Company: KMX
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001170010-25-000024
Chunk: 83

Company: CARMAX INC
Filing Date: 2025-04-11
Form: 10-K
Item: Item 7A
Chunk 83
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 term funding transactions.  See Note 12. 

Interest Rate Exposure - Other Debt

We have interest rate risk from changing interest rates related to borrowings under our revolving credit facility.  We also have interest rate risk from changing interest rates related to borrowings under our term loan; however, a portion of the variable-rate risk is mitigated by derivative instruments.  Substantially all of these borrowings are variable-rate debt based on SOFR.  A 100-basis point increase in market interest rates would have decreased our fiscal 2025 net earnings per share by approximately $0.01. 

Other Market Exposures

Our pension plan has interest rate risk related to its projected benefit obligation (“PBO”).  Due to the relatively young overall age of the plan’s participants, a 100-basis point change in the discount rate has approximately a 14% effect on the PBO balance.  A 100-basis point decrease in the discount rate would have decreased our fiscal 2025 net earnings per share by less than $0.01.  See Note 11 for more information on our benefit plans.

As our cash-settled restricted stock units are liability awards, the related compensation expense is sensitive to changes in the company’s stock price.  The mark-to-market effect on the liability depends on each award’s grant price and previously 

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recognized expense.  At February 28, 2025, a 10% increase in the company’s stock price would have affected fiscal 2025 net earnings per share by approximately $0.03.

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