CarMax 2001 Annual Report Download

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Circuit City Stores, Inc. Annual Report 2001
focus on the
customer

Table of contents

  • Page 1
    Circuit City Stores, Inc. Annual Report 2001 focus on the customer

  • Page 2
    ...no- haggle prices, a broad selection and high- quality customer service. At the end of fiscal year 2001, CarMax operated 40 retail units in 37 locations, including 33 used- car superstores and 22 new- car franchises. IN THIS REPORT, WE USE THE FOLLOWING TERMS AND DEFINITIONS: Circuit City Stores and...

  • Page 3
    ...is on providing customers with the shopping experience- the service, the information, the selection and the value- that assures Circuit City is their first choice for consumer electronics and CarMax is their first choice for used and new vehicles. In every facet of our businesses, our Associates are...

  • Page 4
    ..., products to the marketplace and developed an automotive retail business differentiated by its ability to sell high-quality used cars in a consumer-friendly way. CONSOLIDATED RESULTS Circuit City Stores, Inc. reported consolidated sales of $12.96 billion for the fiscal year ended February 28, 2001...

  • Page 5
    ... store design, we began in fiscal 2001 to roll out Internet- based sales training programs for all our store Associates. We plan to expand this training method to more product categories in the coming fiscal year. Given the challenging retail climate, we will even more closely examine our operating...

  • Page 6
    ... no-haggle prices on the vehicle, the financing and the extended warranty. Trade-ins also are handled as a separate no-haggle transaction, including a written appraisal offer good with or without a purchase. We typically offer a broad selection of 250 to 400 high-quality used vehicles per superstore...

  • Page 7
    ...played the key leadership role in the development of CarMax's buying and inventory management team and system. purchasing and inventory management sy stems: We must purchase large volumes of used cars- one at a time. To accomplish this task, we have developed unique training programs for our buying...

  • Page 8
    ...business, we were able in all stores to add cash registers and place more products on the floor. Improved product adjacencies in the new store design enable our commissioned sales Associates to easily demonstrate related products and help customers compare features and benefits across models. Hourly...

  • Page 9
    ... customers find the same knowledgeable sales assistance upon which they have always relied, but they also find more products quickly accessible on the floor and conveniently located cash registers for easy checkout. And, we were the first national brick-and-mortar specialty retailer to sell consumer...

  • Page 10
    ... to purchase many consumer electronics and home office products. Our long-standing commitment to product-knowledgeable sales assistance distinguishes Circuit City from all our significant competitors. Delivering on that commitment requires contemporary sales training programs. All Circuit City store...

  • Page 11
    ... new video game departments, they can play with the full range of game platforms. Finally, we believe the Internet is becoming a more important information source for today's consumer. CircuitCity.com provides a wealth of information on more than 2,600 products, not just those available for sale on...

  • Page 12
    ... PCs. Circuit City Web customers can purchase products online for delivery to their home or check inventory at up to three stores, purchase the products online and pick them up from the store at their convenience. In addition, the Web site enables us to offer special selections of product line...

  • Page 13
    ... Circuit City provides a broad, feature-rich selection of name-brand consumer electronics and home office products. In fiscal 2001, we dramatically expanded our selections in computer software, peripherals and accessories; digital and 35mm cameras and imaging accessories; DVD movies; and video game...

  • Page 14
    ... the store design as well as the operating and management information systems that support our consumer offer. Our objective, as always, remains to achieve the best returns we can for Circuit City shareholders. shop the competition and continuously enhance our inventory management systems to...

  • Page 15
    CIRCUIT CITY At Circuit City, we are committed to providing the value that is critical to an outstanding shopping experience-extensive product information, a vast product array, low prices and satisfaction after the sale-in an environment that lets customers shop the way they want to shop. 13

  • Page 16
    ..."CARMAX SALES CONSULTANTS TAKE THE CUSTOMER THROUGH THE ENTIRE BUYING PROCESS, FROM VEHICLE SELECTION THROUGH TEST DRIVING AND FINANCING TO DELIVERY." TOM FOLLIARD EXECUTIVE VICE PRESIDENT STORE OPERATIONS used-car sales combined, and our largest superstore in Laurel, Md., sells nearly eight times...

  • Page 17
    CARM AX Ca rM a x's p io n e e rin g co n su m e r o ffe r is u n m a t ch e d in a u t o m o b ile re t a ilin g : lo w, n o - h a g g le p rice s; a b ro a d se le ct io n ; g u a ra n t e e d q u a lit y; a n d cu st o m e rfrie n d ly se rvice . 15

  • Page 18
    ... site, and in 1996, we launched CarMax.com. CarMax.com allows consumers to search our entire used- and newcar inventory, including the prices of all vehicles. Consumers also can view financing and warranty information, estimate monthly payments, approximate trade-in values and compare the features...

  • Page 19
    CARM AX CarMax provides easily accessible information, including our low, no-haggle prices, on each used and new vehicle in our entire inventory-in-store via automated touch screens and online via CarMax.com. 17

  • Page 20
    ...-IN-TRAINING APPRAISE THOUSANDS OF CARS BEFORE MAKING THEIR FIRST SOLO PURCHASE FOR CARMAX." CLIFF WOOD VICE PRESIDENT M ERCHANDISING Each CarMax used-car superstore offers no fewer than 250 vehicles, and typical inventories range from 250 vehicles to 400 vehicles. At our highest volume locations...

  • Page 21
    CARM AX CarMax is a superstore for used cars, with typical inventories ranging from 250 vehicles to 400 vehicles. In fiscal 2001, CarMax sold an average of 4,000 used cars per superstore, more than three times the combined new- and used-car volume of the average new-car dealership. 19

  • Page 22
    ...a good deal on the vehicle or even advertise no-haggle pricing, but most then vary the pricing on trade-ins, financing and warranties to earn back the margin lost on the vehicle. The prices are low, but the quality is high. Every CarMax used car undergoes our rigorous Certified Quality Inspection SM...

  • Page 23
    ... AX Cre a t in g va lu e fo r a u t o m o t ive co n su m e rs m e a n s p ro vid in g t o p - n o t ch cu st o m e r se rvice , e a sily a cce ssib le p ro d u ct in fo rm a t io n a n d lo w p rice s o n h ig h - q u a lit y ve h icle s. Ca rM a x d e live rs t h e e n t ire va lu e e q u a t io...

  • Page 24
    ...36 67 110 $ 163 $ 190 Cash dividends per share paid on Circuit City Group Common Stock...$ 0.07 Return on average stockholders' equity (%)...7.1 Number of Associates at year-end...56,865 Number of Circuit City retail units at year-end ...629 Number of CarMax retail units at year-end ...40 $ 0.07...

  • Page 25
    ... 527-4058 CARMAX MARKETS (as of 2/ 28/ 01) CALIFORNIA Los Angeles (4) FLORIDA Miami (3) Orlando (2) Tampa (2) GEORGIA Atlanta (3) ILLINOIS Chicago (6) NORTH CAROLINA Charlotte Raleigh SOUTH CAROLINA Greenville TENNESSEE Nashville TEXAS Dallas/Fort Worth (5) Houston (4) San Antonio VIRGINIA Richmond...

  • Page 26
    ... Common Stock are shareholders of the Company and as such are subject to all of the risks associated with an investment in the Company and all of its businesses, assets and liabilities. The results of operations or financial condition of one 23 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT Group...

  • Page 27
    ...CarMax's used-car comparable store sales growth remained strong through the fiscal 2001 anniversary of this competitor's exit from the used-car superstore business. We also believe that the continuation of CarMax's robust used-car sales growth during 24 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT

  • Page 28
    ... reï¬,ected the higher percentage of sales from better-featured products and newer technologies, which carry higher gross profit margins, and continued improvements in inventory management partly offset by the strength in 25 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT Circuit City Stores, Inc.

  • Page 29
    ... improvement plan that included better inventory management, increased retail service sales, pricing adjustments and the addition of consumer electronics accessory sales. CarMax's gross profit margins have improved significantly since that time. In fiscal 2001, the increase in used-car sales as...

  • Page 30
    ... will drive profitability of the consumer electronics business during the current decade. For that reason, we are focused on store designs, sales counselor training, inventory management, marketing programs and Six Sigma process improvements that will maintain Circuit City's position as a leading...

  • Page 31
    ... earnings from the Circuit City and CarMax businesses and increases in accounts payable for both businesses, partly offset by increases in inventory. During fiscal 2001, a term loan totaling $175 million was repaid using existing working capital. In addition, a term loan totaling $130 million...

  • Page 32
    ... Circuit City and CarMax businesses has been funded with internally generated cash, sale-leaseback transactions, operating leases and shortterm and long-term debt. Finance operation receivables have been funded through securitization transactions. During fiscal 2001, stockholders' equity increased...

  • Page 33
    ...'s service-driven operating strategies; (i) changes in availability or cost of capital expenditure and working capital financing, including the availability of longterm financing to support development of the Company's businesses and the availability of securitization financing for credit card...

  • Page 34
    ...38 $5.50 $1.56 $2.63 $3.38 $3.69 $5.50 $7.13 $4.00 $3.25 $3.69 $3.38 $1.75 $1.31 * Circuit City Group stock prices and dividends per share have been adjusted to reï¬,ect a two-for-one stock split effective June 30, 1999. 31 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT Circuit City Stores, Inc.

  • Page 35
    Consolidated Statements of Earnings Years Ended February 28 or 29 2000 % (Amounts in thousands except per share data) NET SALES AND OPERATING REVENUES ... 2001 % 1999 % Cost of sales, buying and warehousing ...Appliance exit costs [NOTE 15] ...GROSS PROFIT ... $12,959,028 10,135,380 28,326 2,...

  • Page 36
    ...,174 Long-term debt, excluding current installments [NOTES 5 AND 10] ...Deferred revenue and other liabilities...Deferred income taxes [NOTE 6] ...TOTAL LIABILITIES ...STOCKHOLDERS' EQUITY [NOTES 1 AND 7] : 1,291,599 116,137 92,165 14,949 1,514,850 Circuit City Group Common Stock, $0.50 par value...

  • Page 37
    ... end of year...$ 446,131 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the year for: Interest...$ 25,336 Income taxes...$ 117,366 See accompanying notes to consolidated financial statements. $ 34,389 $ 14,908 $ 31,858 $ 53,528 34 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT

  • Page 38
    ...Company...Unearned compensation-restricted stock...Cash dividends-Circuit City Group Common Stock ($0.07 per share)...BALANCE AT FEBRUARY 28, 2001...See accompanying notes to consolidated financial statements. $103,510 $12,820 $1,597,315 $2,356,483 35 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT...

  • Page 39
    ... of transfer. The Company determines fair value based on the present value of future expected cash ï¬,ows using management's best estimates of the key assumptions such as finance charge income, default rates, payment rates, forward yield curves and discount rates appropriate for the type of asset...

  • Page 40
    ... RECOGNITION: The Company recognizes revenue when the earnings process is complete, generally at either the time of sale to a customer or upon delivery to a customer. (L) DEFERRED REVENUE: The Circuit City Group sells its own extended warranty contracts and extended warranty contracts on behalf of...

  • Page 41
    ... is land owned for future sites that are scheduled to open more than one year beyond the fiscal year reported. 5. DEBT Long-term debt at February 28 or 29 is summarized as follows: (Amounts in thousands) 2001 2000 Term loans ...$230,000 $405,000 Industrial Development Revenue Bonds due through...

  • Page 42
    ...refinance this loan, it intends to repay the debt using existing working capital. The Company maintains a multi-year, $150,000,000 unsecured revolving credit agreement with four banks. The agreement calls for interest based on both committed rates and money market rates and a commitment fee of 0.18...

  • Page 43
    ... Stock or CarMax Group Common Stock. The exercise price for nonqualified options is equal to, or greater than, the market value at the date of grant. Options generally are exercisable over a period of from one to 10 years from the date of grant. 40 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT

  • Page 44
    ... information about stock options outstanding as of February 28, 2001. The Company applies APB Opinion No. 25 and related interpretations in accounting for its stock option plans. Accordingly, no compensation cost has been recognized. Had compensation cost been determined based on the fair value...

  • Page 45
    ...,000 shares at $29.50 per share at the end of fiscal 1999. Options to purchase 1,357,200 shares of CarMax Group Common Stock ranging from $6.06 to $16.31 per share were outstanding and not included in the calculation at the end of fiscal 2001, and 42 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT

  • Page 46
    ... leases are fixed-dollar rental commitments, with many containing rent escalations based on the Consumer Price Index. Most provide that the Company pay taxes, maintenance, insurance and operating expenses applicable to the premises. 43 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT Circuit City...

  • Page 47
    ... $246.1 million with a weighted-average life ranging from 0.4 years to 3 years. The following table shows the key economic assumptions used in measuring the fair value of retained interests at February 28, 2001, and a sensitivity analysis showing the 44 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT

  • Page 48
    ... rate ...1.0 -1.2% Discount rate...12.0% $1,840 $1,471 $ 890 $3,864 $3,050 $1,786 45 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT Circuit City Stores, Inc. hypothetical effect on the fair value of those interests when there are unfavorable variations from the assumptions used. Key economic...

  • Page 49
    ...seven service centers in fiscal 2001 and expects to close two distribution centers and one service center by July 31, 2001. The majority of these properties are leased. The Company is in the process of marketing these properties to be subleased. Circuit City maintains control over its in-home major...

  • Page 50
    ... the Circuit City name and to all related operations, such as its finance operation. This segment is engaged in the business of selling brand-name consumer electronics, personal computers and entertainment software. CarMax refers to the used- and new-car retail locations bearing the CarMax name...

  • Page 51
    ... of their operations and their cash ï¬,ows for each of the fiscal years in the three-year period ended February 28, 2001 in conformity with accounting principles generally accepted in the United States of America. Richmond, Virginia April 2, 2001 48 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT

  • Page 52
    ... believe will offer similar benefits to the consumer. We also will focus on new marketing programs designed to increase foot traffic at all Circuit City stores. Geographic expansion is currently a limited contributor to Circuit City's growth. We opened 23 new Circuit City Superstores and relocated...

  • Page 53
    ... no significant short-term change overall. Because we purchase substantially all products sold in Circuit City stores in U.S. dollars, prices are not directly impacted by the value of the dollar in relation to foreign currencies. Cost of Sales, Buying and Warehousing 2001...2000 ...1999 ...1998...

  • Page 54
    ... on allocated debt used to fund store expansion, remodeling and working capital, including inventory. Income Taxes On June 16, 1999, Digital Video Express announced that it would cease marketing of the Divx home video system and discontinue operations, but existing, registered customers would be...

  • Page 55
    ... will drive profitability of the consumer electronics business during the current decade. For that reason, we are focused on store designs, sales counselor training, inventory management, marketing programs and Six Sigma process improvements that will maintain Circuit City's position as a leading...

  • Page 56
    ...844 53 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT Circuit City Group Financing for the securitization programs is achieved primarily through the issuance of public market debt, which is issued at ï¬,oating rates based on LIBOR. Receivables held by the Company for sale are financed with working...

  • Page 57
    Circuit City Group Statements of Earnings Years Ended February 28 or 29 2000 % (Amounts in thousands) NET SALES AND OPERATING REVENUES... 2001 % 1999 % Cost of sales, buying and warehousing...Appliance exit costs [NOTE 12] ...GROSS PROFIT... $10,458,037 100.0 7,964,148 76.1 28,326 0.3 2,465,563...

  • Page 58
    ... 13] TOTAL LIABILITIES AND GROUP EQUITY...See accompanying notes to Group financial statements. 55 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT Circuit City Group Current installments of long-term debt [NOTES 4 AND 8] ...Accounts payable ...Short-term debt [NOTE 4]...Accrued expenses and other...

  • Page 59
    ...,745) (69,844) 158,001 90,200 $ 248,201 (Decrease) increase in cash and cash equivalents ...Cash and cash equivalents at beginning of year... Cash and cash equivalents at end of year...$ 437,329 See accompanying notes to Group financial statements. 56 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT

  • Page 60
    ... [NOTE 2] ...BALANCE AT FEBRUARY 29, 2000... Net earnings...Equity issuances, net ...Cash dividends...Inter-Group Interest adjustment [NOTE 2] ...BALANCE AT FEBRUARY 28, 2001...See accompanying notes to Group financial statements. 57 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT Circuit City Group

  • Page 61
    ... of transfer. The Company determines fair value based on the present value of future expected cash ï¬,ows using management's best estimates of the key assumptions such as finance charge income, default rates, payment rates, forward yield curves and discount rates appropriate for the type of asset...

  • Page 62
    ... earnings process is complete, generally at either the time of sale to a customer or upon delivery to a customer. (J) DEFERRED REVENUE: The Circuit City Group sells its own extended warranty contracts and extended warranty contracts on behalf of unrelated third parties. The contracts extend beyond...

  • Page 63
    ... improvements (10 to 15 years)...598,586 566,103 Capital leases, primarily buildings (20 years)...12,471 12,471 1,544,312 Less accumulated depreciation and amortization...747,523 1,419,001 665,676 Property and equipment, net...$ 796,789 $ 753,325 60 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT

  • Page 64
    ... Federal statutory income tax rate...35.0% State and local income taxes, net of federal benefit...3.0% Effective income tax rate ...38.0% 35.0% 3.0% 38.0% 35.0% 3.1% 38.1% 61 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT Circuit City Group The weighted average interest rate on the outstanding...

  • Page 65
    ... open market for employees (501,984 shares in fiscal 2000 and 858,710 shares in fiscal 1999). The average price per share purchased under the Plan was $29.93 in fiscal 2001, $41.70 in fiscal 2000 and $21.69 in fiscal 1999. The Company match or purchase price discount for the Circuit City Group...

  • Page 66
    ... on years of service and average compensation. Plan assets consist primarily of equity securities and included 160,000 shares of Circuit City Group Common Stock at February 28, 2001, and February 29, 2000. Eligible employees of the Circuit City Group participate in the Company's plan. Pension costs...

  • Page 67
    ... average discount rate ...7.5% Rate of increase in compensation levels...6.0% Expected rate of return on plan assets...9.0% 8.0% 6.0% 9.0% 6.8% 5.0% 9.0% Present value of net minimum capital lease payments [NOTE 4] ...$12,049 In fiscal 2001, the Company entered into sale-leaseback transactions...

  • Page 68
    ... level in cash collateral accounts. In determining the fair value of retained interests, the Company estimates future cash ï¬,ows using management's best estimates of key assumptions such as finance charge income, default rates, payment rates, forward yield curves and discount rates. The Company...

  • Page 69
    ...seven service centers in fiscal 2001 and expects to close two distribution centers and one service center by July 31, 2001. The majority of these properties are leased. The Company is in the process of marketing these properties to be subleased. Circuit City maintains control over its in-home major...

  • Page 70
    ...results of its operations and its cash ï¬,ows for each of the fiscal years in the three-year period ended February 28, 2001 in conformity with accounting principles generally accepted in the United States of America. Richmond, Virginia April 2, 2001 67 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT

  • Page 71
    ... the fiscal 2001 anniversary of this competitor's exit from the used-car superstore business. We also believe that the continuation of CarMax's robust used-car sales growth during the second half of the fiscal year indicates that the CarMax used-car concept offers strong consumer value and can...

  • Page 72
    ... lease termination costs on undeveloped property and the write-down of assets associated with excess property for sale. Excluding these charges, earnings before income taxes were $6.6 million. For fiscal 1999, CarMax recorded a pretax loss of $38.5 million. 69 CIRCUIT CITY STORES, INC. 2001 ANNUAL...

  • Page 73
    ...return on investment. RECENT ACCOUNTING PRONOUNCEMENTS Refer to the "Management's Discussion and Analysis of Results of Operations and Financial Condition" for Circuit City Stores, Inc. for a review of recent accounting pronouncements. FINANCIAL CONDITION In fiscal 2001, net cash provided by CarMax...

  • Page 74
    ... programs can be expanded to accommodate future receivables growth. CarMax expects to open two used-car superstores late in fiscal 2002 and assuming the business continues to meet our expectations, as many as 30 stores over the following four years. The initial cash investment per store...

  • Page 75
    CarMax Group Statements of Operations Years Ended February 28 or 29 2000 % (Amounts in thousands) NET SALES AND OPERATING REVENUES... 2001 % 1999 % Cost of sales ...GROSS PROFIT... $2,500,991 2,171,232 329,759 244,167 12,110 256,277 73,482 27,918 $ $ $ 45,564 34,009 11,555 45,564 100.0 ...

  • Page 76
    ... 196,123 121,257 7,249 5,877 330,506 344,989 $675,495 Commitments and contingent liabilities [NOTES 1, 8, 9, 11, 12 AND 13] TOTAL LIABILITIES AND GROUP EQUITY...See accompanying notes to Group financial statements. 73 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT Carmax Group

  • Page 77
    ... $ 9,981 1,220 108,584 2,324 112,128 (8,733) 26,412 $ 17,679 Decrease in cash and cash equivalents ...Cash and cash equivalents at beginning of year...Cash and cash equivalents at end of year ...See accompanying notes to Group financial statements. 74 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT

  • Page 78
    ... 3,456 344,989 45,564 950 $391,503 Net earnings...Equity issuances, net ...BALANCE AT FEBRUARY 29, 2000 ... Net earnings...Equity issuances, net ...BALANCE AT FEBRUARY 28, 2001 ...See accompanying notes to Group financial statements. 75 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT Carmax Group

  • Page 79
    ... interests are included in net accounts receivable and are carried at fair value with changes in fair value reï¬,ected in earnings. (C) FAIR VALUE OF FINANCIAL INSTRUMENTS: The Company enters into financial instruments on behalf of the CarMax Group. 76 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT

  • Page 80
    ... to Employees," and provides the pro forma disclosures of SFAS No. 123, "Accounting for Stock-Based Compensation." (O) DERIVATIVE FINANCIAL INSTRUMENTS: The Company enters into interest rate swap agreements to manage exposure to interest rates and to more closely match funding costs to the use of...

  • Page 81
    ..., net...$192,158 Land held for development is land owned for future sites that are scheduled to open more than one year beyond the fiscal year reported. 5. DEBT In July 1994, the Company entered into a seven-year, $100,000,000 unsecured bank term loan. The loan was restructured in August 1996 as...

  • Page 82
    ... considerations, management believes that it is more likely than not that the gross deferred tax assets at February 28, 2001, and February 29, 2000, will be realized by the CarMax Group; therefore, no valuation allowance is necessary. 79 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT Carmax Group

  • Page 83
    ... on the open market on behalf of employees (580,000 in fiscal 2000 and 268,532 in fiscal 1999). The average price per share purchased under the Plan was $4.18 in fiscal 2001, $3.68 in fiscal 2000 and $7.56 in fiscal 1999. The Company match or purchase price discount for the CarMax Group totaled...

  • Page 84
    ... plan and allocated to the CarMax Group was $500,000 at February 28, 2001, and $300,000 at February 29, 2000. 81 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT Carmax Group Weighted average discount rate...7.5% Rate of increase in compensation levels...6.0% Expected rate of return on plan assets...

  • Page 85
    ... return for which they contracted. The servicing fee specified in the automobile loan securitization agreements adequately compensates the finance operation for servicing the accounts. Accordingly, no servicing asset or liability has been recorded. 82 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT

  • Page 86
    ... required level in cash collateral accounts. In determining the fair value of retained interests, the Company estimates future cash ï¬,ows using management's best estimates of key assumptions such as finance charge income, default rates, prepayment rates and discount rates. The Company employs...

  • Page 87
    ...results of its operations and its cash ï¬,ows for each of the fiscal years in the three-year period ended February 28, 2001 in conformity with accounting principles generally accepted in the United States of America. Richmond, Virginia April 2, 2001 84 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT

  • Page 88
    ...New York Major General Hugh G. Robinson (Ret.),P.E.(2,4) Chairman and Chief Executive Officer, The Tetra Group; Dallas, Texas Walter J. Salmon (1,2) Stanley Roth Senior Professor of Retailing, Emeritus, Harvard Business School; Boston, Massachusetts 85 CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT

  • Page 89
    ...Scott A. Rivas Vice President Human Resources W. Austin Ligon Senior Vice President Automotive William E. McCorey Vice President Management Information Systems Eric A. Jonas Jr. Assistant Vice President Corporate Human Resource Services Angela C. Schwarz Vice President CarMax Auto Finance Gary...

  • Page 90
    Circuit City Stores, Inc. 9950 MAYLAND DRIVE RICHMOND, VIRGINIA 23233-1464