Segment Reporting

6 Months Ended

Aug. 31, 2021

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, 2021
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	7,953,811	$	34,548	$	—	$	7,988,359
Intersegment sales and operating revenues	—		7,008		(7,008)		—
Total sales and operating revenues	$	7,953,811	$	41,556	$	(7,008)	$	7,988,359
Depreciation and amortization (1)	$	176	$	2,208	$	—	$	2,384
Gross profit	$	788,089	$	29,072	$	(1,677)	$	815,484
Reconciliation to Consolidated Earnings Before Taxes (“EBT”):
CAF Income							200,033
Selling, general and administrative expenses							(574,286)
Depreciation and amortization (2)							(52,789)
Interest expense							(22,410)
Other income (expense)							1,782
Earnings before income taxes							$	367,814

	Six Months Ended August 31, 2021
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	15,651,410	$	34,548	$	—	$	15,685,958
Intersegment sales and operating revenues	—		7,008		(7,008)		—
Total sales and operating revenues	$	15,651,410	$	41,556	$	(7,008)	$	15,685,958
Depreciation and amortization (1)	$	301	$	2,208	$	—	$	2,509
Gross profit	$	1,712,598	$	29,072	$	(1,677)	$	1,739,993
Reconciliation to Consolidated Earnings Before Taxes (“EBT”):
CAF Income							441,764
Selling, general and administrative expenses							(1,128,355)
Depreciation and amortization (2)							(102,679)
Interest expense							(42,944)
Other income (expense)							27,359
Earnings before income taxes							$	935,138

(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.