CarMax 2007 Annual Report Download - page 14

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PART I
In this document, “we,” “our,” “us,” “CarMax,” and “the company” refer to CarMax, Inc. and its wholly owned
subsidiaries, unless the context requires otherwise.
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
This Annual Report on Form 10-K and, in particular, the description of our business set forth in Item 1 and our
Management’ s Discussion and Analysis of Financial Condition and Results of Operations set forth in Item 7 contain
a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, including statements regarding:
• Our projected future sales growth, comparable store unit sales growth, earnings, and earnings per
share.
• Our expected future expenditures, cash needs, and financing sources.
• The projected number, timing, and cost of new store openings.
• Our sales and marketing plans.
• Our assessment of the potential outcome and financial impact of litigation and the potential impact of
unasserted claims.
• Our assessment of competitors and potential competitors.
• Our assessment of the effect of recent legislation and accounting pronouncements.
In addition, any statements contained in or incorporated by reference into this report that are not statements of
historical fact should be considered forward-looking statements. You can identify these forward-looking statements
by use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,”
“should,” “will,” and other similar expressions, whether in the negative or affirmative. We cannot guarantee that we
will achieve the plans, intentions, or expectations disclosed in the forward-looking statements. There are a number
of important risks and uncertainties that could cause our actual results to differ materially from those indicated by
our forward-looking statements. These risks and uncertainties include, without limitation, those set forth in Item 1A
under the heading “Risk Factors.” We caution investors not to place undue reliance on any forward-looking
statements as these statements speak only as of the date when made. We undertake no obligation to update any
forward-looking statements made in this report.
Item 1. Business.
BUSINESS OVERVIEW
CarMax Background. CarMax, Inc. was incorporated under the laws of the Commonwealth of Virginia in 1996.
CarMax, Inc. is a holding company and our operations are conducted through our subsidiaries. Our home office is
located at 12800 Tuckahoe Creek Parkway, Richmond, Va.
Under the ownership of Circuit City Stores, Inc. (“Circuit City”), we began operations in 1993 with the opening of
our first CarMax superstore in Richmond, Va. In 1997, Circuit City completed the initial public offering of a
tracking stock, Circuit City Stores, Inc.–CarMax Group common stock, which was intended to track separately the
performance of the CarMax operations. On October 1, 2002, the CarMax business was separated from Circuit City
through a tax-free transaction, becoming an independent, separately traded public company.
CarMax Business. We are the nation’ s largest retailer of used cars, based on the 337,021 used vehicles we retailed
during the fiscal year ended February 28, 2007. As of the end of fiscal 2007, we operated 77 used car superstores in
36 metropolitan markets. In addition, we sold 208,959 wholesale vehicles in fiscal 2007 through our on-site
auctions.
We were the first used vehicle retailer to offer a large selection of high quality used vehicles at competitively low,
fixed prices using a customer-friendly sales process in an attractive, modern sales facility. The CarMax consumer
offer provides our customers the opportunity to shop for vehicles the same way they shop for items at other “big-
box” retailers, and it is structured around four core equities: low, no-haggle prices; a broad selection; high quality;
and customer-friendly service. Our strategy is to better serve the auto retailing market by addressing the major
sources of customer dissatisfaction with traditional auto retailers and to maximize operating efficiencies through the
use of standardized operating procedures and store formats enhanced by sophisticated, proprietary management
information systems.