CarMax 2008 Annual Report Download - page 33

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Defined Benefit Retirement Plan
The plan obligations and related assets of our defined benefit retirement plan are presented in Note 8. Plan assets,
which consist primarily of marketable equity and debt instruments, are valued using current market quotations. Plan
obligations and the annual pension expense are determined by independent actuaries using a number of assumptions
that we provide. Key assumptions used to measure the plan obligations include the discount rate, the estimated rate
of salary increases, the estimated future return on plan assets and the mortality rate. In determining the discount
rate, we use the current yield on high-quality, fixed-income investments that have maturities corresponding to the
timing of the benefit payments. Salary increase assumptions are based upon our historical experience and
anticipated future board and management actions. Asset returns are estimated based upon the anticipated average
yield on the plan assets. We do not believe that any significant changes in assumptions used to measure the plan
obligations are likely to occur that would have a material impact on our financial position or results of operations.
RESULTS OF OPERATIONS
NET SALES AND OPERATING REVENUES
Years Ended February 29 or 28
(In millions) 2008 % 2007 % 2006 %
Used vehicle sales.............................. $6,589.3 80.4 $5,872.8 78.7 $4,771.3 76.2
New vehicle sales ................................... 370.6 4.5 445.1 6.0 502.8 8.0
Wholesale vehicle sales.......................... 985.0 12.0 918.4 12.3 778.3 12.4
Other sales and revenues:
Extended service plan revenues......... 132.4 1.6 114.4 1.5 97.9 1.6
Service department sales.................... 96.0 1.2 90.6 1.2 93.4 1.5
Third-party finance fees, net .............. 26.1 0.3 24.3 0.3 16.3 0.3
Total other sales and revenues........... 254.6 3.1 229.3 3.1 207.6 3.3
Total net sales and operating revenues .. $8,199.6 100.0 $7,465.7 100.0 $6,260.0 100.0
RETAIL VEHICLE SALES CHANGES
Years Ended February 29 or 28
2008 2007 2006
Vehicle units:
Used vehicles ......................................................................... 12 % 16 % 15%
New vehicles.......................................................................... (17)% (11)% 1%
Total........................................................................................... 10 % 14 % 14%
Vehicle dollars:
Used vehicles ......................................................................... 12 % 23 % 19%
New vehicles.......................................................................... (17)% (11)% 2%
Total........................................................................................... 10 % 20 % 17%
Comparable store used unit sales growth is one of the key drivers of our profitability. A store is included in
comparable store retail sales in the store’ s fourteenth full month of operation.
COMPARABLE STORE RETAIL VEHICLE SALES CHANGES
Years Ended February 29 or 28
2008 2007 2006
Vehicle units:
Used vehicles ......................................................................... 3 % 9 % 4%
New vehicles.......................................................................... (11)% (11)% 1%
Total........................................................................................... 2 % 8 % 4%
Vehicle dollars:
Used vehicles ......................................................................... 3 % 16 % 8%
New vehicles.......................................................................... (11)% (12)% 1%
Total........................................................................................... 2 % 13 % 8%