2016 Q4 Form 10-Q Financial Statement

#000117001017000008 Filed on January 06, 2017

View on sec.gov

Income Statement

Concept 2016 Q4 2015 Q4
Revenue $3.702B $3.544B
YoY Change 4.44% 4.08%
Cost Of Revenue $3.198B $3.080B
YoY Change 3.85% 4.09%
Gross Profit $503.1M $464.3M
YoY Change 8.36% 3.97%
Gross Profit Margin 13.59% 13.1%
Selling, General & Admin $356.7M $337.5M
YoY Change 5.7% 6.59%
% of Gross Profit 70.9% 72.69%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $42.70M $35.30M
YoY Change 20.96% 20.89%
% of Gross Profit 8.49% 7.6%
Operating Expenses $356.7M $337.5M
YoY Change 5.7% 6.59%
Operating Profit $146.4M $126.8M
YoY Change 15.44% -2.44%
Interest Expense $15.07M $10.02M
YoY Change 50.39% 36.56%
% of Operating Profit 10.29% 7.9%
Other Income/Expense, Net -$1.027M -$1.157M
YoY Change -11.24% -24.67%
Pretax Income $219.7M $208.0M
YoY Change 5.63% -1.37%
Income Tax $83.02M $79.76M
% Of Pretax Income 37.79% 38.35%
Net Earnings $136.6M $128.2M
YoY Change 6.59% -1.42%
Net Earnings / Revenue 3.69% 3.62%
Basic Earnings Per Share $0.72 $0.64
Diluted Earnings Per Share $0.72 $0.63
COMMON SHARES
Basic Shares Outstanding 189.2M shares 201.3M shares
Diluted Shares Outstanding 190.8M shares 203.4M shares

Balance Sheet

Concept 2016 Q4 2015 Q4
SHORT-TERM ASSETS
Cash & Short-Term Investments $24.00M $33.00M
YoY Change -27.27% -82.63%
Cash & Equivalents $23.71M $33.35M
Short-Term Investments
Other Short-Term Assets $41.35M $32.67M
YoY Change 26.55% -90.13%
Inventory $2.170B $2.153B
Prepaid Expenses
Receivables $92.00M $88.53M
Other Receivables $0.00 $0.00
Total Short-Term Assets $2.684B $2.635B
YoY Change 1.87% 2.41%
LONG-TERM ASSETS
Property, Plant & Equipment $2.449B $2.106B
YoY Change 16.31% 14.82%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $137.1M $148.1M
YoY Change -7.41% -50.3%
Total Long-Term Assets $13.08B $11.75B
YoY Change 11.32% 14.37%
TOTAL ASSETS
Total Short-Term Assets $2.684B $2.635B
Total Long-Term Assets $13.08B $11.75B
Total Assets $15.76B $14.38B
YoY Change 9.59% 11.98%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $476.8M $420.9M
YoY Change 13.28% -7.91%
Accrued Expenses $224.6M $211.8M
YoY Change 6.02% 4.35%
Deferred Revenue
YoY Change
Short-Term Debt $1.000M $0.00
YoY Change -100.0%
Long-Term Debt Due $323.0M $291.0M
YoY Change 11.0% 10.65%
Total Short-Term Liabilities $1.028B $923.6M
YoY Change 11.28% -0.48%
LONG-TERM LIABILITIES
Long-Term Debt $11.49B $10.32B
YoY Change 11.33% 20.65%
Other Long-Term Liabilities $232.4M $229.9M
YoY Change 1.1% 25.63%
Total Long-Term Liabilities $232.4M $229.9M
YoY Change 1.1% -97.37%
TOTAL LIABILITIES
Total Short-Term Liabilities $1.028B $923.6M
Total Long-Term Liabilities $232.4M $229.9M
Total Liabilities $12.74B $11.47B
YoY Change 11.12% 18.72%
SHAREHOLDERS EQUITY
Retained Earnings $1.821B $1.743B
YoY Change 4.49%
Common Stock $93.68M $98.78M
YoY Change -5.17%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $3.015B $2.912B
YoY Change
Total Liabilities & Shareholders Equity $15.76B $14.38B
YoY Change 9.59% 11.98%

Cashflow Statement

Concept 2016 Q4 2015 Q4
OPERATING ACTIVITIES
Net Income $136.6M $128.2M
YoY Change 6.59% -1.42%
Depreciation, Depletion And Amortization $42.70M $35.30M
YoY Change 20.96% 20.89%
Cash From Operating Activities -$303.0M -$296.9M
YoY Change 2.05% -14.68%
INVESTING ACTIVITIES
Capital Expenditures -$100.9M -$95.10M
YoY Change 6.1% -8.2%
Acquisitions
YoY Change
Other Investing Activities $24.90M $20.00M
YoY Change 24.5% -5.66%
Cash From Investing Activities -$76.00M -$75.10M
YoY Change 1.2% -8.86%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 86.80M 304.8M
YoY Change -71.52% 14.72%
NET CHANGE
Cash From Operating Activities -303.0M -296.9M
Cash From Investing Activities -76.00M -75.10M
Cash From Financing Activities 86.80M 304.8M
Net Change In Cash -292.2M -67.20M
YoY Change 334.82% -59.2%
FREE CASH FLOW
Cash From Operating Activities -$303.0M -$296.9M
Capital Expenditures -$100.9M -$95.10M
Free Cash Flow -$202.1M -$201.8M
YoY Change 0.15% -17.43%

Facts In Submission

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CY2015Q4 us-gaap Financing Receivable Allowance For Credit Losses Write Offs
FinancingReceivableAllowanceForCreditLossesWriteOffs
51900000 USD
us-gaap Financing Receivable Allowance For Credit Losses Write Offs
FinancingReceivableAllowanceForCreditLossesWriteOffs
128700000 USD
CY2016Q4 us-gaap Financing Receivable Allowance For Credit Losses Write Offs
FinancingReceivableAllowanceForCreditLossesWriteOffs
62900000 USD
us-gaap Financing Receivable Allowance For Credit Losses Write Offs
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164600000 USD
CY2016Q1 us-gaap Financing Receivable Recorded Investment Past Due
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262800000 USD
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359700000 USD
us-gaap Gain Loss On Disposition Of Assets
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us-gaap Gain Loss On Disposition Of Assets
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CY2015Q4 us-gaap Gross Profit
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464331000 USD
us-gaap Gross Profit
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1529495000 USD
CY2016Q4 us-gaap Gross Profit
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us-gaap Gross Profit
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CY2015Q4 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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207957000 USD
us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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783758000 USD
CY2016Q4 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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219661000 USD
us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
764090000 USD
CY2015Q4 us-gaap Income Tax Expense Benefit
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us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
301357000 USD
CY2016Q4 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
83016000 USD
us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
289723000 USD
us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
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-109243000 USD
us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
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-5240000 USD
us-gaap Increase Decrease In Accounts Receivable
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us-gaap Increase Decrease In Accounts Receivable
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us-gaap Increase Decrease In Finance Receivables
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952974000 USD
us-gaap Increase Decrease In Finance Receivables
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900675000 USD
us-gaap Increase Decrease In Inventories
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66396000 USD
us-gaap Increase Decrease In Inventories
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238146000 USD
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us-gaap Increase Decrease In Other Current Assets
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5802000 USD
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-268000 USD
us-gaap Increase Decrease In Other Operating Assets
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-1193000 USD
us-gaap Increase Decrease In Other Operating Liabilities
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us-gaap Increase Decrease In Other Operating Liabilities
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us-gaap Increase Decrease In Restricted Cash
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22064000 USD
us-gaap Increase Decrease In Restricted Cash
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13211000 USD
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172300000 USD
us-gaap Interest And Fee Income Loans And Leases
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507000000 USD
CY2016Q4 us-gaap Interest And Fee Income Loans And Leases
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192700000 USD
us-gaap Interest And Fee Income Loans And Leases
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567000000 USD
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10021000 USD
us-gaap Interest Expense
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24574000 USD
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15071000 USD
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40063000 USD
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344900000 USD
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106700000 USD
us-gaap Interest Income Expense After Provision For Loan Loss
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337500000 USD
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415100000 USD
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148600000 USD
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441700000 USD
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7600000 USD
us-gaap Interest Paid Capitalized
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8400000 USD
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35000000 USD
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8024000 USD
us-gaap Labor And Related Expense
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21000000 USD
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7500000 USD
us-gaap Labor And Related Expense
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22900000 USD
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12744683000 USD
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us-gaap Net Cash Provided By Used In Investing Activities Continuing Operations
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us-gaap Net Cash Provided By Used In Operating Activities Continuing Operations
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us-gaap Net Cash Provided By Used In Operating Activities Continuing Operations
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us-gaap Other Comprehensive Income Defined Benefit Plans Adjustment Net Of Tax Portion Attributable To Parent
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us-gaap Other Comprehensive Income Defined Benefit Plans Adjustment Net Of Tax Portion Attributable To Parent
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us-gaap Other Comprehensive Income Derivatives Qualifying As Hedges Net Of Tax Portion Attributable To Parent
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6200000 USD
us-gaap Other Comprehensive Income Derivatives Qualifying As Hedges Net Of Tax Portion Attributable To Parent
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us-gaap Other Comprehensive Income Loss Derivatives Qualifying As Hedges Net Of Tax
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us-gaap Other Comprehensive Income Loss Derivatives Qualifying As Hedges Net Of Tax
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OtherComprehensiveIncomeLossNetOfTax
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us-gaap Other Comprehensive Income Loss Net Of Tax
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us-gaap Other Comprehensive Income Loss Net Of Tax Portion Attributable To Parent
OtherComprehensiveIncomeLossNetOfTaxPortionAttributableToParent
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CY2016Q4 us-gaap Other Comprehensive Income Loss Net Of Tax Portion Attributable To Parent
OtherComprehensiveIncomeLossNetOfTaxPortionAttributableToParent
6447000 USD
us-gaap Other Comprehensive Income Loss Net Of Tax Portion Attributable To Parent
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10061000 USD
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us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci On Derivatives Before Tax
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us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci On Derivatives Before Tax
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us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci On Derivatives Net Of Tax
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us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci On Derivatives Net Of Tax
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us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci On Derivatives Tax
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us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci On Derivatives Tax
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us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Gain Loss Before Tax
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CY2016Q4 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Gain Loss Before Tax
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us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Gain Loss Before Tax
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CY2015Q4 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Gain Loss Net Of Tax
OtherComprehensiveIncomeLossReclassificationAdjustmentFromAOCIPensionAndOtherPostretirementBenefitPlansForNetGainLossNetOfTax
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us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Gain Loss Net Of Tax
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CY2016Q4 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Gain Loss Net Of Tax
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us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Gain Loss Net Of Tax
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CY2015Q4 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Gain Loss Tax
OtherComprehensiveIncomeLossReclassificationAdjustmentFromAOCIPensionAndOtherPostretirementBenefitPlansForNetGainLossTax
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us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Gain Loss Tax
OtherComprehensiveIncomeLossReclassificationAdjustmentFromAOCIPensionAndOtherPostretirementBenefitPlansForNetGainLossTax
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CY2016Q4 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Gain Loss Tax
OtherComprehensiveIncomeLossReclassificationAdjustmentFromAOCIPensionAndOtherPostretirementBenefitPlansForNetGainLossTax
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us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Gain Loss Tax
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us-gaap Other Comprehensive Income Unrealized Gain Loss On Derivatives Arising During Period Net Of Tax
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us-gaap Other Comprehensive Income Unrealized Gain Loss On Derivatives Arising During Period Tax
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us-gaap Other Comprehensive Income Unrealized Gain Loss On Derivatives Arising During Period Tax
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us-gaap Payments Of Debt Issuance Costs
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us-gaap Payments To Acquire Property Plant And Equipment
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us-gaap Payments To Acquire Property Plant And Equipment
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us-gaap Pension Contributions
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us-gaap Proceeds From Issuance Or Sale Of Equity
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us-gaap Proceeds From Repayments Of Short Term Debt
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1520000 USD
us-gaap Proceeds From Sale Of Property Plant And Equipment
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us-gaap Provision For Loan And Lease Losses
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us-gaap Provision For Loan And Lease Losses
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us-gaap Provision For Loan Lease And Other Losses
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us-gaap Provision For Loan Lease And Other Losses
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us-gaap Reclassification From Accumulated Other Comprehensive Income Current Period Net Of Tax
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1746804000 USD
CY2016Q4 us-gaap Retained Earnings Accumulated Deficit
RetainedEarningsAccumulatedDeficit
1821359000 USD
CY2015Q4 us-gaap Sales Revenue Net
SalesRevenueNet
3544069000 USD
us-gaap Sales Revenue Net
SalesRevenueNet
11443870000 USD
CY2016Q4 us-gaap Sales Revenue Net
SalesRevenueNet
3701524000 USD
us-gaap Sales Revenue Net
SalesRevenueNet
11825158000 USD
CY2015Q4 us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
337512000 USD
us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
1018075000 USD
CY2016Q4 us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
356735000 USD
us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
1103091000 USD
us-gaap Share Based Compensation
ShareBasedCompensation
45284000 USD
us-gaap Share Based Compensation
ShareBasedCompensation
72026000 USD
us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Forfeitures And Expirations In Period
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresAndExpirationsInPeriod
4000 shares
us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Gross
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross
2310000 shares
us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Weighted Average Grant Date Fair Value
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageGrantDateFairValue
14.19
CY2016Q1 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Number
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
7322000 shares
CY2016Q4 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Number
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
8484000 shares
CY2016Q2 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Plan Modification Incremental Compensation Cost
ShareBasedCompensationArrangementByShareBasedPaymentAwardPlanModificationIncrementalCompensationCost
3500000 USD
CY2016Q3 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Plan Modification Incremental Compensation Cost
ShareBasedCompensationArrangementByShareBasedPaymentAwardPlanModificationIncrementalCompensationCost
10900000 USD
CY2016Q1 us-gaap Short Term Bank Loans And Notes Payable
ShortTermBankLoansAndNotesPayable
428000 USD
CY2016Q4 us-gaap Short Term Bank Loans And Notes Payable
ShortTermBankLoansAndNotesPayable
880000 USD
CY2016Q1 us-gaap Standard Product Warranty Accrual
StandardProductWarrantyAccrual
6100000 USD
CY2016Q4 us-gaap Standard Product Warranty Accrual
StandardProductWarrantyAccrual
5700000 USD
us-gaap Stock Issued During Period Shares Stock Options Exercised
StockIssuedDuringPeriodSharesStockOptionsExercised
1144000 shares
CY2016Q1 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest
2904786000 USD
CY2016Q4 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest
3015384000 USD
CY2016Q1 us-gaap Trading Securities
TradingSecurities
13622000 USD
CY2016Q4 us-gaap Trading Securities
TradingSecurities
17861000 USD
CY2016Q1 us-gaap Unamortized Debt Issuance Expense
UnamortizedDebtIssuanceExpense
21665000 USD
CY2016Q4 us-gaap Unamortized Debt Issuance Expense
UnamortizedDebtIssuanceExpense
23227000 USD
CY2016Q1 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
26800000 USD
CY2016Q4 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
30400000 USD
CY2015Q1 us-gaap Valuation Allowances And Reserves Balance
ValuationAllowancesAndReservesBalance
94400000 USD
CY2015Q3 us-gaap Valuation Allowances And Reserves Balance
ValuationAllowancesAndReservesBalance
108100000 USD
CY2015Q4 us-gaap Valuation Allowances And Reserves Balance
ValuationAllowancesAndReservesBalance
109800000 USD
CY2016Q1 us-gaap Valuation Allowances And Reserves Balance
ValuationAllowancesAndReservesBalance
110200000 USD
CY2016Q3 us-gaap Valuation Allowances And Reserves Balance
ValuationAllowancesAndReservesBalance
113300000 USD
CY2016Q4 us-gaap Valuation Allowances And Reserves Balance
ValuationAllowancesAndReservesBalance
112400000 USD
CY2015Q4 us-gaap Valuation Allowances And Reserves Charged To Cost And Expense
ValuationAllowancesAndReservesChargedToCostAndExpense
18600000 USD
us-gaap Valuation Allowances And Reserves Charged To Cost And Expense
ValuationAllowancesAndReservesChargedToCostAndExpense
61000000 USD
CY2016Q4 us-gaap Valuation Allowances And Reserves Charged To Cost And Expense
ValuationAllowancesAndReservesChargedToCostAndExpense
15900000 USD
us-gaap Valuation Allowances And Reserves Charged To Cost And Expense
ValuationAllowancesAndReservesChargedToCostAndExpense
51800000 USD
CY2015Q4 us-gaap Valuation Allowances And Reserves Deductions
ValuationAllowancesAndReservesDeductions
16900000 USD
us-gaap Valuation Allowances And Reserves Deductions
ValuationAllowancesAndReservesDeductions
45600000 USD
CY2016Q4 us-gaap Valuation Allowances And Reserves Deductions
ValuationAllowancesAndReservesDeductions
16800000 USD
us-gaap Valuation Allowances And Reserves Deductions
ValuationAllowancesAndReservesDeductions
49600000 USD
CY2015Q4 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
203383000 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
208242000 shares
CY2016Q4 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
190818000 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
193239000 shares
CY2015Q4 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
201291000 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
205760000 shares
CY2016Q4 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
189200000 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
191431000 shares
us-gaap Basis Of Accounting
BasisOfAccounting
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Basis of Presentation and Use of Estimates.</font><font style="font-family:inherit;font-size:10pt;"> &#160;The accompanying interim unaudited consolidated financial statements include the accounts of CarMax and our wholly owned subsidiaries.&#160;&#160;All significant intercompany balances and transactions have been eliminated in consolidation.&#160;&#160;These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (&#8220;GAAP&#8221;) for interim financial information.&#160;&#160;Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.&#160;&#160;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.&#160;&#160;The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year.&#160;&#160;These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the fiscal year ended </font><font style="font-family:inherit;font-size:10pt;">February&#160;29, 2016</font><font style="font-family:inherit;font-size:10pt;">.</font></div></div>
us-gaap Nature Of Operations
NatureOfOperations
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;padding-left:24px;text-indent:0px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">Background</font></div><div style="line-height:120%;text-indent:90px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">CarMax, Inc. (&#8220;we,&#8221; &#8220;our,&#8221; &#8220;us,&#8221; &#8220;CarMax&#8221; and &#8220;the company&#8221;), including its wholly owned subsidiaries, is the largest retailer of used vehicles in the United States.&#160;We operate in </font><font style="font-family:inherit;font-size:10pt;">two</font><font style="font-family:inherit;font-size:10pt;"> reportable segments:&#160;&#160;CarMax Sales Operations and CarMax Auto Finance (&#8220;CAF&#8221;).&#160;&#160;Our CarMax Sales Operations segment consists of all aspects of our auto merchandising and service operations, excluding financing provided by CAF.&#160;&#160;Our CAF segment consists solely of our own finance operation that provides financing to customers buying retail vehicles from CarMax.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">We seek to deliver an unrivaled customer experience by offering a broad selection of high quality used vehicles and related products and services at low, no-haggle prices using a customer-friendly sales process in an attractive, modern sales facility, as well as through carmax.com and our mobile apps.&#160;&#160;We provide customers with a full range of related products and services, including the appraisal and purchase of vehicles directly from consumers; the financing of vehicle purchases through CAF and third-party financing providers; the sale of extended protection plan (&#8220;EPP&#8221;) products, which include extended service plans (&#8220;ESPs&#8221;) and guaranteed asset protection (&#8220;GAP&#8221;); and vehicle repair service.&#160;&#160;Vehicles purchased through the appraisal process that do not meet our retail standards are sold to licensed dealers through on-site wholesale auctions.</font></div></div>
us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">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.&#160;&#160;Actual results could differ from those estimates.&#160; Certain prior year amounts have been reclassified to conform to the current year&#8217;s presentation.&#160; Amounts and percentages may not total due to rounding.</font></div></div>

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