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Lehman Brothers 11 th Annual Retail and Restaurant Conference April 29, 2008

Lehman Brothers 11 th Annual Retail and Restaurant Conference April 29, 2008 Katharine W. Kenny Assistant Vice President, Investor Relations. Forward-Looking Statements.

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Lehman Brothers 11 th Annual Retail and Restaurant Conference April 29, 2008

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  1. Lehman Brothers 11th Annual Retail and Restaurant Conference April 29, 2008 Katharine W. KennyAssistant Vice President, Investor Relations

  2. 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. The Company disclaims any intent or obligation to update its forward-looking statements.

  3. The CarMax Story • Largest used car retailer in the U.S. • Unmatched consumer offer • Competitively low, no-haggle prices • Huge selection • Guaranteed quality • Customer-friendly sales processes • Unique culture • Diversified profit base

  4. Largest Used Car Retailer in the U.S. • CarMax currently has: • 93 used car superstores • 42 markets • In FYE 02/29/08 CarMax sold: • 377,244 used vehicles • 222,406 wholesale vehicles

  5. Unique Culture • Ethical, experienced management and well trained, engaged associates • Fortune’s “100 Best Companies to Work For” 4 consecutive years • 2008 International Torch Award for Marketplace Excellence by the Council of Better Business Bureaus • 2008 Training Magazine “Top 125”

  6. Low Associate Turnover • Less than 10% for managers and senior managers • Less than 20% for President’s Club sales associates

  7. Diversified Profit Base (FYE 2/29/08) Percentages represent breakdown of gross profit dollars, including CarMax Auto Finance income

  8. Strong Results Net Earnings* Revenues Superstores $ in millions $ in millions $8,199 89 $182 $90 $3,970 40 5 yr CAGR = 17% 5 yr CAGR = 15% 5 yr CAGR = 15% * Prior years restated for SFAS 123R

  9. Growth Opportunity • 15% planned annual increase in store base • 4% to 8% expected long-term used unit comp growth

  10. Growth Opportunity • Present in markets representing ≈ 43% of U.S. population • 5 year average used unit comps: • CarMax +6% • Public new car dealers (avg) (2)%

  11. Growth Opportunity • carmax.com (provide more sales leads and speed the sales process) • Future margin improvement (impacted by cost reduction initiatives and SG&A leverage) • New formats, including micro-stores and car-buying centers

  12. Consumer Offer Purchasing/ Inventory Management Finance Originations Reconditioning Competitive Advantages Well-tested Proprietary Processes & Systems

  13. Competitive Advantages Scale Efficiencies • Sell more used cars per store • CarMax 417/month • Public new car dealers (avg) 50/month • 25,000+ used vehicles in nationwide inventory • Customer transfers represent ≈ 25% of sales • carmax.com and marketing efficiencies • 70% of customers visit website first

  14. Competitive Advantages carmax.com (original search capability)

  15. Competitive Advantages carmax.com (with new search capability)

  16. Competitive Advantages CarMax Auto Finance • Reduces reliance on 3rd party lenders • Provides opportunity to innovate and drive incremental sales • Generates attractive economic returns

  17. Fiscal 2008 Financial Results • Fiscal year negatively impacted by weak economy and credit market turmoil • 3% used unit comps reflect strength of CarMax model • Lower earnings primarily a result of CAF higher funding costs and retained interest adjustments

  18. Why CarMax? A unique and sustainable retail growth story with defensible competitive advantages • Used car focus, with diversified profit base • Unique consumer offer • Process and systems driven • Organic growth opportunity

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