Copart (CPRT) 10-K risk factor changes: FY2009 vs FY2008

Our business could be harmed if any of these [removed: risks] [added: risks,] as well as other risks not currently known to us or that we currently deem immaterial, materialized.

In assessing the risks described below, you should also refer to the other information contained in this Form 10-K, including our consolidated financial statements and the related notes and [removed: schedule,] [added: schedules,] and other filings with the SEC before deciding to purchase any shares of our common stock._

We depend on a limited number of major vehicle [removed: sellers.][added: sellers for a substantial portion of our revenues.]

Our [removed: recent] acquisitions in the UK expose us to risks arising from the acquisitions and risks associated with operating in markets outside North America.

We may acquire additional companies in the UK or [added: other countries in] Europe or seek to establish new yards or facilities to complement the acquired companies' operations.

We have [removed: no prior] [added: limited] experience operating outside North America, and any failure to integrate these recently acquired companies or future UK or [added: other] European acquisitions into our operations successfully could have an adverse effect on our financial position, results of operations or cash flows.

(York) Holdings, Limited and AG Watson Auto Salvage & Motor Spares (Scotland) [removed: Limited] [added: Limited,] all located within the UK.

We may continue to acquire additional companies or operations in the UK or [added: other countries in] Europe or may seek to establish new yards or operations in the UK or Europe now that we have established a presence in these markets.

Our [removed: recent] acquisitions in the UK and continued expansion of our operations outside North America pose substantial risks and uncertainties that could have an adverse effect on our future operating results.

[removed: In addition, our] operating expenses were adversely affected in the second quarter [added: of fiscal 2008] by incremental integration expenses.

We have and may continue to incur substantial expenses establishing new yards or [added: operations in the UK or Europe.]

Among other things, we have deployed our VB2 [added: online] vehicle [removed: remarketing] [added: auction] technologies at all of our operations in the UK and we cannot predict whether this deployment will be successful or will result in increases in the revenues or operating efficiencies of any acquired companies relative to their historic operating performance.

Operationally, the businesses of Universal, Century and AG Watson have depended on key seller relationships, and [removed: we will need] [added: our failure] to maintain [removed: those.][added: those relationships would have an adverse effect on our operating objectives for the UK and could have an adverse effect on our future operating results.]

exposure to foreign currency exchange rate risk, which we have not been previously subject to in any material [removed: amounts.][added: amounts and which had an adverse impact on our revenues and revenue growth rates during the twelve months ended July 31, 2009.]

If we determine that our goodwill has become impaired, we [removed: may] [added: could] incur significant charges [removed: to] [added: that would have a material adverse affect on] our [removed: pre-tax income.][added: results of operations.]

Goodwill represents the excess of cost over the fair market value of [removed: net] assets acquired in business combinations.

As of July 31, [removed: 2008,] [added: 2009, the amount of goodwill on] our [removed: total goodwill,] [added: balance sheet] subject to future impairment [removed: testing,] [added: testing] was approximately [removed: $177] [added: $166] million.

In the UK we operate primarily on a principal basis, purchasing the salvage vehicle outright from the insurance companies and reselling the vehicle to [removed: buyers.][added: buyers.]

[added: Continued operations] on a principal basis will have a negative impact on our future consolidated gross margin percentages, and exposes us to inventory risks including:

Our strategic shift from live sales to an entirely Internet-based sales model presents [removed: new] risks, including substantial technology risks.

During 2004, in North America and during 2008 in the [removed: United Kingdom] [added: UK] we converted all of our sales from a live auction process to an entirely Internet-based auction-style model based on technology developed internally by us.

The change in our business model may make it more difficult for management, investment analysts, and investors to model or predict our future operating results until sufficient historic [removed: data is available to evaluate the effect of the VB2 implementation over a longer period of time and in different economic environments.]

[removed: In] addition, extreme weather conditions, although they increase the available supply of salvage cars, can have an adverse effect on our operating results.

[removed: High] [added: Macroeconomic factors such as high] fuel [added: prices, declines in commodity prices, and declines in used car] prices may have an adverse effect on our revenues and operating results as well as our earnings growth rates.

[removed: Increases] [added: Significant increases] in the cost of fuel could lead to a reduction in miles driven per car and a reduction in accident rates.

We may incur increased fees, which we [removed: will] [added: may] not be able to pass on to our [removed: sellers of vehicles.][added: vehicle sellers.]

We believe our principal competitors include other [added: auction and] vehicle remarketing [added: service] companies with whom we compete directly in obtaining vehicles from insurance companies and other sellers, and large vehicle dismantlers, who may buy salvage vehicles directly from insurance companies, bypassing the salvage sales process.

[removed: While most vehicle sellers have abandoned or reduced efforts to sell salvage vehicles directly without the use of service] providers such as us, there can be no assurance that this trend will continue, which could adversely affect our market share, results of operations and financial condition.

Our ability to manage growth [removed: is] [added: depends] not only [removed: dependent] on our ability to successfully integrate new facilities, but also on our ability to:

[added: the impact of foreign exchange gain and loss] as a result of our recently acquired companies in the [removed: UK, the impact of foreign exchange gain and loss;][added: UK;]

[added: the] severity of weather and seasonality of weather patterns;

[added: the] availability of subhaulers at competitive rates;

In addition, we may enter into agreements with third parties regarding the license or other use of our intellectual [added: property in foreign jurisdictions.]

As we face increasing competition, the possibility of intellectual property [removed: rights claims against us grows.]

New accounting pronouncements or new interpretations of existing standards could require us to make [removed: changes or] adjustments [removed: in our] [added: to] accounting policies [removed: and procedures] that could adversely [removed: effect our] [added: affect the] financial statements.

The Financial Accounting Standards Board, [added: or] the [added: FASB, the Public Company Accounting Oversight Board, the] SEC, [removed: or] [added: and] other accounting organizations or governmental entities [added: from time to time] issue new pronouncements or new interpretations of existing accounting standards that [removed: may] require [removed: us] [added: changes] to [removed: change] our accounting policies and procedures.

To date, we do not believe any new pronouncements or interpretations have had [removed: an] [added: a material] adverse effect on our financial condition or results of operations, but future pronouncements or interpretations could require [removed: us to] [added: a] change [added: or changes in] our policies or procedures.

Participants in the salvage vehicle sales industry are subject to, and may be required to expend funds to ensure compliance [removed: with,] [added: with] a variety of governmental, regulatory and administrative rules, regulations, land use ordinances, licensure requirements and procedures, including those governing vehicle registration, the environment, zoning and land use.

If we experience problems with our [removed: providers of] [added: trucking] fleet operations, our business could be harmed.

[removed: We] [added: In addition to using independent subhaulers in the UK, we] utilize a [removed: combination of a] fleet of company [removed: owned] trucks [removed: and independent subhaulers] to pick up and deliver vehicles [removed: to and] from our UK storage facilities.

During fiscal 2009, no single customer accounted for more than 10% of our revenues.

In addition, our

In recent periods, the amount of goodwill on our balance sheet has increased substantially, principally as a result of a series of acquisitions we have made in the UK since 2007.

Pursuant to SFAS No. 142, _Goodwill and Other Intangible Assets_, we are required to annually test goodwill and intangible assets with indefinite lives to determine if impairment has occurred.

Additionally, interim reviews must be performed whenever events or changes in circumstances indicate that impairment may have occurred.

If the testing performed indicates that impairment has occurred, we are required to record a non-cash impairment charge for the difference between the carrying value of the goodwill or other intangible assets and the implied fair value of the goodwill or other intangible assets in the period the determination is made.

The testing of goodwill and other intangible assets for impairment requires us to make significant estimates about our future

performance and cash flows, as well as other assumptions.

These estimates can be affected by numerous factors, including changes in the definition of a business segment in which we operate, changes in economic, industry or market conditions, changes in business operations, changes in competition or potential changes in the share price of our common stock and market capitalization.

Changes in these factors, or changes in actual performance compared with estimates of our future performance, could affect the fair value of goodwill or other intangible assets, which may result in an impairment charge.

For example, continued deterioration in worldwide economic conditions could affect these assumptions and lead us to determine that a goodwill impairment is required with respect to our acquisitions in the UK.

We cannot accurately predict the amount or timing of any impairment of assets.

Should the value of our goodwill or other intangible assets become impaired, it could have a material adverse effect on our operating results and could result in our incurring net losses in future periods.

Continued operations on a principal basis will have a negative impact on our future consolidated gross margin percentages and exposes us to additional inventory risks.

data is available to evaluate the effect of the VB2 implementation over a longer period of time and in different economic environments.

In

Macroeconomic factors that affect oil prices and the automobile and commodity markets can have adverse effects on our revenues, revenue growth rates (if any), and operating results.

Recently, the markets in which we operate have been particularly affected by changes in fuel prices, commodity prices, and decreases in the prices of used cars.

In particular, declines in scrap metal and used car prices had an adverse impact on our revenue growth rates during the twelve months ended July 31, 2009.

Continued volatility in fuel, commodity, and used car prices could have a material adverse effect on our revenues and revenue growth rates in future periods.

While most vehicle sellers have abandoned or reduced efforts to sell salvage vehicles directly without the use of service

rights claims against us grows.

We are partially self-insured for certain losses and if our estimates of the cost of future claims differ from actual trends, our results of our operations could be harmed.

If they were to act together, these shareholders would have significant influence over most matters requiring approval by shareholders,

The recent financial crisis and economic downturn may negatively affect our business, operating results, or financial condition.

The capital and credit markets have been experiencing extreme volatility and disruption for over a year, which has led to an economic downturn in the US and abroad.

As a result of the ongoing financial crisis and economic downturn, the number of miles driven may continue to decrease, which may lead to fewer accident claims, a reduction of vehicle repairs, and fewer salvage vehicles.

Adverse credit conditions may also affect the ability of buyers to secure financing to purchase salvaged vehicles which may adversely affect demand.

In addition if the banking system or the financial markets deteriorate or remain volatile our banking institution may reduce our line of credit.

Fluctuations in foreign currency exchange rates could result in declines in our reported revenues and earnings.

Our reported revenues and earnings are subject to fluctuations in currency exchange rates.

We do not engage in foreign currency hedging arrangements and, consequently, foreign currency fluctuations may adversely affect our revenues and earnings.

Should we choose to engage in

hedging activities in the future we cannot be assured our hedges will be effective or that the costs of the hedges will not exceed their benefits.

Fluctuations in the rate of exchange between the US dollar and foreign currencies, primarily the British Pound and Canadian Dollar, could adversely affect our financial results.

Investment in NASCAR sponsorships and other advertising could impact our operating results

We have, in fiscal 2009, and will continue in fiscal 2010 to invest in advertising and sponsorship programs with NASCAR and other events in the motorsports industry.

We may expend amounts that are material to our overall general and administrative expenses and we cannot predict what future benefits, if any, will be derived.

New buyer programs could impact our operating results

We have or will initiate programs to open our auctions to the general public.

During fiscal 2008, vehicles supplied by our largest seller accounted for approximately 10% of our revenues.

operations in the UK or Europe.

If we fail to maintain those relationships it would have an adverse effect on our operating objectives for the UK and could have an adverse effect on our future operating results.

In the future, goodwill and intangible assets may increase as a result of future acquisitions.

Goodwill and intangible assets are reviewed at least annually for impairment.

Impairment may result from, among other things, deterioration in the performance of acquired businesses, adverse market conditions, and adverse changes in applicable laws or regulations, including changes that restrict the activities of the acquired business.

Our recent acquisitions of Universal, Century, Simpson Bros.

(York) Holdings, Limited and AG Watson Auto Salvage & Motor Spares (Scotland) Limited resulted in a significant increase in the amount of goodwill on our balance sheet.

Continued operations

property in foreign jurisdictions.

Moreover, we continually review our critical accounting policies in light of the accounting literature and changes in our operations.

If we experience problems with our UK trucking fleet operations, our business could be harmed.

We are partially self-insured for certain losses.

_Executive Officers of the Registrant_

Executive Officers

Our executive officers and their ages as of July 31, 2008 were as follows:

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Name | | Age | | | Position |

| Willis J. Johnson | | | 61 | | Chairman of the Board, Chief Executive Officer and Director |

| A. Jayson Adair | | | 38 | | President and Director |

| Vincent W. Mitz | | | 45 | | Executive Vice President |

| William E. Franklin | | | 52 | | Senior Vice President and Chief Financial Officer |

| Paul A. Styer | | | 52 | | Senior Vice President, General Counsel and Secretary |

| Robert H. Vannuccini | | | 41 | | Senior Vice President of Marketing |

| David L. Bauer | | | 47 | | Senior Vice President of Information Technology and Chief Information Officer |

| Russell D. Lowy | | | 49 | | Chief Operating Officer |

| Thomas E. Wylie | | | 57 | | Senior Vice President of Human Resources |

| Simon E. Rote | | | 36 | | Vice President of Finance |

Willis J.

Johnson, our founder, has served as our Chairman of the Board since 2004, Chief Executive Officer since 1986 and as a director since 1982.

Mr. Johnson served as our President from 1986 until May 1995.

Mr. Johnson was an officer and director of U-Pull-It, Inc., or UPI, a self-service auto dismantler which he co-founded in 1982, from 1982 through September 1994.

Mr. Johnson sold his entire interest in UPI in September 1994.

Mr. Johnson has over 30 years of experience in owning and operating auto dismantling companies.

A.

Jayson Adair has served as our President since November 1996 and as a director since September 1992.

From April 1995 until October 1996, Mr. Adair served as our Executive Vice President.

From August 1990 until April 1995, Mr. Adair served as our Vice President of Sales and Operations and from June 1989 to August 1990, Mr. Adair served as our Manager of Operations.

Vincent W.

_This [added: Annual Report on] Form 10-K, including the information incorporated by reference herein, contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act.

These factors include those listed in Part I, Item 1A.—"Risk Factors" [removed: beginning on page 18] of this Form 10-K and those discussed elsewhere in this Form 10-K.

We provide vehicle [removed: sellers,] [added: sellers] with a full range of [removed: remarketing] services to process and sell vehicles primarily over the Internet through our Virtual Bidding Second [removed: Generation, or VB2,] [added: Generation] Internet auction-style sales technology, which we refer to as VB2.

We sell principally to licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers and [removed: exporters,] [added: exporters;] however at certain locations, we sell directly to the general public.

We offer vehicle sellers a full range of [removed: remarketing] services that expedite each stage of the salvage vehicle sales process and minimize administrative and processing costs.

In the United [removed: States,] [added: States and Canada,] or [removed: US,] [added: North America,] we sell vehicles primarily as an agent and derive revenue primarily from fees paid by vehicle sellers and vehicle buyers as well as related fees for services such as towing and storage.

In the United Kingdom, or UK, we operate primarily on a principal basis, purchasing [removed: the] salvage [removed: vehicle] [added: vehicles] outright from [removed: the] insurance companies and reselling the [removed: vehicle] [added: vehicles] for our own account.

Our revenues consist of sales transaction fees charged to vehicle sellers and vehicle buyers, transportation [removed: revenue and] [added: revenue,] purchased vehicle [removed: revenues.][added: revenues, and other remarketing services.]

Revenues from sellers are generally generated either on a fixed fee contract basis where we collect a fixed amount for selling [removed: the vehicles] [added: each vehicle] regardless of the selling price of the vehicle or, under our Percentage Incentive Program, or PIP program, [added: where] our fees are generally based on a predetermined percentage of the vehicle sales price.

Under the fixed fee program, we generally charge an [removed: additional fee for title processing and]

Sales transaction fees also include fees charged to vehicle buyers for purchasing vehicles, [removed: storage] [added: storage, loading] and annual registration.

Purchased vehicle [removed: revenue,] [added: revenue] includes the gross sales price of the vehicle which we have purchased or are otherwise considered to own and [removed: are] [added: is] primarily generated in the UK.

During fiscal 2004 and fiscal 2008, we converted all of our North American and [removed: United Kingdom vehicle remarketing facilities,] [added: UK sales,] respectively, to an Internet-based auction-style model using our VB2 Internet sales technology.

We have experienced significant growth [added: in facilities] as we have acquired twenty three [removed: vehicle storage] facilities and established thirteen new facilities since the beginning of fiscal 2006.

We believe that these acquisitions and openings strengthen our coverage as we have [removed: 143] [added: 147] facilities located in North America and the [removed: United Kingdom] [added: UK] and are able to provide national coverage for our sellers.

(York) Holdings Limited, a [removed: United Kingdom] [added: UK] limited liability company (Simpson), which operates one location in York, England.

In addition to growth through acquisitions, we seek to increase revenues and profitability by, among other things, (i) acquiring and developing [removed: new] [added: additional] vehicle storage facilities in key markets, (ii) pursuing national and regional vehicle seller agreements, (iii) expanding our service offerings to sellers and buyers, and (iv) expanding the application of VB2 into new markets.

The following sets forth information on [removed: customer] revenue by [removed: geographic region based on the location of the selling entity] [added: class] (in thousands, except percentages):

[removed: Revenues] [added: Yard Operation Expenses. Yard operation expenses] from continuing operations were approximately [removed: $784.8] [added: $328.9] million during fiscal [removed: 2008,] [added: 2008 compared to $271.5 million for fiscal 2007,] an increase of [removed: approximately $224.2] [added: $57.4] million, or [removed: 40%,] [added: 21.1%,] over fiscal 2007.

[removed: Yard Operation Expenses. Yard operation] [added: General and Administrative. General and administrative] expenses from continuing operations were approximately [removed: $462.6] [added: $84.3] million [removed: during] [added: for] fiscal 2008, [added: compared to $63.6 million for fiscal 2007,] an increase of approximately [removed: $168.7] [added: $20.7] million, or [removed: 57.4%,] [added: 32.5%,] over fiscal 2007.

General and [removed: Administrative.] [added: Administrative Expenses.] General and administrative expenses [removed: from continuing operations] were approximately [added: $86.9 million for fiscal 2009 compared to] $84.3 million for fiscal 2008, an increase of approximately [removed: $20.7] [added: $2.6] million, or [removed: 32.5%, over fiscal 2007.][added: 3.1%.]

Included in general and administrative expenses is depreciation and amortization of $10.6 million, an increase of $4.9 million over fiscal [removed: 2007.][added: 2007 and includes amortization expenses relating to intangible assets acquired as part of the UK acquisitions.]

Other Income. Total other income was approximately $11.7 million during fiscal 2008, [added: compared to $14.3 million for fiscal 2007,] a [removed: decrease] [added: decline] of approximately $2.5 [removed: million from] [added: million, or 17.8%, over] fiscal 2007.

[removed: The decrease is due primarily to a] [added: Interest income declined] $6.0 million [removed: decrease in interest income] due to lower interest rates and a lower average cash and investment [removed: balance offset by $2.2 million in losses from an equity investment in Lanelogic Corporation (Lanelogic) last year.][added: balance.]

Income Taxes. Our effective income tax rates for fiscal [removed: 2007] [added: 2009] and [removed: 2006] [added: 2008] were approximately [removed: 37.3%] [added: 38.7%] and [removed: 35.4%,] [added: 37.1%,] respectively.

Net Income. Due to the foregoing factors, we realized net income of approximately [removed: $136.3] [added: $141.1] million for fiscal [removed: 2007,] [added: 2009,] compared to net income of approximately [removed: $96.9] [added: $156.9] million for fiscal [removed: 2006.][added: 2008.]

This increased [removed: seasonal] volume requires the increased use of our cash to pay out advances and handling costs of the additional business.

Our primary source of cash generated by operations is from the collection [removed: of] [added: on] sellers' fees, buyers' fees and reimbursable advances from the proceeds of [removed: sold] [added: auctioned salvage] vehicles.

As of July 31, [removed: 2008,] [added: 2009,] we had working capital of approximately [removed: $84.5] [added: $212.3] million, including cash, and cash equivalents of approximately [removed: $39.0] [added: $162.7] million.

We believe that our currently available cash and cash [removed: equivalents,] [added: equivalents and] cash generated from operations [removed: and borrowing availability under our bank credit facility] will be sufficient to satisfy our operating and working capital requirements for at least the next 12 months.

Net cash provided by operating activities increased by approximately [removed: $6.0] [added: $9.3] million to [removed: $141.9] [added: $203.3] million during fiscal [removed: 2006] [added: 2009] when compared to fiscal [removed: 2005.][added: 2008.]

During the fiscal years ended July 31, [removed: 2008, 2007] [added: 2008] and [removed: 2006,] [added: 2007,] we purchased approximately $154.4 [removed: million, $921.8] million and [removed: $717.1] [added: $921.8] million, [removed: respectively] [added: respectively,] of short-term investments, which were offset by the sale of $257.0 [removed: million,] [added: million and] $967.9 million, [removed: $568.4 million, respectively] [added: respectively,] of short-term investments.

[removed: Prior to October 31, 2007,] [added: By] the end of the first quarter of fiscal 2008, we converted our entire balance of short-term investments to cash and cash equivalents.

Capital expenditures related to continuing operations (excluding those associated with [removed: property and equipment] [added: fixed assets] attributable to acquisitions) were approximately [removed: $113.4] [added: $79.0] million, [removed: $76.8] [added: $113.4] million and [removed: $97.0] [added: $76.8] million for fiscal [removed: 2008, 2007] [added: 2009, 2008] and [removed: 2006,] [added: 2007,] respectively.

(York), Ltd; AG Watson Auto Salvage and Motor Spares (Scotland) Limited; and Bob Lowe's Salvage [removed: Pool .][added: Pool.]

In fiscal [removed: 2008, 2007] [added: 2009, 2008] and [removed: 2006,] [added: 2007,] we generated approximately [removed: $12.7] [added: $3.1] million, [removed: $10.9] [added: $12.7] million and [removed: $5.4] [added: $10.9] million, respectively, through the exercise of stock options.

In fiscal [removed: 2008, 2007] [added: 2009, 2008] and [removed: 2006,] [added: 2007,] we generated approximately [removed: $1.7] [added: $1.9] million, [removed: $1.5] [added: $1.7] million and [removed: $1.6] [added: $1.5] million, respectively, through the issuance of shares under the [removed: employee stock purchase program.][added: Employee Stock Purchase Plan.]

In fiscal [removed: 2008, 2007] [added: 2009, we used approximately $17.5 million] and [removed: 2006,] [added: in 2008 and 2007,] we generated approximately $8.2 [removed: million, $4.7] million and [removed: $4.2] [added: $4.7] million, respectively, through changes in our book overdraft.

From February 2003 through July 31, [removed: 2008,] [added: 2009,] we repurchased a total of 13,649,469 shares at a weighted average price of $29.21.

The following table summarizes our significant contractual obligations and commercial commitments as of July 31, [removed: 2008] [added: 2009] (in thousands):

additional fee for title processing and special preparation.

The following table sets forth facilities that we have acquired or opened from August 1, 2006 through July 31, 2009:

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| Locations | | Acquisition or Greenfield | | Date | | Geographic Service Area |

| Baltimore Maryland | | Greenfield | | November 2006 | | Central Maryland |

| Woodburn, Oregon | | Greenfield | | January 2007 | | Central Oregon |

| Sandy, England | | Acquisition | | June 2007 | | East England and Midlands |

| Sandtoft, England | | Acquisition | | June 2007 | | Northern England |

| Sandwich, England | | Acquisition | | June 2007 | | London and South East England |

| Westbury, England | | Acquisition | | June 2007 | | South Wales and South West England |

| Chester, England | | Acquisition | | June 2007 | | North Wales and North West England |

| Denny, Scotland | | Acquisition | | *June 2007 | | Scotland |

| Wootton, England | | Acquisition | | June 2007 | | Central England |

| Punta Gorda, Florida | | Greenfield | | July 2007 | | Southwest Florida |

| Peterlee, England | | Acquisition | | August 2007 | | Northern England |

| Wisbech, England | | Acquisition | | August 2007 | | Eastern England |

| Rochford, England | | Acquisition | | August 2007 | | Southeast England |

| London, Canada | | Greenfield | | September 2007 | | Southern Ontario |

| Windsor, New Jersey | | Greenfield | | November 2007 | | Central New Jersey |

| Walton, Kentucky | | Greenfield | | January 2008 | | Northern Kentucky |

| Birmingham, Alabama | | Greenfield | | February 2008 | | Central Alabama |

| Inverkeithing, Scotland | | Acquisition | | March 2008 | | Central Scotland |

| Whitburn, Scotland | | Acquisition | | March 2008 | | Central Scotland |

| Featherstone, England | | Acquisition | | *March 2008 | | Northeast England |

| Doncaster, England | | Acquisition | | *March 2008 | | Northeast England |

| Minneapolis, Minnesota | | Greenfield | | March 2008 | | Central Minnesota and Wisconsin |

| Sikeston, Missouri | | Acquisition | | March 2008 | | Southeast Missouri |

| York, England | | Acquisition | | April 2008 | | Northern England |

| Prairie Grove, Arkansas | | Greenfield | | July 2008 | | Northwest Arkansas |

| Louisville, Kentucky | | Greenfield | | September 2008 | | Northwest Kentucky and Southern Indiana |

| Richmond, Virginia | | Greenfield | | October 2008 | | Central Virginia |

| Montgomery, Alabama | | Greenfield | | February 2009 | | Central Alabama |

| Greer, South Carolina | | Greenfield | | February 2009 | | Northwest South Carolina |

| Warren, Massachusetts | | Greenfield | | June 2009 | | Central Massachusetts |

Closed in fiscal 2008

Former MAG facility

In particular, we have certain contracts inherited through our UK acquisitions that require us to act as a principal, purchasing vehicles from the insurance companies and reselling them for our own account.

It is our intention, where possible, to migrate these contracts to the agency model in future periods.

special preparation.

Because we operate as a principal in the UK, purchasing and reselling salvaged vehicles for our own account, we expect operating costs to increase as a percentage of revenue in future periods.

During the second quarter of fiscal 2006, we adopted a formal plan to discontinue the operations of our public auction business Motors Auction Group, or MAG, and dispose of or convert the related assets.

The MAG yards converted into salvage facilities will continue to be included in the results of continuing operations on the income statements.

As part of this strategy, in fiscal 2008, we acquired eight new facilities in the UK located in Peterlee; Wisbech; Rochford; York; Inverkeithing; Whitburn; Featherstone and Doncaster and in North America, we acquired one facility in Sikeston, Missouri and opened six new facilities in London, Ontario; Windsor, New Jersey; Walton, Kentucky; Birmingham, Alabama; Minneapolis, Minnesota and Prairie Grove, Arkansas.

In fiscal 2007, we acquired seven new facilities in the UK located in Sandy; Sandtoft, Sandwich, Westbury, Chester, Denny; and Wootton and in North America we opened new facilities in Baltimore, Maryland; Woodburn, Oregon; and Punta Gorda, Florida.

In fiscal 2006, we acquired new facilities in or near Greenwood, Nebraska; Grand Island, Nebraska; York Haven, Pennsylvania; Chambersburg, Pennsylvania; Altoona, Pennsylvania; Fruitland, Maryland; Billings, Montana and opened new facilities in or near Honolulu, Hawaii; Lansing, Michigan; Dover, Florida and Jacksonville, Florida.

The Denny, Doncaster and Featherstone facilities were closed prior to July 31, 2008.

In particular, the UK acquisition, because of its size and, also, because the UK operates primarily on the principal model versus the agency model employed in the United States, will have a significant impact on the comparability of revenues and gross margin percentages in future periods.

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| North America | | $ | 596,965 | | | 76 | % | $ | 545,861 | | | 97 | % |

| United Kingdom | | | 187,883 | | | 24 | % | | 14,819 | | | 3 | % |

| | | | | | | | | | | | | | |

| | | | | | | | | | | | | | |

Revenue growth from same store sales in North America, those opened before August 1, 2007, was approximately $46.7 million.

Revenue growth from new facilities in North America, those opened or acquired after August 1, 2007, including facilities in or near London, Ontario; Windsor, New Jersey; Walton, Kentucky; Birmingham, Alabama; Minneapolis, Minnesota; Sikeston, Missouri and Prairie Grove, Arkansas was approximately $4.4 million.

Of the increase in revenues in fiscal 2008 as compared to fiscal 2007, $173.1 million was attributable to revenues generated in the UK.

We entered the UK market through four acquisitions, the first being the acquisition of Universal Salvage in June 2007.

Prior to that transaction, we had no UK operations.

In the UK, we operate primarily on a principle basis purchasing cars outright and reselling them for our own account.

Under this method, the total amount of the selling price and the total amount of the cost of the car are reflected in the results of operations.

In North America, we operate primarily on an agency basis; selling the car on behalf of the seller and collecting only a service fee.

Under this method only the earned fee is included in the results of operations, not the gross selling price and the cost of the car.

Included in yard expenses is depreciation expense of $32.2 million, of which $4.5 million was attributable to the UK operations and represents an increase of $1.5 million over fiscal 2007.

In North America, yard operation expense, excluding depreciation, increased by $11.7 million and was attributable to the increase in the volume of cars processed.

UK operations generated yard operating expenses of $170.1 million.

Yard operation expenses increased to 58.9% of revenues during fiscal 2008, as compared to 52.4% of revenues during fiscal 2007.

In the UK, we operate primarily on a principle basis purchasing the vehicle outright and reselling them for our own account.

Accordingly, the purchase price of the vehicle, which was approximately $116.3 million and $9.7 million in fiscal 2008 and 2007, respectively, is reflected in our yard operating expenses.

Because the UK operates primarily on the principle basis, its gross margin percentage is significantly lower than the gross margin percentage of the US.

Approximately 70% of the vehicles processed in the UK during the year were purchased cars.

The following sets forth information on gross margin, defined as revenue less yard operation expenses, and percentage of gross margin by geographic region (in thousands, except percentages):

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | 2008 | | | Percentage of Gross Margin | | | 2007 | | | Percentage of Gross Margin | | |

| North America | | $ | 304,511 | | | 51.0 | % | $ | 262,402 | | | 48.1 | % |

| United Kingdom | | | 17,748 | | | 9.4 | % | | 4,380 | | | 29.6 | % |

| | | | | | | | | | | | | | |

| | | $ | 322,259 | | | 41.1 | % | $ | 266,782 | | | 47.6 | % |

Our principal exposures to financial market risk are interest rate [removed: and] [added: risk,] foreign currency [added: risk and translation] risk.

Interest Rate Risk

The primary objective of our investment activities is to preserve principal while secondarily maximizing yields without significantly increasing risk.

To achieve this objective in the current uncertain global financial markets, as of July 31, 2009, all of our total cash and cash equivalents were held in bank deposits and money market funds.

As of July 31, 2009, we held no direct investments in auction rate securities, collateralized debt obligations, structured investment vehicles or mortgaged-backed securities.

Based on the average cash balance held during the twelve months ended July 31, 2009, a 10% change in our interest yield would not materially affect our operating results.

We do not hedge interest rate fluctuation risks.

Foreign Currency and Translation Exposure

Fluctuations in the foreign currencies create volatility in our reported results of operations because we are required to consolidate the results of operations of our foreign currency denominated subsidiaries.

International net revenues result from transactions by our Canadian and UK operations and are typically denominated in the local currency of each country.

These operations also incur a majority of their expenses in the local currency, the Canadian dollar and the British pound.

Our international operations are subject to risks associated with foreign exchange rate volatility.

Accordingly, our future results could be materially adversely impacted by changes in these or other factors.

A hypothetical uniform 10% strengthening or weakening in the value of the US dollar relative to the Canadian dollar and British pound in which our revenues and profits are denominated would result in a decrease/increase to revenue of approximately $15.2 million for the twelve months ended July 31, 2009.

There are inherent limitations in the sensitivity analysis presented, due primarily to the assumption that foreign exchange rate movements are linear and instantaneous.

As a result, the analysis is unable to reflect the potential effects of more complex market changes that could arise, which may positively or negatively affect income.

Fluctuations in the foreign currencies create volatility in our reported consolidated financial position because we are required to remeasure substantially all assets and liabilities held by our foreign subsidiaries at the current exchange rate at the close of the accounting period.

At July 31, 2009, the cumulative effect of foreign exchange rate fluctuations on our consolidated financial position was a net translation loss of approximately $27.1 million.

This loss is recognized as an adjustment to stockholders' equity through accumulated other comprehensive income.

A 10% strengthening or weakening in the value of the US dollar relative to the Canadian dollar or the British pound will not have a material affect on our consolidated financial position.

We do not hedge our exposure to translation risks arising from fluctuations in foreign currency exchange rates.

Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio of marketable securities.

As of July 31, 2008, our cash and cash equivalents consisted primarily of funds invested in money market accounts, which bear interest at a variable rate.

Our exposure to foreign currency transactions gains and losses arises from the translation of the assets and liabilities of our Canadian and UK subsidiaries to US dollars during consolidation.

We do not hedge our exposure to the Canadian dollar or the British pound.

We do not use derivative financial instruments for speculative or trading purposes.

[removed: General][added: General]

Copart, Inc. is a leading provider of [added: online auctions and] vehicle remarketing services in the United States (US), Canada and the United Kingdom (UK).

We provide vehicle sellers with a full range of [removed: remarketing] services to process and sell vehicles over the Internet through our Virtual Bidding Second Generation Internet auction-style sales technology, which we refer to as VB2.

Sellers are primarily [removed: insurances] [added: insurance] companies but also include banks and financial institutions, charities, car dealerships, fleet operators, vehicle rental companies and the general public.

We offer vehicle sellers a full range of [removed: remarketing] services that expedite each stage of the vehicle sales process, minimize administrative and processing costs and maximize the ultimate sales price.

In [added: the US and Canada, or] North America, we sell vehicles primarily as an agent and derive revenue primarily from [removed: sales transaction] fees paid by vehicle sellers and vehicle buyers as well as related fees for services such as towing and storage.

During fiscal [removed: 2004, in North America,] [added: 2004] and [removed: during] fiscal [removed: 2008 in the UK,] [added: 2008,] we [removed: discontinued] [added: converted] all [removed: live auctions] [added: of our North American] and [removed: began remarketing vehicles on] [added: UK sales respectively, to] our Internet based auction-style selling platform which we call VB2.

This technology and model [removed: allows for] [added: employs a two-step] bidding [removed: in two phases.][added: process.]

The first [removed: phase] [added: step] is an open preliminary bidding feature that allows a buyer to enter bids either at a bidding station at the storage facility during the preview days or over the Internet.

The preliminary bidding [removed: phase] [added: step] is an open bid format similar to eBay.

Buyers enter the maximum price they are willing to pay for a vehicle and VB2's BID4U feature will incrementally bid the vehicle on their behalf during all [removed: phases] [added: steps] of the auction.

Preliminary bidding ends one hour prior to the start of a second bidding [removed: phase,] [added: step,] an Internet-only virtual auction.

This second [removed: phase] [added: step] allows bidders the opportunity to bid against each other and the high preliminary bidder.

We believe the implementation of VB2 [removed: across our North American salvage operations] has increased the pool of available buyers for each sale and the added competition has increased the amount buyers are willing to pay for vehicles.

For fiscal [removed: 2008,] [added: 2009,] sales of North American vehicles, on a unit basis, to buyers registered outside the state where the vehicle is located accounted for [removed: 50.8%] [added: 46.8%] of total vehicles sold [removed: (24.6%] [added: (25.3%] of vehicles were sold to out of state buyers and [removed: 26.2%] [added: 21.5%] were sold to out of country buyers, based on registration).

We believe that we offer the highest level of service in the [removed: salvage vehicle sales] [added: auction] and [added: vehicle] remarketing industry and have established our leading market position by:

applying technology to enhance operating efficiency through Internet bidding, web-based order processing, salvage value quotes, electronic communication with buyers and sellers, vehicle imaging, and an [removed: electronic] [added: online] used vehicle parts locator service; and

providing the venue for insurance customers through our Virtual Insured Exchange (VIX) product to [removed: enter] [added: contingently sell] a vehicle [removed: into a sealed bid sale] [added: through the auction process] to establish its true value, allowing the insurance customer to avoid dealing with estimated values when negotiating with owners who wish to retain their damaged vehicles.

[removed: Our] [added: Historically, we believe our] business has [removed: grown, we believe,] [added: grown] as a result of [removed: i)] [added: (i)] acquisitions, [removed: ii)] [added: (ii)] increases in the overall volume in the salvage car market, [removed: iii)] [added: (iii)] growth in market share, [removed: iv)] [added: (iv)] increases in amount of revenue generated per sales transaction resulting from increases in the gross selling price and the addition of value-added services for both buyers and sellers, and [removed: v)] [added: (v)] the growth in non-insurance company sellers.

For fiscal year [removed: 2008,] [added: 2009,] which ended July 31, [removed: 2008,] [added: 2009,] our revenues were approximately [removed: $784.8] [added: $743.1] million and our operating income was approximately [removed: $237.9] [added: $225.3] million.

Universal, Century and Watson were all leading providers of vehicle [removed: remarketing] [added: auctions and] services to the motor insurance and automotive industries.

In fiscal 2008, we [removed: began] [added: initiated] two new programs (i) Copart Dealer Services (CDS), by which we sell dealer-trade-ins using our VB2 application and (ii) CopartDirect, whereby we sell cars on behalf of the general public, using our VB2 application, so that individuals can avoid the inconvenience of selling the [removed: car] [added: cars] themselves.

As of July 31, [removed: 2008,] [added: 2009,] we had [removed: 129] [added: 133] facilities in the US, 2 facilities in Canada and 12 facilities in the UK.

Industry [removed: Overview][added: Overview]

The [added: auction and] vehicle remarketing [added: services] industry provides a venue for sellers to dispose [added: of] or liquidate vehicles to a broad domestic and international buyer pool.

On occasion in North America and on a primary basis in the UK, companies in our industry will purchase vehicles from the largest segment of sellers, insurance companies, and resell the [removed: vehicle] [added: vehicles] for their own account.

Although there are other sellers of vehicles, such as [added: banks and] financial institutions, [added: charities, car dealerships, fleet operators,] vehicle [removed: leasing companies, automobile] rental [removed: companies, charities, automobile dealers,] [added: companies] and the general public, the primary [removed: seller] [added: sellers] of vehicles [removed: is] [added: are] insurance companies.

The vehicle is inspected by the insurance company's adjuster, who estimates the costs of repairing the vehicle and gathers information regarding the damaged vehicle's mileage, options and condition in order to estimate its [added: pre-accident value (PAV), or] actual cash value [removed: (pre-accident value).][added: (ACV).]

The adjuster determines whether to pay for repairs or to classify the vehicle as a total loss based upon the adjuster's estimate of repair costs, vehicle's salvage value, and the [removed: pre-accident] [added: PAV] or [removed: settlement value,] [added: ACV,] as well as customer service considerations.

The insurance company will thereafter assign the vehicle to a [removed: remarketer,] [added: vehicle auction and remarketing services company,] settle with the insured and receive title to the vehicle.

We believe the primary factors that insurance companies consider when selecting [removed: a] [added: an auction and vehicle] remarketing [added: services] company include:

the services provided by the [removed: salvage vehicle sales] company and the degree to which such services reduce administrative costs and expenses;

the price the [removed: salvage vehicle sales] company charges for its services;

Generally, upon receipt of the pick up order (the assignment), [removed: the company arranges] [added: we arrange] for the transport of a vehicle to a facility.

As a service to the vehicle seller, [removed: the company] [added: we] will customarily pay advance charges (reimbursable charges paid on behalf of vehicle sellers) to obtain the vehicle's release from a towing [removed: company or] [added: company,] vehicle repair [added: facility or impound] facility.

In the UK, upon release of interest by the vehicle owner, the insurance company notifies us that the vehicle is available for [removed: sale.][added: sale for our own account.]

Generally, sellers of non-salvage vehicles will arrange to deliver the vehicle to one of [removed: the company's] [added: our] locations.

At that time, the vehicle information will be uploaded to [removed: the vehicle database] [added: our system] and made available for [removed: the] buyers to [removed: review.][added: review online.]

Proceeds are then collected from the buyer, seller fees are [removed: then] subtracted and the remainder is remitted to the seller.

Operating and Growth [removed: Strategy][added: Strategy]

For fiscal 2009, sales of UK vehicles, on a unit basis, to buyers registered outside the country where the vehicle is located accounted for 18.4% of total vehicles sold.

In fiscal 2009, we opened our website to the public, initiated our Registered Broker program by which the public can purchase vehicles through a registered buyer, and initiated our Market Maker program by which registered buyers can open Copart storefronts with internet kiosks that enable the general public to browse and view our inventory and purchase vehicles from us through the Market Maker.

In North America, we opened five new facilities located in Louisville, Kentucky; Richmond, Virginia; Montgomery, Alabama; Greer, South Carolina; and Warren, Massachusetts.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Louisville, Kentucky | | Greenfield | | | | September 2008 | | Northwest Kentucky and Southern Indiana |

| Richmond, Virginia | | Greenfield | | | | October 2008 | | Central Virginia |

| Montgomery, Alabama | | Greenfield | | | | February 2009 | | Central Alabama |

| Greer, South Carolina | | Greenfield | | | | February 2009 | | Northwest South Carolina |

| Warren, Massachusetts | | Greenfield | | | | June 2009 | | Central Massachusetts |

Former MAG facility

This includes, for our sellers, real-time access to sales

consistency in products and services.

We have no purchase programs in North America.

_U-Pull-It_

In the UK we have two facilities from which the public can purchase parts from salvaged and end-of-life vehicles.

In general, the buyer is responsible for detaching the parts from the vehicle and any associated hauling or transportation of the parts after detachment.

After the valuable parts have been removed by the buyer, the remaining parts and car body are sold for their scrap value.

However, non-registered buyers may transact business at any of our sales via a registered broker who meets the local licensing and permitting requirements.

Strict admission procedures are intended

be disposed of as non-hazardous or hazardous waste, as appropriate.

Sampling was performed in November 2008.

In December 2008, a report was submitted to the TCEQ indicating that lead levels were below Texas surface water quality standards.

In May of 2009, the TCEQ approved the Surface Water Sampling Report, as well as the Concrete Cap Inspection Report submitted in December 2008.

We are making necessary repairs to the concrete cap and providing a survey map of the cap.

Annual inspections of the cap will be required to ensure its maintenance.

There is no assurance that we may not incur future liabilities if the stabilization process proves

We implemented the use of VB2 in the UK in fiscal 2008.

We cannot predict whether the implementation of VB2 in the UK will have the same favorable impact on our buyer base and operating efficiencies that we experienced in North America.

In North America, we acquired one new vehicle storage facility in Sikeston, Missouri and opened six new vehicle storage facilities located in London, Canada; Windsor, New Jersey; Walton, Kentucky; Birmingham, Alabama; Minneapolis, Minnesota and Prairie Grove, Arkansas.

In fiscal 2006, we adopted a formal plan to discontinue the operations of Motors Auction Group, or MAG, a wholly owned subsidiary, and dispose of the related assets or convert them to our salvage business.

We operated six public automobile sales facilities located in Detroit, Michigan; Chesapeake, Virginia; New Castle, Delaware; Greencastle, Pennsylvania; Pittsburgh, Pennsylvania and Richmond, Virginia.

We sold the businesses located in Chesapeake, New Castle and

Greencastle prior to the end of fiscal 2006.

We converted Detroit, Pittsburgh and Richmond into salvage facilities.

As of the end of fiscal 2006, no MAG operations remained.

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| Honolulu, Hawaii | | | | August 2005 | | Hawaii |

| Greenwood, Nebraska | | | | September 2005 | | Eastern Nebraska |

| Grand Island, Nebraska | | | | September 2005 | | Eastern Nebraska |

| York Haven, Pennsylvania | | | | November 2005 | | Southern Pennsylvania |

| Chambersburg, Pennsylvania | | | | November 2005 | | Southern Pennsylvania |

| Altoona, Pennsylvania | | | | November 2005 | | Central Pennsylvania |

| Fruitland, Maryland | | | | November 2005 | | Eastern Maryland |

| Lansing, Michigan | | | | December 2005 | | Central Michigan |

| Billings, Montana | | | | March 2006 | | Central Montana |

| Dover, Florida | | | | July 2006 | | Western Florida |

| Jacksonville, Florida | | | | July 2006 | | Northeast Florida |

consistency in remarketing of vehicles.

Under PIP, we agree to sell all of the

We believe that we have

sampling.

Sampling is anticipated to be performed in September or October, 2008.

In addition, in 1994, we detected a small quantity of two hazardous substances in a temporary groundwater monitoring well at the Dallas facility.

Our environmental consultants concluded that both substances arose from an off-site source and no further action was recommended.

On July 28, 2006, Foreign Car Sales and Service LLC (FCS) filed suit against Copart in the United States District Court for the Middle District of Louisiana, originally alleging antitrust violations and unfair trade practices.

Relief sought originally included class certification based on both unfair trade practices and Sherman Act violations, damages, fees, costs and expenses.

On August 23, 2007, we filed: (i) a Motion to Dismiss Claims for Improper Venue, (ii) a Motion to Dismiss for Failure to Join Persons Needed for Just Adjudication, (iii) a Motion To Dismiss for Lack of Diversity Jurisdiction, (iv) a Motion to Dismiss Load Out Fee Class Action for Failure to State Claim, and (v) a Motion to Dismiss Load Out Fee Class Action for Lack of Diversity Jurisdiction.

On February 22, 2008, the court granted the motions to dismiss with regard to all claims, leaving only the antitrust claim pending.

On July 15, 2008, the federal antitrust claims were dismissed with prejudice.

No material claims remain.

On November 30, 2007, Tracy Utterback Suggs filed suit against Copart in Harris County, Texas District Court.

The complaint alleges breach of contract and negligence for allowing Suggs' vehicle

to be destroyed.

The plaintiff claims that the vehicle in question was the key piece of evidence in support of an anticipated design defect products liability case against American Honda and that the Company is responsible for the spoliation of that evidence.

On May 28, 2008, the parties reached a settlement in principle at mediation.

CARS is seeking [removed: $4.7] [added: in excess of $2] million in damages, punitive damages, and prejudgment interest related to allegations involving breach of contract and misrepresentation.

We believe the claim is without merit and [added: we] are [added: vigorously] defending the [removed: lawsuit vigorously.][added: lawsuit.]

We [removed: accrue] [added: provide] for costs relating to these matters when a loss is probable and the amount can be reasonably estimated.

The effect of the outcome of these matters on our future results of operations cannot be predicted because any such effect depends on future results of [removed: operations,] [added: operations and] the amount and timing of the resolution of such matters.

On December 16, 2008, Liberty Mutual Fire Insurance Company filed suit against Copart in the US District Court, Northern District of California.

Liberty Mutual's complaint seeks reformation of an insurance contract and specific performance in relation to a policy issued to us with a $50,000 self-insured retention.

After settlement of a claim under the subject policy for $3.95 million, Liberty Mutual is seeking to reform the contract and charge Copart for a $2 million self-insured retention which it claims was the original intent.

We are vigorously defending the lawsuit.

We maintain insurance which may or may not provide coverage for claims made against us.

There is no assurance that there will be insurance coverage available when and if needed or that our insurers will not seek to deny or limit coverage.

Additionally, the insurance that we carry requires that we pay for costs and/or claims exposure up to the amount of the insurance deductibles negotiated when insurance is purchased.

On July 28, 2006, Foreign Car Sales and Service LLC (FCS) filed suit against Copart in the United States District Court for the Middle District of Louisiana, originally alleging antitrust violations and unfair trade practices.

Relief sought originally included class certification based on both unfair trade practices and Sherman Act violations, damages, fees, costs and expenses.

On August 23, 2007, we filed: (i) a Motion to Dismiss Claims for Improper Venue, (ii) a Motion to Dismiss for Failure to Join Persons Needed for Just Adjudication, (iii) a Motion To Dismiss for Lack of Diversity Jurisdiction, (iv) a Motion to Dismiss Load Out Fee Class Action for Failure to State Claim and (v) a Motion to Dismiss Load Out Fee Class Action for Lack of Diversity Jurisdiction.

On February 22, 2008, the court granted the motions to dismiss with regard to all claims, leaving only the antitrust claim pending.

On July 15, 2008, the federal antitrust claims were dismissed with prejudice.

No material claims remain.

On November 30, 2007, Tracy Utterback Suggs filed suit against Copart in Harris County, Texas District Court.

The complaint alleges breach of contract and negligence for allowing Suggs' vehicle to be destroyed.

The plaintiff claims that the vehicle in question was the key piece of evidence in support of an anticipated design defect products liability case against American Honda and that we are responsible for the spoliation of that evidence.

On May 28, 2008, the parties reached a settlement in principle at mediation.

The settlement does not result in any material contribution on the part of Copart because our insurance company agreed to fund the settlement, under a reservation of rights.

All portions of the settlement requiring court approval have been approved.

The lawsuit remains open pending the final funding of the settlement by the insurance company.

We are aware, however, that the insurance company intends to claim that we are responsible for a $2 million self-insured retention.

We cannot determine that a loss is probable, and we cannot reasonably estimate the amount of a loss regarding this claim, if a claim is made.

We intend to vigorously defend any claim made by the insurance company.

On April 18, 2007, Heather Trafton, as personal representative of the estate of Larry Trafton, filed a wrongful death suit against Carlos Sigas Star Auto and Copart in the Circuit Court of the Thirteenth Judicial Circuit of Florida in the County of Hillsborough, Florida.

The plaintiff alleges that Manuel Vega, a driver for the independent tow company Carlos Sigas Star Auto, caused the death of decedent, motorcyclist Larry Trafton, by running a red light and colliding with Mr. Trafton at an intersection.

Although neither Mr. Sigas nor Mr. Vega are employees of Copart, the plaintiff alleges that we are responsible for the wrongful death of Mr. Trafton.

On or about February 6, 2008, we received the plaintiff's initial monetary demand in the amount of $6 million.

On September 16, 2008, the parties reached a settlement in principle at mediation.

The settlement does not result in any material contribution on the part of Copart.

The settlement remains subject to the parties entering into formal settlement agreements, and it must also be approved by the court.

However, we believe the ultimate outcome will not have a material impact on our consolidated financial position, results of operations or cash flows.

On July 14, 2008, we filed a lawsuit against Auto Auction Services Corp. (AASC) in US District Court, Northern District of California.

The principal parties are Copart as plaintiff and AASC as defendant.

The complaint identifies, but did not name as defendants, various co-conspirators, including Manheim Auctions, Inc. and ADESA, Inc. The complaint primarily alleges that AASC and its co-conspirators engaged in a group boycott and concerted refusal to deal with Copart for the purpose of excluding Copart from effectively providing vehicle auction services to fleet operators, fleet management companies, national or regional banks, finance companies, and leasing companies, all in violation of federal and California antitrust and unfair competition laws.

We are seeking injunctive relief and unspecified monetary damages.

SECURITIES AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

| þ | | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: July 31, [removed: 2008] [added: 2009] |

The aggregate market value of the voting and non-voting Common Stock held by non-affiliates of the registrant as of January 31, [removed: 2008] [added: 2009] (the last business day of the registrant's most recently completed second fiscal quarter) was [removed: $2,340,296,687] [added: $1,576,240,787] based upon the closing sales price reported for such date on the NASDAQ Global Select Market (formerly the NASDAQ National Market).

At September [removed: 26, 2008,] [added: 29, 2009,] registrant had [removed: 83,283,898] [added: 84,082,113] outstanding shares of Common Stock.

Items 10, 11, 12, 13, and 14 of Part III incorporate certain information by reference from the registrant's definitive proxy statement for its [removed: 2008] [added: 2009] Annual Meeting of Shareholders (Proxy Statement) to be filed pursuant to Regulation 14A within 120 days after the registrant's fiscal year end of July 31, [removed: 2008.][added: 2009.]

for the Fiscal Year Ended July 31, [removed: 2008][added: 2009]

| [removed: Information] [added: [](#SPECIAL_NOTE) [Information] concerning forward-looking statements used in this Form [removed: 10-K] [added: 10-K](#SPECIAL_NOTE)] | | | | [removed: 2] [added: [2](#SPECIAL_NOTE)] |

[removed: | Corporate] [added: Corporate] Information [removed: | | | | 2 |]

| | | [removed: General] [added: [](#de79401_general) [General](#de79401_general)] | | [removed: 3] [added: [3](#de79401_general)] |

| | | [removed: Industry Overview] [added: [](#de79401_industry_overview) [Industry Overview](#de79401_industry_overview)] | | [removed: 5] [added: [5](#de79401_industry_overview)] |

| | | [removed: Operating] [added: [](#dg79401_operating_and_growth_strategy) [Operating] and Growth [removed: Strategy] [added: Strategy](#dg79401_operating_and_growth_strategy)] | | [removed: 6] [added: [6](#dg79401_operating_and_growth_strategy)] |

| | | [removed: Our] [added: [](#dg79401_our_competitive_advantages) [Our] Competitive [removed: Advantages] [added: Advantages](#dg79401_our_competitive_advantages)] | | [removed: 8] [added: [8](#dg79401_our_competitive_advantages)] |

| | | [removed: Our] [added: [](#dg79401_our_service_offerings) [Our] Service [removed: Offerings] [added: Offerings](#dg79401_our_service_offerings)] | | [removed: 9] [added: [9](#dg79401_our_service_offerings)] |

| | | [removed: Seller Marketing] [added: [](#di79401_seller_marketing) [Seller Marketing](#di79401_seller_marketing)] | | [removed: 12] [added: [12](#di79401_seller_marketing)] |

| | | [removed: Buyers] [added: [](#di79401_buyers) [Buyers](#di79401_buyers)] | | [removed: 12] [added: [12](#di79401_buyers)] |

| | | [removed: Competition] [added: [](#di79401_competition) [Competition](#di79401_competition)] | | [removed: 13] [added: [13](#di79401_competition)] |

| | | [removed: Management] [added: [](#di79401_management_information_systems) [Management] Information [removed: Systems] [added: Systems](#di79401_management_information_systems)] | | [removed: 13] [added: [13](#di79401_management_information_systems)] |

| | | [removed: Employees] [added: [](#di79401_employees) [Employees](#di79401_employees)] | | [removed: 13] [added: [13](#di79401_employees)] |

| | | [removed: Environmental Matters] [added: [](#di79401_environmental_matters) [Environmental Matters](#di79401_environmental_matters)] | | [removed: 14] [added: [13](#di79401_environmental_matters)] |

| | | [removed: Governmental Regulations] [added: [](#di79401_governmental_regulations) [Governmental Regulations](#di79401_governmental_regulations)] | | [removed: 15] [added: [15](#di79401_governmental_regulations)] |

| | | [removed: Legal Proceedings] [added: [](#di79401_legal_proceedings) [Legal Proceedings](#di79401_legal_proceedings)] | | [removed: 15] [added: [15](#di79401_legal_proceedings)] |

| | | [removed: Intellectual] [added: [](#di79401_intellectual_property_and_proprietary_rights) [Intellectual] Property and Proprietary [removed: Rights] [added: Rights](#di79401_intellectual_property_and_proprietary_rights)] | | [removed: 16] [added: [16](#di79401_intellectual_property_and_proprietary_rights)] |

| | | [removed: Seasonality] [added: [](#di79401_seasonality) [Seasonality](#di79401_seasonality)] | | [removed: 17] [added: [16](#di79401_seasonality)] |

[removed: Item 1A.][added: | [](#dk79401_item_1a._risk_factors) [Item 1A.](#dk79401_item_1a._risk_factors) | | [](#dk79401_item_1a._risk_factors) [Risk Factors](#dk79401_item_1a._risk_factors) | | [17](#dk79401_item_1a._risk_factors) |]

[removed: Unresolved] [added: | [](#dm79401_item_1b._unresolved_staff_comments) [Item 1B.](#dm79401_item_1b._unresolved_staff_comments) | | [](#dm79401_item_1b._unresolved_staff_comments) [Unresolved] Staff [removed: Comments 28][added: Comments](#dm79401_item_1b._unresolved_staff_comments) | | [27](#dm79401_item_1b._unresolved_staff_comments) |]

[removed: Legal Proceedings 29][added: | [](#dm79401_item_3._legal_proceedings) [Item 3.](#dm79401_item_3._legal_proceedings) | | [](#dm79401_item_3._legal_proceedings) [Legal Proceedings](#dm79401_item_3._legal_proceedings) | | [27](#dm79401_item_3._legal_proceedings) |]

[removed: Submission] [added: | [](#dm79401_item_4._submission_of___dm702394) [Item 4.](#dm79401_item_4._submission_of___dm702394) | | [](#dm79401_item_4._submission_of___dm702394) [Submission] of Matters to a Vote of Security [removed: Holders 30][added: Holders](#dm79401_item_4._submission_of___dm702394) | | [28](#dm79401_item_4._submission_of___dm702394) |]

[removed: Market] [added: | [](#do79401_item_5._market_for_registrant___ite04649) [Item 5.](#do79401_item_5._market_for_registrant___ite04649) | | [](#do79401_item_5._market_for_registrant___ite04649) [Market] for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity [removed: Securities 31][added: Securities](#do79401_item_5._market_for_registrant___ite04649) | | [29](#do79401_item_5._market_for_registrant___ite04649) |]

[removed: Selected] [added: | [](#dq79401_item_6._selected_financial_data) [Item 6.](#dq79401_item_6._selected_financial_data) | | [](#dq79401_item_6._selected_financial_data) [Selected] Financial [removed: Data 34][added: Data](#dq79401_item_6._selected_financial_data) | | [32](#dq79401_item_6._selected_financial_data) |]

[removed: Management's] [added: | [](#ds79401_item_7._management_s_discussio__ite03668) [Item 7.](#ds79401_item_7._management_s_discussio__ite03668) | | [](#ds79401_item_7._management_s_discussio__ite03668) [Management's] Discussion and Analysis of Financial Condition and Results of [removed: Operations 35][added: Operations](#ds79401_item_7._management_s_discussio__ite03668) | | [33](#ds79401_item_7._management_s_discussio__ite03668) |]

[removed: Quantitative] [added: | [](#du79401_item_7a._quantitative_and_qual__ite02669) [Item 7A.](#du79401_item_7a._quantitative_and_qual__ite02669) | | [](#du79401_item_7a._quantitative_and_qual__ite02669) [Quantitative] and Qualitative Disclosures About Market [removed: Risk 47][added: Risk](#du79401_item_7a._quantitative_and_qual__ite02669) | | [47](#du79401_item_7a._quantitative_and_qual__ite02669) |]

[removed: Financial] [added: | [](#du79401_item_8._financial_statements_and_supplementary_data) [Item 8.](#du79401_item_8._financial_statements_and_supplementary_data) | | [](#du79401_item_8._financial_statements_and_supplementary_data) [Financial] Statements and Supplementary [removed: Data 47][added: Data](#du79401_item_8._financial_statements_and_supplementary_data) | | [48](#du79401_item_8._financial_statements_and_supplementary_data) |]

[removed: Changes] [added: | [](#du79401_item_9._changes_in_and_disagre__ite03576) [Item 9.](#du79401_item_9._changes_in_and_disagre__ite03576) | | [](#du79401_item_9._changes_in_and_disagre__ite03576) [Changes] in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure 47][added: Disclosure](#du79401_item_9._changes_in_and_disagre__ite03576) | | [48](#du79401_item_9._changes_in_and_disagre__ite03576) |]

[removed: Controls] [added: | [](#du79401_item_9a._controls_and_procedures) [Item 9A.](#du79401_item_9a._controls_and_procedures) | | [](#du79401_item_9a._controls_and_procedures) [Controls] and [removed: Procedures 47][added: Procedures](#du79401_item_9a._controls_and_procedures) | | [48](#du79401_item_9a._controls_and_procedures) |]

[removed: Item 9B.][added: | [](#dy79401_item_9b._other_information) [Item 9B.](#dy79401_item_9b._other_information) | | [](#dy79401_item_9b._other_information) [Other Information](#dy79401_item_9b._other_information) | | [52](#dy79401_item_9b._other_information) |]

[removed: Directors,] [added: | [](#dy79401_item_10._directors,_executive___ite03076) [Item 10.](#dy79401_item_10._directors,_executive___ite03076) | | [](#dy79401_item_10._directors,_executive___ite03076) [Directors,] Executive Officers of the Registrant and Corporate [removed: Governance 52][added: Governance](#dy79401_item_10._directors,_executive___ite03076) | | [53](#dy79401_item_10._directors,_executive___ite03076) |]

[removed: Item 11.][added: | [](#dy79401_item_11._executive_compensation) [Item 11.](#dy79401_item_11._executive_compensation) | | [](#dy79401_item_11._executive_compensation) [Executive Compensation](#dy79401_item_11._executive_compensation) | | [53](#dy79401_item_11._executive_compensation) |]

[removed: Security] [added: | [](#dy79401_item_12._security_ownership_of__ite03987) [Item 12.](#dy79401_item_12._security_ownership_of__ite03987) | | [](#dy79401_item_12._security_ownership_of__ite03987) [Security] Ownership of Certain Beneficial Owners and Management and Related Shareholder [removed: Matters 52][added: Matters](#dy79401_item_12._security_ownership_of__ite03987) | | [53](#dy79401_item_12._security_ownership_of__ite03987) |]

[removed: Certain] [added: | [](#dy79401_item_13._certain_relationships__ite03067) [Item 13.](#dy79401_item_13._certain_relationships__ite03067) | | [](#dy79401_item_13._certain_relationships__ite03067) [Certain] Relationships and Related Transactions, and Director [removed: Independence 53][added: Independence](#dy79401_item_13._certain_relationships__ite03067) | | [54](#dy79401_item_13._certain_relationships__ite03067) |]

[removed: Principal] [added: | [](#dy79401_item_14._principal_accountant_fees_and_services) [Item 14.](#dy79401_item_14._principal_accountant_fees_and_services) | | [](#dy79401_item_14._principal_accountant_fees_and_services) [Principal] Accountant Fees and [removed: Services 53][added: Services](#dy79401_item_14._principal_accountant_fees_and_services) | | [54](#dy79401_item_14._principal_accountant_fees_and_services) |]

10-K 1 a2194735z10-k.htm FORM 10-K

Use these links to rapidly review the document

[PART IV](#ea79401_part_iv)

Washington, D.C. 20549

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No o

| [](#de79401_item_1._business) [Item 1.](#de79401_item_1._business) | | [](#de79401_item_1._business) [Business](#de79401_item_1._business) | | [3](#de79401_item_1._business) |

| [](#dm79401_item_2._properties) [Item 2.](#dm79401_item_2._properties) | | [](#dm79401_item_2._properties) [Properties](#dm79401_item_2._properties) | | [27](#dm79401_item_2._properties) |

10-K 1 a2188134z10-k.htm 10-K

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Item 1.

Business 3

Risk Factors 18

| | | Executive Officers of the Registrant | | 27 |

Item 1B.

Item 2.

Properties 28

Item 3.

Item 4.

Item 5.

Item 6.

Item 7.

Item 7A.

Item 8.

Item 9.

Item 9A.

Other Information 51

Item 10.

Executive Compensation 52

Item 12.

Item 13.

Item 14.

Item 15.

We also own or lease an additional [removed: 143] [added: 147] operating facilities.

In the UK, as of July 31, [removed: 2008,] [added: 2009,] we owned or leased 12 operating facilities.

We believe that our existing facilities are adequate to meet current requirements and that [added: suitable additional or substitute space will be available as needed to accommodate any expansion of operations and additional offices on commercially acceptable terms.]

suitable additional or substitute space will be available as needed to accommodate any expansion of operations and additional offices on commercially acceptable terms.

We did not submit any matters to a vote of our shareholders during the fourth quarter of our [removed: 2008] [added: 2009] fiscal year.

As of July 31, [removed: 2008,] [added: 2009,] there were [removed: 83,274,995] [added: 83,938,814] shares outstanding.

As of July 31, [removed: 2008,] [added: 2009,] we had [removed: 1,614] [added: 1,745] shareholders of record.

On July 31, [removed: 2008,] [added: 2009,] the last reported sale price of our common stock on the Nasdaq Global Select Market was [removed: $43.86] [added: $35.31] per share.

| Fiscal Year [removed: 2007] [added: 2009] | | High | | | Low | | |

In addition to our stock [removed: repurchase,] [added: repurchase program,] we are considering a variety of alternative potential uses for our remaining cash balances and our cash flow from operations.

At the end of fiscal year [removed: 2008,] [added: 2009,] the total number of shares repurchased under the program was 13,649,469.

As of July 31, [removed: 2008,] [added: 2009,] 15,350,531 shares were available for repurchase under our program.

| First Quarter | | | — | | | — | | | — | | | 21,966,295 | [added: *] |

| First Quarter | | | [removed: — | | | — | | | —] [added: 46.96] | | | [removed: —] [added: 30.21] | |

| Third Quarter | | | [removed: — | | | — | | | —] [added: 32.78] | | | [removed: —] [added: 23.48] | |

| Fourth Quarter | | | [removed: — | | | — | | | —] [added: 36.00] | | | [removed: —] [added: 29.02] | |

There were no issuances of unregistered securities in the quarter ended July 31, [removed: 2008.][added: 2009.]

_Notwithstanding any statement to the contrary in any of our previous or future filings with the SEC, the following information relating to the price performance of our common stock shall not be deemed "filed" with the SEC or "Soliciting Material" under the Exchange Act, or subject to Regulation 14A or 14C, or to liabilities of Section 18 of the Exchange Act except to the extent we specifically request that such information be treated as soliciting material or to the extent we specifically [removed: request that such information be treated as soliciting material or to the extent we specifically] incorporate this information by reference._

The following is a line graph comparing the cumulative total return to shareholders of our common stock at July 31, [removed: 2008] [added: 2009] since July 31, [removed: 2003,] [added: 2004,] to the cumulative total return over such period of (i) the [removed: Nasdaq] [added: NASDAQ] Composite [removed: Index and] [added: Index,] (ii) a peer [removed: group.][added: group consisting of Sterling Construction Company, Inc. (STRL) and Coast Distribution System, Inc. (CRV), and (iii) the NASDAQ Q-50 (NXTQ).]

Among Copart, Inc., The NASDAQ Composite [removed: Index][added: Index,]

[removed: And] A Peer [removed: Group][added: Group, and The NASDAQ Q-50 (NXTQ)]

[removed: ][added: ]

Assumes that $100.00 was invested on July 31, [removed: 2003] [added: 2004] in our common stock and in the [removed: Nasdaq] [added: NASDAQ] Stock Market (US) [removed: Index and] [added: Index,] the peer group, and [added: the NASDAQ Q-50 (NXTQ), and] that all dividends were reinvested.

| Second Quarter | | | 36.57 | | | 22.54 | |

For the year ended July 31, 2009, we did not repurchase any shares under our stock repurchase program.

In December 2008, our President exercised 600,000 options at an exercise price of $4.47 per share.

In a cashless exercise, 96,929 shares of the 600,000 options exercised were net settled in

satisfaction of the exercise price for the portion of options that were classified as non-qualified stock options.

Additionally, 222,817 shares were withheld at a per share price of $26.93, totaling approximately $6.0 million, based on the closing price of our common stock on the date of exercise, in lieu of the federal and state minimum statutory tax withholding requirements.

In June 2009, our President exercised 361,035 options at an exercise price of $11.12 per share.

In a cashless exercise, 116,741 shares of the 361,035 shares exercised were net settled in satisfaction of the exercise price for the portion of options that were classified as non-qualified stock options.

Additionally, 109,595 shares were withheld at a per share price of $34.39, totaling approximately $3.8 million, based on the closing price of our common stock on the date of exercise, in lieu of the federal and state minimum statutory tax withholding requirements.

We remitted approximately $9.8 million to the proper taxing authorities in satisfaction of the employee's minimum statutory withholding requirements.

The tax withholding amounts paid by us have been accounted for as a repurchase of shares in the shareholders' equity section in the accompanying consolidated balance sheet.

However, these deemed share repurchases are not included as part of our stock repurchase program described in the preceding paragraph.

| _Fiscal 2009_ | | | | | | | | | | | | | |

| First Quarter | | | — | | | — | | | — | | | 15,350,531 | |

| Second Quarter | | | — | | | — | | | — | | | 15,350,531 | |

| Third Quarter | | | — | | | — | | | — | | | 15,350,531 | |

| Fourth Quarter | | | — | | | — | | | — | | | 15,350,531 | |

Includes 20 million share increase in our stock repurchase program authorized by the Board of Directors in October 2007.

We have determined that our peer group is no longer representative of our industry and we intend to discontinue the use of the peer group beginning in our Form 10-K for fiscal 2010.

| | | 7/04 | | | 7/05 | | | 7/06 | | | 7/07 | | | 7/08 | | | 7/09 | | |

| Copart, Inc. | | $ | 100.00 | | $ | 109.93 | | $ | 119.73 | | $ | 126.47 | | $ | 197.12 | | $ | 158.70 | |

| NASDAQ Composite | | $ | 100.00 | | $ | 115.86 | | $ | 113.24 | | $ | 138.79 | | $ | 123.03 | | $ | 105.70 | |

| Peer Group | | $ | 100.00 | | $ | 173.31 | | $ | 346.59 | | $ | 261.79 | | $ | 261.62 | | $ | 198.66 | |

| NASDAQ Q-50 (NXTQ) | | $ | 100.00 | | $ | 134.06 | | $ | 146.68 | | $ | 185.86 | | $ | 140.18 | | $ | 160.37 | |

| Fourth Quarter | | | 31.42 | | | 28.11 | |

| Third Quarter | | | 30.45 | | | 27.36 | |

| Second Quarter | | | 31.42 | | | 28.52 | |

| First Quarter | | | 30.39 | | | 26.31 | |

For the year ended July 31, 2006, we repurchased 366,000 shares at a weighted average price of $24.24.

| _Fiscal 2006_ | | | | | | | | | | | | | |

| Second Quarter | | | 366,000 | | $ | 24.24 | | | 366,000 | | | 4,961,700 | |

| | | 7/03 | | | 7/04 | | | 7/05 | | | 7/06 | | | 7/07 | | | 7/08 | | |

| Copart, Inc. | | $ | 100.00 | | $ | 237.21 | | $ | 260.77 | | $ | 284.01 | | $ | 300.00 | | $ | 467.59 | |

| Nasdaq Composite | | $ | 100.00 | | $ | 110.63 | | $ | 128.07 | | $ | 125.91 | | $ | 153.98 | | $ | 139.25 | |

| Peer Group | | $ | 100.00 | | $ | 189.10 | | $ | 327.72 | | $ | 655.41 | | $ | 495.05 | | $ | 494.73 | |

The following selected [removed: operating and balance sheet data, as] [added: consolidated statements] of [removed: and] [added: income data] for the years ended July 31, [removed: 2008, 2007,] [added: 2006] and [added: 2005 and the consolidated balance sheet data at July 31, 2007,] 2006 [removed: have been] [added: and 2005, are] derived from the audited consolidated financial statements [removed: of the Company.][added: that are not included in this Annual Report on Form 10-K.]

The following selected [removed: operating and balance sheet data, as] [added: consolidated statements] of [removed: and] [added: income data] for the years ended July 31, [removed: 2005] [added: 2009, 2008] and [removed: 2004 have been] [added: 2007 and the consolidated balance data at July 31, 2009 and 2008, are] derived from [added: the] audited consolidated financial statements [removed: of the Company.][added: appearing elsewhere in this Annual Report on Form 10-K.]

[removed: The] [added: You should read the following] selected consolidated financial data [removed: should be read] in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Company's consolidated financial statements and the [added: related] notes [removed: thereto.][added: appearing elsewhere in this Annual Report on Form 10-K.]

| | | | | [added: 2009 | | |] 2008 | | | 2007 | | | 2006 | | | 2005 | | | [removed: 2004 | | |]

| | | | | [removed: (In 000's] [added: (in thousands,] except per share and other data) | | | | | | | | | | | | | | |

| | Revenues | | | $ | [removed: 784,848] [added: 743,082] | | $ | [removed: 560,680] [added: 784,848] | | $ | [removed: 528,571] [added: 560,680] | | $ | [removed: 447,731] [added: 528,571] | | $ | [removed: 391,014] [added: 447,731] | |

| | Operating [removed: Income] [added: income] | | | | [added: 225,325 | | |] 237,917 | | | 203,145 | | | 171,562 | | | 156,436 | | [removed: | 124,461 | |]

| | Income from continuing operations before income taxes | | | | [added: 227,732 | | |] 249,650 | | | 217,421 | | | 174,522 | | | 164,595 | | [removed: | 129,921 | |]

| | Income tax expense | | | | [removed: (92,718] [added: (88,186] | ) | | [removed: (81,083] [added: (92,718] | ) | | [removed: (61,862] [added: (81,083] | ) | | [removed: (62,772] [added: (61,862] | ) | | [removed: (50,929] [added: (62,772] | ) |

| | Income from continuing operations | | | | [added: 139,546 | | |] 156,932 | | | 136,338 | | | 112,660 | | | 101,823 | | [removed: | 78,992 | |]

| | Income (loss) from discontinued operations, net of income tax effects | | | | [added: 1,557 | | |] — | | | — | | | (15,713 | ) | | 293 | | [removed: | 228 | |]

| | Net income | | | | [added: 141,103 | | |] 156,932 | | | 136,338 | | | 96,947 | | | 102,116 | | [removed: | 79,220 | |]

| | | Income from continuing operations | | $ | [removed: 1.80] [added: 1.67] | | $ | [removed: 1.50] [added: 1.80] | | $ | [removed: 1.24] [added: 1.50] | | $ | [removed: 1.13] [added: 1.24] | | $ | [removed: 0.89] [added: 1.13] | |

| | | Discontinued operations | | [removed: $] | [removed: —] [added: 0.02] | | [removed: $] | — | | [removed: $] | [removed: (0.17] [added: —] | [removed: )] | [removed: $] | [removed: —] [added: (0.17] | [added: )] | [removed: $] | — | |

| | | Net income per share | | $ | [removed: 1.80] [added: 1.69] | | $ | [removed: 1.50] [added: 1.80] | | $ | [removed: 1.07] [added: 1.50] | | $ | [removed: 1.13] [added: 1.07] | | $ | [removed: 0.89] [added: 1.13] | |

| | | Weighted average shares | | | [added: 83,537 | | |] 87,412 | | | 90,651 | | | 90,372 | | | 90,162 | | [removed: | 89,457 | |]

| | | Income from continuing operations | | $ | [removed: 1.75] [added: 1.64] | | $ | [removed: 1.46] [added: 1.75] | | $ | [removed: 1.21] [added: 1.46] | | $ | [removed: 1.10] [added: 1.21] | | $ | [removed: 0.87] [added: 1.10] | |

| | | Discontinued operations | | [removed: $] | [removed: —] [added: 0.02] | | [removed: $] | — | | [removed: $] | [removed: (0.17] [added: —] | [removed: )] | [removed: $] | [removed: —] [added: (0.17] | [added: )] | [removed: $] | — | |

| | | Net income per share | | $ | [removed: 1.75] [added: 1.66] | | $ | [removed: 1.46] [added: 1.75] | | $ | [removed: 1.04] [added: 1.46] | | $ | [removed: 1.10] [added: 1.04] | | $ | [removed: 0.87] [added: 1.10] | |

| | | Weighted average shares | | | [added: 84,930 | | |] 89,858 | | | 93,455 | | | 92,925 | | | 92,984 | | [removed: | 91,537 | |]

| | Cash, cash equivalents and short-term investments | | | $ | [removed: 38,954] [added: 162,691] | | $ | [removed: 210,246] [added: 38,954] | | $ | [removed: 279,850] [added: 210,246] | | $ | [removed: 253,643] [added: 279,850] | | $ | [removed: 199,141] [added: 253,643] | |

| | Working capital | | | $ | [removed: 84,501] [added: 212,349] | | $ | [removed: 247,850] [added: 84,501] | | $ | [removed: 328,017] [added: 247,850] | | $ | [removed: 293,696] [added: 328,017] | | $ | [removed: 228,535] [added: 293,696] | |

| | Total assets | | | $ | [removed: 956,247] [added: 1,058,032] | | $ | [removed: 1,014,600] [added: 956,247] | | $ | [removed: 899,240] [added: 1,014,600] | | $ | [removed: 793,884] [added: 899,240] | | $ | [removed: 692,981] [added: 793,884] | |

| | Total debt | | | $ | [removed: 2,240] [added: 1,457] | | $ | [removed: 2,793] [added: 2,240] | | $ | [removed: —] [added: 2,793] | | $ | — | | $ | [removed: 16] [added: —] | |

| | Shareholders' equity | | | $ | [removed: 798,996] [added: 921,459] | | $ | [removed: 880,866] [added: 798,996] | | $ | [removed: 809,970] [added: 880,866] | | $ | [removed: 709,379] [added: 809,970] | | $ | [removed: 602,263] [added: 709,379] | |

| | Number of storage facilities | | | | [added: 147 | | |] 143 | | | 131 | | | 122 | | | 117 | | [removed: | 107 | |]

The historical results are not necessarily indicative of the results to be expected in any future period.

The response to this item is submitted as a separate section of this [added: Annual Report on] Form 10-K in Item 15.

We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, or "Disclosure Controls," as of the end of the period covered by this [added: Annual Report on] Form 10-K.

Disclosure Controls are controls and procedures designed to provide reasonable assurance that information required to be disclosed in our reports filed under the Exchange Act, such as this [removed: Form 10-K,] [added: Annual Report,] is recorded, processed, summarized and reported within the time periods specified in the US [removed: SEC's] [added: Securities and Exchange Commission's] rules and forms.

Disclosure Controls include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed in our reports filed under the Exchange Act is [removed: accumulated and communicated to our management, including our CEO and CFO, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.]

Our Disclosure Controls include some, but not all, components of our internal [added: control over financial reporting.]

Based upon the Controls Evaluation, our CEO and CFO have concluded [removed: that] [added: that,] as of the end of the period covered by this [added: Annual Report on] Form 10-K, our Disclosure Controls were effective to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is accumulated and communicated to management, including the CEO and CFO, to allow timely decisions regarding required disclosure, and that such information is recorded, processed, summarized and reported within the time periods specified by the [removed: SEC.][added: Securities and Exchange Commission.]

Management assessed our internal control over financial reporting as of July 31, [removed: 2008,] [added: 2009,] the end of our fiscal year.

Management based its assessment on criteria established in Internal [removed: Control-Integrated] [added: Control—Integrated] Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Our independent registered public accounting firm, Ernst & Young LLP, independently assessed the effectiveness of our internal control over financial reporting as of July 31, [removed: 2008.][added: 2009.]

Ernst & Young LLP has issued an attestation report which appears on the following page of this [added: Annual Report on] Form 10-K.

We have audited Copart, Inc.'s internal control over financial reporting as of July 31, [removed: 2008,] [added: 2009,] based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria).

In our opinion, Copart, Inc. maintained, in all material respects, effective internal control over financial reporting as of July 31, [removed: 2008] [added: 2009] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Copart, Inc. as of July 31, [removed: 2008] [added: 2009] and [removed: 2007,] [added: 2008,] and the related consolidated statements of income, shareholders' equity and comprehensive income, and cash flows for each of the three years in the period ended July 31, [removed: 2008] [added: 2009] of Copart, Inc. and our report dated September [removed: 25, 2008] [added: 29, 2009] expressed an unqualified opinion thereon.

[removed: | | |] /s/ [removed: ERNST] [added: Ernst] & [removed: YOUNG] [added: Young] LLP [removed: |]

accumulated and communicated to our management, including our CEO and CFO, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

September 29, 2009

control over financial reporting.

Our internal control over financial reporting was also separately evaluated as of the end of the period covered by this Form 10-K in connection with "Management's Report on Internal Control Over Financial Reporting" which is set forth below.

| | | |

| --- | --- | --- |

September 25, 2008

Certain information required by Part III is omitted from this [added: Annual Report on] Form 10-K because we intend to file a definitive proxy statement for our [removed: 2008] [added: 2009] Annual Meeting of Shareholders (the Proxy Statement) not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and certain information to be included therein is incorporated herein by reference.

Information [added: required by this item] concerning the Board of Directors of the Company, the members of the Company's Audit Committee, the Company's Audit Committee Financial Expert, and compliance with Section 16(a) of the Securities Exchange Act of 1934 is incorporated by reference to the sections entitled "Election of Directors and Director Biographies," "Board of Directors Information" and "General—Compliance with Section 16(a) Beneficial Ownership Reporting Requirements" in the Company's Proxy Statement.

[removed: The information] [added: Information] required by this item with respect to material changes to the procedures by which our shareholders may recommend nominees to our Board of Directors is incorporated herein by reference from the information provided under the heading "The Nominating and Governance Committee" of our Proxy Statement.

From our main web page, click on [removed: "Investor Relations."][added: "Company Info."]

Information required by this item concerning our Executive Officers is incorporated by reference to the section entitled "Executive Officers" in the Company's Proxy Statement.

Next, click on "Investor Relations."

Pursuant to General Instruction G(3) of Form 10-K, the information required by this item regarding our executive officers is included under the caption "Executive Officers of the Registrant" in Part I of this Form 10-K.

Next, click on "Corporate Governance."

| | | | | [removed: Report] [added: [](#Report_financials) [Report] of Independent Registered Public Accounting [removed: Firm] [added: Firm](#Report_financials)] | | | [removed: 59] [added: [61](#Report_financials)] | |

| | | | | [removed: Consolidated] [added: [](#Consolidated_balance) [Consolidated] Balance Sheets at July 31, [removed: 2008] [added: 2009] and [removed: 2007] [added: 2008](#Consolidated_balance)] | | | [removed: 60] [added: [62](#Consolidated_balance)] | |

| | | | | [removed: Consolidated] [added: [](#Consolidated_Statements_of_Income) [Consolidated] Statements of Income for the [removed: three] years ended July 31, [removed: 2008, 2007] [added: 2009, 2008] and [removed: 2006] [added: 2007](#Consolidated_Statements_of_Income)] | | | [removed: 61] [added: [63](#Consolidated_Statements_of_Income)] | |

| | | | | [removed: Consolidated] [added: [](#Consolidated_Statements_of_Share) [Consolidated] Statements of Shareholders' Equity and Comprehensive Income for the years ended July 31, [removed: 2008, 2007] [added: 2009, 2008] and [removed: 2006] [added: 2007](#Consolidated_Statements_of_Share)] | | | [removed: 62] [added: [64](#Consolidated_Statements_of_Share)] | |

| | | | | [removed: Consolidated] [added: [](#Consolidated_Statements_of_Cash) [Consolidated] Statements of Cash Flows for the years ended July 31, [removed: 2008, 2007] [added: 2009, 2008] and [removed: 2006] [added: 2007](#Consolidated_Statements_of_Cash)] | | | [removed: 63] [added: [65](#Consolidated_Statements_of_Cash)] | |

| | | | | [removed: Notes] [added: [](#Notes_to_Consolidated) [Notes] to Consolidated Financial [removed: Statements] [added: Statements](#Notes_to_Consolidated)] | | | [removed: 64] [added: [66](#Notes_to_Consolidated)] | |

| [removed: |] 3.3 | | Certificate of Determination of Rights, Preferences and Privileges of Series A Participating Preferred Stock of Copart, [removed: Inc.(8)] [added: Inc.] | [added: | 8/A-12/G (File No. 000-23255), Exhibit No. 3.3 | | March 11, 2003 |]

| [removed: |] 4.1 | | Preferred Stock Rights Agreement, [removed: dated] [added: dates] as of March 6, 2003, between the [removed: Company] [added: company] and Equiserve Trust [removed: Company,] [added: Company] N.A., including the Certificate of Determination, the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits A, [removed: B,] [added: B] and C, [removed: respectively.(8)] [added: respectively] | [added: | 8/A-12/G (File No. 000-23255), Exhibit No. 4.1 | | March 11, 2003 |]

| [removed: |] 10.1* | | [removed: Copart,] [added: Copart] Inc. 1992 Stock Option Plan, as [removed: amended(2)] [added: amended, and form of stock option agreement] | [added: | Registration Statement on Form S-8 (File No. 333-93887), Exhibit No. 10.1 | | December 30, 1999 |]

| [removed: |] 10.2* | | 1994 Employee Stock Purchase Plan (as amended December 8, 2003) with form of [removed: Subscription Agreement(11)] [added: subscription agreement] | [added: | Registration Statement on Form S-8 (File No. 333-112597), Exhibit No. 4.1 | | February 6, 2004 |]

| [removed: |] 10.3* | | 1994 Director Option [removed: Plan,] [added: Plan] with form of [removed: Subscription Agreement(11)] [added: subscription agreement] | [added: | Registration Statement on Form S-1 (File No. 333-74250) | | January 19, 1994 |]

| [removed: | 10.5] [added: 10.5*] | | Form of Indemnification [removed: Agreement,] [added: Agreement] signed by [removed: Executive Officers and Directors] [added: executive officers] and [removed: the registrant(7)] [added: directors] | [added: | Annual Report on Form 10-K (File No. 000-23254), Exhibit No. 10.5 | | October 29, 2002 |]

| [removed: |] 10.6 | | General lease dated as of December 29, 1997 between Robert Arthur Gomes and Robert Paul Gomes and Copart of Connecticut, [removed: Inc.(7)] [added: Inc.] | [added: | Annual Report on Form 10-K (File No. 000-23254), Exhibit No. 10.6 | | October 29, 2002 |]

| [removed: |] 10.7 | | Standard Industrial/Commercial [removed: single-tenant] [added: single tenant] lease-net dated [removed: as of] December 23, 1998 between Wickland Oil Martinez and the [removed: registrant(7)] [added: Registrant] | [added: | Annual Report on Form 10-K (File No. 000-23254), Exhibit No. 10.7 | | October 29, 2002 |]

| [removed: | 10.17] [added: 10.15] | | Credit [removed: Agreement,] [added: Agreement] dated as of March 6, [removed: 2008,] [added: 2008] by and between [removed: Copart,] [added: Copart] Inc. and Bank of America, [removed: N.A.(16)] [added: N.A.] | [added: | Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.1 | | March 7, 2008 |]

| [removed: |] 21.1 | | List of subsidiaries of [removed: registrant] [added: Registrant] | [added: | — | | Filed herewith |]

| [removed: |] 23.1 | | Consent of [removed: Ernst & Young LLP,] Independent Registered Public Accounting [removed: Firm] [added: Firm] | [added: | — | | Filed herewith |]

| [removed: |] 24.1 | | Power of Attorney (included on [removed: page 58)] [added: signature page)] | [added: | — | | Filed herewith |]

| [removed: |] 31.1 | | Certification of [removed: Willis J. Johnson,] Chief Executive [removed: Officer,] [added: Officer] pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002] [added: 2002] | [added: | — | | Filed herewith |]

| [removed: |] 31.2 | | Certification of [removed: William E. Franklin,] Chief Financial [removed: Officer,] [added: Officer] pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002] [added: 2002] | [added: | — | | Filed herewith |]

| [removed: |] 32.1 | | Certification of [removed: Willis J. Johnson,] [added: the] Chief Executive [removed: Officer,] [added: Officer] pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002] [added: 2002] | [added: | — | | Filed herewith |]

| [removed: |] 32.2 | | Certification of [removed: William E. Franklin,] [added: the] Chief Financial [removed: Officer,] [added: Officer] pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002] [added: 2002] | [added: | — | | Filed herewith |]

| /s/ WILLIS J. JOHNSON Willis J. Johnson | | Chief Executive Officer (Principal Executive Officer and Director) | | September 29, [removed: 2008] [added: 2009] |

| /s/ WILLIAM E. FRANKLIN William E. Franklin | | Senior Vice President of Finance and Chief Financial Officer (Principal Financial and Accounting Officer) | | September 29, [removed: 2008] [added: 2009] |

| /s/ A. JAYSON ADAIR A. Jayson Adair | | President and Director | | September 29, [removed: 2008] [added: 2009] |

| /s/ JAMES E. MEEKS James E. Meeks | | Director | | September 29, [removed: 2008] [added: 2009] |

| /s/ STEVEN D. COHAN Steven D. Cohan | | Director | | September 29, [removed: 2008] [added: 2009] |

| /s/ DANIEL ENGLANDER Daniel Englander | | Director | | September 29, [removed: 2008] [added: 2009] |

| [removed: /s/ BARRY ROSENSTEIN] Barry Rosenstein | | Director | | September 29, [removed: 2008] [added: 2009] |

| /s/ THOMAS W. SMITH Thomas W. Smith | | Director | | September 29, [removed: 2008] [added: 2009] |

We have audited the accompanying consolidated balance sheets of Copart, Inc. as of July 31, [removed: 2008] [added: 2009] and [removed: 2007,] [added: 2008,] and the related consolidated statements of income, shareholders' equity and comprehensive income, and cash flows for each of the three years in the period ended July 31, [removed: 2008.][added: 2009.]

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Copart, Inc. at July 31, [removed: 2008] [added: 2009] and [removed: 2007,] [added: 2008,] and the consolidated results of its operations and its cash flows for each of the three years in the period ended July 31, [removed: 2008,] [added: 2009,] in conformity with [removed: US] [added: U.S.] generally accepted accounting principles.

As discussed in Note 1 to the [removed: Consolidated Financial Statements,] [added: consolidated financial statements,] effective August 1, 2007, the Company adopted Financial Accounting Standards Board Interpretation No. 48, _Accounting for Uncertainty in Income [removed: Taxes_.][added: Taxes._]

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Copart, Inc.'s internal control over financial reporting as of July 31, [removed: 2008,] [added: 2009,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated September [removed: 25, 2008] [added: 29, 2009] expressed an unqualified opinion thereon.

[removed: | | |] /s/ [removed: ERNST] [added: Ernst] & [removed: YOUNG] [added: Young] LLP [removed: |]

[removed: COPART,] [added: COPART,] INC.

| | | [added: July 31, 2009] | | [added: |] July 31, 2008 | | | July 31, 2007 | | |

| [removed: |] Cash and cash equivalents [added: at beginning of period] | | | [removed: $] | [added: | | |] 38,954 | | [removed: $] | 107,621 | | [added: | 131,125 | |]

| | Accounts receivable, net | | | | [removed: 111,705] [added: 109,248] | | | [removed: 109,895] [added: 111,705] | |

| | Vehicle pooling costs | | | | [removed: 30,787] [added: 28,685] | | | [removed: 28,842] [added: 30,787] | |

_

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| --- | --- | --- | --- | --- | --- | --- |

| | | | | Incorporated by reference herein | | |

| Exhibit Number | | | | | | |

| | Description | | Form | | Date | |

| 3.1 | | Amended and restated Articles of Incorporation | | Annual Report on Form 10-K, (File No. 000-23254), Exhibit No. 3.1 | | October 26, 2000 |

| 3.1b | | Certificate of Amendment of Articles of Incorporation | | Annual Report on Form 10-K (File No. 000-23254), Exhibit No. 3.1b | | October 26, 2000 |

| 3.2 | | Amended and Restated Bylaws of Registrant | | Annual Report on Form 10-K, Exhibit No. 3.2 | | October 21, 1995 |

| 3.2b | | Certificate of Amendment of Bylaws | | Quarterly Report on Form 10-Q (File No. 000-23255), Exhibit No. 3.4 | | December 15, 2003 |

| 3.2c | | Certificate of Amendment of Bylaws | | Annual Report on Form 10-K (File No. 000-23255), Exhibit No. 3.2b | | October 14, 2004 |

| 3.2d | | Amendment to Section 3.2 to the Bylaws of Copart, Inc. effective as of January 13, 2009 | | Current Report on Form 8-K (File No. 000-23255), Exhibit No. 3.1 | | December 5, 2008 |

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| | | | | Incorporated by reference herein | | |

| Exhibit Number | | | | | | |

| | Description | | Form | | Date | |

| 10.4* | | Copart Inc. 2001 Stock Option Plan | | Registration Statement on Form S-8 (File No. 333-90612), Exhibit No. 4.1 | | June 17, 2002 |

| 10.10* | | Copart Inc. 2007 Equity Incentive Plan (2007 EIP) | | Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.1 | | December 12, 2007 |

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| | | | | Incorporated by reference herein | | |

| Exhibit Number | | | | | | |

| | Description | | Form | | Date | |

| 10.11* | | Form of Performance Share Award Agreement for use with 2007 EIP | | Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.2 | | December 12, 2007 |

| 10.12* | | Form of Restricted Stock Unit Award Agreement for use with 2007 EIP | | Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.3 | | December 12, 2007 |

| 10.13* | | Form of Stock Option Award Agreement for use with 2007 EIP | | Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.5 | | December 12, 2007 |

| 10.14* | | Form of Restricted Stock Award Agreement for use with 2007 EIP | | Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.4 | | December 12, 2007 |

| 10.16* | | Copart, Inc. Executive Bonus Plan | | Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.13 | | August 3, 2006 |

| 10.17* | | Amended and Restated Executive Officer Employment Agreement between the Company and William E. Franklin, dated September 25, 2008 | | Quarterly Report on Form 10-Q (File No. 000-23255), Exhibit No. 10.1 | | December 10, 2008 |

| 10.18* | | Form of Copart, Inc. Stand-Alone Stock Option Award Agreement for grant of options to purchase 2,000,000 shares of the Company's common stock to each of Willis J. Johnson and A. Jayson Adair | | Registration Statement on Form S-8 (File No. 333-159946), Exhibit No. 4.1 | | April 16, 2009 |

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| | | | | Incorporated by reference herein | | |

| Exhibit Number | | | | | | |

| | Description | | Form | | Date | |

Management contract, plan or arrangement

| September 29, 2009 | | | | |

| September 29, 2009 | | | | |

| /s/ MATT BLUNT Matt Blunt | | Director | | September 29, 2009 |

| | | | |

| --- | --- | --- | --- |

| Number | | | Description |

| | 3.1 | | Amended and Restated Articles of Incorporation of the registrant(4) |

| | 3.1b | | Certificate of Amendment of Articles of Incorporation(4) |

| | 3.2 | | Bylaws of the registrant, as amended(3) |

| | 3.2b | | Certificate of Amendment of Bylaws(12) |

| | 3.4 | | Certificate of Amendment of Bylaws(10) |

| | 10.4* | | Copart, Inc. 2001 Stock Option Plan(6) |

| | 10.8 | | Lease agreement dated as of September 14, 2001 between Woodmich L.L.C. and the registrant(7) |

| --- | --- | --- | --- |

| | 10.10 | | Aircraft lease dated as of April 11, 2002 between Fleet Capital Corporation and the registrant(7) |

| | 10.11 | | Amendment No. 1 dated November 1, 2004, to Stock Option Agreement dated as of October 6, 2003 between the registrant and Marvin L. Schmidt(13) |

| | 10.12* | | Copart Inc. 2007 Equity Incentive Plan(15) |

| | 10.13 | | Form of Performance Share Award Agreement(15) |

| | 10.14 | | Form of Restricted Stock Unit Award Agreement(15) |

| | 10.15 | | Form Restricted Stock Award Agreement(15) |

| | 10.16 | | Form of Stock Option Award Agreement(15) |

| | 14.01 | | Code of Ethics for Principal Executive and Senior Financial Officers (adopted September 30, 2003)(9) |

| | 14.02 | | Copart, Inc. Code of Business Conduct (as amended June 5, 2007)(14) |

(1)

Incorporated by reference from exhibit to registrant's Registration Statement on Form S-1, originally filed on January 19, 1994, as amended (File No. 33-74250).

(2)

Incorporated by reference from exhibit to registrant's Registration Statement on Form S-8 filed with the Securities and Exchange Commission on December 31, 1999.

(3)

Incorporated by reference from exhibit to registrant's Form 10-K for its fiscal year ended July 31, 1995, filed with the Securities and Exchange Commission on October 21, 1995.

(4)

Incorporated by reference from exhibit to registrant's Form 10-K for its fiscal year ended July 31, 2000, filed with the Securities and Exchange Commission on October 26, 2000.

(5)

Incorporated by reference from exhibit to registrant's Form 10-Q for the quarter ended January 31, 2001, filed with the Securities and Exchange Commission on March 16, 2001.

(6)

Incorporated by reference from exhibit to registrant's Form 10-Q for the quarter ended January 31, 2002, filed with the Securities and Exchange Commission on March 18, 2002.

(7)

Incorporated by reference from exhibit to registrant's Form 10-K for its fiscal year ended July 31, 2002, filed with the Securities and Exchange Commission on October 29, 2002.

(8)

Incorporated by reference from exhibit to registrant's Form 8-A12/G filed with the Securities and Exchange Commission on March 11, 2003.

(9)

Incorporated by reference from exhibit to registrant's Form 10 K for its fiscal year ended July 31, 2003, filed with the Securities and Exchange Commission on October 17, 2003.

(10)

Incorporated by reference from exhibit to registrant's Form 10-Q for the quarter ended October 31, 2003, filed with the Securities and Exchange Commission on December 15, 2003.