CarMax 2013 Annual Report Download - page 16

customers are subject to federal truth-in-lending, consumer leasing, equal credit opportunity and fair credit reporting
laws and regulations, all of which are subject to enforcement by the federal Consumer Financial Protection Bureau
or Federal Trade Commission, as well as state and local motor vehicle finance, collection, repossession and
installment finance laws.
Claims arising out of actual or alleged violations of law could be asserted against us by individuals or governmental
authorities and could expose us to significant damages or other penalties, including revocation or suspension of the
licenses necessary to conduct business and fines.
Environmental Laws and Regulations. We are subject to a variety of federal, state and local laws and regulations
that pertain to the environment. Our business involves the use, handling and disposal of hazardous materials and
wastes, including motor oil, gasoline, solvents, lubricants, paints and other substances. We are subject to
compliance with regulations concerning the operation of underground and above-ground gasoline storage tanks,
gasoline dispensing equipment, above-ground oil tanks and automotive paint booths.
AVAILABILITY OF REPORTS AND OTHER INFORMATION
The following items are available free of charge through the “Corporate Governance” link on our investor
information home page at investor.carmax.com, shortly after we file them with, or furnish them to, the Securities
and Exchange Commission (the “SEC”): annual reports on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K, proxy statements on Schedule 14A, and any amendments to those reports. The following
documents are also available free of charge on our website: Corporate Governance Guidelines, Code of Business
Conduct, and the charters of the Audit Committee, Nominating and Governance Committee, and Compensation and
Personnel Committee. We publish any changes to these documents on our website. We also promptly disclose
reportable waivers of the Code of Business Conduct on our website. The contents of our website are not, however,
part of this report.
Printed copies of these documents are also available to any shareholder, without charge, upon written request to our
corporate secretary at the address set forth on the cover page of this report.
Item 1A. Risk Factors.
We are subject to a variety of risks, the most significant of which are described below. Our business, sales, results
of operations and financial condition could be materially adversely affected by any of these risks.
Economic Conditions. We are subject to changes in general or regional U.S. economic conditions, including, but
not limited to, consumer credit availability, consumer credit delinquency and loss rates, interest rates, gasoline
prices, inflation, personal discretionary spending levels, unemployment levels, the state of the housing market, and
consumer sentiment about the economy in general. The difficult U.S. economic environment over the past several
years has adversely affected the automotive retail industry in general, including CarMax. Any significant change or
further deterioration in economic conditions could adversely affect consumer demand or increase costs and have a
material adverse effect on our business, sales, results of operations and financial condition.
Competition. Automotive retailing is a highly competitive and highly fragmented business. Our competition
includes publicly and privately owned new and used car dealers, as well as millions of private individuals. Since we
sell vehicles that do not meet our retail standards through on-site wholesale auctions, our competition also includes
automotive wholesalers. Competitors buy and sell the same or similar makes of vehicles that we offer in the same or
similar markets at competitive prices. In addition, competitors who have franchise relationships with automotive
manufacturers brand certain used cars as “certified pre-owned,” which could provide those competitors with an
advantage over CarMax. New entrants to the automotive retail market, or new automotive wholesalers, could result
in increased acquisition costs for used vehicles and lower-than-expected retail and wholesale sales and margins.
The increasing use of the Internet to market, buy and sell used vehicles and to provide vehicle financing could have
a material adverse effect on our sales and results of operations. The increasing on-line availability of used vehicle
information, including pricing information, could make it more difficult for us to differentiate our customer offering
from competitors’ offerings, could result in lower-than-expected retail margins, and could have a material adverse
effect on our business, sales and results of operations. In addition, our competitive standing is affected by
companies, including search engines such as Google, Bing and Yahoo! and online classified sites such as
AutoTrader.com and cars.com, that are not direct competitors but that may direct on-line traffic to the websites of
competing automotive retailers. The increasing activities of these companies could make it more difficult for
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