CarMax 2012 Annual Report Download - page 10

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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:
x Our projected future sales growth, comparable store unit sales growth, margins, earnings, CarMax Auto Finance
income and earnings per share.
x Our expectations of factors that could affect CarMax Auto Finance income.
x Our expected future expenditures, cash needs and financing sources.
x The projected number, timing and cost of new store openings.
x Our sales and marketing plans.
x Our assessment of the potential outcome and financial impact of litigation and the potential impact of
unasserted claims.
x Our assessment of competitors and potential competitors.
x 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,” “outlook,” “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 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, Virginia.
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, Virginia. In 1997, Circuit City completed the initial public offering of a
tracking stock that 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,
publicly traded company.
CarMax Business. We are the nation’s largest retailer of used cars, based on the 408,080 used vehicles we retailed
during the fiscal year ended February 29, 2012. As of the end of fiscal 2012, we operated 108 used car superstores
in 53 metropolitan markets. In addition, we are one of the nation’s largest wholesale vehicle auction operators,
based on the 316,649 wholesale vehicles we sold through our on-site auctions in fiscal 2012.
We were the first used vehicle retailer to offer a large selection of high quality used vehicles at competitively low,
“no-haggle” prices using a customer-friendly sales process in an attractive, modern sales facility. The CarMax
consumer offer provides 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 customer benefits: low, no-haggle prices; a broad selection; high