Katharine W. Kenny Vice President, Investor Relations European - - PowerPoint PPT Presentation

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Katharine W. Kenny Vice President, Investor Relations European - - PowerPoint PPT Presentation

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Katharine W. Kenny Vice President, Investor Relations European Investor Meetings May 2016 Forward-Looking Statements This presentation contains forward looking statements, which are subject to risks and uncertainties. Additional discussion

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Katharine W. Kenny

Vice President, Investor Relations

European Investor Meetings May 2016

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Forward-Looking Statements

This presentation contains forward‐looking statements, which are subject to risks and

  • uncertainties. Additional discussion of factors that

could cause actual results to differ materially from management’s projections and estimates is contained in the CarMax, Inc. SEC filings, including its Form 10‐K, for the year ended February 29, 2016. The company disclaims any intent or obligation to update its forward‐looking statements.

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Competitive Advantages

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  • Unique consumer offer
  • Competitively low, no‐haggle prices
  • Huge selection
  • Guaranteed quality
  • Transparent, low pressure sales process
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Competitive Advantages

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  • Well‐tested proprietary processes/systems
  • Proven adaptable to changing market conditions
  • Well‐trained, engaged associates
  • Award‐winning culture
  • Fortune’s “100 Best Companies to Work For” (12 yrs)
  • Training Magazine’s Top 125 (9 yrs)
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Current CarMax Locations

159 used car stores in 79 markets

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Compelling Growth Opportunity

  • Stores currently reach only 65% of population
  • Market share (age 0‐10 used vehicles):
  • Average 5% in existing markets
  • Less than 3% nationwide
  • First or second purchase cycle in many markets
  • Expansion and share gains will drive future growth
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Compelling Growth Opportunity

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Compelling Growth Opportunity

Large Markets: Small Format:

FY13: Denver ‐‐ FY14:

  • St. Louis

Harrisonburg, Va. Philadelphia Jackson, Tn. FY15: Cleveland Dothan, Al. Lynchburg, Va. Tupelo, Ms. FY16: Minneapolis Gainesville, Fla. Boston Tallahassee, Fla. Bloomington, Ill.

  • St. Louis, Mo. (fill‐in)

FY17: San Francisco Springfield, Ill. Bristol, Tn.

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Financial Summary

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10 year CAGR = 9.2% 10 year CAGR = 17.4%

$0 B $2 B $4 B $6 B $8 B $10 B $12 B $14 B $16 B

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Total Revenues

$0.61 $0.89 $0.80 $0.25 $1.24 $1.65 $1.79 $1.87 $2.16 $2.73 $3.03

$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Earnings per Diluted Share

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CarMax Business Model

*Percentages represent breakdown of gross profit dollars, including CAF income, excluding Other gross profit

  • Diversified gross profit base*:
  • Used
  • Wholesale
  • EPP
  • Finance
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Retail Used Vehicles

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CarMax is the largest retailer of used cars in the U.S., selling > 2x as many cars as the next largest retailer

$2,000 $2,050 $2,100 $2,150 $2,200 $2,250 $2,300

FY12 FY13 FY14 FY15 FY16

Used Gross Profit $ Per Unit

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Wholesale Vehicles

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CarMax has 67 auction locations and operates the third largest auction operation in the U.S.

317 K 325 K 343 K 376 K 394 K 200 K 250 K 300 K 350 K 400 K 450 K

FY12 FY13 FY14 FY15 FY16

Total Wholesale Units

$500 $750 $1,000 $1,250 $1,500

FY12 FY13 FY14 FY15 FY16

Wholesale Gross Profit $ Per Unit

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CarMax Auto Finance

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CAF is 8th largest originator of used cars loans in the U.S.

(1) Before provision for loan losses $262.2 $299.3 $336.2 $367.3 $392.0 $100 M $150 M $200 M $250 M $300 M $350 M $400 M

FY12 FY13 FY14 FY15 FY16

CAF Income

$4.7 $5.4 $6.6 $7.9 $9.1 $4 B $6 B $8 B $10 B

FY12 FY13 FY14 FY15 FY16

CAF Avg Managed Receivables

7.3% 7.4% 6.9% 6.5% 6.1% 4% 5% 6% 7% 8%

FY12 FY13 FY14 FY15 FY16

CAF Net Interest Margin (1)

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Stock Repurchase Program

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Cumulative total of 46.4 million shares, or 20% of outstanding share base, have been repurchased

5.8 6.9 17.5 16.3

0 M 5 M 10 M 15 M 20 M 25 M 180 M 190 M 200 M 210 M 220 M 230 M 240 M

FY12 FY13 FY14 FY15 FY16 Shares repurchased Weighted avg shares outstanding

Stock Repurchase Activity

Shares Repurchased Weighted Avg Diluted Shares

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Capital Structure

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(1) Debt includes finance and capital lease obligations and 8 times rent expense.

43.5% 46.8% 46.3% 40.5% 40.6% 40.0% 31.1% 24.3% 20.9% 18.7% 17.1% 24.0% 34.1%

0% 10% 20% 30% 40% 50% 60%

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Debt‐to‐Capital Ratio (1)

(excluding non‐recourse debt)

Targeted ratio is in the range of 35% to 45%

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  • April rollout of website redesign
  • Adaptive to all screen sizes
  • More personalized experience
  • Improved, high resolution pictures
  • Ability to schedule an appt, transfer/hold vehicles
  • Monthly payment estimates/calculator
  • Easier to build and display new features
  • CarMax Owner App
  • One place to store vehicle documents
  • Exclusive discounts

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Online Enhancements

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New Site Old Site

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  • Customer Experience
  • Ongoing testing
  • Home delivery
  • Online finance
  • Enhancing execution/reducing waste
  • Mobile appraisal tool for buyers
  • More efficient transportation system

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Continuous Improvement

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