while also maintaining a competitively priced inventory.

Used vehicle gross profit decreased 2.3% in the second quarter of fiscal 2023, driven by the 6.4% decrease in total used unit sales, partially offset by the $97 increase in used vehicle gross profit per unit. Used vehicle gross profit decreased 4.1% in the first six months of fiscal 2023, driven by the 8.9% decrease in total used unit sales, partially offset by the $116 increase in used vehicle gross profit per unit. We continue to focus on striking the right balance between covering cost increases, maintaining margin and passing along efficiencies to consumers to support vehicle affordability.

Wholesale Vehicle Gross Profit.  Our wholesale gross profit per unit reflects the demand for older, higher mileage vehicles, which are the mainstay of our auctions, as well as strong dealer attendance and resulting high dealer-to-car ratios at our auctions.  The frequency of our auctions, which are generally held weekly or bi-weekly, minimizes the depreciation risk on these vehicles.  Our ability to adjust appraisal offers in response to the wholesale pricing environment is a key factor that influences wholesale gross profit. 

Wholesale vehicle gross profit decreased 25.6% in the second quarter of fiscal 2023, primarily driven by the 15.1% decrease in wholesale unit sales as well as the $124 decrease in wholesale vehicle gross profit per unit. Wholesale vehicle gross profit decreased 11.3% in the first six months of fiscal 2023, primarily driven by the 6.4% decrease in wholesale unit sales as well as

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the $54 decrease in wholesale vehicle gross profit per unit. Our decision to source a higher mix of older vehicles for retail sale also impacted wholesale vehicle gross profit per unit. When those vehicles cannot be reconditioned to our standards for consumer sales, we shift them to wholesale, which often sell at lower margins. Wholesale gross profit per unit was also impacted by steep market depreciation, which continued into September.

Other Gross Profit.  Other gross profit includes profits related to EPP revenues, net third-party finance income/(fees), advertising and subscription profits earned by our Edmunds business, and other revenues. Other revenues are predominantly comprised of service department operations, including used vehicle reconditioning.  We have no cost of sales related to EPP revenues or net third-party finance income/(fees), as these represent revenues paid to us by certain third-party providers.  Third-party finance income is reported net of the fees we pay to third-party Tier 3 finance providers.  Accordingly, changes in the relative mix of the components of other gross profit can affect the composition and amount of other gross profit.

Other gross profit decreased 15.4% in the second quarter of fiscal 2023, primarily driven by a $12.5 million decline in service department margins as well as a decrease in EPP revenues, as discussed above. The decline in service department profits was driven by deleverage resulting from lower retail unit sales as well as inflationary pressure.

Other gross profit decreased 15.2% in the first six months of fiscal 2023, primarily driven by a $43.4 million decline in service department margins as well as a decrease in EPP revenues, as discussed above, partially offset by the inclusion of six months of Edmunds' margin in fiscal 2023 compared with three months of Edmunds' margin in fiscal 2022. The decline in service department profits was driven by deleverage resulting from lower retail unit sales as well as inflationary pressure.

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SG&A Expenses

COMPONENTS OF SG&A EXPENSES AS A PERCENTAGE OF TOTAL SG&A EXPENSES

Three Months Ended August 31, 2022    Six Months Ended August 31, 2022

COMPONENTS OF SG&A EXPENSES COMPARED WITH PRIOR PERIOD (1)

	Three Months Ended August 31								Six Months Ended August 31
(In millions except per unit data)	2022			2021			Change		2022			2021			Change
Compensation and benefits:
Compensation and benefits, excluding share-based compensation expense	$	333.8		$	299.5		11.4	%	$	679.0		$	583.6		16.3	%
Share-based compensation expense	24.5			28.7			(14.5)	%	46.8			67.1			(30.3)	%
Total compensation and benefits (2)	$	358.3		$	328.2		9.2	%	$	725.8		$	650.7		11.5	%
Occupancy costs	68.8			55.1			25.0	%	134.7			105.6			27.5	%
Advertising expense	82.9			85.0			(2.5)	%	171.8			157.5			9.1	%
Other overhead costs (3)	156.0			106.0			47.2	%	290.5			214.6			35.5	%
Total SG&A expenses	$	666.0		$	574.3		16.0	%	$	1,322.8		$	1,128.4		17.2	%
SG&A as % of gross profit	90.4		%	70.4		%	20.0	%	82.0		%	64.8		%	17.2	%

(1)     Amounts are net of intercompany eliminations.

(2)     Excludes compensation and benefits related to reconditioning and vehicle repair service, which are included in cost of sales. See Note 11 for details of share-based compensation expense by grant type.

(3) Includes IT expenses, non-CAF bad debt, preopening and relocation costs, insurance, charitable contributions, travel and other administrative expenses.

SG&A expenses increased 16.0% in the second quarter of fiscal 2023. Factors contributing to the net increase include the following:

•$50.0 million increase in other overhead costs, driven by investments to advance our technology platforms and support our strategic and growth initiatives. The change in other overhead costs was also negatively impacted by a $14 million one-time change in accounting estimate made in the prior year related to non-CAF uncollectible receivables.

•$34.3 million increase in compensation and benefits expense, excluding share-based compensation expense, driven by increased staffing and wage pressures in the prior year, partially offset by steps taken during the current year to better align our staffing expenses with sales.

•$13.7 million increase in store occupancy costs driven by the 5.4% increase in our store base since the beginning of last year's second quarter as well as other growth- and capacity-related costs.

•$4.2 million decrease in stock-based compensation expense, primarily related to cash-settled restricted stock units, as the expense associated with these units was primarily driven by the change in the company's stock price during the relevant periods.

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SG&A expenses increased 17.2% in the first six months of fiscal 2023. Factors contributing to the net increase include the following:

•$95.4 million increase in compensation and benefits expense, excluding share-based compensation expense, driven by increased staffing and wage pressures as well as the inclusion of Edmunds for six months in the current year compared to three months in the prior year.

•$75.9 million increase in other overhead costs, driven by investments to advance our technology platforms and support our strategic and growth initiatives. Other overhead costs were also negatively impacted by a year-over-year increase in non-CAF uncollectible receivables. This increase reflects several factors including, but not limited to, ongoing DMV processing delays, costs associated with our Love Your Car Guarantee program and field execution opportunities stemming from the dynamic operating environment.

•$29.1 million increase in store occupancy costs driven by the 6.4% increase in our store base since the beginning of the last fiscal year as well as other growth- and capacity-related costs.

•$14.3 million increase in advertising expense driven by our previously communicated investment in advertising spend as well as last year's lower level of spend in the first quarter given our tight inventory position and robust consumer demand.

•$20.3 million decrease in stock-based compensation expense, primarily related to cash-settled restricted stock units, as the expense associated with these units was primarily driven by the change in the company's stock price during the relevant periods.

Interest Expense.  Interest expense includes the interest related to short- and long-term debt, financing obligations and finance lease obligations.  It does not include interest on the non-recourse notes payable, which is reflected within CAF income.

Interest expense increased to $32.7 million and $61.5 million in the second quarter and first six months of fiscal 2023, respectively, compared with $22.4 million and $42.9 million in the second quarter and first six months of fiscal 2022. The increase for both periods primarily reflected higher outstanding debt balances in the current fiscal year, including the $700 million term loan issued in October 2021, as well as higher interest rates.

Other Income. Other income of $4.0 million in the second quarter of fiscal 2023 was relatively consistent with $1.8 million in the second quarter of fiscal 2022. Other income decreased to $1.9 million in the first six months of fiscal 2023 compared with $27.4 million in the first six months of fiscal 2022. The decrease for the six month period was primarily due to net gains on an equity investment recorded during fiscal 2022.

Income Taxes.  The effective income tax rate was 24.9% in the second quarter of fiscal 2023 and 25.0% in the first six months of fiscal 2023 versus 22.4% in the second quarter of fiscal 2022 and 22.8% in the first six months of fiscal 2022. The increase in the effective income tax rate for both periods was primarily driven by the difference in excess tax benefit related to settlements of share-based awards.

RESULTS OF OPERATIONS – CARMAX AUTO FINANCE

CAF income primarily reflects interest and fee income generated by CAF’s portfolio of auto loans receivable less the interest expense associated with the debt issued to fund these receivables, a provision for estimated loan losses and direct CAF expenses. Total interest margin reflects the spread between interest and fees charged to consumers and our funding costs. Changes in the interest margin on new originations affect CAF income over time. Increases in interest rates, which affect CAF’s funding costs, or other competitive pressures on consumer rates, could result in compression in the interest margin on new originations. Changes in the allowance for loan losses as a percentage of ending managed receivables reflect the effect of changes in loss and delinquency experience and economic factors on our outlook for net losses expected to occur over the remaining contractual life of the loans receivable.

CAF’s managed portfolio is composed primarily of loans originated over the past several years.  Trends in receivable growth and interest margins primarily reflect the cumulative effect of changes in the business over a multi-year period. Historically, we have sought to originate loans in our core portfolio, which excludes Tier 2 and Tier 3 origination, with an underlying risk profile that we believe will, in the aggregate result in cumulative net losses in the 2% to 2.5% range (excluding CECL-required recovery costs) over the life of the loans.  Actual loss performance of the loans may fall outside of this range based on various factors, including intentional changes in the risk profile of originations, economic conditions (including the effects of COVID-19) and wholesale recovery rates.  Current period originations reflect current trends in both our retail sales and the CAF business, including the volume of loans originated, current interest rates charged to consumers, loan terms and average credit scores.  Loans originated in a given fiscal period impact CAF income over time, as we recognize income over the life of the underlying auto loan. 

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CAF also originates a small portion of auto loans to customers who typically would be financed by our Tier 3 finance providers, in order to better understand the performance of these loans, mitigate risk and add incremental profits. Historically, CAF targeted originating approximately 5% of the total Tier 3 loan volume. During the first quarter of fiscal 2022, we increased our Tier 3 loan volume beyond our target of 5% of total Tier 3 loan volume to 10% by the end of the first quarter of fiscal 2022. Additionally, in the second quarter of fiscal 2022, CAF began to originate loans in the Tier 2 space on a test basis. Any future adjustments in Tier 2 and Tier 3 will consider the broader lending environment along with the long-term sustainability of the change. These loans have higher loss and delinquency rates than the remainder of the CAF portfolio, as well as higher contract rates.

CAF income does not include any allocation of indirect costs.  Although CAF benefits from certain indirect overhead expenditures, we have not allocated indirect costs to CAF to avoid making subjective allocation decisions.  Examples of indirect costs not allocated to CAF include retail store expenses and corporate expenses.

See Note 4 for additional information on CAF income and Note 5 for information on auto loans receivable, including credit quality.

SELECTED CAF FINANCIAL INFORMATION

	Three Months Ended August 31						Six Months Ended August 31
(In millions)	2022		% (1)	2021		% (1)	2022		% (1)	2021		% (1)
Interest margin:
Interest and fee income	$	357.2	8.8	$	324.1	8.8	$	703.9	8.8	$	634.4	8.8
Interest expense	(62.5)		(1.5)	(60.6)		(1.7)	(111.3)		(1.4)	(126.4)		(1.8)
Total interest margin	$	294.7	7.3	$	263.5	7.2	$	592.6	7.4	$	508.0	7.0
Provision for loan losses	$	(75.5)	(1.9)	$	(35.5)	(1.0)	$	(133.3)	(1.7)	$	(11.1)	(0.2)
CarMax Auto Finance income	$	182.9	4.5	$	200.0	5.4	$	387.3	4.8	$	441.8	6.1

(1)     Annualized percentage of total average managed receivables.

CAF ORIGINATION INFORMATION (AFTER THE IMPACT OF 3-DAY PAYOFFS)

	Three Months Ended August 31						Six Months Ended August 31
	2022			2021			2022			2021
Net loans originated (in millions)	$	2,334.0		$	2,372.4		$	4,780.8		$	4,855.8
Vehicle units financed	89,443			99,671			184,106			218,034
Net penetration rate (1)	41.2		%	43.0		%	40.2		%	43.4		%
Weighted average contract rate	9.4		%	8.5		%	9.2		%	8.7		%
Weighted average credit score (2)	709			704			706			699
Weighted average loan-to-value (LTV) (3)	88.1		%	89.4		%	87.8		%	89.8		%
Weighted average term (in months)	66.3			66.6			66.3			66.4

(1)     Vehicle units financed as a percentage of total used units sold.

(2)     The credit scores represent FICO® scores and reflect only receivables with obligors that have a FICO® score at the time of application. The FICO® score with respect to any receivable with co-obligors is calculated as the average of each obligor’s FICO® score at the time of application. FICO® scores are not a significant factor in our primary scoring model, which relies on information from credit bureaus and other application information as discussed in Note 5.  FICO® is a federally registered servicemark of Fair Isaac Corporation.

(3) LTV represents the ratio of the amount financed to the total collateral value, which is measured as the vehicle selling price plus applicable taxes, title and fees.

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LOAN PERFORMANCE INFORMATION

	As of and for the Three Months Ended August 31						As of and for the Six Months Ended August 31
(In millions)	2022			2021			2022			2021
Total ending managed receivables	$	16,349.3		$	14,984.4		$	16,349.3		$	14,984.4
Total average managed receivables	$	16,176.2		$	14,683.3		$	15,996.6		$	14,416.0
Allowance for loan losses	$	477.5		$	398.1		$	477.5		$	398.1
Allowance for loan losses as a percentage of ending managed receivables	2.92		%	2.66		%	2.92		%	2.66		%
Net credit losses on managed receivables	$	56.2		$	16.9		$	88.8		$	24.1
Annualized net credit losses as a percentage of total average managed receivables	1.39		%	0.46		%	1.11		%	0.34		%
Past due accounts as a percentage of ending managed receivables	4.64		%	2.72		%	4.64		%	2.72		%
Average recovery rate (1)	67.3		%	66.3		%	69.1		%	65.4		%

(1)    The average recovery rate represents the average percentage of the outstanding principal balance we receive when a vehicle is repossessed and liquidated, generally at our wholesale auctions.  While in any individual period conditions may vary, over the past 10 fiscal years, the annual recovery rate has ranged from a low of 46% to a high of 71%, and it is primarily affected by the wholesale market environment.

•CAF Income (Decrease of $17.2 million, or 8.6%, and decrease of $54.4 million, or 12.3%, in the second quarter and first six months of fiscal 2023, respectively)

◦The decrease in CAF income for both the second quarter and first six months of fiscal 2023 reflects a year-over-year swing in the provision for loan losses as discussed below.

◦The increase in the provision for loan losses for both periods was partially offset by increases in the total interest margin and average managed receivables.

•Provision for Loan Losses    

◦The provision for loan losses resulted in expense of $75.5 million and $133.3 million in the second quarter and first six months of fiscal 2023, respectively, compared with expense of $35.5 million and $11.1 million in the second quarter and first six months of fiscal 2022, respectively.

◦The increase in the provision for both the second quarter and six month period was primarily the result of a reduced provision coming out of the pandemic in the prior year periods.

◦The allowance for loan losses as a percentage of ending managed receivables was 2.92% as of August 31, 2022, compared with 2.66% as of August 31, 2021 and 2.77% as of February 28, 2022. The increase in the allowance percentage from February primarily reflected the effect of the previously disclosed expansion of Tier 2 and Tier 3 originations within CAF’s portfolio.

•Total Interest Margin (Increased to 7.3% and 7.4% in the second quarter and first six months of fiscal 2023, respectively, from 7.2% and 7.0% in the second quarter and first six months of fiscal 2022)

◦The increase in the total interest margin percentage for the second quarter was primarily driven by a $9.4 million benefit related to swaps not designated as hedges for accounting purposes.

◦The increase in the total interest margin percentage for the first six months of fiscal 2023 was primarily the result of lower funding costs as well as an $18.6 million benefit related to swaps not designated as hedges for accounting purposes.

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•Loan Origination and Performance

◦The decrease in net loan originations in the second quarter and first six months of fiscal 2023 resulted from a decrease in used unit sales and the net penetration rate, partially offset by an increase in the average amount financed.

◦CAF net penetration in the second quarter and first six months of fiscal 2023 declined from the prior year periods, largely reflecting an increase in the mix of customers utilizing outside financing.

◦The weighted average contract rate increased to 9.4% in the second quarter of fiscal 2023, compared with 8.5% in the prior year quarter. The weighted average contract rate increased to 9.2% in the first six months of fiscal 2023, compared with 8.7% in the prior year period. The increases for both periods were primarily due to higher rates charged to customers in response to the current interest rate environment.

◦The year-over-year increase in past due accounts as a percentage of ending managed receivables in the second quarter and first six months of fiscal 2023 primarily reflected unusually low delinquency levels experienced in the prior year periods as well as the impact of the expansion of Tier 2 and Tier 3 originations within CAF's portfolio.

PLANNED FUTURE ACTIVITIES

We anticipate opening a total of ten stores in fiscal 2023. During the first half of fiscal 2023, we entered the New York City metro market by opening three stores. We anticipate opening two more stores in this market in the next fiscal year. We currently estimate capital expenditures will total approximately $500 million in fiscal 2023, an increase from $308.5 million in fiscal 2022. The increase in planned capital spending in fiscal 2023 largely reflects long-term growth capacity initiatives for our auction, sales and production facilities in addition to continued investments in technology. We expect approximately 30% of our capital expenditures in fiscal 2023 will be focused on investments in technology.

FINANCIAL CONDITION

Liquidity and Capital Resources

Our primary ongoing cash requirements are to fund our existing operations, store expansion and improvement, CAF and strategic growth initiatives. Since fiscal 2013, we have also elected to use cash for our share repurchase program.  Our primary ongoing sources of liquidity include funds provided by operations, proceeds from non-recourse funding vehicles and borrowings under our revolving credit facility or through other financing sources.

Our current capital allocation strategy is to focus on our core business, including investing in digital capabilities and the strategic expansion of our store footprint, pursue new growth opportunities through investments, partnerships and acquisitions and return excess capital to shareholders. We believe we have the appropriate liquidity, access to capital and financial strength to support our operations and continue investing in our strategic initiatives for the foreseeable future.

We currently target an adjusted debt-to-total capital ratio in a range of 35% to 45%. Our adjusted debt to capital ratio, net of cash on hand, was at the middle of our targeted range for the second quarter of fiscal 2023. In calculating this ratio, we utilize total debt excluding non-recourse notes payable, finance lease liabilities, a multiple of eight times rent expense and total shareholders’ equity. Generally, we expect to use our revolving credit facility and other financing sources, together with stock repurchases, to maintain this targeted ratio; however, in any period, we may be outside this range due to seasonal, market, strategic or other factors.

Operating Activities.  During the first six months of fiscal 2023, net cash provided by operating activities totaled $479.6 million, compared with cash used in operating activities of $1.39 billion in the prior year period. Our operating cash flows are significantly impacted by changes in auto loans receivable, which increased $804.9 million in the current year period compared with $1.18 billion in the prior year period. 

The majority of the changes in auto loans receivable are accompanied by changes in non-recourse notes payable, which are issued to fund auto loans originated by CAF. Net issuances of non-recourse notes payable were $654.4 million in the current year period compared with $1.21 billion in the prior year period and are separately reflected as cash from financing activities. Due to the presentation differences between auto loans receivable and non-recourse notes payable on the consolidated statements of cash flows, fluctuations in these amounts can have a significant impact on our operating and financing cash flows without affecting our overall liquidity, working capital or cash flows.

As of August 31, 2022, total inventory was $4.67 billion, representing a decrease of $452.9 million compared with the balance as of the start of the fiscal year.  The decrease was primarily due to a decrease in vehicle units reflecting the seasonal pattern in inventory levels.

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The change in net cash provided by (used in) operating activities for the first six months of the current fiscal year compared with the prior year period reflected the changes in inventory and auto loans receivable, as discussed above, as well as timing-related changes in accounts receivable, partially offset by a decrease in net earnings when excluding non-cash expenses, which include depreciation and amortization, share-based compensation expense and the provisions for loan losses and cancellation reserves.

Investing Activities. During the first six months of fiscal 2023, net cash used in investing activities totaled $207.3 million compared with $380.2 million in fiscal 2022.  Capital expenditures were $204.5 million in the current year period versus $137.8 million in the prior year period.  Capital expenditures primarily included store construction costs and store remodeling expenses as well as investments in technology.  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.

As of August 31, 2022, 153 of our 234 used car stores were located on owned sites and 81 were located on leased sites, including 25 land-only leases and 56 land and building leases.

Financing Activities.  During the first six months of fiscal 2023, net cash used in financing activities totaled $322.2 million compared with net cash provided by financing activities of $1.77 billion in the prior year period.  Included in these amounts were net issuances of non-recourse notes payable of $654.4 million compared with $1.21 billion in the prior year period. Non-recourse notes payable are typically used to fund changes in auto loans receivable (see “Operating Activities”).

During the first six months of fiscal 2023, cash used in financing activities was impacted by stock repurchases of $325.2 million as well as net payments on our long-term debt of $644.7 million. During the first six months of fiscal 2022, cash provided by financing activities was impacted by stock repurchases of $355.5 million as well as net proceeds on our long-term debt of $867.2 million.

TOTAL DEBT AND CASH AND CASH EQUIVALENTS

(In thousands)		As of August 31		As of February 28
Debt Description (1)	Maturity Date	2022		2022
Revolving credit facility (2)	June 2024	$	605,450	$	1,243,500
Term loan (2)	June 2024	300,000		300,000
Term loan (2)	October 2026	699,422		699,352
3.86% Senior notes	April 2023	100,000		100,000
4.17% Senior notes	April 2026	200,000		200,000
4.27% Senior notes	April 2028	200,000		200,000
Financing obligations	Various dates through February 2059	520,005		524,766
Non-recourse notes payable	Various dates through February 2029	16,121,244		15,466,799
Total debt (3)		$	18,746,121	$	18,734,417
Cash and cash equivalents		$	56,772	$	102,716

 (1)    Interest is payable monthly, with the exception of our senior notes, which are payable semi-annually.

 (2)    Borrowings accrue interest at variable rates based on the Eurodollar rate (LIBOR), or successor benchmark rate, the federal funds rate, or the prime rate, depending on the type of borrowing.

(3)    Total debt excludes unamortized debt issuance costs. See Note 10 for additional information.

Borrowings under our $2.00 billion unsecured revolving credit facility are available for working capital and general corporate purposes, and the unused portion is fully available to us.  The credit facility, term loans and senior note agreements contain representations and warranties, conditions and covenants.  If these requirements are 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.  As of August 31, 2022, we were in compliance with these financial covenants.

See Note 10 for additional information on our revolving credit facility, term loans, senior notes and financing obligations.

CAF auto loans receivable are primarily funded through our warehouse facilities and asset-backed term funding transactions.  These non-recourse funding vehicles are structured to legally isolate the auto loans receivable, and we would not expect to be able to access the assets of our non-recourse funding vehicles, even in insolvency, receivership or conservatorship proceedings.  Similarly, the investors in the non-recourse notes payable have no recourse to our assets beyond the related

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receivables, the amounts on deposit in reserve accounts and the restricted cash from collections on auto loans receivable.  We do, however, continue to have the rights associated with the interest we retain in these non-recourse funding vehicles. 

As of August 31, 2022, $13.12 billion and $3.00 billion of non-recourse notes payable were outstanding related to asset-backed term funding transactions and our warehouse facilities, respectively.  During the first six months of fiscal 2023, we funded a total of $3.15 billion in asset-backed term funding transactions.  As of August 31, 2022, we had $2.40 billion of unused capacity in our warehouse facilities.

We have periodically increased our warehouse facility limit over time, as our store base, sales and CAF loan originations have grown. See Note 10 for additional information on the warehouse facilities. 

We generally repurchase the receivables funded through our warehouse facilities when we enter into an asset-backed term funding transaction. If our counterparties were to refuse to permit these repurchases it could impact our ability to execute on our funding program. Additionally, the 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 fund 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 related receivables with the warehouse facility agents on a daily basis and deliver executed lockbox agreements to the warehouse facility agents. 

The timing and amount of stock repurchases are determined based on stock price, market conditions, legal requirements and other factors.  Shares repurchased are deemed authorized but unissued shares of common stock.  In April 2022, our board of directors increased our share repurchase authorization by $2 billion. As of August 31, 2022, a total of $4 billion of board authorizations for repurchases was outstanding, with no expiration date, of which $2.45 billion remained available for repurchase. See Note 11 for more information on share repurchase activity.

Fair Value Measurements

We recognize money market securities, mutual fund investments, certain equity investments and derivative instruments at fair value.  See Note 7 for more information on fair value measurements.

FORWARD-LOOKING STATEMENTS

We caution readers that the statements contained in this report that are not statements of historical fact, including statements about our future business plans, operations, capital structure, opportunities, or prospects, including without limitation any statements or factors regarding expected operating capacity, sales, inventory, market share, online purchases of vehicles from consumers, gross profit per used unit, revenue, margins, expenditures, liquidity, loan originations, CAF income, stock repurchases, indebtedness, earnings, market conditions or expectations with regards to the continued impact of the COVID-19 pandemic, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  You can identify these forward-looking statements by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “positioned,” “predict,” “target,” “should,” “will” and other similar expressions, whether in the negative or affirmative.  Such forward-looking statements are based upon management’s current knowledge, expectations and assumptions and involve risks and uncertainties and assumptions about future events and involve risks and uncertainties that could cause actual results to differ materially from anticipated results.  We disclaim any intent or obligation to update these statements.  Among the factors that could cause actual results and outcomes to differ materially from those contained in the forward-looking statements are the following:

•The effect and consequences of the Coronavirus public health crisis on matters including U.S. and local economies; our business operations and continuity; the availability of corporate and consumer financing; the health and productivity of our associates; the ability of third-party providers to continue uninterrupted service; and the regulatory environment in which we operate.

•Changes in general or regional U.S. economic conditions, including the potential impact of Russia's invasion of Ukraine.

•Changes in the availability or cost of capital and working capital financing, including changes related to the asset-backed securitization market.

•Changes in the competitive landscape and/or our failure to successfully adjust to such changes.

•Events that damage our reputation or harm the perception of the quality of our brand.

•Our inability to realize the benefits associated with our omni-channel initiatives and strategic investments.

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•Our inability to recruit, develop and retain associates and maintain positive associate relations.

•The loss of key associates from our store, regional or corporate management teams or a significant increase in labor costs.

•Security breaches or other events that result in the misappropriation, loss or other unauthorized disclosure of confidential customer, associate or corporate information.

•Significant changes in prices of new and used vehicles.

•Changes in economic conditions or other factors that result in greater credit losses for CAF’s portfolio of auto loans receivable than anticipated.

•A reduction in the availability of or access to sources of inventory or a failure to expeditiously liquidate inventory.

•Changes in consumer credit availability provided by our third-party finance providers.

•Changes in the availability of extended protection plan products from third-party providers.

•Factors related to the regulatory and legislative environment in which we operate.

•Factors related to geographic and sales growth, including the inability to effectively manage our growth.

•The failure of or inability to sufficiently enhance key information systems.

•The performance of the third-party vendors we rely on for key components of our business.

•The effect of various litigation matters.

•Adverse conditions affecting one or more automotive manufacturers, and manufacturer recalls.

•The failure or inability to realize the benefits associated with our strategic transactions.

•The inaccuracy of estimates and assumptions used in the preparation of our financial statements, or the effect of new accounting requirements or changes to U.S. generally accepted accounting principles.

•The volatility in the market price for our common stock.

•The failure or inability to adequately protect our intellectual property.

•The occurrence of severe weather events.

•Factors related to the geographic concentration of our stores.

For more details on factors that could affect expectations, see Part II, Item 1A, “Risk Factors” on Page 49 of this report, our Annual Report on Form 10-K for the fiscal year ended February 28, 2022, and our quarterly or current reports as filed with or furnished to the U.S. Securities and Exchange Commission (“SEC”).  Our filings are publicly available on our investor information home page at investors.carmax.com.  Requests for information may also be made to our Investor Relations Department by email to investor_relations@carmax.com or by calling 1-804-747-0422, ext. 7865.  We undertake no obligation to update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

Page 47

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes to our market risk since February 28, 2022.  For information on our exposure to market risk, refer to Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” contained in our Annual Report on Form 10-K for the fiscal year ended February 28, 2022.

Item 4.    Controls and Procedures

Disclosure.  We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.  Our disclosure controls and procedures are also designed to ensure that this information is accumulated and communicated to management, including the chief executive officer (“CEO”) and the chief financial officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, with the participation of the CEO and CFO, we evaluated the effectiveness of our disclosure controls and procedures.  Based upon that evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of the end of the period.

Internal Control over Financial Reporting. There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended August 31, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Page 48

PART II.  OTHER INFORMATION

Item 1.    Legal Proceedings

For a discussion of certain legal proceedings, see Note 16 to the consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 1A.     Risk Factors

In connection with information set forth in this Form 10-Q, the factors discussed under “Risk Factors” in our Form 10-K for fiscal year ended February 28, 2022, should be considered.  These risks could materially and adversely affect our business, financial condition, and results of operations.  There have been no material changes to the factors discussed in our Form 10‑K.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

On October 23, 2018, the board authorized the repurchase of up to $2 billion of our common stock with no expiration date. In April 2022, the board increased our share repurchase authorization by $2 billion. 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 stock price, market conditions, legal requirements and other factors. Shares repurchased are deemed authorized but unissued shares of common stock.

The following table provides information relating to the company's repurchase of common stock for the second quarter of fiscal 2023. The table does not include transactions related to employee equity awards or exercise of employee stock options.

					Approximate
					Dollar Value
				Total Number	of Shares that
	Total Number	Average		of Shares Purchased	May Yet Be
	of Shares	Price Paid		as Part of Publicly	Purchased Under
Period	Purchased	per Share		Announced Program	the Program
June 1 - 30, 2022	575,500	$	93.31	575,500	$	2,563,233,107
July 1 - 31, 2022	565,556	$	93.20	565,556	$	2,510,523,456
August 1 - 31, 2022	588,516	$	96.15	588,516	$	2,453,937,874
Total	1,729,572			1,729,572

Page 49

Item 6.    Exhibits

10.1	CarMax, Inc. 2002 Employee Stock Purchase Plan, as amended and restated January 1, 2023, filed herewith.
31.1	Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a), filed herewith.
31.2	Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a), filed herewith.
32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, filed herewith.
32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, filed herewith.
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

Page 50

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CARMAX, INC.
By:	/s/  William D. Nash
	William D. Nash
	President and
	Chief Executive Officer
By:	/s/  Enrique N. Mayor-Mora
	Enrique N. Mayor-Mora
	Executive Vice President and
	Chief Financial Officer

September 30, 2022

Page 51

EX-10.1

CarMax Restricted Confidential CARMAX, INC. AMENDED AND RESTATED 2002 EMPLOYEE STOCK PURCHASE PLAN (as amended and restated January 1, 2023) 1. Purpose and Effective Date. The CarMax, Inc. Amended and Restated 2002 Employee Stock Purchase Plan (the “Plan”) provides eligible employees of CarMax, Inc., a Virginia corporation, an opportunity to purchase CarMax, Inc. Common Stock (“Common Stock”) through payroll deductions and to receive a Company match for a portion of their payroll deductions. The Plan was originally effective on October 1, 2002, and was amended and restated effective as of November 1, 2004, as of July 1, 2006, as of January 19, 2009, as of June 23, 2009, as of January 1, 2020, and as of June 1, 2021. The effective date of this amendment and restatement is January 1, 2023. 2. Definitions. (a) Benefits Department: The employee benefits department of the Company. (b) Committee: The Compensation and Personnel Committee of the Company’s Board of Directors. (c) Company: CarMax, Inc., a Virginia corporation, and any subsidiary business entity (including, but not limited to, a corporation, a partnership, or limited liability company) that is under common control with CarMax, Inc., as determined under Section 414(b) or (c) of the Internal Revenue Code of 1986, as amended. Notwithstanding the foregoing, prior to January 1, 2023, the term “Company” shall not include Edmunds.com, Inc., Edmunds Holding, LLC, Edmunds Holding Company, Everest Endeavors II, LLC, and any other subsidiary entities thereof. Effective January 1, 2023, the term “Company” shall include entities in the Edmunds Group. (d) Compensation: All cash compensation and commissions (estimated as deemed necessary by the Plan Administrator) before any deductions or withholding and including overtime and bonuses, including relocation bonuses, but exclusive of all amounts paid as reimbursements of expenses including those paid as part of commissions, and those paid in the form of housing allowances or other payments in connection with employee relocations except to the extent such amounts are included in the definition of “Compensation” under the CarMax, Inc. Retirement Savings Plan. Effective January 1, 2023, solely with respect to Employees of the Edmunds Group, “Compensation” shall not include short-term disability pay. (e) Edmunds Group: Edmunds Holding, LLC, Edmunds.com, Inc., and any other subsidiary entities thereof. (f) Eligible Employees: Employees who meet the requirements set forth in Section 4. (g) Employee: Any person employed by the Company as a common law employee on the United States payroll. It is expressly intended that persons not employed as common law employees on the Company’s United States payroll are to be excluded from participation in the

2 Plan, even if a court or administrative agency determines that such individuals are common law employees and not independent contractors. (h) Enrollment Date: The date on which an Eligible Employee begins participation in the Plan pursuant to Section 6. (i) Participating Employees: Eligible Employees who participate in the Plan. (j) Plan Administrator: An Employee (or a group of Employees) appointed by the Committee as provided in Section 5 or, in the absence of any such specific appointment, the Chief Financial Officer of the Company. (k) Plan Service Provider: A plan service provider/dealer registered with the Securities and Exchange Commission and a member of the National Association of Securities Dealers or other provider of employee plan administrative services selected by the Plan Administrator as provided in Section 5. 3. Amount of Stock Subject to the Plan. The total number of shares of Common Stock that may be purchased under the Plan shall be 8,000,000, subject to adjustment as provided in Section 16. Such shares must be shares purchased for Participating Employees on the open market. 4. Eligible Employees. (a) Any Employee classified as a “Full-Time Associate” or “Part-Time Associate” pursuant to the Company’s policies and procedures (including, effective January 1, 2023, an Employee of the Edmunds Group) shall become eligible to participate in the Plan after he or she has completed one year of service as an Employee of the Company; provided, however, that (i) Employees who are subject to Section 16 of the Securities Exchange Act of 1934, as amended, with respect to securities of the Company, and (ii) Employees who are officers of the Company (other than those serving as Assistant Vice Presidents, Assistant Treasurers, Assistant Secretaries, or Assistant Controllers), including without limitation officers of the Edmunds Group with the term “Chief” in the job title, shall not be eligible to participate in the Plan. (b) If an Employee has one year of service but is excluded from participation in the Plan due to the requirements set forth in (i) or (ii) of the preceding paragraph, the Employee will be eligible to participate in the Plan as soon as administratively practicable, after he or she is no longer excluded because of such requirements. Continuity of service for purposes of determining if an Employee has completed one year of service is determined pursuant to the Company’s rehire/reinstatement and change of status policies in effect at the time the eligibility determination is made. (c) For purposes of this Section 4, an Employee’s service with the Edmunds Group (including service prior to January 1, 2023) shall constitute service with the Company.

3 5. Administration of the Plan. (a) The Plan shall be administered by the Committee or its designee. The Committee shall have all powers necessary to administer the Plan, including but not limited to, the power: to construe and interpret the Plan’s documents; to decide all questions relating to an Employee’s employment status and eligibility to participate in the Plan; to make adjustments to the limitations on payroll deductions set forth in Section 7; to employ such other persons as are necessary for the proper administration of the Plan; and to make all other determinations necessary or advisable in administering the Plan. Any construction, interpretation, or application of the Plan by the Committee shall be final, conclusive and binding. (b) The Committee shall appoint an officer or other Employee of the Company to serve as the Plan Administrator. The Plan Administrator shall be authorized to designate other Employees of the Company to assist him or her in carrying out his or her responsibilities under the Plan. The Plan Administrator and his or her designees shall be responsible for the general administration of the Plan including establishment of operating procedures, enrollment deadlines and such other matters as the Committee deems necessary for the efficient and proper administration of the Plan. (c) The Plan Administrator shall appoint a Plan Service Provider in order to fulfill the duties of the Plan Service Provider set forth herein. The Plan Administrator shall also have the authority to replace any Plan Service Provider he or she has appointed for the Plan with another Plan Service Provider. 6. Participation in the Plan. (a) An Eligible Employee may commence or recommence participation in the Plan as soon as administratively feasible after he or she has enrolled and that enrollment has been processed by the Plan Service Provider. (b) An Eligible Employee shall authorize payroll deductions from the Employee’s Compensation and authorize the Plan Service Provider to establish an employee stock purchase plan account for the Employee (“ESPP Account”). (c) A Participating Employee’s contributions will begin in the first pay period that is administratively practicable after the enrollment has been processed by the Plan Service Provider. 7. Payroll Deductions and Limitations. (a) Payroll deductions shall be a percentage of the Participating Employee’s Compensation for each payroll period as specified by the Participating Employee according to procedures defined by the Benefits Department. Payroll deductions for each payroll period shall not be less than 2% nor more than 10% of Compensation for such payroll period. Payroll deduction specifications shall be made in 1% increments. The Plan Administrator shall have the power to change these percentage limitations.

4 (b) The maximum amount that may be contributed by each Participating Employee to the Plan in any one calendar year is $10,000. When a Participating Employee’s aggregate payroll deductions for the calendar year total $10,000, the Participating Employee’s purchases of Common Stock and payroll deductions under the Plan shall be suspended for the remainder of the calendar year. However, the Participating Employee shall continue to be a participant under the Plan unless he or she elects to stop contributions in the manner described in Section 17 or his or her participation terminates under Section 18 and the Employee’s purchases of Common Stock and payroll deductions will be resumed for the first full payroll period of the next calendar year. 8. Changes in Payroll Deductions. A Participating Employee may change the percentage of his or her payroll deductions, according to the procedures defined by the Benefits Department, subject to the minimum, maximum and allowed increments set forth in Section 7. The change will be effective as soon as administratively practicable after the change request has been processed by the Plan Service Provider. A Participating Employee may also elect to stop making contributions in the manner described in Section 17. 9. Company Matching Contributions. The Company shall contribute an amount each month (the “Company Matching Contribution”) towards the purchase of shares for Participating Employees. Unless modified by the Committee, the amount of the Company Matching Contribution shall be 15% of each Participating Employee’s contribution. From time to time the Committee may modify the amount of the Company Matching Contribution; provided, however, that the Company Matching Contribution may not exceed 15% of each Participating Employee’s contribution. The Company Matching Contribution shall be used to purchase shares for Participating Employees in accordance with Section 11. Participating Employees shall be fully vested in shares purchased with Company Matching Contributions. 10. Purchase Price. A purchase price for all shares of Common Stock to be purchased under the Plan shall be determined on a monthly basis. The purchase price shall apply to all purchases attributable to a Participating Employee’s payroll deductions for the payroll periods in the calendar month immediately preceding the date the purchase transactions take place (the “Payroll Deduction Month”). The purchase price shall be 100% of the average selling price of Common Stock on the open market during a two to three day period in which the purchases are made (the “Purchase Price”). Such purchase period shall end no later than the last business day of the month immediately following the Payroll Deduction Month. 11. Method of Purchase. The shares of Common Stock to be purchased under the Plan shall be purchased once each month on the open market. The Company shall transmit the aggregate payroll deductions from the prior month together with the related Company Matching Contribution and information on each Participating Employee’s contribution to the Plan Service Provider promptly after the end of each month. On a date as soon as practicable following receipt of the funds, the Plan Service Provider shall arrange for the purchase of Common Stock on the open market. As soon as practicable after completing the purchase of the shares, the Plan Service Provider shall credit the ESPP Account for each Participating Employee with as many shares and fractional interests in shares as the Participating Employee’s contribution and the Company Matching Contribution will allow, based on the Purchase Price. Shares purchased pursuant to both Participating Employee contributions and Company Matching Contributions

5 made with respect to a calendar year shall be credited to the ESPP Accounts of Participating Employees no later than March 15 following the end of such calendar year. 12. Dividend Reinvestment. (a) Each ESPP Account shall be established with the following default dividend policy. Cash dividends, if any, paid with respect to the Common Stock held in each ESPP Account under the Plan shall be automatically reinvested in Common Stock, unless the Participating Employee directs otherwise. The Plan Service Provider shall arrange for the reinvestment of dividends on the open market at the Participating Employee’s expense as soon as the Plan Service Provider receives the cash dividends. The Company will not pay any expenses associated with reinvesting dividends. (b) The Committee shall have the right at any time or from time to time upon written notice to the Plan Service Provider to change the default dividend reinvestment policy for ESPP Accounts established under the Plan. 13. Rights as a Shareholder. A Participating Employee shall have the right to vote full shares of Common Stock held in the Participating Employee’s ESPP Account and the right to receive annual reports, proxy statements and other documents sent to shareholders of Common Stock generally; provided, however, that so long as such shares are held for a Participating Employee by the Plan Service Provider, if a Participating Employee fails to respond in a timely manner to a request for instructions with respect to voting, the Plan Service Provider shall take such action with respect to the shares held for the Participating Employee as permitted by the New York Stock Exchange rules. To the extent that such rules and applicable law permit, the Plan Service Provider shall vote shares with respect to which no specific voting instructions are given in accordance with the recommendations of the Board of Directors of the Company. By instructing the Plan Service Provider in accordance with the terms and conditions of the Plan Agreement (defined below), a Participating Employee shall have the right at any time: (a) to obtain evidence of the shares of Common Stock credited to the Participating Employee’s ESPP Account; (b) to direct that any whole shares of Common Stock credited to the Participating Employee’s ESPP Account be sold, and that the proceeds, less selling expenses, be remitted to the Participating Employee; or (c) to direct that any whole shares of Common Stock credited to the Participating Employee’s ESPP Account be transferred to an individual brokerage account. 14. Rights Not Transferable. Rights under the Plan are not assignable or transferable by a Participating Employee other than by will or by the laws of descent and distribution and, during the Participating Employee’s lifetime, are exercisable only by the Participating Employee. 15. Joint Accounts. Participating Employees may, to the extent permitted by the Plan Service Provider, establish ESPP Accounts as joint accounts with rights therein as prescribed under applicable state law.

6 16. Certain Adjustments in the Case of Stock Dividends or Splits. The Committee shall make appropriate adjustments in the number of shares of Common Stock that may be purchased under the Plan if there are changes in the Common Stock by reason of stock dividends, stock splits, reverse stock splits, recapitalizations, mergers or consolidations. 17. Stopping Contributions. (a) A Participating Employee may stop his or her contributions in accordance with procedures defined by the Benefits Department. Payroll deductions will stop as soon as administratively practicable. In addition, contributions will be automatically stopped for any Participating Employee who goes on a leave of absence without pay, effective when the Employee ceases to be paid by the Company. (b) After contributions for an Employee have been stopped, the Plan Service Provider will leave the ESPP Account open and the Committee reserves the right to charge the Employee any account fees resulting from the ESPP Account left open. Shares may be left in the ESPP Account or the Employee may sell the shares or request evidence of ownership thereof. If dividends are being paid and reinvested at the time of withdrawal, they will continue to be reinvested (if paid) unless the Employee requests the Plan Service Provider to pay them in cash. The Employee may also ask the Plan Service Provider to close the ESPP Account. (c) An Employee for whom contributions have been stopped may start contributions again pursuant to Section 6 at any time when the Employee is an Eligible Employee. 18. Termination of Participation in the Plan. An Employee’s participation in the Plan shall terminate when the Employee ceases to be employed by the Company, whether by reason of retirement, termination of employment, death, or otherwise (“Terminated Participant”). Payroll deductions shall cease immediately or as soon as administratively feasible after the Plan Service Provider processes the termination. Purchases shall be made for the calendar month in which the last payroll deduction is made in accordance with Section 11. The Terminated Participant may elect to: (i) obtain evidence of the whole shares of Common Stock credited to his or her ESPP Account; (ii) direct the Plan Service Provider to sell all whole shares of Common Stock credited to his or her ESPP Account and remit the proceeds, less selling expenses, to the Terminated Participant, or (iii) direct the Plan Service Provider to transfer all whole shares of Common Stock credited to his or her ESPP Account to an individual brokerage account. In any event, the Plan Service Provider will sell any fractional interest held in the Terminated Participant’s ESPP Account to the Company and remit the proceeds of such sale, less selling expenses to the Terminated Participant. In the event of an Employee’s death, the distribution shall be made to the Employee’s designated beneficiary or, in the absence of a designated beneficiary, to the Employee’s estate, in accordance with procedures established by the Plan Service Provider. 19. Amendment of the Plan. The Committee may, at any time, or from time to time, amend the Plan in any respect; provided, however, that the Company shall obtain shareholder approval of an amendment to the extent necessary to comply with any applicable law, regulation or stock exchange rule.

7 20. Termination of the Plan. The Plan and all rights of Employees hereunder shall terminate: (a) on the last business day of any month that Participating Employees become entitled to purchase a number of shares of Common Stock greater than the number of shares remaining unpurchased out of the total number of authorized shares under Section 3; or (b) at any earlier date at the discretion of the Board of Directors of the Company. In the event that the Plan terminates under circumstances described in (a) above, the Common Stock remaining unpurchased as of the termination date shall be allocated to Participating Employees for purchase on a pro rata basis. Upon termination of the Plan, ESPP Accounts shall remain open subject to the same limitations and conditions set forth in the second paragraph of Section 17. 21. ESPP Account. The relationship between the Plan Service Provider and each Participating Employee shall be governed by a separate agreement of terms and conditions between them (“Plan Agreement”). In electing to participate in the Plan, a Participating Employee shall be deemed to have accepted the terms of the Plan Agreement. 22. Payment of Expenses. The Company shall pay all expenses associated with purchases under the Plan, including brokerage commissions, if any. 23. Notices. Any notice or instruction to be given to the Company shall be in writing and delivered by hand, Company office mail or U.S. mail to the address below: CarMax, Inc. c/o Secretary, CarMax, Inc. 12800 Tuckahoe Creek Parkway Richmond, Virginia 23238 Any signature submitted to the Company electronically or by facsimile will have the same force and effect as an original signature. 24. Government and Other Regulations. The Plan, and the rights to purchase Common Stock hereunder, and the Company’s obligation to sell and deliver Common Stock hereunder shall be subject to all applicable federal, state and foreign laws, rules and regulations, and to such approvals by any regulatory or government agency as may, in the opinion of counsel for the Company, be required. Any provision of this Plan that violates or conflicts with Section 409A of the Internal Revenue Code of 1986, as amended, shall be null and void and of no effect. 25. Severability. If any provision of this Plan is not valid or enforceable, that validity or enforceability shall not affect the remaining provisions of the Plan. 26. Indemnification of Committee. Service on the Committee shall constitute service as a member of the Board of Directors of the Company so that members of the Committee shall be entitled to indemnification and reimbursement as members of the Board of Directors of the Company pursuant to its Articles of Incorporation and Bylaws.

27. Tax Matters. (a) Each Employee shall make provision satisfactory to the Plan Administrator for payment of any taxes required by law to be withheld in respect of the purchase or disposition of Common Stock. In the Plan Administrator's discretion and subject to applicable law, such tax obligations may be paid in whole or in part by the withholding or delivery of shares of Common Stock, including shares purchased under this Plan, valued at fair market value on the date of withholding or delivery. The Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Employee. (b) The Company does not represent or guarantee that any particular federal, state, or local income or payroll tax consequence will result to Participating Employees as a result of participation in the Plan. 28. Designation of Beneficiary. An Eligible or Participating Employee may file a written designation of a beneficiary in the manner prescribed by the Plan Administrator to receive shares of Common Stock or cash allocated to the Employee's ESPP Account in the event of the Employee's death. In the absence of a beneficiary designation, or if the designated beneficiary has predeceased the Employee, the Company shall deliver the shares of Common Stock and cash allocated to the Employee's ESPP Account to the executor or administrator of the Participating Employee's estate. 29. Governing Law. The Plan shall be construed, enforced, and administered in accordance with the laws of the Commonwealth of Virginia to the extent such laws are not preempted by federal law. IN WITNESS HEREOF, this plan has been executed as of the 13th day of July, 2022. CARMAX, INC. By: /s/ Enrique Mayor-Mora Name: Enrique Mayor-Mora Title: EVP and Chief Financial Officer 8

EX-31.1

EXHIBIT 31.1

Certification of the Chief Executive Officer

Pursuant to Rule 13a-14(a)

I, William D. Nash, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CarMax, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  September 30, 2022

/s/ William D. Nash

William D. Nash

President and

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of the Chief Financial Officer

Pursuant to Rule 13a-14(a)

I, Enrique N. Mayor-Mora, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CarMax, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  September 30, 2022

/s/ Enrique N. Mayor-Mora 

Enrique N. Mayor-Mora

Executive Vice President and

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the CarMax, Inc. (the "company") Quarterly Report on Form 10-Q for the period ended August 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, William D. Nash, President and Chief Executive Officer of the company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company as of, and for, the periods presented in the Report.

Date:	September 30, 2022	By:	/s/ William D. Nash
			William D. Nash
			President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the CarMax, Inc. (the "company") Quarterly Report on Form 10-Q for the period ended August 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Enrique N. Mayor-Mora, Executive Vice President and Chief Financial Officer of the company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company as of, and for, the periods presented in the Report.

Date:	September 30, 2022	By:	/s/ Enrique N. Mayor-Mora
			Enrique N. Mayor-Mora
			Executive Vice President and
			Chief Financial Officer

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	Aug. 31, 2022	Sep. 28, 2022
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Aug. 31, 2022
Document Transition Report	false
Entity File Number	1-31420
Entity Registrant Name	CARMAX, INC.
Entity Central Index Key	0001170010
Current Fiscal Year End Date	--02-28
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Incorporation, State or Country Code	VA
Entity Tax Identification Number	54-1821055
Entity Address, Address Line One	12800 Tuckahoe Creek Parkway
Entity Address, City or Town	Richmond,
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	23238
City Area Code	804
Local Phone Number	747-0422
Title of 12(b) Security	Common Stock
Trading Symbol	KMX
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		158,015,491

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Consolidated Statements Of Earnings - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
SALES AND OPERATING REVENUES:
NET SALES AND OPERATING REVENUES	$ 8,144,803	$ 7,988,359	$ 17,456,424	$ 15,685,958
TOTAL COST OF SALES	7,407,658	7,172,875	15,843,888	13,945,965
GROSS PROFIT	737,145	815,484	1,612,536	1,739,993
CARMAX AUTO FINANCE INCOME	182,869	200,033	387,342	441,764
Selling, general and administrative expenses	666,041	574,286	1,322,781	1,128,355
Depreciation, Depletion and Amortization, Nonproduction	57,692	52,789	113,340	102,679
Interest expense	32,745	22,410	61,520	42,944
Other income	(4,039)	(1,782)	(1,940)	(27,359)
Earnings before income taxes	167,575	367,814	504,177	935,138
Income tax provision	41,670	82,547	126,007	213,115
NET EARNINGS	$ 125,905	$ 285,267	$ 378,170	$ 722,023
WEIGHTED AVERAGE COMMON SHARES:
Basic, shares	158,801	162,966	159,556	163,058
Diluted, shares	160,218	165,643	161,015	165,969
NET EARNINGS PER SHARE:
Basic (in dollars per share)	$ 0.79	$ 1.75	$ 2.37	$ 4.43
Diluted (in dollars per share)	$ 0.79	$ 1.72	$ 2.35	$ 4.35
Used vehicle sales
SALES AND OPERATING REVENUES:
NET SALES AND OPERATING REVENUES	$ 6,284,085	$ 6,104,366	$ 13,298,575	$ 12,261,710
TOTAL COST OF SALES	5,789,098	5,597,842	12,240,108	11,158,179
Wholesale vehicle sales
SALES AND OPERATING REVENUES:
NET SALES AND OPERATING REVENUES	1,690,326	1,701,572	3,806,843	3,075,929
TOTAL COST OF SALES	1,549,669	1,512,559	3,474,519	2,701,072
Total other sales and revenues
SALES AND OPERATING REVENUES:
NET SALES AND OPERATING REVENUES	170,392	182,421	351,006	348,319
TOTAL COST OF SALES	$ 68,891	$ 62,474	$ 129,261	$ 86,714
NET SALES AND OPERATING REVENUES
Percentage of Sales
Item as a percent of net sales and operating revenues	100.00%	100.00%	100.00%	100.00%
TOTAL COST OF SALES
Percentage of Sales
Item as a percent of net sales and operating revenues	90.90%	89.80%	90.80%	88.90%
GROSS PROFIT
Percentage of Sales
Item as a percent of net sales and operating revenues	9.10%	10.20%	9.20%	11.10%
CARMAX AUTO FINANCE INCOME
Percentage of Sales
Item as a percent of net sales and operating revenues	2.20%	2.50%	2.20%	2.80%
Selling, general and administrative expenses
Percentage of Sales
Item as a percent of net sales and operating revenues	8.20%	7.20%	7.60%	7.20%
Depreciation and Amortization, Nonproduction
Percentage of Sales
Item as a percent of net sales and operating revenues	0.70%	0.70%	0.60%	0.70%
Interest expense
Percentage of Sales
Item as a percent of net sales and operating revenues	0.40%	0.30%	0.40%	0.30%
Other income
Percentage of Sales
Item as a percent of net sales and operating revenues	0.00%	0.00%	0.00%	(0.20%)
Earnings before income taxes
Percentage of Sales
Item as a percent of net sales and operating revenues	2.10%	4.60%	2.90%	6.00%
Income tax provision
Percentage of Sales
Item as a percent of net sales and operating revenues	0.50%	1.00%	0.70%	1.40%
NET EARNINGS
Percentage of Sales
Item as a percent of net sales and operating revenues	1.50%	3.60%	2.20%	4.60%
NET SALES AND OPERATING REVENUES | Used vehicle sales
Percentage of Sales
Item as a percent of net sales and operating revenues	77.20%	76.40%	76.20%	78.20%
NET SALES AND OPERATING REVENUES | Wholesale vehicle sales
Percentage of Sales
Item as a percent of net sales and operating revenues	20.80%	21.30%	21.80%	19.60%
NET SALES AND OPERATING REVENUES | Total other sales and revenues
Percentage of Sales
Item as a percent of net sales and operating revenues	2.10%	2.30%	2.00%	2.20%
TOTAL COST OF SALES | Used vehicle sales
Percentage of Sales
Item as a percent of net sales and operating revenues	71.10%	70.10%	70.10%	71.10%
TOTAL COST OF SALES | Wholesale vehicle sales
Percentage of Sales
Item as a percent of net sales and operating revenues	19.00%	18.90%	19.90%	17.20%
TOTAL COST OF SALES | Total other sales and revenues
Percentage of Sales
Item as a percent of net sales and operating revenues	0.80%	0.80%	0.70%	0.60%

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Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Statement of Comprehensive Income [Abstract]
NET EARNINGS	$ 125,905	$ 285,267	$ 378,170	$ 722,023
Other comprehensive income, net of taxes:
Net change in retirement benefit plan unrecognized actuarial losses	481	658	962	1,317
Net change in cash flow hedge unrecognized gains	25,626	2,753	77,459	5,031
Other comprehensive income (loss), net of taxes	26,107	3,411	78,421	6,348
TOTAL COMPREHENSIVE INCOME	$ 152,012	$ 288,678	$ 456,591	$ 728,371

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Consolidated Balance Sheets - USD ($) $ in Thousands	Aug. 31, 2022	Feb. 28, 2022
CURRENT ASSETS:
Cash and cash equivalents	$ 56,772	$ 102,716
Restricted cash from collections on auto loans receivable	533,253	548,099
Accounts receivable, net	402,452	560,984
Inventory	4,671,685	5,124,569
Other current assets	208,297	212,922
TOTAL CURRENT ASSETS	5,872,459	6,549,290
Auto loans receivable, net of allowance for loan losses of $477,543 and $433,030 as of August 31, 2022 and February 28, 2022, respectively	15,961,213	15,289,701
Property and equipment, net of accumulated depreciation of $1,544,765 and $1,437,548 as of August 31, 2022 and February 28, 2022, respectively	3,312,605	3,209,068
Deferred Income Tax Assets, Net	93,057	120,931
Operating lease assets	530,285	537,357
Goodwill	141,258	141,258
Other assets	559,666	490,659
TOTAL ASSETS	26,470,543	26,338,264
CURRENT LIABILITIES:
Accounts payable	928,749	937,717
Accrued expenses and other current liabilities	482,361	533,271
Current portion of operating lease liabilities	48,783	44,197
Current portion of long-term debt	112,504	11,203
Current portion of non-recourse notes payable	559,792	521,069
TOTAL CURRENT LIABILITIES	2,132,189	2,047,457
Long-term debt, excluding current portion	2,511,417	3,255,304
Non-recourse notes payable, excluding current portion	15,534,801	14,919,715
Operating lease liabilities, excluding current portion	512,542	523,269
Other liabilities	365,367	357,080
TOTAL LIABILITIES	21,056,316	21,102,825
Commitments and contingent liabilities
SHAREHOLDERS’ EQUITY:
Common stock, $0.50 par value; 350,000,000 shares authorized; 158,043,981 and 161,053,983 shares issued and outstanding as of August 31, 2022 and February 28, 2022, respectively	79,022	80,527
Capital in excess of par value	1,684,408	1,677,268
Accumulated other comprehensive income (loss)	31,999	(46,422)
Retained earnings	3,618,798	3,524,066
TOTAL SHAREHOLDERS’ EQUITY	5,414,227	5,235,439
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 26,470,543	$ 26,338,264

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Aug. 31, 2022	Feb. 28, 2022
Statement of Financial Position [Abstract]
Financing Receivable, Allowance for Credit Loss	$ 477,543	$ 433,030
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 1,544,765	$ 1,437,548
Common Stock, Par or Stated Value Per Share	$ 0.50	$ 0.50
Common Stock, Shares Authorized	350,000,000	350,000,000
Common Stock, Shares, Issued	158,043,981	161,053,983
Common stock, shares outstanding	158,043,981	161,053,983

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Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
OPERATING ACTIVITIES:
Net earnings	$ 378,170	$ 722,023
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	137,903	129,300
Share-based compensation expense	47,010	72,780
Provision for loan losses	133,343	11,107
Provision for cancellation reserves	59,208	62,886
Deferred income tax provision	800	32,502
Other	9,713	(19,883)
Net decrease (increase) in:
Accounts receivable, net	158,532	(244,471)
Inventory	452,884	(948,299)
Other current assets	79,188	(26,496)
Auto loans receivable, net	(804,855)	(1,177,458)
Other assets	(31,703)	(9,745)
Net (decrease) increase in:
Accounts payable, accrued expenses and other current liabilities and accrued income taxes	(74,986)	115,542
Other liabilities	(65,618)	(105,109)
Net Cash Provided by (Used in) Operating Activities	479,589	(1,385,321)
INVESTING ACTIVITIES:
Capital expenditures	(204,463)	(137,838)
Proceeds from disposal of property and equipment	84	260
Proceeds from Sales of Business, Affiliate and Productive Assets	0	602
Purchases of investments	(5,428)	(12,651)
Sales and returns of investments	2,492	10,954
Payments to Acquire Businesses, Net of Cash Acquired	0	(241,563)
Net Cash Provided by (Used in) Investing Activities	(207,315)	(380,236)
FINANCING ACTIVITIES:
Increase in short-term debt, net	0	167
Proceeds from issuances of long-term debt	2,412,900	3,035,601
Payments on long-term debt	(3,057,565)	(2,168,411)
Cash paid for debt issuance costs	(10,240)	(9,547)
Payments on finance lease obligations	(9,883)	(5,709)
Issuances of non-recourse notes payable	8,230,501	7,414,283
Payments on non-recourse notes payable	(7,576,056)	(6,201,801)
Repurchase and retirement of common stock	(325,168)	(355,495)
Equity issuances	13,282	60,087
Net Cash Provided by (Used in) Financing Activities	(322,229)	1,769,175
(Decrease) increase in cash, cash equivalents, and restricted cash	(49,955)	3,618
Cash, cash equivalents, and restricted cash at beginning of year	803,618	771,947
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	753,663	775,565
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents	56,772	58,095
Restricted cash from collections on auto loans receivable	533,253	570,567
Restricted cash included in other assets	163,638	146,903
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$ 753,663	$ 775,565

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Consolidated Statements of Shareholders' Equity Statement - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]
BALANCE, SHARES at Feb. 28, 2021		163,172,000
BALANCE at Feb. 28, 2021	$ 4,364,613	$ 81,586	$ 1,513,821	$ 2,887,897	$ (118,691)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	436,756			436,756
Other Comprehensive Income (Loss), Net of Tax	2,937				2,937
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	20,102		20,102
Stock Repurchased and Retired During Period, Shares		(998,000)
Stock Repurchased and Retired During Period, Value	(124,542)	$ (499)	(9,348)	(114,695)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		375,000
Stock Issued During Period, Value, Stock Options Exercised	21,590	$ 187	21,403
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		254,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	(17,975)	$ 127	(18,102)
BALANCE, SHARES at May. 31, 2021		162,803,000
BALANCE at May. 31, 2021	4,703,481	$ 81,401	1,527,876	3,209,958	(115,754)
BALANCE, SHARES at Feb. 28, 2021		163,172,000
BALANCE at Feb. 28, 2021	4,364,613	$ 81,586	1,513,821	2,887,897	(118,691)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	722,023
Other Comprehensive Income (Loss), Net of Tax	6,348
BALANCE, SHARES at Aug. 31, 2021		162,470,000
BALANCE at Aug. 31, 2021	4,915,179	$ 81,235	1,653,066	3,293,221	(112,343)
BALANCE, SHARES at May. 31, 2021		162,803,000
BALANCE at May. 31, 2021	4,703,481	$ 81,401	1,527,876	3,209,958	(115,754)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	285,267			285,267
Other Comprehensive Income (Loss), Net of Tax	3,411				3,411
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	14,116		14,116
Adjustments to Additional Paid in Capital, Other			90,183
Stock Issued During Period, Value, Acquisitions	90,571	$ 388
Stock Issued During Period, Shares, Acquisitions		776,000
Stock Repurchased and Retired During Period, Shares		(1,754,000)
Stock Repurchased and Retired During Period, Value	(220,045)	$ (877)	(17,164)	(202,004)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		621,000
Stock Issued During Period, Value, Stock Options Exercised	38,496	$ 311	38,185
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		24,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	(118)	$ 12	(130)
BALANCE, SHARES at Aug. 31, 2021		162,470,000
BALANCE at Aug. 31, 2021	$ 4,915,179	$ 81,235	1,653,066	3,293,221	(112,343)
BALANCE, SHARES at Feb. 28, 2022	161,053,983	161,054,000
BALANCE at Feb. 28, 2022	$ 5,235,439	$ 80,527	1,677,268	3,524,066	(46,422)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	252,265			252,265
Other Comprehensive Income (Loss), Net of Tax	52,314				52,314
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	21,594		21,594
Stock Repurchased and Retired During Period, Shares		(1,644,000)
Stock Repurchased and Retired During Period, Value	(157,594)	$ (822)	(17,207)	(139,565)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		49,000
Stock Issued During Period, Value, Stock Options Exercised	3,442	$ 24	3,418
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		155,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	(6,823)	$ 78	(6,901)
BALANCE, SHARES at May. 31, 2022		159,614,000
BALANCE at May. 31, 2022	$ 5,400,637	$ 79,807	1,678,172	3,636,766	5,892
BALANCE, SHARES at Feb. 28, 2022	161,053,983	161,054,000
BALANCE at Feb. 28, 2022	$ 5,235,439	$ 80,527	1,677,268	3,524,066	(46,422)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	378,170
Other Comprehensive Income (Loss), Net of Tax	$ 78,421
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	(204,000)
BALANCE, SHARES at Aug. 31, 2022	158,043,981	158,044,000
BALANCE at Aug. 31, 2022	$ 5,414,227	$ 79,022	1,684,408	3,618,798	31,999
BALANCE, SHARES at May. 31, 2022		159,614,000
BALANCE at May. 31, 2022	5,400,637	$ 79,807	1,678,172	3,636,766	5,892
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	125,905			125,905
Other Comprehensive Income (Loss), Net of Tax	26,107				26,107
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	15,062		15,062
Stock Repurchased and Retired During Period, Shares		(1,730,000)
Stock Repurchased and Retired During Period, Value	(163,017)	$ (865)	(18,279)	(143,873)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		155,000
Stock Issued During Period, Value, Stock Options Exercised	9,840	$ 78	9,762
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		5,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	$ (307)	$ 2	(309)
BALANCE, SHARES at Aug. 31, 2022	158,043,981	158,044,000
BALANCE at Aug. 31, 2022	$ 5,414,227	$ 79,022	$ 1,684,408	$ 3,618,798	$ 31,999

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Supplemental Cash Flow Information

6 Months Ended

Aug. 31, 2022

Supplemental Cash Flow Elements [Abstract]

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

Supplemental Cash Flow Information

Supplemental disclosures of cash flow information:

	Six Months Ended August 31
(In thousands)	2022		2021
Non-cash investing and financing activities:
(Decrease) increase in accrued capital expenditures	$	(352)	$	6,038

See Note 14 for supplemental cash flow information related to leases.

Cash Flow, Supplemental Disclosures [Text Block]

	Six Months Ended August 31
(In thousands)	2022		2021
Non-cash investing and financing activities:
(Decrease) increase in accrued capital expenditures	$	(352)	$	6,038

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Supplemental Cash Flow Information Supplemental Cash Flow Information

6 Months Ended

Aug. 31, 2022

Supplemental Cash Flow Elements [Abstract]

Cash Flow, Supplemental Disclosures [Text Block]

	Six Months Ended August 31
(In thousands)	2022		2021
Non-cash investing and financing activities:
(Decrease) increase in accrued capital expenditures	$	(352)	$	6,038

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Supplemental Cash Flow Information Supplemental Cash Flow Information - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
Supplemental Cash Flow Elements [Abstract]
Capital Expenditures Incurred but Not yet Paid	$ (352)	$ 6,038

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Background

6 Months Ended

Aug. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Description and Accounting Policies [Text Block]

Background

Business. CarMax, Inc. (“we,” “our,” “us,” “CarMax” and “the company”), including its wholly owned subsidiaries, is the nation’s largest retailer of used vehicles.  We operate in two reportable segments:  CarMax Sales Operations and CarMax Auto Finance (“CAF”).  Our CarMax Sales Operations segment consists of all aspects of our auto merchandising and service operations, excluding financing provided by CAF.  Our CAF segment consists solely of our own finance operation that provides financing to customers buying retail vehicles from CarMax. On June 1, 2021, we completed the acquisition of Edmunds Holding Company (“Edmunds”), which does not meet the quantitative thresholds to be considered a reportable segment. See Note 17 for additional information on our reportable segments and Note 2 for additional information regarding our acquisition of Edmunds.

We deliver an unrivaled customer experience by offering a broad selection of quality used vehicles and related products and services at competitive, no-haggle prices using a customer-friendly sales process.  Our omni-channel platform, which gives us the largest addressable market in the used car industry, empowers our retail customers to buy a car on their terms – online, in-store or an integrated combination of both. Customers can choose to complete the car-buying experience in-person at one of our stores; or buy the car online and receive delivery through express pickup, available nationwide, or home delivery, available to most customers. We offer customers a range of related products and services, including the appraisal and purchase of vehicles directly from consumers; the financing of retail vehicle purchases through CAF and third-party finance providers; the sale of extended protection plan (“EPP”) products, which include extended service plans (“ESPs”) and guaranteed asset protection (“GAP”); and vehicle repair service.  Vehicles purchased through the appraisal process that do not meet our retail standards are sold to licensed dealers through on-site or virtual wholesale auctions.

Basis of Presentation and Use of Estimates. The accompanying interim unaudited consolidated financial statements include the accounts of CarMax and our wholly owned subsidiaries.  All significant intercompany balances and transactions have been eliminated in consolidation.  These interim unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  In the opinion of management, such interim consolidated financial statements reflect all normal recurring adjustments considered necessary to present fairly the financial position and the results of operations and cash flows for the interim periods presented.  The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year.  

The accounting policies followed in the presentation of our interim financial results are consistent with those included in the company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2022 (the “2022 Annual Report”), with the exception of those related to recent accounting pronouncements adopted in the current fiscal year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in our 2022 Annual Report.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities.  Actual results could differ from those estimates.  In particular, the novel coronavirus (“COVID-19”) pandemic and the resulting adverse impacts to global economic conditions, as well as our operations, may impact future estimates including, but not limited to, our allowance for loan losses, inventory valuations, fair value measurements, downward adjustments to investments in equity securities, asset impairment charges, the effectiveness of the company’s hedging instruments, deferred tax valuation allowances, cancellation reserves, actuarial losses on our retirement benefit plans and discount rate assumptions. Certain prior year amounts have been reclassified to conform to the current year’s presentation.  Amounts and percentages may not total due to rounding.

Recent Accounting Pronouncements.

Effective in Future Periods

In June 2022, the Financial Accounting Standards Board (“FASB”) issued an accounting pronouncement (ASU 2022-03) related to accounting for equity securities. The amendments in the update clarify the guidance for measuring the fair value of equity securities subject to contractual restrictions that prohibit the sale of the equity securities, as well as introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. This update is effective for annual periods beginning after December 15, 2023, and interim periods within those fiscal years. We plan to adopt this pronouncement for our fiscal year beginning March 1, 2024, and we do not expect it to have a material effect on our consolidated financial statements.

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Business Combinations and Asset Acquisitions

3 Months Ended

Aug. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Business Combination Disclosure

On June 1, 2021, we completed the acquisition of Edmunds Holding Company, one of the most well established and trusted online guides for automotive information and a recognized leader in digital car shopping innovations. With this acquisition, CarMax has enhanced its digital capabilities and further strengthened its role and reach across the used auto ecosystem while adding exceptional technology and creative talent. Edmunds continues to operate independently and remains focused on delivering confidence to consumers and excellent value to its dealer and Original Equipment Manufacturer (“OEM”) clients. Additionally, this acquisition allows both businesses to accelerate their respective capabilities to deliver an enhanced digital experience to their customers by leveraging Edmunds’ compelling content and technology, CarMax’s unparalleled national scale and infrastructure, and the combined talent of both businesses.

The acquisition was accounted for in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, and, accordingly, Edmunds’ results of operations have been consolidated in our financial statements since the date of acquisition. We recorded a preliminary allocation of the purchase price to assets acquired and liabilities assumed based on their estimated fair values as of June 1, 2021. The transaction costs associated with the acquisition were approximately $8.0 million and were expensed as incurred within selling, general and administrative expenses.

The following table summarizes the total purchase consideration:

(In thousands)
Total cash consideration for outstanding shares	$	251,047
Fair value of common stock (1)	90,571
Fair value of preexisting relationship	60,200
Total	$	401,818

(1)     Represents the issuance of 776,097 shares of CarMax common stock to Edmunds equity holders, the fair value of which was based on the market value of CarMax common stock as of market close on the acquisition date (June 1, 2021).

In January 2020, we acquired a minority stake in Edmunds for $50 million. The noncontrolling equity investment in Edmunds was remeasured at a fair value of $60.2 million prior to the acquisition of the remaining ownership stake on June 1, 2021, which resulted in the recognition of a gain of $8.7 million. The gain was included in other income in the consolidated statements of earnings for the second quarter of fiscal 2022.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition:

(In thousands)	Fair Value
Cash	$	9,484
Accounts receivable, net	33,719
Other current assets	2,397
Property and equipment, net	20,741
Goodwill (1)	141,258
Intangible assets	218,000
Operating lease assets	97,250
Other assets	191
Total assets acquired	523,040
Accounts payable	5,063
Accrued expenses and other current liabilities	11,277
Current portion of operating lease liabilities	12,795
Deferred income taxes (1)	3,823
Operating lease liabilities, excluding current portion	88,264
Total liabilities assumed	121,222
Net assets acquired	$	401,818

(1)     During the third quarter of fiscal 2022, we obtained new information about facts and circumstances that existed as of the acquisition date, which resulted in a change in the fair value of assets and liabilities recognized. The adjustments were primarily related to research and development tax credits, which resulted in a decrease in goodwill and a decrease in deferred income taxes of $8.4 million.

The excess of purchase consideration over the fair value of net identifiable assets acquired and liabilities assumed was recorded as goodwill, which was primarily attributed to expected synergies and the assembled workforce of the acquired business and was not deductible for tax purposes. The fair values assigned to the net identifiable assets and liabilities assumed were based on management’s estimates and assumptions.

Identifiable intangible assets were recognized at their estimated acquisition date fair values. The fair value of identifiable intangible assets was determined by using certain estimates and assumptions that were not observable in the market. The fair values of the trade name asset and the internally developed software asset were determined using the relief-from-royalty method, and the fair value of the customer relationships asset was determined using the excess earnings method. These income-based approaches included significant assumptions such as the amount and timing of projected cash flows, growth rates, customer attrition rates, discount rates, and the assessment of the asset’s life cycle. The estimated fair value and estimated remaining useful lives of identifiable intangible assets as of the acquisition date were as follows:

(In thousands)	Useful Life (Years)	Fair Value
Trade name	Indefinite	$	31,900
Internally developed software	7	52,900
Customer relationships	17	133,200
Identifiable intangible assets		$	218,000

The operating results of Edmunds have been included in our consolidated financial statements since the date of the acquisition. Net sales and operating revenues and net earnings attributable to Edmunds were not material for the reporting periods presented. Our pro forma results as if the acquisition had taken place on the first day of fiscal 2021 would not be materially different from the amounts reflected in the accompanying consolidated financial statements, and therefore were not presented.

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Revenue

6 Months Ended

Aug. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

Revenue

We recognize revenue when control of the good or service has been transferred to the customer, generally either at the time of sale or upon delivery to a customer.  Our contracts have a fixed contract price and revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. We collect sales taxes and other taxes from customers on behalf of governmental authorities at the time of sale.  These taxes are accounted for on a net basis and are not included in net sales and operating revenues or cost of sales. We generally expense sales commissions when incurred because the amortization period would have been less than one year. These costs are recorded within selling, general and administrative expenses. We do not have any significant payment terms as payment is received at or shortly after the point of sale.

Disaggregation of Revenue

	Three Months Ended August 31				Six Months Ended August 31
(In millions)	2022		2021		2022		2021
Used vehicle sales	$	6,284.1	$	6,104.4	$	13,298.6	$	12,261.7
Wholesale vehicle sales	1,690.3		1,701.6		3,806.8		3,075.9
Other sales and revenues:
Extended protection plan revenues	109.8		113.0		226.3		247.3
Third-party finance income, net	2.7		2.8		6.1		(1.8)
Advertising & subscription revenues (1)	34.3		34.5		68.7		34.5
Service revenues	19.4		21.0		41.2		43.2
Other	4.2		11.1		8.7		25.1
Total other sales and revenues	170.4		182.4		351.0		348.3
Total net sales and operating revenues	$	8,144.8	$	7,988.4	$	17,456.4	$	15,686.0

(1)     Excludes intersegment sales and operating revenues that have been eliminated in consolidation. See Note 17 for further details.

Used Vehicle Sales. Revenue from the sale of used vehicles is recognized upon transfer of control of the vehicle to the customer. As part of our customer service strategy, we guarantee the retail vehicles we sell with a 30-day/1,500 mile, money-back guarantee.  We record a reserve for estimated returns based on historical experience and trends. The reserve for estimated returns is presented gross on the consolidated balance sheets, with a return asset recorded in other current assets and a refund liability recorded in accrued expenses and other current liabilities. We also guarantee the used vehicles we sell with a 90-day/4,000-mile limited warranty. These warranties are deemed assurance-type warranties and are accounted for as warranty obligations. See Note 16 for additional information on this warranty and its related obligation.

Wholesale Vehicle Sales. Wholesale vehicles are sold at our auctions, and revenue from the sale of these vehicles is recognized upon transfer of control of the vehicle to the customer. Dealers also pay a fee to us based on the sale price of the vehicles they purchase. This fee is recognized as revenue at the time of sale. While we provide condition disclosures on each wholesale vehicle sold, the vehicles are subject to a limited right of return. We record a reserve for estimated returns based on historical experience and trends. The reserve for estimated returns is presented gross on the consolidated balance sheets, with a return asset recorded in other current assets and a refund liability recorded in accrued expenses and other current liabilities.

EPP Revenues. We also sell ESP and GAP products on behalf of unrelated third parties, who are primarily responsible for fulfilling the contract, to customers who purchase a retail vehicle.  The ESPs we currently offer on all used vehicles provide coverage up to 60 months (subject to mileage limitations), while GAP covers the customer for the term of their finance contract. We recognize revenue, on a net basis, at the time of sale. We also record a reserve, or refund liability, for estimated contract cancellations. The reserve for cancellations is evaluated for each product and is based on forecasted forward cancellation curves utilizing historical experience, recent trends and credit mix of the customer base.  Our risk related to contract cancellations is limited to the revenue that we receive.  Cancellations fluctuate depending on the volume of EPP sales, customer financing default or prepayment rates, and shifts in customer behavior, including those related to changes in the coverage or term of the product.  The current portion of estimated cancellation reserves is recognized as a component of accrued expenses and other current liabilities with the remaining amount recognized in other liabilities.  See Note 8 for additional information on cancellation reserves.

We are contractually entitled to receive profit-sharing revenues based on the performance of the ESPs administered by third parties. These revenues are a form of variable consideration included in EPP revenues to the extent that it is probable that it

will not result in a significant revenue reversal. An estimate of the amount to which we expect to be entitled, subject to various constraints, is recognized upon satisfying the performance obligation of selling the ESP. These constraints include factors that are outside of the company’s influence or control and the length of time until settlement. We apply the expected value method, utilizing historical claims and cancellation data from CarMax customers, as well as external data and other qualitative assumptions. This estimate is reassessed each reporting period with changes reflected in other sales and revenues on our consolidated statements of earnings and other assets on our consolidated balance sheets. As of August 31, 2022 and February 28, 2022, no current or long-term contract asset was recognized related to cumulative profit-sharing payments to which we expect to be entitled.

Third-Party Finance Income/(Fees). Customers applying for financing who are not approved or are conditionally approved by CAF are generally evaluated by other third-party finance providers.  These providers generally either pay us or are paid a fixed, pre-negotiated fee per contract.  We recognize these fees at the time of sale.

Advertising and Subscription Revenues. Advertising and subscription revenues consist of revenues earned by our Edmunds business. Advertising revenues are derived from advertising contracts with automotive manufacturers based on fixed fees per impression and fees for certain activities completed by customers on the manufacturers' websites. These fees are recognized in the period the impressions are delivered or certain activities occurred. Subscription revenues are derived from packages sold to automotive dealers that include car leads, inventory listings and enhanced placement in Edmunds' dealer locator and are recognized over the period that the services are made available to the dealers. Subscription revenues also include a digital marketing subscription service, which allows dealers to gain exposure on third party partner websites. Revenues for this service are recognized on a net basis.

Service Revenues. Service revenue consists of labor and parts income related to vehicle repair service, including repairs of vehicles covered under an ESP we sell or warranty program. Service revenue is recognized at the time the work is completed.

Other Revenues. Other revenues consist primarily of new vehicle sales and sales of accessories. Revenue in this category is recognized upon transfer of control to the customer.

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CarMax Auto Finance

6 Months Ended

Aug. 31, 2022

CarMax Auto Finance Income [Abstract]

CarMax Auto Finance

CarMax Auto Finance

CAF provides financing to qualified retail customers purchasing vehicles from CarMax.  CAF provides us the opportunity to capture additional profits, cash flows and sales while managing our reliance on third-party finance sources.  Management regularly analyzes CAF’s operating results by assessing profitability, the performance of the auto loans receivable, including trends in credit losses and delinquencies, and CAF direct expenses.  This information is used to assess CAF’s performance and make operating decisions, including resource allocation.

We typically use securitizations or other funding arrangements to fund loans originated by CAF.  CAF income primarily reflects the interest and fee income generated by the auto loans receivable less the interest expense associated with the debt issued to fund these receivables, a provision for estimated loan losses and direct CAF expenses.

CAF income does not include any allocation of indirect costs.  Although CAF benefits from certain indirect overhead expenditures, we have not allocated indirect costs to CAF to avoid making subjective allocation decisions.  Examples of indirect costs not allocated to CAF include retail store expenses and corporate expenses.  In addition, except for auto loans receivable, which are disclosed in Note 5, CAF assets are not separately reported nor do we allocate assets to CAF because such allocation would not be useful to management in making operating decisions.

Components of CAF Income

	Three Months Ended August 31						Six Months Ended August 31
(In millions)	2022		% (1)	2021		% (1)	2022		% (1)	2021		% (1)
Interest margin:
Interest and fee income	$	357.2	8.8	$	324.1	8.8	$	703.9	8.8	$	634.4	8.8
Interest expense	(62.5)		(1.5)	(60.6)		(1.7)	(111.3)		(1.4)	(126.4)		(1.8)
Total interest margin	294.7		7.3	263.5		7.2	592.6		7.4	508.0		7.0
Provision for loan losses	(75.5)		(1.9)	(35.5)		(1.0)	(133.3)		(1.7)	(11.1)		(0.2)
Total interest margin after provision for loan losses	219.2		5.4	228.0		6.2	459.3		5.7	496.9		6.9
Direct expenses:
Payroll and fringe benefit expense	(15.9)		(0.4)	(12.4)		(0.3)	(30.6)		(0.4)	(25.0)		(0.3)
Depreciation and amortization	(3.8)		(0.1)	(0.2)		—	(7.6)		(0.1)	(0.4)		—
Other direct expenses	(16.6)		(0.4)	(15.3)		(0.4)	(33.7)		(0.4)	(29.7)		(0.4)
Total direct expenses	(36.3)		(0.9)	(27.9)		(0.8)	(71.9)		(0.9)	(55.1)		(0.8)
CarMax Auto Finance income	$	182.9	4.5	$	200.0	5.4	$	387.3	4.8	$	441.8	6.1
Total average managed receivables	$	16,176.2		$	14,683.3		$	15,996.6		$	14,416.0

(1)     Annualized percentage of total average managed receivables.

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Auto Loan Receivables

6 Months Ended

Aug. 31, 2022

Receivables [Abstract]

Auto Loan Receivables

Auto Loans Receivable

Auto loans receivable include amounts due from customers related to retail vehicle sales financed through CAF and are presented net of an allowance for estimated loan losses.  These auto loans represent a large group of smaller-balance homogeneous loans, which we consider to be part of one class of financing receivable and one portfolio segment for purposes of determining our allowance for loan losses. We generally use warehouse facilities to fund auto loans receivable originated by CAF until we elect to fund them through an asset-backed term funding transaction, such as a term securitization or alternative funding arrangement.  We recognize transfers of auto loans receivable into the warehouse facilities and asset-backed term funding transactions (together, “non-recourse funding vehicles”) as secured borrowings, which result in recording the auto loans receivable and the related non-recourse notes payable on our consolidated balance sheets. The majority of the auto loans receivable serve as collateral for the related non-recourse notes payable of $16.12 billion as of August 31, 2022, and $15.47 billion as of February 28, 2022. See Note 10 for additional information on securitizations and non-recourse notes payable.

Interest income and expenses related to auto loans are included in CAF income.  Interest income on auto loans receivable is recognized when earned based on contractual loan terms.  All loans continue to accrue interest until repayment or charge-off.  When a charge-off occurs, accrued interest is written off by reversing interest income. Direct costs associated with loan originations are not considered material, and thus, are expensed as incurred.  See Note 4 for additional information on CAF income.

Auto Loans Receivable, Net

	As of August 31		As of February 28
(In millions)	2022		2022
Asset-backed term funding	$	12,563.5	$	11,653.8
Warehouse facilities	2,997.9		3,291.9
Overcollateralization (1)	629.0		489.1
Other managed receivables (2)	158.9		217.5
Total ending managed receivables	16,349.3		15,652.3
Accrued interest and fees	81.7		67.3
Other	7.7		3.1
Less: allowance for loan losses	(477.5)		(433.0)
Auto loans receivable, net	$	15,961.2	$	15,289.7

(1)     Represents receivables restricted as excess collateral for the non-recourse funding vehicles.

(2)     Other managed receivables includes receivables not funded through the non-recourse funding vehicles.

Credit Quality.  When customers apply for financing, CAF’s proprietary scoring models utilize the customers’ credit history and certain application information to evaluate and rank their risk.  We obtain credit histories and other credit data that includes information such as number, age, type of and payment history for prior or existing credit accounts.  The application information that is used includes income, collateral value and down payment.  The scoring models yield credit grades that represent the relative likelihood of repayment.  Customers with the highest probability of repayment are A-grade customers. Customers assigned a lower grade are determined to have a lower probability of repayment.  For loans that are approved, the credit grade influences the terms of the agreement, such as the required loan-to-value ratio and interest rate. After origination, credit grades are generally not updated.

CAF uses a combination of the initial credit grades and historical performance to monitor the credit quality of the auto loans receivable on an ongoing basis.  We validate the accuracy of the scoring models periodically.  Loan performance is reviewed on a recurring basis to identify whether the assigned grades adequately reflect the customers’ likelihood of repayment.

Ending Managed Receivables by Major Credit Grade

	As of August 31, 2022
	Fiscal Year of Origination (1)
(In millions)	2023		2022		2021		2020		2019		Prior to 2019		Total		% (2)
Core managed receivables (3):
A	$	2,242.3	$	3,097.9	$	1,405.5	$	934.1	$	369.8	$	102.7	$	8,152.3	49.8
B	1,533.9		2,227.8		1,010.7		645.1		326.3		128.2		5,872.0		35.9
C and other	439.1		739.7		390.2		222.0		109.3		54.2		1,954.5		12.0
Total core managed receivables	4,215.3		6,065.4		2,806.4		1,801.2		805.4		285.1		15,978.8		97.7
Other managed receivables (4):
C and other	155.0		143.2		18.9		26.8		17.9		8.7		370.5		2.3
Total ending managed receivables	$	4,370.3	$	6,208.6	$	2,825.3	$	1,828.0	$	823.3	$	293.8	$	16,349.3	100.0

	As of February 28, 2022
	Fiscal Year of Origination (1)
(In millions)	2022		2021		2020		2019		2018		Prior to 2018		Total		% (2)
Core managed receivables (3):
A	$	3,885.5	$	1,788.3	$	1,266.1	$	574.1	$	203.4	$	32.3	$	7,749.7	49.5
B	2,795.2		1,288.5		857.7		473.1		205.2		50.4		5,670.1		36.2
C and other	919.1		496.2		294.8		156.7		73.8		29.6		1,970.2		12.6
Total core managed receivables	7,599.8		3,573.0		2,418.6		1,203.9		482.4		112.3		15,390.0		98.3
Other managed receivables (4):
C and other	165.2		23.9		34.7		23.8		10.0		4.7		262.3		1.7
Total ending managed receivables	$	7,765.0	$	3,596.9	$	2,453.3	$	1,227.7	$	492.4	$	117.0	$	15,652.3	100.0

(1)     Classified based on credit grade assigned when customers were initially approved for financing.

(2)     Percent of total ending managed receivables.

(3)     Represents CAF's Tier 1 originations.

(4)     Represents CAF's Tier 2 and Tier 3 originations.

Allowance for Loan Losses.  The allowance for loan losses at August 31, 2022 represents the net credit losses expected over the remaining contractual life of our managed receivables. The allowance for loan losses is determined using a net loss timing curve, primarily based on the composition of the portfolio of managed receivables and historical gross loss and recovery trends. Due to the fact that losses for receivables with less than 18 months of performance history can be volatile, our net loss estimate weights both historical losses by credit grade at origination and actual loss data on the receivables to-date, along with forward loss curves, in estimating future performance. Once the receivables have 18 months of performance history, the net loss estimate reflects actual loss experience of those receivables to date, along with forward loss curves, to predict future performance. The forward loss curves are constructed using historical performance data and show the average timing of losses over the course of a receivable’s life. The net loss estimate is calculated by applying the loss rates developed using the methods described above to the amortized cost basis of the managed receivables at inception of the loan.

The output of the net loss timing curve is adjusted to take into account reasonable and supportable forecasts about the future. Specifically, the change in U.S. unemployment rates and the National Automobile Dealers Association used vehicle price index are used to predict changes in gross loss and recovery rates, respectively. An economic adjustment factor, based upon a single macroeconomic scenario, is developed to capture the relationship between changes in these forecasts and changes in gross loss and recovery rates. This factor is applied to the output of the net loss timing curve for the reasonable and supportable forecast period of two years. After the end of this two-year period, we revert to historical experience on a straight-line basis over a period of 12 months. We periodically consider whether the use of alternative metrics would result in improved model performance and revise the models when appropriate. We also consider whether qualitative adjustments are necessary for factors that are not reflected in the quantitative methods but impact the measurement of estimated credit losses. Such

adjustments include the uncertainty of the impacts of recent economic trends on customer behavior. The change in the allowance for loan losses is recognized through an adjustment to the provision for loan losses.

Allowance for Loan Losses

	Three Months Ended August 31, 2022
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	390.4	$	67.8	$	458.2	2.85
Charge-offs	(84.2)		(11.9)		(96.1)
Recoveries	35.9		4.0		39.9
Provision for loan losses	54.0		21.5		75.5
Balance as of end of period	$	396.1	$	81.4	$	477.5	2.92

	Three Months Ended August 31, 2021
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	348.1	$	31.4	$	379.5	2.62
Charge-offs	(40.3)		(3.4)		(43.7)
Recoveries	25.1		1.7		26.8
Provision for loan losses	27.1		8.4		35.5
Balance as of end of period	$	360.0	$	38.1	$	398.1	2.66

	Six Months Ended August 31, 2022
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	377.5	$	55.5	$	433.0	2.77	%
Charge-offs	(145.6)		(18.7)		(164.3)
Recoveries	69.0		6.5		75.5
Provision for loan losses	95.2		38.1		133.3
Balance as of end of period	$	396.1	$	81.4	$	477.5	2.92	%

	Six Months Ended August 31, 2021
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	379.4	$	31.7	$	411.1	2.97	%
Charge-offs	(79.0)		(6.5)		(85.5)
Recoveries	57.3		4.1		61.4
Provision for loan losses	2.3		8.8		11.1
Balance as of end of period	$	360.0	$	38.1	$	398.1	2.66	%

(1)     Percent of total ending managed receivables.

(2)     Net of costs incurred to recover vehicle.

During the first six months of fiscal 2023, the allowance for loan losses increased $44.5 million, primarily reflecting growth in receivables. The previously disclosed expansion of our Tier 2 and Tier 3 originations within CAF's portfolio resulted in a 10 basis point increase in the allowance as a percent of total ending managed receivables during the period. While loss performance was unfavorable compared to the prior year period, the prior year performance fluctuated outside normal expectations. The allowance for loan losses as of August 31, 2022 reflects the historical loss performance experienced prior to the pandemic as well as increases for our Tier 3 expansion and growing Tier 2 portfolio.

Past Due Receivables. An account is considered delinquent when the related customer fails to make a substantial portion of a scheduled payment on or before the due date. In general, accounts are charged-off on the last business day of the month during

which the earliest of the following occurs: the receivable is 120 days or more delinquent as of the last business day of the month, the related vehicle is repossessed and liquidated, or the receivable is otherwise deemed uncollectible. For purposes of determining impairment, auto loans are evaluated collectively, as they represent a large group of smaller-balance homogeneous loans, and therefore, are not individually evaluated for impairment.

Past Due Receivables

	As of August 31, 2022
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	8,119.0	$	5,548.4	$	1,644.0	$	15,311.4	$	279.4	$	15,590.8	95.36
Delinquent loans:
31-60 days past due	20.8		199.0		173.0		392.8		48.4		441.2		2.70
61-90 days past due	9.8		100.7		113.8		224.3		34.2		258.5		1.58
Greater than 90 days past due	2.7		23.9		23.7		50.3		8.5		58.8		0.36
Total past due	33.3		323.6		310.5		667.4		91.1		758.5		4.64
Total ending managed receivables	$	8,152.3	$	5,872.0	$	1,954.5	$	15,978.8	$	370.5	$	16,349.3	100.00

	As of February 28, 2022
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	7,711.9	$	5,401.3	$	1,702.7	$	14,815.9	$	206.4	$	15,022.3	95.98
Delinquent loans:
31-60 days past due	25.4		173.3		160.4		359.1		33.0		392.1		2.50
61-90 days past due	9.2		75.6		85.2		170.0		19.1		189.1		1.21
Greater than 90 days past due	3.2		19.9		21.9		45.0		3.8		48.8		0.31
Total past due	37.8		268.8		267.5		574.1		55.9		630.0		4.02
Total ending managed receivables	$	7,749.7	$	5,670.1	$	1,970.2	$	15,390.0	$	262.3	$	15,652.3	100.00

(1)     Percent of total ending managed receivables.

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Derivative Instruments And Hedging Activities

6 Months Ended

Aug. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments And Hedging Activities

Derivative Instruments and Hedging Activities

We use derivatives to manage certain risks arising from both our business operations and economic conditions, particularly with regard to issuances of debt.  Primary exposures include LIBOR and other rates used as benchmarks in our securitizations and other debt financing.  We enter into derivative instruments to manage exposures related to the future known receipt or payment of uncertain cash amounts, the values of which are impacted by interest rates, and generally designate these derivative instruments as cash flow hedges for accounting purposes.  In certain cases, we may choose not to designate a derivative instrument as a cash flow hedge for accounting purposes due to uncertainty around the probability that future hedged transactions will occur. Our derivative instruments are used to manage (i) differences in the amount of our known or expected cash receipts and our known or expected cash payments principally related to the funding of our auto loans receivable, and (ii) exposure to variable interest rates associated with our term loans.

For the derivatives associated with our non-recourse funding vehicles that are designated as cash flow hedges, the changes in fair value are initially recorded in accumulated other comprehensive income (loss) (“AOCI”).  For the majority of these derivatives, the amounts are subsequently reclassified into CAF income in the period that the hedged forecasted transaction affects earnings, which occurs as interest expense is recognized on those future issuances of debt. During the next 12 months, we estimate that an additional $36.6 million will be reclassified from AOCI as an increase to CAF income. Changes in fair value related to derivatives that have not been designated as cash flow hedges for accounting purposes are recognized in the income statement in the period in which the change occurs. For the three and six months ended August 31, 2022, we recognized income of $9.4 million and $18.6 million, respectively, in CAF income representing these changes in fair value.

As of August 31, 2022 and February 28, 2022, we had interest rate swaps outstanding with a combined notional amount of $4.49 billion and $3.64 billion, respectively, that were designated as cash flow hedges of interest rate risk. As of August 31, 2022 and February 28, 2022, we had interest rate swaps with a combined notional amount of $1.01 billion and $578.3 million, respectively, outstanding that were not designated as cash flow hedges for accounting purposes.

See Note 7 for discussion of fair values of financial instruments and Note 13 for the effect on comprehensive income.

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Fair Value Measurements

6 Months Ended

Aug. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market or, if none exists, the most advantageous market, for the specific asset or liability at the measurement date (referred to as the “exit price”).  The fair value should be based on assumptions that market participants would use, including a consideration of nonperformance risk.

We assess the inputs used to measure fair value using the three-tier hierarchy.  The hierarchy indicates the extent to which inputs used in measuring fair value are observable in the market.

Level 1     Inputs include unadjusted quoted prices in active markets for identical assets or liabilities that we can access at the measurement date.

Level 2     Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets in active markets, quoted prices from identical or similar assets in inactive markets, observable inputs, such as interest rates and yield curves, and assumptions about risk.

Level 3     Inputs that are significant to the measurement that are not observable in the market and include management’s judgments about the assumptions market participants would use in pricing the asset or liability (including assumptions about risk).

Our fair value processes include controls that are designed to ensure that fair values are appropriate.  Such controls include model validation, review of key model inputs, analysis of period-over-period fluctuations and reviews by senior management.

Valuation Methodologies

Money Market Securities.  Money market securities are cash equivalents, which are included in cash and cash equivalents, restricted cash from collections on auto loans receivable and other assets.  They consist of highly liquid investments with original maturities of three months or less and are classified as Level 1.

Mutual Fund Investments.  Mutual fund investments consist of publicly traded mutual funds that primarily include diversified equity investments in large-, mid- and small-cap domestic and international companies or investment grade debt securities.  The investments, which are included in other assets, are held in a rabbi trust established to fund informally our executive deferred compensation plan and are classified as Level 1.

Derivative Instruments.  The fair values of our derivative instruments are included in either other current assets, other assets, accounts payable or other liabilities.  Our derivatives are not exchange-traded and are over-the-counter customized derivative instruments.  All of our derivative exposures are with highly rated bank counterparties.

We measure derivative fair values assuming that the unit of account is an individual derivative instrument and that derivatives are sold or transferred on a stand-alone basis.  We estimate the fair value of our derivatives using quotes determined by the derivative counterparties and third-party valuation services.  Quotes from third-party valuation services and quotes received from bank counterparties project future cash flows and discount the future amounts to a present value using market-based expectations for interest rates and the contractual terms of the derivative instruments.  The models do not require significant judgment and model inputs can typically be observed in a liquid market; however, because the models include inputs other than quoted prices in active markets, all derivatives are classified as Level 2.

Our derivative fair value measurements consider assumptions about counterparty and our own nonperformance risk.  We monitor counterparty and our own nonperformance risk and, in the event that we determine that a party is unlikely to perform under terms of the contract, we would adjust the derivative fair value to reflect the nonperformance risk.

Items Measured at Fair Value on a Recurring Basis

	As of August 31, 2022
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	698,000		$	—		$	698,000
Mutual fund investments	23,809			—			23,809
Derivative instruments designated as hedges	—			76,580			76,580
Derivative instruments not designated as hedges	—			27,946			27,946
Total assets at fair value	$	721,809		$	104,526		$	826,335
Percent of total assets at fair value	87.4		%	12.6		%	100.0		%
Percent of total assets	2.7		%	0.4		%	3.1		%
Liabilities:
Total liabilities at fair value	$	—		$	—		$	—
Percent of total liabilities	—		%	—		%	—		%

	As of February 28, 2022
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	701,865		$	—		$	701,865
Mutual fund investments	24,022			—			24,022
Derivative instruments designated as hedges	—			39,452			39,452
Derivative instruments not designated as hedges	—			9,339			9,339
Total assets at fair value	$	725,887		$	48,791		$	774,678
Percent of total assets at fair value	93.7		%	6.3		%	100.0		%
Percent of total assets	2.8		%	0.2		%	2.9		%
Liabilities:
Derivative instruments designated as hedges	$	—		$	(1,379)		$	(1,379)
Total liabilities at fair value	$	—		$	(1,379)		$	(1,379)
Percent of total liabilities	—		%	—		%	—		%

Fair Value of Financial Instruments

The carrying value of our cash and cash equivalents, accounts receivable, other restricted cash deposits and accounts payable approximates fair value due to the short-term nature and/or variable rates associated with these financial instruments. Auto loans receivable are presented net of an allowance for estimated loan losses, which we believe approximates fair value. We believe that the carrying value of our revolving credit facility and term loans approximates fair value due to the variable rates associated with these obligations. The fair value of our senior unsecured notes, which are not carried at fair value on our consolidated balance sheets, was determined using Level 2 inputs based on quoted market prices. The carrying value and fair value of the senior unsecured notes as of August 31, 2022 and February 28, 2022, respectively, are as follows:

(In thousands)	As of August 31, 2022		As of February 28, 2022
Carrying value	$	500,000	$	500,000
Fair value	$	479,642	$	517,396

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Cancellation Reserves

6 Months Ended

Aug. 31, 2022

Cancellation Reserves [Abstract]

Cancellation Reserves

Cancellation Reserves

We recognize revenue for EPP products, on a net basis, at the time of sale. We also record a reserve, or refund liability, for estimated contract cancellations.  Cancellations of these services may result from early termination by the customer, or default or prepayment on the finance contract.  The reserve for cancellations is evaluated for each product and is based on forecasted forward cancellation curves utilizing historical experience, recent trends and credit mix of the customer base. 

Cancellation Reserves

	Three Months Ended August 31				Six Months Ended August 31
(In millions)	2022		2021		2022		2021
Balance as of beginning of period	$	148.7	$	138.4	$	144.7	$	124.5
Cancellations	(27.4)		(22.9)		(55.1)		(43.1)
Provision for future cancellations	27.5		28.8		59.2		62.9
Balance as of end of period	$	148.8	$	144.3	$	148.8	$	144.3

The current portion of estimated cancellation reserves is recognized as a component of accrued expenses and other current liabilities with the remaining amount recognized in other liabilities. As of August 31, 2022 and February 28, 2022, the current portion of cancellation reserves was $82.1 million and $78.7 million, respectively.

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Income Taxes

6 Months Ended

Aug. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

We had $26.3 million of gross unrecognized tax benefits as of August 31, 2022, and $24.8 million as of February 28, 2022.  There were no significant changes to the gross unrecognized tax benefits as reported for the fiscal year ended February 28, 2022.

On August 16, 2022, federal legislation commonly referred to as the Inflation Reduction Act of 2022 (“IRA”), was enacted. We have evaluated the tax provisions of the IRA, the most significant of which are the corporate alternative minimum tax and the share repurchase tax. We do not expect the legislation to have a material impact on our results of operations. As the IRS issues additional guidance related to the IRA, we will evaluate any impact to our consolidated financial statements.

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Debt

3 Months Ended

Aug. 31, 2022

Debt Disclosure [Abstract]

Debt

10. Debt

(In thousands)		As of August 31		As of February 28
Debt Description (1)	Maturity Date	2022		2022
Revolving credit facility (2)	June 2024	$	605,450	$	1,243,500
Term loan (2)	June 2024	300,000		300,000
Term loan (2)	October 2026	699,422		699,352
3.86% Senior notes	April 2023	100,000		100,000
4.17% Senior notes	April 2026	200,000		200,000
4.27% Senior notes	April 2028	200,000		200,000
Financing obligations	Various dates through February 2059	520,005		524,766
Non-recourse notes payable	Various dates through February 2029	16,121,244		15,466,799
Total debt		18,746,121		18,734,417
Less: current portion		(672,296)		(532,272)
Less: unamortized debt issuance costs		(27,607)		(27,126)
Long-term debt, net		$	18,046,218	$	18,175,019

 (1)    Interest is payable monthly, with the exception of our senior notes, which are payable semi-annually.

 (2)    Borrowings accrue interest at variable rates based on the Eurodollar rate (LIBOR), or the successor benchmark rate, the federal funds rate, or the prime rate, depending on the type of borrowing.

Revolving Credit Facility. Borrowings under our $2.00 billion unsecured revolving credit facility (the “credit facility”) are available for working capital and general corporate purposes.  We pay a commitment fee on the unused portions of the available funds. Borrowings under the credit facility are either due “on demand” or at maturity depending on the type of

borrowing.  Borrowings with “on demand” repayment terms are presented as short-term debt, while amounts due at maturity are presented as long-term debt.  As of August 31, 2022, the unused capacity of $1.39 billion was fully available to us.

Term Loans. Borrowings under our $300 million and $700 million term loans are available for working capital and general corporate purposes. The interest rate on our term loans was 3.27% as of August 31, 2022, and the loans were classified as long-term debt as no repayments are scheduled to be made within the next 12 months.

Senior Notes. Borrowings under our unsecured senior notes totaling $500 million are available for working capital and general corporate purposes. The 3.86% senior note matures in April 2023 and is therefore classified as current. The remaining notes were classified as long-term debt as no repayments are scheduled to be made within the next 12 months.

Financing Obligations.  Financing obligations relate to stores subject to sale-leaseback transactions that do not qualify for sale accounting.  The financing obligations were structured at varying interest rates and generally have initial lease terms ranging from 15 to 20 years with payments made monthly.  We have not entered into any new sale-leaseback transactions since fiscal 2009. In the event the agreements are modified or extended beyond their original term, the related obligation is adjusted based on the present value of the revised future payments, with a corresponding change to the assets subject to these transactions. Upon modification, the amortization of the obligation is reset, resulting in more of the payments being applied to interest expense in the initial years following the modification.

Non-Recourse Notes Payable.  The non-recourse notes payable relate to auto loans receivable funded through non-recourse funding vehicles.  The timing of principal payments on the non-recourse notes payable is based on the timing of principal collections and defaults on the related auto loans receivable. The current portion of non-recourse notes payable represents principal payments that are due to be distributed in the following period.

Notes payable related to our asset-backed term funding transactions accrue interest predominantly at fixed rates and have scheduled maturities through February 2029, but may mature earlier, depending upon the repayment rate of the underlying auto loans receivable. 

Information on our funding vehicles of non-recourse notes payable as of August 31, 2022 are as follows:

(In billions)	Capacity
Warehouse facilities:
December 2022 expiration	$	0.25
February 2023 expiration	2.85
August 2023 expiration	2.30
Combined warehouse facility limit	$	5.40
Unused capacity	$	2.40
Non-recourse notes payable outstanding:
Warehouse facilities	$	3.00
Asset-backed term funding transactions	13.12
Non-recourse notes payable	$	16.12

We generally enter into warehouse facility agreements for one-year terms and typically renew the agreements annually. The return requirements of warehouse facility investors could fluctuate significantly depending on market conditions.  At renewal, the cost, structure and capacity of the facilities could change.  These changes could have a significant impact on our funding costs.

See Note 5 for additional information on the related auto loans receivable.

Capitalized Interest.  We capitalize interest in connection with the construction of certain facilities.  For the six months ended August 31, 2022 and 2021, we capitalized interest of $2.1 million and $3.5 million, respectively.

Financial Covenants.  The credit facility, term loans and senior note agreements contain representations and warranties, conditions and covenants.  We must also meet financial covenants in conjunction with certain financing obligations.  The agreements governing our non-recourse funding vehicles contain representations and warranties, financial covenants and

performance triggers.  As of August 31, 2022, we were in compliance with all financial covenants and our non-recourse funding vehicles were in compliance with the related performance triggers.

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Stock and Stock-Based Incentive Plans

6 Months Ended

Aug. 31, 2022

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Stock and Stock-Based Incentive Plans

Stock and Stock-Based Incentive Plans

(A)Share Repurchase Program

In April 2022, our board of directors (“board”) increased our share repurchase authorization by $2.0 billion. As of August 31, 2022, a total of $4.0 billion of board authorizations for repurchases of our common stock was outstanding, with no expiration date, of which $2.45 billion remained available for repurchase.

Common Stock Repurchases

	Three Months Ended				Six Months Ended
	August 31				August 31
	2022		2021		2022		2021
Number of shares repurchased (in thousands)	1,729.6		1,754.1		3,373.9		2,751.7
Average cost per share	$	94.24	$	125.44	$	95.01	$	125.22
Available for repurchase, as of end of period (in millions)	$	2,453.9	$	991.5	$	2,453.9	$	991.5

(B)Share-Based Compensation

Composition of Share-Based Compensation Expense

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands)	2022		2021		2022		2021
Cost of sales	$	901	$	2,094	$	1,141	$	3,823
CarMax Auto Finance income	(295)		1,481		413		3,189
Selling, general and administrative expenses	24,534		28,705		46,770		67,125
Share-based compensation expense, before income taxes	$	25,140	$	32,280	$	48,324	$	74,137

Composition of Share-Based Compensation Expense – By Grant Type

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands)	2022		2021		2022		2021
Nonqualified stock options	$	9,468	$	7,708	$	20,680	$	19,529
Cash-settled restricted stock units (RSUs)	9,505		17,590		10,354		38,562
Stock-settled market stock units (MSUs)	3,529		3,244		8,876		8,089
Other share-based incentives:
Stock-settled performance stock units (PSUs)	250		976		4,941		4,370
Restricted stock (RSAs)	(35)		263		309		305
Stock-settled deferred stock units (DSUs)	1,850		1,925		1,850		1,925
Employee stock purchase plan	573		574		1,314		1,357
Total other share-based incentives	$	2,638	$	3,738	$	8,414	$	7,957
Share-based compensation expense, before income taxes	$	25,140	$	32,280	$	48,324	$	74,137

(C)Stock Incentive Plan Information

Share/Unit Activity

	Six Months Ended August 31, 2022
	Equity Classified						Liability Classified
(Shares/units in thousands)	Options		MSUs		Other		RSUs
Outstanding as of February 28, 2022	5,796		393		170		1,163
Granted	1,282		136		50		677
Exercised or vested and converted	(204)		(120)		(80)		(740)
Cancelled	(44)		(5)		(5)		(46)
Outstanding as of August 31, 2022	6,830		404		135		1,054
Weighted average grant date fair value per share/unit:
Granted	$	33.26	$	126.73	$	95.58	$	91.20
Ending outstanding	$	25.69	$	120.95	$	99.04	$	97.36
	As of August 31, 2022
Unrecognized compensation (in millions)	$	68.0	$	21.5	$	3.5

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Net Earnings Per Share

6 Months Ended

Aug. 31, 2022

Earnings Per Share [Abstract]

Net Earnings Per Share

Net Earnings Per Share

Basic net earnings per share is computed by dividing net earnings available for basic common shares by the weighted average number of shares of common stock outstanding.  Diluted net earnings per share is computed by dividing net earnings available for diluted common shares by the sum of weighted average number of shares of common stock outstanding and dilutive potential common stock.  Diluted net earnings per share is calculated using the “if-converted” treasury stock method.

Basic and Dilutive Net Earnings Per Share Reconciliations

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands except per share data)	2022		2021		2022		2021
Net earnings	$	125,905	$	285,267	$	378,170	$	722,023
Weighted average common shares outstanding	158,801		162,966		159,556		163,058
Dilutive potential common shares:
Stock options	1,125		2,271		1,151		2,400
Stock-settled stock units and awards	292		406		308		511
Weighted average common shares and dilutive potential common shares	160,218		165,643		161,015		165,969
Basic net earnings per share	$	0.79	$	1.75	$	2.37	$	4.43
Diluted net earnings per share	$	0.79	$	1.72	$	2.35	$	4.35

Certain options to purchase shares of common stock were outstanding and not included in the calculation of diluted net earnings per share because their inclusion would have been antidilutive.  On a weighted average basis, for the three months ended August 31, 2022 and 2021, options to purchase 2,098,895 shares and 912,093 shares of common stock, respectively, were not included. For the six months ended August 31, 2022 and 2021, options to purchase 1,767,906 shares and 600,617 shares of common stock, respectively, were not included.

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Aug. 31, 2022

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Income (Loss)

Changes in Accumulated Other Comprehensive Income (Loss) By Component

					Total
	Net		Net		Accumulated
	Unrecognized		Unrecognized		Other
	Actuarial		Hedge		Comprehensive
(In thousands, net of income taxes)	Losses		Gains		Income (Loss)
Balance as of February 28, 2022	$	(73,001)	$	26,579	$	(46,422)
Other comprehensive income before reclassifications	—		81,908		81,908
Amounts reclassified from accumulated other comprehensive income (loss)	962		(4,449)		(3,487)
Other comprehensive income	962		77,459		78,421
Balance as of August 31, 2022	$	(72,039)	$	104,038	$	31,999

Changes In and Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

	Three Months Ended August 31				Six Months Ended August 31
(In thousands)	2022		2021		2022		2021
Retirement Benefit Plans:
Actuarial loss amortization reclassifications recognized in net pension expense:
Cost of sales	$	273	$	359	$	538	$	716
CarMax Auto Finance income	16		21		32		43
Selling, general and administrative expenses	347		488		702		977
Total amortization reclassifications recognized in net pension expense	636		868		1,272		1,736
Tax expense	(155)		(210)		(310)		(419)
Amortization reclassifications recognized in net pension expense, net of tax	481		658		962		1,317
Net change in retirement benefit plan unrecognized actuarial losses, net of tax	481		658		962		1,317
Cash Flow Hedges (Note 6):
Changes in fair value	40,168		(665)		110,210		(2,671)
Tax (expense) benefit	(10,315)		175		(28,302)		703
Changes in fair value, net of tax	29,853		(490)		81,908		(1,968)
Reclassifications to CarMax Auto Finance income	(5,687)		4,401		(5,986)		9,499
Tax benefit (expense)	1,460		(1,158)		1,537		(2,500)
Reclassification of hedge (losses) gains, net of tax	(4,227)		3,243		(4,449)		6,999
Net change in cash flow hedge unrecognized gains, net of tax	25,626		2,753		77,459		5,031
Total other comprehensive income, net of tax	$	26,107	$	3,411	$	78,421	$	6,348

Changes in the funded status of our retirement plans and changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in accumulated other comprehensive income (loss).  The cumulative balances are net of deferred taxes of $12.9 million as of August 31, 2022 and $14.2 million as of February 28, 2022.

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Leases (Notes)

6 Months Ended

Aug. 31, 2022

Leases [Abstract]

Leases of Lessee Disclosure [Text Block]

Leases

Our leases primarily consist of operating and finance leases related to retail stores, office space, land and equipment. We also have stores subject to sale-leaseback transactions that do not qualify for sale accounting and are accounted for as financing obligations. For more information on these financing obligations see Note 10.

The initial term for real property leases is typically 5 to 20 years. For equipment leases, the initial term generally ranges from 3 to 8 years. Most leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 20 years or more. We include options to renew (or terminate) in our lease term, and as part of our right-of-use (“ROU”) assets and lease liabilities, when it is reasonably certain that we will exercise that option.

ROU assets and the related lease liabilities are initially measured at the present value of future lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our collateralized incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. We include variable lease payments in the initial measurement of ROU assets and lease liabilities only to the extent they depend on an index or rate. Changes in such indices or rates are accounted for in the period the change occurs, and do not result in the remeasurement of the ROU asset or liability. We are also responsible for payment of certain real estate taxes, insurance and other expenses on our leases. These amounts are generally considered to be variable and are not included in the measurement of the ROU asset and lease liability. We generally account for non-lease components, such as maintenance, separately from lease components. For certain equipment leases, we apply a portfolio approach to account for the lease assets and liabilities.

Our lease agreements do not contain any material residual value guarantees or material restricted covenants. Leases with a term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

The components of lease expense were as follows:

	Three Months Ended August 31				Six Months Ended August 31
(In thousands)	2022		2021		2022		2021
Operating lease cost (1)	$	22,911	$	18,698	$	45,931	$	33,050
Finance lease cost:
Depreciation of lease assets	4,017		3,258		7,523		6,400
Interest on lease liabilities	5,467		4,167		10,401		8,274
Total finance lease cost	9,484		7,425		17,924		14,674
Total lease cost	$	32,395	$	26,123	$	63,855	$	47,724

(1) Includes short-term leases and variable lease costs, which are immaterial.

Supplemental balance sheet information related to leases was as follows:

		As of August 31		As of February 28
(In thousands)	Classification	2022		2022
Assets:
Operating lease assets	Operating lease assets	$	530,285	$	537,357
Finance lease assets	Property and equipment, net (1)	142,232		127,183
Total lease assets		$	672,517	$	664,540
Liabilities:
Current:
Operating leases	Current portion of operating lease liabilities	$	48,783	$	44,197
Finance leases	Accrued expenses and other current liabilities	17,007		10,290
Long-term:
Operating leases	Operating lease liabilities, excluding current portion	512,542		523,269
Finance leases	Other liabilities	157,320		145,179
Total lease liabilities		$	735,652	$	722,935

(1)    Finance lease assets are recorded net of accumulated depreciation of $38.2 million as of August 31, 2022 and $30.7 million as of February 28, 2022.

Lease term and discount rate information related to leases was as follows:

	As of August 31		As of February 28
Lease Term and Discount Rate	2022		2022
Weighted Average Remaining Lease Term (in years)
Operating leases	16.91		17.31
Finance leases	11.36		12.42
Weighted Average Discount Rate
Operating leases	4.81	%	4.80	%
Finance leases	19.80	%	14.35	%

Supplemental cash flow information related to leases was as follows:

	Six Months Ended August 31
(In thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	44,725	$	31,656
Operating cash flows from finance leases	$	4,508	$	5,383
Financing cash flows from finance leases	$	9,883	$	5,709
Lease assets obtained in exchange for lease obligations:
Operating leases	$	16,837	$	44,059
Finance leases	$	22,572	$	12,404

Maturities of lease liabilities were as follows:

	As of August 31, 2022
(In thousands)	Operating Leases (1)		Finance Leases (1)
Fiscal 2023, remaining	$	37,495	$	16,682
Fiscal 2024	73,538		39,188
Fiscal 2025	71,693		36,222
Fiscal 2026	66,355		37,330
Fiscal 2027	60,313		33,211
Thereafter	575,478		214,012
Total lease payments	884,872		376,645
Less: interest	(323,547)		(202,318)
Present value of lease liabilities	$	561,325	$	174,327

(1)    Lease payments exclude $30.5 million of legally binding minimum lease payments for leases signed but not yet commenced.

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Contingent Liabilities

6 Months Ended

Aug. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Contingent Liabilities

Contingent Liabilities

Litigation.  CarMax entities are defendants in two proceedings asserting wage and hour claims with respect to non-exempt CarMax employees in California. The asserted claims include failure to provide meal periods and rest breaks; pay statutory or contractual wages; reimburse for work-related expenses; and Private Attorneys General Act (“PAGA”) claims. On July 9, 2021, Daniel Bendure v. CarMax Auto Superstores California, LLC et al., a putative class action, was filed in the Superior Court of California, County of San Bernardino. The Bendure lawsuit seeks civil penalties for violation of the Labor Code, attorneys’ fees, costs, restitution of unpaid wages, interest, injunctive and equitable relief, general damages, and special damages. Bendure subsequently decided not to proceed with an individual or putative class claim, but rather filed and served a PAGA-only complaint in the Superior Court of California for the County of San Bernardino on December 7, 2021, based on the same allegations pled in the original complaint. CarMax filed a motion to compel arbitration. The Court has stayed all discovery until after it rules on CarMax’s motion to compel arbitration. On August 12, 2021, Jordon Miller v. CarMax Auto Superstores California, LLC et al., a putative class action, was filed in the Superior Court of California, County of Riverside. The Miller lawsuit also seeks civil penalties for violation of the Labor Code, attorneys’ fees, costs, restitution of unpaid wages, interest, injunctive and equitable relief, general damages, and special damages.

On June 15, 2022, the United States Supreme Court issued its decision in Viking River Cruises v. Moriana, holding that an individual who signs an arbitration agreement cannot circumvent that agreement by filing a related PAGA claim in court. The U.S. Supreme Court further held that, based on California law, an individual who pursues his PAGA claim in arbitration does not have standing to pursue a representative PAGA claim. However, the U.S. Supreme Court indicated that the issue of whether an individual has standing to pursue a representative PAGA claim is a question of state law. The California Supreme Court has agreed to hear a new case, Adolph v. Uber, to address this issue of state law, which is expected to be decided in 2023.

In light of the Viking River decision, CarMax has filed a motion to compel arbitration of the individual Bendure claim and to dismiss Bendure’s representative PAGA claims. The Court is scheduled to hear this motion on November 17, 2022. CarMax also intends to move to compel arbitration of the Miller individual PAGA claims noted above and will seek to dismiss any representative PAGA claims.

We are unable to make a reasonable estimate of the amount or range of loss that could result from an unfavorable outcome in these matters.

We are involved in various other legal proceedings in the normal course of business. Based upon our evaluation of information currently available, we believe that the ultimate resolution of any such proceedings will not have a material adverse effect, either individually or in the aggregate, on our financial condition, results of operations or cash flows.

Other Matters.  In accordance with the terms of real estate lease agreements, we generally agree to indemnify the lessor from certain liabilities arising as a result of the use of the leased premises, including environmental liabilities and repairs to leased property upon termination of the lease.  Additionally, in accordance with the terms of agreements entered into for the sale of properties, we generally agree to indemnify the buyer from certain liabilities and costs arising subsequent to the date of the sale, including environmental liabilities and liabilities resulting from the breach of representations or warranties made in accordance with the agreements.  We do not have any known material environmental commitments, contingencies or other indemnification issues arising from these arrangements.

As part of our customer service strategy, we guarantee the used vehicles we retail with a 90-day/4,000 mile limited warranty.  A vehicle in need of repair within this period will be repaired free of charge.  As a result, each vehicle sold has an implied liability associated with it.  Accordingly, based on historical trends, we record a provision for estimated future repairs during the guarantee period for each vehicle sold.  The liability for this guarantee was $26.3 million as of August 31, 2022, and $18.5 million as of February 28, 2022, and is included in accrued expenses and other current liabilities.

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Segment Reporting

6 Months Ended

Aug. 31, 2022

Segment Reporting [Abstract]

Segment Reporting Disclosure

Segment Information

We operate in two reportable segments: CarMax Sales Operations and CAF. Our CarMax Sales Operations segment consists of all aspects of our auto merchandising and service operations, excluding financing provided by CAF. Our CAF segment consists solely of our own finance operation that provides financing to customers buying retail vehicles from CarMax.

We also have a non-reportable operating segment related to our recently acquired Edmunds business, which is reflected as “Other” in the segment tables below. Revenue generated by Edmunds primarily represents advertising and subscription revenues as discussed in Note 3. Edmunds also generates intersegment revenue as a result of transactions between Edmunds and CarMax Sales Operations, which represent arm’s length transactions at prevailing market prices. Such amounts are eliminated in consolidation.

The performance of our CarMax Sales Operations segment is reviewed by our chief operating decision maker at the gross profit level, the components of which are presented in the tables below. Required segment information related to our CAF segment is presented in Note 4. Additionally, asset information by segment is not utilized for purposes of assessing performance or allocating resources and, as a result, such information has not been presented.

Segment Information

	Three Months Ended August 31, 2022
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	8,110,524	$	34,279	$	—	$	8,144,803
Intersegment sales and operating revenues	—		6,929		(6,929)		—
Total sales and operating revenues	$	8,110,524	$	41,208	$	(6,929)	$	8,144,803
Depreciation and amortization (1)	$	376	$	3,389	$	—	$	3,765
Gross profit	$	712,284	$	26,362	$	(1,501)	$	737,145
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							182,869
Selling, general and administrative expenses							(666,041)
Depreciation and amortization (2)							(57,692)
Interest expense							(32,745)
Other income (expense)							4,039
Earnings before income taxes							$	167,575

	Six Months Ended August 31, 2022
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	17,387,760	$	68,664	$	—	$	17,456,424
Intersegment sales and operating revenues	—		14,670		(14,670)		—
Total sales and operating revenues	$	17,387,760	$	83,334	$	(14,670)	$	17,456,424
Depreciation and amortization (1)	$	688	$	6,463	$	—	$	7,151
Gross profit	$	1,561,573	$	54,090	$	(3,127)	$	1,612,536
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							387,342
Selling, general and administrative expenses							(1,322,781)
Depreciation and amortization (2)							(113,340)
Interest expense							(61,520)
Other income (expense)							1,940
Earnings before income taxes							$	504,177

(1)    Represents only the portion of depreciation and amortization recorded within Cost of sales, and thus included in the calculation of Gross profit.

(2)    Exclusive of depreciation and amortization recorded within Cost of sales.

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Background Basis of Accounting (Policies)

6 Months Ended

Aug. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Background

Business. CarMax, Inc. (“we,” “our,” “us,” “CarMax” and “the company”), including its wholly owned subsidiaries, is the nation’s largest retailer of used vehicles.  We operate in two reportable segments:  CarMax Sales Operations and CarMax Auto Finance (“CAF”).  Our CarMax Sales Operations segment consists of all aspects of our auto merchandising and service operations, excluding financing provided by CAF.  Our CAF segment consists solely of our own finance operation that provides financing to customers buying retail vehicles from CarMax. On June 1, 2021, we completed the acquisition of Edmunds Holding Company (“Edmunds”), which does not meet the quantitative thresholds to be considered a reportable segment. See Note 17 for additional information on our reportable segments and Note 2 for additional information regarding our acquisition of Edmunds.

We deliver an unrivaled customer experience by offering a broad selection of quality used vehicles and related products and services at competitive, no-haggle prices using a customer-friendly sales process.  Our omni-channel platform, which gives us the largest addressable market in the used car industry, empowers our retail customers to buy a car on their terms – online, in-store or an integrated combination of both. Customers can choose to complete the car-buying experience in-person at one of our stores; or buy the car online and receive delivery through express pickup, available nationwide, or home delivery, available to most customers. We offer customers a range of related products and services, including the appraisal and purchase of vehicles directly from consumers; the financing of retail vehicle purchases through CAF and third-party finance providers; the sale of extended protection plan (“EPP”) products, which include extended service plans (“ESPs”) and guaranteed asset protection (“GAP”); and vehicle repair service.  Vehicles purchased through the appraisal process that do not meet our retail standards are sold to licensed dealers through on-site or virtual wholesale auctions.

Basis of Presentation

Basis of Presentation and Use of Estimates. The accompanying interim unaudited consolidated financial statements include the accounts of CarMax and our wholly owned subsidiaries.  All significant intercompany balances and transactions have been eliminated in consolidation.  These interim unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  In the opinion of management, such interim consolidated financial statements reflect all normal recurring adjustments considered necessary to present fairly the financial position and the results of operations and cash flows for the interim periods presented.  The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year.  

The accounting policies followed in the presentation of our interim financial results are consistent with those included in the company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2022 (the “2022 Annual Report”), with the exception of those related to recent accounting pronouncements adopted in the current fiscal year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in our 2022 Annual Report.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities.  Actual results could differ from those estimates.  In particular, the novel coronavirus (“COVID-19”) pandemic and the resulting adverse impacts to global economic conditions, as well as our operations, may impact future estimates including, but not limited to, our allowance for loan losses, inventory valuations, fair value measurements, downward adjustments to investments in equity securities, asset impairment charges, the effectiveness of the company’s hedging instruments, deferred tax valuation allowances, cancellation reserves, actuarial losses on our retirement benefit plans and discount rate assumptions. Certain prior year amounts have been reclassified to conform to the current year’s presentation.  Amounts and percentages may not total due to rounding.

Recent Accounting Pronouncements

Effective in Future Periods

In June 2022, the Financial Accounting Standards Board (“FASB”) issued an accounting pronouncement (ASU 2022-03) related to accounting for equity securities. The amendments in the update clarify the guidance for measuring the fair value of equity securities subject to contractual restrictions that prohibit the sale of the equity securities, as well as introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. This update is effective for annual periods beginning after December 15, 2023, and interim periods within those fiscal years. We plan to adopt this pronouncement for our fiscal year beginning March 1, 2024, and we do not expect it to have a material effect on our consolidated financial statements.

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Business Combinations and Asset Acquisitions (Tables)

Jun. 01, 2021

Business Combination and Asset Acquisition [Abstract]

Schedule of purchase consideration

(In thousands)
Total cash consideration for outstanding shares	$	251,047
Fair value of common stock (1)	90,571
Fair value of preexisting relationship	60,200
Total	$	401,818

(1)     Represents the issuance of 776,097 shares of CarMax common stock to Edmunds equity holders, the fair value of which was based on the market value of CarMax common stock as of market close on the acquisition date (June 1, 2021).

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

(In thousands)	Fair Value
Cash	$	9,484
Accounts receivable, net	33,719
Other current assets	2,397
Property and equipment, net	20,741
Goodwill (1)	141,258
Intangible assets	218,000
Operating lease assets	97,250
Other assets	191
Total assets acquired	523,040
Accounts payable	5,063
Accrued expenses and other current liabilities	11,277
Current portion of operating lease liabilities	12,795
Deferred income taxes (1)	3,823
Operating lease liabilities, excluding current portion	88,264
Total liabilities assumed	121,222
Net assets acquired	$	401,818

(1)     During the third quarter of fiscal 2022, we obtained new information about facts and circumstances that existed as of the acquisition date, which resulted in a change in the fair value of assets and liabilities recognized. The adjustments were primarily related to research and development tax credits, which resulted in a decrease in goodwill and a decrease in deferred income taxes of $8.4 million.

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination

(In thousands)	Useful Life (Years)	Fair Value
Trade name	Indefinite	$	31,900
Internally developed software	7	52,900
Customer relationships	17	133,200
Identifiable intangible assets		$	218,000

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Revenue (Tables)

6 Months Ended

Aug. 31, 2022

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

Disaggregation of Revenue

	Three Months Ended August 31				Six Months Ended August 31
(In millions)	2022		2021		2022		2021
Used vehicle sales	$	6,284.1	$	6,104.4	$	13,298.6	$	12,261.7
Wholesale vehicle sales	1,690.3		1,701.6		3,806.8		3,075.9
Other sales and revenues:
Extended protection plan revenues	109.8		113.0		226.3		247.3
Third-party finance income, net	2.7		2.8		6.1		(1.8)
Advertising & subscription revenues (1)	34.3		34.5		68.7		34.5
Service revenues	19.4		21.0		41.2		43.2
Other	4.2		11.1		8.7		25.1
Total other sales and revenues	170.4		182.4		351.0		348.3
Total net sales and operating revenues	$	8,144.8	$	7,988.4	$	17,456.4	$	15,686.0

(1)     Excludes intersegment sales and operating revenues that have been eliminated in consolidation. See Note 17 for further details.

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CarMax Auto Finance (Tables)

6 Months Ended

Aug. 31, 2022

CarMax Auto Finance Income [Abstract]

Components Of CarMax Auto Finance Income

Components of CAF Income

	Three Months Ended August 31						Six Months Ended August 31
(In millions)	2022		% (1)	2021		% (1)	2022		% (1)	2021		% (1)
Interest margin:
Interest and fee income	$	357.2	8.8	$	324.1	8.8	$	703.9	8.8	$	634.4	8.8
Interest expense	(62.5)		(1.5)	(60.6)		(1.7)	(111.3)		(1.4)	(126.4)		(1.8)
Total interest margin	294.7		7.3	263.5		7.2	592.6		7.4	508.0		7.0
Provision for loan losses	(75.5)		(1.9)	(35.5)		(1.0)	(133.3)		(1.7)	(11.1)		(0.2)
Total interest margin after provision for loan losses	219.2		5.4	228.0		6.2	459.3		5.7	496.9		6.9
Direct expenses:
Payroll and fringe benefit expense	(15.9)		(0.4)	(12.4)		(0.3)	(30.6)		(0.4)	(25.0)		(0.3)
Depreciation and amortization	(3.8)		(0.1)	(0.2)		—	(7.6)		(0.1)	(0.4)		—
Other direct expenses	(16.6)		(0.4)	(15.3)		(0.4)	(33.7)		(0.4)	(29.7)		(0.4)
Total direct expenses	(36.3)		(0.9)	(27.9)		(0.8)	(71.9)		(0.9)	(55.1)		(0.8)
CarMax Auto Finance income	$	182.9	4.5	$	200.0	5.4	$	387.3	4.8	$	441.8	6.1
Total average managed receivables	$	16,176.2		$	14,683.3		$	15,996.6		$	14,416.0

(1)     Annualized percentage of total average managed receivables.

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Auto Loan Receivables (Tables)

6 Months Ended

Aug. 31, 2022

Receivables [Abstract]

Auto Loan Receivables, Net

Auto Loans Receivable, Net

	As of August 31		As of February 28
(In millions)	2022		2022
Asset-backed term funding	$	12,563.5	$	11,653.8
Warehouse facilities	2,997.9		3,291.9
Overcollateralization (1)	629.0		489.1
Other managed receivables (2)	158.9		217.5
Total ending managed receivables	16,349.3		15,652.3
Accrued interest and fees	81.7		67.3
Other	7.7		3.1
Less: allowance for loan losses	(477.5)		(433.0)
Auto loans receivable, net	$	15,961.2	$	15,289.7

(1)     Represents receivables restricted as excess collateral for the non-recourse funding vehicles.

(2)     Other managed receivables includes receivables not funded through the non-recourse funding vehicles.

Ending Managed Receivables By Major Credit Grade

Ending Managed Receivables by Major Credit Grade

	As of August 31, 2022
	Fiscal Year of Origination (1)
(In millions)	2023		2022		2021		2020		2019		Prior to 2019		Total		% (2)
Core managed receivables (3):
A	$	2,242.3	$	3,097.9	$	1,405.5	$	934.1	$	369.8	$	102.7	$	8,152.3	49.8
B	1,533.9		2,227.8		1,010.7		645.1		326.3		128.2		5,872.0		35.9
C and other	439.1		739.7		390.2		222.0		109.3		54.2		1,954.5		12.0
Total core managed receivables	4,215.3		6,065.4		2,806.4		1,801.2		805.4		285.1		15,978.8		97.7
Other managed receivables (4):
C and other	155.0		143.2		18.9		26.8		17.9		8.7		370.5		2.3
Total ending managed receivables	$	4,370.3	$	6,208.6	$	2,825.3	$	1,828.0	$	823.3	$	293.8	$	16,349.3	100.0

	As of February 28, 2022
	Fiscal Year of Origination (1)
(In millions)	2022		2021		2020		2019		2018		Prior to 2018		Total		% (2)
Core managed receivables (3):
A	$	3,885.5	$	1,788.3	$	1,266.1	$	574.1	$	203.4	$	32.3	$	7,749.7	49.5
B	2,795.2		1,288.5		857.7		473.1		205.2		50.4		5,670.1		36.2
C and other	919.1		496.2		294.8		156.7		73.8		29.6		1,970.2		12.6
Total core managed receivables	7,599.8		3,573.0		2,418.6		1,203.9		482.4		112.3		15,390.0		98.3
Other managed receivables (4):
C and other	165.2		23.9		34.7		23.8		10.0		4.7		262.3		1.7
Total ending managed receivables	$	7,765.0	$	3,596.9	$	2,453.3	$	1,227.7	$	492.4	$	117.0	$	15,652.3	100.0

(1)     Classified based on credit grade assigned when customers were initially approved for financing.

(2)     Percent of total ending managed receivables.

(3)     Represents CAF's Tier 1 originations.

(4)     Represents CAF's Tier 2 and Tier 3 originations.

Allowance For Loan Losses

Allowance for Loan Losses

	Three Months Ended August 31, 2022
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	390.4	$	67.8	$	458.2	2.85
Charge-offs	(84.2)		(11.9)		(96.1)
Recoveries	35.9		4.0		39.9
Provision for loan losses	54.0		21.5		75.5
Balance as of end of period	$	396.1	$	81.4	$	477.5	2.92

	Three Months Ended August 31, 2021
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	348.1	$	31.4	$	379.5	2.62
Charge-offs	(40.3)		(3.4)		(43.7)
Recoveries	25.1		1.7		26.8
Provision for loan losses	27.1		8.4		35.5
Balance as of end of period	$	360.0	$	38.1	$	398.1	2.66

	Six Months Ended August 31, 2022
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	377.5	$	55.5	$	433.0	2.77	%
Charge-offs	(145.6)		(18.7)		(164.3)
Recoveries	69.0		6.5		75.5
Provision for loan losses	95.2		38.1		133.3
Balance as of end of period	$	396.1	$	81.4	$	477.5	2.92	%

	Six Months Ended August 31, 2021
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	379.4	$	31.7	$	411.1	2.97	%
Charge-offs	(79.0)		(6.5)		(85.5)
Recoveries	57.3		4.1		61.4
Provision for loan losses	2.3		8.8		11.1
Balance as of end of period	$	360.0	$	38.1	$	398.1	2.66	%

(1)     Percent of total ending managed receivables.

(2)     Net of costs incurred to recover vehicle.

Past Due Receivables

Past Due Receivables

	As of August 31, 2022
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	8,119.0	$	5,548.4	$	1,644.0	$	15,311.4	$	279.4	$	15,590.8	95.36
Delinquent loans:
31-60 days past due	20.8		199.0		173.0		392.8		48.4		441.2		2.70
61-90 days past due	9.8		100.7		113.8		224.3		34.2		258.5		1.58
Greater than 90 days past due	2.7		23.9		23.7		50.3		8.5		58.8		0.36
Total past due	33.3		323.6		310.5		667.4		91.1		758.5		4.64
Total ending managed receivables	$	8,152.3	$	5,872.0	$	1,954.5	$	15,978.8	$	370.5	$	16,349.3	100.00

	As of February 28, 2022
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	7,711.9	$	5,401.3	$	1,702.7	$	14,815.9	$	206.4	$	15,022.3	95.98
Delinquent loans:
31-60 days past due	25.4		173.3		160.4		359.1		33.0		392.1		2.50
61-90 days past due	9.2		75.6		85.2		170.0		19.1		189.1		1.21
Greater than 90 days past due	3.2		19.9		21.9		45.0		3.8		48.8		0.31
Total past due	37.8		268.8		267.5		574.1		55.9		630.0		4.02
Total ending managed receivables	$	7,749.7	$	5,670.1	$	1,970.2	$	15,390.0	$	262.3	$	15,652.3	100.00

(1)     Percent of total ending managed receivables.

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Fair Value Measurements (Tables)

6 Months Ended

Aug. 31, 2022

Fair Value Disclosures [Abstract]

Schedule Of Items Measured At Fair Value On A Recurring Basis

Items Measured at Fair Value on a Recurring Basis

	As of August 31, 2022
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	698,000		$	—		$	698,000
Mutual fund investments	23,809			—			23,809
Derivative instruments designated as hedges	—			76,580			76,580
Derivative instruments not designated as hedges	—			27,946			27,946
Total assets at fair value	$	721,809		$	104,526		$	826,335
Percent of total assets at fair value	87.4		%	12.6		%	100.0		%
Percent of total assets	2.7		%	0.4		%	3.1		%
Liabilities:
Total liabilities at fair value	$	—		$	—		$	—
Percent of total liabilities	—		%	—		%	—		%

	As of February 28, 2022
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	701,865		$	—		$	701,865
Mutual fund investments	24,022			—			24,022
Derivative instruments designated as hedges	—			39,452			39,452
Derivative instruments not designated as hedges	—			9,339			9,339
Total assets at fair value	$	725,887		$	48,791		$	774,678
Percent of total assets at fair value	93.7		%	6.3		%	100.0		%
Percent of total assets	2.8		%	0.2		%	2.9		%
Liabilities:
Derivative instruments designated as hedges	$	—		$	(1,379)		$	(1,379)
Total liabilities at fair value	$	—		$	(1,379)		$	(1,379)
Percent of total liabilities	—		%	—		%	—		%

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block]

(In thousands)	As of August 31, 2022		As of February 28, 2022
Carrying value	$	500,000	$	500,000
Fair value	$	479,642	$	517,396

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Cancellation Reserves (Tables)

6 Months Ended

Aug. 31, 2022

Cancellation Reserves [Abstract]

Schedule Of Cancellation Reserves Accrual

Cancellation Reserves

	Three Months Ended August 31				Six Months Ended August 31
(In millions)	2022		2021		2022		2021
Balance as of beginning of period	$	148.7	$	138.4	$	144.7	$	124.5
Cancellations	(27.4)		(22.9)		(55.1)		(43.1)
Provision for future cancellations	27.5		28.8		59.2		62.9
Balance as of end of period	$	148.8	$	144.3	$	148.8	$	144.3

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Debt (Tables)

6 Months Ended

Aug. 31, 2022

Debt Disclosure [Abstract]

Schedule Of Debt

Debt

(In thousands)		As of August 31		As of February 28
Debt Description (1)	Maturity Date	2022		2022
Revolving credit facility (2)	June 2024	$	605,450	$	1,243,500
Term loan (2)	June 2024	300,000		300,000
Term loan (2)	October 2026	699,422		699,352
3.86% Senior notes	April 2023	100,000		100,000
4.17% Senior notes	April 2026	200,000		200,000
4.27% Senior notes	April 2028	200,000		200,000
Financing obligations	Various dates through February 2059	520,005		524,766
Non-recourse notes payable	Various dates through February 2029	16,121,244		15,466,799
Total debt		18,746,121		18,734,417
Less: current portion		(672,296)		(532,272)
Less: unamortized debt issuance costs		(27,607)		(27,126)
Long-term debt, net		$	18,046,218	$	18,175,019

 (1)    Interest is payable monthly, with the exception of our senior notes, which are payable semi-annually.

 (2)    Borrowings accrue interest at variable rates based on the Eurodollar rate (LIBOR), or the successor benchmark rate, the federal funds rate, or the prime rate, depending on the type of borrowing.

Schedule of Funding Vehicles [Table Text Block]

(In billions)	Capacity
Warehouse facilities:
December 2022 expiration	$	0.25
February 2023 expiration	2.85
August 2023 expiration	2.30
Combined warehouse facility limit	$	5.40
Unused capacity	$	2.40
Non-recourse notes payable outstanding:
Warehouse facilities	$	3.00
Asset-backed term funding transactions	13.12
Non-recourse notes payable	$	16.12

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Stock and Stock-Based Incentive Plans (Tables)

3 Months Ended

6 Months Ended

Aug. 31, 2022

Aug. 31, 2022

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Schedule of Common Stock Repurchases

Common Stock Repurchases

	Three Months Ended				Six Months Ended
	August 31				August 31
	2022		2021		2022		2021
Number of shares repurchased (in thousands)	1,729.6		1,754.1		3,373.9		2,751.7
Average cost per share	$	94.24	$	125.44	$	95.01	$	125.22
Available for repurchase, as of end of period (in millions)	$	2,453.9	$	991.5	$	2,453.9	$	991.5

Composition of Share-Based Compensation Expense

Composition of Share-Based Compensation Expense

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands)	2022		2021		2022		2021
Cost of sales	$	901	$	2,094	$	1,141	$	3,823
CarMax Auto Finance income	(295)		1,481		413		3,189
Selling, general and administrative expenses	24,534		28,705		46,770		67,125
Share-based compensation expense, before income taxes	$	25,140	$	32,280	$	48,324	$	74,137

Composition Of Share-Based Compensation Expense - By Grant Type

Composition of Share-Based Compensation Expense – By Grant Type

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands)	2022		2021		2022		2021
Nonqualified stock options	$	9,468	$	7,708	$	20,680	$	19,529
Cash-settled restricted stock units (RSUs)	9,505		17,590		10,354		38,562
Stock-settled market stock units (MSUs)	3,529		3,244		8,876		8,089
Other share-based incentives:
Stock-settled performance stock units (PSUs)	250		976		4,941		4,370
Restricted stock (RSAs)	(35)		263		309		305
Stock-settled deferred stock units (DSUs)	1,850		1,925		1,850		1,925
Employee stock purchase plan	573		574		1,314		1,357
Total other share-based incentives	$	2,638	$	3,738	$	8,414	$	7,957
Share-based compensation expense, before income taxes	$	25,140	$	32,280	$	48,324	$	74,137

Schedule of Stock Incentive Plan Information

Share/Unit Activity

	Six Months Ended August 31, 2022
	Equity Classified						Liability Classified
(Shares/units in thousands)	Options		MSUs		Other		RSUs
Outstanding as of February 28, 2022	5,796		393		170		1,163
Granted	1,282		136		50		677
Exercised or vested and converted	(204)		(120)		(80)		(740)
Cancelled	(44)		(5)		(5)		(46)
Outstanding as of August 31, 2022	6,830		404		135		1,054
Weighted average grant date fair value per share/unit:
Granted	$	33.26	$	126.73	$	95.58	$	91.20
Ending outstanding	$	25.69	$	120.95	$	99.04	$	97.36
	As of August 31, 2022
Unrecognized compensation (in millions)	$	68.0	$	21.5	$	3.5

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Net Earnings Per Share (Tables)

6 Months Ended

Aug. 31, 2022

Earnings Per Share [Abstract]

Basic And Dilutive Net Earnings Per Share Reconciliations

Basic and Dilutive Net Earnings Per Share Reconciliations

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands except per share data)	2022		2021		2022		2021
Net earnings	$	125,905	$	285,267	$	378,170	$	722,023
Weighted average common shares outstanding	158,801		162,966		159,556		163,058
Dilutive potential common shares:
Stock options	1,125		2,271		1,151		2,400
Stock-settled stock units and awards	292		406		308		511
Weighted average common shares and dilutive potential common shares	160,218		165,643		161,015		165,969
Basic net earnings per share	$	0.79	$	1.75	$	2.37	$	4.43
Diluted net earnings per share	$	0.79	$	1.72	$	2.35	$	4.35

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Aug. 31, 2022

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Changes In Accumulated Other Comprehensive Loss By Component

Changes in Accumulated Other Comprehensive Income (Loss) By Component

					Total
	Net		Net		Accumulated
	Unrecognized		Unrecognized		Other
	Actuarial		Hedge		Comprehensive
(In thousands, net of income taxes)	Losses		Gains		Income (Loss)
Balance as of February 28, 2022	$	(73,001)	$	26,579	$	(46,422)
Other comprehensive income before reclassifications	—		81,908		81,908
Amounts reclassified from accumulated other comprehensive income (loss)	962		(4,449)		(3,487)
Other comprehensive income	962		77,459		78,421
Balance as of August 31, 2022	$	(72,039)	$	104,038	$	31,999

Changes In And Reclassifications Out Of Accumulated Other Comprehensive Loss

Changes In and Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

	Three Months Ended August 31				Six Months Ended August 31
(In thousands)	2022		2021		2022		2021
Retirement Benefit Plans:
Actuarial loss amortization reclassifications recognized in net pension expense:
Cost of sales	$	273	$	359	$	538	$	716
CarMax Auto Finance income	16		21		32		43
Selling, general and administrative expenses	347		488		702		977
Total amortization reclassifications recognized in net pension expense	636		868		1,272		1,736
Tax expense	(155)		(210)		(310)		(419)
Amortization reclassifications recognized in net pension expense, net of tax	481		658		962		1,317
Net change in retirement benefit plan unrecognized actuarial losses, net of tax	481		658		962		1,317
Cash Flow Hedges (Note 6):
Changes in fair value	40,168		(665)		110,210		(2,671)
Tax (expense) benefit	(10,315)		175		(28,302)		703
Changes in fair value, net of tax	29,853		(490)		81,908		(1,968)
Reclassifications to CarMax Auto Finance income	(5,687)		4,401		(5,986)		9,499
Tax benefit (expense)	1,460		(1,158)		1,537		(2,500)
Reclassification of hedge (losses) gains, net of tax	(4,227)		3,243		(4,449)		6,999
Net change in cash flow hedge unrecognized gains, net of tax	25,626		2,753		77,459		5,031
Total other comprehensive income, net of tax	$	26,107	$	3,411	$	78,421	$	6,348

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Leases (Tables)

6 Months Ended

Aug. 31, 2022

Leases [Abstract]

Lease, Cost [Table Text Block]

	Three Months Ended August 31				Six Months Ended August 31
(In thousands)	2022		2021		2022		2021
Operating lease cost (1)	$	22,911	$	18,698	$	45,931	$	33,050
Finance lease cost:
Depreciation of lease assets	4,017		3,258		7,523		6,400
Interest on lease liabilities	5,467		4,167		10,401		8,274
Total finance lease cost	9,484		7,425		17,924		14,674
Total lease cost	$	32,395	$	26,123	$	63,855	$	47,724

(1) Includes short-term leases and variable lease costs, which are immaterial.

Supplemental Balance Sheet Disclosures [Text Block]

		As of August 31		As of February 28
(In thousands)	Classification	2022		2022
Assets:
Operating lease assets	Operating lease assets	$	530,285	$	537,357
Finance lease assets	Property and equipment, net (1)	142,232		127,183
Total lease assets		$	672,517	$	664,540
Liabilities:
Current:
Operating leases	Current portion of operating lease liabilities	$	48,783	$	44,197
Finance leases	Accrued expenses and other current liabilities	17,007		10,290
Long-term:
Operating leases	Operating lease liabilities, excluding current portion	512,542		523,269
Finance leases	Other liabilities	157,320		145,179
Total lease liabilities		$	735,652	$	722,935

(1)    Finance lease assets are recorded net of accumulated depreciation of $38.2 million as of August 31, 2022 and $30.7 million as of February 28, 2022.

Other Lease Disclosures [Table Text Block]

	As of August 31		As of February 28
Lease Term and Discount Rate	2022		2022
Weighted Average Remaining Lease Term (in years)
Operating leases	16.91		17.31
Finance leases	11.36		12.42
Weighted Average Discount Rate
Operating leases	4.81	%	4.80	%
Finance leases	19.80	%	14.35	%

	Six Months Ended August 31
(In thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	44,725	$	31,656
Operating cash flows from finance leases	$	4,508	$	5,383
Financing cash flows from finance leases	$	9,883	$	5,709
Lease assets obtained in exchange for lease obligations:
Operating leases	$	16,837	$	44,059
Finance leases	$	22,572	$	12,404

Schedule Of Future Minimum Lease Obligations [Table Text Block]

	As of August 31, 2022
(In thousands)	Operating Leases (1)		Finance Leases (1)
Fiscal 2023, remaining	$	37,495	$	16,682
Fiscal 2024	73,538		39,188
Fiscal 2025	71,693		36,222
Fiscal 2026	66,355		37,330
Fiscal 2027	60,313		33,211
Thereafter	575,478		214,012
Total lease payments	884,872		376,645
Less: interest	(323,547)		(202,318)
Present value of lease liabilities	$	561,325	$	174,327

(1)    Lease payments exclude $30.5 million of legally binding minimum lease payments for leases signed but not yet commenced.

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Segment Reporting (Tables)

3 Months Ended

Aug. 31, 2022

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

	Three Months Ended August 31, 2022
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	8,110,524	$	34,279	$	—	$	8,144,803
Intersegment sales and operating revenues	—		6,929		(6,929)		—
Total sales and operating revenues	$	8,110,524	$	41,208	$	(6,929)	$	8,144,803
Depreciation and amortization (1)	$	376	$	3,389	$	—	$	3,765
Gross profit	$	712,284	$	26,362	$	(1,501)	$	737,145
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							182,869
Selling, general and administrative expenses							(666,041)
Depreciation and amortization (2)							(57,692)
Interest expense							(32,745)
Other income (expense)							4,039
Earnings before income taxes							$	167,575

	Six Months Ended August 31, 2022
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	17,387,760	$	68,664	$	—	$	17,456,424
Intersegment sales and operating revenues	—		14,670		(14,670)		—
Total sales and operating revenues	$	17,387,760	$	83,334	$	(14,670)	$	17,456,424
Depreciation and amortization (1)	$	688	$	6,463	$	—	$	7,151
Gross profit	$	1,561,573	$	54,090	$	(3,127)	$	1,612,536
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							387,342
Selling, general and administrative expenses							(1,322,781)
Depreciation and amortization (2)							(113,340)
Interest expense							(61,520)
Other income (expense)							1,940
Earnings before income taxes							$	504,177

(1)    Represents only the portion of depreciation and amortization recorded within Cost of sales, and thus included in the calculation of Gross profit.

(2)    Exclusive of depreciation and amortization recorded within Cost of sales.

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Background (Narrative) (Details)	6 Months Ended
	Aug. 31, 2022 segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Reportable segments	2

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Business Combinations and Asset Acquisitions (Narrative) (Details) $ in Millions	Jun. 01, 2021 USD ($) shares
Business Combination and Asset Acquisition [Abstract]
Business Acquisition, Transaction Costs	$ 8.0
Stock Issued During Period, Shares, Acquisitions | shares	776,097
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain	$ 8.7

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Business Combinations and Asset Acquisitions (Schedule of Purchase Consideration) (Details) - Edmunds $ in Thousands	Jun. 01, 2021 USD ($)
Business Acquisition [Line Items]
Business Combination, Consideration Transferred	$ 401,818
Business Combination, Consideration Transferred	251,047
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable	90,571
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	$ 60,200

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Business Combinations and Asset Acquisitions (Schedule of Recognized Identified Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands	Jun. 01, 2021	Aug. 31, 2022	Feb. 28, 2022
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents	$ 9,484
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables	33,719
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other	2,397
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	20,741
Goodwill		$ 141,258	$ 141,258
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill	218,000
Operating lease assets		530,285	537,357
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets	191
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	523,040
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable	5,063
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other	11,277
Current portion of operating lease liabilities		$ 48,783	$ 44,197
Business Combination Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Assets	3,823
Business Combination, Recognized Identifiable Asset Acquired and Liability Assumed, Lease Obligation	88,264
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities	121,222
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net	401,818
Goodwill, Purchase Accounting Adjustments	8,400
Edmunds
Business Acquisition [Line Items]
Goodwill	141,258
Operating lease assets	97,250
Current portion of operating lease liabilities	$ 12,795

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Business Combinations and Asset Acquisitions (Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination(Details) $ in Thousands	Jun. 01, 2021 USD ($)
Acquired Indefinite-lived Intangible Assets [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill	$ 218,000
Internally developed software
Acquired Indefinite-lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	7 years
Finite-lived Intangible Assets Acquired	$ 52,900
Customer Relationships
Acquired Indefinite-lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	17 years
Finite-lived Intangible Assets Acquired	$ 133,200
Trade Names
Acquired Indefinite-lived Intangible Assets [Line Items]
Indefinite-Lived Trade Names	$ 31,900

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Revenue (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 8,144.8	$ 7,988.4	$ 17,456.4	$ 15,686.0
Used vehicle sales
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	6,284.1	6,104.4	13,298.6	12,261.7
Wholesale vehicle sales
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	1,690.3	1,701.6	3,806.8	3,075.9
Extended protection plan revenues
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	109.8	113.0	226.3	247.3
Third-party finance income, net
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	2.7	2.8	6.1	(1.8)
Advertising & subscription revenues [Domain]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	34.3	34.5	68.7	34.5
Service revenues
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	19.4	21.0	41.2	43.2
Other
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	4.2	11.1	8.7	25.1
Total other sales and revenues
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 170.4	$ 182.4	$ 351.0	$ 348.3

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CarMax Auto Finance (Components Of CarMax Auto Finance Income) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Auto Finance Income [Line Items]
Interest and fee income	$ 357,200	$ 324,100	$ 703,900	$ 634,400
Interest expense	(62,500)	(60,600)	(111,300)	(126,400)
Total interest margin	294,700	263,500	592,600	508,000
Provision for loan losses	(75,500)	(35,500)	(133,300)	(11,100)
Total interest margin after provision for loan losses	219,200	228,000	459,300	496,900
Payroll and fringe benefit expense	(15,900)	(12,400)	(30,600)	(25,000)
Other Depreciation and Amortization	(3,800)	(200)	(7,600)	(400)
Other direct expenses	(16,600)	(15,300)	(33,700)	(29,700)
Total direct expenses	(36,300)	(27,900)	(71,900)	(55,100)
CarMax Auto Finance income	182,869	200,033	387,342	441,764
Total average managed receivables	$ 16,176,200	$ 14,683,300	$ 15,996,600	$ 14,416,000
Interest and fee income, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	8.80%	8.80%	8.80%	8.80%
Interest expense, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(1.50%)	(1.70%)	(1.40%)	(1.80%)
Total interest margin, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	7.30%	7.20%	7.40%	7.00%
Provision for loan losses, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(1.90%)	(1.00%)	(1.70%)	(0.20%)
Total interest margin after provision for loan losses, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	5.40%	6.20%	5.70%	6.90%
Payroll and fringe benefit expense, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(0.40%)	(0.30%)	(0.40%)	(0.30%)
Other Depreciation and Amortization
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(0.10%)	0.00%	(0.10%)	0.00%
Other direct expenses, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(0.40%)	(0.40%)	(0.40%)	(0.40%)
Total direct expenses, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(0.90%)	(0.80%)	(0.90%)	(0.80%)
CarMax Auto Finance income, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	4.50%	5.40%	4.80%	6.10%

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Auto Loan Receivables (Auto Loan Receivables, Net) (Details) - USD ($) $ in Thousands	Aug. 31, 2022	May 31, 2022	Feb. 28, 2022	Aug. 31, 2021	May 31, 2021	Feb. 28, 2021
Non-recourse Notes Payable	$ 16,121,244		$ 15,466,799
Financing Receivable, before Allowance for Credit Loss	16,349,300		15,652,300
Interest Receivable	81,700		67,300
Other	7,700		3,100
Financing Receivable, Allowance for Credit Loss	477,543	$ 458,200	433,030	$ 398,100	$ 379,500	$ 411,100
Financing Receivable, after Allowance for Credit Loss	15,961,213		15,289,701
Asset-backed term funding
Financing Receivable, before Allowance for Credit Loss	12,563,500		11,653,800
Warehouse facilities
Financing Receivable, before Allowance for Credit Loss	2,997,900		3,291,900
Overcollateralization
Financing Receivable, before Allowance for Credit Loss	629,000		489,100
Other managed receivables
Financing Receivable, before Allowance for Credit Loss	$ 158,900		$ 217,500

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Auto Loan Receivables (Ending Managed Receivables By Major Credit Grade) (Details) - USD ($) $ in Millions	Aug. 31, 2022	Feb. 28, 2022
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	$ 4,370.3	$ 7,765.0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	6,208.6	3,596.9
Financing Receivable, Originated Two Years before Latest Fiscal Year	2,825.3	2,453.3
Financing Receivable, Originated Three Years before Latest Fiscal Year	1,828.0	1,227.7
Financing Receivable, Originated Four Years before Latest Fiscal Year	823.3	492.4
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	293.8	117.0
Financing Receivable, before Allowance for Credit Loss	$ 16,349.3	$ 15,652.3
Total ending managed receivables as percentage by major credit grade	100.00%	100.00%
Core managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	$ 4,215.3	$ 7,599.8
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	6,065.4	3,573.0
Financing Receivable, Originated Two Years before Latest Fiscal Year	2,806.4	2,418.6
Financing Receivable, Originated Three Years before Latest Fiscal Year	1,801.2	1,203.9
Financing Receivable, Originated Four Years before Latest Fiscal Year	805.4	482.4
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	285.1	112.3
Financing Receivable, before Allowance for Credit Loss	$ 15,978.8	$ 15,390.0
Total ending managed receivables as percentage by major credit grade	97.70%	98.30%
Credit Grade A | Core managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	$ 2,242.3	$ 3,885.5
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	3,097.9	1,788.3
Financing Receivable, Originated Two Years before Latest Fiscal Year	1,405.5	1,266.1
Financing Receivable, Originated Three Years before Latest Fiscal Year	934.1	574.1
Financing Receivable, Originated Four Years before Latest Fiscal Year	369.8	203.4
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	102.7	32.3
Financing Receivable, before Allowance for Credit Loss	$ 8,152.3	$ 7,749.7
Total ending managed receivables as percentage by major credit grade	49.80%	49.50%
Credit Grade B | Core managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	$ 1,533.9	$ 2,795.2
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	2,227.8	1,288.5
Financing Receivable, Originated Two Years before Latest Fiscal Year	1,010.7	857.7
Financing Receivable, Originated Three Years before Latest Fiscal Year	645.1	473.1
Financing Receivable, Originated Four Years before Latest Fiscal Year	326.3	205.2
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	128.2	50.4
Financing Receivable, before Allowance for Credit Loss	$ 5,872.0	$ 5,670.1
Total ending managed receivables as percentage by major credit grade	35.90%	36.20%
Credit Grade C And Other | Core managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	$ 439.1	$ 919.1
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	739.7	496.2
Financing Receivable, Originated Two Years before Latest Fiscal Year	390.2	294.8
Financing Receivable, Originated Three Years before Latest Fiscal Year	222.0	156.7
Financing Receivable, Originated Four Years before Latest Fiscal Year	109.3	73.8
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	54.2	29.6
Financing Receivable, before Allowance for Credit Loss	$ 1,954.5	$ 1,970.2
Total ending managed receivables as percentage by major credit grade	12.00%	12.60%
Credit Grade C And Other | Other managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	$ 155.0	$ 165.2
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	143.2	23.9
Financing Receivable, Originated Two Years before Latest Fiscal Year	18.9	34.7
Financing Receivable, Originated Three Years before Latest Fiscal Year	26.8	23.8
Financing Receivable, Originated Four Years before Latest Fiscal Year	17.9	10.0
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	8.7	4.7
Financing Receivable, before Allowance for Credit Loss	$ 370.5	$ 262.3
Total ending managed receivables as percentage by major credit grade	2.30%	1.70%

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Auto Loan Receivables (Allowance for Loan Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021	May 31, 2022	Feb. 28, 2022	May 31, 2021	Feb. 28, 2021
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing Receivable, Allowance for Credit Loss	$ 477,543	$ 398,100	$ 477,543	$ 398,100	$ 458,200	$ 433,030	$ 379,500	$ 411,100
Financing Receivable, Allowance for Credit Loss, Writeoff	(96,100)	(43,700)	(164,300)	(85,500)
Financing Receivable, Allowance for Credit Loss, Recovery	39,900	26,800	75,500	61,400
Provision for loan losses	$ 75,500	$ 35,500	133,300	$ 11,100
Financing Receivable, Allowance for Credit Loss, Period Increase (Decrease)			$ 44,500
Allowance For Loan Losses, percent
Financing Receivable, Allowance for Credit Loss [Line Items]
Item as percent of total ending managed receivables	2.92%	2.66%	2.92%	2.66%	2.85%	2.77%	2.62%	2.97%
Core managed receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing Receivable, Allowance for Credit Loss	$ 396,100	$ 360,000	$ 396,100	$ 360,000	$ 390,400	$ 377,500	$ 348,100	$ 379,400
Financing Receivable, Allowance for Credit Loss, Writeoff	(84,200)	(40,300)	(145,600)	(79,000)
Financing Receivable, Allowance for Credit Loss, Recovery	35,900	25,100	69,000	57,300
Provision for loan losses	54,000	27,100	95,200	2,300
Other managed receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing Receivable, Allowance for Credit Loss	81,400	38,100	81,400	38,100	$ 67,800	$ 55,500	$ 31,400	$ 31,700
Financing Receivable, Allowance for Credit Loss, Writeoff	(11,900)	(3,400)	(18,700)	(6,500)
Financing Receivable, Allowance for Credit Loss, Recovery	4,000	1,700	6,500	4,100
Provision for loan losses	$ 21,500	$ 8,400	$ 38,100	$ 8,800

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Auto Loan Receivables (Past Due Receivables) (Details) - USD ($) $ in Millions	Aug. 31, 2022	Feb. 28, 2022
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	$ 15,590.8	$ 15,022.3
Past due receivables as a percentage of total ending managed receivables	4.64%	4.02%
Financing Receivable, before Allowance for Credit Loss, Noncurrent	$ 758.5	$ 630.0
Financing Receivable, before Allowance for Credit Loss	$ 16,349.3	$ 15,652.3
Item As A Percent Of Total Ending Managed Receivables	100.00%	100.00%
One to Thirty Days Past Due
Financing Receivable, Past Due [Line Items]
Past due receivables as a percentage of total ending managed receivables	95.36%	95.98%
Thirty One To Sixty Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due receivables as a percentage of total ending managed receivables	2.70%	2.50%
Financing Receivable, before Allowance for Credit Loss, Noncurrent	$ 441.2	$ 392.1
Sixty One To Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due receivables as a percentage of total ending managed receivables	1.58%	1.21%
Financing Receivable, before Allowance for Credit Loss, Noncurrent	$ 258.5	$ 189.1
Greater Than Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due receivables as a percentage of total ending managed receivables	0.36%	0.31%
Financing Receivable, before Allowance for Credit Loss, Noncurrent	$ 58.8	$ 48.8
Core managed receivables
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	15,311.4	14,815.9
Financing Receivable, before Allowance for Credit Loss, Noncurrent	667.4	574.1
Financing Receivable, before Allowance for Credit Loss	15,978.8	15,390.0
Core managed receivables | Thirty One To Sixty Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	392.8	359.1
Core managed receivables | Sixty One To Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	224.3	170.0
Core managed receivables | Greater Than Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	50.3	45.0
Core managed receivables | Credit Grade A
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	8,119.0	7,711.9
Financing Receivable, before Allowance for Credit Loss, Noncurrent	33.3	37.8
Financing Receivable, before Allowance for Credit Loss	8,152.3	7,749.7
Core managed receivables | Credit Grade A | Thirty One To Sixty Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	20.8	25.4
Core managed receivables | Credit Grade A | Sixty One To Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	9.8	9.2
Core managed receivables | Credit Grade A | Greater Than Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	2.7	3.2
Core managed receivables | Credit Grade B
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	5,548.4	5,401.3
Financing Receivable, before Allowance for Credit Loss, Noncurrent	323.6	268.8
Financing Receivable, before Allowance for Credit Loss	5,872.0	5,670.1
Core managed receivables | Credit Grade B | Thirty One To Sixty Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	199.0	173.3
Core managed receivables | Credit Grade B | Sixty One To Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	100.7	75.6
Core managed receivables | Credit Grade B | Greater Than Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	23.9	19.9
Core managed receivables | Credit Grade C And Other
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	1,644.0	1,702.7
Financing Receivable, before Allowance for Credit Loss, Noncurrent	310.5	267.5
Financing Receivable, before Allowance for Credit Loss	1,954.5	1,970.2
Core managed receivables | Credit Grade C And Other | Thirty One To Sixty Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	173.0	160.4
Core managed receivables | Credit Grade C And Other | Sixty One To Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	113.8	85.2
Core managed receivables | Credit Grade C And Other | Greater Than Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	23.7	21.9
Other managed receivables | Credit Grade C And Other
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	279.4	206.4
Financing Receivable, before Allowance for Credit Loss, Noncurrent	91.1	55.9
Financing Receivable, before Allowance for Credit Loss	370.5	262.3
Other managed receivables | Credit Grade C And Other | Thirty One To Sixty Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	48.4	33.0
Other managed receivables | Credit Grade C And Other | Sixty One To Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	34.2	19.1
Other managed receivables | Credit Grade C And Other | Greater Than Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	$ 8.5	$ 3.8

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Derivative Instruments And Hedging Activities (Narrative) (Details) - Interest Rate Swaps - Cash Flow Hedging - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Aug. 31, 2022	Aug. 31, 2022	Feb. 28, 2022
Designated As Hedging Instrument
Derivative [Line Items]
Additional reclassification from AOCL to CAF income within the next 12 months		$ 36.6
Derivative, Notional Amount	$ 4,490.0	4,490.0	$ 3,640.0
Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Derivative, Gain (Loss) on Derivative, Net	9.4	18.6
Derivative, Notional Amount	$ 1,010.0	$ 1,010.0	$ 578.3

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Fair Value Measurements (Schedule Of Items Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Thousands	Aug. 31, 2022	Feb. 28, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market securities	$ 698,000	$ 701,865
Mutual fund investments	23,809	24,022
Total assets at fair value	$ 826,335	$ 774,678
Percent of total assets at fair value	100.00%	100.00%
Percent of total assets	3.10%	2.90%
Total liabilities at fair value	$ 0	$ (1,379)
Percent of total liabilities	0.00%	0.00%
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market securities	$ 698,000	$ 701,865
Mutual fund investments	23,809	24,022
Total assets at fair value	$ 721,809	$ 725,887
Percent of total assets at fair value	87.40%	93.70%
Percent of total assets	2.70%	2.80%
Total liabilities at fair value	$ 0	$ 0
Percent of total liabilities	0.00%	0.00%
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market securities	$ 0	$ 0
Mutual fund investments	0	0
Total assets at fair value	$ 104,526	$ 48,791
Percent of total assets at fair value	12.60%	6.30%
Percent of total assets	0.40%	0.20%
Total liabilities at fair value	$ 0	$ (1,379)
Percent of total liabilities	0.00%	0.00%
Designated As Hedging Instrument
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	$ 76,580	$ 39,452
Liabilities: Derivative instruments		(1,379)
Designated As Hedging Instrument | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	0	0
Liabilities: Derivative instruments		0
Designated As Hedging Instrument | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	76,580	39,452
Liabilities: Derivative instruments		(1,379)
Not Designated as Hedging Instrument [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	27,946	9,339
Not Designated as Hedging Instrument [Member] | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	0	0
Not Designated as Hedging Instrument [Member] | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	$ 27,946	$ 9,339

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Fair Value Measurements Fair Value Measurements (Schedule of Carrying Values and Estimated Fair Values of Debt Instruments) (Details) - USD ($) $ in Thousands	Aug. 31, 2022	Feb. 28, 2022
Fair Value Disclosures [Abstract]
Senior Notes	$ 500,000	$ 500,000
Debt Instrument, Fair Value Disclosure	$ 479,642	$ 517,396

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Cancellation Reserves (Narrative) (Details) - USD ($) $ in Millions	Aug. 31, 2022	Feb. 28, 2022
Cancellation Reserves [Abstract]
Cancellation reserves, current portion	$ 82.1	$ 78.7

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Cancellation Reserves (Schedule Of Cancellation Reserves Accrual) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance as of beginning of period	$ 148.7	$ 138.4	$ 144.7	$ 124.5
Cancellations	(27.4)	(22.9)	(55.1)	(43.1)
Provision for future cancellations	27.5	28.8	59.2	62.9
Balance as of end of period	$ 148.8	$ 144.3	$ 148.8	$ 144.3

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Income Taxes (Narrative) (Details) - USD ($) $ in Millions	Aug. 31, 2022	Feb. 28, 2022
Federal Income Tax Note
Unrecognized tax benefits, gross	$ 26.3	$ 24.8

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Debt (Schedule Of Debt) (Details) - USD ($) $ in Thousands	Aug. 31, 2022	Feb. 28, 2022
Debt Instrument [Line Items]
Long-term Debt	$ 18,046,218	$ 18,175,019
Financing Obligations	520,005	524,766
Non-recourse Notes Payable	16,121,244	15,466,799
Total debt	18,746,121	18,734,417
Less: current portion	(672,296)	(532,272)
Unamortized Debt Issuance Expense	(27,607)	(27,126)
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long-term Debt	605,450	1,243,500
Term Loan [Member]
Debt Instrument [Line Items]
Long-term Debt	300,000	300,000
3.86% senior notes dues 2023 [Member]
Debt Instrument [Line Items]
Long-term Debt	100,000	100,000
4.17% senior notes due 2026 [Member]
Debt Instrument [Line Items]
Long-term Debt	200,000	200,000
4.27% senior notes due 2028 [Member]
Debt Instrument [Line Items]
Long-term Debt	200,000	200,000
October 2021 Term Loan
Debt Instrument [Line Items]
Long-term Debt	$ 699,422	$ 699,352

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Debt (Schedule of Funding Vehicles) (Details) - USD ($) $ in Thousands	Aug. 31, 2022	Feb. 28, 2022
Debt Instrument [Line Items]
Non-recourse Notes Payable	$ 16,121,244	$ 15,466,799
Warehouse Facility Three
Debt Instrument [Line Items]
Warehouse Facilities Maximum Borrowing Capacity	2,850,000
Warehouse Facility Two
Debt Instrument [Line Items]
Warehouse Facilities Maximum Borrowing Capacity	2,300,000
Warehouse Facility One
Debt Instrument [Line Items]
Warehouse Facilities Maximum Borrowing Capacity	250,000
Warehouse Facilities [Member]
Debt Instrument [Line Items]
Warehouse Facilities Maximum Borrowing Capacity	5,400,000
Debt Instrument, Unused Borrowing Capacity, Amount	2,400,000
Non-recourse Notes Payable	3,000,000
Term Securitizations Debt [Member]
Debt Instrument [Line Items]
Non-recourse Notes Payable	$ 13,120,000

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Debt (Narrative) (Details) - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Feb. 28, 2022
Debt Instrument [Line Items]
Outstanding Balance	$ 18,046,218		$ 18,175,019
Capitalized interest	2,100	$ 3,500
Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity	2,000,000
Unused capacity	1,390,000
Term Loan [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 300,000
Long-Term Debt, Percentage Bearing Variable Interest, Percentage Rate	3.27%
Senior Notes [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 500,000
Financing obligation | Minimum
Debt Instrument [Line Items]
Initial lease terms, in years	15 years
Financing obligation | Maximum
Debt Instrument [Line Items]
Initial lease terms, in years	20 years
October 2021 Term Loan
Debt Instrument [Line Items]
Outstanding Balance	$ 700,000
Long-Term Debt, Percentage Bearing Variable Interest, Percentage Rate	3.27%

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Stock and Stock-Based Incentive Plans (Narrative) (Details) - USD ($) $ in Millions	Aug. 31, 2022	Aug. 31, 2021
Stock and Stock-Based Incentive Plans
Stock Repurchase Program, Authorized Amount	$ 4,000.0
Share Repurchase Program
Stock and Stock-Based Incentive Plans
Available for repurchase, as of end of period	$ 2,453.9	$ 991.5

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Stock and Stock-Based Incentive Plans (Schedule of Common Stock Repurchases) (Details) - Share Repurchase Program - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares repurchased	1,729,600	1,754,100	3,373,900	2,751,700
Average Cost Per Share	$ 94.24	$ 125.44	$ 95.01	$ 125.22
Available for repurchase, as of end of period	$ 2,453.9	$ 991.5	$ 2,453.9	$ 991.5

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Stock and Stock-Based Incentive Plans (Composition of Share-Based Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense, before income taxes	$ 25,140	$ 32,280	$ 48,324	$ 74,137
Cost of sales
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense, before income taxes	901	2,094	1,141	3,823
Carmax Auto Finance Income
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense, before income taxes	(295)	1,481	413	3,189
Selling, general and administrative expenses
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense, before income taxes	$ 24,534	$ 28,705	$ 46,770	$ 67,125

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Stock and Stock-Based Incentive Plans (Composition of Share-Based Compensation Expense - By Grant Type) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	$ 25,140	$ 32,280	$ 48,324	$ 74,137
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	9,468	7,708	20,680	19,529
Cash-settled restricted stock units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	9,505	17,590	10,354	38,562
Stock-settled market stock units (MSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	3,529	3,244	8,876	8,089
Stock-settled performance stock units (PSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	250	976	4,941	4,370
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	(35)	263	309	305
Stock-settled deferred stock units (DSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	1,850	1,925	1,850	1,925
Employee stock purchase plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	573	574	1,314	1,357
Other share-based incentives
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	$ 2,638	$ 3,738	$ 8,414	$ 7,957

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Stock and Stock-Based Incentive Plans (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	6 Months Ended
	Aug. 31, 2022	Feb. 28, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	6,830	5,796
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	1,282
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	(204)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period	(44)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 33.26
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value	$ 25.69
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount	$ 68.0
Stock-settled market stock units (MSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	404	393
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	136
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(120)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period	(5)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 126.73
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 120.95
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 21.5
Other share-based incentives
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	135	170
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	50
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(80)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period	(5)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 95.58
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 99.04
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 3.5
Cash-settled restricted stock units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	1,054	1,163
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	677
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(740)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period	(46)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 91.20
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 97.36

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Net Earnings Per Share (Basic And Dilutive Net Earnings Per Share Reconciliations) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Aug. 31, 2022	May 31, 2022	Aug. 31, 2021	May 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Schedule of Basic and Dilutive Net Earnings Per Share Reconciliation [Line Items]
Net earnings	$ 125,905	$ 252,265	$ 285,267	$ 436,756	$ 378,170	$ 722,023
Weighted average common shares outstanding, shares	158,801		162,966		159,556	163,058
Weighted average common shares and dilutive potential common shares, shares	160,218		165,643		161,015	165,969
Basic net earnings per share (in dollars per share)	$ 0.79		$ 1.75		$ 2.37	$ 4.43
Diluted net earnings per share (in dollars per share)	$ 0.79		$ 1.72		$ 2.35	$ 4.35
Stock options
Schedule of Basic and Dilutive Net Earnings Per Share Reconciliation [Line Items]
Dilutive potential common shares, shares	1,125		2,271		1,151	2,400
Stock-settled stock units and awards
Schedule of Basic and Dilutive Net Earnings Per Share Reconciliation [Line Items]
Dilutive potential common shares, shares	292		406		308	511

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Net Earnings Per Share (Narrative) (Details) - shares	3 Months Ended		6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Earnings Per Share [Abstract]
Anti-dilutive securities not included in calculation of diluted net earnings per share	2,098,895	912,093	1,767,906	600,617

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Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Aug. 31, 2022	May 31, 2022	Aug. 31, 2021	May 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Schedule of Accumulated Other Comprehensive Loss [Line Items]
Beginning balance		$ (46,422)			$ (46,422)
Other comprehensive income before reclassifications					81,908
Amounts reclassified from accumulated other comprehensive income (loss)					(3,487)
Other comprehensive income (loss), net of taxes	$ 26,107	52,314	$ 3,411	$ 2,937	78,421	$ 6,348
Ending balance	31,999				31,999
Net Unrecognized Actuarial Losses
Schedule of Accumulated Other Comprehensive Loss [Line Items]
Beginning balance		(73,001)			(73,001)
Other comprehensive income before reclassifications					0
Amounts reclassified from accumulated other comprehensive income (loss)					962
Other comprehensive income (loss), net of taxes					962
Ending balance	(72,039)				(72,039)
Net Unrecognized Hedge Gains (Losses)
Schedule of Accumulated Other Comprehensive Loss [Line Items]
Beginning balance		$ 26,579			26,579
Other comprehensive income before reclassifications					81,908
Amounts reclassified from accumulated other comprehensive income (loss)					(4,449)
Other comprehensive income (loss), net of taxes					77,459
Ending balance	$ 104,038				$ 104,038

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Accumulated Other Comprehensive Income (Loss) (Changes In and Reclassifications Out of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Total amortization reclassifications recognized in net pension expense	$ 636	$ 868	$ 1,272	$ 1,736
Tax expense	(155)	(210)	(310)	(419)
Amortization reclassifications recognized in net pension expense, net of tax	481	658	962	1,317
Net change in retirement benefit plan unrecognized actuarial losses, net of tax	481	658	962	1,317
Changes in fair value	40,168	(665)	110,210	(2,671)
Tax (expense) benefit	(10,315)	175	(28,302)	703
Changes in fair value, net of tax	29,853	(490)	81,908	(1,968)
Reclassifications to CarMax Auto Finance income	(5,687)	4,401	(5,986)	9,499
Tax benefit (expense)	1,460	(1,158)	1,537	(2,500)
Reclassification of hedge (losses) gains, net of tax	(4,227)	3,243	(4,449)	6,999
Net change in cash flow hedge unrecognized losses, net of tax	25,626	2,753	77,459	5,031
Total other comprehensive income, net of tax	26,107	3,411	78,421	6,348
Cost of sales
Total amortization reclassifications recognized in net pension expense	273	359	538	716
CarMax Auto Finance income
Total amortization reclassifications recognized in net pension expense	16	21	32	43
Selling, general and administrative expenses
Total amortization reclassifications recognized in net pension expense	$ 347	$ 488	$ 702	$ 977

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Accumulated Other Comprehensive Income (Loss) (Narrative) (Details) - USD ($) $ in Millions	Aug. 31, 2022	Feb. 28, 2022
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Deferred tax	$ 12.9	$ 14.2

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Leases Narrative (Details)	6 Months Ended
	Aug. 31, 2022
Minimum
Lessee, Lease, Description [Line Items]
Lease renewal term	1 year
Real Estate Lease Term	5 years
Equipment Lease Term	3 years
Maximum
Lessee, Lease, Description [Line Items]
Lease renewal term	20 years
Real Estate Lease Term	20 years
Equipment Lease Term	8 years

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Leases Components of Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Leases [Abstract]
Operating Lease, Cost	$ 22,911	$ 18,698	$ 45,931	$ 33,050
Finance Lease, Right-of-Use Asset, Amortization	4,017	3,258	7,523	6,400
Finance Lease, Interest Expense	5,467	4,167	10,401	8,274
Finance Lease, Cost	9,484	7,425	17,924	14,674
Lease, Cost	$ 32,395	$ 26,123	$ 63,855	$ 47,724

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Leases - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands	Aug. 31, 2022	Feb. 28, 2022
Leases [Abstract]
Operating lease assets	$ 530,285	$ 537,357
Finance Lease, Right-of-Use Asset	142,232	127,183
Total lease assets	672,517	664,540
Current portion of operating lease liabilities	48,783	44,197
Finance Lease, Liability, Current	17,007	10,290
Operating lease liabilities, excluding current portion	512,542	523,269
Finance Lease, Liability, Noncurrent	157,320	145,179
Total lease liabilities	735,652	722,935
Finance Lease Accumulated Depreciation	$ 38,200	$ 30,700

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Lease Term and Discount Rate (Details)	Aug. 31, 2022 Rate	Feb. 28, 2022 Rate
Leases [Abstract]
Operating Lease, Weighted Average Remaining Lease Term	16 years 10 months 28 days	17 years 3 months 21 days
Finance Lease, Weighted Average Remaining Lease Term	11 years 4 months 9 days	12 years 5 months 1 day
Operating Lease, Weighted Average Discount Rate, Percent	4.81%	4.80%
Finance Lease, Weighted Average Discount Rate, Percent	19.80%	14.35%

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Lease Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
Leases [Abstract]
Operating Lease, Payments	$ 44,725	$ 31,656
Finance Lease, Interest Payment on Liability	4,508	5,383
Finance Lease, Principal Payments	9,883	5,709
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	16,837	44,059
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability	$ 22,572	$ 12,404

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Leases Maturities of Lease Liabilities (Details) $ in Thousands	Aug. 31, 2022 USD ($)
Leases [Abstract]
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year	$ 37,495
Lessee, Operating Lease, Liability, Payments, Due Year Two	73,538
Lessee, Operating Lease, Liability, Payments, Due Year Three	71,693
Lessee, Operating Lease, Liability, Payments, Due Year Four	66,355
Lessee, Operating Lease, Liability, Payments, Due Year Five	60,313
Lessee, Operating Lease, Liability, Payments, Due after Year Five	575,478
Lessee, Operating Lease, Liability, Payments, Due	884,872
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	(323,547)
Operating Lease, Liability	561,325
Finance Lease, Liability, Payments, Remainder of Fiscal Year	16,682
Finance Lease, Liability, Payments, Due Year Two	39,188
Finance Lease, Liability, Payments, Due Year Three	36,222
Finance Lease, Liability, Payments, Due Year Four	37,330
Finance Lease, Liability, Payments, Due Year Five	33,211
Finance Lease, Liability, Payments, Due after Year Five	214,012
Finance Lease, Liability, Payment, Due	376,645
Finance Lease, Liability, Undiscounted Excess Amount	(202,318)
Finance Lease, Liability	174,327
lessee, minimum lease payments for leases not yet commenced	$ 30,500

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Contingent Liabilities (Details) - USD ($) $ in Millions	Aug. 31, 2022	Feb. 28, 2022
Commitments and Contingencies Disclosure [Abstract]
Liability associated with guarantee	$ 26.3	$ 18.5

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Segment Reporting (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
NET SALES AND OPERATING REVENUES	$ 8,144,803	$ 7,988,359	$ 17,456,424	$ 15,685,958
Depreciation and amortization			137,903	129,300
Gross Profit	737,145	815,484	1,612,536	1,739,993
CARMAX AUTO FINANCE INCOME	182,869	200,033	387,342	441,764
Selling, General and Administrative Expense	(666,041)	(574,286)	(1,322,781)	(1,128,355)
Depreciation, Depletion and Amortization, Nonproduction	(57,692)	(52,789)	(113,340)	(102,679)
Interest expense	(32,745)	(22,410)	(61,520)	(42,944)
Other income	4,039	1,782	1,940	27,359
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest	167,575	$ 367,814	504,177	$ 935,138
TOTAL COST OF SALES
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Depreciation and amortization	3,765		7,151
Intersegment Eliminations
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
NET SALES AND OPERATING REVENUES	(6,929)		(14,670)
Gross Profit	(1,501)		(3,127)
CarMax Sales Operations
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
NET SALES AND OPERATING REVENUES	8,110,524		17,387,760
Gross Profit	712,284		1,561,573
CarMax Sales Operations | TOTAL COST OF SALES
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Depreciation and amortization	376		688
CarMax Sales Operations | Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
NET SALES AND OPERATING REVENUES	8,110,524		17,387,760
Other Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
NET SALES AND OPERATING REVENUES	34,279		68,664
Gross Profit	26,362		54,090
Other Segments | TOTAL COST OF SALES
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Depreciation and amortization	3,389		6,463
Other Segments | Intersegment Eliminations
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
NET SALES AND OPERATING REVENUES	6,929		14,670
Other Segments | Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
NET SALES AND OPERATING REVENUES	$ 41,208		$ 83,334