ITEM 1. BUSINESS
Not applicable.
ITEM 2.
ITEM 2. PROPERTIES
CarMax Auto Funding LLC established the CarMax Auto Owner Trust 2004-1 (the "Trust") as of March 30, 2004 pursuant to a Trust Agreement among CarMax Auto Funding LLC, The Bank of New York (Delaware) (the "Delaware Trustee"), and The Bank of New York (the "Owner Trustee"). Pursuant to the Indenture dated as of May 1, 2004 between the Trust and Wells Fargo Bank, National Association (the "Indenture Trustee"), the Trust issued in a public transaction $111,000,000 in aggregate principal amount of 1.176% Class A-1 Asset-Backed Notes, $134,000,000 in aggregate principal amount of 1.87% Class A-2 Asset-Backed Notes, $161,000,000 in aggregate principal amount of 2.66% Class A-3 Asset-Backed Notes, $128,000,000 in aggregate principal amount of 3.41% Class A-4 Asset-Backed Notes, $18,000,000 in aggregate principal amount of 2.72% Class B Asset-Backed Notes, $21,000,000 in aggregate principal amount of 3.02% Class C Asset-Backed Notes and $27,000,000 in aggregate principal amount of 3.52% Class D Asset-Backed Notes (collectively, the "Notes"). Pursuant to the Amended and Restated Trust Agreement dated as of May 1, 2004 among CarMax Auto Funding LLC, the Delaware Trustee and the Owner Trustee, the Trust issued asset backed certificates representing a beneficial interest in the Trust (the "Certificates") to CarMax Auto Funding LLC. The Notes are secured by the assets of the Trust. The Certificates do not bear interest, and payments in respect of the Certificates are subordinate to payments on the Notes.
The property of the Trust includes, among other things, a pool of simple interest retail installment sale contracts originated by CarMax Auto Superstores, Inc. or one of its affiliates in the ordinary course of business in connection with the sale of new and used motor vehicles (the "Receivables"), payments due or received on or in respect of the Receivables after April 30, 2004 (the "Cut-Off Date"), security interests in the vehicles financed by the Receivables (the "Financed Vehicles") and certain other property described below. The principal balance of the Receivables was $600,000,002.26 as of the Cut-Off Date. CarMax Auto Superstores, Inc. sold the Receivables to CarMax Auto Funding LLC pursuant to a Receivables Purchase Agreement dated as of May 1, 2004 (the "Purchase Agreement").
Simultaneously with the issuance of the Notes, CarMax Auto Funding LLC sold and assigned to the Trust without recourse, all of CarMax Auto Funding LLC's interest in the Receivables, the proceeds thereof and certain other assets pursuant to a Sale and Servicing Agreement dated as of May 1, 2004 (the "Sale and Servicing Agreement") among the Trust, as issuer, CarMax Auto Funding LLC, as depositor, and CarMax Auto Superstores, Inc., as servicer (the "Servicer"). The Servicer is responsible for the servicing of the Receivables pursuant to the Sale and Servicing Agreement and is compensated for acting as the Servicer. In order to facilitate the Servicer's servicing functions and minimize administrative burden and expenses, (i) the certificates of title for the Financed Vehicles will not be marked to reflect the Trust's security interest in the Financed Vehicles and (ii) the Servicer will act as custodian of the Receivables and the Receivables will not be segregated or otherwise marked to reflect their transfer to the Trust.
The property of the Trust also includes (i) various documents relating to the Receivables, (ii) various monies due under the Receivables on and after the Cut-Off Date, (iii) the right to receive proceeds from claims on various insurance policies covering the Financed Vehicles or the obligors under each related Receivable, (iv) all amounts on deposit in the collection account, the note payment account, the certificate payment account and the reserve account, including all eligible investments credited thereto, (v) rights under the
Purchase Agreement to cause CarMax Auto Superstores, Inc. to repurchase Receivables affected materially and adversely by breaches of the representations and warranties of CarMax Auto Superstores, Inc. made in the Purchase Agreement, (vi) rights under the Sale and Servicing Agreement to cause the Servicer to purchase Receivables affected materially and adversely by breaches of the representations and warranties of the Servicer made in the Sale and Servicing Agreement and (vii) all proceeds of the foregoing.
A summary of the Receivable pool default and delinquency information as of February 28, 2005 follows (unaudited):
Aggregate principal balance of Receivables outstanding: $430,983,645.45
Aggregate gross balance of defaulted Receivables: $ 2,253,676.04
Aggregate recoveries: $ 265,141.25
Aggregate net losses: $ 1,988,534.79
Cumulative net loss percentage: 0.3314%
Receivable Delinquency Information:
Number of Loans Principal Balance --------------- ----------------- 31-60 days past due 236 $ 2,935,802.02 61-90 days past due 79 $ 977,386.65 91 or more days past due 41 $ 386,184.60 --------------- ----------------- Total 356 $ 4,299,373.27
As of the Cut-Off Date, none of the Receivables were delinquent by more than 30 days. Readers are cautioned that the above default and delinquency information represents only ten months of activity after the Cut-Off Date and is not likely to be indicative of longer-term results.
A summary as of February 28, 2005 of certain distributions made by the Trust follows (unaudited):