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 November 30, 2023

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 January 3, 2024
Common Stock, par value $0.50	157,921,209

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 Nine Months Ended November 30, 2023 and 2022	3
		Consolidated Statements of Comprehensive Income (Unaudited) –
		Three and Nine Months Ended November 30, 2023 and 2022	4
		Consolidated Balance Sheets (Unaudited) –
		November 30, 2023 and February 28, 2023	5
		Consolidated Statements of Cash Flows (Unaudited) –
		Nine Months Ended November 30, 2023 and 2022	6
		Consolidated Statements of Shareholders’ Equity (Unaudited) –
		Three and Nine Months Ended November 30, 2023 and 2022	7
		Notes to Consolidated Financial Statements (Unaudited)	9
	Item 2.	Management’s Discussion and Analysis of Financial Condition and
		Results of Operations	29
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
	Item 4.	Controls and Procedures	45
PART II.	OTHER INFORMATION
	Item 1.	Legal Proceedings	46
	Item 1A.	Risk Factors	46
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
	Item 6.	Exhibits	47
SIGNATURES			48

Page 2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Earnings

(Unaudited)

	Three Months Ended November 30						Nine Months Ended November 30
(In thousands except per share data)	2023		%(1)	2022		%(1)	2023		%(1)	2022		%(1)
SALES AND OPERATING REVENUES:
Used vehicle sales	$	4,832,077	78.6	$	5,204,584	80.0	$	16,424,691	78.6	$	18,503,159	77.2
Wholesale vehicle sales	1,165,204		19.0	1,152,207		17.7	4,001,542		19.1	4,959,050		20.7
Other sales and revenues	151,257		2.5	149,165		2.3	483,204		2.3	500,171		2.1
NET SALES AND OPERATING REVENUES	6,148,538		100.0	6,505,956		100.0	20,909,437		100.0	23,962,380		100.0
COST OF SALES:
Used vehicle cost of sales	4,434,165		72.1	4,801,790		73.8	15,060,045		72.0	17,041,898		71.1
Wholesale vehicle cost of sales	1,042,303		17.0	1,037,534		15.9	3,574,200		17.1	4,512,053		18.8
Other cost of sales	59,207		1.0	89,944		1.4	148,174		0.7	219,205		0.9
TOTAL COST OF SALES	5,535,675		90.0	5,929,268		91.1	18,782,419		89.8	21,773,156		90.9
GROSS PROFIT	612,863		10.0	576,688		8.9	2,127,018		10.2	2,189,224		9.1
CARMAX AUTO FINANCE INCOME	148,659		2.4	152,196		2.3	421,004		2.0	539,538		2.3
Selling, general and administrative expenses	559,962		9.1	591,727		9.1	1,705,493		8.2	1,914,508		8.0
Depreciation and amortization	60,623		1.0	57,377		0.9	177,859		0.9	170,717		0.7
Interest expense	31,265		0.5	30,150		0.5	93,316		0.4	91,670		0.4
Other income	(886)		—	(363)		—	(4,730)		—	(2,303)		—
Earnings before income taxes	110,558		1.8	49,993		0.8	576,084		2.8	554,170		2.3
Income tax provision	28,555		0.5	12,413		0.2	147,148		0.7	138,420		0.6
NET EARNINGS	$	82,003	1.3	$	37,580	0.6	$	428,936	2.1	$	415,750	1.7
WEIGHTED AVERAGE COMMON SHARES:
Basic	158,446			158,003			158,347			159,044
Diluted	158,799			158,536			158,866			160,195
NET EARNINGS PER SHARE:
Basic	$	0.52		$	0.24		$	2.71		$	2.61
Diluted	$	0.52		$	0.24		$	2.70		$	2.60

(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 November 30				Nine Months Ended November 30
(In thousands)	2023		2022		2023		2022
NET EARNINGS	$	82,003	$	37,580	$	428,936	$	415,750
Other comprehensive (loss) income, net of taxes:
Net change in retirement benefit plan unrecognized actuarial losses	98		482		294		1,444
Net change in cash flow hedge unrecognized gains	(18,028)		24,939		(37,496)		102,398
Other comprehensive (loss) income, net of taxes	(17,930)		25,421		(37,202)		103,842
TOTAL COMPREHENSIVE INCOME	$	64,073	$	63,001	$	391,734	$	519,592

See accompanying notes to consolidated financial statements.

Page 4

CARMAX, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

	As of November 30		As of February 28
(In thousands except share data)	2023		2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	605,375	$	314,758
Restricted cash from collections on auto loans receivable	483,570		470,889
Accounts receivable, net	212,406		298,783
Inventory	3,638,946		3,726,142
Other current assets	169,653		230,795
TOTAL CURRENT ASSETS	5,109,950		5,041,367
Auto loans receivable, net of allowance for loan losses of $511,924 and $507,201 as of November 30, 2023 and February 28, 2023, respectively	17,081,891		16,341,791
Property and equipment, net of accumulated depreciation of $1,782,087 and $1,614,924 as of November 30, 2023 and February 28, 2023, respectively	3,623,697		3,430,914
Deferred income taxes	121,219		80,740
Operating lease assets	533,387		545,677
Goodwill	141,258		141,258
Other assets	561,848		600,989
TOTAL ASSETS	$	27,173,250	$	26,182,736
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	762,594	$	826,592
Accrued expenses and other current liabilities	494,365		478,964
Accrued income taxes	10,581		—
Current portion of operating lease liabilities	56,410		53,287
Current portion of long-term debt	312,744		111,859
Current portion of non-recourse notes payable	446,544		467,609
TOTAL CURRENT LIABILITIES	2,083,238		1,938,311
Long-term debt, excluding current portion	1,605,638		1,909,361
Non-recourse notes payable, excluding current portion	16,558,053		15,865,776
Operating lease liabilities, excluding current portion	509,141		523,828
Other liabilities	372,815		332,383
TOTAL LIABILITIES	21,128,885		20,569,659
Commitments and contingent liabilities
SHAREHOLDERS’ EQUITY:
Common stock, $0.50 par value; 350,000,000 shares authorized; 158,021,407 and 158,079,033 shares issued and outstanding as of November 30, 2023 and February 28, 2023, respectively	79,011		79,040
Capital in excess of par value	1,786,924		1,713,074
Accumulated other comprehensive income	60,667		97,869
Retained earnings	4,117,763		3,723,094
TOTAL SHAREHOLDERS’ EQUITY	6,044,365		5,613,077
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	27,173,250	$	26,182,736

See accompanying notes to consolidated financial statements.

Page 5

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended November 30
(In thousands)	2023		2022
OPERATING ACTIVITIES:
Net earnings	$	428,936	$	415,750
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	193,528		202,655
Share-based compensation expense	90,479		64,974
Provision for loan losses	238,952		218,967
Provision for cancellation reserves	62,587		79,924
Deferred income tax benefit	(28,290)		(2,178)
Other	8,534		8,879
Net decrease (increase) in:
Accounts receivable, net	86,377		314,190
Inventory	87,196		1,709,632
Other current assets	91,793		149,777
Auto loans receivable, net	(979,052)		(1,170,098)
Other assets	(8,775)		(43,502)
Net decrease in:
Accounts payable, accrued expenses and other
current liabilities and accrued income taxes	(60,365)		(195,154)
Other liabilities	(62,921)		(91,739)
NET CASH PROVIDED BY OPERATING ACTIVITIES	148,979		1,662,077
INVESTING ACTIVITIES:
Capital expenditures	(355,442)		(319,486)
Proceeds from disposal of property and equipment	1,299		3,806
Purchases of investments	(4,641)		(6,460)
Sales and returns of investments	1,562		3,486
NET CASH USED IN INVESTING ACTIVITIES	(357,222)		(318,654)
FINANCING ACTIVITIES:
Proceeds from issuances of long-term debt	134,600		2,863,500
Payments on long-term debt	(242,989)		(4,116,775)
Cash paid for debt issuance costs	(15,576)		(13,987)
Payments on finance lease obligations	(12,177)		(10,056)
Issuances of non-recourse notes payable	9,099,929		11,351,696
Payments on non-recourse notes payable	(8,430,615)		(10,581,076)
Repurchase and retirement of common stock	(44,287)		(333,814)
Equity issuances	28,430		13,504
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	517,315		(827,008)
Increase in cash, cash equivalents, and restricted cash	309,072		516,415
Cash, cash equivalents, and restricted cash at beginning of year	951,004		803,618
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	1,260,076	$	1,320,033
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents	$	605,375	$	688,618
Restricted cash from collections on auto loans receivable	483,570		466,525
Restricted cash included in other assets	171,131		164,890
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	1,260,076	$	1,320,033

See accompanying notes to consolidated financial statements.

Page 6

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity

(Unaudited)

	Nine Months Ended November 30, 2023
								Accumulated
	Common			Capital in				Other
	Shares	Common		Excess of		Retained		Comprehensive
(In thousands)	Outstanding	Stock		Par Value		Earnings		Income		Total
Balance as of February 28, 2023	158,079	$	79,040	$	1,713,074	$	3,723,094	$	97,869	$	5,613,077
Net earnings	—	—		—		228,298		—		228,298
Other comprehensive loss	—	—		—		—		(36,539)		(36,539)
Share-based compensation expense	—	—		21,274		—		—		21,274
Exercise of common stock options	18	9		979		—		—		988
Stock incentive plans, net shares issued	112	56		(3,986)		—		—		(3,930)
Balance as of May 31, 2023	158,209	$	79,105	$	1,731,341	$	3,951,392	$	61,330	$	5,823,168
Net earnings	—	—		—		118,635		—		118,635
Other comprehensive income	—	—		—		—		17,267		17,267
Share-based compensation expense	—	—		20,256		—		—		20,256
Exercise of common stock options	446	223		26,323		—		—		26,546
Stock incentive plans, net shares issued	1	—		(213)		—		—		(213)
Balance as of August 31, 2023	158,656	$	79,328	$	1,777,707	$	4,070,027	$	78,597	$	6,005,659
Net earnings	—	—		—		82,003		—		82,003
Other comprehensive loss	—	—		—		—		(17,930)		(17,930)
Share-based compensation expense	—	—		15,728		—		—		15,728
Repurchases of common stock	(649)	(324)		(7,312)		(34,267)		—		(41,903)
Exercise of common stock options	12	6		890		—		—		896
Stock incentive plans, net shares issued	2	1		(89)		—		—		(88)
Balance as of November 30, 2023	158,021	$	79,011	$	1,786,924	$	4,117,763	$	60,667	$	6,044,365

See accompanying notes to consolidated financial statements.

Page 7

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity

(Unaudited)

	Nine Months Ended November 30, 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
Net earnings	—	—		—		37,580		—		37,580
Other comprehensive income	—	—		—		—		25,421		25,421
Share-based compensation expense	—	—		12,797		—		—		12,797
Repurchases of common stock	(30)	(15)		(320)		(2,297)		—		(2,632)
Exercise of common stock options	4	2		218		—		—		220
Stock incentive plans, net shares issued	1	1		(41)		—		—		(40)
Balance as of November 30, 2022	158,019	$	79,010	$	1,697,062	$	3,654,081	$	57,420	$	5,487,573

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 16 for additional information on our reportable segments.

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. 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, 2023 (the “2023 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 2023 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.  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 October 2023, the Financial Accounting Standards Board (“FASB”) issued an accounting pronouncement (ASU 2023-06) related to disclosure or presentation requirements for various subtopics in the FASB’s Accounting Standards Codification (“Codification”). The amendments in the update are intended to align the requirements in the Codification with the U.S. Securities and Exchange Commission's (“SEC”) regulations and facilitate the application of GAAP for all entities. The effective date for each amendment is the date on which the SEC removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or if the SEC has not removed the requirements by June 30, 2027, this amendment will be removed from the Codification and will not become effective for any entity. Early adoption is prohibited. We do not expect this update to have a material impact on our consolidated financial statements.

In November 2023, the FASB issued an accounting pronouncement (ASU 2023-07) related to the disclosure of incremental segment information on an annual and interim basis. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. We plan to adopt this pronouncement beginning with our fiscal year ended February 28, 2025, and we do not expect it to have a material effect on our consolidated financial statements.

Page 9

In December 2023, the FASB issued an accounting pronouncement (ASU 2023-09) related to income tax disclosures. The amendments in this update are intended to enhance the transparency and decision usefulness of income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information. This update is effective for annual periods beginning after December 15, 2024, though early adoption is permitted. We plan to adopt this pronouncement for our fiscal year beginning March 1, 2025, and we do not expect it to have a material effect on our consolidated financial statements.

2. 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 November 30				Nine Months Ended November 30
(In millions)	2023		2022		2023		2022
Used vehicle sales	$	4,832.1	$	5,204.6	$	16,424.7	$	18,503.2
Wholesale vehicle sales	1,165.2		1,152.2		4,001.5		4,959.1
Other sales and revenues:
Extended protection plan revenues	90.8		91.8		303.8		318.1
Third-party finance (fees)/income, net	(1.2)		1.0		(2.4)		7.1
Advertising & subscription revenues (1)	36.7		33.3		101.6		101.9
Service revenues	20.3		19.6		63.8		60.8
Other	4.7		3.5		16.4		12.3
Total other sales and revenues	151.3		149.2		483.2		500.2
Total net sales and operating revenues	$	6,148.5	$	6,506.0	$	20,909.4	$	23,962.4

(1)     Excludes intersegment sales and operating revenues that have been eliminated in consolidation. See Note 16 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 15 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

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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 7 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 is determined upon satisfying the performance obligation of selling the ESP. This estimate is subject to various constraints; primarily, factors that are outside of the company’s influence or control. We have determined that these constraints generally preclude any profit-sharing revenues from being recognized before they are paid. As of November 30, 2023 and February 28, 2023, no current or long-term contract asset was recognized related to cumulative profit-sharing payments to which we expect to be entitled. The estimate of the amount to which we expect to be entitled is reassessed each reporting period and any changes are reflected in other sales and revenues on our consolidated statements of earnings and other assets on our consolidated balance sheets.

Third-Party Finance (Fees)/Income. 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 include miscellaneous goods and services, which are immaterial to our consolidated financial statements.

3. 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 4, 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 November 30						Nine Months Ended November 30
(In millions)	2023		% (1)	2022		% (1)	2023		% (1)	2022		% (1)
Interest margin:
Interest and fee income	$	426.9	9.8	$	365.4	8.8	$	1,244.3	9.6	$	1,069.3	8.8
Interest expense	(170.2)		(3.9)	(88.8)		(2.1)	(464.8)		(3.6)	(200.1)		(1.6)
Total interest margin	256.7		5.9	276.6		6.7	779.5		6.0	869.2		7.2
Provision for loan losses	(68.3)		(1.6)	(85.7)		(2.1)	(239.0)		(1.8)	(219.0)		(1.8)
Total interest margin after provision for loan losses	188.4		4.3	190.9		4.6	540.5		4.2	650.2		5.4
Direct expenses:
Payroll and fringe benefit expense	(16.2)		(0.4)	(16.1)		(0.4)	(49.6)		(0.4)	(46.7)		(0.4)
Depreciation and amortization	(4.1)		(0.1)	(4.0)		(0.1)	(12.3)		(0.1)	(11.6)		(0.1)
Other direct expenses	(19.4)		(0.4)	(18.7)		(0.5)	(57.6)		(0.4)	(52.4)		(0.4)
Total direct expenses	(39.7)		(0.9)	(38.8)		(0.9)	(119.5)		(0.9)	(110.7)		(0.9)
CarMax Auto Finance income	$	148.7	3.4	$	152.2	3.7	$	421.0	3.2	$	539.5	4.4
Total average managed receivables	$	17,508.9		$	16,540.2		$	17,276.0		$	16,177.8

(1)     Annualized percentage of total average managed receivables.     

4. 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 $17.03 billion as of November 30, 2023, and $16.36 billion as of February 28, 2023. See Note 9 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 3 for additional information on CAF income.

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Auto Loans Receivable, Net

	As of November 30		As of February 28
(In millions)	2023		2023
Asset-backed term funding	$	12,053.2	$	12,242.8
Warehouse facilities	4,529.6		3,649.9
Overcollateralization (1)	783.4		739.9
Other managed receivables (2)	138.9		135.3
Total ending managed receivables	17,505.1		16,767.9
Accrued interest and fees	97.9		78.0
Other	(9.2)		3.1
Less: allowance for loan losses	(511.9)		(507.2)
Auto loans receivable, net	$	17,081.9	$	16,341.8

(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 November 30, 2023
	Fiscal Year of Origination (1)
(In millions)	2024		2023		2022		2021		2020		Prior to 2020		Total		% (2)
Core managed receivables (3):
A	$	3,217.4	$	2,922.2	$	1,842.0	$	725.5	$	355.1	$	69.4	$	9,131.6	52.2
B	1,980.5		1,899.8		1,359.4		564.5		289.1		95.0		6,188.3		35.4
C and other	281.6		552.1		447.9		219.6		104.8		38.3		1,644.3		9.3
Total core managed receivables	5,479.5		5,374.1		3,649.3		1,509.6		749.0		202.7		16,964.2		96.9
Other managed receivables (4):
C and other	225.0		197.6		80.7		10.5		14.2		12.9		540.9		3.1
Total ending managed receivables	$	5,704.5	$	5,571.7	$	3,730.0	$	1,520.1	$	763.2	$	215.6	$	17,505.1	100.0
Gross charge-offs	$	26.1	$	188.8	$	120.2	$	36.9	$	18.3	$	11.4	$	401.7

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	As of February 28, 2023
	Fiscal Year of Origination (1)
(In millions)	2023		2022		2021		2020		2019		Prior to 2019		Total		% (2)
Core managed receivables (3):
A	$	3,890.9	$	2,555.3	$	1,112.0	$	677.1	$	218.3	$	36.3	$	8,489.9	50.6
B	2,497.5		1,839.9		816.2		488.9		215.1		56.0		5,913.6		35.3
C and other	732.7		609.5		314.5		169.3		74.1		25.6		1,925.7		11.5
Total core managed receivables	7,121.1		5,004.7		2,242.7		1,335.3		507.5		117.9		16,329.2		97.4
Other managed receivables (4):
C and other	272.0		112.5		15.0		21.1		13.2		4.9		438.7		2.6
Total ending managed receivables	$	7,393.1	$	5,117.2	$	2,257.7	$	1,356.4	$	520.7	$	122.8	$	16,767.9	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 November 30, 2023 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.

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Allowance for Loan Losses

	Three Months Ended November 30, 2023
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	433.0	$	105.0	$	538.0	3.08
Charge-offs	(125.1)		(23.6)		(148.7)
Recoveries (2)	47.2		7.1		54.3
Provision for loan losses	57.3		11.0		68.3
Balance as of end of period	$	412.4	$	99.5	$	511.9	2.92

	Three Months Ended November 30, 2022
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	396.1	$	81.4	$	477.5	2.92
Charge-offs	(96.3)		(16.3)		(112.6)
Recoveries (2)	35.7		4.7		40.4
Provision for loan losses	60.9		24.8		85.7
Balance as of end of period	$	396.4	$	94.6	$	491.0	2.95

	Nine Months Ended November 30, 2023
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	401.5	$	105.7	$	507.2	3.02
Charge-offs	(336.9)		(64.8)		(401.7)
Recoveries (2)	146.2		21.2		167.4
Provision for loan losses	201.6		37.4		239.0
Balance as of end of period	$	412.4	$	99.5	$	511.9	2.92

	Nine Months Ended November 30, 2022
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	377.5	$	55.5	$	433.0	2.77
Charge-offs	(241.9)		(35.0)		(276.9)
Recoveries (2)	104.7		11.2		115.9
Provision for loan losses	156.1		62.9		219.0
Balance as of end of period	$	396.4	$	94.6	$	491.0	2.95

(1)     Percent of total ending managed receivables.

(2)     Net of costs incurred to recover vehicle.

During the first nine months of fiscal 2024, the allowance for loan losses as a percent of total ending managed receivables decreased by 10 basis points. The decrease was primarily driven by the impact of our tightened underwriting standards in response to the current environment, partially offset by unfavorable loss performance as well as our continued investment in the Tier 2 business. The increase in net charge-offs primarily reflects continued customer hardship in the current economic environment. The allowance for loan losses as of November 30, 2023 reflects our best estimate of expected future losses based on recent trends in delinquencies, loss performance, recovery rates and the economic environment.

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

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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 November 30, 2023
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	9,079.3	$	5,715.6	$	1,294.5	$	16,089.4	$	398.3	$	16,487.7	94.19
Delinquent loans:
31-60 days past due	31.6		270.6		178.1		480.3		68.1		548.4		3.13
61-90 days past due	15.5		165.0		144.2		324.7		62.3		387.0		2.21
Greater than 90 days past due	5.2		37.1		27.5		69.8		12.2		82.0		0.47
Total past due	52.3		472.7		349.8		874.8		142.6		1,017.4		5.81
Total ending managed receivables	$	9,131.6	$	6,188.3	$	1,644.3	$	16,964.2	$	540.9	$	17,505.1	100.00

	As of February 28, 2023
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	8,450.3	$	5,540.2	$	1,612.3	$	15,602.8	$	327.6	$	15,930.4	95.00
Delinquent loans:
31-60 days past due	25.1		225.7		175.4		426.2		60.6		486.8		2.90
61-90 days past due	10.6		120.0		114.5		245.1		42.1		287.2		1.71
Greater than 90 days past due	3.9		27.7		23.5		55.1		8.4		63.5		0.39
Total past due	39.6		373.4		313.4		726.4		111.1		837.5		5.00
Total ending managed receivables	$	8,489.9	$	5,913.6	$	1,925.7	$	16,329.2	$	438.7	$	16,767.9	100.00

(1)     Percent of total ending managed receivables. 

5. 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 SOFR 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 (“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 $52.1 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 nine months ended November 30, 2023, we recognized expense of $6.1 million and $16.6 million, respectively, in CAF income representing these changes in fair value.

As of November 30, 2023 and February 28, 2023, we had interest rate swaps outstanding with a combined notional amount of $5.00 billion and $4.49 billion, respectively, that were designated as cash flow hedges of interest rate risk. As of November 30,

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2023 and February 28, 2023, we had interest rate swaps with a combined notional amount of $0.90 billion and $1.14 billion, respectively, outstanding that were not designated as cash flow hedges for accounting purposes.

See Note 6 for discussion of fair values of financial instruments and Note 12 for the effect on comprehensive income.

6. 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 November 30, 2023
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	1,194,255		$	—		$	1,194,255
Mutual fund investments	22,809			—			22,809
Derivative instruments designated as hedges	—			59,137			59,137
Derivative instruments not designated as hedges	—			17,246			17,246
Total assets at fair value	$	1,217,064		$	76,383		$	1,293,447
Percent of total assets at fair value	94.1		%	5.9		%	100.0		%
Percent of total assets	4.5		%	0.3		%	4.8		%
Liabilities:
Derivative instruments designated as hedges	$	—		$	(6,208)		$	(6,208)
Total liabilities at fair value	$	—		$	(6,208)		$	(6,208)
Percent of total liabilities	—		%	—		%	—		%

	As of February 28, 2023
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	865,943		$	—		$	865,943
Mutual fund investments	22,671			—			22,671
Derivative instruments designated as hedges	—			97,328			97,328
Derivative instruments not designated as hedges	—			33,870			33,870
Total assets at fair value	$	888,614		$	131,198		$	1,019,812
Percent of total assets at fair value	87.1		%	12.9		%	100.0		%
Percent of total assets	3.4		%	0.5		%	3.9		%
Liabilities:
Total liabilities at fair value	$	—		$	—		$	—
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 November 30, 2023 and February 28, 2023, respectively, are as follows:

(In thousands)	As of November 30, 2023		As of February 28, 2023
Carrying value	$	400,000	$	500,000
Fair value	$	376,076	$	473,749

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7. 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 November 30				Nine Months Ended November 30
(In millions)	2023		2022		2023		2022
Balance as of beginning of period	$	136.6	$	148.8	$	139.2	$	144.7
Cancellations	(22.4)		(25.2)		(70.2)		(80.3)
Provision for future cancellations	17.4		20.7		62.6		79.9
Balance as of end of period	$	131.6	$	144.3	$	131.6	$	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 November 30, 2023 and February 28, 2023, the current portion of cancellation reserves was $68.0 million and $76.1 million, respectively.

8. Income Taxes

We had $31.1 million of gross unrecognized tax benefits as of November 30, 2023, and $27.1 million as of February 28, 2023.  There were no significant changes to the gross unrecognized tax benefits as reported for the fiscal year ended February 28, 2023.

9. Debt

(In thousands)		As of November 30		As of February 28
Debt Description (1)	Maturity Date	2023		2023
Revolving credit facility (2)	June 2028	$	—	$	—
Term loan (2)	June 2024	300,000		300,000
Term loan (2)	October 2026	699,598		699,493
3.86% Senior notes	April 2023	—		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	519,396		522,526
Non-recourse notes payable	Various dates through December 2030	17,029,405		16,360,092
Total debt		18,948,399		18,382,111
Less: current portion		(759,288)		(579,468)
Less: unamortized debt issuance costs		(25,420)		(27,506)
Long-term debt, net		$	18,163,691	$	17,775,137

(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 SOFR, 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 November 30, 2023, the unused capacity of $2.00 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 6.32% as of November 30, 2023. The $300 million term loan

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matures in June 2024 and was therefore classified as current. The $700 million term loan was classified as long-term debt as no repayments are scheduled to be made within the next 12 months.

Senior Notes. The 3.86% senior notes matured during the first quarter of fiscal 2024. Borrowings under our unsecured senior notes totaling $400 million are available for working capital and general corporate purposes. As of November 30, 2023, all 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 December 2030, 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 November 30, 2023 are as follows:

(In billions)	Capacity
Warehouse facilities:
December 2023 expiration	$	0.50
February 2024 expiration	2.80
August 2024 expiration	2.30
Combined warehouse facility limit	$	5.60
Unused capacity	$	1.07
Non-recourse notes payable outstanding:
Warehouse facilities	$	4.53
Asset-backed term funding transactions	12.50
Non-recourse notes payable	$	17.03

We generally enter into warehouse facility agreements for one-year terms and typically renew the agreements annually. In December 2023, the $0.50 billion facility was extended with an expiration date of January 2024, which we expect to renew for an annual term in January 2024. 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 4 for additional information on the related auto loans receivable.

Capitalized Interest.  We capitalize interest in connection with the construction of certain facilities.  For the nine months ended November 30, 2023 and 2022, we capitalized interest of $4.6 million and $3.6 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, as well as financial covenants and performance triggers related to events of default.  As of November 30, 2023, we were in compliance with these financial covenants and our non-recourse funding vehicles were in compliance with these performance triggers.

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10. Stock and Stock-Based Incentive Plans

(A)Share Repurchase Program

During the third quarter of fiscal 2024, we resumed our share repurchase program after having paused it during the third quarter of fiscal year 2023. As of November 30, 2023, a total of $4.0 billion of board authorizations for repurchases of our common stock was outstanding, with no expiration date, of which $2.41 billion remained available for repurchase.

Common Stock Repurchases

	Three Months Ended				Nine Months Ended
	November 30				November 30
	2023		2022		2023		2022
Number of shares repurchased (in thousands)	648.5		30.0		648.5		3,403.9
Average cost per share	$	64.60	$	87.70	$	64.60	$	94.95
Available for repurchase, as of end of period (in millions)	$	2,409.4	$	2,451.3	$	2,409.4	$	2,451.3

(B)Share-Based Compensation

Composition of Share-Based Compensation Expense

	Three Months Ended				Nine Months Ended
	November 30				November 30
(In thousands)	2023		2022		2023		2022
Cost of sales	$	692	$	333	$	3,277	$	1,474
CarMax Auto Finance income	1,016		981		2,663		1,394
Selling, general and administrative expenses	19,918		17,213		86,516		63,983
Share-based compensation expense, before income taxes	$	21,626	$	18,527	$	92,456	$	66,851

Composition of Share-Based Compensation Expense – By Grant Type

	Three Months Ended				Nine Months Ended
	November 30				November 30
(In thousands)	2023		2022		2023		2022
Nonqualified stock options	$	12,334	$	8,968	$	40,061	$	29,648
Cash-settled restricted stock units (RSUs)	5,306		5,167		33,221		15,521
Stock-settled market stock units (MSUs)	3,531		3,358		13,639		12,234
Other share-based incentives:
Stock-settled performance stock units (PSUs)	(137)		209		1,401		5,150
Restricted stock (RSAs)	—		262		307		571
Stock-settled deferred stock units (DSUs)	—		—		1,850		1,850
Employee stock purchase plan	592		563		1,977		1,877
Total other share-based incentives	$	455	$	1,034	$	5,535	$	9,448
Share-based compensation expense, before income taxes	$	21,626	$	18,527	$	92,456	$	66,851

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(C)Stock Incentive Plan Information

Share/Unit Activity

	Nine Months Ended November 30, 2023
	Equity Classified						Liability Classified
(Shares/units in thousands)	Options		MSUs		Other		RSUs
Outstanding as of February 28, 2023	6,776		404		130		1,004
Granted	1,549		186		76		914
Exercised or vested and converted	(476)		(187)		(11)		(489)
Cancelled	(175)		(19)		—		(96)
Outstanding as of November 30, 2023	7,674		384		195		1,333
Weighted average grant date fair value per share/unit:
Granted	$	29.10	$	99.81	$	74.31	$	70.68
Ending outstanding	$	26.90	$	123.67	$	88.70	$	81.34
	As of November 30, 2023
Unrecognized compensation (in millions)	$	54.2	$	19.6	$	0.8

11. 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				Nine Months Ended
	November 30				November 30
(In thousands except per share data)	2023		2022		2023		2022
Net earnings	$	82,003	$	37,580	$	428,936	$	415,750
Weighted average common shares outstanding	158,446		158,003		158,347		159,044
Dilutive potential common shares:
Stock options	156		268		301		857
Stock-settled stock units and awards	197		265		218		294
Weighted average common shares and dilutive potential common shares	158,799		158,536		158,866		160,195
Basic net earnings per share	$	0.52	$	0.24	$	2.71	$	2.61
Diluted net earnings per share	$	0.52	$	0.24	$	2.70	$	2.60

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 November 30, 2023 and 2022, options to purchase 6,263,513 shares and 4,934,554 shares of common stock, respectively, were not included. For the nine months ended November 30, 2023 and 2022, options to purchase 5,732,651 shares and 1,917,727 shares of common stock, respectively, were not included.

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12. Accumulated Other Comprehensive Income

Changes in Accumulated Other Comprehensive Income By Component

					Total
	Net		Net		Accumulated
	Unrecognized		Unrecognized		Other
	Actuarial		Hedge		Comprehensive
(In thousands, net of income taxes)	Losses		Gains		Income
Balance as of February 28, 2023	$	(44,590)	$	142,459	$	97,869
Other comprehensive loss before reclassifications	—		(8,623)		(8,623)
Amounts reclassified from accumulated other comprehensive income	294		(28,873)		(28,579)
Other comprehensive income (loss)	294		(37,496)		(37,202)
Balance as of November 30, 2023	$	(44,296)	$	104,963	$	60,667

Changes In and Reclassifications Out of Accumulated Other Comprehensive Income

	Three Months Ended November 30				Nine Months Ended November 30
(In thousands)	2023		2022		2023		2022
Retirement Benefit Plans:
Actuarial loss amortization reclassifications recognized in net pension expense:
Cost of sales	$	58	$	272	$	174	$	810
CarMax Auto Finance income	4		19		11		51
Selling, general and administrative expenses	67		346		202		1,048
Total amortization reclassifications recognized in net pension expense	129		637		387		1,909
Tax expense	(31)		(155)		(93)		(465)
Amortization reclassifications recognized in net pension expense, net of tax	98		482		294		1,444
Net change in retirement benefit plan unrecognized actuarial losses, net of tax	98		482		294		1,444
Cash Flow Hedges (Note 5):
Changes in fair value	(10,594)		42,521		(11,599)		152,731
Tax benefit (expense)	2,640		(10,919)		2,976		(39,221)
Changes in fair value, net of tax	(7,954)		31,602		(8,623)		113,510
Reclassifications to CarMax Auto Finance income	(13,321)		(8,965)		(38,180)		(14,951)
Tax benefit	3,247		2,302		9,307		3,839
Reclassification of hedge gains, net of tax	(10,074)		(6,663)		(28,873)		(11,112)
Net change in cash flow hedge unrecognized gains, net of tax	(18,028)		24,939		(37,496)		102,398
Total other comprehensive (loss) income, net of tax	$	(17,930)	$	25,421	$	(37,202)	$	103,842

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. The cumulative balances are net of deferred taxes of $20.4 million as of November 30, 2023 and $32.6 million as of February 28, 2023.

13. 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 9.

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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 restrictive 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 November 30				Nine Months Ended November 30
(In thousands)	2023		2022		2023		2022
Operating lease cost (1)	$	22,772	$	22,450	$	66,958	$	68,381
Finance lease cost:
Depreciation of lease assets	5,266		4,178		14,708		11,701
Interest on lease liabilities	6,610		5,728		19,112		16,129
Total finance lease cost	11,876		9,906		33,820		27,830
Total lease cost	$	34,648	$	32,356	$	100,778	$	96,211

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

Supplemental balance sheet information related to leases was as follows:

		As of November 30		As of February 28
(In thousands)	Classification	2023		2023
Assets:
Operating lease assets	Operating lease assets	$	533,387	$	545,677
Finance lease assets	Property and equipment, net (1)	179,381		145,372
Total lease assets		$	712,768	$	691,049
Liabilities:
Current:
Operating leases	Current portion of operating lease liabilities	$	56,410	$	53,287
Finance leases	Accrued expenses and other current liabilities	20,452		18,788
Long-term:
Operating leases	Operating lease liabilities, excluding current portion	509,141		523,828
Finance leases	Other liabilities	202,024		165,135
Total lease liabilities		$	788,027	$	761,038

(1)    Finance lease assets are recorded net of accumulated depreciation of $53.1 million as of November 30, 2023 and $46.7 million as of February 28, 2023.

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

	As of November 30		As of February 28
Lease Term and Discount Rate	2023		2023
Weighted Average Remaining Lease Term (in years)
Operating leases	16.09		16.35
Finance leases	11.56		10.84
Weighted Average Discount Rate
Operating leases	5.02	%	4.91	%
Finance leases	17.17	%	19.34	%

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended November 30
(In thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	66,352	$	67,675
Operating cash flows from finance leases	$	18,387	$	12,747
Financing cash flows from finance leases	$	12,177	$	10,056
Lease assets obtained in exchange for lease obligations:
Operating leases	$	29,080	$	29,027
Finance leases	$	50,085	$	31,344

Maturities of lease liabilities were as follows:

	As of November 30, 2023
(In thousands)	Operating Leases (1)		Finance Leases (1)
Fiscal 2024, remaining	$	20,661	$	10,886
Fiscal 2025	82,816		45,606
Fiscal 2026	77,454		47,365
Fiscal 2027	71,099		43,554
Fiscal 2028	66,952		36,691
Thereafter	561,850		258,658
Total lease payments	880,832		442,760
Less: interest	(315,281)		(220,284)
Present value of lease liabilities	$	565,551	$	222,476

(1)    Lease payments exclude $5.1 million of legally binding minimum lease payments for leases signed but not yet commenced.

14. Supplemental Cash Flow Information

Supplemental disclosures of cash flow information:

	Nine Months Ended November 30
(In thousands)	2023		2022
Non-cash investing and financing activities:
(Decrease) increase in accrued capital expenditures	$	(17,419)	$	3,123
Increase in financing obligations	$	4,527	$	—

See Note 13 for supplemental cash flow information related to leases.

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15. Contingent Liabilities

Litigation.  CarMax entities are defendants in a proceeding 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.

The California Supreme Court held in Adolph v. Uber that an employee who signs an arbitration agreement, as Bendure has, may still pursue a representative PAGA action in court if the employee is successful in his individual PAGA action in arbitration. In light of this decision, Bendure filed a demand on October 16, 2023 for an individual arbitration.

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

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 $25.4 million as of November 30, 2023, and $27.1 million as of February 28, 2023, and is included in accrued expenses and other current liabilities.

16. 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 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 2. 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 3. 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 November 30, 2023
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	6,111,839	$	36,699	$	—	$	6,148,538
Intersegment sales and operating revenues	—		8,100		(8,100)		—
Total sales and operating revenues	$	6,111,839	$	44,799	$	(8,100)	$	6,148,538
Depreciation and amortization (1)	$	393	$	5,097	$	—	$	5,490
Gross profit	$	586,332	$	27,710	$	(1,179)	$	612,863
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							148,659
Selling, general and administrative expenses							(559,962)
Depreciation and amortization (2)							(60,623)
Interest expense							(31,265)
Other income (expense)							886
Earnings before income taxes							$	110,558

	Three Months Ended November 30, 2022
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	6,472,702	$	33,254	$	—	$	6,505,956
Intersegment sales and operating revenues	—		5,549		(5,549)		—
Total sales and operating revenues	$	6,472,702	$	38,803	$	(5,549)	$	6,505,956
Depreciation and amortization (1)	$	404	$	3,735	$	—	$	4,139
Gross profit	$	554,057	$	23,780	$	(1,149)	$	576,688
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							152,196
Selling, general and administrative expenses							(591,727)
Depreciation and amortization (2)							(57,377)
Interest expense							(30,150)
Other income (expense)							363
Earnings before income taxes							$	49,993

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	Nine Months Ended November 30, 2023
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	20,807,858	$	101,579	$	—	$	20,909,437
Intersegment sales and operating revenues	—		26,165		(26,165)		—
Total sales and operating revenues	$	20,807,858	$	127,744	$	(26,165)	$	20,909,437
Depreciation and amortization (1)	$	1,239	$	14,236	$	—	$	15,475
Gross profit	$	2,053,228	$	77,269	$	(3,479)	$	2,127,018
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							421,004
Selling, general and administrative expenses							(1,705,493)
Depreciation and amortization (2)							(177,859)
Interest expense							(93,316)
Other income (expense)							4,730
Earnings before income taxes							$	576,084

	Nine Months Ended November 30, 2022
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	23,860,462	$	101,918	$	—	$	23,962,380
Intersegment sales and operating revenues	—		20,219		(20,219)		—
Total sales and operating revenues	$	23,860,462	$	122,137	$	(20,219)	$	23,962,380
Depreciation and amortization (1)	$	1,092	$	10,199	$	—	$	11,291
Gross profit	$	2,115,631	$	77,869	$	(4,276)	$	2,189,224
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							539,538
Selling, general and administrative expenses							(1,914,508)
Depreciation and amortization (2)							(170,717)
Interest expense							(91,670)
Other income (expense)							2,303
Earnings before income taxes							$	554,170

(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, 2023 (“fiscal 2023”), 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.

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 November 30, 2023, we operated 241 used car stores in 109 U.S. television markets.

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 43.1% of our retail used vehicle unit sales in the first nine months of fiscal 2024.  As of November 30, 2023, CAF serviced approximately 1.1 million customer accounts in its $17.51 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 nine months of fiscal 2024 are as follows:

Net Sales and
Operating Revenues Gross Profit

A high-level summary of our financial results for the third quarter and first nine months of fiscal 2024 as compared to the third quarter and first nine months of fiscal 2023 is as follows (1):

(Dollars in millions except per share or per unit data)	Three Months Ended November 30, 2023			Change from Three Months Ended November 30, 2022		Nine Months Ended November 30, 2023			Change from Nine Months Ended November 30, 2022
Income statement information
Net sales and operating revenues	$	6,148.5		(5.5)	%	$	20,909.4		(12.7)	%
Gross profit	$	612.9		6.3	%	$	2,127.0		(2.8)	%
CAF income	$	148.7		(2.3)	%	$	421.0		(22.0)	%
Selling, general and administrative expenses	$	560.0		(5.4)	%	$	1,705.5		(10.9)	%
Net earnings	$	82.0		118.2	%	$	428.9		3.2	%
Unit sales information
Used unit sales	174,766			(2.9)	%	593,515			(7.0)	%
Change in used unit sales in comparable stores	(4.1)		%	N/A		(8.5)		%	N/A
Wholesale unit sales	127,900			7.7	%	430,785			(7.3)	%
Per unit information
Used gross profit per unit	$	2,277		1.8	%	$	2,299		0.3	%
Wholesale gross profit per unit	$	961		(0.5)	%	$	992		3.1	%
SG&A as a % of gross profit	91.4		%	(11.2)	%	80.2		%	(7.3)	%
Per share information
Net earnings per diluted share	$	0.52		116.7	%	$	2.70		3.8	%
Online sales metrics
Online retail sales (2)	14		%	2	%	14		%	3	%
Omni sales (3)	55		%	3	%	55		%	2	%
Revenue from online transactions (4)	31		%	3	%	31		%	1	%

(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, but not all, 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.

Net earnings per diluted share during the first nine months of fiscal 2024 included a benefit of $0.32 in connection with the receipt of settlement proceeds in a class action lawsuit related to the economic loss associated with vehicles containing Takata airbags. 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 has been used to fund the repurchase of common stock under our share repurchase program and our location growth.

Our current capital allocation strategy is to focus on our core business. Given our recent performance and continued market uncertainties, we are taking a conservative approach to our capital structure in order to maintain the flexibility that allows us to efficiently access the capital markets for both CAF and CarMax as a whole. We have taken steps to better align our expenses to sales as well as slowed the rate of our store growth. We resumed our share repurchases during the third quarter of fiscal 2024 after a pause initiated during the third quarter of the prior fiscal year. 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, whether online, in-store or through an integrated combination of online and in-store experiences. 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. As a result, online, omni and in-person sales can vary from quarter to quarter depending on consumer preferences and how they choose to interact with us. We believe consumers in the used car industry will increasingly prefer to have the ability to progress digitally. Approximately 70% of our customers leveraged some or all of our digital capabilities to complete their transactions during the current fiscal year, compared to approximately 40% when we completed our initial omni-channel roll-out at the end of fiscal 2020.

Our diversified business model, combined with our exceptional associates, national scale and unparalleled omni-channel experience, is a unique advantage in the used car industry that firmly positions us to drive profitable market share gains while creating shareholder value over the long-term. Some of the direct benefits that we believe omni-channel has delivered to our business include:

•Omni-channel is driving incremental retail customers to CarMax. Customers who complete an online transaction are 10% more likely to be first-time customers compared with our omni-channel and in-store customers. Online customers are also typically younger, which creates the opportunity to participate in more of their lifetime purchase cycles.

•The annual growth rate for market share in our oldest 15 markets, for which we have not opened new stores since calendar year 2013, doubled in calendar year 2019 compared to the average annual growth rate for the previous five years, and the average annual growth rate for these markets has exceeded their average rate from prior to the omni-channel roll-out through calendar year 2022.

•Instant offer, our online consumer-facing appraisal tool, is significantly driving our vehicle purchases and wholesale sales. We doubled our buys from consumers in the year we launched the online instant offer program, which has enabled us to maintain self-sufficiency over 70%. Additionally, our wholesale volume increased approximately 65% and has remained well above the levels from prior to launching the tool.

•Our omni-channel products are supporting double-digit web traffic growth. Over 80% of our customers use our online finance based shopping tool as they begin the credit process, which has become our number one lead source.

•We continue to show sequential year-over-year improvement in key selling cost efficiency metrics for our omni-channel overhead model. With a more fixed cost structure, we expect to lever more strongly as demand increases.

We expect the impact of our omni-channel capabilities will continue to grow as consumers demand a more personalized car-buying experience.

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We purchased approximately 250,000 vehicles from consumers and dealers during the third quarter of fiscal 2024, up 5.1% from the prior year quarter. Approximately 22,000 of these vehicles were purchased through dealers, up 61.7% from the prior year quarter. We leverage the Edmunds sales team to open new markets and sign up new dealers for MaxOffer. We recently launched an appraisal tool for dealer websites that makes instant offers based on our algorithms, which are redeemable via MaxOffer.

Our SG&A expenses in the first nine months of fiscal 2024 decreased from the prior year period, even when excluding the benefits of this year's legal settlements. While SG&A as a percent of gross profit can fluctuate from quarter to quarter depending on variability in gross profit, our initial goal on the path to strengthening our SG&A to gross profit leverage over time is to achieve a rate in the mid-70% range on an annual basis. Achieving this annual rate will require continued efficiency gains in our operating model, gross profit growth and healthier consumer demand. We are on track to outperform the target we set at the beginning of the fiscal year of requiring low single digit gross profit growth to lever SG&A for the full fiscal year, even when excluding the benefits of this year's legal settlements.

Other steps we have taken to support our business for both the short- and long-term include focusing on production efficiencies to align saleable inventory to sales, raising CAF's consumer rates while growing CAF's penetration, tightening CAF's underwriting standards and slowing our planned store growth to provide more capital flexibility. We resumed our share repurchases during the third quarter of fiscal 2024 after a pause initiated during the third quarter of the prior fiscal year.

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

•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-year old used vehicle market to more than 5% by the end of calendar 2025.

The achievement of these targets is dependent on macroeconomic factors that could result in ongoing volatility in consumer demand.

In calendar 2022, we estimate we sold approximately 4.0% of the age 0- to 10-year old vehicles sold on a nationwide basis, consistent with calendar 2021. We estimate we sold approximately 4.8% of the age 0- to 10-year old vehicles sold in the current comparable store markets in which we operate in calendar 2022, consistent with calendar 2021. External title data shows that our market share for the first ten months of calendar 2023 improved compared to our market share for the second half of calendar 2022. Further, market share for the month of October 2023, the latest period for which title data is available, improved year-over-year for the first time this calendar year. Our strategy to continue 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.

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

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

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

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

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

•Becoming the leading retailer of used electric vehicles (“EV”) in the market. In support of this goal, Edmunds has launched several research and buying tools, which include providing data on the health and range of EV batteries as well as an evaluation of potential federal and state tax credits and incentives. This will support our business and help CarMax be part of the solution to reduce emissions.

As of November 30, 2023, we had used car stores located in 109 U.S. television markets, which covered approximately 85% 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 nine months of fiscal 2024, we opened one store, and during the remainder of the fiscal year we plan to open an additional four stores and our first stand-alone reconditioning center in the Atlanta metro market.

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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, 2023.

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, 2023.

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

NET SALES AND OPERATING REVENUES

	Three Months Ended November 30						Nine Months Ended November 30
(In millions)	2023		2022		Change		2023		2022		Change
Used vehicle sales	$	4,832.1	$	5,204.6	(7.2)	%	$	16,424.7	$	18,503.2	(11.2)	%
Wholesale vehicle sales	1,165.2		1,152.2		1.1	%	4,001.5		4,959.1		(19.3)	%
Other sales and revenues:
Extended protection plan revenues	90.8		91.8		(1.0)	%	303.8		318.1		(4.5)	%
Third-party finance (fees)/income, net	(1.2)		1.0		(227.5)	%	(2.4)		7.1		(133.7)	%
Advertising & subscription revenues (1)	36.7		33.3		10.4	%	101.6		101.9		(0.3)	%
Other	25.0		23.1		7.8	%	80.2		73.1		9.8	%
Total other sales and revenues	151.3		149.2		1.4	%	483.2		500.2		(3.4)	%
Total net sales and operating revenues	$	6,148.5	$	6,506.0	(5.5)	%	$	20,909.4	$	23,962.4	(12.7)	%

(1)    Excludes intersegment sales and operating revenues that have been eliminated in consolidation. See Note 16 for further details.

UNIT SALES

	Three Months Ended November 30				Nine Months Ended November 30
	2023	2022	Change		2023	2022	Change
Used vehicles	174,766	180,050	(2.9)	%	593,515	637,939	(7.0)	%
Wholesale vehicles	127,900	118,757	7.7	%	430,785	464,741	(7.3)	%

AVERAGE SELLING PRICES

	Three Months Ended November 30						Nine Months Ended November 30
	2023		2022		Change		2023		2022		Change
Used vehicles	$	27,228	$	28,530	(4.6)	%	$	27,331	$	28,692	(4.7)	%
Wholesale vehicles	$	8,674	$	9,294	(6.7)	%	$	8,887	$	10,280	(13.6)	%

COMPARABLE STORE USED VEHICLE SALES CHANGES

	Three Months Ended November 30 (1)				Nine Months Ended November 30 (1)
	2023		2022		2023		2022
Used vehicle units	(4.1)	%	(22.4)	%	(8.5)	%	(14.3)	%
Used vehicle revenues	(8.3)	%	(21.0)	%	(12.7)	%	(3.2)	%

(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 November 30				Nine Months Ended November 30
	2023		2022		2023		2022
Used vehicle units	(2.9)	%	(20.8)	%	(7.0)	%	(12.6)	%
Used vehicle revenues	(7.2)	%	(19.1)	%	(11.2)	%	(1.0)	%
Wholesale vehicle units	7.7	%	(36.7)	%	(7.3)	%	(16.6)	%
Wholesale vehicle revenues	1.1	%	(40.1)	%	(19.3)	%	(0.8)	%

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

	Three Months Ended November 30 (1)				Nine Months Ended November 30 (1)
	2023		2022		2023		2022
CAF (2)	46.5	%	47.3	%	46.1	%	44.9	%
Tier 2 (3)	18.0	%	20.5	%	18.9	%	22.6	%
Tier 3 (4)	6.9	%	6.1	%	6.7	%	6.4	%
Other (5)	28.6	%	26.1	%	28.3	%	26.1	%
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 less than 2% 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 November 30		Nine Months Ended November 30
	2023	2022	2023	2022
Used car stores, beginning of period	241	234	240	230
Store openings	—	1	1	5
Used car stores, end of period	241	235	241	235

During the first nine months of fiscal 2024, we opened one store in an existing television market (Winchester, VA).

Used Vehicle Sales.  The 7.2% decrease in used vehicle revenues in the third quarter of fiscal 2024 was primarily driven by a 4.6% decrease in average retail selling price, or approximately $1,300, and a 2.9% decrease in used unit sales. The decrease in used units included a 4.1% decrease in comparable store used unit sales. For the first nine months of fiscal 2024, used vehicle revenues decreased 11.2%, driven by a 7.0% decrease in used unit sales and a 4.7% decrease in average selling price, or approximately $1,400. The decrease in used units included an 8.5% decrease in comparable store used unit sales. Online retail sales, as defined previously, accounted for 14% of used unit sales for both the third quarter and first nine months of fiscal 2024, compared with 12% and 11% for the third quarter and first nine months of fiscal 2023, respectively.

During the first nine months of fiscal 2024, we believe persistent vehicle affordability challenges continued to impact our unit sales performance, as headwinds remained due to widespread inflationary pressures, higher interest rates, tightened lending standards and prolonged low consumer confidence. Comparable used unit sales for December 2023 were similar to our third quarter results.

The decrease in average retail selling price in the third quarter of fiscal 2024 reflected lower vehicle acquisition costs. The decrease in average retail selling price in the first nine months of fiscal 2024 reflected lower vehicle acquisition costs as well as shifts in the mix of our sales by vehicle age.

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.

The 1.1% increase in wholesale vehicle revenues in the third quarter of fiscal 2024 was primarily due to a 7.7% increase in unit sales, partially offset by a decrease in average selling price of 6.7%, or approximately $600. For the first nine months of fiscal 2024, wholesale vehicle revenues decreased 19.3%, driven by a decrease in average selling price of 13.6%, or approximately $1,400, and a 7.3% decrease in unit sales.

The decrease in average selling price during the third quarter of fiscal 2024 was primarily due to shifts in the mix of our sales by vehicle age as well as decreased acquisition costs resulting from steep market depreciation, partially offset by shifts in the mix of our sales by vehicle class. The decrease in average selling price during the first nine months of fiscal 2024 was primarily due to shifts in the mix of our sales by vehicle age as well as decreased acquisition costs resulting from steep market depreciation.

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 (fees)/income, 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 increased 1.4% in the third quarter of fiscal 2024. Other sales and revenues decreased 3.4% in the first nine months of fiscal 2024, reflecting a decline in EPP revenue and a decrease in net third-party finance (fees)/income. EPP revenues decreased 4.5%, largely reflecting the decline in our retail unit sales, partially offset by a favorable year-over-year return reserve adjustment. Net third-party finance (fees)/income declined as a result of lower Tier 2 volume, for which we generally receive a fee.

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.

GROSS PROFIT

	Three Months Ended November 30 (1)						Nine Months Ended November 30 (1)
(In millions)	2023		2022		Change		2023		2022		Change
Used vehicle gross profit	$	397.9	$	402.8	(1.2)	%	$	1,364.6	$	1,461.3	(6.6)	%
Wholesale vehicle gross profit	122.9		114.7		7.2	%	427.3		447.0		(4.4)	%
Other gross profit	92.1		59.2		55.4	%	335.1		280.9		19.2	%
Total	$	612.9	$	576.7	6.3	%	$	2,127.0	$	2,189.2	(2.8)	%

(1)     Amounts are net of intercompany eliminations.

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GROSS PROFIT PER UNIT

	Three Months Ended November 30 (1)						Nine Months Ended November 30 (1)
	2023			2022			2023			2022
	$ per unit(2)		%(3)	$ per unit(2)		%(3)	$ per unit(2)		%(3)	$ per unit(2)		%(3)
Used vehicle gross profit	$	2,277	8.2	$	2,237	7.7	$	2,299	8.3	$	2,291	7.9
Wholesale vehicle gross profit	$	961	10.5	$	966	10.0	$	992	10.7	$	962	9.0
Other gross profit	$	527	60.9	$	329	39.7	$	564	69.3	$	440	56.2

(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 and dealers 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 1.2% in the third quarter of fiscal 2024, driven primarily by the 2.9% decrease in total used unit sales. Used vehicle gross profit decreased 6.6% in the first nine months of fiscal 2024, driven by the 7.0% decrease in total used unit sales. Used vehicle gross profit per unit for both the third quarter and first nine months of fiscal 2024 was relatively consistent with the comparable prior year periods. 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. We expect used vehicle gross profit per unit in the fourth quarter of fiscal 2024 to be lower than the prior year record fourth quarter. We expect used vehicle gross profit per unit for the full year fiscal 2024 to be in line with the prior year.

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 increased 7.2% in the third quarter of fiscal 2024, primarily driven by a 7.7% increase in wholesale unit sales. Wholesale vehicle gross profit decreased 4.4% in the first nine months of fiscal 2024, primarily driven by a 7.3% decrease in wholesale unit sales, partially offset by a $30 increase in wholesale vehicle gross profit per unit. Wholesale vehicle gross profit per unit for the third quarter of fiscal 2024 was in line with the prior year period. We expect wholesale vehicle gross profit per unit in the fourth quarter of fiscal 2024 to be in line with the results for the first nine months of fiscal 2024 and lower than the prior year near record fourth quarter. We expect wholesale vehicle gross profit per unit for the full year fiscal 2024 to be in line with the prior year.

Other Gross Profit.  Other gross profit includes profits related to EPP revenues, net third-party finance (fees)/income, 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 (fees)/income, as these represent revenues paid to us by certain third-party providers.  Third-

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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 increased 55.4% in the third quarter of fiscal 2024, primarily driven by a $33.4 million improvement in service department margins. Other gross profit increased 19.2% in the first nine months of fiscal 2024, primarily driven by a $79.3 million improvement in service department margins, partially offset by a decrease in EPP revenues and a decline in net third-party finance (fees)/income, as discussed above. The increase in service department profits for both the third quarter and first nine months of fiscal 2024 was driven by efficiency and cost coverage measures that we have put in place. We expect year-over-year improvements in service for the full year fiscal 2024 as compared to fiscal 2023.

We do not expect to receive EPP profit-sharing revenues in the fourth quarter of fiscal 2024 due to the inflationary pressures our partners have experienced.

SG&A Expenses

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

Three Months Ended November 30, 2023    Nine Months Ended November 30, 2023

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

	Three Months Ended November 30								Nine Months Ended November 30
(In millions except per unit data)	2023			2022			Change		2023			2022			Change
Compensation and benefits:
Compensation and benefits, excluding share-based compensation expense	$	286.3		$	306.2		(6.5)	%	$	922.7		$	985.2		(6.3)	%
Share-based compensation expense	19.9			17.2			15.7	%	86.5			64.0			35.2	%
Total compensation and benefits (2)	$	306.2		$	323.4		(5.3)	%	$	1,009.2		$	1,049.2		(3.8)	%
Occupancy costs	70.3			70.1			0.2	%	204.2			204.8			(0.3)	%
Advertising expense	63.3			58.7			7.9	%	201.5			230.5			(12.6)	%
Other overhead costs (3)	120.2			139.5			(13.9)	%	290.6			430.0			(32.4)	%
Total SG&A expenses	$	560.0		$	591.7		(5.4)	%	$	1,705.5		$	1,914.5		(10.9)	%
SG&A as a % of gross profit	91.4		%	102.6		%	(11.2)	%	80.2		%	87.5		%	(7.3)	%

(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 10 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.

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SG&A expenses decreased 5.4% in the third quarter of fiscal 2024. Factors contributing to the net decrease include the following:

•$19.9 million decrease in compensation and benefits, excluding share-based compensation expense, driven by our continued focus in our stores and CECs on driving efficiency gains and aligning staffing levels to sales as well as a $5.5 million decrease in bonus compensation expense.

•$19.3 million decrease in other overhead costs driven by improvements in non-CAF uncollectible receivables that reflect improved execution at our stores and home office as well as external partners, and to a lesser degree, reduced technology spend and favorability in staffing-related costs.

•$4.6 million increase in advertising expense driven by the timing of our spend.

SG&A expenses decreased 10.9% in the first nine months of fiscal 2024. Factors contributing to the net decrease include the following:

•$139.4 million decrease in other overhead costs, which included a $67.2 million benefit in connection with the receipt of settlement proceeds in a class action lawsuit related to the economic loss associated with vehicles containing Takata airbags. Other overhead costs were also positively impacted by improvements in non-CAF uncollectible receivables that reflect improved execution at our stores and home office as well as external partners, a reduction in technology spend and favorability in staffing-related costs.

•$62.5 million decrease in compensation and benefits, excluding share-based compensation expense, driven by our continued focus in our stores and CECs on driving efficiency gains and aligning staffing levels to sales.

•$29.0 million decrease in advertising expense driven by our deliberate efforts to reduce marketing spend to align with sales as well as the timing of our spend.

•$22.5 million increase 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.

As noted previously, entering the fourth quarter we have now passed the year mark since we initiated our significant cost management efforts. Due to the timing shifts in our advertising spend, we expect our full year spend on a per unit basis to be similar to fiscal 2023. Accordingly, we expect that our advertising spend in the fourth quarter of fiscal 2024 will exceed the per unit spend during the prior year fourth quarter.

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 of $31.3 million and $93.3 million in the third quarter and first nine months of fiscal 2024, respectively, was relatively consistent with $30.2 million and $91.7 million in the third quarter and first nine months of fiscal 2023, respectively.

Other Income. Other income of $0.9 million and $4.7 million in the third quarter and first nine months of fiscal 2024, respectively, was relatively consistent with $0.4 million and $2.3 million in the third quarter and first nine months of fiscal 2023, respectively.

Income Taxes.  The effective income tax rate was 25.8% in the third quarter of fiscal 2024 and 25.5% in the first nine months of fiscal 2024 versus 24.8% in the third quarter of fiscal 2023 and 25.0% in the first nine months of fiscal 2023.

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 as well as changes in the mix of credit quality originated.

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 originations, 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

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factors, including intentional changes in the risk profile of originations, economic conditions 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. 

CAF also originates a small portion of auto loans to customers who typically would be financed by our Tier 2 and Tier 3 finance providers, in order to better understand the performance of these loans, mitigate risk and add incremental profits. Historically, CAF has targeted originating approximately 5% of the total Tier 3 loan volume, which we increased to 10% during fiscal 2022 and throughout most of fiscal 2023. In response to the current environment, CAF adjusted its underwriting standards, including, towards the end of the fourth quarter of fiscal 2023, reducing its targeted percentage of Tier 3 volume from 10% to 5%. During the second quarter of fiscal 2024, CAF further adjusted its targeted percentage of Tier 3 volume to less than 5%. Within the Tier 2 space, CAF continues to originate loans on a test basis and we slightly increased our investment in this space during the second quarter of fiscal 2024. 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 3 for additional information on CAF income and Note 4 for information on auto loans receivable, including credit quality.

SELECTED CAF FINANCIAL INFORMATION

	Three Months Ended November 30						Nine Months Ended November 30
(In millions)	2023		% (1)	2022		% (1)	2023		% (1)	2022		% (1)
Interest margin:
Interest and fee income	$	426.9	9.8	$	365.4	8.8	$	1,244.3	9.6	$	1,069.3	8.8
Interest expense	(170.2)		(3.9)	(88.8)		(2.1)	(464.8)		(3.6)	(200.1)		(1.6)
Total interest margin	$	256.7	5.9	$	276.6	6.7	$	779.5	6.0	$	869.2	7.2
Provision for loan losses	$	(68.3)	(1.6)	$	(85.7)	(2.1)	$	(239.0)	(1.8)	$	(219.0)	(1.8)
CarMax Auto Finance income	$	148.7	3.4	$	152.2	3.7	$	421.0	3.2	$	539.5	4.4

(1)     Annualized percentage of total average managed receivables.

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

	Three Months Ended November 30						Nine Months Ended November 30
	2023			2022			2023			2022
Net loans originated (in millions)	$	1,953.4		$	2,147.2		$	6,491.0		$	6,928.0
Vehicle units financed	76,813			79,967			255,873			264,073
Net penetration rate (1)	44.0		%	44.4		%	43.1		%	41.4		%
Weighted average contract rate	11.3		%	9.8		%	11.1		%	9.4		%
Weighted average credit score (2)	720			712			718			708
Weighted average loan-to-value (LTV) (3)	89.4		%	88.9		%	88.9		%	88.1		%
Weighted average term (in months)	65.2			66.1			65.2			66.3

(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 4.  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 November 30						As of and for the Nine Months Ended November 30
(In millions)	2023			2022			2023			2022
Total ending managed receivables	$	17,505.1		$	16,652.7		$	17,505.1		$	16,652.7
Total average managed receivables	$	17,508.9		$	16,540.2		$	17,276.0		$	16,177.8
Allowance for loan losses	$	511.9		$	491.0		$	511.9		$	491.0
Allowance for loan losses as a percentage of ending managed receivables	2.92		%	2.95		%	2.92		%	2.95		%
Net credit losses on managed receivables	$	94.4		$	72.2		$	234.3		$	161.0
Annualized net credit losses as a percentage of total average managed receivables	2.16		%	1.74		%	1.81		%	1.33		%
Past due accounts as a percentage of ending managed receivables	5.81		%	4.99		%	5.81		%	4.99		%
Average recovery rate (1)	50.9		%	61.3		%	54.6		%	66.7		%

(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 (Decreases of $3.5 million, or 2.3%, and $118.5 million, or 22.0%, in the third quarter and first nine months of fiscal 2024, respectively)

◦The decrease in CAF income for the third quarter of fiscal 2024 reflects a decrease in the net interest margin percentage, partially offset by a decrease in the provision for loan losses and an increase in average managed receivables.

◦The decrease in CAF income for the first nine months of fiscal 2024 reflects a decrease in the net interest margin percentage and an increase in the provision for loan losses, partially offset by an increase in average managed receivables.

•Total Interest Margin (Decreased to 5.9% and 6.0% in the third quarter and first nine months of fiscal 2024, respectively, from 6.7% and 7.2% in the third quarter and first nine months of fiscal 2023, respectively)

◦The decrease in the total interest margin percentage for both the third quarter and first nine months of fiscal 2024 was primarily driven by higher funding costs as well as an unfavorable impact of swaps not designated as hedges for accounting purposes, partially offset by higher customer rates. While total interest margin for the third quarter decreased year-over-year, it was relatively consistent with the second quarter of fiscal 2024 and we believe it will remain relatively stable in the near-term, pending market conditions.

•Provision for Loan Losses

◦The provision for loan losses resulted in expense of $68.3 million and $239.0 million in the third quarter and first nine months of fiscal 2024, respectively, compared with expense of $85.7 million and $219.0 million in the third quarter and first nine months of fiscal 2023.

◦The decrease in the provision for the third quarter of fiscal 2024 primarily reflected the effect of our previously disclosed tightening of CAF's underwriting standards.

◦The increase in the provision for the first nine months of fiscal 2024 was primarily due to the effects of unfavorable loss performance within CAF's portfolio as well as the uncertain macroeconomic environment, partially offset by the effect of the tightening of CAF's underwriting standards, as noted above.

◦The allowance for loan losses as a percentage of ending managed receivables was 2.92% as of November 30, 2023, compared with 2.95% as of November 30, 2022 and 3.02% as of February 28, 2023. The decrease in the allowance percentage from February primarily reflects CAF's tightened underwriting standards in response to the current environment, partially offset by unfavorable loss performance as well as CAF's continued investment in the Tier 2 business.

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•Loan Origination and Performance

◦The decline in net loan originations in the third quarter of fiscal 2024 resulted from decreases in the average amount financed, used unit sales and the net penetration rate.

◦The decline in net loan originations in the first nine months of fiscal 2024 resulted from decreases in used unit sales and the average amount financed, partially offset by an increase in the net penetration rate.

◦CAF net penetration in the third quarter of fiscal 2024 was relatively in line with the prior year quarter. CAF net penetration increased in the first nine months of fiscal 2024 compared to the prior year period, primarily reflecting changes in the underlying credit mix of customers applying for financing.

◦The weighted average contract rate increased to 11.3% and 11.1% in the third quarter and first nine months of fiscal 2024, respectively, compared with 9.8% and 9.4% in the third quarter and first nine months of fiscal 2023, respectively. 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 third quarter and first nine months of fiscal 2024 reflects an increase in delinquencies as well as our expansion of Tier 2 and Tier 3 originations within CAF's portfolio. The increase in delinquencies primarily reflects customer hardship in the current economic environment.

PLANNED FUTURE ACTIVITIES

We anticipate opening a total of six locations in fiscal 2024, including two more stores in the New York metro market and one store each in the Los Angeles and Chicago markets, as well as our first stand-alone reconditioning center in the Atlanta metro market. We currently estimate capital expenditures will total approximately $450 million in fiscal 2024. Capital expenditures were $422.7 million in fiscal 2023. Planned capital spending in fiscal 2024 largely reflects spending to support our future long-term growth, including investments in auction, sales and production facilities, as well as our new stores.

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. Given our recent performance and continued market uncertainties, we are taking a conservative approach to our capital structure in order to maintain the flexibility that allows us to efficiently access the capital markets for both CAF and CarMax as a whole. We have taken steps to better align our expenses to sales as well as slowed the rate of our store growth. We resumed our share repurchases during the third quarter of fiscal 2024 after a pause initiated during the third quarter of the prior fiscal year. 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 have historically targeted 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 below our targeted range for the third quarter of fiscal 2024. 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 nine months of fiscal 2024, net cash provided by operating activities totaled $149.0 million compared with $1.66 billion in the prior year period.

As of November 30, 2023, total inventory was $3.64 billion, representing a decrease of $87.2 million compared with the balance as of the start of the fiscal year.  The decrease was primarily due to a decline in vehicle units, reflecting lower sales volume, partially offset by an increase in the average carrying cost of inventory due to market appreciation at the beginning of the current fiscal year as well as a shift in the mix of vehicles.

Our operating cash flows are significantly impacted by changes in auto loans receivable, which increased $979.1 million in the current year period compared with $1.17 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

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issuances of non-recourse notes payable were $669.3 million in the current year period compared with $770.6 million 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.

The change in net cash provided by operating activities for the first nine months of the current fiscal year compared with the prior year period primarily reflected the changes in inventory, as discussed above, combined with the prior year decrease in inventory, as well as the net impact of volume and timing-related changes in accounts receivable and accounts payable, partially offset by the changes in auto loans receivable, as discussed above.

Investing Activities. During the first nine months of fiscal 2024, net cash used in investing activities totaled $357.2 million compared with $318.7 million in fiscal 2023.  Capital expenditures were $355.4 million in the current year period versus $319.5 million in the prior year period.  Capital expenditures primarily included land purchases and construction costs to support our growth capacity initiatives and new store openings as well as investments in technology.  We maintain a multi-year pipeline of sites to support our store and capacity growth, so portions of capital spending in one year may relate to locations that we open in subsequent fiscal years.

As of November 30, 2023, 158 of our 241 used car stores were located on owned sites and 83 were located on leased sites, including 27 land-only leases and 56 land and building leases.

Financing Activities.  During the first nine months of fiscal 2024, net cash provided by financing activities totaled $517.3 million compared with net cash used in financing activities of $827.0 million in the prior year period.  Included in these amounts were net issuances of non-recourse notes payable of $669.3 million compared with $770.6 million 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 nine months of fiscal 2024, cash provided by financing activities was impacted by net payments on our long-term debt of $108.4 million as well as stock repurchases of $44.3 million. During the first nine months of fiscal 2023, cash used in financing activities was impacted by net payments on our long-term debt of $1.25 billion as well as stock repurchases of $333.8 million.

TOTAL DEBT AND CASH AND CASH EQUIVALENTS

(In thousands)		As of November 30		As of February 28
Debt Description (1)	Maturity Date	2023		2023
Revolving credit facility (2)	June 2028	$	—	$	—
Term loan (2)	June 2024	300,000		300,000
Term loan (2)	October 2026	699,598		699,493
3.86% Senior notes	April 2023	—		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	519,396		522,526
Non-recourse notes payable	Various dates through December 2030	17,029,405		16,360,092
Total debt (3)		$	18,948,399	$	18,382,111
Cash and cash equivalents		$	605,375	$	314,758

(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 SOFR, the federal funds rate, or the prime rate, depending on the type of borrowing.

(3)    Total debt excludes unamortized debt issuance costs. See Note 9 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 November 30, 2023, we were in compliance with these financial covenants.

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See Note 9 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 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 November 30, 2023, $12.50 billion and $4.53 billion of non-recourse notes payable were outstanding related to asset-backed term funding transactions and our warehouse facilities, respectively.  During the first nine months of fiscal 2024, we funded a total of $4.50 billion in asset-backed term funding transactions.  As of November 30, 2023, we had $1.07 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 9 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, as well as covenants and performance triggers related to events of default.  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.  As of November 30, 2023, a total of $4 billion of board authorizations for repurchases was outstanding, with no expiration date, of which $2.41 billion remained available for repurchase. During the third quarter of fiscal 2024, we resumed our share repurchases after a pause initiated during the third quarter of the prior fiscal year. See Note 10 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 6 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,” “on track,” “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:

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

•Changes in general or regional U.S. economic conditions, including inflationary pressures, climbing interest rates and the potential impact of international events.

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

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

•Significant changes in prices of new and used vehicles.

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

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

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

•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.

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

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

•The effect and consequences of the Coronavirus (“COVID-19”) 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 consumer credit availability provided by our third-party finance providers.

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

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

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

•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 failure or inability to adequately protect our intellectual property.

•The occurrence of severe weather events.

•Factors related to the geographic concentration of our stores.

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

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

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

•The effect of various litigation matters.

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

For more details on factors that could affect expectations, see Part II, Item 1A, “Risk Factors” on Page 46 of this report, our Annual Report on Form 10-K for the fiscal year ended February 28, 2023, 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.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes to our market risk since February 28, 2023.  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, 2023.

Page 44

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. During the third quarter of fiscal 2024, we implemented a new enterprise resource planning (“ERP”) system which included accounts receivable, accounts payable, fixed assets, project accounting, general ledger and consolidation applications as well as inventory and order management modules. As a result of this implementation, we modified certain existing internal controls over financial reporting as well as implemented new controls and procedures related to the new ERP system.

Except as noted above, there were no other changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended November 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Page 45

PART II.  OTHER INFORMATION

Item 1.    Legal Proceedings

For a discussion of certain legal proceedings, see Note 15 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, 2023, 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 third quarter of fiscal 2024. The table does not include transactions related to employee equity awards or exercise of employee stock options. We resumed our share repurchases during the third quarter of fiscal 2024 after a pause initiated during the third quarter of the prior fiscal year.

					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
September 1 - 30, 2023	—	$	—	—	$	2,451,306,850
October 1 - 31, 2023	334,500	$	65.02	334,500	$	2,429,557,387
November 1 - 30, 2023	314,000	$	64.16	314,000	$	2,409,411,772
Total	648,500			648,500

Page 46

Item 6.    Exhibits

3.1	CarMax, Inc. Bylaws, as Amended and Restated October 24, 2023, filed as Exhibit 3.1 to CarMax's Current Report on Form 8-K, filed October 26, 2023 (File No. 1-31420), is incorporated by this reference.
10.1	Form of CarMax, Inc. Amended and Restated Severance Agreement, dated December 1, 2023, between CarMax, Inc. and the persons listed at the end of such Agreement, filed herewith.*
10.2	CarMax, Inc. Amended and Restated Severance Agreement, dated December 1, 2023, between CarMax, Inc. and William D. Nash, 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.

* Indicates management contract, compensatory plan or arrangement of the company required to be filed as an exhibit.

Page 47

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

January 5, 2024

Page 48

EX-10.1

AMENDED AND RESTATED SEVERANCE AGREEMENT THIS AMENDED AND RESTATED SEVERANCE AGREEMENT (the “Agreement”) is entered into as of _________________, 20____, by and between CarMax, Inc., a Virginia corporation, for itself and on behalf of its subsidiaries and affiliates (hereafter referred to collectively as “CarMax”), and NAME (hereafter referred to as the “Associate”). WHEREAS, CarMax and the Associate are parties to that certain Severance Agreement dated as of [__] (the “Prior Agreement”); WHEREAS, CarMax and the Associate desire to amend and restate the Prior Agreement in its entirety and enter into this Agreement to modify certain terms of the Associate’s employment; WHEREAS, CarMax recognizes that the Associate has developed or will continue to develop an intimate knowledge of and experience with respect to the business of CarMax; WHEREAS, the Associate has developed or will develop and/or has or will come in contact with CarMax’s proprietary and confidential information that is not readily available to the public, and which is of great importance to CarMax and is treated by CarMax as secret and confidential information; and WHEREAS, upon execution of this Agreement, any prior severance or employment agreement, if any, between the Associate and CarMax, whether oral or written, will have no force and effect with respect to the terms and conditions of the Associate’s employment with CarMax and will be replaced and superseded by the terms of this Agreement. NOW, THEREFORE, in consideration of the Associate’s continued employment by CarMax and the mutual covenants and agreements of the parties set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, CarMax and the Associate, intending to be legally bound, agree as follows: Article 1. Term. The Associate’s employment with CarMax shall continue until such time as the Associate’s employment is terminated by either party in accordance with Article 7 of this Agreement or the Associate’s term of employment is extended or shortened by a subsequent written agreement duly executed by the Associate and CarMax. Article 2. Duties and Responsibilities. CarMax shall employ the Associate in the position of TITLE . The specific duties of such position are set forth in the then-current written job description for such position and are incorporated herein by reference. The Associate acknowledges and agrees to perform those job duties and/or such other job duties that may be assigned to the Associate or required of the Associate by CarMax. In the event that the Associate accepts a new or different

2 position with CarMax or receives a new position title, (i) the Associate acknowledges and agrees to perform such new job duties, if any, as may be assigned to the Associate or required of the Associate by CarMax and (ii) this Agreement shall remain in full force and effect. Article 3. Standard of Care. 3.1 General. During the term of this Agreement, the Associate shall devote the Associate’s full business time, attention, knowledge and skills to CarMax’s business and interests. The Associate covenants, warrants, and represents that the Associate shall: (a) devote the Associate’s best efforts and talents to the performance of the Associate’s employment obligations and duties for CarMax; (b) exercise the highest degree of loyalty and the highest standards of conduct in the performance of the Associate’s duties; (c) observe and conform to the rules, regulations, and policies established or issued by CarMax; and (d) observe and conform to the law in the performance of the Associate’s employment obligations and duties for CarMax. 3.2 Forfeiture and Recoupment. The Associate acknowledges and agrees that the Associate’s compensation will be subject to the CarMax clawback policy in effect as of the date hereof, and consents to and agrees to be bound by any other clawback policy of CarMax as may be established and/or amended from time to time to comply with applicable laws (including without limitation pursuant to the listing standards of any national securities exchange or association on which CarMax’s securities are listed or as may be required by the Dodd-Frank Wall Street Reform and Consumer Protection Act). CarMax may require you to forfeit, return or reimburse CarMax all or a portion of your compensation pursuant to the terms of the clawback policy or as necessary or appropriate to comply with applicable laws. No recovery of your compensation under a clawback policy or otherwise will constitute an event that triggers or contributes to any right you may have to resign for Good Reason or “constructive termination” (or similar term) under any agreement (including this Agreement), arrangement or policy with CarMax. The Associate further waives any rights the Associate may have to indemnification, insurance payments or other reimbursement for any such compensation that is subject to recoupment and / or forfeiture under the clawback policy. Article 4. Other Employment. The Associate shall not, during the term of this Agreement, be interested directly or indirectly, in any manner, as partner, officer, director, advisor, employee, or in any other capacity, in any other business similar to CarMax’s business for the Associate’s personal advantage or benefit or that of others; provided, further, the Associate agrees to obtain CarMax’s prior written consent before engaging in any other occupation for compensation (actual or expected) while employed by CarMax. Such consent may be granted or withheld, in CarMax’s absolute discretion; provided, however, such consent will not be required where such other

3 occupation for compensation does not (i) in any manner infringe upon the Associate’s job duties or the time or attention required to perform such duties, (ii) relate to any other business similar to CarMax’s business or (iii) have a detrimental effect on CarMax’s business, as determined in CarMax’s absolute discretion. Article 5. Compensation and Benefits. As remuneration for all services to be rendered by the Associate during the term of this Agreement, and as consideration for complying with the covenants herein, CarMax shall pay and provide to the Associate the following: 5.1. Base Salary. The Associate shall be paid an annual salary (the “Base Salary”), payable biweekly (the “Biweekly Amount”), subject to applicable federal, state, and local withholding and any performance-based adjustments made by CarMax. In the event that the Associate accepts a new or different position with CarMax or accepts a new position title, CarMax, in its sole discretion, may adjust the Base Salary. 5.2 Bonus. (a) The Associate is eligible to participate in CarMax’s performance-based bonus plan, as such plan may exist from time to time during the term of this Agreement and as defined and applied to the Associate’s position. (b) The award and amount of any bonus shall be determined (i) under CarMax’s then- current performance-based bonus plan and (ii) at the absolute discretion of CarMax. 5.3 Long Term Incentives. During the term, the Associate shall be eligible to participate in CarMax’s 2002 Stock Incentive Plan (or any successor incentive plan thereto) to the extent that the CarMax Compensation Committee, in its sole discretion, determines is appropriate. 5.4 401(k) Plan. During the term of this Agreement, the Associate shall be entitled to participate in CarMax’s 401(k) plan, subject to the eligibility and participation requirements of such plan. 5.5 Welfare Benefit Plans. During the term of this Agreement, the Associate and/or the Associate’s family will be eligible to participate in and will receive benefits under CarMax’s then-current welfare benefit plans, policies and programs (the “Welfare Plans”) to the extent such Welfare Plans are made available to other CarMax associates who are professionally similarly situated to the Associate (the “Peer Associates”), subject to the eligibility requirements and other provisions of such Welfare Plans. The benefits available pursuant to such Welfare Plans may include group term life insurance, comprehensive health and major medical insurance, dental insurance, and short-term and long-term disability benefits.

4 5.6 Vacation. During the term of this Agreement, the Associate will be entitled to paid vacation each fiscal year in accordance with then-current CarMax Time Away Guidelines. 5.7 Right to Change Plans. Nothing herein shall obligate CarMax to institute, maintain, or refrain from changing, amending, or discontinuing any benefit plan, policy program, or guideline so long as such changes are similarly applicable to the Peer Associates. Article 6. Expenses. During the term of this Agreement, CarMax shall pay or reimburse the Associate for reasonable travel and business expenses incurred by the Associate in furtherance of CarMax business and in accordance with the then-current CarMax travel and expense policy and any other applicable policies, upon submission to CarMax of vouchers or receipts reflecting such expenses. Article 7. Employment Termination. The Associate’s employment with CarMax may be terminated in accordance with any of the following provisions: 7.1 Termination by Death. (a) In the event the Associate’s employment ends by reason of the Associate’s death during the term of this Agreement, the Associate’s benefits shall be determined in accordance with the then-current CarMax survivor’s benefits, insurance, and/or other applicable programs. Further, stock options and grants, including performance-based grants, will become vested and exercisable by the Associate, the Associate’s personal representatives, distributees, legatees, or estate in accordance with the terms and conditions of the applicable stock grant or option award agreement. (b) The date of termination due to death shall be the Associate’s date of death. Upon the date of termination, CarMax shall be obligated to pay the Associate’s beneficiary or estate any Base Salary that was accrued but not yet paid as of the date of termination plus all other vested rights and benefits that the Associate is entitled to pursuant to this Agreement and other CarMax plans and programs. 7.2 Voluntary Termination by the Associate. The Associate may terminate employment at any time by giving at least thirty (30) days prior written notice to the Associate’s immediate supervisor. During the notice period, the Associate shall fulfill all required job duties and responsibilities and cooperate and assist in the training of a replacement, if any. CarMax reserves the right to require the Associate to discontinue working for CarMax at any time during the thirty (30) day notice period, but shall pay the Associate the amount the Associate would have earned during any non-working portion of the remaining thirty (30) day notice period in accordance with Article 5.1, in addition to any other benefits to which the Associate has a vested right on the last day of employment;

5 provided, however, that the Associate shall forfeit any bonus with respect to the fiscal year in which the Associate’s voluntary termination under this Article 7.2 occurs. Subject to Article 7.5, CarMax thereafter shall have no further obligations under this Agreement. 7.3 Voluntary Termination by CarMax. CarMax may terminate the Associate’s employment at any time and for any reason other than death or Cause (as defined below), by providing the Associate with at least thirty (30) days prior written notice. CarMax reserves the right to require the Associate to discontinue working for CarMax during the thirty (30) day notice period, but shall pay the Associate the amount the Associate would have earned during any non-working portion of the remaining thirty (30) day notice period in accordance with Article 5.1, in addition to any other benefits to which the Associate has a vested right on the last day of employment. After the thirty (30) day notice period, the Associate shall receive thirty-nine (39) biweekly payments, each equal to the Biweekly Amount less applicable federal, state, and local withholdings; provided however that CarMax’s obligation to provide such thirty-nine (39) biweekly payments is subject to the Associate’s compliance with (a) Articles 8, 9, 10 and 11 of this Agreement and (b) delivery to CarMax of an executed Agreement and General Release, which shall be substantially in the form attached hereto as Exhibit A (with such changes or additions as needed under then applicable law to give effect to its intent and purpose) (the “Agreement and General Release”) within twenty-one (21) days of presentation thereof by CarMax to the Associate. Any amounts due following a termination of employment under this Agreement shall not be due until after the expiration of any revocation period applicable to the Agreement and General Release without the Associate having revoked such Agreement and General Release. CarMax thereafter shall have no further obligations under this Agreement. 7.4 Voluntary Termination by CarMax For Cause. Nothing in this Agreement shall be construed to prevent CarMax from terminating the Associate’s employment under this Agreement, without notice or liability, for Cause. For purposes of this Agreement, “Cause” means that CarMax has any reason to believe any of the following: (a) the Associate has committed fraud, misappropriation of funds or property, embezzlement or other similar acts of dishonesty; (b) the Associate has been convicted of a felony or other crime involving moral turpitude (or pled nolo contendere thereto); (c) the Associate has used, possessed or distributed any illegal drug; (d) the Associate has committed any misconduct that may subject CarMax to criminal or civil liability; (e) the Associate has breached the Associate’s duty of loyalty to CarMax, including, without limitation, the misappropriation of any of CarMax’s corporate opportunities;

6 (f) the Associate has committed a serious violation or violations of any CarMax policy or procedure; (g) the Associate has committed a violation of any term of this Agreement; (h) the Associate refuses to follow the lawful instructions of CarMax management; (i) the Associate has committed any material misrepresentation in the employment application process; (j) the Associate has committed deliberate actions, including neglect or failure to perform the job, which are contrary to the best interest of CarMax; or (k) the Associate has continually failed to perform substantially the Associate’s duties with CarMax. If the Associate’s employment is terminated for Cause during the term of this Agreement, this Agreement will terminate without further obligation of CarMax to the Associate other than the payment to the Associate of the Associate’s Base Salary through the date of termination for Cause. The Associate shall immediately thereafter forfeit all rights and benefits the Associate would otherwise have been entitled to receive under this Agreement. 7.5 Good Reason Termination during Change in Control Employment Period. (a) For purposes of this Article 7.5, the defined terms set forth below shall have the following meanings: (i) “Change in Control” means, as related to CarMax, Inc. (the “CarMax Parent”), the occurrence of either of the following events: (i) a third person, including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, becomes, or obtains the right to become, the beneficial owner of CarMax Parent securities having twenty percent (20%) or more of the combined voting power of the then outstanding securities of the CarMax Parent that may be cast for the election of directors to the board of directors of the CarMax Parent (other than as a result of an issuance of securities initiated by the CarMax Parent in the ordinary course of business); or (ii) as the result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions, the persons who were directors of the CarMax Parent before such transactions shall cease to constitute a majority of the board or of the board of directors of any successor to the CarMax Parent. (ii) “Asset Sale” shall mean a sale of all or substantially all of the assets of the CarMax Parent in a single transaction or a series of related transactions.

7 (iii) “Change in Control Date” shall mean the date on which a Change in Control or Asset Sale occurs. (iv) “Change in Control Employment Period” shall mean the period beginning on the Change in Control Date and ending on the second (2nd) anniversary of such date provided an Associate is employed by CarMax on such Change in Control Date. (v) “Good Reason” shall mean, without the Associate’s express written consent, the occurrence of any one (1) or more of the following: (1) A material reduction in the Associate’s Base Salary or target annual bonus; (2) A material reduction in the Associate’s duties or authority, (except in connection with the termination of the Associate’s employment (x) for Cause or disability, (y) as a result of the Associate’s death or retirement or (z) by the Associate other than for Good Reason); (3) The Associate being required to relocate to a principal place of employment more than thirty-five (35) miles from the CarMax Parent’s headquarters; (4) The failure of the CarMax Parent to obtain an agreement from any successor to all or substantially all of the assets or business of the CarMax Parent to assume and agree to perform this Agreement within fifteen (15) days after a merger, consolidation, sale or similar transaction. Notwithstanding anything herein to the contrary, for purposes of this Agreement, any determination of Good Reason must satisfy the materiality requirement under Treasury Regulation § 1.409A-1(n)(2)(i), any successor thereto and other applicable guidance. (b) At any time during the Change in Control Employment Period, the Associate may terminate the Associate’s employment for Good Reason upon notice to CarMax. Such notice shall state the intended date of termination and shall be given to CarMax at least forty-five (45) days prior to such date and shall set forth in detail the facts and circumstances claimed to provide grounds for such termination. CarMax shall have the right to cure the facts and circumstances giving rise to such grounds for termination for Good Reason. If CarMax does not so cure within the forty-five (45) day notice period, then the Associate’s employment shall terminate on the date of termination stated in the notice. (c) Notwithstanding Article 7.2, in the event of the Associate’s voluntary termination of employment for Good Reason during the Change in Control Employment Period, the Associate shall receive thirty-nine (39) biweekly payments, each equal to the Biweekly Amount less applicable federal, state, and local withholdings; provided however that CarMax’s obligation to provide such thirty-nine (39)

8 biweekly payments is subject to the Associate’s compliance with (i) Articles 8, 9, 10 and 11 of this Agreement and (ii) delivery to CarMax of an executed Agreement and General Release within twenty-one (21) days of presentation thereof by CarMax to the Associate. Any amounts due following a termination of employment under this Agreement shall not be due until after the expiration of any revocation period applicable to the Agreement and General Release without the Associate having revoked such Agreement and General Release. CarMax thereafter shall have no further obligations under this Agreement. Article 8. Covenant Not to Compete. The terms and provisions contained in this Article 8 comprise a covenant not to compete (the “Covenant Not to Compete”). The Associate acknowledges and agrees as follows: 8.1 CarMax operates a unique business concept regarding the sale and servicing of new and used vehicles in a highly competitive industry. 8.2 CarMax’s competitors have attempted to duplicate CarMax’s business concept in various markets throughout the United States, including markets where CarMax does not currently have a business location, and may continue to do so. 8.3 In connection with the Associate’s employment with CarMax, the Associate will receive access to, and training regarding, CarMax’s business concept and will, accordingly, acquire commercially valuable knowledge of and insight into CarMax’s operations and CarMax’s proprietary and confidential information, any of which if made available to any Competitor (as defined below) could place CarMax at a competitive disadvantage. 8.4 In order to protect CarMax’s legitimate business interests from Competitors (as defined below) and to protect CarMax’s critical interest in its proprietary and confidential information, the Associate covenants and agrees as follows: During the Associate’s employment with CarMax and for a period of twenty-four (24) months following the last day of the Associate’s employment (the “Restricted Period”), the Associate will not, directly or indirectly, compete with CarMax by acting “in a competitive capacity” (as defined below), for, or on behalf of, any person or entity operating or developing, during the Restricted Period, a business that provides or intends to provide activities, products or services that are the same or substantially similar to, and competitive with, the business of CarMax as of Associate’s last day of employment with CarMax (each, a “Competitor”) within any Metropolitan Statistical Area (as defined by the United States Office of Management and Budget) in which CarMax has a retail store site as of Associate’s last day of employment. Such Competitors include, but are not limited to: Sonic Automotive, Inc.; Lithia Motors, Inc.; Group 1 Automotive, Inc.; AutoNation, Inc.; Penske Automotive Group, Inc.; Asbury Automotive Group, Inc.; Hendrick Automotive Group; Auction Direct USA, L.P.; AutoAmerica, Inc.; Off Lease Only, Inc.; Carvana, LLC; Carvana Group, LLC; AutoMatch USA, LLC; DriveTime Car Sales Company, LLC; DriveTime Automotive Group, Inc.; Hertz Global Holdings, Inc.; Enterprise Holdings, Inc.; Avis Budget Group, Inc.; Cox Automotive, Inc.; Classified

9 Ventures, LLC; TrueCar, Inc.; Dealer Dot Com, Inc.; CarGurus, Inc.; Blinker, Inc.; KAR Auction Services, Inc.; Cars.com; TrueCar, Inc.; Vroom, Inc.; Shift Technologies, Inc.; ACV Auctions, Inc.; CarOffer, LLC; Copart, Inc.; WeBuyAnyCar.com; and GiveMeTheVIN.com, and any automotive retail operation affiliated with, owned, operated, or controlled by Berkshire Hathaway Inc.; Carrefour S.A.; and/or Gulliver International Co., Ltd. 8.5 A business, including any Competitor, or any of its respective subsidiaries or affiliates, will not be considered to be in competition with CarMax for purposes of Article 8 if the business, or operating unit of the business, or its respective subsidiaries or affiliates, by which the Associate will be or is employed (i) does not have within the twenty-four (24) months preceding the Associate’s termination of employment with CarMax, annual gross revenues (calculated on a rolling 12-month basis) of at least $5,000,000 derived from the sale and servicing of new or used vehicles; or (ii) is not projected (by the business or operating unit of the business) to have within the twenty-four (24) months following the Associate’s termination of employment with CarMax, annual gross revenues (regardless of how calculated) of at least $5,000,000 derived from the sale and servicing of new or used vehicles. 8.6 Acting “in a competitive capacity” shall mean providing to a Competitor, directly or indirectly, the same or substantially similar services that the Associate provided to CarMax at any time during Associate’s last twenty-four (24) months of employment. 8.7 Nothing herein shall prevent or restrict the Associate from working for any person in any role or in any capacity that is not in competition with CarMax. 8.8 Notwithstanding the foregoing, nothing herein shall be deemed to prevent or limit the right of the Associate to invest in the capital stock or other securities of any corporation whose stock or securities are regularly traded on any public exchange. 8.9 The Associate and CarMax have examined in detail the Covenant Not to Compete contained in this Article 8 and each agrees that the restraint imposed upon the Associate is reasonable in light of the legitimate business interests of CarMax and is not unduly harsh or burdensome with respect to the Associate’s ability to earn a livelihood. If any provision of the Covenant Not to Compete relating to the time period, geographic area or scope of restricted activities shall be declared by a court of competent jurisdiction to exceed the maximum time period, geographic area or scope of activities, as applicable, that such court deems reasonable and enforceable, then such time period, geographic area or scope of activities shall be deemed to be, and thereafter shall become, the maximum time period, scope of activities or largest geographic area that such court deems reasonable and enforceable and this Agreement shall automatically be considered to have been amended and revised to reflect such determination. 8.10 The Associate and CarMax acknowledge that the Associate’s services are of a special, extraordinary, and intellectual character that gives the Associate unique value, and that CarMax’s business is highly competitive, and that violation of the Covenant Not to Compete provided herein would cause immediate, immeasurable, and irreparable harm,

10 loss, and damage to CarMax not adequately compensable by a monetary award. In the event of any breach or threatened breach by the Associate of the Covenant Not to Compete, CarMax shall be entitled to such equitable and injunctive relief as may be available to restrain the Associate from violating the provisions hereof. Nothing herein shall be construed as prohibiting CarMax from pursuing any other remedies available at law or in equity for such breach or threatened breach, including the recovery of damages and the immediate termination of the employment of the Associate hereunder for Cause. Article 9. Non-Solicitation of Employees. The Associate agrees that during the Associate’s employment with CarMax and for a period of twenty-four (24) months following the last day of the Associate’s employment, the Associate shall not, directly or indirectly, solicit or induce, or attempt to solicit or induce, any employee of CarMax with whom the Associate had material business-related contact on behalf of CarMax, to leave employment with CarMax for any reason whatsoever (the “Covenant Not to Solicit”). For purposes of this Article 9, employee shall mean any individual employed by CarMax. Article 10. Confidentiality. The terms and provisions contained in this Article 10 comprise a covenant of confidentiality (the “Covenant of Confidentiality”). The Associate understands and agrees that any and all Protected Information is the property of CarMax and is essential to the protection of CarMax’s goodwill and to the maintenance of CarMax’s competitive position and accordingly should be kept secret. For purposes of this Agreement, “Protected Information” means trade secrets, confidential and proprietary business information of or about CarMax, and any other information of CarMax, including technical data, processes, know-how, financial data, analyses, forecasts, plans, operations information and data, customer lists (including potential customers) and information, marketing plans, materials and information, product and service information, accounts and billings information, sales transaction data, sales documents and information, discoveries, ideas, concepts, designs, drawings, specifications, techniques, models, information systems data and materials, computer software or hardware, data analyses and compilations, source code, object code, documentation, diagrams, flow charts, research, procedures, methods, systems, programs, price lists, pricing policies, supplier and distributor information, sources of supply, internal memoranda, promotional plans, internal policies, purchasing information, operating methods and procedures, training materials, and any products and services which may be developed from time to time by CarMax and its agents or employees, including the Associate; provided, however, that information that is in the public domain (other than as a result of a breach of this Agreement), approved for release by CarMax or lawfully obtained from third parties who are not bound by a confidentiality agreement with CarMax, is not Protected Information. CarMax has advised the Associate and the Associate acknowledges that it is the policy of CarMax to maintain as secret and confidential all Protected Information, and that Protected Information has been and will be developed at substantial cost to and effort by CarMax. The Associate agrees to hold in strict confidence and safeguard any and all Protected Information

11 accessed or accessible by the Associate during the Associate’s employment. The Associate shall not, without the prior written consent of CarMax, at any time, directly or indirectly, divulge, furnish, use, disclose or make accessible to any person, firm, corporation, association, or other entity (otherwise than as may be required in the regular course of the Associate’s employment with CarMax), any Protected Information, or cause any such Protected Information to enter the public domain. Nothing contained in this Article 10 is intended to reduce in any way the protection available to CarMax pursuant to the Uniform Trade Secrets Act as adopted in Virginia or any other state or other applicable laws that prohibit the misuse or disclosure of confidential or proprietary information. Unless lengthened by the application of the Virginia Uniform Trade Secrets Act or other applicable law, the restrictions in Article 10 shall remain in effect during Associate’s employment and for five (5) years thereafter. Article 11. Return of CarMax Property. Upon the termination (for any reason) of the Associate’s employment with CarMax, the Associate shall deliver promptly to CarMax all CarMax property including, without limitation, any automobiles, equipment, credit cards, keys, building access cards, identification, cellular phones, computers, software, CD ROMs, customer lists, and all Protected Information as defined in Article 10 of this Agreement. The Associate further agrees not to take or extract any portion of any such information and/or materials in written, computer, electronic or any other reproducible form. Article 12. Monies Owed. To the extent that the Associate owes CarMax any monies at the time of termination of employment, the Associate authorizes and agrees to have CarMax withhold such amounts owed from the Associate’s final paycheck, to the maximum extent permitted by applicable law. Article 13. Work Product. (a) All work product prepared by the Associate in connection with performing job duties for CarMax shall be the sole property of CarMax. CarMax shall have full and exclusive rights to use, reproduce, publish, or otherwise profit from such work product, as CarMax deems appropriate. The Associate agrees to assist CarMax, or any agent designated by CarMax, at any time and at no cost to the Associate, in obtaining any patents, copyrights, trademarks or other forms of legal protection for any such work product. (b) To the extent that any work product is deemed in any way to fall within the definition of “work made for hire,” as such term is defined in 17 U.S.C. § 101, such work product shall be considered “work made for hire,” the copyright of which shall be owned solely, completely and exclusively by CarMax. (c) For the purpose of this Agreement, the term “work product” includes, but is not limited to, reports, manuals, inventions, improvements, designs, formulae,

12 processes, techniques, methods, computer software, proposals, technical solutions, patents, training materials, other works of authorship, innovations, and enhancements created by the Associate or the Associate’s staff. Article 14. Dispute Resolution. Except for actions initiated by CarMax to enjoin a breach by the Associate, and/or recover damages from the Associate, related to the Covenant Not to Compete (Article 8), the Covenant Not to Solicit (Article 9) or the Covenant of Confidentiality (Article 10) (collectively, the “Restrictive Covenants”), or Forfeiture and Recoupment (Article 3.2), which action(s) CarMax may bring in an appropriate court of law or equity, any disagreement between the Associate and CarMax concerning anything covered by this Agreement or concerning other terms or conditions of the Associate’s employment or the termination of the Associate’s employment will be settled by final and binding arbitration pursuant to CarMax’s Dispute Resolution Rules and Procedures in effect at the time the disagreement or dispute arises or at the time of termination in the event the Associate’s employment terminated. The decision of the arbitrator will be final and binding on both the Associate and CarMax and may be enforced in a court of appropriate jurisdiction. Article 15. General Provisions. 15.1 Notices. If CarMax needs to send any notices to the Associate in connection with this Agreement, it will send such notice to the Associate’s address of record, as shown in CarMax’s most recent payroll records. The Associate shall send any similar notices to CarMax at: CarMax, Inc. Attention: Corporate Secretary 12800 Tuckahoe Creek Parkway Richmond, VA 23238 15.2 Amendments and Entire Agreement. This Agreement may not be amended except by a writing executed by CarMax and the Associate. This Agreement constitutes the entire agreement of CarMax and the Associate relating to the subject matter hereof and supersedes all prior oral and written understandings and agreements relating to such subject matter, including the Prior Agreement. The terms and conditions of the Associate’s employment shall, to the extent not addressed or described in this Agreement, be governed by CarMax’s then-current policies and procedures and existing practices. 15.3 Successors and Assigns. The Associate hereby consents to CarMax’s assignment of this Agreement to any affiliate, subsidiary or parent of CarMax at any time. Any other assignment by either party of the rights and obligations of such party hereunder shall not be made without the prior written consent of such other party. 15.4 Severability. All provisions of this Agreement shall be applicable only to the extent that they do not violate any applicable law, and are intended to be limited to the extent necessary so that they will not render this Agreement invalid, illegal or unenforceable

13 under any applicable law. If any provision of this Agreement or any application thereof shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of other provisions of this Agreement or of any other application of such provision shall in no way be affected thereby. The Restrictive Covenants shall be severable, and if any of them is held invalid because of its duration, scope of area or activity, or any other reason, the parties agree that such covenant shall be adjusted or modified by the court to the extent necessary to cure that invalidity, and the modified covenant shall thereafter be enforceable as if originally made in this Agreement. 15.5 Attorney’s Fees. In any action arising under this Agreement, CarMax, so long as it prevails, shall be entitled to recover its reasonable attorney’s fees and costs. 15.6 Waiver of Rights. No waiver by CarMax or the Associate of a right or remedy hereunder shall be deemed to be a waiver of any other right or remedy or of any subsequent right or remedy of the same kind. 15.7 Restrictive Covenants of the Essence. The Restrictive Covenants in Articles 8, 9 and 10 of the Agreement are of the essence of this Agreement. In the event that the Associate has a claim or cause of action against CarMax (whether related to this Agreement or not), such claim or cause of action, including but not limited to a breach of this Agreement by CarMax, shall not prevent or otherwise constitute a defense to CarMax’s enforcement of the Restrictive Covenants and shall not excuse the Associate’s performance of the Restrictive Covenants. CarMax shall at all times maintain the right to seek enforcement of the Restrictive Covenants whether or not CarMax has previously refrained from seeking enforcement of any such Restrictive Covenant as to the Associate or any other peer Associate who has signed an agreement with similar covenants. 15.8 Definitions: Headings and Numbers; Construction. A term defined in any part of this Agreement shall have the defined meaning wherever such term is used herein. The headings contained in this Agreement are for reference purposes only and shall not affect in any manner the meaning or interpretation of this Agreement. Where appropriate to the context of this Agreement, use of the singular shall be deemed also to refer to the plural, and use of the plural to the singular. This Agreement shall be construed and enforced without any presumption or construction against the party drafting the Agreement. 15.9 Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original but both of which taken together shall constitute but one and the same instrument. 15.10 Governing Laws and Forum. This Agreement shall be governed by, construed and enforced in accordance with the laws of the Commonwealth of Virginia without regard to conflicts of laws principles thereof. In the event of any litigation between CarMax and Associate related to the enforcement or enforceability of the Restrictive Covenants, the parties agree that the Circuit Court for the County of Henrico, Virginia, shall have mandatory and exclusive jurisdiction and venue of any such action.

14 15.11 Grants or Options. This Agreement does not affect the terms and conditions controlling, or status of, any stock options or grants of restricted stock which previously have been or later may be awarded to the Associate, except as provided in Article 3.2. Any vested stock options or grants of restricted stock are governed by the terms of the letters by which they were made, subject to Article 3.2, which are incorporated herein by reference as if set forth in full in this Agreement. 15.12 No Encumbrances. In entering into this Agreement, the Associate certifies that the Associate possesses the legal capacity to do so, and that the Associate’s employment with CarMax is not in violation of any other valid agreement. The Associate agrees to hold CarMax harmless from any debts, judgments, or liens that the Associate acquired prior to entering into this Agreement. If the Associate is currently involved in, or becomes involved in, a lawsuit or any other legal proceeding unrelated to CarMax or any of its affiliates, subsidiaries, or related entities (collectively, the “CarMax Entities”), the Associate warrants that such CarMax Entities shall have no liability with respect to such lawsuit or legal proceeding and agrees to fully indemnify the CarMax Entities for any and all fees, costs and other expenses with respect to any such action. 15.13 Opportunity to Review. The Associate acknowledges that the Associate has read this Agreement and has had an adequate opportunity to review it and to obtain any legal or financial advice that the Associate deems appropriate. The Associate acknowledges that the Associate has signed this Agreement freely and voluntarily. Article 16. Protected Rights. Notwithstanding any other terms and conditions of this Agreement: The Associate understands that nothing contained in this Agreement limits the Associate’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”). The Associate further understands that this Agreement does not limit the Associate’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to CarMax. This Agreement does not limit the Associate’s right to receive an award for information provided to any Government Agencies. [Signature Page Follows]

15 IN WITNESS WHEREOF, CarMax and the Associate have executed this Agreement as of __________________________________. BY: Associate/Employee: Printed Name: CarMax, Inc. By: Name: Title: Persons Who Executed Above Amended and Restated Severance Agreement dated December 1, 2023: Diane L. Cafritz James Lyski Enrique N. Mayor-Mora Shamim Mohammad C. Joseph Wilson

16 EXHIBIT A AGREEMENT AND GENERAL RELEASE This Agreement and General Release (the “Agreement and General Release”), dated as of __________ _____, 20__, is made by and between CarMax, Inc., for itself and its affiliates, subsidiaries, divisions, successors and assigns in such capacity, and the current, future and former employees, officers, directors, trustees and agents thereof (collectively referred to throughout this Agreement as the “Company”) and _______________________ (“Associate”), for him/herself and his/her heirs, executors, administrators, successors and assigns (together with Associate, collectively referred to throughout this Agreement and General Release as “Employee”) agree: 1. Last Day of Employment. The Associate’s last day of employment with the Company is ____________, 20___. In addition, effective as of ____________, 20___, the Associate resigns from the Associate’s position as of the Company, and will not be eligible for any benefits or compensation after ____________, 20__, other than as specifically provided in Article 7, as applicable, of the Amended and Restated Severance Agreement between the Company and the Associate dated as of __________ __, 20___ (“Severance Agreement”) and the Associate’s continued right, if any, to indemnification and directors and officers liability insurance. In addition, effective as of ____________, 20___, the Associate resigns from all offices, directorships, trusteeships, committee memberships and fiduciary capacities held with, or on behalf of, the Company or any benefit plans of the Company. These resignations will become irrevocable as set forth in Section 3 below. 2. Consideration. The parties acknowledge that this Agreement and General Release is being executed in accordance with Article 7 of the Severance Agreement, and that this Agreement and General Release is a condition to the receipt by Employee of all payments and benefits thereunder. 3. Revocation. The Associate may revoke this Agreement and General Release for a period of seven (7) calendar days following the day the Associate executes this Agreement and General Release. Any revocation within this period must be submitted, in writing, to the Company and state, “I hereby revoke my acceptance of our Agreement and General Release.” The revocation must be personally delivered or mailed to the Company’s ___________________________ at the Company’s corporate office, or his/her designee, and, if mailed, postmarked within seven (7) calendar days of execution of this Agreement and General Release. This Agreement and General Release shall not become effective or enforceable until the revocation period has expired. If the last day of the revocation period is a Saturday, Sunday, or legal holiday in Virginia, then the revocation period shall not expire until the next following day that is not a Saturday, Sunday, or legal holiday. 4. General Release of Claims. Employee knowingly and voluntarily releases and forever discharges the Company from any and all claims, rights, causes of action, demands, damages, fees, costs, expenses, including attorneys’ fees, and liabilities of any kind whatsoever, whether known or unknown, against the Company, that Employee has, has ever had or may have as of the date of execution of this Agreement and General Release, including, but not limited to, any alleged violation of:

17 ● The Age Discrimination in Employment Act of 1967, as amended; ● The Older Workers Benefit Protection Act of 1990; ● Title VII of the Civil Rights Act of 1964, as amended; ● The Civil Rights Act of 1991; ● Sections 1981 through 1988 of Title 42 of the United States Code, as amended; ● The Employee Retirement Income Security Act of 1974, as amended; ● The Immigration Reform and Control Act, as amended; ● The Americans with Disabilities Act of 1990, as amended; ● The Worker Adjustment and Retraining Notification Act, as amended; ● The Occupational Safety and Health Act, as amended; ● The Family and Medical Leave Act of 1993; ● All other federal, state or local civil or human rights laws, whistleblower laws, or any other local, state or federal law, regulations and ordinances; ● All public policy, contract, tort, or common laws; and ● All allegations for costs, fees, and other expenses including attorneys’ fees incurred in these matters. Notwithstanding anything herein to the contrary, the sole matters to which the Agreement and General Release do not apply are: (i) Employee’s rights, if any, of indemnification and directors and officers liability insurance coverage to which the Associate was entitled immediately prior to __________ __, 20__ with regard to the Associate’s service as an officer and director of the Company; (ii) Employee’s rights under any tax-qualified pension plan or claims for accrued vested benefits under any other employee benefit plan, policy or arrangement maintained by the Company or under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended; (iii) Employee’s rights under Article 7.3 or 7.5 of the Severance Agreement, as the case may be; (iv) Employee’s rights as a stockholder of the Company; (v) Employee’s right to file charges or complaints with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”), although Employee waives the Associate’s right to recover any damages or other relief in any claim or suit brought by or through the Government Agencies on behalf of Employee under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964 as amended, the Americans with Disabilities Act, or any other federal or state discrimination law, except where such waivers are prohibited by law, provided, however, this Agreement and General Release does not limit Employee’s right to receive an award for information provided to any Government Agencies; (vi) Employee’s rights to file charges with the Equal Employment Opportunity Commission, or any government agency concerning claims of discrimination, although Employee waives the Associate’s right to recover any damages or other relief in any claim or suit brought by or through the Equal Employment Opportunity Commission or any other federal, state or local agency on behalf of Employee under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964 as amended, the Americans with

18 Disabilities Act, or any other federal or state discrimination law, except where such waivers are prohibited by law; and (vii) Employee’s rights that cannot be released by private agreement under applicable law. 5. Affirmations. Employee affirms that the Associate has been paid or has received all compensation, wages, bonuses, commissions, and/or benefits to which the Associate may be entitled and no other compensation, wages, bonuses, commissions and benefits are due to the Associate, except as provided in Article 7.3 or 7.5 of the Severance Agreement, as applicable. The Employee also affirms the Associate has no known workplace injuries. 6. Return of Property. Employee represents that the Associate has returned to the Company all property belonging to the Company, including but not limited to any vehicle, laptop, cell phone, keys, access cards, phone cards and credit cards, and all Protected Information as defined in Article 10 of the Severance Agreement. 7. Cooperation. Employee agrees to reasonably cooperate with the Company to provide truthful and accurate information in connection with any administrative proceeding, arbitration, or litigation relating to any matter that occurred during the Associate’s employment with the Company in which the Associate was involved or of which the Associate has knowledge. Employee further understands that this Agreement and General Release does not limit Employee’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. 8. Governing Law and Interpretation. This Agreement and General Release shall be governed and construed in accordance with the laws of the Commonwealth of Virginia, without reference to Virginia’s choice of law statutes or decisions. In the event Employee or the Company breaches any provision of this Agreement and General Release, Employee and the Company acknowledge that either may institute an action to specifically enforce any term or terms of this Agreement and General Release pursuant to the dispute resolution provisions of Article 14 of the Severance Agreement. Should any provision of this Agreement and General Release be declared illegal or unenforceable by any court of competent jurisdiction and should the provision be incapable of being modified to be enforceable, such provision shall immediately become null and void, leaving the remainder of this Agreement and General Release in full force and effect. Nothing herein, however, shall operate to void or nullify any enforceable general release language contained in this Agreement and General Release. 9. No Admission of Wrongdoing. Employee agrees neither this Agreement and General Release nor the furnishing of the consideration for this Agreement and General Release shall be deemed or construed at any time for any purpose as an admission by the Company of any liability or unlawful conduct of any kind. 10. Amendment. This Agreement and General Release may not be modified, altered or changed except upon express written consent of both parties wherein specific reference is made to this Agreement and General Release.

19 11. Entire Agreement. This Agreement and General Release sets forth the entire agreement between the parties hereto and fully supersedes any prior agreements or understandings between the parties; provided, however, that notwithstanding anything in this Agreement and General Release, the provisions in the Severance Agreement that are intended to survive termination of the Severance Agreement, including but not limited to those contained in Articles 3.2, 8, 9, 10, 11 and 14 shall survive and continue in full force and effect. Employee acknowledges the Associate has not relied on any representations, promises, or agreements of any kind made to the Associate in connection with the Associate’s decision to accept this Agreement and General Release. EMPLOYEE HAS BEEN ADVISED THAT ASSOCIATE HAS UP TO TWENTY-ONE (21) CALENDAR DAYS TO REVIEW AND CONSIDER THIS AGREEMENT AND GENERAL RELEASE AND HAS BEEN ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT AND GENERAL RELEASE. EMPLOYEE AGREES ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT AND GENERAL RELEASE DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY-ONE (21) CALENDAR DAY CONSIDERATION PERIOD. HAVING ELECTED TO EXECUTE THIS AGREEMENT AND GENERAL RELEASE, TO FULFILL THE PROMISES SET FORTH HEREIN, AND TO RECEIVE THE SUMS AND BENEFITS SET FORTH IN THE SEVERANCE AGREEMENT, TO WHICH EMPLOYEE WOULD NOT OTHERWISE BE ENTITLED, EMPLOYEE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT AND GENERAL RELEASE INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS EMPLOYEE HAS OR MIGHT HAVE AGAINST THE COMPANY AS SET FORTH HEREIN. IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this Agreement and General Release as of the date first above written: Associate/Employee: Name: Printed Name: Date: CarMax, Inc. By: Name: Title:

EX-10.2

EXHIBIT 10.2 CARMAX, INC. AMENDED AND RESTATED SEVERANCE AGREEMENT THIS AMENDED AND RESTATED SEVERANCE AGREEMENT (“Agreement”) is entered into as of December 1, 2023 (“Effective Date”) between CarMax, Inc., a Virginia corporation, and its affiliated companies (collectively, “CarMax” or the “Company”), and William D. Nash (the “Executive”). WHEREAS, CarMax and the Executive are parties to that certain Severance Agreement dated as of September 1, 2016 (the “Prior Agreement”); WHEREAS, CarMax and the Executive desire to amend and restate the Prior Agreement in its entirety and enter into this Agreement to modify certain terms of the Executive’s employment; WHEREAS, the Company recognizes the Executive’s intimate knowledge and experience in the business of the Company, and has appointed the Executive as President and Chief Executive Officer; WHEREAS, the Executive will develop and come in contact with the Company’s proprietary and confidential information that is not readily available to the public, and that is of great importance to the Company and that is treated by the Company as secret and confidential information; WHEREAS, the Company and the Executive desire to agree upon the terms, conditions, compensation and benefits of the Executive’s future employment; and WHEREAS, upon execution of this Agreement, any prior employment or severance agreement between the Executive and the Company, whether oral or written, will have no force and effect with respect to the terms and conditions of Executive’s employment and will be replaced and superseded by the terms of this Agreement. NOW, THEREFORE, in consideration of the Executive’s continued employment by the Company, and of the premises, mutual covenants and agreements of the parties set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

2 Article 1. Employment Acceptance The Company hereby agrees to employ the Executive and the Executive hereby accepts employment as President and Chief Executive Officer of the Company, in accordance with the terms and conditions set forth herein. Article 2. Position and Responsibilities During the term of the Executive’s employment with the Company (“Term”), the Executive agrees to serve as President and Chief Executive Officer of the Company. In his capacity as President and Chief Executive Officer, the Executive shall report directly to the Company’s Board of Directors (“Board”) and shall have the duties and responsibilities of President and Chief Executive Officer and such other duties and responsibilities not inconsistent with the performance of his duties as President and Chief Executive Officer of the Company. The Executive’s principal work location shall be the corporate headquarters of the Company located in the Richmond, Virginia metropolitan area. Article 3. Standard of Care 3.1 General. During the Term, the Executive shall devote his full business time, attention, knowledge and skills to the Company’s business and interests. The Executive covenants, warrants, and represents that he shall: (a) Devote his best efforts and talents to the performance of his employment obligations and duties for the Company; (b) Exercise the highest degree of loyalty and the highest standards of conduct in the performance of his duties; (c) Observe and conform to the Company’s bylaws and other rules, regulations, and policies established or issued by the Company; and (d) Refrain from taking advantage, for himself or others, of any corporate opportunities of the Company. 3.2 Forfeiture and Recoupment. The Executive acknowledges and agrees that his compensation will be subject to the CarMax clawback policy in effect as of the date hereof, and consents to and agrees to be bound by any other clawback policy of CarMax as may be established and/or amended from time to time to comply with applicable laws (including without limitation pursuant to the listing standards of any national securities exchange or association on

3 which CarMax’s securities are listed or as may be required by the Dodd-Frank Wall Street Reform and Consumer Protection Act). CarMax may require you to forfeit, return or reimburse CarMax all or a portion of your compensation pursuant to the terms of the clawback policy or as necessary or appropriate to comply with applicable laws. No recovery of your compensation under a clawback policy or otherwise will constitute an event that triggers or contributes to any right you may have to resign for Good Reason or “constructive termination” (or similar term) under any agreement (including this Agreement), arrangement or policy with CarMax. The Executive further waives any rights he may have to indemnification, insurance payments or other reimbursement for any such compensation that is subject to recoupment and / or forfeiture under the clawback policy. Article 4. Other Activities During the Term, the Executive shall comply with the provisions of Article 8 herein. Furthermore, during his employment, the Executive agrees to obtain the written consent of the Board before entering into any other occupation, even if dissimilar to that of the Company, including, without limitation, service as a member of a board of directors of one or more other companies. Such consent may be granted or withheld, in the Board’s sole discretion. The Executive may participate on charitable and civic boards, and in educational, professional, community and industry affairs, without Board consent, provided that such participation does not interfere with the performance of his duties. Article 5. Compensation and Benefits As remuneration for all services to be rendered by the Executive during the Term, and as consideration for complying with the covenants herein during and after the termination or expiration of the Term, the Company shall pay and provide to the Executive the following compensation and benefits: 5.1 Base Salary. During the Term, the Company shall pay the Executive a base salary (“Base Salary”) in an amount established and approved by the Compensation and Personnel Committee of the Board (“Compensation Committee”); provided, however, that such Base Salary shall be established at a rate of not less than $1,231,776 per year, except as otherwise provided in this Article 5.1 below. This Base Salary shall be subject to all appropriate federal and state withholding taxes and payable in accordance with the normal payroll practices of the Company. The Compensation Committee shall review and adjust the Base Salary as it deems

4 appropriate at least annually during the Term; provided, however, that the Executive’s Base Salary shall not be decreased without the Executive’s written consent, other than across-the- board reductions applicable to all senior officers of the Company. If adjusted, the Base Salary shall be so adjusted for all purposes of this Agreement. 5.2 Annual Bonus. In addition to his Base Salary, the Executive shall be entitled to participate in the Company’s Annual Performance-Based Bonus Plan (“Annual Bonus Plan”), as such Annual Bonus Plan may exist from time to time during the Term. Under the Company’s Annual Bonus Plan, the Executive has the opportunity to earn an annual bonus with respect to any fiscal year of the Company (“Annual Bonus”). The Annual Bonus will be determined by a formula approved each fiscal year by the Compensation Committee (the “Annual Bonus Formula”) in its sole discretion. At the beginning of each fiscal year, the Compensation Committee will authorize, in accordance with the Annual Bonus Plan, the Executive’s Annual Bonus for that fiscal year, which shall be targeted at one hundred and thirty percent (130%) of the Executive’s Base Salary for that fiscal year (“Target Bonus Rate”). The specified Target Bonus Rate may be increased from time to time by the Compensation Committee but shall not be decreased without the Executive’s written consent. Depending upon the actual financial performance recorded by the Company for any given fiscal year, the Executive’s Annual Bonus may be increased or decreased solely in accordance with the Annual Bonus Formula and otherwise in accordance with the Annual Bonus Plan. 5.3 Long-Term Incentives. During the Term, the Executive shall be eligible to participate in the Company’s 2002 Stock Incentive Plan, as amended and restated (or any successor incentive plan thereto), to the extent that the Compensation Committee, in its sole discretion, determines is appropriate. The Compensation Committee will make its determination consistent with the methodology used by the Company for compensating the Executive’s peer executives. Additionally, the Executive shall be entitled to participate in all other incentive plans, whether equity-based or cash-based, applicable generally to his peer executives within the Company. 5.4 Retirement and Deferred Compensation Plans. During the Term, the Executive shall be entitled to participate in all tax-qualified and nonqualified retirement and deferred compensation plans, policies and programs applicable generally to his peer executives within the Company, subject to the eligibility and participation requirements of such plans, policies and programs.

5 5.5 Welfare Benefit Plans. During the Term, the Executive and the Executive’s family will be entitled to participate in all welfare benefit plans, policies and programs, including those defined under Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended, provided by the Company to his peer executives within the Company, subject to the eligibility requirements and other provisions of such plans, policies and programs. 5.6 Fringe Benefits. During the Term, the Executive will be entitled to fringe benefits in accordance with the plans, policies and programs of the Company in effect for his peer executives within the Company. 5.7 Vacation. During the Term, the Executive will be entitled to participate in the Company’s Time Away paid time off program for salaried employees (or successor paid time off program) as that program is administered by the Company and as it may be amended or modified from time to time; provided, in all events, the Executive will be entitled to not less than 30 days of paid vacation each fiscal year. 5.8 Right to Change Plans. By reason of Articles 5.4, 5.5, 5.6 and 5.7 herein, the Company shall not be obligated to institute, maintain, or refrain from changing, amending, or discontinuing any benefit plan, policy or program, so long as such changes are similarly applicable to the Executive’s peer executives. Article 6. Expenses During the Term, the Company shall pay or reimburse the Executive for all ordinary and necessary expenses, in a reasonable amount, that the Executive incurs in performing his duties under this Agreement including, but not limited to, travel, entertainment, professional dues and subscriptions, and all dues, fees, and expenses associated with membership in various professional, business, and civic associations and societies in which the Company finds that the Executive’s participation is in the best interests of the Company. The payment or reimbursement of expenses shall be subject to such rules concerning documentation of expenses and the type or magnitude of such expenses as the Compensation Committee or the Company, as applicable, may establish from time to time. Article 7. Employment Termination 7.1 Date of Termination. The Company or the Executive may terminate the Executive’s employment in accordance with the provisions of this Article 7. The “Date of Termination” of

6 the Executive’s employment shall be as determined in Articles 7.2, 7.3, 7.4, 7.5, 7.6, and 7.7 below. 7.2 Termination Due to Retirement or Death. (a) In the event the Executive’s employment ends by reason of Retirement (as defined below), the Date of Termination shall be the date set forth in a notice by the Executive, which notice shall be given to the Company at least ninety (90) days prior to such date. In the event of the Executive’s death, the Date of Termination shall be the date of death. In either case, the Executive’s benefits shall be determined in accordance with the Company’s retirement, survivor’s benefits, insurance and other applicable plans and programs of the Company then in effect. For the purposes of this Agreement, “Retirement” shall mean the Executive’s voluntary termination of employment at a time during which he is eligible for “Normal Retirement” or “Early Retirement” as such terms are defined in the CarMax, Inc. Pension Plan as of the Effective Date. (b) Upon the Date of Termination due to the Executive’s Retirement or death, the Company shall be obligated to pay the Executive or, if applicable, the Executive’s beneficiary or estate, the following “Accrued Obligations”: (i) any Base Salary that was accrued but not yet paid as of the Date of Termination; (ii) the unpaid Annual Bonus, if any, earned with respect to the fiscal year preceding the Date of Termination; (iii) any compensation previously deferred by the Executive by his own election; and (iv) all other employee welfare and retirement benefits to which the Executive is entitled on the Date of Termination in accordance with the terms of the applicable plan or plans. The Accrued Obligations payable under the above clauses (i) and (ii) shall be paid to the Executive in a lump sum cash payment within ten (10) days after the Date of Termination or as soon thereafter as may be practicable. The Accrued Obligations payable under clauses (iii) and (iv) shall be paid in accordance with the terms of the plan under which they are due. (c) Upon the Date of Termination due to the Executive’s Retirement, the Executive shall be entitled to a pro rata share of the Annual Bonus based on actual performance for the fiscal year in which the Date of Termination occurs (such proration to be based on the fraction, the numerator of which is the number of full completed days of employment during the fiscal year through the Date of Termination, and the denominator of which is 365) (“Pro Rata

7 Actual Bonus”). The Pro Rata Actual Bonus, if any, shall be paid to the Executive when annual bonuses are paid to other senior officers of the Company for such fiscal year. (d) Upon the Date of Termination due to the Executive’s death, the Executive’s beneficiary or estate shall be entitled to a pro rata share of the Annual Bonus at the Target Bonus Rate for the fiscal year in which the Date of Termination occurs (such proration to be based on the fraction, the numerator of which is the number of full completed days of employment during the fiscal year through the Date of Termination, and the denominator of which is 365) (“Pro Rata Target Bonus”). The Pro Rata Target Bonus shall be paid to the Executive’s beneficiary or estate in a lump sum cash payment within ten (10) days after the date of the Executive’s death or as soon as practicable thereafter. (e) Upon the termination of the Executive’s employment due to his Retirement or death, the terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Article 7.2. 7.3 Termination Due to Disability. (a) The Company shall have the right to terminate the Executive’s employment for his Disability (as defined below). The Date of Termination due to Disability shall be the date set forth in a notice to the Executive, which notice shall be given by the Company at least thirty (30) days prior to such date. For the purposes of this Agreement, “Disability” or “Disabled” shall mean any physical or mental illness or injury that causes the Executive (i) to be considered “disabled” for the purpose of eligibility to receive income-replacement benefits in accordance with the Company’s long-term disability plan in which the Executive is a participant, or (ii) if the Executive does not participate in any such plan, to be unable to substantially perform the duties of his position for 180 days in the aggregate during any period of twelve (12) consecutive months and a physician selected by the Company (and reasonably acceptable to the Executive) shall have furnished to the Company certification that the return of the Executive to his normal duties is impossible or improbable. The Board shall review the foregoing information and shall determine in good faith if the Executive is Disabled. The Board’s decision shall be binding on the Executive. Notwithstanding the foregoing, if the Executive incurs a physical or mental illness

8 or injury that does not constitute a Disability, such physical or mental illness or injury shall not constitute a failure by the Executive to perform his duties hereunder and shall not be deemed a breach or default of this Agreement by the Executive. (b) Upon the Date of Termination due to the Executive’s Disability, the Executive shall be entitled to his Accrued Obligations and a Pro Rata Target Bonus. The Accrued Obligations provided under Article 7.2(b)(i) and (ii) and the Pro Rata Target Bonus shall be paid to the Executive in a lump sum cash payment within ten (10) days after the Date of Termination or as soon as practicable thereafter. The Accrued Obligations provided under Article 7.2(b)(iii) and (iv) shall be paid in accordance with the terms of the plan under which they are due. (c) Upon the termination of the Executive’s employment due to his Disability, the terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Article 7.3. 7.4 Voluntary Termination by the Executive Without Good Reason. The Executive may terminate his employment at any time without Good Reason (as defined in Article 7.7) by giving the Company at least forty-five (45) days notice, which notice shall state the Date of Termination. The Company reserves the right to require the Executive not to work during the notice period but shall pay the Executive his accrued and unpaid Base Salary, at the rate then in effect provided in Article 5.1 herein, through the Date of Termination (but not to exceed forty- five (45) days), and such payment shall be made to the Executive within ten (10) days after the Date of Termination or as soon thereafter as may be practicable. The Company shall also pay the Executive any compensation previously deferred by the Executive by his own election and all other employee welfare and retirement benefits to which the Executive is entitled on the Date of Termination, all in accordance with the terms of the applicable plan or plans under which they are due. In the event of the Executive’s voluntary termination of employment without Good Reason, the terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is

9 equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Article 7.4. 7.5 Involuntary Termination by the Company Without Cause. Upon notice to the Executive, the Company may terminate the Executive’s employment at any time for any reason other than for Cause and other than due to Disability (“Involuntary Termination Without Cause”). The Date of Termination shall be the date stated in such notice. (a) In the event of the Executive’s Involuntary Termination Without Cause, which occurs prior to the occurrence of, or after the conclusion of, a Change in Control Employment Period (defined at Article 11.4) that relates to a “Change in Control Event” (as defined in Article 11.5(b)), the Executive shall receive the following payments and benefits: (i) The Company shall pay to the Executive, in equal monthly installments over the twenty-four (24) month period beginning on the 60th day following the Executive’s “Separation from Service” (as such term is defined in the Internal Revenue Code of 1986, as amended (“Code”) Section 409A), an amount equal to the product of two (2) times the sum of (x) the Executive’s Base Salary and (y) the amount of the last Annual Bonus for the Executive as determined by the Compensation Committee in accordance with the Annual Bonus Plan, regardless of the Date of Termination. (ii) The Executive’s participation in the Company’s health, dental, and vision plans will end on the last day of the month in which the Date of Termination occurs. The Executive may elect to continue coverage under the health, dental and/or vision plans for himself and his eligible dependents in accordance with the terms and procedures of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”). If the Executive elects COBRA coverage, the Executive shall be responsible for remitting the COBRA premium to the Company (or to a COBRA administrator designated by the Company) in accordance with the terms of the Company’s health, dental and vision plans and applicable COBRA requirements. If the Executive elects COBRA coverage, the Company shall reimburse the Executive for a portion of the cost of such coverage until the end of the COBRA coverage period, up to a maximum period of eighteen (18) months. The amount of the Company’s reimbursement shall be equal to the sum of (1) the amount the Company would have otherwise paid for

10 such coverage if the Executive had remained an active employee of the Company, and (2) the COBRA administration fee. If the Executive does not elect COBRA coverage, the Company shall have no obligation to the Executive with respect to health, dental and vision benefits following the Date of Termination. (iii) The Company shall provide the Executive with reasonable outplacement services not to exceed a cost of $50,000. Such services shall be provided no later than the expiration of the two-year period following the Executive’s Separation from Service. (iv) The Executive shall be entitled to his Accrued Obligations and a Pro Rata Actual Bonus. The Accrued Obligations provided under Article 7.2(b)(i) and (ii) shall be paid to the Executive in a lump sum cash payment within ten (10) days after the Date of Termination or as soon thereafter as may be practicable. The Accrued Obligations provided under Article 7.2(b)(iii) and (iv) shall be paid in accordance with the terms of the plan under which they are due. The Pro Rata Actual Bonus, if any, shall be paid to the Executive when annual bonuses are paid to other senior officers of the Company for such fiscal year. (v) The terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Article 7.5. (b) Amounts payable under this Article 7.5 shall be in lieu of any amounts otherwise payable under any severance plan or agreement covering senior officers of the Company. (c) In the event that the Company terminates the Executive’s employment at any time for any reason (i) other than for Cause and other than due to Disability and (ii) after the Executive has attained age 65 or higher, such termination shall not be deemed an Involuntary Termination Without Cause.

11 7.6 Termination For Cause. The Company may terminate the Executive’s employment at any time for Cause, without notice or liability for doing so. The Date of Termination shall be the date that Cause is determined as provided below. (a) For purposes of this Agreement, “Cause” means a good faith determination by the Board that one (1) or more of the following has occurred: (i) The Executive has committed a material breach of this Agreement, which breach was not cured or waived by the Company, within ten (10) days of receipt by the Executive of notice from the Company specifying the breach; (ii) The Executive has committed gross negligence in the performance of his duties hereunder, intentionally fails to perform his duties, engages in intentional misconduct or intentionally refuses to abide by or comply with the directives of the Board or the Company’s policies and procedures, as applicable, which actions continued for a period of ten (10) days after receipt by the Executive of notice of the need to cure or cease; (iii) The Executive has willfully and continuously failed to perform substantially his duties (other than any such failure resulting from the Executive’s Disability or incapacity due to bodily injury or physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board that specifically identifies the manner in which the Board believes that the Executive has not substantially performed his duties; (iv) The Executive has willfully violated a material requirement of the Company’s code of conduct or breached his fiduciary duty to the Company; (v) The Executive’s conviction of (or a plea of guilty or nolo contendere to) a felony or any crime involving moral turpitude, dishonesty, fraud, theft or financial impropriety; (vi) The Executive has engaged in illegal conduct, embezzlement or fraud with respect to the business or affairs of the Company; (vii) The Executive has failed to disclose to the Board a conflict of interest of which the Executive knew or with reasonable diligence should have known in connection with any transaction entered into on behalf of the Company; or

12 (viii) The Executive has failed to agree to a modification of the Agreement pursuant to Article 17.3 hereof when the purpose of the modification is to comply with applicable federal, state or local laws or regulations, or when such modification is designed to further define the restrictions of Article 8 or otherwise enhance the enforcement of Article 8 without increasing the duration or scope of the Article 8 restrictions. No act or failure to act on the Executive’s part will be considered “willful” if conducted by the Executive in good faith and with a reasonable belief that the Executive’s act or omission was in, and not opposed to, the best interests of the Company. (b) If the Executive’s employment is terminated for Cause during the Term, this Agreement will terminate without further obligation of the Company to the Executive other than (i) the payment to the Executive of his accrued and unpaid Base Salary through the Date of Termination, and (ii) the payment of any compensation previously deferred by the Executive by his own election and all other employee welfare and retirement benefits to which the Executive is entitled on the Date of Termination, all in accordance with the terms of the applicable plan or plans under which they are due. In the event of the Executive’s termination of employment for Cause, the terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Article 7.6. 7.7 Termination for Good Reason. At any time during the Term, the Executive may terminate his employment for Good Reason (as defined below) upon notice to the Company. Such notice shall state the intended Date of Termination and shall be given to the Company at least forty-five (45) days prior to such date and shall set forth in detail the facts and circumstances claimed to provide grounds for such termination. The Company shall have the right to cure the facts and circumstances giving rise to such grounds for termination for Good Reason. If the Company does not so cure within such forty-five (45) day notice period, then the Executive’s employment shall terminate on the Date of Termination stated in the notice.

13 (a) For purposes of this Agreement, “Good Reason” shall mean, without the Executive’s express written consent, the occurrence of any one (1) or more of the following: (i) A reduction in the Executive’s Base Salary (other than, prior to the occurrence of a Change in Control or Asset Sale, a reduction across-the-board affecting all senior officers in substantially like percentages of their base salaries) or Target Bonus Rate; (ii) A material reduction in the Executive’s duties or authority as President and Chief Executive Officer of the Company, or any removal of the Executive from or any failure to reappoint or reelect the Executive to such positions (except in connection with the termination of the Executive’s employment for Cause or Disability, as a result of the Executive’s death or Retirement or by the Executive other than for Good Reason); (iii) The Executive being required to relocate to a principal place of employment more than 35 miles from the Company’s headquarters except, prior to the occurrence of a Change in Control or Asset Sale, in connection with the relocation of substantially all senior Company executives pursuant to the relocation of the Company’s headquarters; or (iv) The failure of the Company to obtain an agreement from any successor to all or substantially all of the assets or business of the Company to assume and agree to perform this Agreement within fifteen (15) days after a merger, consolidation, sale or similar transaction. (b) In the event of the Executive’s voluntary termination of employment for Good Reason, which occurs prior to the occurrence of, or after the conclusion of, a Change in Control Employment Period that relates to a Change in Control Event, the Executive shall receive the following payments and benefits: (i) The Company shall pay to the Executive, in equal monthly installments over the twenty-four (24) month period beginning on the 60th day following the Executive’s Separation from Service, an amount equal to the product of two (2) times the sum of (x) the Executive’s Base Salary and (y) the amount of the last Annual Bonus for

14 the Executive as determined by the Compensation Committee in accordance with the Annual Bonus Plan, regardless of the Date of Termination. (ii) The Executive’s participation in the Company’s health, dental, and vision plans will end on the last day of the month in which the Date of Termination occurs. The Executive may elect to continue coverage under the health, dental and/or vision plans for himself and his eligible dependents in accordance with the terms and procedures of COBRA. If the Executive elects COBRA coverage, the Executive shall be responsible for remitting the COBRA premium to the Company (or to a COBRA administrator designated by the Company) in accordance with the terms of the Company’s health, dental and vision plans and applicable COBRA requirements. If the Executive elects COBRA coverage, the Company shall reimburse the Executive for a portion of the cost of such coverage until the end of the COBRA coverage period, up to a maximum period of eighteen (18) months. The amount of the Company’s reimbursement shall be equal to the sum of (1) the amount the Company would have otherwise paid for such coverage if the Executive had remained an active employee of the Company, and (2) the COBRA administration fee. If the Executive does not elect COBRA coverage, the Company shall have no obligation to the Executive with respect to health, dental and vision benefits following the Date of Termination. (iii) The Company shall provide the Executive with reasonable outplacement services not to exceed a cost of $50,000. Such services shall be provided no later than the expiration of the two-year period following the Executive’s Separation from Service. (iv) The Executive shall be entitled to his Accrued Obligations. The Accrued Obligations provided under Article 7.2(b)(i) and (ii) shall be paid to the Executive in a lump sum cash payment on the tenth day after the Date of Termination or as soon thereafter as may be practicable. The Accrued Obligations provided under Article 7.2(b)(iii) and (iv) shall be paid in accordance with the terms of the plan under which they are due. (v) The terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation,

15 regardless of whether such compensation is equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Article 7.7. (vi) The Executive shall be entitled to a one-time payment in an amount equal to the Executive’s Base Salary on the Date of Termination multiplied by one hundred and thirty percent (130%). This one-time payment shall be paid to the Executive in a lump sum cash payment on the tenth day after the Date of Termination or as soon thereafter as may be practicable. (c) The Executive’s right to terminate his employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness not constituting a Disability. Amounts payable under this Article 7.7 shall be in lieu of any amounts otherwise payable under any severance plan or agreement covering senior officers of the Company. 7.8 Conditions on Company Obligations. All payments and benefits made or provided pursuant to Article 7 are subject to the Executive’s: (a) Compliance with the provisions of Article 8, Article 9, Article 10 and Article 17.2 hereof; (b) Except with respect to payment of the Executive’s Accrued Obligations, delivery to the Company of an executed Agreement and General Release without the Executive having revoked such agreement, which shall be substantially in the form attached hereto as Exhibit A (with such changes or additions as needed under then applicable law to give effect to its intent and purpose) (“Agreement and General Release”), satisfactory to the Company by the appropriate deadlines specified by the Company, provided that all such steps must be completed prior to the 60th day (or for purposes of Article 11.5(b), the 45th day) following the Executive’s Separation from Service; and (c) Compliance with Code Section 409A. Notwithstanding anything herein to the contrary, distributions under Article 7.5(a)(i), 7.7(b)(i), 7.7(b)(vi), or 11.5(b) may not be made to a Key Employee (as defined below) upon his or her Separation from Service before the date which is six months after the date of the Key Employee’s Separation from Service (or, if earlier, the date of death of the Key Employee) (the “Key Employee Delay”). Any payments that would otherwise be made during this period of delay shall be accumulated and paid on the first day of the seventh month following the Executive’s Separation from Service (or, if earlier, the first day of the month after the Executive’s death). For purposes of this Article 7.8(c), “Key Employee”

16 means an executive who, as of December 31st of a calendar year, meets the requirements of Code Section 409A(a)(2)(B)(i) to be treated as a “specified employee” of the Company; i.e., a key employee (as defined in Code Section 416(i)(1)(A)(i), (ii) or (iii) applied in accordance with the regulations thereunder and disregarding Code Section 416(i)(5)). An executive who meets the criteria in the preceding sentence will be considered a Key Employee for purposes of this Agreement for the 12-month period commencing on the next following April 1. After payment of all amounts and benefits under this Article 7, the Company thereafter shall have no further obligation under this Agreement. Article 8. Covenant Not to Compete The terms and provisions contained in this Article 8 comprise a covenant not to compete (the “Covenant Not to Compete”). The Executive acknowledges and agrees as follows: 8.1 CarMax operates a unique business concept regarding the sale and servicing of new and used vehicles in a highly competitive industry. 8.2 CarMax’s competitors have attempted to duplicate CarMax’s business concept in various markets throughout the United States, including markets where CarMax does not currently have a business location, and may continue to do so. 8.3 In connection with the Executive’s employment with CarMax, he will receive access to, and training regarding, CarMax’s business concept and will, accordingly, acquire commercially valuable knowledge of and insight into CarMax’s operations and CarMax’s proprietary and confidential information, any of which if made available to any Competitor (as defined below) could place CarMax at a competitive disadvantage. 8.4 In order to protect CarMax’s legitimate business interests from Competitors (as defined below) and to protect CarMax’s critical interest in its proprietary and confidential information, the Executive covenants and agrees as follows: During the Executive’s employment with CarMax and for a period of twenty-four (24) months following the last day of the Executive’s employment (the “Restricted Period”), the Executive will not, directly or indirectly, compete with CarMax by acting “in a competitive capacity” (as defined below), for, or on behalf of, any person or entity operating or developing, during the Restricted Period, a business that provides or intends to provide activities, products or services that are the same or substantially similar to, and competitive with, the business of CarMax as of Executive’s last day of employment with

17 CarMax (each, a “Competitor”) within any Metropolitan Statistical Area (as defined by the United States Office of Management and Budget) in which CarMax has a retail store site as of Executive’s last day of employment. Such Competitors include, but are not limited to: Sonic Automotive, Inc.; Lithia Motors, Inc.; Group 1 Automotive, Inc.; AutoNation, Inc.; Penske Automotive Group, Inc.; Asbury Automotive Group, Inc.; Hendrick Automotive Group; Auction Direct USA, L.P.; AutoAmerica, Inc.; Off Lease Only, Inc.; Carvana, LLC; Carvana Group, LLC; AutoMatch USA, LLC; DriveTime Car Sales Company, LLC; DriveTime Automotive Group, Inc.; Hertz Global Holdings, Inc.; Enterprise Holdings, Inc.; Avis Budget Group, Inc.; Cox Automotive, Inc.; Classified Ventures, LLC; TrueCar, Inc.; Dealer Dot Com, Inc.; CarGurus, Inc.; Blinker, Inc.; KAR Auction Services, Inc.; Cars.com; TrueCar, Inc.; Vroom, Inc.; Shift Technologies, Inc.; ACV Auctions, Inc.; CarOffer, LLC; Copart, Inc.; WeBuyAnyCar.com; and GiveMeTheVIN.com, and any automotive retail operation affiliated with, owned, operated, or controlled by Berkshire Hathaway Inc.; Carrefour S.A.; and/or Gulliver International Co., Ltd. 8.5 A business, including any Competitor, or any of its respective subsidiaries or affiliates, will not be considered to be in competition with CarMax for purposes of Article 8 if the business, or operating unit of the business, or its respective subsidiaries or affiliates, by which the Executive will be or is employed (i) does not have within the twenty-four (24) months preceding the Executive’s termination of employment with CarMax, annual gross revenues (calculated on a rolling 12-month basis) of at least $5,000,000 derived from the sale and servicing of new or used vehicles; or (ii) is not projected (by the business or operating unit of the business) to have within the twenty-four (24) months following the Executive’s termination of employment with CarMax, annual gross revenues (regardless of how calculated) of at least $5,000,000 derived from the sale and servicing of new or used vehicles. 8.6 Acting “in a competitive capacity” shall mean providing to a Competitor, directly or indirectly, the same or substantially similar services that the Executive provided to CarMax at any time during Executive’s last twenty-four (24) months of employment. 8.7 Nothing herein shall prevent or restrict the Executive from working for any person in any role or in any capacity that is not in competition with CarMax.

18 8.8 Notwithstanding the foregoing, nothing herein shall be deemed to prevent or limit the right of the Executive to invest in the capital stock or other securities of any corporation whose stock or securities are regularly traded on any public exchange. 8.9 Intellectual Property. The Executive understands and acknowledges that any writing, invention, design, system, process, development or discovery (collectively, “Intellectual Property”) conceived, developed, created or made by the Executive, alone or with others, both during the Term of this Agreement and in the course of the Executive’s employment prior to the Term, is the sole and exclusive property of the Company to the extent such Intellectual Property is related to the Executive’s duties or is within the scope of the Company’s actual or anticipated business. The Executive agrees to assign to the Company any and all of his right, title, and interest in and to such Intellectual Property, including, but not limited to, patent, trademark and other rights. The Executive further agrees to cooperate fully with the Company to secure, maintain, enforce, or defend the Company’s ownership of and rights in such Intellectual Property. The rights and remedies of this Article 8.9 are in addition to any rights and remedies available under applicable law. 8.10 The Executive and CarMax have examined in detail the Covenant Not to Compete contained in this Article 8 and each agrees that the restraint imposed upon the Executive is reasonable in light of the legitimate business interests of CarMax and is not unduly harsh or burdensome with respect to the Executive’s ability to earn a livelihood. If any provision of the Covenant Not to Compete relating to the time period, geographic area or scope of restricted activities shall be declared by a court of competent jurisdiction to exceed the maximum time period, geographic area or scope of activities, as applicable, that such court deems reasonable and enforceable, then such time period, geographic area or scope of activities shall be deemed to be, and thereafter shall become, the maximum time period, scope of activities or largest geographic area that such court deems reasonable and enforceable and this Agreement shall automatically be considered to have been amended and revised to reflect such determination. 8.11 The Executive and CarMax acknowledge that the Executive’s services are of a special, extraordinary, and intellectual character that gives the Executive unique value, and that CarMax’s business is highly competitive, and that violation of the Covenant Not to Compete provided herein would cause immediate, immeasurable, and irreparable harm, loss, and damage to CarMax not adequately compensable by a monetary award. In the event of any breach or

19 threatened breach by the Executive of the Covenant Not to Compete, CarMax shall be entitled to such equitable and injunctive relief as may be available to restrain the Executive from violating the provisions hereof. Nothing herein shall be construed as prohibiting CarMax from pursuing any other remedies available at law or in equity for such breach or threatened breach, including the recovery of damages and the immediate termination of the employment of the Executive hereunder for Cause. Article 9. Non-Solicitation of Employees The Executive agrees that during the Executive’s employment with CarMax and for a period of twenty-four (24) months following the last day of the Executive’s employment, the Executive shall not, directly or indirectly, solicit or induce, or attempt to solicit or induce, any employee of CarMax with whom the Executive had material business-related contact on behalf of CarMax, to leave employment with CarMax for any reason whatsoever (the “Covenant Not to Solicit”). For purposes of this Article 9, employee shall mean any individual employed by CarMax. Article 10. Confidentiality The terms and provisions contained in this Article 10 comprise a covenant of confidentiality (the “Covenant of Confidentiality”). The Executive understands and agrees that any and all Protected Information is the property of CarMax and is essential to the protection of CarMax’s goodwill and to the maintenance of CarMax’s competitive position and accordingly should be kept secret. For purposes of this Agreement, “Protected Information” means trade secrets, confidential and proprietary business information of or about CarMax, and any other information of CarMax, including technical data, processes, know-how, financial data, analyses, forecasts, plans, operations information and data, customer lists (including potential customers) and information, marketing plans, materials and information, product and service information, accounts and billings information, sales transaction data, sales documents and information, discoveries, ideas, concepts, designs, drawings, specifications, techniques, models, information systems data and materials, computer software or hardware, data analyses and compilations, source code, object code, documentation, diagrams, flow charts, research, procedures, methods, systems, programs, price lists, pricing policies, supplier and distributor information, sources of supply, internal memoranda, promotional plans, internal policies, purchasing information, operating methods and procedures, training materials, and any products and services which may be developed from time

20 to time by CarMax and its agents or employees, including the Executive; provided, however, that information that is in the public domain (other than as a result of a breach of this Agreement), approved for release by CarMax or lawfully obtained from third parties who are not bound by a confidentiality agreement with CarMax, is not Protected Information. CarMax has advised the Executive and the Executive acknowledges that it is the policy of CarMax to maintain as secret and confidential all Protected Information, and that Protected Information has been and will be developed at substantial cost to and effort by CarMax. The Executive agrees to hold in strict confidence and safeguard any and all Protected Information accessed or accessible by the Executive during the Executive’s employment. The Executive shall not, without the prior written consent of CarMax, at any time, directly or indirectly, divulge, furnish, use, disclose or make accessible to any person, firm, corporation, association, or other entity (otherwise than as may be required in the regular course of the Executive’s employment with CarMax), any Protected Information, or cause any such Protected Information to enter the public domain. Nothing contained in this Article 10 is intended to reduce in any way the protection available to CarMax pursuant to the Uniform Trade Secrets Act as adopted in Virginia or any other state or other applicable laws that prohibit the misuse or disclosure of confidential or proprietary information. Unless lengthened by the application of the Virginia Uniform Trade Secrets Act or other applicable law, the restrictions in Article 10 shall remain in effect during Associate’s employment and for five (5) years thereafter. Article 11. Change in Control; Sale of Assets 11.1 Purpose. The Company recognizes that the possibility of a Change in Control or Asset Sale exists, and the uncertainty and questions that it may raise among management may result in the departure or distraction of management personnel to the detriment of the Company. Accordingly, the purpose of this Article 11 is to encourage the Executive to continue employment after a Change in Control or Asset Sale by providing reasonable employment security to the Executive and to recognize the prior service of the Executive in the event of a termination of employment under certain circumstances after a Change in Control or Asset Sale. This Article 11 shall not become effective, and the Company shall have no obligation hereunder, if the employment of the Executive with the Company terminates before a Change in Control or Asset Sale.

21 11.2 Definitions. (a) “Change in Control” of the Company means the occurrence of either of the following events: (i) a third person, including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, becomes, or obtains the right to become, the beneficial owner of Company securities having twenty percent (20%) or more of the combined voting power of the then outstanding securities of the Company that may be cast for the election of directors to the Board of the Company (other than as a result of an issuance of securities initiated by the Company in the ordinary course of business); or (ii) as the result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions, the persons who were directors of the Company before such transactions shall cease to constitute a majority of the board or of the board of directors of any successor to the Company. (b) “Asset Sale” shall mean a sale of all or substantially all of the assets of the Company in a single transaction or a series of related transactions. 11.3 Long-Term Incentive Compensation. The terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences to the Executive upon the occurrence of a Change in Control or an Asset Sale or upon a termination of the Executive’s employment thereafter. 11.4 Continued Employment Following Change in Control or an Asset Sale. If a Change in Control or an Asset Sale occurs and the Executive is employed by the Company on the date the Change in Control or Asset Sale occurs (the “Change in Control Date”), the period beginning on the Change in Control Date and ending on the second (2nd) anniversary of such date shall be the “Change in Control Employment Period.” 11.5 Termination of Employment During Change in Control Employment Period. The Executive will be entitled to the compensation and benefits described in this Article 11.5 if, during the Change in Control Employment Period, (a) the Company terminates his employment for any reason other than for Cause or due to Disability, or (b) the Executive voluntarily terminates his employment with the Company for Good Reason. The compensation and benefits described in this Article 11.5 are in lieu of, and not in addition to, any compensation and benefits

22 provided to the Executive pursuant to Articles 7.5 and 7.7 herein and any amounts otherwise payable under any severance plan or agreement covering senior officers of the Company. Upon such a termination of employment, the Executive shall receive the following payments and benefits: (a) The Executive shall be entitled to his Accrued Obligations and a Pro Rata Target Bonus. The Accrued Obligations provided under Article 7.2(b)(i) and (ii) and the Pro Rata Target Bonus shall be paid to the Executive in a lump sum cash payment within ten (10) days after the Date of Termination or as soon thereafter as may be practicable. The Accrued Obligations provided under Article 7.2(b)(iii) and (iv) shall be paid in accordance with the terms of the plan under which they are due. (b) The Company shall pay to the Executive an amount equal to 2.99 times the Executive’s Final Compensation. For purposes of this Agreement, “Final Compensation” means the Base Salary in effect at the Date of Termination, plus the higher Annual Bonus paid or payable for the two (2) most recently completed fiscal years. If the Change in Control Employment Period relates to an event that also qualifies as a Change in Control Event, this payment will be paid to the Executive in a lump sum cash payment on the forty-fifth (45th) day following the Executive’s Separation from Service. Otherwise, such payment shall be paid at the time and in the form set forth in Article 7.5. For purposes of this Article 11.5(b), a “Change in Control Event” means an event described in IRS regulations or other guidance under Code Section 409A(a)(2)(A)(v). (c) The Executive’s participation in the Company’s health, dental, and vision plans will end on the last day of the month in which the Date of Termination occurs. The Executive may elect to continue coverage under the health, dental and/or vision plans for himself and his eligible dependents in accordance with the terms and procedures of COBRA. If the Executive elects COBRA coverage, the Executive shall be responsible for remitting the COBRA premium to the Company (or to a COBRA administrator designated by the Company) in accordance with the terms of the health, dental and vision plans and applicable COBRA requirements. If the Executive elects COBRA coverage, the Company shall reimburse the Executive for a portion of the cost of such coverage until the end of the COBRA coverage period, up to a maximum period of eighteen (18) months. The amount of the Company’s reimbursement shall be equal to the sum of (1) the amount the Company would have otherwise

23 paid for such coverage if the Executive had remained an active employee of the Company, and (2) the COBRA administration fee. If the Executive does not elect COBRA coverage, the Company shall have no obligation to the Executive with respect to health, dental and vision benefits following the Date of Termination. (d) The Company shall provide the Executive with reasonable outplacement services not to exceed a cost of $50,000. Such services shall be provided no later than the expiration of the two-year period following the Executive’s Separation from Service. 11.6 Death, Disability or Retirement Termination During Change In Control Employment Period. If the Executive’s employment ends by reason of Retirement, the Executive’s death, or as a result of Disability during the Change in Control Employment Period, this Agreement will terminate without any further obligation on the part of the Company under this Agreement other than: (a) The Executive (or his beneficiary or his estate in the event of his death) will be entitled to the payment of the Executive’s Accrued Obligations and a Pro Rata Target Bonus. The Accrued Obligations provided under Article 7.2(b)(i) and (ii) and the Pro Rata Target Bonus shall be paid in a lump sum cash payment within ten (10) days after the Date of Termination or as soon thereafter as may be practicable. The Accrued Obligations provided under Article 7.2(b)(iii) and (iv) shall be paid in accordance with the terms of the plan under which they are due; and (b) The terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Article 11.6. The compensation and benefits described in this Article 11.6 are in lieu of, and not in addition to, any compensation and benefits provided to the Executive pursuant to Articles 7.2 and 7.3 herein and any amounts otherwise payable under any severance plan or agreement covering senior officers of the Company.

24 11.7 Termination for Cause and Termination Other Than For Good Reason Following a Change in Control. (a) If the Executive’s employment is terminated for Cause during the Change in Control Employment Period, this Agreement will terminate without further obligation to the Executive other than the payment to the Executive of his accrued and unpaid Base Salary through the Date of Termination, as well as any deferred compensation and other employee welfare and retirement benefits to which the Executive is entitled on the Date of Termination in accordance with the terms of the applicable plan or plans under which they are due. The terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Article 11.7(a). The compensation and benefits described in this Article 11.7 are in lieu of, and not in addition to, any compensation and benefits provided to the Executive pursuant to Articles 7.4 and 7.6 herein and any amounts otherwise payable under any severance plan or agreement covering senior officers of the Company. (b) If the Executive terminates employment during the Change in Control Employment Period other than for Good Reason, this Agreement will terminate without further obligation to the Executive other than: (i) The Executive (or his beneficiary or his estate in the event of his death) will be entitled to the payment of the Executive’s Accrued Obligations. The Accrued Obligations provided under Article 7.2(b)(i) and (ii) shall be paid in a lump sum cash payment within ten (10) days after the Date of Termination or as soon thereafter as may be practicable. The Accrued Obligations provided under Article 7.2(b)(iii) and (iv) shall be paid in accordance with the terms of the plan under which they are due; and (ii) The terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the

25 consequences of the termination of the Executive’s employment under this Article 11.7(b). 11.8 Conditions on Company Obligations. All payments and benefits made or provided pursuant to Article 11 are subject to the provisions of Article 7.8 (including the Key Employee Delay in Article 7.8(c)). After payment of all amounts and benefits under this Article 11, the Company thereafter shall have no further obligation under this Agreement. Article 12. Assignment 12.1 Assignment by Company. This Agreement may and shall be assigned or transferred to, and shall be binding upon and shall inure to the benefit of, any successor of the Company, and any such successor shall be deemed substituted for all purposes of the “Company” under the terms of this Agreement. As used in this Agreement, the term “successor” shall mean any person, firm, corporation, or business entity which, at any time, whether by merger, purchase, or otherwise, acquires all or substantially all, or control of all or substantially all, of the assets or the business of the Company. Except as provided herein, the Company may not otherwise assign this Agreement. 12.2 Assignment by the Executive. The services to be provided by the Executive to the Company hereunder are personal to the Company and the Executive’s duties may not be assigned by the Executive; provided, however, that this Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, and administrators, successors, heirs, distributees, devisees, and legatees. If the Executive dies while any amounts payable to the Executive hereunder remain outstanding, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee or, in the absence of such designee, to the Executive’s estate. Article 13. Dispute Resolution Except for actions initiated by CarMax to enjoin a breach by the Executive, and/or recover damages from the Executive, related to the Covenant Not to Compete (Article 8), the Covenant Not to Solicit (Article 9) or the Covenant of Confidentiality (Article 10) (collectively, the “Restrictive Covenants”), or Forfeiture and Recoupment (Article 3.2), which action(s) CarMax may bring in an appropriate court of law or equity, any disagreement between the Executive and CarMax concerning anything covered by this Agreement or concerning other terms or conditions

26 of the Executive’s employment or the termination of the Executive’s employment will be settled by final and binding arbitration pursuant to CarMax’s Dispute Resolution Rules and Procedures in effect at the time the disagreement or dispute arises or at the time of termination in the event the Executive’s employment terminated. The decision of the arbitrator will be final and binding on both the Executive and CarMax and may be enforced in a court of appropriate jurisdiction. Article 14. Litigation By Third Parties All litigation or inquiries by third parties (including, but not limited to, those by the Company’s shareholders or by government agencies) arising out of or in connection with the Executive’s performance under this Agreement, against either the Company or the Executive or both, shall be jointly defended or opposed by the parties hereto to support this Agreement. The Company shall appoint legal counsel for the parties and shall bear the costs, reasonable legal fees and expenses related to such litigation or inquiry. Article 15. Indemnity; Limitation of Liability As an officer of the Company, the Executive shall be entitled to indemnity and limitation of liability as provided pursuant to the Company’s Articles of Incorporation, bylaws and any other governing document, as the same shall be amended from time to time. Article 16. Notice Any notices, requests, demands, or other communications provided for by this Agreement shall be in writing, and given by delivery in person or by registered or certified mail, postage prepaid (in which case notice will be deemed to have been given on the third day after mailing) or by overnight delivery by a reliable overnight courier service (in which case notice will be deemed to have been given on the day after delivery to such courier service). Notices to the Executive shall be directed to the last address he has filed in writing with the Company. Notices to the Company shall be directed to the Secretary of the Company. Article 17. Miscellaneous 17.1 Entire Agreement. This Agreement supersedes any prior agreements or understandings, oral or written, between the parties hereto, with respect to the subject matter hereof, and constitutes the entire agreement of the parties with respect thereto. Without limiting the generality of the foregoing sentence, this Agreement completely supersedes any and all prior employment and severance agreements entered into by and between the Company, and the Executive, including the Prior Agreement, and all amendments thereto, in their entirety.

27 17.2 Return of Materials. Upon the termination of the Executive’s employment with the Company, however such termination is effected, the Executive shall promptly deliver to the Company all property (including Intellectual Property), records, materials, documents, and copies of documents concerning the Executive’s business and/or its customers (hereinafter collectively “Company Materials”) which the Executive has in his possession or under his control at the time of termination of his employment. The Executive further agrees not to take or extract any portion of Company Materials in written, computer, electronic or any other reproducible form without the prior written consent of the Board. 17.3 Modification. This Agreement shall not be varied, altered, modified, canceled, changed, or in any way amended except by mutual agreement of the parties in a written instrument executed by the parties hereto or their legal representatives. 17.4 Severability. It is the intention of the parties that the provisions of the restrictive covenants herein shall be enforceable to the fullest extent permissible under the applicable law. If any clause or provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws effective during the Term hereof, then the remainder of this Agreement shall not be affected thereby, and in lieu of each clause or provision of this Agreement that is illegal, invalid or unenforceable, there shall be added, as a part of this Agreement, a clause or provision as similar in terms to such illegal, invalid or unenforceable clause or provision as may be possible and as may be legal, valid and enforceable. 17.5 Attorney’s Fees. In any action arising under this Agreement, CarMax, so long as it prevails, shall be entitled to recover its reasonable attorney’s fees and costs. 17.6 Section 409A. Notwithstanding any other provision of this Agreement, (i) to the extent applicable, this Agreement will be interpreted, operated and administered in accordance with the requirements of Code Section 409A, and (ii) if either the Company or the Executive determines that any provision of this Agreement may cause compensation payable to the Executive to be classified as income under Code Section 409A(a) or (b) and thereby results in tax penalties to the Executive, the Company or the Executive, as the case may be, shall notify the other party and the parties will amend the Agreement to avoid penalties under Code Section 409A.

28 17.7 Counterparts. This Agreement may be executed in one (1) or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. 17.8 Tax Withholding. The Company may withhold from any benefits payable under this Agreement all federal, state, city, or other taxes as may be required pursuant to any law or governmental regulation or ruling. 17.9 Restrictive Covenants of the Essence. The Restrictive Covenants in Articles 8, 9 and 10 of the Agreement are of the essence of this Agreement. In the event that the Executive has a claim or cause of action against CarMax (whether related to this Agreement or not), such claim or cause of action, including but not limited to a breach of this Agreement by CarMax, shall not prevent or otherwise constitute a defense to CarMax’s enforcement of the Restrictive Covenants and shall not excuse the Executive’s performance of the Restrictive Covenants. CarMax shall at all times maintain the right to seek enforcement of the Restrictive Covenants whether or not CarMax has previously refrained from seeking enforcement of any such Restrictive Covenant as to the Executive or any other peer Executive who has signed an agreement with similar covenants. Notwithstanding any provision contained within this Agreement, the obligations of the Executive under Articles 8, 9, 10, 13 and 17 of this Agreement shall continue after the termination of this Agreement and the Executive’s employment and shall be binding on the Executive’s heirs, executors, legal representatives and assigns. 17.10 Beneficiaries. The Executive may designate one (1) or more persons or entities as the primary or contingent beneficiaries of any amounts to be received under this Agreement. Such designation must be in the form of a signed writing acceptable to the Company’s chief legal officer. The Executive may make or change such designation at any time. 17.11 Full Settlement. Except as set forth in this Agreement, the Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including without limitation, set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others, except to the extent any amounts are due the Company or its subsidiaries or affiliates pursuant to a judgment against the Executive; provided, however, in no event shall any judgment result in the offset of amounts subject to Code Section 409A. In no event shall the Executive be obligated to seek other employment in mitigation of the amounts

29 payable to the Executive under any of the provisions of this Agreement, nor shall the amount of any payment hereunder be reduced by any compensation earned by the Executive as a result of employment by another employer; provided, that continued health, dental and vision benefit plan participation pursuant to Article 7.5(a)(ii) or Article 11.5(c) herein shall be reduced to the extent that the Executive becomes eligible to such benefits from a subsequent employer. 17.12 Contractual Rights to Benefits. This Agreement establishes and vests in the Executive a contractual right to the benefits to which he is entitled hereunder. However, nothing herein contained shall require or be deemed to require, or prohibit or be deemed to prohibit, the Company to segregate, earmark, or otherwise set aside any funds or other assets in trust or otherwise to provide for any payments to be made or required hereunder. 17.13 Resignations. Upon the termination of the Executive’s employment, however such termination is effected, he shall be deemed to have resigned as of the date of such termination all offices and directorships he may have held with the Company and all subsidiaries. Article 18. Governing Law This Agreement shall be governed by, construed and enforced in accordance with the laws of the Commonwealth of Virginia without regard to conflicts of laws principles thereof. In the event of any litigation between CarMax and Executive related to the enforcement or enforceability of the Restrictive Covenants, the parties agree that the Circuit Court for the County of Henrico, Virginia, shall have mandatory and exclusive jurisdiction and venue of any such action. Article 19. Protected Rights Notwithstanding any other terms and conditions of this Agreement: Executive understands that nothing contained in this Agreement limits Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”). Executive further understands that this Agreement does not limit Executive’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. This Agreement does

30 not limit Executive’s right to receive an award for information provided to any Government Agencies. [Signature Page Follows]

31 IN WITNESS WHEREOF, the Executive and the Company have executed this Agreement as of December 1, 2023. CARMAX, INC.: By: /s/ Diane L. Cafritz Name: Diane L. Cafritz Title: Executive Vice President, Human Resources, General Counsel and Chief Compliance Officer EXECUTIVE: /s/ William D. Nash William D. Nash President and Chief Executive Officer

32 EXHIBIT A [Form of Release] AGREEMENT AND GENERAL RELEASE This Agreement and General Release (the “Agreement and General Release”), dated as of _______ __, 20__, is made by and between CarMax, Inc., for itself and its affiliates, subsidiaries, divisions, successors and assigns in such capacity, and the current, future and former employees, officers, directors, trustees and agents thereof (collectively referred to throughout this Agreement as the “Company”) and _______________________ (“Executive”), for him/herself and his/her heirs, executors, administrators, successors and assigns (together with Executive, collectively referred to throughout this Agreement and General Release as “Employee”) agree: 1. Last Day of Employment. The Executive’s last day of employment with the Company is ____________, 20__. In addition, effective as of ____________, 20__, the Executive resigns from the Executive’s position as President and Chief Executive Officer of the Company, and will not be eligible for any benefits or compensation after ____________, 20__, other than as specifically provided in Articles 7 or 11, as applicable, of the Amended and Restated Severance Agreement between the Company and the Executive dated as of __________ __, 20__ (“Severance Agreement”) and the Executive’s continued right to indemnification and directors and officers liability insurance. In addition, effective as of ____________, 20__, the Executive resigns from all offices, directorships, trusteeships, committee memberships and fiduciary capacities held with, or on behalf of, the Company or any benefit plans of the Company. These resignations will become irrevocable as set forth in Section 3 below. 2. Consideration. The parties acknowledge that this Agreement and General Release is being executed in accordance with Article 7 or Article 11 of the Severance Agreement, as applicable, and that this Agreement and General Release is a condition to the receipt by Employee of all payments and benefits thereunder. 3. Revocation. The Executive may revoke this Agreement and General Release for a period of seven (7) calendar days following the day the Executive executes this Agreement and General

33 Release. Any revocation within this period must be submitted, in writing, to the Company and state, “I hereby revoke my acceptance of our Agreement and General Release.” The revocation must be personally delivered to the Company’s _______________, or his/her designee, or mailed to the Company, _______________________________ and postmarked within seven (7) calendar days of execution of this Agreement and General Release. This Agreement and General Release shall not become effective or enforceable until the revocation period has expired. If the last day of the revocation period is a Saturday, Sunday, or legal holiday in Virginia, then the revocation period shall not expire until the next following day that is not a Saturday, Sunday, or legal holiday. 4. General Release of Claims. Employee knowingly and voluntarily releases and forever discharges the Company from any and all claims, rights, causes of action, demands, damages, fees, costs, expenses, including attorneys’ fees, and liabilities of any kind whatsoever, whether known or unknown, against the Company, that Employee has, has ever had or may have as of the date of execution of this Agreement and General Release, including, but not limited to, any alleged violation of: ● The Age Discrimination in Employment Act of 1967, as amended; ● The Older Workers Benefit Protection Act of 1990; ● Title VII of the Civil Rights Act of 1964, as amended; ● The Civil Rights Act of 1991; ● Sections 1981 through 1988 of Title 42 of the United States Code, as amended; ● The Employee Retirement Income Security Act of 1974, as amended; ● The Immigration Reform and Control Act, as amended; ● The Americans with Disabilities Act of 1990, as amended; ● The Worker Adjustment and Retraining Notification Act, as amended; ● The Occupational Safety and Health Act, as amended; ● The Family and Medical Leave Act of 1993; ● All other federal, state or local civil or human rights laws, whistleblower laws, or any other local, state or federal law, regulations and ordinances; ● All public policy, contract, tort, or common laws; and ● All allegations for costs, fees, and other expenses including attorneys’ fees incurred in these matters.

34 Notwithstanding anything herein to the contrary, the sole matters to which the Agreement and General Release do not apply are: (i) Employee’s rights of indemnification and directors and officers liability insurance coverage to which the Executive was entitled immediately prior to __________ __, 20__ with regard to the Executive’s service as an officer and director of the Company (including, without limitation, under Article 15 of the Severance Agreement); (ii) Employee’s rights under any tax-qualified pension plan or claims for accrued vested benefits under any other employee benefit plan, policy or arrangement maintained by the Company or under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended; (iii) Employee’s rights under Article 7 or Article 11 of the Severance Agreement, as the case may be; (iv) Employee’s rights as a stockholder of the Company; (v) Employee’s right to file charges or complaints with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”), although Employee waives the Executive’s right to recover any damages or other relief in any claim or suit brought by or through the Government Agencies on behalf of Employee under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964 as amended, the Americans with Disabilities Act, or any other federal or state discrimination law, except where such waivers are prohibited by law, provided, however, this Agreement and General Release does not limit Employee’s right to receive an award for information provided to any Government Agencies; and (vi) Employee’s rights that cannot be released by private agreement under applicable law. 5. Affirmations. Employee affirms that the Executive has been paid or has received all compensation, wages, bonuses, commissions, and/or benefits to which the Executive may be entitled and no other compensation, wages, bonuses, commissions and benefits are due to the Executive, except as provided in Article 7 or Article 11 of the Severance Agreement, as applicable. The Employee also affirms the Executive has no known workplace injuries. 6. Return of Property. Employee represents that the Executive has returned to the Company all property belonging to the Company, including but not limited to any vehicle, laptop, cell phone, keys, access cards, phone cards and credit cards, and all Protected Information as defined in Article 10 of the Severance Agreement.

35 7. Cooperation. Employee agrees to reasonably cooperate with the Company to provide truthful and accurate information in connection with any administrative proceeding, arbitration, or litigation relating to any matter that occurred during the Associate’s employment with the Company in which the Associate was involved or of which the Associate has knowledge. Employee further understands that this Agreement and General Release does not limit Employee’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. 8. Governing Law and Interpretation. This Agreement and General Release shall be governed and construed in accordance with the laws of the Commonwealth of Virginia, without reference to Virginia’s choice of law statutes or decisions. In the event Employee or the Company breaches any provision of this Agreement and General Release, Employee and the Company acknowledge that either may institute an action to specifically enforce any term or terms of this Agreement and General Release pursuant to the dispute resolution provisions of Article 13 of the Severance Agreement. Should any provision of this Agreement and General Release be declared illegal or unenforceable by any court of competent jurisdiction and should the provision be incapable of being modified to be enforceable, such provision shall immediately become null and void, leaving the remainder of this Agreement and General Release in full force and effect. Nothing herein, however, shall operate to void or nullify any enforceable general release language contained in this Agreement and General Release. 9. No Admission of Wrongdoing. Employee agrees neither this Agreement and General Release nor the furnishing of the consideration for this Agreement and General Release shall be deemed or construed at any time for any purpose as an admission by the Company of any liability or unlawful conduct of any kind. 10. Amendment. This Agreement and General Release may not be modified, altered or changed except upon express written consent of both parties wherein specific reference is made to this Agreement and General Release. 11. Entire Agreement. This Agreement and General Release sets forth the entire agreement between the parties hereto and fully supersedes any prior agreements or understandings between the parties; provided, however, that notwithstanding anything in this Agreement and General Release, the provisions in the Severance Agreement that are intended to survive termination of the

36 Severance Agreement, including but not limited to those contained in Articles 8, 9 and 10, 13 and in Article 17.2 thereof, shall survive and continue in full force and effect. Employee acknowledges the Executive has not relied on any representations, promises, or agreements of any kind made to the Executive in connection with the Executive’s decision to accept this Agreement and General Release. EMPLOYEE HAS BEEN ADVISED THAT EXECUTIVE HAS UP TO TWENTY-ONE (21) CALENDAR DAYS TO REVIEW AND CONSIDER THIS AGREEMENT AND GENERAL RELEASE AND HAS BEEN ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT AND GENERAL RELEASE. EMPLOYEE AGREES ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT AND GENERAL RELEASE DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY-ONE (21) CALENDAR DAY CONSIDERATION PERIOD. HAVING ELECTED TO EXECUTE THIS AGREEMENT AND GENERAL RELEASE, TO FULFILL THE PROMISES SET FORTH HEREIN, AND TO RECEIVE THE SUMS AND BENEFITS SET FORTH IN THE SEVERANCE AGREEMENT, TO WHICH EMPLOYEE WOULD NOT OTHERWISE BE ENTITLED, EMPLOYEE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT AND GENERAL RELEASE INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS EMPLOYEE HAS OR MIGHT HAVE AGAINST THE COMPANY AS SET FORTH HEREIN. [Signature Page Follows]

37 IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this Agreement and General Release as of the date set forth below: CARMAX, INC.: By:________________________________ Name: _____________________________ Title: ______________________________ EXECUTIVE/EMPLOYEE: ___________________________________ Name: _____________________________

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:  January 5, 2024

/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:  January 5, 2024

/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 November 30, 2023, 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:	January 5, 2024	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 November 30, 2023, 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:	January 5, 2024	By:	/s/ Enrique N. Mayor-Mora
			Enrique N. Mayor-Mora
			Executive Vice President and
			Chief Financial Officer

XML

Document And Entity Information - shares	9 Months Ended
	Nov. 30, 2023	Jan. 03, 2024
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Nov. 30, 2023
Document Transition Report	false
Entity File Number	1-31420
Entity Registrant Name	CARMAX, INC.
Entity Central Index Key	0001170010
Current Fiscal Year End Date	--02-29
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
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		157,921,209

XML

Consolidated Statements Of Earnings - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Nov. 30, 2023	Nov. 30, 2022
SALES AND OPERATING REVENUES:
NET SALES AND OPERATING REVENUES	$ 6,148,538	$ 6,505,956	$ 20,909,437	$ 23,962,380
TOTAL COST OF SALES	5,535,675	5,929,268	18,782,419	21,773,156
GROSS PROFIT	612,863	576,688	2,127,018	2,189,224
CARMAX AUTO FINANCE INCOME	148,659	152,196	421,004	539,538
Selling, general and administrative expenses	559,962	591,727	1,705,493	1,914,508
Depreciation, Depletion and Amortization, Nonproduction	60,623	57,377	177,859	170,717
Interest expense	31,265	30,150	93,316	91,670
Other income	(886)	(363)	(4,730)	(2,303)
Earnings before income taxes	110,558	49,993	576,084	554,170
Income tax provision	28,555	12,413	147,148	138,420
NET EARNINGS	$ 82,003	$ 37,580	$ 428,936	$ 415,750
WEIGHTED AVERAGE COMMON SHARES:
Basic, shares	158,446	158,003	158,347	159,044
Diluted, shares	158,799	158,536	158,866	160,195
NET EARNINGS PER SHARE:
Basic (in dollars per share)	$ 0.52	$ 0.24	$ 2.71	$ 2.61
Diluted (in dollars per share)	$ 0.52	$ 0.24	$ 2.70	$ 2.60
Used vehicle sales
SALES AND OPERATING REVENUES:
NET SALES AND OPERATING REVENUES	$ 4,832,077	$ 5,204,584	$ 16,424,691	$ 18,503,159
TOTAL COST OF SALES	4,434,165	4,801,790	15,060,045	17,041,898
Wholesale vehicle sales
SALES AND OPERATING REVENUES:
NET SALES AND OPERATING REVENUES	1,165,204	1,152,207	4,001,542	4,959,050
TOTAL COST OF SALES	1,042,303	1,037,534	3,574,200	4,512,053
Total other sales and revenues
SALES AND OPERATING REVENUES:
NET SALES AND OPERATING REVENUES	151,257	149,165	483,204	500,171
TOTAL COST OF SALES	$ 59,207	$ 89,944	$ 148,174	$ 219,205
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	90.00%	91.10%	89.80%	90.90%
GROSS PROFIT
Percentage of Sales
Item as a percent of net sales and operating revenues	10.00%	8.90%	10.20%	9.10%
CARMAX AUTO FINANCE INCOME
Percentage of Sales
Item as a percent of net sales and operating revenues	2.40%	2.30%	2.00%	2.30%
Selling, general and administrative expenses
Percentage of Sales
Item as a percent of net sales and operating revenues	9.10%	9.10%	8.20%	8.00%
Depreciation and Amortization, Nonproduction
Percentage of Sales
Item as a percent of net sales and operating revenues	1.00%	0.90%	0.90%	0.70%
Interest expense
Percentage of Sales
Item as a percent of net sales and operating revenues	0.50%	0.50%	0.40%	0.40%
Other income
Percentage of Sales
Item as a percent of net sales and operating revenues	0.00%	0.00%	0.00%	0.00%
Earnings before income taxes
Percentage of Sales
Item as a percent of net sales and operating revenues	1.80%	0.80%	2.80%	2.30%
Income tax provision
Percentage of Sales
Item as a percent of net sales and operating revenues	0.50%	0.20%	0.70%	0.60%
NET EARNINGS
Percentage of Sales
Item as a percent of net sales and operating revenues	1.30%	0.60%	2.10%	1.70%
NET SALES AND OPERATING REVENUES | Used vehicle sales
Percentage of Sales
Item as a percent of net sales and operating revenues	78.60%	80.00%	78.60%	77.20%
NET SALES AND OPERATING REVENUES | Wholesale vehicle sales
Percentage of Sales
Item as a percent of net sales and operating revenues	19.00%	17.70%	19.10%	20.70%
NET SALES AND OPERATING REVENUES | Total other sales and revenues
Percentage of Sales
Item as a percent of net sales and operating revenues	2.50%	2.30%	2.30%	2.10%
TOTAL COST OF SALES | Used vehicle sales
Percentage of Sales
Item as a percent of net sales and operating revenues	72.10%	73.80%	72.00%	71.10%
TOTAL COST OF SALES | Wholesale vehicle sales
Percentage of Sales
Item as a percent of net sales and operating revenues	17.00%	15.90%	17.10%	18.80%
TOTAL COST OF SALES | Total other sales and revenues
Percentage of Sales
Item as a percent of net sales and operating revenues	1.00%	1.40%	0.70%	0.90%

XML

Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Nov. 30, 2023	Nov. 30, 2022
Statement of Comprehensive Income [Abstract]
NET EARNINGS	$ 82,003	$ 37,580	$ 428,936	$ 415,750
Other comprehensive (loss) income, net of taxes:
Net change in retirement benefit plan unrecognized actuarial losses	98	482	294	1,444
Net change in cash flow hedge unrecognized gains	(18,028)	24,939	(37,496)	102,398
Other comprehensive income (loss), net of taxes	(17,930)	25,421	(37,202)	103,842
TOTAL COMPREHENSIVE INCOME	$ 64,073	$ 63,001	$ 391,734	$ 519,592

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Nov. 30, 2023	Feb. 28, 2023
CURRENT ASSETS:
Cash and cash equivalents	$ 605,375	$ 314,758
Restricted cash from collections on auto loans receivable	483,570	470,889
Accounts receivable, net	212,406	298,783
Inventory	3,638,946	3,726,142
Other current assets	169,653	230,795
TOTAL CURRENT ASSETS	5,109,950	5,041,367
Auto loans receivable, net of allowance for loan losses of $511,924 and $507,201 as of November 30, 2023 and February 28, 2023, respectively	17,081,891	16,341,791
Property and equipment, net of accumulated depreciation of $1,782,087 and $1,614,924 as of November 30, 2023 and February 28, 2023, respectively	3,623,697	3,430,914
Deferred Income Tax Assets, Net	121,219	80,740
Operating lease assets	533,387	545,677
Goodwill	141,258	141,258
Other assets	561,848	600,989
TOTAL ASSETS	27,173,250	26,182,736
CURRENT LIABILITIES:
Accounts payable	762,594	826,592
Accrued expenses and other current liabilities	494,365	478,964
Accrued income taxes	10,581	0
Current portion of operating lease liabilities	56,410	53,287
Current portion of long-term debt	312,744	111,859
Current portion of non-recourse notes payable	446,544	467,609
TOTAL CURRENT LIABILITIES	2,083,238	1,938,311
Long-term debt, excluding current portion	1,605,638	1,909,361
Non-recourse notes payable, excluding current portion	16,558,053	15,865,776
Operating lease liabilities, excluding current portion	509,141	523,828
Other liabilities	372,815	332,383
TOTAL LIABILITIES	21,128,885	20,569,659
Commitments and contingent liabilities
SHAREHOLDERS’ EQUITY:
Common stock, $0.50 par value; 350,000,000 shares authorized; 158,021,407 and 158,079,033 shares issued and outstanding as of November 30, 2023 and February 28, 2023, respectively	79,011	79,040
Capital in excess of par value	1,786,924	1,713,074
Accumulated other comprehensive income	60,667	97,869
Retained earnings	4,117,763	3,723,094
TOTAL SHAREHOLDERS’ EQUITY	6,044,365	5,613,077
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 27,173,250	$ 26,182,736

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Nov. 30, 2023	Feb. 28, 2023
Statement of Financial Position [Abstract]
Financing Receivable, Allowance for Credit Loss	$ 511,924	$ 507,201
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 1,782,087	$ 1,614,924
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	158,021,407	158,079,033
Common stock, shares outstanding	158,021,407	158,079,033

XML

Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022
OPERATING ACTIVITIES:
Net earnings	$ 428,936	$ 415,750
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	193,528	202,655
Share-based compensation expense	90,479	64,974
Provision for loan losses	238,952	218,967
Provision for cancellation reserves	62,587	79,924
Deferred income tax benefit	(28,290)	(2,178)
Other	8,534	8,879
Net decrease (increase) in:
Accounts receivable, net	86,377	314,190
Inventory	87,196	1,709,632
Other current assets	91,793	149,777
Auto loans receivable, net	(979,052)	(1,170,098)
Other assets	(8,775)	(43,502)
Net decrease in:
Accounts payable, accrued expenses and other current liabilities and accrued income taxes	(60,365)	(195,154)
Other liabilities	(62,921)	(91,739)
Net Cash Provided by (Used in) Operating Activities	148,979	1,662,077
INVESTING ACTIVITIES:
Capital expenditures	(355,442)	(319,486)
Proceeds from disposal of property and equipment	1,299	3,806
Purchases of investments	(4,641)	(6,460)
Sales and returns of investments	1,562	3,486
Net Cash Provided by (Used in) Investing Activities	(357,222)	(318,654)
FINANCING ACTIVITIES:
Proceeds from issuances of long-term debt	134,600	2,863,500
Payments on long-term debt	(242,989)	(4,116,775)
Cash paid for debt issuance costs	(15,576)	(13,987)
Payments on finance lease obligations	(12,177)	(10,056)
Issuances of non-recourse notes payable	9,099,929	11,351,696
Payments on non-recourse notes payable	(8,430,615)	(10,581,076)
Repurchase and retirement of common stock	(44,287)	(333,814)
Equity issuances	28,430	13,504
Net Cash Provided by (Used in) Financing Activities	517,315	(827,008)
Increase in cash, cash equivalents, and restricted cash	309,072	516,415
Cash, cash equivalents, and restricted cash at beginning of year	951,004	803,618
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	1,260,076	1,320,033
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents	605,375	688,618
Restricted cash from collections on auto loans receivable	483,570	466,525
Restricted cash included in other assets	171,131	164,890
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$ 1,260,076	$ 1,320,033

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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, 2022		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		161,054,000
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	415,750
Other Comprehensive Income (Loss), Net of Tax	103,842
BALANCE, SHARES at Nov. 30, 2022		158,019,000
BALANCE at Nov. 30, 2022	5,487,573	$ 79,010	1,697,062	3,654,081	57,420
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		158,044,000
BALANCE at Aug. 31, 2022	5,414,227	$ 79,022	1,684,408	3,618,798	31,999
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	37,580			37,580
Other Comprehensive Income (Loss), Net of Tax	25,421				25,421
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	12,797		12,797
Stock Repurchased and Retired During Period, Shares		(30,000)
Stock Repurchased and Retired During Period, Value	(2,632)	$ (15)	(320)	(2,297)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		4,000
Stock Issued During Period, Value, Stock Options Exercised	220	$ 2	218
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		1,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	(40)	$ 1	(41)
BALANCE, SHARES at Nov. 30, 2022		158,019,000
BALANCE at Nov. 30, 2022	$ 5,487,573	$ 79,010	1,697,062	3,654,081	57,420
BALANCE, SHARES at Feb. 28, 2023	158,079,033	158,079,000
BALANCE at Feb. 28, 2023	$ 5,613,077	$ 79,040	1,713,074	3,723,094	97,869
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	228,298			228,298
Other Comprehensive Income (Loss), Net of Tax	(36,539)				(36,539)
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	21,274		21,274
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		18,000
Stock Issued During Period, Value, Stock Options Exercised	988	$ 9	979
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		112,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	(3,930)	$ 56	(3,986)
BALANCE, SHARES at May. 31, 2023		158,209,000
BALANCE at May. 31, 2023	$ 5,823,168	$ 79,105	1,731,341	3,951,392	61,330
BALANCE, SHARES at Feb. 28, 2023	158,079,033	158,079,000
BALANCE at Feb. 28, 2023	$ 5,613,077	$ 79,040	1,713,074	3,723,094	97,869
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	428,936
Other Comprehensive Income (Loss), Net of Tax	$ (37,202)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	476,000
BALANCE, SHARES at Nov. 30, 2023	158,021,407	158,021,000
BALANCE at Nov. 30, 2023	$ 6,044,365	$ 79,011	1,786,924	4,117,763	60,667
BALANCE, SHARES at May. 31, 2023		158,209,000
BALANCE at May. 31, 2023	5,823,168	$ 79,105	1,731,341	3,951,392	61,330
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	118,635			118,635
Other Comprehensive Income (Loss), Net of Tax	17,267				17,267
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	20,256		20,256
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		446,000
Stock Issued During Period, Value, Stock Options Exercised	26,546	$ 223	26,323
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		1,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	(213)	$ 0	(213)
BALANCE, SHARES at Aug. 31, 2023		158,656,000
BALANCE at Aug. 31, 2023	6,005,659	$ 79,328	1,777,707	4,070,027	78,597
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	82,003			82,003
Other Comprehensive Income (Loss), Net of Tax	(17,930)				(17,930)
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	15,728		15,728
Stock Repurchased and Retired During Period, Shares		(649,000)
Stock Repurchased and Retired During Period, Value	(41,903)	$ (324)	(7,312)	(34,267)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		12,000
Stock Issued During Period, Value, Stock Options Exercised	896	$ 6	890
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		2,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	$ (88)	$ 1	(89)
BALANCE, SHARES at Nov. 30, 2023	158,021,407	158,021,000
BALANCE at Nov. 30, 2023	$ 6,044,365	$ 79,011	$ 1,786,924	$ 4,117,763	$ 60,667

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Supplemental Cash Flow Information

9 Months Ended

Nov. 30, 2023

Supplemental Cash Flow Elements [Abstract]

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

Supplemental Cash Flow Information

Supplemental disclosures of cash flow information:

	Nine Months Ended November 30
(In thousands)	2023		2022
Non-cash investing and financing activities:
(Decrease) increase in accrued capital expenditures	$	(17,419)	$	3,123
Increase in financing obligations	$	4,527	$	—

See Note 13 for supplemental cash flow information related to leases.

Cash Flow, Supplemental Disclosures [Text Block]

	Nine Months Ended November 30
(In thousands)	2023		2022
Non-cash investing and financing activities:
(Decrease) increase in accrued capital expenditures	$	(17,419)	$	3,123
Increase in financing obligations	$	4,527	$	—

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Supplemental Cash Flow Information Supplemental Cash Flow Information

9 Months Ended

Nov. 30, 2023

Supplemental Cash Flow Elements [Abstract]

Cash Flow, Supplemental Disclosures [Text Block]

	Nine Months Ended November 30
(In thousands)	2023		2022
Non-cash investing and financing activities:
(Decrease) increase in accrued capital expenditures	$	(17,419)	$	3,123
Increase in financing obligations	$	4,527	$	—

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Supplemental Cash Flow Information Supplemental Cash Flow Information - USD ($) $ in Thousands	9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022
Supplemental Cash Flow Elements [Abstract]
Capital Expenditures Incurred but Not yet Paid	$ 17,419	$ 3,123
Increase in financing obligations	$ 4,527	$ 0

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Background

9 Months Ended

Nov. 30, 2023

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 16 for additional information on our reportable segments.

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. 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, 2023 (the “2023 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 2023 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.  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 October 2023, the Financial Accounting Standards Board (“FASB”) issued an accounting pronouncement (ASU 2023-06) related to disclosure or presentation requirements for various subtopics in the FASB’s Accounting Standards Codification (“Codification”). The amendments in the update are intended to align the requirements in the Codification with the U.S. Securities and Exchange Commission's (“SEC”) regulations and facilitate the application of GAAP for all entities. The effective date for each amendment is the date on which the SEC removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or if the SEC has not removed the requirements by June 30, 2027, this amendment will be removed from the Codification and will not become effective for any entity. Early adoption is prohibited. We do not expect this update to have a material impact on our consolidated financial statements.

In November 2023, the FASB issued an accounting pronouncement (ASU 2023-07) related to the disclosure of incremental segment information on an annual and interim basis. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. We plan to adopt this pronouncement beginning with our fiscal year ended February 28, 2025, and we do not expect it to have a material effect on our consolidated financial statements.

In December 2023, the FASB issued an accounting pronouncement (ASU 2023-09) related to income tax disclosures. The amendments in this update are intended to enhance the transparency and decision usefulness of income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information. This update is effective for annual periods beginning after December 15, 2024, though early adoption is permitted. We plan to adopt this pronouncement for our fiscal year beginning March 1, 2025, and we do not expect it to have a material effect on our consolidated financial statements.

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Revenue

9 Months Ended

Nov. 30, 2023

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 November 30				Nine Months Ended November 30
(In millions)	2023		2022		2023		2022
Used vehicle sales	$	4,832.1	$	5,204.6	$	16,424.7	$	18,503.2
Wholesale vehicle sales	1,165.2		1,152.2		4,001.5		4,959.1
Other sales and revenues:
Extended protection plan revenues	90.8		91.8		303.8		318.1
Third-party finance (fees)/income, net	(1.2)		1.0		(2.4)		7.1
Advertising & subscription revenues (1)	36.7		33.3		101.6		101.9
Service revenues	20.3		19.6		63.8		60.8
Other	4.7		3.5		16.4		12.3
Total other sales and revenues	151.3		149.2		483.2		500.2
Total net sales and operating revenues	$	6,148.5	$	6,506.0	$	20,909.4	$	23,962.4

(1)     Excludes intersegment sales and operating revenues that have been eliminated in consolidation. See Note 16 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 15 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 7 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 is determined upon satisfying the performance obligation of selling the ESP. This estimate is subject to various constraints; primarily, factors that are outside of the company’s influence or control. We have determined that these constraints generally preclude any profit-sharing revenues from being recognized before they are paid. As of November 30, 2023 and February 28, 2023, no current or long-term contract asset was recognized related to cumulative profit-sharing payments to which we expect to be entitled. The estimate of the amount to which we expect to be entitled is reassessed each reporting period and any changes are reflected in other sales and revenues on our consolidated statements of earnings and other assets on our consolidated balance sheets.

Third-Party Finance (Fees)/Income. 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 include miscellaneous goods and services, which are immaterial to our consolidated financial statements.

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CarMax Auto Finance

9 Months Ended

Nov. 30, 2023

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 4, 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 November 30						Nine Months Ended November 30
(In millions)	2023		% (1)	2022		% (1)	2023		% (1)	2022		% (1)
Interest margin:
Interest and fee income	$	426.9	9.8	$	365.4	8.8	$	1,244.3	9.6	$	1,069.3	8.8
Interest expense	(170.2)		(3.9)	(88.8)		(2.1)	(464.8)		(3.6)	(200.1)		(1.6)
Total interest margin	256.7		5.9	276.6		6.7	779.5		6.0	869.2		7.2
Provision for loan losses	(68.3)		(1.6)	(85.7)		(2.1)	(239.0)		(1.8)	(219.0)		(1.8)
Total interest margin after provision for loan losses	188.4		4.3	190.9		4.6	540.5		4.2	650.2		5.4
Direct expenses:
Payroll and fringe benefit expense	(16.2)		(0.4)	(16.1)		(0.4)	(49.6)		(0.4)	(46.7)		(0.4)
Depreciation and amortization	(4.1)		(0.1)	(4.0)		(0.1)	(12.3)		(0.1)	(11.6)		(0.1)
Other direct expenses	(19.4)		(0.4)	(18.7)		(0.5)	(57.6)		(0.4)	(52.4)		(0.4)
Total direct expenses	(39.7)		(0.9)	(38.8)		(0.9)	(119.5)		(0.9)	(110.7)		(0.9)
CarMax Auto Finance income	$	148.7	3.4	$	152.2	3.7	$	421.0	3.2	$	539.5	4.4
Total average managed receivables	$	17,508.9		$	16,540.2		$	17,276.0		$	16,177.8

(1)     Annualized percentage of total average managed receivables.

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Auto Loan Receivables

9 Months Ended

Nov. 30, 2023

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 $17.03 billion as of November 30, 2023, and $16.36 billion as of February 28, 2023. See Note 9 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 3 for additional information on CAF income.

Auto Loans Receivable, Net

	As of November 30		As of February 28
(In millions)	2023		2023
Asset-backed term funding	$	12,053.2	$	12,242.8
Warehouse facilities	4,529.6		3,649.9
Overcollateralization (1)	783.4		739.9
Other managed receivables (2)	138.9		135.3
Total ending managed receivables	17,505.1		16,767.9
Accrued interest and fees	97.9		78.0
Other	(9.2)		3.1
Less: allowance for loan losses	(511.9)		(507.2)
Auto loans receivable, net	$	17,081.9	$	16,341.8

(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 November 30, 2023
	Fiscal Year of Origination (1)
(In millions)	2024		2023		2022		2021		2020		Prior to 2020		Total		% (2)
Core managed receivables (3):
A	$	3,217.4	$	2,922.2	$	1,842.0	$	725.5	$	355.1	$	69.4	$	9,131.6	52.2
B	1,980.5		1,899.8		1,359.4		564.5		289.1		95.0		6,188.3		35.4
C and other	281.6		552.1		447.9		219.6		104.8		38.3		1,644.3		9.3
Total core managed receivables	5,479.5		5,374.1		3,649.3		1,509.6		749.0		202.7		16,964.2		96.9
Other managed receivables (4):
C and other	225.0		197.6		80.7		10.5		14.2		12.9		540.9		3.1
Total ending managed receivables	$	5,704.5	$	5,571.7	$	3,730.0	$	1,520.1	$	763.2	$	215.6	$	17,505.1	100.0
Gross charge-offs	$	26.1	$	188.8	$	120.2	$	36.9	$	18.3	$	11.4	$	401.7

	As of February 28, 2023
	Fiscal Year of Origination (1)
(In millions)	2023		2022		2021		2020		2019		Prior to 2019		Total		% (2)
Core managed receivables (3):
A	$	3,890.9	$	2,555.3	$	1,112.0	$	677.1	$	218.3	$	36.3	$	8,489.9	50.6
B	2,497.5		1,839.9		816.2		488.9		215.1		56.0		5,913.6		35.3
C and other	732.7		609.5		314.5		169.3		74.1		25.6		1,925.7		11.5
Total core managed receivables	7,121.1		5,004.7		2,242.7		1,335.3		507.5		117.9		16,329.2		97.4
Other managed receivables (4):
C and other	272.0		112.5		15.0		21.1		13.2		4.9		438.7		2.6
Total ending managed receivables	$	7,393.1	$	5,117.2	$	2,257.7	$	1,356.4	$	520.7	$	122.8	$	16,767.9	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 November 30, 2023 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 November 30, 2023
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	433.0	$	105.0	$	538.0	3.08
Charge-offs	(125.1)		(23.6)		(148.7)
Recoveries (2)	47.2		7.1		54.3
Provision for loan losses	57.3		11.0		68.3
Balance as of end of period	$	412.4	$	99.5	$	511.9	2.92

	Three Months Ended November 30, 2022
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	396.1	$	81.4	$	477.5	2.92
Charge-offs	(96.3)		(16.3)		(112.6)
Recoveries (2)	35.7		4.7		40.4
Provision for loan losses	60.9		24.8		85.7
Balance as of end of period	$	396.4	$	94.6	$	491.0	2.95

	Nine Months Ended November 30, 2023
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	401.5	$	105.7	$	507.2	3.02
Charge-offs	(336.9)		(64.8)		(401.7)
Recoveries (2)	146.2		21.2		167.4
Provision for loan losses	201.6		37.4		239.0
Balance as of end of period	$	412.4	$	99.5	$	511.9	2.92

	Nine Months Ended November 30, 2022
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	377.5	$	55.5	$	433.0	2.77
Charge-offs	(241.9)		(35.0)		(276.9)
Recoveries (2)	104.7		11.2		115.9
Provision for loan losses	156.1		62.9		219.0
Balance as of end of period	$	396.4	$	94.6	$	491.0	2.95

(1)     Percent of total ending managed receivables.

(2)     Net of costs incurred to recover vehicle.

During the first nine months of fiscal 2024, the allowance for loan losses as a percent of total ending managed receivables decreased by 10 basis points. The decrease was primarily driven by the impact of our tightened underwriting standards in response to the current environment, partially offset by unfavorable loss performance as well as our continued investment in the Tier 2 business. The increase in net charge-offs primarily reflects continued customer hardship in the current economic environment. The allowance for loan losses as of November 30, 2023 reflects our best estimate of expected future losses based on recent trends in delinquencies, loss performance, recovery rates and the economic environment.

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 November 30, 2023
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	9,079.3	$	5,715.6	$	1,294.5	$	16,089.4	$	398.3	$	16,487.7	94.19
Delinquent loans:
31-60 days past due	31.6		270.6		178.1		480.3		68.1		548.4		3.13
61-90 days past due	15.5		165.0		144.2		324.7		62.3		387.0		2.21
Greater than 90 days past due	5.2		37.1		27.5		69.8		12.2		82.0		0.47
Total past due	52.3		472.7		349.8		874.8		142.6		1,017.4		5.81
Total ending managed receivables	$	9,131.6	$	6,188.3	$	1,644.3	$	16,964.2	$	540.9	$	17,505.1	100.00

	As of February 28, 2023
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	8,450.3	$	5,540.2	$	1,612.3	$	15,602.8	$	327.6	$	15,930.4	95.00
Delinquent loans:
31-60 days past due	25.1		225.7		175.4		426.2		60.6		486.8		2.90
61-90 days past due	10.6		120.0		114.5		245.1		42.1		287.2		1.71
Greater than 90 days past due	3.9		27.7		23.5		55.1		8.4		63.5		0.39
Total past due	39.6		373.4		313.4		726.4		111.1		837.5		5.00
Total ending managed receivables	$	8,489.9	$	5,913.6	$	1,925.7	$	16,329.2	$	438.7	$	16,767.9	100.00

(1)     Percent of total ending managed receivables.

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Derivative Instruments And Hedging Activities

9 Months Ended

Nov. 30, 2023

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 SOFR 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 (“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 $52.1 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 nine months ended November 30, 2023, we recognized expense of $6.1 million and $16.6 million, respectively, in CAF income representing these changes in fair value.

As of November 30, 2023 and February 28, 2023, we had interest rate swaps outstanding with a combined notional amount of $5.00 billion and $4.49 billion, respectively, that were designated as cash flow hedges of interest rate risk. As of November 30,

2023 and February 28, 2023, we had interest rate swaps with a combined notional amount of $0.90 billion and $1.14 billion, respectively, outstanding that were not designated as cash flow hedges for accounting purposes.

See Note 6 for discussion of fair values of financial instruments and Note 12 for the effect on comprehensive income.

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Fair Value Measurements

9 Months Ended

Nov. 30, 2023

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 November 30, 2023
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	1,194,255		$	—		$	1,194,255
Mutual fund investments	22,809			—			22,809
Derivative instruments designated as hedges	—			59,137			59,137
Derivative instruments not designated as hedges	—			17,246			17,246
Total assets at fair value	$	1,217,064		$	76,383		$	1,293,447
Percent of total assets at fair value	94.1		%	5.9		%	100.0		%
Percent of total assets	4.5		%	0.3		%	4.8		%
Liabilities:
Derivative instruments designated as hedges	$	—		$	(6,208)		$	(6,208)
Total liabilities at fair value	$	—		$	(6,208)		$	(6,208)
Percent of total liabilities	—		%	—		%	—		%

	As of February 28, 2023
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	865,943		$	—		$	865,943
Mutual fund investments	22,671			—			22,671
Derivative instruments designated as hedges	—			97,328			97,328
Derivative instruments not designated as hedges	—			33,870			33,870
Total assets at fair value	$	888,614		$	131,198		$	1,019,812
Percent of total assets at fair value	87.1		%	12.9		%	100.0		%
Percent of total assets	3.4		%	0.5		%	3.9		%
Liabilities:
Total liabilities at fair value	$	—		$	—		$	—
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 November 30, 2023 and February 28, 2023, respectively, are as follows:

(In thousands)	As of November 30, 2023		As of February 28, 2023
Carrying value	$	400,000	$	500,000
Fair value	$	376,076	$	473,749

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Cancellation Reserves

9 Months Ended

Nov. 30, 2023

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 November 30				Nine Months Ended November 30
(In millions)	2023		2022		2023		2022
Balance as of beginning of period	$	136.6	$	148.8	$	139.2	$	144.7
Cancellations	(22.4)		(25.2)		(70.2)		(80.3)
Provision for future cancellations	17.4		20.7		62.6		79.9
Balance as of end of period	$	131.6	$	144.3	$	131.6	$	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 November 30, 2023 and February 28, 2023, the current portion of cancellation reserves was $68.0 million and $76.1 million, respectively.

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Income Taxes

9 Months Ended

Nov. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

We had $31.1 million of gross unrecognized tax benefits as of November 30, 2023, and $27.1 million as of February 28, 2023.  There were no significant changes to the gross unrecognized tax benefits as reported for the fiscal year ended February 28, 2023.

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Debt

3 Months Ended

Nov. 30, 2023

Debt Disclosure [Abstract]

Debt

Debt

(In thousands)		As of November 30		As of February 28
Debt Description (1)	Maturity Date	2023		2023
Revolving credit facility (2)	June 2028	$	—	$	—
Term loan (2)	June 2024	300,000		300,000
Term loan (2)	October 2026	699,598		699,493
3.86% Senior notes	April 2023	—		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	519,396		522,526
Non-recourse notes payable	Various dates through December 2030	17,029,405		16,360,092
Total debt		18,948,399		18,382,111
Less: current portion		(759,288)		(579,468)
Less: unamortized debt issuance costs		(25,420)		(27,506)
Long-term debt, net		$	18,163,691	$	17,775,137

(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 SOFR, 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 November 30, 2023, the unused capacity of $2.00 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 6.32% as of November 30, 2023. The $300 million term loan

matures in June 2024 and was therefore classified as current. The $700 million term loan was classified as long-term debt as no repayments are scheduled to be made within the next 12 months.

Senior Notes. The 3.86% senior notes matured during the first quarter of fiscal 2024. Borrowings under our unsecured senior notes totaling $400 million are available for working capital and general corporate purposes. As of November 30, 2023, all 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 December 2030, 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 November 30, 2023 are as follows:

(In billions)	Capacity
Warehouse facilities:
December 2023 expiration	$	0.50
February 2024 expiration	2.80
August 2024 expiration	2.30
Combined warehouse facility limit	$	5.60
Unused capacity	$	1.07
Non-recourse notes payable outstanding:
Warehouse facilities	$	4.53
Asset-backed term funding transactions	12.50
Non-recourse notes payable	$	17.03

We generally enter into warehouse facility agreements for one-year terms and typically renew the agreements annually. In December 2023, the $0.50 billion facility was extended with an expiration date of January 2024, which we expect to renew for an annual term in January 2024. 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 4 for additional information on the related auto loans receivable.

Capitalized Interest.  We capitalize interest in connection with the construction of certain facilities.  For the nine months ended November 30, 2023 and 2022, we capitalized interest of $4.6 million and $3.6 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, as well as financial covenants and performance triggers related to events of default.  As of November 30, 2023, we were in compliance with these financial covenants and our non-recourse funding vehicles were in compliance with these performance triggers.

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Stock and Stock-Based Incentive Plans

9 Months Ended

Nov. 30, 2023

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Stock and Stock-Based Incentive Plans

Stock and Stock-Based Incentive Plans

(A)Share Repurchase Program

During the third quarter of fiscal 2024, we resumed our share repurchase program after having paused it during the third quarter of fiscal year 2023. As of November 30, 2023, a total of $4.0 billion of board authorizations for repurchases of our common stock was outstanding, with no expiration date, of which $2.41 billion remained available for repurchase.

Common Stock Repurchases

	Three Months Ended				Nine Months Ended
	November 30				November 30
	2023		2022		2023		2022
Number of shares repurchased (in thousands)	648.5		30.0		648.5		3,403.9
Average cost per share	$	64.60	$	87.70	$	64.60	$	94.95
Available for repurchase, as of end of period (in millions)	$	2,409.4	$	2,451.3	$	2,409.4	$	2,451.3

(B)Share-Based Compensation

Composition of Share-Based Compensation Expense

	Three Months Ended				Nine Months Ended
	November 30				November 30
(In thousands)	2023		2022		2023		2022
Cost of sales	$	692	$	333	$	3,277	$	1,474
CarMax Auto Finance income	1,016		981		2,663		1,394
Selling, general and administrative expenses	19,918		17,213		86,516		63,983
Share-based compensation expense, before income taxes	$	21,626	$	18,527	$	92,456	$	66,851

Composition of Share-Based Compensation Expense – By Grant Type

	Three Months Ended				Nine Months Ended
	November 30				November 30
(In thousands)	2023		2022		2023		2022
Nonqualified stock options	$	12,334	$	8,968	$	40,061	$	29,648
Cash-settled restricted stock units (RSUs)	5,306		5,167		33,221		15,521
Stock-settled market stock units (MSUs)	3,531		3,358		13,639		12,234
Other share-based incentives:
Stock-settled performance stock units (PSUs)	(137)		209		1,401		5,150
Restricted stock (RSAs)	—		262		307		571
Stock-settled deferred stock units (DSUs)	—		—		1,850		1,850
Employee stock purchase plan	592		563		1,977		1,877
Total other share-based incentives	$	455	$	1,034	$	5,535	$	9,448
Share-based compensation expense, before income taxes	$	21,626	$	18,527	$	92,456	$	66,851

(C)Stock Incentive Plan Information

Share/Unit Activity

	Nine Months Ended November 30, 2023
	Equity Classified						Liability Classified
(Shares/units in thousands)	Options		MSUs		Other		RSUs
Outstanding as of February 28, 2023	6,776		404		130		1,004
Granted	1,549		186		76		914
Exercised or vested and converted	(476)		(187)		(11)		(489)
Cancelled	(175)		(19)		—		(96)
Outstanding as of November 30, 2023	7,674		384		195		1,333
Weighted average grant date fair value per share/unit:
Granted	$	29.10	$	99.81	$	74.31	$	70.68
Ending outstanding	$	26.90	$	123.67	$	88.70	$	81.34
	As of November 30, 2023
Unrecognized compensation (in millions)	$	54.2	$	19.6	$	0.8

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Net Earnings Per Share

9 Months Ended

Nov. 30, 2023

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				Nine Months Ended
	November 30				November 30
(In thousands except per share data)	2023		2022		2023		2022
Net earnings	$	82,003	$	37,580	$	428,936	$	415,750
Weighted average common shares outstanding	158,446		158,003		158,347		159,044
Dilutive potential common shares:
Stock options	156		268		301		857
Stock-settled stock units and awards	197		265		218		294
Weighted average common shares and dilutive potential common shares	158,799		158,536		158,866		160,195
Basic net earnings per share	$	0.52	$	0.24	$	2.71	$	2.61
Diluted net earnings per share	$	0.52	$	0.24	$	2.70	$	2.60

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 November 30, 2023 and 2022, options to purchase 6,263,513 shares and 4,934,554 shares of common stock, respectively, were not included. For the nine months ended November 30, 2023 and 2022, options to purchase 5,732,651 shares and 1,917,727 shares of common stock, respectively, were not included.

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Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Nov. 30, 2023

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

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Income

Changes in Accumulated Other Comprehensive Income By Component

					Total
	Net		Net		Accumulated
	Unrecognized		Unrecognized		Other
	Actuarial		Hedge		Comprehensive
(In thousands, net of income taxes)	Losses		Gains		Income
Balance as of February 28, 2023	$	(44,590)	$	142,459	$	97,869
Other comprehensive loss before reclassifications	—		(8,623)		(8,623)
Amounts reclassified from accumulated other comprehensive income	294		(28,873)		(28,579)
Other comprehensive income (loss)	294		(37,496)		(37,202)
Balance as of November 30, 2023	$	(44,296)	$	104,963	$	60,667

Changes In and Reclassifications Out of Accumulated Other Comprehensive Income

	Three Months Ended November 30				Nine Months Ended November 30
(In thousands)	2023		2022		2023		2022
Retirement Benefit Plans:
Actuarial loss amortization reclassifications recognized in net pension expense:
Cost of sales	$	58	$	272	$	174	$	810
CarMax Auto Finance income	4		19		11		51
Selling, general and administrative expenses	67		346		202		1,048
Total amortization reclassifications recognized in net pension expense	129		637		387		1,909
Tax expense	(31)		(155)		(93)		(465)
Amortization reclassifications recognized in net pension expense, net of tax	98		482		294		1,444
Net change in retirement benefit plan unrecognized actuarial losses, net of tax	98		482		294		1,444
Cash Flow Hedges (Note 5):
Changes in fair value	(10,594)		42,521		(11,599)		152,731
Tax benefit (expense)	2,640		(10,919)		2,976		(39,221)
Changes in fair value, net of tax	(7,954)		31,602		(8,623)		113,510
Reclassifications to CarMax Auto Finance income	(13,321)		(8,965)		(38,180)		(14,951)
Tax benefit	3,247		2,302		9,307		3,839
Reclassification of hedge gains, net of tax	(10,074)		(6,663)		(28,873)		(11,112)
Net change in cash flow hedge unrecognized gains, net of tax	(18,028)		24,939		(37,496)		102,398
Total other comprehensive (loss) income, net of tax	$	(17,930)	$	25,421	$	(37,202)	$	103,842

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. The cumulative balances are net of deferred taxes of $20.4 million as of November 30, 2023 and $32.6 million as of February 28, 2023.

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Leases (Notes)

9 Months Ended

Nov. 30, 2023

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 9.

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 restrictive 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 November 30				Nine Months Ended November 30
(In thousands)	2023		2022		2023		2022
Operating lease cost (1)	$	22,772	$	22,450	$	66,958	$	68,381
Finance lease cost:
Depreciation of lease assets	5,266		4,178		14,708		11,701
Interest on lease liabilities	6,610		5,728		19,112		16,129
Total finance lease cost	11,876		9,906		33,820		27,830
Total lease cost	$	34,648	$	32,356	$	100,778	$	96,211

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

Supplemental balance sheet information related to leases was as follows:

		As of November 30		As of February 28
(In thousands)	Classification	2023		2023
Assets:
Operating lease assets	Operating lease assets	$	533,387	$	545,677
Finance lease assets	Property and equipment, net (1)	179,381		145,372
Total lease assets		$	712,768	$	691,049
Liabilities:
Current:
Operating leases	Current portion of operating lease liabilities	$	56,410	$	53,287
Finance leases	Accrued expenses and other current liabilities	20,452		18,788
Long-term:
Operating leases	Operating lease liabilities, excluding current portion	509,141		523,828
Finance leases	Other liabilities	202,024		165,135
Total lease liabilities		$	788,027	$	761,038

(1)    Finance lease assets are recorded net of accumulated depreciation of $53.1 million as of November 30, 2023 and $46.7 million as of February 28, 2023.

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

	As of November 30		As of February 28
Lease Term and Discount Rate	2023		2023
Weighted Average Remaining Lease Term (in years)
Operating leases	16.09		16.35
Finance leases	11.56		10.84
Weighted Average Discount Rate
Operating leases	5.02	%	4.91	%
Finance leases	17.17	%	19.34	%

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended November 30
(In thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	66,352	$	67,675
Operating cash flows from finance leases	$	18,387	$	12,747
Financing cash flows from finance leases	$	12,177	$	10,056
Lease assets obtained in exchange for lease obligations:
Operating leases	$	29,080	$	29,027
Finance leases	$	50,085	$	31,344

Maturities of lease liabilities were as follows:

	As of November 30, 2023
(In thousands)	Operating Leases (1)		Finance Leases (1)
Fiscal 2024, remaining	$	20,661	$	10,886
Fiscal 2025	82,816		45,606
Fiscal 2026	77,454		47,365
Fiscal 2027	71,099		43,554
Fiscal 2028	66,952		36,691
Thereafter	561,850		258,658
Total lease payments	880,832		442,760
Less: interest	(315,281)		(220,284)
Present value of lease liabilities	$	565,551	$	222,476

(1)    Lease payments exclude $5.1 million of legally binding minimum lease payments for leases signed but not yet commenced.

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Contingent Liabilities

9 Months Ended

Nov. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Contingent Liabilities

Contingent Liabilities

Litigation.  CarMax entities are defendants in a proceeding 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.

The California Supreme Court held in Adolph v. Uber that an employee who signs an arbitration agreement, as Bendure has, may still pursue a representative PAGA action in court if the employee is successful in his individual PAGA action in arbitration. In light of this decision, Bendure filed a demand on October 16, 2023 for an individual arbitration.

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

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 $25.4 million as of November 30, 2023, and $27.1 million as of February 28, 2023, and is included in accrued expenses and other current liabilities.

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Segment Reporting

9 Months Ended

Nov. 30, 2023

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 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 2. 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 3. 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 November 30, 2023
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	6,111,839	$	36,699	$	—	$	6,148,538
Intersegment sales and operating revenues	—		8,100		(8,100)		—
Total sales and operating revenues	$	6,111,839	$	44,799	$	(8,100)	$	6,148,538
Depreciation and amortization (1)	$	393	$	5,097	$	—	$	5,490
Gross profit	$	586,332	$	27,710	$	(1,179)	$	612,863
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							148,659
Selling, general and administrative expenses							(559,962)
Depreciation and amortization (2)							(60,623)
Interest expense							(31,265)
Other income (expense)							886
Earnings before income taxes							$	110,558

	Three Months Ended November 30, 2022
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	6,472,702	$	33,254	$	—	$	6,505,956
Intersegment sales and operating revenues	—		5,549		(5,549)		—
Total sales and operating revenues	$	6,472,702	$	38,803	$	(5,549)	$	6,505,956
Depreciation and amortization (1)	$	404	$	3,735	$	—	$	4,139
Gross profit	$	554,057	$	23,780	$	(1,149)	$	576,688
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							152,196
Selling, general and administrative expenses							(591,727)
Depreciation and amortization (2)							(57,377)
Interest expense							(30,150)
Other income (expense)							363
Earnings before income taxes							$	49,993

	Nine Months Ended November 30, 2023
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	20,807,858	$	101,579	$	—	$	20,909,437
Intersegment sales and operating revenues	—		26,165		(26,165)		—
Total sales and operating revenues	$	20,807,858	$	127,744	$	(26,165)	$	20,909,437
Depreciation and amortization (1)	$	1,239	$	14,236	$	—	$	15,475
Gross profit	$	2,053,228	$	77,269	$	(3,479)	$	2,127,018
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							421,004
Selling, general and administrative expenses							(1,705,493)
Depreciation and amortization (2)							(177,859)
Interest expense							(93,316)
Other income (expense)							4,730
Earnings before income taxes							$	576,084

	Nine Months Ended November 30, 2022
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	23,860,462	$	101,918	$	—	$	23,962,380
Intersegment sales and operating revenues	—		20,219		(20,219)		—
Total sales and operating revenues	$	23,860,462	$	122,137	$	(20,219)	$	23,962,380
Depreciation and amortization (1)	$	1,092	$	10,199	$	—	$	11,291
Gross profit	$	2,115,631	$	77,869	$	(4,276)	$	2,189,224
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							539,538
Selling, general and administrative expenses							(1,914,508)
Depreciation and amortization (2)							(170,717)
Interest expense							(91,670)
Other income (expense)							2,303
Earnings before income taxes							$	554,170

(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)

9 Months Ended

Nov. 30, 2023

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 16 for additional information on our reportable segments.

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. 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, 2023 (the “2023 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 2023 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.  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 October 2023, the Financial Accounting Standards Board (“FASB”) issued an accounting pronouncement (ASU 2023-06) related to disclosure or presentation requirements for various subtopics in the FASB’s Accounting Standards Codification (“Codification”). The amendments in the update are intended to align the requirements in the Codification with the U.S. Securities and Exchange Commission's (“SEC”) regulations and facilitate the application of GAAP for all entities. The effective date for each amendment is the date on which the SEC removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or if the SEC has not removed the requirements by June 30, 2027, this amendment will be removed from the Codification and will not become effective for any entity. Early adoption is prohibited. We do not expect this update to have a material impact on our consolidated financial statements.

In November 2023, the FASB issued an accounting pronouncement (ASU 2023-07) related to the disclosure of incremental segment information on an annual and interim basis. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. We plan to adopt this pronouncement beginning with our fiscal year ended February 28, 2025, and we do not expect it to have a material effect on our consolidated financial statements.

In December 2023, the FASB issued an accounting pronouncement (ASU 2023-09) related to income tax disclosures. The amendments in this update are intended to enhance the transparency and decision usefulness of income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information. This update is effective for annual periods beginning after December 15, 2024, though early adoption is permitted. We plan to adopt this pronouncement for our fiscal year beginning March 1, 2025, and we do not expect it to have a material effect on our consolidated financial statements.

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Revenue (Tables)

9 Months Ended

Nov. 30, 2023

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

Disaggregation of Revenue

	Three Months Ended November 30				Nine Months Ended November 30
(In millions)	2023		2022		2023		2022
Used vehicle sales	$	4,832.1	$	5,204.6	$	16,424.7	$	18,503.2
Wholesale vehicle sales	1,165.2		1,152.2		4,001.5		4,959.1
Other sales and revenues:
Extended protection plan revenues	90.8		91.8		303.8		318.1
Third-party finance (fees)/income, net	(1.2)		1.0		(2.4)		7.1
Advertising & subscription revenues (1)	36.7		33.3		101.6		101.9
Service revenues	20.3		19.6		63.8		60.8
Other	4.7		3.5		16.4		12.3
Total other sales and revenues	151.3		149.2		483.2		500.2
Total net sales and operating revenues	$	6,148.5	$	6,506.0	$	20,909.4	$	23,962.4

(1)     Excludes intersegment sales and operating revenues that have been eliminated in consolidation. See Note 16 for further details.

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CarMax Auto Finance (Tables)

9 Months Ended

Nov. 30, 2023

CarMax Auto Finance Income [Abstract]

Components Of CarMax Auto Finance Income

Components of CAF Income

	Three Months Ended November 30						Nine Months Ended November 30
(In millions)	2023		% (1)	2022		% (1)	2023		% (1)	2022		% (1)
Interest margin:
Interest and fee income	$	426.9	9.8	$	365.4	8.8	$	1,244.3	9.6	$	1,069.3	8.8
Interest expense	(170.2)		(3.9)	(88.8)		(2.1)	(464.8)		(3.6)	(200.1)		(1.6)
Total interest margin	256.7		5.9	276.6		6.7	779.5		6.0	869.2		7.2
Provision for loan losses	(68.3)		(1.6)	(85.7)		(2.1)	(239.0)		(1.8)	(219.0)		(1.8)
Total interest margin after provision for loan losses	188.4		4.3	190.9		4.6	540.5		4.2	650.2		5.4
Direct expenses:
Payroll and fringe benefit expense	(16.2)		(0.4)	(16.1)		(0.4)	(49.6)		(0.4)	(46.7)		(0.4)
Depreciation and amortization	(4.1)		(0.1)	(4.0)		(0.1)	(12.3)		(0.1)	(11.6)		(0.1)
Other direct expenses	(19.4)		(0.4)	(18.7)		(0.5)	(57.6)		(0.4)	(52.4)		(0.4)
Total direct expenses	(39.7)		(0.9)	(38.8)		(0.9)	(119.5)		(0.9)	(110.7)		(0.9)
CarMax Auto Finance income	$	148.7	3.4	$	152.2	3.7	$	421.0	3.2	$	539.5	4.4
Total average managed receivables	$	17,508.9		$	16,540.2		$	17,276.0		$	16,177.8

(1)     Annualized percentage of total average managed receivables.

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Auto Loan Receivables (Tables)

9 Months Ended

Nov. 30, 2023

Receivables [Abstract]

Auto Loan Receivables, Net

Auto Loans Receivable, Net

	As of November 30		As of February 28
(In millions)	2023		2023
Asset-backed term funding	$	12,053.2	$	12,242.8
Warehouse facilities	4,529.6		3,649.9
Overcollateralization (1)	783.4		739.9
Other managed receivables (2)	138.9		135.3
Total ending managed receivables	17,505.1		16,767.9
Accrued interest and fees	97.9		78.0
Other	(9.2)		3.1
Less: allowance for loan losses	(511.9)		(507.2)
Auto loans receivable, net	$	17,081.9	$	16,341.8

(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 November 30, 2023
	Fiscal Year of Origination (1)
(In millions)	2024		2023		2022		2021		2020		Prior to 2020		Total		% (2)
Core managed receivables (3):
A	$	3,217.4	$	2,922.2	$	1,842.0	$	725.5	$	355.1	$	69.4	$	9,131.6	52.2
B	1,980.5		1,899.8		1,359.4		564.5		289.1		95.0		6,188.3		35.4
C and other	281.6		552.1		447.9		219.6		104.8		38.3		1,644.3		9.3
Total core managed receivables	5,479.5		5,374.1		3,649.3		1,509.6		749.0		202.7		16,964.2		96.9
Other managed receivables (4):
C and other	225.0		197.6		80.7		10.5		14.2		12.9		540.9		3.1
Total ending managed receivables	$	5,704.5	$	5,571.7	$	3,730.0	$	1,520.1	$	763.2	$	215.6	$	17,505.1	100.0
Gross charge-offs	$	26.1	$	188.8	$	120.2	$	36.9	$	18.3	$	11.4	$	401.7

	As of February 28, 2023
	Fiscal Year of Origination (1)
(In millions)	2023		2022		2021		2020		2019		Prior to 2019		Total		% (2)
Core managed receivables (3):
A	$	3,890.9	$	2,555.3	$	1,112.0	$	677.1	$	218.3	$	36.3	$	8,489.9	50.6
B	2,497.5		1,839.9		816.2		488.9		215.1		56.0		5,913.6		35.3
C and other	732.7		609.5		314.5		169.3		74.1		25.6		1,925.7		11.5
Total core managed receivables	7,121.1		5,004.7		2,242.7		1,335.3		507.5		117.9		16,329.2		97.4
Other managed receivables (4):
C and other	272.0		112.5		15.0		21.1		13.2		4.9		438.7		2.6
Total ending managed receivables	$	7,393.1	$	5,117.2	$	2,257.7	$	1,356.4	$	520.7	$	122.8	$	16,767.9	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 November 30, 2023
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	433.0	$	105.0	$	538.0	3.08
Charge-offs	(125.1)		(23.6)		(148.7)
Recoveries (2)	47.2		7.1		54.3
Provision for loan losses	57.3		11.0		68.3
Balance as of end of period	$	412.4	$	99.5	$	511.9	2.92

	Three Months Ended November 30, 2022
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	396.1	$	81.4	$	477.5	2.92
Charge-offs	(96.3)		(16.3)		(112.6)
Recoveries (2)	35.7		4.7		40.4
Provision for loan losses	60.9		24.8		85.7
Balance as of end of period	$	396.4	$	94.6	$	491.0	2.95

	Nine Months Ended November 30, 2023
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	401.5	$	105.7	$	507.2	3.02
Charge-offs	(336.9)		(64.8)		(401.7)
Recoveries (2)	146.2		21.2		167.4
Provision for loan losses	201.6		37.4		239.0
Balance as of end of period	$	412.4	$	99.5	$	511.9	2.92

	Nine Months Ended November 30, 2022
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	377.5	$	55.5	$	433.0	2.77
Charge-offs	(241.9)		(35.0)		(276.9)
Recoveries (2)	104.7		11.2		115.9
Provision for loan losses	156.1		62.9		219.0
Balance as of end of period	$	396.4	$	94.6	$	491.0	2.95

(1)     Percent of total ending managed receivables.

(2)     Net of costs incurred to recover vehicle.

Past Due Receivables

Past Due Receivables

	As of November 30, 2023
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	9,079.3	$	5,715.6	$	1,294.5	$	16,089.4	$	398.3	$	16,487.7	94.19
Delinquent loans:
31-60 days past due	31.6		270.6		178.1		480.3		68.1		548.4		3.13
61-90 days past due	15.5		165.0		144.2		324.7		62.3		387.0		2.21
Greater than 90 days past due	5.2		37.1		27.5		69.8		12.2		82.0		0.47
Total past due	52.3		472.7		349.8		874.8		142.6		1,017.4		5.81
Total ending managed receivables	$	9,131.6	$	6,188.3	$	1,644.3	$	16,964.2	$	540.9	$	17,505.1	100.00

	As of February 28, 2023
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	8,450.3	$	5,540.2	$	1,612.3	$	15,602.8	$	327.6	$	15,930.4	95.00
Delinquent loans:
31-60 days past due	25.1		225.7		175.4		426.2		60.6		486.8		2.90
61-90 days past due	10.6		120.0		114.5		245.1		42.1		287.2		1.71
Greater than 90 days past due	3.9		27.7		23.5		55.1		8.4		63.5		0.39
Total past due	39.6		373.4		313.4		726.4		111.1		837.5		5.00
Total ending managed receivables	$	8,489.9	$	5,913.6	$	1,925.7	$	16,329.2	$	438.7	$	16,767.9	100.00

(1)     Percent of total ending managed receivables.

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Fair Value Measurements (Tables)

9 Months Ended

Nov. 30, 2023

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 November 30, 2023
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	1,194,255		$	—		$	1,194,255
Mutual fund investments	22,809			—			22,809
Derivative instruments designated as hedges	—			59,137			59,137
Derivative instruments not designated as hedges	—			17,246			17,246
Total assets at fair value	$	1,217,064		$	76,383		$	1,293,447
Percent of total assets at fair value	94.1		%	5.9		%	100.0		%
Percent of total assets	4.5		%	0.3		%	4.8		%
Liabilities:
Derivative instruments designated as hedges	$	—		$	(6,208)		$	(6,208)
Total liabilities at fair value	$	—		$	(6,208)		$	(6,208)
Percent of total liabilities	—		%	—		%	—		%

	As of February 28, 2023
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	865,943		$	—		$	865,943
Mutual fund investments	22,671			—			22,671
Derivative instruments designated as hedges	—			97,328			97,328
Derivative instruments not designated as hedges	—			33,870			33,870
Total assets at fair value	$	888,614		$	131,198		$	1,019,812
Percent of total assets at fair value	87.1		%	12.9		%	100.0		%
Percent of total assets	3.4		%	0.5		%	3.9		%
Liabilities:
Total liabilities at fair value	$	—		$	—		$	—
Percent of total liabilities	—		%	—		%	—		%

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

(In thousands)	As of November 30, 2023		As of February 28, 2023
Carrying value	$	400,000	$	500,000
Fair value	$	376,076	$	473,749

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Cancellation Reserves (Tables)

9 Months Ended

Nov. 30, 2023

Cancellation Reserves [Abstract]

Schedule Of Cancellation Reserves Accrual

Cancellation Reserves

	Three Months Ended November 30				Nine Months Ended November 30
(In millions)	2023		2022		2023		2022
Balance as of beginning of period	$	136.6	$	148.8	$	139.2	$	144.7
Cancellations	(22.4)		(25.2)		(70.2)		(80.3)
Provision for future cancellations	17.4		20.7		62.6		79.9
Balance as of end of period	$	131.6	$	144.3	$	131.6	$	144.3

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Debt (Tables)

9 Months Ended

Nov. 30, 2023

Debt Disclosure [Abstract]

Schedule Of Debt

(In thousands)		As of November 30		As of February 28
Debt Description (1)	Maturity Date	2023		2023
Revolving credit facility (2)	June 2028	$	—	$	—
Term loan (2)	June 2024	300,000		300,000
Term loan (2)	October 2026	699,598		699,493
3.86% Senior notes	April 2023	—		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	519,396		522,526
Non-recourse notes payable	Various dates through December 2030	17,029,405		16,360,092
Total debt		18,948,399		18,382,111
Less: current portion		(759,288)		(579,468)
Less: unamortized debt issuance costs		(25,420)		(27,506)
Long-term debt, net		$	18,163,691	$	17,775,137

(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 SOFR, 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 2023 expiration	$	0.50
February 2024 expiration	2.80
August 2024 expiration	2.30
Combined warehouse facility limit	$	5.60
Unused capacity	$	1.07
Non-recourse notes payable outstanding:
Warehouse facilities	$	4.53
Asset-backed term funding transactions	12.50
Non-recourse notes payable	$	17.03

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Stock and Stock-Based Incentive Plans (Tables)

9 Months Ended

Nov. 30, 2023

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Schedule of Common Stock Repurchases

Common Stock Repurchases

	Three Months Ended				Nine Months Ended
	November 30				November 30
	2023		2022		2023		2022
Number of shares repurchased (in thousands)	648.5		30.0		648.5		3,403.9
Average cost per share	$	64.60	$	87.70	$	64.60	$	94.95
Available for repurchase, as of end of period (in millions)	$	2,409.4	$	2,451.3	$	2,409.4	$	2,451.3

Composition of Share-Based Compensation Expense

Composition of Share-Based Compensation Expense

	Three Months Ended				Nine Months Ended
	November 30				November 30
(In thousands)	2023		2022		2023		2022
Cost of sales	$	692	$	333	$	3,277	$	1,474
CarMax Auto Finance income	1,016		981		2,663		1,394
Selling, general and administrative expenses	19,918		17,213		86,516		63,983
Share-based compensation expense, before income taxes	$	21,626	$	18,527	$	92,456	$	66,851

Composition Of Share-Based Compensation Expense - By Grant Type

Composition of Share-Based Compensation Expense – By Grant Type

	Three Months Ended				Nine Months Ended
	November 30				November 30
(In thousands)	2023		2022		2023		2022
Nonqualified stock options	$	12,334	$	8,968	$	40,061	$	29,648
Cash-settled restricted stock units (RSUs)	5,306		5,167		33,221		15,521
Stock-settled market stock units (MSUs)	3,531		3,358		13,639		12,234
Other share-based incentives:
Stock-settled performance stock units (PSUs)	(137)		209		1,401		5,150
Restricted stock (RSAs)	—		262		307		571
Stock-settled deferred stock units (DSUs)	—		—		1,850		1,850
Employee stock purchase plan	592		563		1,977		1,877
Total other share-based incentives	$	455	$	1,034	$	5,535	$	9,448
Share-based compensation expense, before income taxes	$	21,626	$	18,527	$	92,456	$	66,851

Disclosure of Share-Based Compensation Arrangements by Share-Based Payment Award

Share/Unit Activity

	Nine Months Ended November 30, 2023
	Equity Classified						Liability Classified
(Shares/units in thousands)	Options		MSUs		Other		RSUs
Outstanding as of February 28, 2023	6,776		404		130		1,004
Granted	1,549		186		76		914
Exercised or vested and converted	(476)		(187)		(11)		(489)
Cancelled	(175)		(19)		—		(96)
Outstanding as of November 30, 2023	7,674		384		195		1,333
Weighted average grant date fair value per share/unit:
Granted	$	29.10	$	99.81	$	74.31	$	70.68
Ending outstanding	$	26.90	$	123.67	$	88.70	$	81.34
	As of November 30, 2023
Unrecognized compensation (in millions)	$	54.2	$	19.6	$	0.8

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Net Earnings Per Share (Tables)

9 Months Ended

Nov. 30, 2023

Earnings Per Share [Abstract]

Basic And Dilutive Net Earnings Per Share Reconciliations

Basic and Dilutive Net Earnings Per Share Reconciliations

	Three Months Ended				Nine Months Ended
	November 30				November 30
(In thousands except per share data)	2023		2022		2023		2022
Net earnings	$	82,003	$	37,580	$	428,936	$	415,750
Weighted average common shares outstanding	158,446		158,003		158,347		159,044
Dilutive potential common shares:
Stock options	156		268		301		857
Stock-settled stock units and awards	197		265		218		294
Weighted average common shares and dilutive potential common shares	158,799		158,536		158,866		160,195
Basic net earnings per share	$	0.52	$	0.24	$	2.71	$	2.61
Diluted net earnings per share	$	0.52	$	0.24	$	2.70	$	2.60

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Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Nov. 30, 2023

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

Changes In Accumulated Other Comprehensive Loss By Component

Changes in Accumulated Other Comprehensive Income By Component

					Total
	Net		Net		Accumulated
	Unrecognized		Unrecognized		Other
	Actuarial		Hedge		Comprehensive
(In thousands, net of income taxes)	Losses		Gains		Income
Balance as of February 28, 2023	$	(44,590)	$	142,459	$	97,869
Other comprehensive loss before reclassifications	—		(8,623)		(8,623)
Amounts reclassified from accumulated other comprehensive income	294		(28,873)		(28,579)
Other comprehensive income (loss)	294		(37,496)		(37,202)
Balance as of November 30, 2023	$	(44,296)	$	104,963	$	60,667

Changes In And Reclassifications Out Of Accumulated Other Comprehensive Loss

Changes In and Reclassifications Out of Accumulated Other Comprehensive Income

	Three Months Ended November 30				Nine Months Ended November 30
(In thousands)	2023		2022		2023		2022
Retirement Benefit Plans:
Actuarial loss amortization reclassifications recognized in net pension expense:
Cost of sales	$	58	$	272	$	174	$	810
CarMax Auto Finance income	4		19		11		51
Selling, general and administrative expenses	67		346		202		1,048
Total amortization reclassifications recognized in net pension expense	129		637		387		1,909
Tax expense	(31)		(155)		(93)		(465)
Amortization reclassifications recognized in net pension expense, net of tax	98		482		294		1,444
Net change in retirement benefit plan unrecognized actuarial losses, net of tax	98		482		294		1,444
Cash Flow Hedges (Note 5):
Changes in fair value	(10,594)		42,521		(11,599)		152,731
Tax benefit (expense)	2,640		(10,919)		2,976		(39,221)
Changes in fair value, net of tax	(7,954)		31,602		(8,623)		113,510
Reclassifications to CarMax Auto Finance income	(13,321)		(8,965)		(38,180)		(14,951)
Tax benefit	3,247		2,302		9,307		3,839
Reclassification of hedge gains, net of tax	(10,074)		(6,663)		(28,873)		(11,112)
Net change in cash flow hedge unrecognized gains, net of tax	(18,028)		24,939		(37,496)		102,398
Total other comprehensive (loss) income, net of tax	$	(17,930)	$	25,421	$	(37,202)	$	103,842

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Leases (Tables)

9 Months Ended

Nov. 30, 2023

Leases [Abstract]

Lease, Cost [Table Text Block]

	Three Months Ended November 30				Nine Months Ended November 30
(In thousands)	2023		2022		2023		2022
Operating lease cost (1)	$	22,772	$	22,450	$	66,958	$	68,381
Finance lease cost:
Depreciation of lease assets	5,266		4,178		14,708		11,701
Interest on lease liabilities	6,610		5,728		19,112		16,129
Total finance lease cost	11,876		9,906		33,820		27,830
Total lease cost	$	34,648	$	32,356	$	100,778	$	96,211

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

Supplemental Balance Sheet Disclosures [Text Block]

		As of November 30		As of February 28
(In thousands)	Classification	2023		2023
Assets:
Operating lease assets	Operating lease assets	$	533,387	$	545,677
Finance lease assets	Property and equipment, net (1)	179,381		145,372
Total lease assets		$	712,768	$	691,049
Liabilities:
Current:
Operating leases	Current portion of operating lease liabilities	$	56,410	$	53,287
Finance leases	Accrued expenses and other current liabilities	20,452		18,788
Long-term:
Operating leases	Operating lease liabilities, excluding current portion	509,141		523,828
Finance leases	Other liabilities	202,024		165,135
Total lease liabilities		$	788,027	$	761,038

(1)    Finance lease assets are recorded net of accumulated depreciation of $53.1 million as of November 30, 2023 and $46.7 million as of February 28, 2023.

Other Lease Disclosures [Table Text Block]

	As of November 30		As of February 28
Lease Term and Discount Rate	2023		2023
Weighted Average Remaining Lease Term (in years)
Operating leases	16.09		16.35
Finance leases	11.56		10.84
Weighted Average Discount Rate
Operating leases	5.02	%	4.91	%
Finance leases	17.17	%	19.34	%

	Nine Months Ended November 30
(In thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	66,352	$	67,675
Operating cash flows from finance leases	$	18,387	$	12,747
Financing cash flows from finance leases	$	12,177	$	10,056
Lease assets obtained in exchange for lease obligations:
Operating leases	$	29,080	$	29,027
Finance leases	$	50,085	$	31,344

Schedule Of Future Minimum Lease Obligations [Table Text Block]

	As of November 30, 2023
(In thousands)	Operating Leases (1)		Finance Leases (1)
Fiscal 2024, remaining	$	20,661	$	10,886
Fiscal 2025	82,816		45,606
Fiscal 2026	77,454		47,365
Fiscal 2027	71,099		43,554
Fiscal 2028	66,952		36,691
Thereafter	561,850		258,658
Total lease payments	880,832		442,760
Less: interest	(315,281)		(220,284)
Present value of lease liabilities	$	565,551	$	222,476

(1)    Lease payments exclude $5.1 million of legally binding minimum lease payments for leases signed but not yet commenced.

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Segment Reporting (Tables)

9 Months Ended

Nov. 30, 2023

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

	Three Months Ended November 30, 2023
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	6,111,839	$	36,699	$	—	$	6,148,538
Intersegment sales and operating revenues	—		8,100		(8,100)		—
Total sales and operating revenues	$	6,111,839	$	44,799	$	(8,100)	$	6,148,538
Depreciation and amortization (1)	$	393	$	5,097	$	—	$	5,490
Gross profit	$	586,332	$	27,710	$	(1,179)	$	612,863
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							148,659
Selling, general and administrative expenses							(559,962)
Depreciation and amortization (2)							(60,623)
Interest expense							(31,265)
Other income (expense)							886
Earnings before income taxes							$	110,558

	Three Months Ended November 30, 2022
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	6,472,702	$	33,254	$	—	$	6,505,956
Intersegment sales and operating revenues	—		5,549		(5,549)		—
Total sales and operating revenues	$	6,472,702	$	38,803	$	(5,549)	$	6,505,956
Depreciation and amortization (1)	$	404	$	3,735	$	—	$	4,139
Gross profit	$	554,057	$	23,780	$	(1,149)	$	576,688
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							152,196
Selling, general and administrative expenses							(591,727)
Depreciation and amortization (2)							(57,377)
Interest expense							(30,150)
Other income (expense)							363
Earnings before income taxes							$	49,993

	Nine Months Ended November 30, 2023
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	20,807,858	$	101,579	$	—	$	20,909,437
Intersegment sales and operating revenues	—		26,165		(26,165)		—
Total sales and operating revenues	$	20,807,858	$	127,744	$	(26,165)	$	20,909,437
Depreciation and amortization (1)	$	1,239	$	14,236	$	—	$	15,475
Gross profit	$	2,053,228	$	77,269	$	(3,479)	$	2,127,018
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							421,004
Selling, general and administrative expenses							(1,705,493)
Depreciation and amortization (2)							(177,859)
Interest expense							(93,316)
Other income (expense)							4,730
Earnings before income taxes							$	576,084

	Nine Months Ended November 30, 2022
(In thousands)	CarMax Sales Operations		Other		Eliminations		Total
Sales and operating revenues	$	23,860,462	$	101,918	$	—	$	23,962,380
Intersegment sales and operating revenues	—		20,219		(20,219)		—
Total sales and operating revenues	$	23,860,462	$	122,137	$	(20,219)	$	23,962,380
Depreciation and amortization (1)	$	1,092	$	10,199	$	—	$	11,291
Gross profit	$	2,115,631	$	77,869	$	(4,276)	$	2,189,224
Reconciliation to Consolidated Earnings Before Taxes:
CAF Income							539,538
Selling, general and administrative expenses							(1,914,508)
Depreciation and amortization (2)							(170,717)
Interest expense							(91,670)
Other income (expense)							2,303
Earnings before income taxes							$	554,170

(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)	9 Months Ended
	Nov. 30, 2023 segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Reportable segments	2

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Revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Nov. 30, 2023	Nov. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 6,148.5	$ 6,506.0	$ 20,909.4	$ 23,962.4
Used vehicle sales
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	4,832.1	5,204.6	16,424.7	18,503.2
Wholesale vehicle sales
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	1,165.2	1,152.2	4,001.5	4,959.1
Extended protection plan revenues
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	90.8	91.8	303.8	318.1
Third-party finance (fees)/income, net
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	(1.2)	1.0	(2.4)	7.1
Advertising & subscription revenues [Domain]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	36.7	33.3	101.6	101.9
Service revenues
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	20.3	19.6	63.8	60.8
Other
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	4.7	3.5	16.4	12.3
Total other sales and revenues
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 151.3	$ 149.2	$ 483.2	$ 500.2

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CarMax Auto Finance (Components Of CarMax Auto Finance Income) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Nov. 30, 2023	Nov. 30, 2022
Auto Finance Income [Line Items]
Interest and fee income	$ 426,900	$ 365,400	$ 1,244,300	$ 1,069,300
Interest expense	(170,200)	(88,800)	(464,800)	(200,100)
Total interest margin	256,700	276,600	779,500	869,200
Provision for loan losses	(68,300)	(85,700)	(239,000)	(219,000)
Total interest margin after provision for loan losses	188,400	190,900	540,500	650,200
Payroll and fringe benefit expense	(16,200)	(16,100)	(49,600)	(46,700)
Other Depreciation and Amortization	(4,100)	(4,000)	(12,300)	(11,600)
Other direct expenses	(19,400)	(18,700)	(57,600)	(52,400)
Total direct expenses	(39,700)	(38,800)	(119,500)	(110,700)
CarMax Auto Finance income	148,659	152,196	421,004	539,538
Total average managed receivables	$ 17,508,900	$ 16,540,200	$ 17,276,000	$ 16,177,800
Interest and fee income, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	9.80%	8.80%	9.60%	8.80%
Interest expense, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(3.90%)	(2.10%)	(3.60%)	(1.60%)
Total interest margin, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	5.90%	6.70%	6.00%	7.20%
Provision for loan losses, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(1.60%)	(2.10%)	(1.80%)	(1.80%)
Total interest margin after provision for loan losses, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	4.30%	4.60%	4.20%	5.40%
Payroll and fringe benefit expense, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(0.40%)	(0.40%)	(0.40%)	(0.40%)
Other Depreciation and Amortization
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(0.10%)	(0.10%)	(0.10%)	(0.10%)
Other direct expenses, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(0.40%)	(0.50%)	(0.40%)	(0.40%)
Total direct expenses, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(0.90%)	(0.90%)	(0.90%)	(0.90%)
CarMax Auto Finance income, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	3.40%	3.70%	3.20%	4.40%

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Auto Loan Receivables (Auto Loan Receivables, Net) (Details) - USD ($) $ in Thousands	Nov. 30, 2023	Aug. 31, 2023	Feb. 28, 2023	Nov. 30, 2022	Aug. 31, 2022	Feb. 28, 2022
Non-recourse Notes Payable	$ 17,029,405		$ 16,360,092
Financing Receivable, before Allowance for Credit Loss	17,505,100		16,767,900
Interest Receivable	97,900		78,000
Other	(9,200)		(3,100)
Financing Receivable, Allowance for Credit Loss	511,924	$ 538,000	507,201	$ 491,000	$ 477,500	$ 433,000
Financing Receivable, after Allowance for Credit Loss	17,081,891		16,341,791
Asset-backed term funding
Financing Receivable, before Allowance for Credit Loss	12,053,200		12,242,800
Warehouse facilities
Financing Receivable, before Allowance for Credit Loss	4,529,600		3,649,900
Overcollateralization
Financing Receivable, before Allowance for Credit Loss	783,400		739,900
Other managed receivables
Financing Receivable, before Allowance for Credit Loss	$ 138,900		$ 135,300

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Auto Loan Receivables (Ending Managed Receivables By Major Credit Grade) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Nov. 30, 2023	Nov. 30, 2022	Feb. 28, 2023
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	$ 5,704.5		$ 5,704.5		$ 7,393.1
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	5,571.7		5,571.7		5,117.2
Financing Receivable, Originated Two Years before Latest Fiscal Year	3,730.0		3,730.0		2,257.7
Financing Receivable, Originated Three Years before Latest Fiscal Year	1,520.1		1,520.1		1,356.4
Financing Receivable, Originated Four Years before Latest Fiscal Year	763.2		763.2		520.7
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	215.6		215.6		122.8
Financing Receivable, before Allowance for Credit Loss	$ 17,505.1		$ 17,505.1		$ 16,767.9
Total ending managed receivables as percentage by major credit grade	100.00%		100.00%		100.00%
Financing Receivable, Allowance for Credit Loss, Writeoff	$ 148.7	$ 112.6	$ 401.7	$ 276.9
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff			120.2
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff			188.8
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff			36.9
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff			18.3
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff			11.4
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff			26.1
Core managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	5,479.5		5,479.5		$ 7,121.1
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	5,374.1		5,374.1		5,004.7
Financing Receivable, Originated Two Years before Latest Fiscal Year	3,649.3		3,649.3		2,242.7
Financing Receivable, Originated Three Years before Latest Fiscal Year	1,509.6		1,509.6		1,335.3
Financing Receivable, Originated Four Years before Latest Fiscal Year	749.0		749.0		507.5
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	202.7		202.7		117.9
Financing Receivable, before Allowance for Credit Loss	$ 16,964.2		$ 16,964.2		$ 16,329.2
Total ending managed receivables as percentage by major credit grade	96.90%		96.90%		97.40%
Financing Receivable, Allowance for Credit Loss, Writeoff	$ 125.1	96.3	$ 336.9	241.9
Other managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Allowance for Credit Loss, Writeoff	23.6	$ 16.3	64.8	$ 35.0
Credit Grade A | Core managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	3,217.4		3,217.4		$ 3,890.9
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	2,922.2		2,922.2		2,555.3
Financing Receivable, Originated Two Years before Latest Fiscal Year	1,842.0		1,842.0		1,112.0
Financing Receivable, Originated Three Years before Latest Fiscal Year	725.5		725.5		677.1
Financing Receivable, Originated Four Years before Latest Fiscal Year	355.1		355.1		218.3
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	69.4		69.4		36.3
Financing Receivable, before Allowance for Credit Loss	$ 9,131.6		$ 9,131.6		$ 8,489.9
Total ending managed receivables as percentage by major credit grade	52.20%		52.20%		50.60%
Credit Grade B | Core managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	$ 1,980.5		$ 1,980.5		$ 2,497.5
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	1,899.8		1,899.8		1,839.9
Financing Receivable, Originated Two Years before Latest Fiscal Year	1,359.4		1,359.4		816.2
Financing Receivable, Originated Three Years before Latest Fiscal Year	564.5		564.5		488.9
Financing Receivable, Originated Four Years before Latest Fiscal Year	289.1		289.1		215.1
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	95.0		95.0		56.0
Financing Receivable, before Allowance for Credit Loss	$ 6,188.3		$ 6,188.3		$ 5,913.6
Total ending managed receivables as percentage by major credit grade	35.40%		35.40%		35.30%
Credit Grade C And Other | Core managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	$ 281.6		$ 281.6		$ 732.7
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	552.1		552.1		609.5
Financing Receivable, Originated Two Years before Latest Fiscal Year	447.9		447.9		314.5
Financing Receivable, Originated Three Years before Latest Fiscal Year	219.6		219.6		169.3
Financing Receivable, Originated Four Years before Latest Fiscal Year	104.8		104.8		74.1
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	38.3		38.3		25.6
Financing Receivable, before Allowance for Credit Loss	$ 1,644.3		$ 1,644.3		$ 1,925.7
Total ending managed receivables as percentage by major credit grade	9.30%		9.30%		11.50%
Credit Grade C And Other | Other managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	$ 225.0		$ 225.0		$ 272.0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	197.6		197.6		112.5
Financing Receivable, Originated Two Years before Latest Fiscal Year	80.7		80.7		15.0
Financing Receivable, Originated Three Years before Latest Fiscal Year	10.5		10.5		21.1
Financing Receivable, Originated Four Years before Latest Fiscal Year	14.2		14.2		13.2
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	12.9		12.9		4.9
Financing Receivable, before Allowance for Credit Loss	$ 540.9		$ 540.9		$ 438.7
Total ending managed receivables as percentage by major credit grade	3.10%		3.10%		2.60%

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Auto Loan Receivables (Allowance for Loan Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Nov. 30, 2023	Nov. 30, 2022	Aug. 31, 2023	Feb. 28, 2023	Aug. 31, 2022	Feb. 28, 2022
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing Receivable, Allowance for Credit Loss	$ 511,924	$ 491,000	$ 511,924	$ 491,000	$ 538,000	$ 507,201	$ 477,500	$ 433,000
Financing Receivable, Allowance for Credit Loss, Writeoff	(148,700)	(112,600)	(401,700)	(276,900)
Financing Receivable, Allowance for Credit Loss, Recovery	54,300	40,400	167,400	115,900
Provision for loan losses	$ 68,300	$ 85,700	$ 239,000	$ 219,000
Allowance For Loan Losses, percent
Financing Receivable, Allowance for Credit Loss [Line Items]
Item as percent of total ending managed receivables	2.92%	2.95%	2.92%	2.95%	3.08%	3.02%	2.92%	2.77%
Core managed receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing Receivable, Allowance for Credit Loss	$ 412,400	$ 396,400	$ 412,400	$ 396,400	$ 433,000	$ 401,500	$ 396,100	$ 377,500
Financing Receivable, Allowance for Credit Loss, Writeoff	(125,100)	(96,300)	(336,900)	(241,900)
Financing Receivable, Allowance for Credit Loss, Recovery	47,200	35,700	146,200	104,700
Provision for loan losses	57,300	60,900	201,600	156,100
Other managed receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing Receivable, Allowance for Credit Loss	99,500	94,600	99,500	94,600	$ 105,000	$ 105,700	$ 81,400	$ 55,500
Financing Receivable, Allowance for Credit Loss, Writeoff	(23,600)	(16,300)	(64,800)	(35,000)
Financing Receivable, Allowance for Credit Loss, Recovery	7,100	4,700	21,200	11,200
Provision for loan losses	$ 11,000	$ 24,800	$ 37,400	$ 62,900

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Auto Loan Receivables (Past Due Receivables) (Details) - USD ($) $ in Millions	Nov. 30, 2023	Feb. 28, 2023
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	$ 16,487.7	$ 15,930.4
Past due receivables as a percentage of total ending managed receivables	5.81%	5.00%
Financing Receivable, before Allowance for Credit Loss, Noncurrent	$ 1,017.4	$ 837.5
Financing Receivable, before Allowance for Credit Loss	$ 17,505.1	$ 16,767.9
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	94.19%	95.00%
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	3.13%	2.90%
Financing Receivable, before Allowance for Credit Loss, Noncurrent	$ 548.4	$ 486.8
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	2.21%	1.71%
Financing Receivable, before Allowance for Credit Loss, Noncurrent	$ 387.0	$ 287.2
Greater Than Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due receivables as a percentage of total ending managed receivables	0.47%	0.39%
Financing Receivable, before Allowance for Credit Loss, Noncurrent	$ 82.0	$ 63.5
Core managed receivables
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	16,089.4	15,602.8
Financing Receivable, before Allowance for Credit Loss, Noncurrent	874.8	726.4
Financing Receivable, before Allowance for Credit Loss	16,964.2	16,329.2
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	480.3	426.2
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	324.7	245.1
Core managed receivables | Greater Than Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	69.8	55.1
Core managed receivables | Credit Grade A
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	9,079.3	8,450.3
Financing Receivable, before Allowance for Credit Loss, Noncurrent	52.3	39.6
Financing Receivable, before Allowance for Credit Loss	9,131.6	8,489.9
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	31.6	25.1
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	15.5	10.6
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	5.2	3.9
Core managed receivables | Credit Grade B
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	5,715.6	5,540.2
Financing Receivable, before Allowance for Credit Loss, Noncurrent	472.7	373.4
Financing Receivable, before Allowance for Credit Loss	6,188.3	5,913.6
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	270.6	225.7
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	165.0	120.0
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	37.1	27.7
Core managed receivables | Credit Grade C And Other
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	1,294.5	1,612.3
Financing Receivable, before Allowance for Credit Loss, Noncurrent	349.8	313.4
Financing Receivable, before Allowance for Credit Loss	1,644.3	1,925.7
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	178.1	175.4
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	144.2	114.5
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	27.5	23.5
Other managed receivables | Credit Grade C And Other
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	398.3	327.6
Financing Receivable, before Allowance for Credit Loss, Noncurrent	142.6	111.1
Financing Receivable, before Allowance for Credit Loss	540.9	438.7
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	68.1	60.6
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	62.3	42.1
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	$ 12.2	$ 8.4

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Derivative Instruments And Hedging Activities (Narrative) (Details) - Interest Rate Swaps - Cash Flow Hedging - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Nov. 30, 2023	Nov. 30, 2023	Feb. 28, 2023
Designated As Hedging Instrument
Derivative [Line Items]
Additional reclassification from AOCL to CAF income within the next 12 months		$ 52.1
Derivative, Notional Amount	$ 5,000.0	5,000.0	$ 4,490.0
Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Derivative, Gain (Loss) on Derivative, Net	(6.1)	(16.6)
Derivative, Notional Amount	$ 900.0	$ 900.0	$ 1,140.0

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Fair Value Measurements (Schedule Of Items Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Thousands	Nov. 30, 2023	Feb. 28, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market securities	$ 1,194,255	$ 865,943
Mutual fund investments	22,809	22,671
Total assets at fair value	$ 1,293,447	$ 1,019,812
Percent of total assets at fair value	100.00%	100.00%
Percent of total assets	4.80%	3.90%
Total liabilities at fair value	$ (6,208)	$ 0
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	$ 1,194,255	$ 865,943
Mutual fund investments	22,809	22,671
Total assets at fair value	$ 1,217,064	$ 888,614
Percent of total assets at fair value	94.10%	87.10%
Percent of total assets	4.50%	3.40%
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	$ 76,383	$ 131,198
Percent of total assets at fair value	5.90%	12.90%
Percent of total assets	0.30%	0.50%
Total liabilities at fair value	$ (6,208)	$ 0
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	$ 59,137	$ 97,328
Liabilities: Derivative instruments	(6,208)
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	59,137	97,328
Liabilities: Derivative instruments	(6,208)
Not Designated as Hedging Instrument [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	17,246	33,870
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	$ 17,246	$ 33,870

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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	Nov. 30, 2023	Feb. 28, 2023
Fair Value Disclosures [Abstract]
Senior Notes	$ 400,000	$ 500,000
Debt Instrument, Fair Value Disclosure	$ 376,076	$ 473,749

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Cancellation Reserves (Narrative) (Details) - USD ($) $ in Millions	Nov. 30, 2023	Feb. 28, 2023
Cancellation Reserves [Abstract]
Cancellation reserves, current portion	$ 68.0	$ 76.1

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Cancellation Reserves (Schedule Of Cancellation Reserves Accrual) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Nov. 30, 2023	Nov. 30, 2022
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance as of beginning of period	$ 136.6	$ 148.8	$ 139.2	$ 144.7
Cancellations	(22.4)	(25.2)	(70.2)	(80.3)
Provision for future cancellations	17.4	20.7	62.6	79.9
Balance as of end of period	$ 131.6	$ 144.3	$ 131.6	$ 144.3

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Income Taxes (Narrative) (Details) - USD ($) $ in Millions	Nov. 30, 2023	Feb. 28, 2023
Federal Income Tax Note
Unrecognized tax benefits, gross	$ 31.1	$ 27.1

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Debt (Schedule Of Debt) (Details) - USD ($) $ in Thousands	Nov. 30, 2023	Feb. 28, 2023
Debt Instrument [Line Items]
Long-term Debt	$ 18,163,691	$ 17,775,137
Financing Obligations	519,396	522,526
Non-recourse Notes Payable	17,029,405	16,360,092
Total debt	18,948,399	18,382,111
Less: current portion	(759,288)	(579,468)
Unamortized Debt Issuance Expense	(25,420)	(27,506)
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long-term Debt	0	0
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	0	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	$ 699,598	$ 699,493

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Debt (Schedule of Funding Vehicles) (Details) - USD ($) $ in Thousands	Nov. 30, 2023	Feb. 28, 2023
Debt Instrument [Line Items]
Non-recourse Notes Payable	$ 17,029,405	$ 16,360,092
Warehouse Facility Three
Debt Instrument [Line Items]
Warehouse Facilities Maximum Borrowing Capacity	2,800,000
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	500,000
Warehouse Facilities [Member]
Debt Instrument [Line Items]
Warehouse Facilities Maximum Borrowing Capacity	5,600,000
Debt Instrument, Unused Borrowing Capacity, Amount	1,070,000
Non-recourse Notes Payable	4,530,000
Term Securitizations Debt [Member]
Debt Instrument [Line Items]
Non-recourse Notes Payable	$ 12,500,000

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Debt (Narrative) (Details) - USD ($) $ in Thousands	9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Feb. 28, 2023
Debt Instrument [Line Items]
Outstanding Balance	$ 18,163,691		$ 17,775,137
Capitalized interest	4,600	$ 3,600
Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity	2,000,000
Unused capacity	2,000,000
Term Loan [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 300,000
Long-Term Debt, Percentage Bearing Variable Interest, Percentage Rate	6.32%
Senior Notes [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 400,000
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	6.32%

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Stock and Stock-Based Incentive Plans (Narrative) (Details) - USD ($) $ in Millions	Nov. 30, 2023	Nov. 30, 2022
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	$ 2,409.4	$ 2,451.3

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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		9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Nov. 30, 2023	Nov. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares repurchased	648,500	30,000.0	648,500	3,403,900
Average Cost Per Share	$ 64.60	$ 87.70	$ 64.60	$ 94.95
Available for repurchase, as of end of period	$ 2,409.4	$ 2,451.3	$ 2,409.4	$ 2,451.3

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Stock and Stock-Based Incentive Plans (Composition of Share-Based Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Nov. 30, 2023	Nov. 30, 2022
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense, before income taxes	$ 21,626	$ 18,527	$ 92,456	$ 66,851
Cost of sales
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense, before income taxes	692	333	3,277	1,474
Carmax Auto Finance Income
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense, before income taxes	1,016	981	2,663	1,394
Selling, general and administrative expenses
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense, before income taxes	$ 19,918	$ 17,213	$ 86,516	$ 63,983

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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		9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Nov. 30, 2023	Nov. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	$ 21,626	$ 18,527	$ 92,456	$ 66,851
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	12,334	8,968	40,061	29,648
Cash-settled restricted stock units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	5,306	5,167	33,221	15,521
Stock-settled market stock units (MSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	3,531	3,358	13,639	12,234
Stock-settled performance stock units (PSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	(137)	209	1,401	5,150
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	0	262	307	571
Stock-settled deferred stock units (DSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	0	0	1,850	1,850
Employee stock purchase plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	592	563	1,977	1,877
Other share-based incentives
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	$ 455	$ 1,034	$ 5,535	$ 9,448

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Stock and Stock-Based Incentive Plans (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	9 Months Ended
	Nov. 30, 2023	Feb. 28, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	7,674	6,776
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	1,549
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	(476)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period	(175)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 29.10
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value	$ 26.90
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount	$ 54.2
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	384	404
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	186
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(187)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period	(19)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 99.81
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 123.67
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 19.6
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	195	130
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	76
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(11)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 74.31
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 88.70
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 0.8
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	1,333	1,004
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	914
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(489)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period	(96)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 70.68
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 81.34

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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						9 Months Ended
	Nov. 30, 2023	Aug. 31, 2023	May 31, 2023	Nov. 30, 2022	Aug. 31, 2022	May 31, 2022	Nov. 30, 2023	Nov. 30, 2022
Schedule of Basic and Dilutive Net Earnings Per Share Reconciliation [Line Items]
Net earnings	$ 82,003	$ 118,635	$ 228,298	$ 37,580	$ 125,905	$ 252,265	$ 428,936	$ 415,750
Weighted average common shares outstanding, shares	158,446			158,003			158,347	159,044
Weighted average common shares and dilutive potential common shares, shares	158,799			158,536			158,866	160,195
Basic net earnings per share (in dollars per share)	$ 0.52			$ 0.24			$ 2.71	$ 2.61
Diluted net earnings per share (in dollars per share)	$ 0.52			$ 0.24			$ 2.70	$ 2.60
Stock options
Schedule of Basic and Dilutive Net Earnings Per Share Reconciliation [Line Items]
Dilutive potential common shares, shares	156			268			301	857
Stock-settled stock units and awards
Schedule of Basic and Dilutive Net Earnings Per Share Reconciliation [Line Items]
Dilutive potential common shares, shares	197			265			218	294

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Net Earnings Per Share (Narrative) (Details) - shares	3 Months Ended		9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Nov. 30, 2023	Nov. 30, 2022
Earnings Per Share [Abstract]
Anti-dilutive securities not included in calculation of diluted net earnings per share	6,263,513	4,934,554	5,732,651	1,917,727

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Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Nov. 30, 2023	Aug. 31, 2023	May 31, 2023	Nov. 30, 2022	Aug. 31, 2022	May 31, 2022	Nov. 30, 2023	Nov. 30, 2022
Schedule of Accumulated Other Comprehensive Loss [Line Items]
Beginning balance			$ 97,869				$ 97,869
Other comprehensive loss before reclassifications							(8,623)
Amounts reclassified from accumulated other comprehensive income							(28,579)
Other comprehensive income (loss), net of taxes	$ (17,930)	$ 17,267	(36,539)	$ 25,421	$ 26,107	$ 52,314	(37,202)	$ 103,842
Ending balance	60,667						60,667
Net Unrecognized Actuarial Losses
Schedule of Accumulated Other Comprehensive Loss [Line Items]
Beginning balance			(44,590)				(44,590)
Other comprehensive loss before reclassifications							0
Amounts reclassified from accumulated other comprehensive income							294
Other comprehensive income (loss), net of taxes							294
Ending balance	(44,296)						(44,296)
Net Unrecognized Hedge Gains (Losses)
Schedule of Accumulated Other Comprehensive Loss [Line Items]
Beginning balance			$ 142,459				142,459
Other comprehensive loss before reclassifications							(8,623)
Amounts reclassified from accumulated other comprehensive income							(28,873)
Other comprehensive income (loss), net of taxes							(37,496)
Ending balance	$ 104,963						$ 104,963

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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		9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Nov. 30, 2023	Nov. 30, 2022
Total amortization reclassifications recognized in net pension expense	$ 129	$ 637	$ 387	$ 1,909
Tax expense	(31)	(155)	(93)	(465)
Amortization reclassifications recognized in net pension expense, net of tax	98	482	294	1,444
Net change in retirement benefit plan unrecognized actuarial losses, net of tax	98	482	294	1,444
Changes in fair value	(10,594)	42,521	(11,599)	152,731
Tax benefit (expense)	2,640	(10,919)	2,976	(39,221)
Changes in fair value, net of tax	(7,954)	31,602	(8,623)	113,510
Reclassifications to CarMax Auto Finance income	(13,321)	(8,965)	(38,180)	(14,951)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax	3,247	2,302	9,307	3,839
Reclassification of hedge gains, net of tax	(10,074)	(6,663)	(28,873)	(11,112)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax	(18,028)	24,939	(37,496)	102,398
Total other comprehensive (loss) income, net of tax	(17,930)	25,421	(37,202)	103,842
Cost of sales
Total amortization reclassifications recognized in net pension expense	58	272	174	810
CarMax Auto Finance income
Total amortization reclassifications recognized in net pension expense	4	19	11	51
Selling, general and administrative expenses
Total amortization reclassifications recognized in net pension expense	$ 67	$ 346	$ 202	$ 1,048

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Accumulated Other Comprehensive Income (Loss) (Narrative) (Details) - USD ($) $ in Millions	Nov. 30, 2023	Feb. 28, 2023
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Deferred tax	$ 20.4	$ 32.6

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Leases Narrative (Details)	9 Months Ended
	Nov. 30, 2023
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		9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Nov. 30, 2023	Nov. 30, 2022
Leases [Abstract]
Operating Lease, Cost	$ 22,772	$ 22,450	$ 66,958	$ 68,381
Finance Lease, Right-of-Use Asset, Amortization	5,266	4,178	14,708	11,701
Finance Lease, Interest Expense	6,610	5,728	19,112	16,129
Finance Lease, Cost	11,876	9,906	33,820	27,830
Lease, Cost	$ 34,648	$ 32,356	$ 100,778	$ 96,211

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Leases - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands	Nov. 30, 2023	Feb. 28, 2023
Leases [Abstract]
Operating lease assets	$ 533,387	$ 545,677
Finance Lease, Right-of-Use Asset	179,381	145,372
Total lease assets	712,768	691,049
Current portion of operating lease liabilities	56,410	53,287
Finance Lease, Liability, Current	20,452	18,788
Operating lease liabilities, excluding current portion	509,141	523,828
Finance Lease, Liability, Noncurrent	202,024	165,135
Total lease liabilities	788,027	761,038
Finance Lease Accumulated Depreciation	$ 53,100	$ 46,700

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Lease Term and Discount Rate (Details)	Nov. 30, 2023 Rate	Feb. 28, 2023 Rate
Leases [Abstract]
Operating Lease, Weighted Average Remaining Lease Term	16 years 1 month 2 days	16 years 4 months 6 days
Finance Lease, Weighted Average Remaining Lease Term	11 years 6 months 21 days	10 years 10 months 2 days
Operating Lease, Weighted Average Discount Rate, Percent	5.02%	4.91%
Finance Lease, Weighted Average Discount Rate, Percent	17.17%	19.34%

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Lease Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022
Leases [Abstract]
Operating Lease, Payments	$ 66,352	$ 67,675
Finance Lease, Interest Payment on Liability	18,387	12,747
Finance Lease, Principal Payments	12,177	10,056
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	29,080	29,027
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability	$ 50,085	$ 31,344

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Leases Maturities of Lease Liabilities (Details) $ in Thousands	Nov. 30, 2023 USD ($)
Leases [Abstract]
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year	$ 20,661
Lessee, Operating Lease, Liability, Payments, Due Year Two	82,816
Lessee, Operating Lease, Liability, Payments, Due Year Three	77,454
Lessee, Operating Lease, Liability, Payments, Due Year Four	71,099
Lessee, Operating Lease, Liability, Payments, Due Year Five	66,952
Lessee, Operating Lease, Liability, Payments, Due after Year Five	561,850
Lessee, Operating Lease, Liability, Payments, Due	880,832
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	(315,281)
Operating Lease, Liability	565,551
Finance Lease, Liability, Payments, Remainder of Fiscal Year	10,886
Finance Lease, Liability, Payments, Due Year Two	45,606
Finance Lease, Liability, Payments, Due Year Three	47,365
Finance Lease, Liability, Payments, Due Year Four	43,554
Finance Lease, Liability, Payments, Due Year Five	36,691
Finance Lease, Liability, Payments, Due after Year Five	258,658
Finance Lease, Liability, Payment, Due	442,760
Finance Lease, Liability, Undiscounted Excess Amount	(220,284)
Finance Lease, Liability	222,476
lessee, minimum lease payments for leases not yet commenced	$ 5,100

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Contingent Liabilities (Details) - USD ($) $ in Millions	Nov. 30, 2023	Feb. 28, 2023
Commitments and Contingencies Disclosure [Abstract]
Liability associated with guarantee	$ 25.4	$ 27.1

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Segment Reporting (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Nov. 30, 2023	Nov. 30, 2022
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
NET SALES AND OPERATING REVENUES	$ 6,148,538	$ 6,505,956	$ 20,909,437	$ 23,962,380
Depreciation and amortization			193,528	202,655
Gross Profit	612,863	576,688	2,127,018	2,189,224
CARMAX AUTO FINANCE INCOME	148,659	152,196	421,004	539,538
Selling, General and Administrative Expense	(559,962)	(591,727)	(1,705,493)	(1,914,508)
Depreciation, Depletion and Amortization, Nonproduction	(60,623)	(57,377)	(177,859)	(170,717)
Interest expense	(31,265)	(30,150)	(93,316)	(91,670)
Other income	886	363	4,730	2,303
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest	110,558	49,993	576,084	554,170
TOTAL COST OF SALES
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Depreciation and amortization	5,490	4,139	15,475	11,291
Intersegment Eliminations
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
NET SALES AND OPERATING REVENUES	(8,100)	(5,549)	(26,165)	(20,219)
Gross Profit	(1,179)	(1,149)	(3,479)	(4,276)
CarMax Sales Operations
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
NET SALES AND OPERATING REVENUES	6,111,839	6,472,702	20,807,858	23,860,462
Gross Profit	586,332	554,057	2,053,228	2,115,631
CarMax Sales Operations | TOTAL COST OF SALES
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Depreciation and amortization	393	404	1,239	1,092
CarMax Sales Operations | Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
NET SALES AND OPERATING REVENUES	6,111,839	6,472,702	20,807,858	23,860,462
Other Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
NET SALES AND OPERATING REVENUES	36,699	33,254	101,579	101,918
Gross Profit	27,710	23,780	77,269	77,869
Other Segments | TOTAL COST OF SALES
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Depreciation and amortization	5,097	3,735	14,236	10,199
Other Segments | Intersegment Eliminations
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
NET SALES AND OPERATING REVENUES	8,100	5,549	26,165	20,219
Other Segments | Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
NET SALES AND OPERATING REVENUES	$ 44,799	$ 38,803	$ 127,744	$ 122,137