CarMax 2008 Annual Report Download - page 45

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33
Credit risk is the exposure to nonperformance of another party to an agreement. We mitigate credit risk by dealing
with highly rated bank counterparties. The market and credit risks associated with financial derivatives are similar
to those relating to other types of financial instruments. Note 5 provides additional information on financial
derivatives.
COMPOSITION OF AUTO LOAN RECEIVABLES
As of February 29 or 28
(In millions) 2008 2007
Principal amount of:
Fixed-rate securitizations ......................................................................................... $ 2,533.4 $ 2,644.1
Floating-rate securitizations synthetically altered to fixed (1)................................... 1,230.6 597.5
Floating-rate securitizations..................................................................................... 0.5 0.6
Loans held for investment (2) ................................................................................... 69.0 62.7
Loans held for sale (3) ............................................................................................... 5.0 6.2
Total............................................................................................................................. $ 3,838.5 $ 3,311.0
(1) Includes $376.7 million of variable-rate securities issued in connection with the 2007-3 and 2008-1 public securitizations that were
synthetically altered to fixed at the bankruptcy-remote special purpose entity.
(2) The majority is held by a bankruptcy-remote special purpose entity.
(3) Held by a bankruptcy-remote special purpose entity.
Interest Rate Exposure
We also have interest rate risk from changing interest rates related to our outstanding debt. Substantially all of our
debt is floating-rate debt based on LIBOR. A 100-basis point increase in market interest rates would have decreased
our fiscal 2008 net earnings per share by less than $0.01.