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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended February 29, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from_________ to _________
Commission File No.: 1-5767
CIRCUIT CITY STORES, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 54-0493875
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9950 Mayland Drive
Richmond, Virginia 23233
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (804) 527-4000
Securities registered pursuant to Section 12(b)of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, Par Value $0.50 per share New York Stock Exchange
Rights to Purchase Preferred Stock,
Series E, Par Value $20.00 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No ___
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [|X|].
Indicate by check mark whether the Registrant is an accelerated filer
(as defined in Exchange Act Rule 12b-2). Yes |X| No ___
The aggregate market value of the Registrant's common shares held by
non-affiliates as of August 29, 2003, which was the last business day of the
Registrant's most recently completed second fiscal quarter, was $2,184,740,830
based upon the closing price of these shares as reported by the New York Stock
Exchange on that date.
On April 30, 2004, the company had outstanding 198,784,226 shares of
common stock.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by reference in
Parts I, II, III and IV of this Annual Report on Form 10-K: (1) pages 12 through
43 of the company's Annual Report for the fiscal year ended February 29, 2004,
(Parts I, II and IV) and (2) "Item One - Election of Directors," "Beneficial
Ownership of Securities," "Certain Information Concerning the Board of Directors
and Its Committees," "Executive Compensation," "Equity Compensation Plans
Information," "Employment Agreements and Change-In-Control Arrangements,"
"Compensation of Directors," "Section 16(a) Beneficial Ownership Reporting
Compliance" and "Item Four - Ratification of Appointment of Independent
Auditors" in the company's Definitive Proxy Statement dated May 7, 2004,
furnished to shareholders of the company in connection with the 2004 Annual
Meeting of Shareholders (Part III).
TABLE OF CONTENTS
Item Page
PART I
1. Business......................................................................................................... 3
2. Properties........................................................................................................ 9
3. Legal Proceedings................................................................................................. 10
4. Submission of Matters to a Vote of Security Holders............................................................... 10
Executive Officers of the Company................................................................................. 10
PART II
5. Market for the Company's Common Equity and Related Shareholder Matters............................................ 12
6. Selected Financial Data........................................................................................... 12
7. Management's Discussion and Analysis of Results of Operations and Financial Condition............................. 12
7A. Quantitative and Qualitative Disclosures about Market Risk........................................................ 12
8. Financial Statements and Supplementary Data....................................................................... 12
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.............................. 12
9A. Controls and Procedures........................................................................................... 12
PART III
10. Directors and Executive Officers of the Company................................................................... 12
11. Executive Compensation............................................................................................ 13
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.................... 13
13. Certain Relationships and Related Transactions.................................................................... 13
14. Principal Accountant Fees and Services............................................................................ 13
PART IV
15. Exhibits, Financial Statement Schedules and Reports on Form 8-K................................................... 14
Signatures....................................................................................................... 15
Schedule II....................................................................................................... S-1
Independent Auditors' Report on Financial Statement Schedule...................................................... S-2
Exhibit Index..................................................................................................... EI-1
Page 2 of 16
PART I
Item 1. Business
Circuit City Stores, Inc. was incorporated under the laws of the
Commonwealth of Virginia in 1949. Its corporate headquarters are located at 9950
Mayland Drive, Richmond, Va. Its retail operation consists of Circuit City
Superstores and mall-based Circuit City stores. The Company has a private-label
finance operation including a wholly owned credit card bank, First North
American National Bank, that provides consumer revolving credit.
The company's Web site address is www.circuitcity.com. The company
makes available, free of charge through its Web site, its Annual Report on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any
amendments to those reports as soon as practicable after electronically filing
the material with or furnishing the material to the Securities and Exchange
Commission.
Proposed Acquisition. On April 13, 2004, the company commenced a tender
offer to acquire all outstanding common shares of InterTAN, Inc., a leading
consumer electronics retailer of both private-label and internationally branded
products headquartered in Barrie, Ontario. The tender offer is conditioned upon
at least a majority of the fully diluted shares being tendered. If successful,
the tender offer will be followed by a merger in which the holders of the
remaining outstanding shares of InterTAN common stock will receive $14 per share
in cash. The transaction is contingent upon customary closing conditions,
including regulatory and other standard approvals. The company expects the cost
of this acquisition, including estimated transaction costs, will be
approximately $300 million.
Upon completion of the tender offer, which is expected in the second
calendar quarter of 2004, InterTAN will become a subsidiary of the company.
Capital Structure. From February 7, 1997, to October 1, 2002, the
common stock of Circuit City Stores, Inc. consisted of two common stock series
that were intended to reflect the performance of the company's two businesses
during that period. The Circuit City Group common stock was intended to reflect
the performance of the Circuit City consumer electronics stores and related
operations and the shares of CarMax Group common stock reserved for the Circuit
City Group or for issuance to holders of Circuit City Group common stock. The
CarMax Group common stock was intended to reflect the performance of the CarMax
auto superstores and related operations.
Effective October 1, 2002, the CarMax auto superstore business was
separated from the Circuit City consumer electronics business through a tax-free
transaction in which CarMax, Inc., formerly a wholly owned subsidiary of Circuit
City Stores, Inc., became an independent, separately traded public company.
Following the separation, the Circuit City Group common stock was renamed
Circuit City common stock. See "Discontinued Operations" for additional
information.
General. Circuit City is a leading national retailer of brand-name
consumer electronics, personal computers and entertainment software. It sells
o video equipment, including televisions, digital satellite systems, DVD
players, video cassette recorders, camcorders and cameras;
o audio equipment, including home and portable audio systems;
o mobile electronics, including car audio, video and security systems;
o home office products, including personal computers, printers,
peripherals, software and facsimile machines;
o entertainment software, including video games, DVD movies and music;
and
o other consumer electronics products, including wireless phones, corded
and cordless phones and accessories.
Merchandise lines vary by location based on store size and market
characteristics. Most merchandise is supplied directly to the stores by regional
warehouse distribution facilities.
Through Digital Video Express, 75 percent of which was owned by the
company, Circuit City developed a new digital video system for watching movies
at home. Divx was primarily engaged in the business of licensing this technology
and replicating and distributing specially encrypted DVDs at wholesale. Circuit
City was allocated 100 percent of Divx's losses from Divx's inception. The Divx
business was discontinued in fiscal 2000. See "Discontinued Operations" for
additional information.
Expansion and Revitalization. At April 30, 2004, Circuit City operated
607 retail locations throughout the United States. Circuit City has established
its presence in virtually all of the nation's top 100 markets. In fiscal 2003,
the company
Page 3 of 16
undertook an analysis of its existing store base and identified specific
characteristics that help create a successful store. A key characteristic
identified was store location, including such factors as its proximity to
specific retailers, ease of access and consumer electronics purchasing power in
the trade area. When a store's sales are not at the level the company believes
the trade area can support and analysis indicates that the primary contributing
factor to the underperformance is the location, the company will attempt to
strategically relocate the store to a more vibrant and convenient location.
Circuit City relocated 18 Superstores in fiscal 2004. In fiscal 2005, the
company plans to open 60 to 70 Superstores, with a relatively even split between
new stores and relocations. In February 2004, the company closed 19
underperforming Superstores.
Recognizing the continual evolution of consumer shopping preferences,
four years ago the company created new store designs in-step with today's
consumer. Last year the company updated the new store designs. New stores have a
brighter, more contemporary look and an open, easily navigable floor plan
conducive to browsing. The company has improved product adjacencies so that
customers can not only better compare features and benefits across product
categories, but also can shop for related accessories and peripherals in
convenient proximity. Shopping carts, baskets and cash register checkouts at the
front of the store add to the convenience of the growing level of take-with
products in the stores. Standardized fixtures accommodate more take-with
selections and provide greater flexibility to adapt to future changes in Circuit
City's product selection.
At the same time, the company has focused on opportunities to upgrade
and improve the existing store base. In fiscal 2004, the company refixtured 222
Superstores. The more flexible fixtures will facilitate the introduction of new
products, as well as other assortment adjustments in store merchandise displays.
At April 30, 2004, 134 Superstores, or 22 percent of the 602
Superstores had been fully remodeled, relocated or newly constructed since the
beginning of fiscal 2001.
Merchandising. Each Circuit City store location follows detailed
operating procedures and merchandising programs, including procedures for
inventory maintenance, customer relations, store administration, merchandise
display, store security and the demonstration and sale of products. Most
merchandise is supplied directly to the stores from one of Circuit City's eight
automated distribution centers, which are strategically located around the
country, and from a centrally located automated software entertainment
distribution center. Merchandise mix and displays are controlled centrally to
help ensure a high level of consistency among the stores. Merchandise pricing
can vary by market to reflect local competitive conditions. Circuit City uses a
centralized buying organization. The central buying staff reduces costs by
purchasing in large volumes and structuring a sound basic merchandising program.
Circuit City's merchandising strategy emphasizes a broad selection of products,
including the industry's newest technologies, and a wide range of prices. To
improve the company's competitive position, Circuit City has initiated efforts
to source more product directly from overseas manufacturers, which enables the
company to lower product acquisition costs and to increase product
differentiation. During fiscal 2004, Circuit City began to introduce its own
unique merchandise brands, including Liquid Video, Verge and esa, tailored to
specific needs within a broad consumer base. These products supplement one of
the best selections of name-brand products in the consumer electronics industry.
Suppliers. During fiscal 2004, Circuit City's 10 largest suppliers
accounted for approximately 56 percent of merchandise purchased. Circuit City's
major suppliers include Sony Corporation; Hewlett Packard; Panasonic; Toshiba;
Samsung Electronics America, Inc.; Hitachi America LTD; Thomson Multimedia,
Inc.; eMachines, Inc.; Canon U.S.A., Inc.; and Apex Digital, Inc. Brand-name
advertised products are sold by all Circuit City retail locations. The company
also offers exclusive, private-label merchandise brands that are sourced by the
company directly from the manufacturers. Circuit City has no significant
long-term contracts for the purchase of merchandise.
Advertising. Circuit City's business relies on considerable amounts of
advertising to maintain high levels of consumer awareness. Advertising
expenditures from continuing operations were 3.3 percent of net sales and
operating revenues in fiscal 2004, 3.5 percent in fiscal 2003 and 3.8 percent in
fiscal 2002. Circuit City uses multi-page newspaper advertisements, network and
cable television advertising, magazine advertising, direct mail and interactive
media. The multi-page newspaper advertisements provide an extensive presentation
of the range of consumer electronics products sold at Circuit City stores and
generally feature products at highly competitive prices. Circuit City is
generally one of the larger newspaper advertisers in markets that it serves.
Television and magazine advertising focuses on promoting great values on
products and new software releases as well as differentiating elements in the
service offering such as the Web site's Express Pickup feature.
Competition. The consumer electronics industry is highly competitive.
Circuit City's competitors include large specialty, discount and warehouse
retailers as well as local, regional and Internet-based retailers. As part of
its competitive strategy, Circuit City offers competitive prices on the
merchandise stocked in its stores and offered on its Web site. Customers who
order on the Web and pick up their product at the store using the Express Pickup
feature automatically receive the lower of the Web price or the in-store price.
Circuit City distinguishes its stores from those of the competition by
offering a broad and, in some cases, unique merchandise assortment, delivering
outstanding customer service and providing the convenience of a one-stop
shopping solution for consumers. The company's merchandise assortment includes
new technologies and great values and is dynamic, responding to changes in the
industry's product trends. To keep pace with rapidly changing technologies, the
company's most
Page 4 of 16
recent store designs feature flexible displays to accommodate new product
offerings. In addition to offering one of the best selections of name-brand
products in the industry, Circuit City offers its own private-label merchandise
brands. Products carrying these brand names are available exclusively at Circuit
City. Product specialists, trained using comprehensive online training courses;
convenient credit options; home delivery and home installation; and onsite
installation centers for automotive electronics all demonstrate Circuit City's
strong commitment to customer service.
Customer Satisfaction. Circuit City conducts market research to improve
its understanding of what its customers want and expect. Market research
techniques used include focus groups, online surveys, telephone interviews, exit
interviews and "mystery shopping," in which a professional mystery shopper acts
as a customer to evaluate customer service performance. This feedback enables
management to identify issues that need to be addressed, helping the company's
stores and Associates remain focused on providing outstanding customer service.
Employees/Training. At April 30, 2004, the company had 42,258 hourly
and salaried employees. In February 2003, the company changed from a dual pay
structure, which included both commission and hourly pay, for the sales force to
a single hourly pay structure. Circuit City Superstores are typically staffed
with
o sales support personnel such as customer service associates,
product specialists and stockpersons;
o two or more sales managers;
o an operations manager or assistant store director; and
o a store director.
None of these employees are subject to a collective bargaining agreement.
Additional personnel may be employed during peak selling seasons. In fiscal
2004, the company outsourced the applicant screening process and reduced the
time to hire a new store Associate by more than 50 percent and thus
significantly decreased the time required to complete seasonal hiring.
Store Associates receive periodic training delivered by customized
Web-based interactive courses, supported with in-store mentoring. Courses
include product knowledge with an emphasis on new technology, customer service
and store operations. Associates also receive online tutoring with links to
vendor Web sites for additional resources. In fiscal 2003, Circuit City adopted
a certification program for product specialists to establish minimum proficiency
levels and measure each product specialist's product knowledge and customer
service skills. Management training programs are designed to prepare future
leaders and include Web-based training, in-store activities, online tutoring and
classroom instruction.
Consumer Credit. The company's business is affected by consumer credit
availability, which varies with a number of factors, including the state of the
economy and the location of a particular store. In order to provide its
customers with more credit options, in fiscal 1991, the company established
FNANB, a federally chartered limited purpose credit card bank that is wholly
owned by the company.
From 1990 to June 2002, FNANB issued a private-label credit card, which
was a credit card that only could be used to purchase merchandise and services
from the company. In June 2002, in connection with the launch of a co-branded
Visa(R) credit card, FNANB stopped issuing new private-label credit accounts;
however, existing private-label accounts remained in place. The co-branded Visa
credit card, referred to as the Circuit City Plus(TM) card, bears both the
Circuit City and Visa names and is accepted not only at the company's stores and
Web site, but also worldwide wherever Visa credit cards are accepted. FNANB's
credit extension, customer service and collection operations are fully automated
with state-of-the-art technology to maintain a high level of customer service.
The receivables generated by FNANB's credit card program are financed
through asset securitization programs. For additional discussion of these
programs, see "Off-Balance-Sheet Arrangements" on page 23 and Note 6 to the
consolidated financial statements on pages 34 and 35 of the company's 2004
Annual Report, which is incorporated in this item by reference.
From 1994 to June 2002, FNANB issued Visa credit cards that did not
bear the Circuit City name. Those Visa credit cards and a small number of
previously issued MasterCard(R) accounts were serviced by FNANB. In November
2003, the company completed the sale of its bankcard finance operation to
FleetBoston Financial. The sale agreement includes a transition services
agreement under which employees of the bankcard operation continued to service
the bankcard accounts until final conversion to FleetBoston's system, which
occurred in April 2004. Results from the company's bankcard finance operation
are presented as discontinued operations. See "Discontinued Operations" for
additional discussion.
On January 20, 2004, the company announced that it has agreed to sell
its private-label finance operation, including both its private-label Circuit
City credit card accounts and its co-branded Circuit City Plus Visa credit card
accounts, to Bank One Corporation for the par value of the receivables. The sale
is expected to close in the second calendar quarter of 2004. The company also
has entered into an ongoing arrangement under which Bank One would offer
private-label and co-branded credit cards to both new and existing customers.
Bank One will compensate Circuit City for each new account opened and provide
special financing terms for Circuit City customers.
Page 5 of 16
FNANB is regulated and supervised by the Office of the Comptroller of
the Currency. OCC regulations require, among other things, examination by the
OCC of FNANB's underwriting policies and procedures and compliance with certain
capital and earnings adequacy requirements. In addition, FNANB is required to
comply with both state and federal consumer protection laws including the Equal
Credit Opportunity Act, Fair Credit Reporting Act, Fair Debt Collection
Practices Act, Gramm-Leach-Bliley Act, Truth-in-Lending Act and USA PATRIOT Act.
In connection with the announced sale of the private-label finance
operation to Bank One, we plan to relinquish the FNANB national bank charter. As
part of the statutory liquidation process, we will assume all of FNANB's
remaining obligations and our equity investment in FNANB will be returned to us
for general corporate purposes through a final liquidating dividend and
distribution of the remaining assets of FNANB. As a result, our capital support
obligations with respect to FNANB will be terminated. We expect to complete the
liquidation process during the third quarter of fiscal 2005.
Systems. Circuit City's in-store point-of-sale system maintains an
online record of all transactions and allows management to track performance by
region, store and individual store Associate. The information gathered by the
system supports automatic replenishment of in-store inventory from the regional
distribution centers and is incorporated into product buying decisions. The POS
system is interfaced with FNANB's credit approval system. After completion of
the sale of the private-label finance operation to Bank One, the POS system will
continue to be interfaced with the credit approval system through Bank One. The
in-store POS system also is seamlessly integrated with the company's e-commerce
Web site. This integration provides the capability for in-store pickup of
merchandise ordered from the Internet and allows for in-store ordering of
merchandise for shipment directly to the customer's home. In the stores,
electronic signature capture for all credit card purchases, automatic printing
of manufacturers' rebates, bar-code scanning for product returns and repairs,
automatic price tag printing for price changes and computerized home delivery
scheduling enhance Circuit City's customer service. These enhancements eliminate
time-consuming administrative tasks for store Associates and reduce costs
through smoother store-level execution. At in-store kiosks, the POS system also
allows customers to sign up for high speed Internet service. The POS system also
is directly integrated with the registration systems of major Internet service
providers, such as America Online, allowing in-store registration for the
interactive services to be completed in approximately five minutes. In addition,
real time service plan activations with Verizon and T-Mobile, in conjunction
with mobile/wireless phone sales, have streamlined the full service customer
experience.
Circuit City's Customer Service Information System maintains an online
history of customer purchases and enables store Associates to better assist
customers with purchases by ensuring that new products can be integrated with
existing products in the home. This system also facilitates product returns and
repairs.
The company also utilizes comprehensive, Web-based training systems to
enhance the product knowledge of in-store Associates.
Circuit City Direct. Circuit City's direct-to-consumer business
continues to grow rapidly by leveraging the company's three channels of
business: Web, stores and telephone. The company's Web site provides customers
with
o a wide selection of over 400,000 consumer electronic and
entertainment products;
o more than 125,000 customer ratings and reviews on products;
o in-depth product and technology information; and
o around-the-clock customer service via telephone, live chat and email.
Circuit City Direct has a highly integrated multi-channel business model,
allowing customers to shop freely across its channels.
o Orders can be placed on circuitcity.com or by calling 1-800-THE-CITY.
o Delivery options include home shipment, store pick-up at all
Superstores, or home delivery for big screen televisions.
o The Web site can be used to check inventory status on-line as well as
at any Circuit City Superstore - a time-saver for customers.
o Products purchased on the Web site can be exchanged or returned via
mail or to any store.
Circuitcity.com's superior customer experience has been recognized by
being one of only seven retailers to win the BizRate.com Circle of Excellence
Award for three consecutive years.
In April 2004, Circuit City Direct expanded its online presence through
the acquisition of the assets of MusicNow, a leading digital music platform.
Circuit City will integrate MusicNow's platform into circuitcity.com as well as
its stores. Additionally, MusicNow will retain its own brand and will continue
to execute on its strategy of empowering third parties to launch digital music
services, including music download and subscription services.
Page 6 of 16
Distribution. As of April 30, 2004, Circuit City operated seven
automated regional electronics distribution centers, each designed to serve
stores within a 500-mile range. These centers use conveyor systems and laser
bar-code scanners to reduce labor requirements, prevent inventory damage and
maintain inventory control. Circuit City also operates one smaller automated
distribution center that primarily handles larger non-conveyable electronics
products. Circuit City believes that for most merchandise the use of the
distribution centers enables it to efficiently distribute a broad selection of
merchandise to its stores, reduce inventory requirements at individual stores,
benefit from volume purchasing and maintain accounting control. Circuit City
also operates an automated centralized entertainment software distribution
center that serves all stores and an import consolidation center that supports
the company's distribution network.
Service Contracts. Circuit City offers service contract coverage for
most of the products purchased at Circuit City stores and on the company's Web
site through its Cityadvantage Protection Plans. The Cityadvantage Protection
Plan for Home and Car Electronics provides protection for televisions and
certain other home and car audio and video products beyond the standard
manufacturer's warranty, with benefits that include
o coverage terms up to five years;
o a nationwide service network;
o repair or replacement service,including in-home service on certain
products; and
o coverage against power surges, which is typically excluded from
manufacturers' warranty coverage.
The Cityadvantage Protection Plan for Computer Products provides
protection for certain computer products, with benefits similar to the
Cityadvantage Protection Plan for Home and Car Electronics. The Cityadvantage
Protection Plan for Small/Portable Electronics provides protection for certain
smaller electronics products, with the additional benefit that permits customers
to return their defective merchandise during the plan period and receive a
Circuit City gift card for the original purchase price of the merchandise.
Circuit City administers the Cityadvantage Protection Plans for Home
and Car Electronics and for Small/Portable Electronics. Service is provided by
Circuit City or its contractors. Service under the Cityadvantage Protection Plan
for Computer Products is provided and administered by GE-Zurich Warranty
Management, Inc. or its contractors. Reputable insurance companies insure the
obligations under these plans. Affiliates of the insurance companies are the
obligors except in the one state in which Circuit City is required to serve as
obligor.
Product Service. Circuit City offers repair service as a
manufacturer-authorized service provider for most of the products purchased at
Circuit City stores and on the company's Web site, both during and after the
manufacturer's warranty period. As of April 30, 2004, Circuit City had five
regional service facilities. To meet customer needs, merchandise that requires
service is shipped from the stores to the nearest regional service facility.
Repaired merchandise is typically returned to the store for customer pickup or
in some circumstances is shipped directly to the customer's home. Circuit City
also has a network of in-home technicians who service large items not
conveniently carried into the store. In certain situations, Circuit City also
may assist customers with shipping defective products directly to the
manufacturer for repair during the manufacturer's warranty period.
Seasonality. Like many retail businesses, Circuit City's sales are
greater in the fourth quarter of the fiscal year than in other periods of the
fiscal year because of holiday buying patterns. A corresponding pre-season
inventory build-up during the third fiscal quarter is associated with this sales
volume. This increased sales volume results in a lower ratio of fixed costs to
sales and, typically, a higher ratio of net earnings to sales in the fourth
fiscal quarter. Circuit City's net sales and operating revenues from continuing
operations for the fourth fiscal quarter, which includes the holiday season,
were $3.25 billion in fiscal 2004; $3.19 billion in fiscal 2003; and $3.36
billion in fiscal 2002. Fourth quarter sales represented approximately 33
percent of net sales and operating revenues in fiscal 2004, 32 percent in fiscal
2003 and 35 percent in fiscal 2002.
Discontinued Operations.
(A) Bankcard Operation: On November 18, 2003, the company completed the
sale of its bankcard finance operation to FleetBoston Financial. The sale
agreement includes a transition services agreement under which the company's
finance operation continued to service the bankcard accounts until final
conversion, which occurred in April 2004. FleetBoston Financial reimbursed the
company for operating costs incurred during the transition period.
For fiscal 2004, the after-tax loss from the discontinued bankcard
operation totaled $90.0 million. Net earnings from the discontinued bankcard
operation were $25.6 million in fiscal 2003 and $42.9 million in fiscal 2002.
(B) CarMax: On October 1, 2002, the CarMax auto superstore business was
separated from the Circuit City consumer electronics business, and CarMax, Inc.
became an independent, separately traded public company. Each outstanding share
of CarMax Group common stock was redeemed in exchange for one share of CarMax,
Inc. common stock. In addition, each holder of Circuit City Group common stock
received as a tax-free distribution 0.313879 of a share of CarMax, Inc. common
Page 7 of 16
stock for each share of Circuit City Group common stock owned as of September
16, 2002, the record date for the distribution. Following the separation, the
Circuit City Group common stock was renamed Circuit City common stock. CarMax
results are presented as results from discontinued operations on the
consolidated statements of operations. The company recorded no gain or loss as a
result of the separation.
With the separation, CarMax paid a special dividend of $28.4 million to
Circuit City Stores, Inc. in recognition of the company's continuing contingent
liability on leases related to 23 CarMax locations. The discontinued CarMax
operations had no impact on the net earnings of the company for fiscal 2004. Net
earnings from the discontinued CarMax operations were $62.0 million for fiscal
2003, representing CarMax results for the seven months prior to the separation
date. Net earnings from the discontinued CarMax operations were $89.5 million in
fiscal 2002. CarMax results have been restated to reflect the adoption of
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," as amended by SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure."
(C) Divx: On June 16, 1999, Digital Video Express announced that it
would cease marketing the Divx home video system and discontinue operations. The
provision for commitments under licensing agreements was reduced $2.3 million in
fiscal 2004, reducing accrued expenses and other current liabilities related to
the former Divx operations to $5.6 million on the consolidated balance sheet at
February 29, 2004. This reduction benefited the fiscal 2004 net loss from
discontinued operations by $1.5 million. Payments of $10.5 million were made
during fiscal 2003, reducing accrued expenses and other current liabilities
related to the former Divx operations to $8.0 million on the consolidated
balance sheet at February 28, 2003. The discontinued Divx operations had no
impact on the net earnings of the company for fiscal 2003 and fiscal 2002. As of
February 29, 2004, entities comprising the discontinued Divx operations had been
dissolved. The remaining Divx liabilities have been assumed by the company and
are included on the consolidated balance sheet.
Page 8 of 16
Item 2. Properties
At April 30, 2004, Circuit City's retail operations were conducted in
607 locations, including 602 Superstores and five mall-based stores.
The following table summarizes the company's retail units as of April
30, 2004:
Mall-based
Superstores Stores Total
----------- ---------- -----
Alabama 7 - 7
Arizona 11 - 11
Arkansas 3 - 3
California 83 - 83
Colorado 12 - 12
Connecticut 7 - 7
Delaware 2 - 2
Florida 43 - 43
Georgia 21 1 22
Hawaii 1 - 1
Idaho 2 - 2
Illinois 34 - 34
Indiana 13 - 13
Kansas 4 - 4
Kentucky 7 - 7
Louisiana 9 - 9
Maine 2 - 2
Maryland 17 - 17
Massachusetts 16 1 17
Michigan 24 - 24
Minnesota 8 1 9
Mississippi 4 - 4
Missouri 11 - 11
Nebraska 1 - 1
Nevada 5 - 5
New Hampshire 5 - 5
New Jersey 17 - 17
New Mexico 1 - 1
New York 30 - 30
North Carolina 18 1 19
Ohio 25 - 25
Oklahoma 4 - 4
Oregon 7 - 7
Pennsylvania 26 - 26
Rhode Island 1 - 1
South Carolina 8 - 8
Tennessee 13 - 13
Texas 46 - 46
Utah 5 - 5
Vermont 1 - 1
Virginia 24 1 25
Washington 11 - 11
West Virginia 4 - 4
Wisconsin 8 - 8
Wyoming 1 - 1
----------------------------
602 5 607
===========================
Of the stores open at April 30, 2004, the company owns five stores and
leases the remaining stores.
Page 9 of 16
Of the company's nine distribution centers, seven are leased. The
company owns a 388,000-square-foot consumer electronics distribution center in
Doswell, Va., which has been financed with Industrial Development Revenue Bonds.
For information with respect to these bonds, see Note 9 to the consolidated
financial statements on pages 35 and 36 of the company's 2004 Annual Report,
which is incorporated in this item by reference. The company leases the import
consolidation center that supports the company's distribution network.
The company owns one of its five service centers. In addition, the
company owns most of the land, but leases two of the three buildings, for its
corporate headquarters. The company leases space for all warehouse, service and
office facilities except for the aforementioned properties.
For information regarding the company's obligations under the leases
for its retail units, distribution centers, repair centers and other facilities,
see Note 11 to the consolidated financial statements on page 37 of the company's
2004 Annual Report, which is incorporated herein by reference.
Item 3. Legal Proceedings
In the normal course of business, the company is involved in various
legal proceedings. Based upon the company's evaluation of the information
presently available, management believes that the ultimate resolution of any
such proceedings will not have a material adverse effect on the company's
financial position, liquidity or results of operations.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year ended February 29, 2004.
Executive Officers of the Company
The following table identifies the executive officers of the company at
April 30, 2004. The company is not aware of any family relationship between any
executive officers of the company or any executive officer and any director of
the company. The executive officers are generally elected annually and serve for
one year or until their successors are elected. The next general election of
officers is expected to occur in June 2004. Business experience for the past
five years is provided in accordance with SEC rules.
Name Age Office
---- --- ------
W.Alan McCollough 54 Chairman, President and
Chief Executive Officer
Executive
John W. Froman 50 Executive Vice President
Chief Operating Officer
Michael E. Foss 46 Senior Vice President
Chief Financial Officer
Ronald E. Baime 42 Senior Vice President
General Merchandise Manager
Dennis J. Bowman 50 Senior Vice President
Strategic Sourcing and Inventory
Planning/Replenishment
W.Stephen Cannon 52 Senior Vice President
General Counsel and Secretary
George D. Clark, Jr. 42 Senior Vice President
Eastern Division President
William C. Denney 47 Senior Vice President
General Merchandise Manager
Fiona P. Dias 38 Senior Vice President
President Circuit City Direct
Philip J. Dunn 51 Senior Vice President,
Treasurer and Controller
Page 10 of 16
Gary M. Mierenfeld 52 Senior Vice President
Store Development, Procurement,
Distribution and Service
Douglas T. Moore 47 Senior Vice President
Western Division President
Ernest V. Speranza 58 Senior Vice President
Chief Marketing Officer
Jeffrey S. Wells 58 Senior Vice President
Human Resources and Training
Mr. McCollough is Chairman of the Board and a member of the Board's
executive committee. He joined the company in 1987 as general manager of
corporate operations. He was elected assistant vice president in 1989, vice
president and Central Division president in 1991, senior vice president -
merchandising in 1994, president and chief operating officer in 1997, chief
executive officer in 2000 and chairman of the board in 2002.
Mr. Froman joined the company in 1986 as a store manager and general
manager in training. In 1989, he was promoted to general manager and named
assistant vice president. He was promoted to director of corporate operations in
1990 and in 1992 added the title of vice president. He was elected Central
Division president in 1994, named senior vice president - merchandising in 1997
and was promoted to executive vice president in 2000. He was named chief
operating officer in 2001.
Mr. Foss joined the company in June 2003 as senior vice president and
chief financial officer. Before joining the company, he was executive vice
president of corporate/business development for TeleTech Holdings Inc., a global
provider of customer management solutions for large companies, from 2001 to
2003; president of TeleTech Companies Group, an operating division of TeleTech
Holdings, Inc., from 2000 to 2001; and executive vice president and chief
financial officer of TeleTech Holdings and president of TeleTech Companies Group
from 1999 to 2000.
Mr. Baime joined the company in 2002 as vice president - general
merchandise manger. He was named senior vice president in 2003. Before joining
the company, he was vice president of music for the Musicland Group at Best Buy,
a specialty retailer of consumer electronics, home office products,
entertainment software and appliances, from 2001 to 2002 and senior vice
president of e-commerce and vice president merchandising for Kohl's Department
Stores, which operates specialty department stores nationwide, from 1997 to
2001.
Mr. Bowman joined the company in 1996 as vice president and chief
information officer. He was elected senior vice president and chief information
officer in 1997. He served as chief information officer from 1996 to 2004. He
was named senior vice president - strategic sourcing and inventory
planning/replenishment in 2004.
Mr. Cannon joined the company in 1994 as senior vice president and
general counsel and was named secretary in February 2003.
Mr. Clark joined the company in 1983. He was promoted to store manager
in 1987 and district manager in 1992. He was named assistant vice president in
1995, vice president and Central Division president in 1997, Eastern Division
president in 2002 and senior vice president in 2003.
Mr. Denney joined the company in 1979. He was named corporate director
of advertising and marketing in 1994, assistant vice president in 1995, vice
president - general merchandise manager in 2002 and senior vice president in
2003.
Ms. Dias joined the company in 2000 as senior vice president -
marketing. She was named president of Circuit City Direct in 2003. Before
joining the company, she was chief marketing officer at Stick Networks, Inc., a
wireless software company, during 2000 and vice president - marketing and
development for the Frito-Lay Company, an operating division of PepsiCo, Inc.
engaged in the snack food industry, from 1999 to 2000.
Mr. Dunn joined the company in 1984. He was named treasurer in 1990,
was promoted to vice president in 1992 and added the title of controller in
1996. In 1999, he was elected senior vice president.
Mr. Mierenfeld joined the company in 1993 as vice president -
distribution. He was elected senior vice president in 1999. He was named senior
vice president - store development procurement, distribution and service in
2003.
Mr. Moore joined the company in 1990. He was named a regional vice
president in 1995; director of corporate operations in 1997; assistant vice
president - general manager, builder appliance sales division in 1998; assistant
vice president - senior national buyer in 1999; assistant vice president -
divisional merchandising manager - imaging in 2000; assistant vice president -
director of merchandising operations in 2002; Western Division president in
2003; and senior vice president in 2003.
Page 11 of 16
Mr. Speranza joined the company in April 2004 as senior vice president
and chief marketing officer. Before joining the company, he was senior vice
president - marketing and advertising, international at Toys "R" Us, Inc., a
worldwide retailer of toys, baby products, and children's apparel, from 1999 to
2003.
Mr. Wells joined the company in 1996 as senior vice president - human
resources and training.
PART II
Item 5. Market for the Company's Common Equity and Related Shareholder Matters
The information appearing under the heading "Common Stock" on page 25
of the company's 2004 Annual Report is incorporated in this item by reference.
As of April 30, 2004, there were 5,819 shareholders of record of common
stock.
Item 6. Selected Financial Data
The information appearing under the heading "Selected Financial Data"
on page 12 of the company's 2004 Annual Report is incorporated in this item by
reference.
Item 7. Management's Discussion and Analysis of Results of Operations and
Financial Condition
The information appearing under the heading "Management's Discussion
and Analysis of Results of Operations and Financial Condition" on pages 13
through 25 of the company's 2004 Annual Report is incorporated in this item by
reference.
Item 7A.Quantitative and Qualitative Disclosures about Market Risk
The information appearing under the sub-heading "Market Risk" on pages
23 and 24 of the company's 2004 Annual Report is incorporated in this item by
reference.
Item 8. Financial Statements and Supplementary Data
The information appearing under the headings "Consolidated Statements
of Operations," "Consolidated Balance Sheets," "Consolidated Statements of Cash
Flows," "Consolidated Statements of Stockholders' Equity," "Notes to
Consolidated Financial Statements" and "Independent Auditors' Report" on pages
26 through 43 of the company's 2004 Annual Report is incorporated in this item
by reference.
The information appearing under the heading "Quarterly Financial Data
(Unaudited)" on page 43 of the company's 2004 Annual Report is incorporated in
this item by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
Item 9A.Controls and Procedures
Under the supervision and with the participation of the company's
management, including the chief executive officer and chief financial officer,
the company has evaluated the effectiveness of its "disclosure controls and
procedures," as that term is defined in Rule 13a-15(e) of the Securities
Exchange Act of 1934, as amended, as of the end of the period covered by this
Annual Report on Form 10-K. Based upon their evaluation, the chief executive
officer and chief financial officer concluded that the company's disclosure
controls and procedures are effective. There were no changes in the company's
internal control over financial reporting in the quarter ended February 29,
2004, that have materially affected, or are reasonably likely to materially
affect, the company's internal control over financial reporting.
PART III
With the exception of the information incorporated by reference from
the company's Proxy Statement in Items 10, 11, 12 and 14 of Part III of this
Annual Report on Form 10-K, the company's Proxy Statement dated May 7, 2004, is
not to be deemed filed as a part of this Report.
Item 10. Directors and Executive Officers of the Company
The information appearing under the heading "Item One - Election of
Directors" on pages 3 through 5 of the company's Proxy Statement dated May 7,
2004, is incorporated in this item by reference.
Page 12 of 16
The information appearing under the heading "Certain Information
Concerning the Board of Directors and Its Committees" on pages 8 through 10 of
the company's Proxy Statement dated May 7, 2004, is incorporated in this item by
reference.
The information appearing under the heading "Section 16(a) Beneficial
Ownership Reporting Compliance" on page 19 of the company's Proxy Statement
dated May 7, 2004, is incorporated in this item by reference.
The company's code of business conduct is available on the company's
investor information homepage at http://investor.circuitcity.com.
Item 11. Executive Compensation
The information appearing under the heading "Executive Compensation" on
pages 12 through 14 of the company's Proxy Statement dated May 7, 2004, is
incorporated in this item by reference.
The information appearing under the heading "Employment Agreements and
Change-In-Control Arrangements" on pages 15 and 16 of the company's Proxy
Statement dated May 7, 2004, is incorporated in this item by reference.
The information appearing under the heading "Compensation of Directors"
on page 19 of the company's Proxy Statement dated May 7, 2004, is incorporated
in this item by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
The information appearing under the heading "Beneficial Ownership of
Securities" on pages 6 and 7 of the company's Proxy Statement dated May 7, 2004,
is incorporated in this item by reference.
The information appearing under the heading "Equity Compensation Plans
Information" on page 14 of the company's Proxy Statement dated May 7, 2004, is
incorporated in this item by reference.
Item 13. Certain Relationships and Related Transactions
None.
Item 14. Principal Accountant Fees and Services
The information appearing under the heading "Item Four - Ratification
of Appointment of Independent Auditors" on page 26 of the company's Proxy
Statement dated May 7, 2004, is incorporated in this item by reference.
Page 13 of 16
Part IV
Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial Statements. The following financial statements are
incorporated by reference into this report.
Consolidated Statements of Operations for the fiscal years ended
February 29, 2004 and February 28, 2003 and 2002.
Consolidated Balance Sheets at February 29, 2004 and February 28,
2003.
Consolidated Statements of Cash Flows for the fiscal years ended
February 29, 2004 and February 28, 2003 and 2002.
Consolidated Statements of Stockholder's Equity for the fiscal
years ended February 29, 2004 and February 28, 2003 and 2002.
Notes to Consolidated Financial Statements.
Independent Auditors' Report.
2. Financial Statement Schedules. The following financial statement
schedules of Circuit City Stores, Inc. for the fiscal years ended
February 29, 2004 and February 28, 2003 and 2002, are filed as
part of this report and should be read in conjunction with the
consolidated financial statements of Circuit City Stores, Inc.
and the notes thereto, described in Item 15(a)(1).
Schedule II Valuation and Qualifying Accounts and Reserves S-1
Independent Auditors' Report on Financial Statement Schedule S-2
Schedules not listed above have been omitted because they are not
applicable or are not required or the information required to be
set forth therein is included in the consolidated financial
statements or notes thereto.
3. Exhibits. The exhibits listed on the accompanying Index to
Exhibits immediately following the financial statement schedules
are filed as part of, or are incorporated by reference into, this
report.
(b) Reports on Form 8-K.
The company filed a Form 8-K on December 2, 2003, announcing the
completion of the sale of its bankcard business.
The Forms 8-K listed below were furnished to the SEC during the period
covered by this report pursuant to Item 12 of Form 8-K and shall not
be deemed "filed" for purposes of the Securities Exchange Act of 1934,
as amended, or incorporated by reference into any document filed under
the Securities Act of 1933, as amended, except as shall be expressly
set forth by specific reference in such filing.
The company furnished a Form 8-K on December 4, 2003, announcing the
company's third quarter fiscal year 2004 sales.
The company furnished a Form 8-K on December 17, 2003, announcing the
company's third quarter fiscal year 2004 results.
The company furnished a Form 8-K on January 7, 2004, announcing the
company's December 2003 sales and fiscal year 2005 store opening
plans.
Page 14 of 16
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CIRCUIT CITY STORES, INC.
(Registrant)
By: /s/W. Alan McCollough
---------------------------
W. Alan McCollough
Chairman, President and Chief Executive Officer
By: /s/Michael E. Foss
---------------------------
Michael E. Foss
Senior Vice President and
Chief Financial Officer
By: /s/Philip J. Dunn
---------------------------
Philip J. Dunn
Senior Vice President, Treasurer,
Controller and
Chief Accounting Officer
May 10, 2004
Page 15 of 16
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
Ronald M. Brill* Director May 10, 2004
- --------------------------
Ronald M. Brill
Carolyn H. Byrd* Director May 10, 2004
- --------------------------
Carolyn H. Byrd
Richard N. Cooper* Director May 10, 2004
- --------------------------
Richard N. Cooper
Barbara S. Feigin* Director May 10, 2004
- --------------------------
Barbara S. Feigin
E.V. Goings * Director May 10, 2004
- --------------------------
E.V. Goings
James F. Hardymon* Director May 10, 2004
- --------------------------
James F. Hardymon
Alan Kane* Director May 10, 2004
- --------------------------
Alan Kane
Allen B. King* Director May 10, 2004
- --------------------------
Allen B. King
/s/W. Alan McCollough Director May 10, 2004
- --------------------------
W. Alan McCollough
Mikael Salovaara* Director May 10, 2004
- --------------------------
Mikael Salovaara
Carolyn Y. Woo* Director May 10, 2004
- --------------------------
Carolyn Y. Woo
*By: /s/W. Alan McCollough
W. Alan McCollough,
Attorney-In-Fact
Page 16 of 16
S-1
Schedule II
CIRCUIT CITY STORES, INC. AND SUBSIDIARIES
Valuation and Qualifying Accounts and Reserves
(Amounts in thousands)
Balance at Charged Charge-offs Balance at
Beginning to less End of
Description of Year Income Recoveries Year
----------- ---------- ------- ---------- ----------
Year ended February 28, 2002:
Allowance for doubtful accounts $ 2,068 $ 3,485 $ (4,893) $ 660
======== ======= ======== =========
Year ended February 28, 2003:
Allowance for doubtful accounts $ 660 $ 4,790 $ ( 4,375) $ 1,075
======== ======= ========= =========
Year ended February 29, 2004:
Allowance for doubtful accounts $ 1,075 $ 3,049 $ (3,577) $ 547
======== ======= ========= =========
S-1
S-2
Independent Auditors' Report on Financial Statement Schedule
The Board of Directors
Circuit City Stores, Inc.:
Under date of March 30, 2004, we reported on the consolidated balance sheets of
Circuit City Stores, Inc. and subsidiaries (the Company) as of February 29, 2004
and February 28, 2003, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the fiscal years in the
three-year period ended February 29, 2004, as incorporated by reference herein.
In connection with our audits of the aforementioned consolidated financial
statements, we also have audited the related Circuit City Stores, Inc. financial
statement schedule as listed in Item 15(a)2 of this Form 10-K. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement schedule
based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.
/s/KPMG LLP
Richmond, Virginia
March 30, 2004
Page S-2
Circuit City Stores, Inc.
Annual Report on Form 10-K
EXHIBIT INDEX
(3) Articles of Incorporation and Bylaws
(a) Amended and Restated Articles of Incorporation of the
Company, effective February 3, 1997, as amended
through October 1, 2002, filed as Exhibit 3(i) to the
company's Quarterly Report on Form 10-Q for the
quarter ended November 30, 2002 (File No. 1-5767),
are expressly incorporated herein by this reference.
(b) Bylaws of the Company, as amended and restated June
17, 2003, filed as Exhibit 3(iii) to the company's
Quarterly Report on Form 10-Q for the quarter ended
May 31, 2003 (File No. 1-5767), are expressly
incorporated herein by this reference.
(4) Instruments Defining the Rights of Security Holders, Including
Indentures
(a) Third Amended and Restated Rights Agreement dated as
of October 1, 2002, between the company and Wells
Fargo Bank Minnesota, N.A., as Rights Agent, filed as
Exhibit 1 to the company's Form 8-A/A filed on
October 1, 2002 (File No. 1-5767), is expressly
incorporated herein by this reference.
(10) Material Contracts
(a) The company's 2000 Non-Employee Directors Stock
Incentive Plan, filed as Appendix A to the company's
Definitive Proxy Statement dated May 10, 2000, for
the Annual Meeting of Shareholders held on June 13,
2000 (File No. 1-5767), is expressly incorporated
herein by this reference. *
(b) Amendments effective June 15, 2001, to the company's
2000 Non-Employee Directors Stock Incentive Plan,
filed as Exhibit 10 to the company's Quarterly Report
on Form 10-Q for the quarter ended May 31, 2001 (File
No. 1-5767), are expressly incorporated herein by
this reference. *
(c) The company's Amended and Restated 1989 Non-Employee
Directors Stock Option Plan, filed as Exhibit A to
the company's Definitive Proxy Statement dated May 9,
1997, for the Annual Meeting of Shareholders held on
June 17, 1997 (File No. 1-5767), is expressly
incorporated herein by this reference. *
(d) Amendments adopted June 17, 1997, to the company's
Amended and Restated 1989 Non-Employee Directors
Stock Option Plan filed as Exhibit 10(ii) to the
company's Quarterly Report on Form 10-Q for the
quarter ended May 31, 1997 (File No. 1-5767), are
expressly incorporated herein by this reference. *
(e) The company's 1994 Stock Incentive Plan, as amended
as of January 24, 1997, filed as Annex III to the
company's Definitive Proxy Statement dated December
24, 1996, for a Special Meeting of Shareholders held
on January 24, 1997 (File No. 1-5767), is expressly
incorporated herein by this reference. *
(f) Amendments effective June 13, 2000, to the company's
1994 Stock Incentive Plan as amended, filed as
Exhibit 10 to the company's Quarterly Report on form
10-Q for the quarter ended May 31, 2000 (File No.
1-5767), are expressly incorporated herein by this
reference. *
(g) Amendment effective June 15, 1999, to the company's
1994 Stock Incentive Plan, as amended, filed as
Exhibit 10 to the company's Quarterly Report on Form
10-Q for the quarter ended May 31, 1999 (File No.
1-5767), is expressly incorporated herein by this
reference. *
Page EI-1
(h) Employment agreement between the company and W. Alan
McCollough effective November 19, 2003, filed as
Exhibit 10.2 to the company's Quarterly Report on
Form 10-Q for the quarter ended November 30, 2003
(File No. 1-5767), is expressly incorporated herein
by this reference. *
(i) Form of employment agreement between the company and
certain executive officers effective June 30, 2003,
filed as Exhibit 10.2 to the company's Quarterly
Report on Form 10-Q for the quarter ended August 31,
2003 (File No. 1-5767), is expressly incorporated
herein by this reference. *
(j) Employment agreement between the company and Fiona P.
Dias effective December 4, 2003, filed herewith. *
(k) The company's 2003 Annual Performance-Based Bonus
Plan, filed as Appendix C to the company's Definitive
Proxy Statement dated May 9, 2003, for an Annual
Meeting of Shareholders held on June 17, 2003 (File
No. 1-5767), is expressly incorporated herein by this
reference. *
(l) The company's Non-Employee Directors Deferred
Compensation Plan, filed as Exhibit 10 to the
company's Quarterly Report on Form 10-Q for the
quarter ended August 31, 2000 (File No. 1-5767), is
expressly incorporated herein by this reference. *
(m) Program for deferral of director compensation
implemented October 1995 filed as Exhibit 10(i) to
the company's Quarterly Report on Form 10-Q for the
quarter ended November 30, 1995 (File No. 1-5767), is
expressly incorporated herein by this reference. *
(n) Benefit Restoration Plan, effective February 28,
1999, filed as Exhibit 10(m) to the company's Annual
Report on Form 10-K for the fiscal year ended
February 28, 1999 (File 1-5767), is expressly
incorporated herein by this reference. *
(o) The 1984 Circuit City Stores, Inc. Employee Stock
Purchase Plan as Amended and Restated Effective
October 1, 2002, filed as Exhibit 10(q) to the
company's Annual Report on Form 10-K for the fiscal
year ended February 28, 2003 (File No. 1-5767), is
expressly incorporated herein by this reference. *
(p) The company's 2003 Stock Incentive Plan, filed as
Appendix B to the company's Definitive Proxy
Statement dated May 9, 2003, for an Annual Meeting of
Shareholders held on June 17, 2003 (File No. 1-5767),
is expressly incorporated herein by this reference. *
(q) Credit Agreement dated as of June 27, 2003, among the
company, the Lenders party thereto, Fleet National
Bank, Fleet Retail Finance Inc., Bank of America,
N.A., Congress Financial Corporation, General
Electric Capital Corporation, Bank One, NA, JPMorgan
Chase Bank, National City Commercial Finance, Inc.,
The CIT Group/Business Credit, Inc. and Wells Fargo
Foothill, LLC, filed as Exhibit 10.1 to the company's
Quarterly Report on Form 10-Q for the quarter ended
August 31, 2003 (File No. 1-5767), is expressly
incorporated herein by this reference.
(r) The Consumer Credit Card Program Agreement dated as
of January 16, 2004, between Circuit City Stores,
Inc. and Bank One, Delaware, N.A., filed herewith.
(13) Annual Report
Pages 12 through 43 of the company's Annual Report for the fiscal year
ended February 29, 2004.
(21) Subsidiaries of the Company
(23) Consent of Independent Auditors
(24) Powers of Attorney
Page EI-2
(31) Rule 13a-14(a)/15d-14(a) Certifications
(i)Certification of CEO under Rule 13a-14(a) of the Securities Exchange
Act of 1934
(ii)Certification of CFO under Rule 13a-14(a) of the Securities Exhange Act
of 1934
(32) Section 1350 Certifications
(i)Certification of CEO under Section 906 of the Sarbanes-Oxley Act of
2002
(ii)Certification of CFO under Section 906 of the Sarbanes-Oxley Act of
2002
*Indicates management contracts, compensatory plans or arrangements of the
company required to be filed as an exhibit.
Page EI-3