Other Nonoperating Expense

  
Components of CAF Income

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|  | Years Ended February 28 or 29 |
| (In millions) | 2022 |  | % (1) |  | 2021 |  | % (1) |  | 2020 |  | % (1) |
| Interest margin: |  |  |  |  |  |  |  |  |  |  |  |
| Interest and fee income | $ | 1,296.8  |  |  | 8.7  |  |  | $ | 1,142.0  |  |  | 8.5  |  |  | $ | 1,104.1  |  |  | 8.4  |  |
| Interest expense | (228.8) |  |  | (1.5) |  |  | (314.1) |  |  | (2.3) |  |  | (358.1) |  |  | (2.7) |  |
| Total interest margin | 1,068.0  |  |  | 7.2  |  |  | 827.9  |  |  | 6.1  |  |  | 746.0  |  |  | 5.7  |  |
| Provision for loan losses | (141.7) |  |  | (0.9) |  |  | (160.7) |  |  | (1.2) |  |  | (185.7) |  |  | (1.4) |  |
| Total interest margin after provision for loan losses | 926.3  |  |  | 6.2  |  |  | 667.2  |  |  | 5.0  |  |  | 560.3  |  |  | 4.3  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |
| Total other expense | —  |  |  | —  |  |  | (2.2) |  |  | —  |  |  | —  |  |  | —  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |
| Direct expenses: |  |  |  |  |  |  |  |  |  |  |  |
| Payroll and fringe benefit expense | (50.5) |  |  | (0.3) |  |  | (46.0) |  |  | (0.3) |  |  | (42.3) |  |  | (0.3) |  |
| Depreciation and amortization | (6.6) |  |  | —  |  |  | (0.8) |  |  | —  |  |  | (0.7) |  |  | —  |  |
| Other direct expenses | (67.7) |  |  | (0.5) |  |  | (55.4) |  |  | (0.4) |  |  | (61.3) |  |  | (0.5) |  |
| Total direct expenses | (124.8) |  |  | (0.8) |  |  | (102.2) |  |  | (0.8) |  |  | (104.3) |  |  | (0.8) |  |
| CarMax Auto Finance income | $ | 801.5  |  |  | 5.4  |  |  | $ | 562.8  |  |  | 4.2  |  |  | $ | 456.0  |  |  | 3.5  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |
| Total average managed receivables | $ | 14,934.0  |  |  |  |  | $ | 13,463.3  |  |  |  |  | $ | 13,105.1  |  |  |  |

  (1)    Percent of total average managed receivables.  
5.AUTO LOANS RECEIVABLEAuto 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 $15.47 billion as of February 28, 2022, and $13.76 billion as of February 28, 2021. See Notes 1(F) and 13 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 4 for additional information on CAF income.  
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