CarMax Inc · NYSE:KMX

CarMax — Robert Baird European Investor Meetings May 2015

22 slides from CarMax's conference presentation, May 2015

1. Slide 1: Robert Baird European Investor Meetings

   Tom Folliard Katharine Kenny President and CEO Vice President, Investor Relations Robert Baird European Investor Meetings May 2015

2. Slide 2: Forward-Looking Statements

   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 filin

3. Slide 3: Agenda

   Agenda  Competitive advantages  Compelling growth opportunity  Financial summary  Focus areas 3

4. Slide 4: Competitive Advantages

   Competitive Advantages  Unique consumer offer  Competitively low, no-haggle prices  Huge selection  Guaranteed quality  Transparent, low pressure sales process 4

5. Slide 5: Competitive Advantages

   Competitive Advantages  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” (11 yrs) Training Magazine’s Top 125 5

6. Slide 6: Current CarMax Locations

   Current CarMax Locations 147 used car stores in 75 markets Existing markets, FY15 New markets opening in FY16 (Size of markers is based on number of stores in each market) 6

7. Slide 7: Compelling Growth Opportunity

   Compelling Growth Opportunity  Stores currently reach only 63% 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 7

8. Slide 8: Compelling Growth Opportunity

   Compelling Growth Opportunity Used Car Store Base 13 to 16 new 225 stores / yr 200 190 174 184 175 171 150 158 144 125 131 118 100 108 100 100 103 89 75 77 67 50 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 8

9. Slide 9: Compelling Growth Opportunity

   Compelling Growth Opportunity Large Market Entries: Fiscal 2013: Denver Fiscal 2014: St. Louis Philadelphia Fiscal 2015: Cleveland Fiscal 2016: Minneapolis / St. Paul Boston Beyond: San Francisco Seattle New York City 9

10. Slide 10: Financial Summary

    Financial Summary Total Revenues Earnings per Diluted Share $2.73 $16 B $3.00 $14 B $2.50 $2.16 $12 B $1.87 $1.79 $2.00 $1.65 $10 B $1.24 $8 B $1.50 $0.89 $6 B $0.80 $1.00 $0.61 $0.46 $4 B $0.25 $0.50 $2 B $0 B $0.00 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY05 FY06 FY07 FY08 FY09 FY1

11. Slide 11: Diversified Profit Base (FY15)

    Diversified Profit Base (FY15) Percentages represent breakdown of gross profit dollars, including CAF income 11

12. Slide 12: Retail Used Vehicles

    Retail Used Vehicles Total Retail Used Units Used Gross Profit $ Per Unit 600 K 582 K $2,300 550 K $2,250 527 K 500 K $2,200 448 K 450 K $2,150 408 K 396 K 400 K $2,100 350 K $2,050 300 K $2,000 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 CarMax is the largest retailer of used cars in the U.S.

13. Slide 13: Wholesale Vehicles

    Wholesale Vehicles Total Wholesale Units Wholesale Gross Profit $ Per Unit 400 K $1,500 376 K 350 K 343 K $1,250 325 K 317 K 300 K $1,000 263 K 250 K $750 200 K $500 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 With 62 auction locations, CarMax operates the second largest auction operation in t

14. Slide 14: CarMax Auto Finance

    CarMax Auto Finance CAF Income CAF Avg Managed Receivables $400 M $10 B $367.3 $7.9 $8 B $350 M $336.2 $6.6 $6 B $5.4 $299.3 $4.2 $4.7 $300 M $4 B $262.2 FY11 FY12 FY13 FY14 FY15 $250 M $220.0 CAF Net Interest Margin (1) 8% $200 M 7% 7.3% 7.4% $150 M 6.7% 6.9% 6% 6.5% $100 M 5% FY11 FY12 FY13 FY14 F

15. Slide 15: Stock Repurchase Program

    Stock Repurchase Program Stock Repurchase Activity Shares Repurchased Weighted Avg Diluted Shares 240 M 25 M Weighted avg shares outstanding 20 M Shares repurchased 230 M 17.5 15 M 220 M 10 M 6.9 5.8 210 M 5M 200 M 0M FY11 FY12 FY13 FY14 FY15 $2.4 billion remained available for repurchase at 2/28/15

16. Slide 16: Capital Structure

    Capital Structure Debt-to-Capital Ratio (1) (excluding non-recourse debt) 60% 50% 46.8% 46.3% 43.5% 40.5% 40.6% 40.0% 40% 31.1% 30% 24.3% 24.0% 20.9% 18.7% 20% 17.1% 10% 0% FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 (1) Debt includes finance and capital lease obligations and 8 times

17. Slide 17: Focus Areas

    Focus Areas  In-store experience  On-line experience  Optimize operations 17

18. Slide 18: In-Store Experience

    In-Store Experience  Store remodels  Approx 15 stores in FY16  In-store process enhancements 18

19. Slide 19: On-Line Experience

    On-Line Experience  Mobile app 19

20. Slide 20: On-Line Experience

    On-Line Experience  Recent carmax.com improvements  Online functionality: hold cars, set appointments, initiate transfers  Added high definition photos with zoom  Rolling out responsive design capability  FY15 website visits  Avg visits up 16% YOY to 14 Mill/mo  Mobile site / mobile apps = 3

21. Slide 21: Optimize Operations

    Optimize Operations  Grow stores efficiently  Enhance execution  Culture of continuous improvement 21

22. Slide 22: 22

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