CarMax 2001 Annual Report Download - page 88

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85
CIRCUIT CITY STORES, INC. 2001 ANNUAL REPORT
Managements Report
Board of Directors
The Board of Directors and Stockholders of Circuit City Stores, Inc.:
The consolidated financial statements of Circuit City Stores, Inc.
and subsidiaries, as well as the financial statements of the Circuit
City Group and the CarMax Group, have been prepared under the
direction of management, which is responsible for their integrity
and objectivity. These financial statements have been prepared in
conformity with accounting principles generally accepted in the
United States of America except for the Circuit City Group, which
has accounted for its interest in the CarMax Group in a manner
similar to the equity method of accounting. Accounting principles
generally accepted in the United States of America require that the
CarMax Group be consolidated with the Circuit City Group.
However, management feels the manner in which the Circuit City
Group is presented more clearly indicates the performance of the
Circuit City business. The financial statements include amounts that
are the best estimates and judgments of management with consider-
ation given to materiality.
Management is responsible for maintaining an internal
control structure designed to provide reasonable assurance that the
books and records reflect the transactions of the Company and that
the Company’s established policies and procedures are carefully fol-
lowed. Because of inherent limitations in any system, there can be
no absolute assurance that errors or irregularities will not occur.
Nevertheless, management believes that the internal control struc-
ture provides reasonable assurance that assets are safeguarded and
that financial information is objective and reliable.
The Company’s and the Groups’ financial statements have been
audited by KPMG LLP, independent auditors. Their Independent
Auditors’ Reports, which are based on audits made in accordance
with auditing standards generally accepted in the United States of
America, express opinions as to the fair presentation of the financial
statements in conformity with accounting principles generally
accepted in the United States of America. In performing their audits,
KPMG LLP considers the Company’s internal control structure to the
extent it deems necessary in order to issue its opinions on the
Company’s and the Groups’ financial statements.
The audit committee of the board of directors is composed solely
of outside directors. The committee meets periodically with manage-
ment, the internal auditors and the independent auditors to assure
each is properly discharging its responsibilities. KPMG LLP and the
internal auditors have full and free access to meet privately with the
audit committee to discuss accounting controls, audit findings and
financial reporting matters.
W. Alan McCollough
President and Chief Executive Officer
Michael T. Chalifoux
Executive Vice President, Chief Financial Officer
and Corporate Secretary
April 2, 2001
Richard L. Sharp
Chairman
Alan L. Wurtzel (5)
Vice Chairman of the Board
W. Alan McCollough (3)
President and Chief Executive Officer
Michael T. Chalifoux (3)
Executive Vice President,
Chief Financial Officer and
Corporate Secretary
Richard N. Cooper (4,5)
Professor of Economics,
Harvard University;
Boston, Massachusetts
Barbara S. Feigin (4,5)
Consultant;
Retired, Executive Vice President,
Worldwide Director of Strategic Services,
Grey Advertising, Inc.;
New York, New York
James F. Hardymon (1,2)
Retired, Chairman and
Chief Executive Officer,
Textron, Inc.;
Providence, Rhode Island
Robert S. Jepson Jr. (1,2)
Chairman and Chief Executive Officer,
Jepson Associates, Inc.;
Savannah, Georgia
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
Mikael Salovaara (4,5)
Partner,
Greycliff Partners;
Morristown, New Jersey
John W. Snow (1,2)
Chairman, President and
Chief Executive Officer,
CSX Corporation;
Richmond, Virginia
(1) Compensation and Personnel Committee Member
(2) Nominating and Governance Committee Member
(3) Executive Committee Member
(4) Audit Committee Member
(5) Pension Investment Committee Member