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Stock and Stock-Based Incentive Plans Stock And Stock-Based Incentive Plans
 6 Months Ended
Aug. 31, 2017
Share-based Compensation [Abstract]  
Stock and Stock-Based Incentive Plans
Stock and Stock-Based Incentive Plans
 
(A) Share Repurchase Program
As of August 31, 2017, our board of directors has authorized the repurchase of up to $4.55 billion of our common stock. At that date, $1.25 billion was available for repurchase, with no expiration date, under the board's outstanding authorization.

Common Stock Repurchases
 
Three Months Ended
 
Six Months Ended
 
August 31
 
August 31
 
2017
 
2016
 
2017
 
2016
Number of shares repurchased (in thousands)
2,453.1

 
2,365.2

 
5,487.8

 
4,934.7

Average cost per share
$
63.78

 
$
53.18

 
$
61.69

 
$
52.25

Available for repurchase, as of end of period (in millions)
$
1,251.8

 
$
1,890.2

 
$
1,251.8

 
$
1,890.2



(B) Share-Based Compensation

Composition of Share-Based Compensation Expense
 
Three Months Ended
 
Six Months Ended
 
August 31
 
August 31
(In thousands)
2017
 
2016
 
2017
 
2016
Cost of sales
$
1,076

 
$
1,054

 
$
1,303

 
$
2,414

CarMax Auto Finance income
848

 
747

 
1,668

 
1,651

Selling, general and administrative expenses
16,316

 
27,679

 
34,409

 
57,262

Share-based compensation expense, before income taxes
$
18,240

 
$
29,480

 
$
37,380

 
$
61,327


 
Composition of Share-Based Compensation Expense – By Grant Type
 
Three Months Ended
 
Six Months Ended
 
August 31
 
August 31
(In thousands)
2017
 
2016
 
2017
 
2016
Nonqualified stock options
$
5,916

 
$
15,090

 
$
16,286

 
$
28,221

Cash-settled restricted stock units (RSUs)
9,785

 
9,085

 
12,903

 
21,461

Stock-settled market stock units (MSUs)
2,543

 
3,698

 
6,164

 
7,348

Stock-settled performance stock units (PSUs)
(863
)
 
199

 
490

 
2,332

Employee stock purchase plan
381

 
355

 
795

 
765

Restricted stock awards (RSAs)
478

 
1,053

 
742

 
1,200

Share-based compensation expense, before income taxes
$
18,240

 
$
29,480

 
$
37,380

 
$
61,327



(C) Stock Incentive Plan Information

Share/Unit Activity
 
Six Months Ended August 31, 2017
 
Equity Classified
 
Liability Classified
(Shares/units in thousands)
Options
MSUs
PSUs
RSAs
 
RSUs
Outstanding as of February 28, 2017
7,753

504

149

50

 
1,406

Granted
1,932

159

74

29

 
628

Exercised or vested and converted
(621
)
(223
)
—

(28
)
 
(463
)
Cancelled
(18
)
(5
)
—

—

 
(58
)
Outstanding as of August 31, 2017
9,046

435

223

51

 
1,513

 
 
 
 
 
 
 
Weighted average grant date fair value per share/unit:
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted
$
16.11

$
73.59

$
58.38

$
62.35

 
$
58.39

Ending outstanding
$
15.48

$
73.72

$
60.10

$
58.06

 
$
59.34

 
 
 
 
 
 
 
 
As of August 31, 2017
 
 
Unrecognized compensation (in millions)
$
47.6

$
15.0

$
3.9

$
2.1

 
 


In the second quarter of fiscal 2017, in connection with the retirement of our former CEO, Thomas J. Folliard, the board of directors modified certain equity awards previously granted to him. This modification effectively provided Mr. Folliard retirement treatment under the terms of the awards, notwithstanding that he was younger than 55 years old. The modification resulted in the recognition of additional share-based compensation expense of $10.9 million. In addition, the awards granted to Mr. Folliard in April 2016 effectively provided him retirement treatment, thus full expense recognition of $3.5 million occurred at the grant date.