CarMax 2014 Annual Report Download - page 16

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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, Nominating and Governance, and Compensation and Personnel Committees.
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.
We operate in a highly competitive industry. Failure to develop and execute strategies to remain the nation’s
preferred retailer of used vehicles and to adapt to the increasing use of the Internet to market, buy and sell used
vehicles could adversely affect our business, sales and results of operations.
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. Competitors buy and sell
the same or similar makes of vehicles that we offer in the same or similar markets at competitive prices. New car
dealers in particular, including publicly-traded auto retailers, have increased their sales of used vehicles since the
recession. If this trend continues, it could result in increased acquisition costs for used vehicles and lower-than-
expected retail sales and margins.
Some of our competitors have recently announced plans for rapid expansion, including into markets with CarMax
locations. Some of our competitors have also borrowed or attempted to borrow portions of the consumer offer that
we pioneered when we opened our first used car superstore in 1993, including our use of low, no-haggle prices and
our commitment to buy a customer’s vehicle even if they do not purchase one from us. 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. This competitive activity could result in increased
acquisition costs for used vehicles and lower-than-expected retail 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 and online classified sites, 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 carmax.com to attract traffic. These companies could also make it more difficult for
CarMax otherwise to market its vehicles on-line (for example, by declining to list CarMax Quality Certified vehicles
as “certified” on their classified sites). This could have a material adverse effect on our business, sales and results of
operations.
The increasing use of the Internet to facilitate consumers’ sales or trade-ins of their current vehicles could have a
material adverse effect on our ability to source vehicles through our appraisal process, which in turn could have a
material adverse effect on our vehicle acquisition costs and results of operations. For example, certain websites
provide on-line appraisal tools to consumers that generate offers and facilitate purchases by dealers other than
CarMax. The popularity of these tools appears to be increasing.
In addition to the direct competition and increasing use of the Internet described above, there are companies that sell
software solutions to new and used car dealers to enable those dealers to, among other things, more efficiently