Copart (CPRT) 10-K risk factor changes: FY2015 vs FY2014

[removed: _Investing] [added: Investing] in our common stock involves a high degree of risk.

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

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

The loss of one or more of these major sellers could adversely affect our consolidated results of operations and financial position, and an inability to increase our sources of vehicle supply could adversely affect our growth [removed: rates.][added: rates.]

No single customer accounted for more than 10% of our revenue for fiscal [removed: 2014.][added: 2015.]

There can be no assurance that our existing agreements will not be [removed: cancelled.][added: canceled.]

[removed: Our] [added: Our] expansion into markets outside North America, including recent expansions in Europe, Brazil and the Middle East expose us to risks arising from operating in international markets.

Any failure to successfully integrate businesses acquired outside of North America into our operations could have an adverse effect on our consolidated results of operations, financial position or cash [removed: flows.][added: flows.]

We first expanded our operations outside North America in [removed: 2007] [added: fiscal 2008] with a significant acquisition in the [removed: United Kingdom (the U.K.), and we continue to evaluate] [added: U.K., followed by] acquisitions [added: in the U.A.E., Brazil, Germany,] and [removed: other opportunities outside North America.][added: Spain in fiscal 2013, and expansions into Bahrain and Oman in fiscal 2015.]

[removed: We cannot provide any] assurance that we will achieve our business and financial objectives in connection with these acquisitions or our strategic decision to expand our operations internationally.

In addition, we anticipate our international operations will [added: continue to] subject us to a variety of risks associated with operating on an international basis, including:

| • | [removed: |] the difficulty of managing and staffing foreign offices and the increased travel, infrastructure and legal compliance costs associated with multiple international locations; |

| • | [removed: |] the need to localize our product offerings, particularly the need to implement our online auction platform in foreign countries; |

| • | [removed: |] tariffs and trade barriers and other regulatory or contractual limitations on our ability to operate in certain foreign markets; |

| • | [removed: |] exposure to foreign currency exchange rate risk, which may have an adverse impact on our revenues and revenue growth rates; |

| • | [removed: |] adapting to different business cultures and market structures, particularly where we seek to implement our auction model in markets where insurers have historically not played a substantial role in the disposition of salvage vehicles; and |

| • | [removed: |] repatriation of funds currently held in foreign jurisdictions to the U.S. may result in higher effective tax rates. |

[removed: Our] [added: Our] operations and acquisitions in certain foreign areas expose us to political, regulatory, economic, and reputational [removed: risks.][added: risks.]

[removed: We] [added: We] face risks associated with the implementation of our salvage auction model in markets that may not operate on the same terms as the North American market.

For example, certain markets operate on a principal rather than agent basis, which may have an adverse impact on our gross margin percentages and expose us to inventory risks that we do not experience in North [removed: America.][added: America.]

In general, acquisitions increase our sales and profitability although, given the typical size of our acquisitions, most acquisitions will not individually have a material impact on [added: our] consolidated results of operations and financial position.

[removed: We] [added: We] are transitioning various functionality of our third-party enterprise operating system to an internally developed proprietary system, and we may experience difficulties operating our business as we work to [removed: develop, design] [added: develop] and [removed: stabilize] [added: design] this [removed: system.][added: system.]

We may also implement [removed: further and] [added: additional or] enhanced information systems in the future to accommodate our growth and to provide additional capabilities and functionality.

[removed: The] [added: In addition, the] transition to our new internal proprietary system will require us to commit substantial financial, operational and technical resources before the volume of business increases, without assurance that the volume of business will increase.

[removed: Consumers will not tolerate a service hampered by] [added: Any failure to maintain the integrity of our systems and infrastructure may result in loss of customers due to among other things,] slow delivery times, unreliable service levels or insufficient capacity, [removed: any of] which could have a material adverse effect on our business, consolidated financial position and results of operations.

[removed: The] [added: The] impairment of capitalized development costs could adversely affect our consolidated results of operations and financial [removed: condition.][added: condition.]

Information security risks for online commerce companies have significantly increased in recent years [removed: in part] because [removed: of] [added: of, in addition to other factors,] the proliferation of new technologies, the use of the Internet and telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties.

These threats may derive from fraud or malice on the part of [removed: our employees or] third parties, or [removed: may result from human error] [added: current] or [removed: accidental technological failure.][added: former employees.]

Our customers and other parties in the payments value chain rely on our digital technologies, computer and [removed: email] [added: e-mail] systems, software and networks to conduct their operations.

These [removed: cyber-attacks] [added: attempts] have caused minor service interruptions, which were promptly addressed and resolved, and our online service was restored to normal business.

We [removed: have implemented various measures] [added: are constantly evaluating and implementing new technologies and processes] to manage [removed: our] risks [removed: related] [added: relating] to [added: cyber-attacks and] system and network disruptions, including but not limited to usage errors by our employees, power outages and catastrophic events such as fires, tornadoes, floods, hurricanes and earthquakes.

If [removed: these] [added: our] systems are [removed: compromised,] [added: compromised again in the future,] become inoperable for extended periods of [removed: time] [added: time,] or cease to function properly, we may have to make a significant investment to fix or replace [removed: them] [added: them,] and our ability to provide many of our electronic and online solutions to our customers may be [removed: impaired, which would have a material adverse effect on our consolidated operating results and financial position.][added: impaired.]

Any of the risks described above could materially [added: and] adversely affect our consolidated financial position and results of operations.

[removed: Our] [added: Our] business is exposed to risks associated with online commerce security and credit card [removed: fraud.][added: fraud.]

[removed: Implementation] [added: Implementation] of our online auction model in new markets may not result in the same synergies and benefits that we achieved when we implemented the model in North America and the [removed: U.K.][added: U.K.]

[added: In considering new markets, we consider the potential] synergies from the implementation of our model based in large part on our experience in North America and the U.K. We cannot predict whether these synergies will also be realized in new markets.

[removed: Failure] [added: Failure] to have sufficient capacity to accept additional cars at one or more of our storage facilities could adversely affect our relationships with insurance companies or other sellers of [removed: vehicles.][added: vehicles.]

[removed: Because] [added: Because] the growth of our business has been due in large part to acquisitions and development of new facilities, the rate of growth of our business and revenues may decline if we are not able to successfully complete acquisitions and develop new [removed: facilities.][added: facilities.]

Furthermore, promising acquisitions are difficult to identify and complete for a number of reasons, including competition among prospective buyers, the availability of affordable financing in [removed: the capital markets and the need to satisfy applicable closing conditions and obtain antitrust and other regulatory approvals on acceptable terms.]

| • | [removed: |] continue to acquire additional facilities on favorable terms; |

In addition, we continue to evaluate acquisitions and other opportunities outside North America.

We cannot provide any

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Any failure to maintain security and prevent unauthorized access to electronic and other confidential information could disrupt our business and materially and adversely affect our reputation, consolidated results of operations and financial condition.

In addition, human error or accidental technological failure could make us vulnerable to cyber-attacks, including the introduction of malicious computer viruses or code into our system, phishing attacks, or other information technology data security incidents.

Cyber-attacks or other cyber security incidents could materially and adversely affect our reputation, operating results, or financial condition by, among other things, making our auction platform inoperable for a period of time, damaging our reputation with buyers, sellers, and insurance companies as a result of the unauthorized disclosure of confidential information (including account data information), or resulting in governmental investigations, litigation, liability, fines, or penalties against us.

While we maintain insurance coverage that may, subject to policy terms and conditions, cover certain aspects of these cyber risks, our insurance coverage may be insufficient to cover all losses and would not remedy damage to our reputation.

We have in the past identified attempts by unauthorized third parties to access our systems and disrupt our online auctions.

In April 2015, we identified that unauthorized third parties had gained access to data provided to us by our members that is considered to be personal information in certain jurisdictions.

We immediately investigated, including the engagement of an external expert security firm, and made the required notifications to members whose information may have been accessed and to regulatory agencies.

We have further enhanced our security protocols based on the investigation we conducted in response to the recently discovered data breach.

Nevertheless, we cannot provide assurances that our efforts to address prior data security incidents and mitigate against the risk of future data security incidents or system failures will be successful.

The techniques used by criminals to obtain unauthorized access to sensitive data change frequently and are often not recognized immediately.

We may be unable to anticipate these techniques or implement adequate preventative measures and believe that cyber-attacks and threats against us have occurred in the past and are likely to continue in the future.

In fiscal 2014, we acquired a facility in Montreal, Canada.

In fiscal 2015, we opened new facilities in Bahrain, Oman, and Moncton, Canada.

the capital markets and the need to satisfy applicable closing conditions and obtain antitrust and other regulatory approvals on acceptable terms.

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materialized.

In August 2012, we announced our acquisition of a company in the United Arab Emirates (the U.A.E.), in November 2012, we announced our acquisitions of companies in Brazil and Germany, and in June 2013, we announced our acquisition of a company in Spain.

A failure or breach of our security systems or infrastructure as a result of cyber-attacks could disrupt our business, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and cause losses.

These threats include cyber-attacks such as computer viruses, malicious code, phishing attacks or information security breaches.

We routinely are subject to cyber-threats and our technologies, systems and networks have been subject to cyber-attacks and we believe we are likely to continue to be a target of such threats and attacks.

Although we have not been the victim of cyber-attacks or other cyber incidents that have had a material impact on our consolidated operating results or financial position, we have experienced incidents relating to cyber-attacks in which unauthorized parties attempted to access and disrupt our online commerce.

However, if one or more of these events continue to occur, it could lead to security breaches of the networks, systems or devices that our customers use to access our products and services, which could result in the unauthorized disclosure, release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary and other information (including account data information) or data security compromises.

This could cause service interruptions, malfunctions or other failures in the physical infrastructure or operations systems that support our businesses and customers (such as

the lack of availability of our value-added systems), as well as the operations of our customers or other third parties.

Continuous cyber-attacks could lead to damage to our reputation with our customers and other parties and the market, additional costs (such as repairing systems, adding new personnel or protection technologies or compliance costs), regulatory penalties, financial losses to both us and our customers and partners and the loss of customers and business opportunities.

In considering new markets, we consider the potential

infrastructure, availability and price of fuel, any of which could result in an increase in our operating expenses and reduction in our net income.

sections.

A material reduction in accident rates could have a material impact on revenue growth.

In issuing the notice of proposed assessment, the

In particular, our outside legal counsel has provided us with an opinion that our sales for resale to non-U.S. registered resellers should not be subject to Georgia sales and use tax.

We have filed a request for protest or administrative appeal with the State of Georgia.

The notional amount of the two derivative transactions amortizes $18.8 million per quarter until September 30, 2015 and $200.0 million on December 14, 2015.

The first swap agreement fixed our interest rate with respect to a notional amount of $237.5 million of our Term Loan, at 85 basis points plus the Applicable Rate as outlined in our Credit Facility Agreement.

The second

swap agreement fixed our interest rate with respect to a notional amount of $56.3 million of our Term Loan, at 69 basis points plus the Applicable Rate as outlined in our Credit Facility Agreement.

The Applicable Rate on our Credit Facility can fluctuate between 1.5% and 2.0% depending on our consolidated net leverage ratio (as defined in the Credit Facility) and at July 31, 2014 was 1.5%.

[removed: CAUTION] [added: CAUTION] REGARDING FORWARD-LOOKING [removed: STATEMENTS][added: STATEMENTS]

[removed: _This] [added: This] Annual Report on Form 10-K for the fiscal year ended July 31, [removed: 2014,] [added: 2015,] or this Form 10-K, including the information incorporated by reference herein, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act).

We do not undertake to update any forward-looking statement that may be made from time to time by or on behalf of [removed: us._][added: us.]

[removed: _All] [added: All] references to numbered Notes are to specific Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K and which descriptions are incorporated into the applicable response by reference.

Capitalized terms used, but not defined, in this Management’s Discussion and Analysis of Financial Condition and Results of Operation (“MD&A”) have the same meanings as in such [removed: Notes._][added: Notes.]

[removed: Overview][added: Overview]

We are a leading provider of online auctions and vehicle remarketing services in the United States (U.S.), Canada, the United Kingdom [removed: (U.K.)] [added: (U.K.), Brazil, the United Arab Emirates (U.A.E.), Oman,] and [removed: Brazil.][added: Bahrain.]

We also provide vehicle remarketing services in [removed: the United Arab Emirates (U.A.E.),] Germany and Spain.

In the U.S. and Canada (North America), [removed: Brazil and] [added: Brazil,] the U.A.E., [added: Oman, and Bahrain,] 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.

[removed: _Service] [added: Service] and Vehicle Sales [removed: Revenue:_] [added: Revenue:] Our revenue consists of sales transaction fees charged to vehicle sellers and vehicle buyers, transportation revenue, purchased vehicle [removed: revenues,] [added: revenue,] and other remarketing services.

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

We may also charge additional fees for the cost of transporting the vehicle to our facility, storage of the vehicle, and other incidental costs [added: not] included in the consignment fee.

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

Purchased vehicle revenue includes the gross sales price of the vehicle, which we have purchased or are otherwise considered to [removed: own] [added: own,] and is primarily generated in the U.K. We have certain contracts with insurance companies in which we act as a principal, purchasing vehicles and reselling them for our own account.

New [removed: cars] [added: car] sales grew on a year over year basis increasing the supply of used cars.

Additionally, the average age of cars on the road continued to increase, growing from 9.6 years in 2002 to [removed: 11.4] [added: 11.5] years in 2014.

[removed: _Operating] [added: Operating] Costs and [removed: Expenses:_] [added: Expenses:] Yard operations [removed: consists] [added: expenses consist] primarily of operating personnel (which includes yard management, clerical and yard employees), rent, contract vehicle towing, insurance, fuel, equipment maintenance and repair, and costs of vehicles sold under the purchase contracts.

[removed: _Other] [added: Other] Income and [removed: Expense:_] [added: Expense:] Other income primarily includes income from the rental of certain real property, foreign exchange rate gains and losses, and gains and losses from the disposal of assets, which will fluctuate based on the nature of these activities each period.

See Notes to Consolidated Financial Statements, [removed: _Note] [added: Note] 8 — Long-Term [removed: Debt._][added: Debt.]

[removed: _Liquidity] [added: Liquidity] and Cash [removed: Flows:_] [added: Flows:] Our primary source of working capital is cash operating results.

[removed: Acquisitions] [added: Acquisitions] and New [removed: Operations][added: Operations]

We believe that these acquisitions and openings [added: will] strengthen our coverage, as we have facilities located in North America, the U.K., [added: Brazil,] the U.A.E., [added: Oman, Bahrain,] Germany, [removed: Spain] and [removed: Brazil, and are able to provide] [added: Spain with the intention of providing] national coverage for our sellers.

The following table sets forth facilities that we have acquired or opened from August 1, [removed: 2011] [added: 2012] through July 31, [removed: 2014:][added: 2015:]

| Locations | | [removed: | |] Acquisition or Greenfield | | [removed: | |] Date | | [removed: | |] Geographic Service Area | [removed: | |]

| [removed: Webster] [added: Webster,] New Hampshire | | [removed: | |] Greenfield | | [removed: | |] September 2012 | | [removed: | |] United States | [removed: | |]

| Gainesville, Georgia | | [removed: | |] Acquisition | | [removed: | |] May 2013 | | [removed: | |] United States | [removed: | |]

| Davison, Michigan | | [removed: | |] Acquisition | | [removed: | |] May 2013 | | [removed: | |] United States | [removed: | |]

| Ionia, Michigan | | [removed: | |] Acquisition | | [removed: | |] May 2013 | | [removed: | |] United States | [removed: | |]

| Kincheloe, Michigan | | [removed: | |] Acquisition | | [removed: | |] May 2013 | | [removed: | |] United States | [removed: | |]

| Salvage Parent, Inc.* | | [removed: | |] Acquisition | | [removed: | |] May 2013 | | [removed: | |] United States | [removed: | |]

| Seaford, Delaware | | [removed: | |] Greenfield | | [removed: | |] July 2014 | | [removed: | |] United States | [removed: | |]

| Montreal, [removed: Canada | |] [added: Quebec] | | Acquisition | | [removed: | |] November 2013 | | [removed: | |] Canada | [removed: | |]

| Dubai, U.A.E. | | [removed: | |] Acquisition | | [removed: | |] August 2012 | | [removed: | |] United Arab Emirates | [removed: | |]

| Embu, Brazil | | [removed: | |] Acquisition | | [removed: | |] November 2012 | | [removed: | |] Brazil | [removed: | |]

| Pirapora, Brazil | | [removed: | |] Acquisition | | [removed: | |] November 2012 | | [removed: | |] Brazil | [removed: | |]

| Osasco, Brazil | | [removed: | |] Acquisition | | [removed: | |] November 2012 | | [removed: | |] Brazil | [removed: | |]

| Castelo Branco, Brazil | | [removed: | |] Acquisition | | [removed: | |] November 2012 | | [removed: | |] Brazil | [removed: | |]

| Vila Jaguara, Brazil | | [removed: | |] Acquisition | | [removed: | |] November 2012 | | [removed: | |] Brazil | [removed: | |]

| Itaquaquecetuba, Brazil | | [removed: | |] Greenfield | | [removed: | |] January 2014 | | [removed: | |] Brazil | [removed: | |]

| Ettlingen, Germany | | [removed: | |] Acquisition | | [removed: | |] November 2012 | | [removed: | |] Germany | [removed: | |]

Sales

Our revenue is impacted by several factors, including salvage frequency and the average vehicle auction selling price, as over 50% of our service revenue is associated in some manner to the ultimate selling price of the vehicle.

Vehicle auction selling prices are driven primarily by: (i) changes in commodity prices, particularly the per ton price for crushed car bodies, as this has an impact on the ultimate selling price of vehicles sold for scrap and vehicles sold for dismantling; (ii) used car pricing, which we believe has an impact on salvage frequency; and (iii) the mix of cars sold, as insurance company cars on average command a lower average selling price than non-insurance cars.

We cannot determine the impact of the movement of these influences as we cannot determine which vehicles are sold to the end user or for scrap, dismantling, retailing or export.

We also cannot predict the future movements of these influences.

Accordingly, we cannot quantify the specific impact that commodity pricing, used car pricing, and product sales mix has on the selling price of vehicles and ultimately on service revenue.

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| Moncton, New Brunswick | | Greenfield | | July 2015 | | Canada |

| Manama, Bahrain | | Greenfield | | May 2015 | | Bahrain |

| Muscat, Oman | | Greenfield | | June 2015 | | Oman |

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Service Revenues.

The increase in service revenues for fiscal 2015 of $27.0 million, or 2.8% as compared to fiscal 2014 came from (i) growth in North America of $18.6 million; (ii) growth in the U.K. of $6.4 million; and (iii) growth in our other international markets of $2.0 million.

The increase in volume in North America primarily came from existing suppliers as we believe there may have been an increase in the overall growth in the salvage market driven by increased salvage frequency.

Excluding a detrimental impact of $5.8 million due to the change in the British pound to U.S. dollar exchange rate, the growth in the U.K. of $6.4 million was driven primarily by increased volume as we increased our market share and a marginal increase in revenue per car.

Vehicle Sales.

The decrease in vehicle sales for fiscal 2015 of $44.4 million, or 21.6% as compared to fiscal 2014 came from (i) a decline in the U.K. of $31.8 million; (ii) a decline in North America of $8.1 million; and (iii) a decline in our other international markets of $4.5 million.

The decline in the U.K. was primarily the result of decreased volume from insurance sellers and lower average auction selling prices, driven by decreased insurance volume and increased open market purchase activity from the general public, and included a $5.1 million detrimental impact due to the change in the British pound to U.S. dollar exchange rate.

The decline in North America was primarily the result of decreased open market purchase activity from the general public and lower average auction selling prices, which we believe is due to lower commodity prices.

The decline in our other international markets was driven primarily by reduced volume.

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| | Year Ended July 31, | | | | | | | | | | | | 2015 vs. 2014 | | | | | | | 2014 vs. 2013 | | | | | |

| (In thousands) | 2015 | | | | 2014 | | | | 2013 | | | | Change | | | | % Change | | | Change | | | | % Change | |

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Yard Operations Expense.

The increase in yard operations expense for fiscal 2015 of $5.9 million, or 1.1% as compared to fiscal 2014 primarily came from (i) growth in volume in North America, the U.K., and in our other international markets; (ii) partially offset by a decrease in the cost to process each car in North America, primarily driven by operational efficiencies and the integration of the Salvage Parent, Inc., acquisition; and (iii) the beneficial impact of $3.5 million in the U.K. due to the change in the British pound to U.S. dollar exchange rate.

Included in our yard operations expenses for fiscal 2014 were severance and lease termination costs of $4.0 million, primarily associated with the integration of the Salvage Parent, Inc. acquisition.

The decrease in yard operation depreciation and amortization expense in fiscal 2015 as compared to fiscal 2014 resulted primarily from certain assets becoming fully amortized in North America.

The decrease in cost of vehicle sales for fiscal 2015 of $38.1 million, or 21.8% as compared to fiscal 2014 came from (i) a decline in the U.K. of $26.9 million, which included the benefical impact of the change in the British pound to U.S. dollar exchange rate of $4.0 million; (ii) a decline in North America of $6.9 million; and (iii) a decline in our other international markets of $4.3 million.

The decline in the U.K. resulted from decreased volume from insurance sellers and

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Our revenue is impacted by changes in salvage frequency.

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| Atlanta, Georgia | | | | Greenfield | | | | August 2011 | | | | United States | | |

| Burlington, North Carolina | | | | Greenfield | | | | July 2012 | | | | United States | | |

| Edmonton, Canada | | | | Acquisition | | | | May 2012 | | | | Canada | | |

| Calgary, Canada | | | | Acquisition | | | | May 2012 | | | | Canada | | |

(ii) pursuing national and regional vehicle seller agreements; (iii) increasing our service offerings to sellers and members; and (iv) expanding the application of VB3 into new markets.

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The increase in volume came from (i) Hurricane Sandy, as the major storm produced an extraordinary volume of flood damaged vehicles; (ii) increased volumes from the full year impact of an exclusive provider contract entered into with a major insurance company at the end of fiscal 2012; and, (iii) what we believe to be a general increase in the overall salvage market as we believe there has been an increase in salvage frequency.

The increase in vehicle sales for fiscal 2013 of $29.8 million, or 17.9% as compared to fiscal 2012 resulted from (i) our international expansion during the year into Germany, Spain, the U.A.E. and Brazil which represented $1.1 million; (ii) the acquisition of Salvage Parent, Inc. which represented $3.2 million; (iii) growth in the U.K. of $13.6 million driven primarily by increased volume from insurance sellers and increased open market purchase activity from the general public; and (iv) growth in the North America of $11.9 million driven primarily by increased open market purchase activity.

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depreciated.

The increase in yard operation depreciation and amortization expense in fiscal 2013 was due primarily to accelerated depreciation from the shorter useful lives of our data center assets.

The increase in yard operations expense for fiscal 2013 of $80.6 million, or 21.4% as compared to fiscal 2012, was due to the growth from (i) our international expansion during the year into Germany, Spain, the U.A.E., and Brazil which represented $5.4 million; (ii) the acquisition of Salvage Parent, Inc. which represented $6.4 million; (iii) growth in the U.K. of $1.6 million driven by increased volume associated with general salvage market growth; and (iv) growth in North America of $59.5 million.

The growth in North America was driven by increases in both the costs to process each car and in volume which were $31.7 million and $27.8 million, respectively.

The increase in volume came from (i) Hurricane Sandy, as the major storm produced an extraordinary volume of flood damaged vehicles; (ii) increased volumes from the full year impact of an exclusive provider contract entered into with a major insurance company at the end of fiscal 2012; and, (iii) what we believe to be a general increase the in overall salvage market as we believe there has been an increase in salvage frequency, which is the percentage of cars involved in accidents that the insurance companies salvage rather than repair.

The increase in the cost to process each car was driven primarily by the abnormal costs for temporary storage facilities, premiums for subhaulers, labor costs incurred from overtime, travel and lodging, and equipment associated with Hurricane Sandy.

There was also an increase in the normal cost to process each car driven by growth in normal subhaul, labor, equipment and titling costs.

The increase in cost of vehicle sales for fiscal 2013 of $30.3 million, or 22.1% as compared to fiscal 2012 came from (i) our international expansion during the year into Germany, Spain, the U.A.E. and Brazil which represented $1.1 million; (ii) the acquisition of Salvage Parent, Inc. which represented $2.9 million; and (iii) growth in the U.K. and North America of $26.2 million and driven primarily by increased volume from insurance sellers in the U.K. and increased open market purchase activity from the general public in both the U.K. and North America.

General and Administrative Expenses. The increase in general and administrative expenses for fiscal 2014 of $26.6 million, or 19.3% as compared to fiscal 2013 increased primarily from (i) our international expansion during the prior fiscal year into Germany, Spain, the U.A.E., and Brazil representing $3.7 million; and, (ii) growth in North America of $19.6 million, driven primarily by the acquisition of Salvage Parent, Inc., which closed in the fourth quarter of fiscal 2013, increased expenditures on technology development, and the overall growth in labor costs, professional services and facilities costs associated with domestic and international expansion.

The increase in general and administrative expenses for fiscal 2013 of $23.4 million, or 20.5% as compared to fiscal 2012 is a result of growth from (i) our international expansion during the year into Germany, Spain, the U.A.E. and Brazil representing $5.3 million; (ii) the acquisition of Salvage Parent, Inc. which closed on May 30, 2013 and represents $2.8 million; (iii) relocation costs of $1.7 million; and (iv) growth in North America of $12.8 million.

The growth in North America was driven primarily by increased costs associated with new product development, the configuration of a new worldwide ERP operating platform and the transition costs associated with the outsourcing of our IT infrastructure and support which totaled $10.8 million; as well as an overall growth in labor costs, professional services and facilities costs associated with domestic and international expansion.

Cash and cash equivalents decreased for fiscal 2013 as compared to fiscal 2012 due to increases of capital expenditures and acquisitions as well as payments on long-term debt, partially offset by a reduction in share repurchase activity, proceeds from stock option exercises and increased accounts payable balances.

10% to 30% more vehicles than at other times of the year.

Net cash provided by operating activities decreased during fiscal 2013 as compared to fiscal 2012 primarily due to increases in prepaid and other assets of $28.8 million, accounts receivable of $15.2 million, and income taxes receivable of $7.8 million, partially offset by increases in accounts payable of $18.6 million.

The remaining decrease of $2.8 million was due to the timing of routine changes in working capital items.

Net cash used in investing activities increased for fiscal 2013 as compared to fiscal 2012 due primarily to increases in capital expenditures, including significant land acquisitions related to our first facilities in Brazil and Germany, lease buyouts of certain facilities, opening and improving facilities, software development, and acquiring yard equipment.

benefits from stock-based payment compensation, partially offset by a $21.7 million decrease in payments on long-term debt.

In the first quarter of fiscal 2014, certain employees exercised stock options through cashless exercises.

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| FY 2012—Q1 | | | | | 40,000 | | | $ | 9.00 | | | | 16,082 | | | | 8,974 | | | | 14,944 | | | $ | 22.39 | | | $ | 201 | |

| FY 2012—Q2 | | | | | 20,000 | | | | 9.00 | | | | 7,506 | | | | 4,584 | | | | 7,910 | | | | 23.98 | | | | 110 | |

| FY 2012—Q3 | | | | | 322,520 | | | | 10.74 | | | | 131,299 | | | | 85,683 | | | | 105,538 | | | | 26.38 | | | | 2,260 | |

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| Operating leases (1) | | | | | 23,357 | | | | 39,052 | | | | 28,736 | | | | 76,189 | | | | — | | | | 167,334 | | |

| Capital leases (1) | | | | | 1,407 | | | | 1,350 | | | | 2 | | | | — | | | | — | | | | 2,759 | | |

| Total contractual obligations | | | | $ | 105,645 | | | $ | 260,741 | | | $ | 28,738 | | | $ | 76,189 | | | $ | 23,771 | | | $ | 495,084 | | |

[removed: Interest] [added: Interest] Income [removed: Risk][added: Risk]

To achieve this objective in the current uncertain global financial markets, all cash and cash equivalents were held in bank deposits and money market funds as of July 31, [removed: 2014.][added: 2015.]

As of July 31, [removed: 2014,] [added: 2015,] 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 for fiscal [removed: 2014,] [added: 2015,] a hypothetical 10% adverse change in our interest yield would not have materially affected our operating results.

[removed: Interest] [added: Interest] Expense [removed: Risk][added: Risk]

Our total borrowings under the Credit [removed: Facility] [added: Agreement] were [removed: $293.8] [added: $243.8] million as of July 31, [removed: 2014.][added: 2015.]

We have entered into two interest rate swaps to exchange our variable interest rate payments commitment for fixed interest rate payments [removed: on the Term Loan balance] [added: through December 2015] to mitigate the interest expense risk.

[removed: Foreign] [added: Foreign] Currency and Translation [removed: Exposure][added: Exposure]

These operations also incur a majority of their expenses in the local currency, the Canadian dollar, [removed: the] British pound, [removed: the] U.A.E. dirham, [removed: the] [added: Bahraini dinar, Omani rial,] Brazilian real, and [removed: the] Euro.

A hypothetical 10% adverse change in the value of the U.S. dollar relative to the Canadian dollar, British pound, U.A.E. dirham, [added: Bahraini dinar, Omani rial,] Brazilian real and Euro would have resulted in [removed: an increase to revenue] [added: a decrease in operating income] of [removed: $26.3] [added: $5.6] million for fiscal [removed: 2014.][added: 2015.]

At July 31, [removed: 2014,] [added: 2015,] the cumulative effect of foreign exchange rate fluctuations on our consolidated financial position was a net translation loss of [removed: $19.0] [added: $68.5] million.

[added: A hypothetical 10% adverse change in the value of the U.S. dollar relative to the Canadian dollar,] British pound, U.A.E. dirham, [added: Bahraini dinar, Omani rial,] Brazilian real and Euro would not have materially affected our consolidated financial position.

The revolving and term loans under the Credit Agreement bear interest, at our election, at either (a) the Base Rate, which is defined as a fluctuating rate per annum equal to the greatest of (i) the Prime Rate in effect on such day; (ii) the Federal Funds Rate in effect on such date plus 0.50%; or (iii) an adjusted LIBOR rate determined on the basis of a one-month interest period plus 1.0%, in each case plus an applicable margin ranging from 0.25% to 1.0% based on our consolidated total net leverage ratio during the preceding fiscal quarter; or (b) an adjusted LIBOR rate plus an applicable margin ranging from 1.25% to 2.0% depending on our consolidated total net leverage ratio during the preceding fiscal quarter.

Interest is due and payable quarterly, in arrears, for loans bearing interest at the Base Rate, and at the end of an interest period (or at each three month interval in the case of loans with interest periods greater than three months) in the case of loans bearing interest at the adjusted LIBOR rate.

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

Amounts borrowed under the Credit Facility bear interest, subject to certain restrictions, at a fluctuating rate based on (i) the Eurocurrency Rate, (ii) the Federal Funds Rate or (iii) the Prime Rate as described in the Credit Facility.

A default interest rate applies on all obligations during an event of default under the Credit Facility at a rate per annum equal to 2.0% above the otherwise applicable interest rate.

A hypothetical 10% adverse change in the value of the U.S. dollar relative to the Canadian dollar,

[removed: Corporate Information][added: Corporate Information]

Our website is [removed: _www.copart.com_.][added: www.copart.com.]

[removed: CopartTM,] [added: Copart™,] VB2TM, [removed: CopartDirectTM, BID4UTM,] [added: CopartDirect™, BID4U™,] CI & [removed: DesignTM,] [added: Design™,] Cars with [removed: HeartTM,] [added: Heart™,] 1-800 CAR [removed: BUYERTM, VB3TM] [added: BUYER™, VB3™] and [removed: CrashedToys.comTM,] [added: CrashedToys.com™,] are trademarks of Copart, Inc. This Form 10-K also includes other trademarks of Copart and of other companies.

[removed: Overview][added: Overview]

We are a leading provider of online auctions and vehicle remarketing services in the United States (U.S.), Canada, the United Kingdom (U.K.), [added: the United Arab Emirates (U.A.E.), Oman, Bahrain,] and Brazil.

We also provide vehicle remarketing services in [removed: the United Arab Emirates (U.A.E.), Germany,] [added: Germany] and Spain.

Vehicle sellers consist primarily of insurance companies, but also include banks and financial [added: institutions, charities, car dealerships, fleet operators and vehicle rental companies.]

In the U.S. and Canada (North America), Brazil, [removed: and] the U.A.E., [added: Oman, and Bahrain,] 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.

VB2 opened our sales process to registered buyers (whom we refer to as members) anywhere in the world [removed: who have Internet access.][added: with access to the Internet.]

The bidders enter bids via the Internet in real time while BID4U submits bids for the high preliminary [removed: bidder,] [added: bidder] up to their maximum bid.

VB3 allows non-registered members to view auctions via our website and our mobile [removed: application,] [added: applications,] to attract non-members and grow our membership base.

For fiscal [removed: 2014,] [added: 2015,] sales of North American vehicles, on a unit basis, to members registered outside the state where the vehicle was located accounted for [removed: 51.3%] [added: 48.7%] of total vehicles sold; [removed: 28.7%] [added: 28.8%] of vehicles were sold to out of state members and [removed: 22.6%] [added: 19.9%] were sold to out of country members, based on registration.

For fiscal [removed: 2014,] [added: 2015,] sales of U.K. vehicles, on a unit basis, to members registered outside the country where the vehicle was located accounted for [removed: 18.6%] [added: 18.4%] of total vehicles sold.

| • | [removed: |] providing coverage that facilitates seller access to buyers around the world, reducing towing and third-party storage expenses, offering a local presence for vehicle inspection stations, and providing prompt response to catastrophes and natural disasters by specially-trained teams; |

| • | [removed: |] providing a comprehensive range of customer services that include merchandising services, efficient title processing, timely pick-up and delivery of vehicles, and Internet sales; |

| • | [removed: |] establishing and efficiently integrating new facilities and acquisitions; |

| • | [removed: |] increasing the number of bidders that can participate at each sale through the ease and convenience of Internet bidding; |

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

| • | [removed: |] providing the venue for insurance customers through our Virtual Insured Exchange (VIX) product to contingently sell a vehicle 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. |

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

For fiscal [removed: 2014,] [added: 2015,] our revenues were [removed: $1.2] [added: $1.1] billion and our operating income was [removed: $274.9] [added: $344.4] million.

In fiscal 2013, we acquired five new facilities in Sao Paulo, Brazil; one facility in Dubai, [removed: United Arab Emirates (U.A.E.);] [added: U.A.E.;] one facility in Ettlingen, Germany; one facility in Cordoba, Spain; and 43 facilities in North America; and we opened a new facility in Webster, New Hampshire.

In fiscal 2014, we acquired one facility in Montreal, Canada; a salvage vehicle auction business in Brazil, which did not include any facilities; as well as the assets of an online marketing company, which included the rights to hundreds of web domains including www.cashforcars.com and [removed: www.cash4cars.com] [added: www.cash4cars.com;] and opened facilities in Seaford, Delaware and Itaquaquecetuba, Brazil.

We may also charge additional fees for the cost of transporting the vehicle to [added: or from] our facility, storage of the vehicle, and other incidental costs included in the consignment fee.

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

[removed: Industry Overview][added: Industry Overview]

Vehicle rebuilders and vehicle repair licensees generally [removed: purchase salvage vehicles to repair and resell.]

| • | [removed: |] the anticipated percentage return on salvage (i.e., gross salvage proceeds, minus vehicle handling and selling expenses, divided by the [removed: actual cash value);] [added: ACV);] |

| • | [removed: |] the services provided by the company and the degree to which such services reduce administrative costs and expenses; |

| • | [removed: |] the price the company charges for its services; |

| • | [removed: |] national coverage; |

| • | [removed: |] the ability to respond to natural disasters; |

| • | [removed: |] the ability to provide analytical data to the seller; and |

| • | [removed: |] in the U.K., the actual amount paid for the vehicle. |

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

In addition, to maximize gross sales proceeds and cost efficiencies at each of our acquired [removed: facilities] [added: facilities,] we introduce our (i) pricing structure, (ii) selling processes, (iii) operational procedures, (iv) management information systems, and (v) when appropriate, redeploy existing personnel.

[removed: _Acquire] [added: Acquire] and Develop New Vehicle Storage Facilities in Key Markets Including Foreign [removed: Markets_][added: Markets]

[removed: _Pursue] [added: Pursue] National and Regional Vehicle Supply [removed: Agreements_][added: Agreements]

[added: By utilizing our existing insurance] company seller relationships, we are able to build new seller relationships and pursue additional supply agreements in existing and new markets.

[removed: _Expand] [added: Expand] Our Service Offerings to Sellers and [removed: Members_][added: Members]

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In fiscal 2015, we opened facilities in Manama, Bahrain; Muscat, Oman; and Moncton, Canada.

purchase salvage vehicles to repair and resell.

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In Germany and Spain, we provide online vehicle remarketing services.

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institutions, charities, car dealerships, fleet operators and vehicle rental companies.

In fiscal 2012, we acquired two new facilities located in Calgary and Edmonton, Canada and we opened two new facilities in Atlanta, Georgia and Burlington, North Carolina.

By utilizing our existing insurance

registered broker who meets the local licensing and permitting requirements.

We have implemented our proprietary business operating software at the majority of our storage facilities.

In addition, we have integrated our mainframe computer system with Internet and Intranet systems in order to provide secure access to our data and images in a variety of formats.

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| 3,250 | | | | 724 | | | | 205 | | | | 4,179 | | |

[removed: _Legal Proceedings_][added: Legal Proceedings]

[removed: On January 8, 2014, KPIT filed suit against us in the] United States District Court for the Eastern District of California, alleging breach of contract, promissory estoppel, breach of the implied covenant of good faith and fair dealing, account stated, quantum meruit, unjust enrichment, and declaratory relief.

[added: KPIT] seeks compensatory and exemplary damages, prejudgment interest, costs of suit, and a judicial declaration of the parties’ rights, duties, and obligations under the Implementation Services Agreement.

We are [removed: zealously] pursuing our claim for damages, and [removed: vigorously] defending KPIT’s claim for damages.

[removed: _Governmental Proceedings_][added: Governmental Proceedings]

The Georgia Department of Revenue, or DOR, [added: has] conducted a sales and use tax audit of our operations in Georgia for the period from January 1, 2007 through June 30, 2011.

As a result of [removed: the] [added: their initial] audit, the DOR issued a notice of proposed assessment for uncollected sales taxes in which it asserted that we failed to [added: collect and] remit sales taxes totaling $73.8 million, including penalties and interest.

In [removed: issuing the notice of proposed assessment, the DOR stated its policy position] [added: particular, our outside legal counsel provided us with an opinion] that [added: the] sales for resale to non-U.S. registered resellers [removed: are] [added: should not be] subject to Georgia sales and use tax.

[removed: We have] [added: Subsequently, we] engaged a Georgia law firm and outside tax advisors to review the conduct of our business operations in Georgia, the notice of [added: proposed] assessment, and the DOR’s policy position.

Based on the opinion from our outside law [removed: firm and] [added: firm,] advice from [added: our] outside tax advisors, [added: and our best estimate of a probable outcome,] we [added: believe that we] have adequately provided for the payment of [removed: a possible] [added: any] assessment in our consolidated financial statements.

We believe we have strong defenses to the DOR’s notice of [removed: proposed] assessment and intend to defend this matter.

We understand that [removed: Georgia law and DOR regulations are ambiguous on many of the points at issue in the audit, and] litigating and defending the matter in Georgia could be expensive and time-consuming and result in substantial management distraction.

[added: If the matter were to] be resolved in a manner adverse to us, it could have a material adverse effect on our consolidated results of [removed: operations, financial position,] [added: operations] and [removed: cash flows.][added: financial position.]

On January 8, 2014, KPIT filed suit against us in the

According to the DOR, the proposed assessment was based on its initial determination that our sales did not constitute nontaxable sales for resale.

Since our receipt of the notice of proposed assessment, our counsel and we have engaged in active discussions with the DOR to resolve the matter.

On June 5, 2015, following our most recent discussions and after additional review of documentation, the DOR provided us with revised audit work papers computing a sales tax liability of $2.7 million before interest and any penalties.

On June 22, 2015, representatives of the DOR and the Office of the Attorney General for the State of Georgia informed our counsel that the DOR intended to issue a formal notice of assessment for an estimated $100.0 million, based on the DOR’s original proposed assessment of $73.8 million plus additional accumulated interest and penalties.

On August 4, 2015, the DOR issued an official Assessment and Demand for Payment for $96.1 million for sales taxes, penalties, and interest that the DOR alleges we owe the State of Georgia.

We filed an appeal of this notice of assessment from the DOR with the Georgia Tax Tribunal on September 3, 2015.

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KPIT

In connection with our response to Hurricane Sandy, we entered into various short-term lease/license agreements with certain land owners in New York and New Jersey to marshal and store storm damaged vehicles until they were sold.

In November and December 2012, various actions were commenced against us and land owners.

In New York, actions were brought by the Town of Southampton, the County of Suffolk, the Town of Brookhaven, and the New York State Department of Environmental Conservation (the DEC), seeking declaratory and injunctive relief as well as civil penalties, in connection with alleged violations of local zoning, land use and environmental regulations.

The claims by the various plaintiffs have been mitigated with the removal of vehicles from the various short-term storage locations in New York.

The claims brought by the DEC have all been resolved through entering into consent orders, which included administrative payments in amounts that are not material to us, and restoration of premises, which we are undertaking.

We are defending the remaining New York claim and believe we have bona fide legal defenses.

In particular, our outside legal counsel has provided us an opinion that the sales for resale to non-U.S. registered resellers should not be subject to Georgia sales and use tax.

We have filed a request for protest or administrative appeal with the State of Georgia.

If the matter were to

[removed: UNITED] [added: UNITED] STATES

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

[removed: WASHINGTON,] [added: WASHINGTON,] D.C. [removed: 20549][added: 20549]

[removed: FORM 10-K][added: FORM 10-K]

[removed: (Mark One)][added: (Mark One)]

| [removed: x] [added: ý] | | [removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [removed: For the fiscal year ended July 31, 2014] |

| [removed: o] [added: ¨] | | [removed: TRANSITION] [added: TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [removed: for the transition period from to] |

[removed: Commission] [added: Commission] file number: 0-23255

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

[removed: |] (Exact name of registrant as specified in its charter) [removed: | | | | | | | |]

| [removed: Delaware | | | | 94-2867490 |] [added: Delaware] | | [added: 94-2867490] |

| [removed: _(State] [added: (State] or other jurisdiction of incorporation or [removed: organization)_ | |] [added: organization)] | | [removed: _(I.R.S.] [added: (I.R.S.] Employer Identification [removed: Number)_ | | |] [added: Number)] |

| [removed: 14185] [added: 14185] Dallas Parkway, Suite 300, Dallas, [removed: Texas _(Address] [added: Texas (Address] of principal executive [removed: offices_) | | | | 75254 _(Zip code)_ |] [added: offices)] | | [added: 75254 (Zip Code)] |

[removed: | Registrant’s] [added: Registrant’s] telephone number, including area code [removed: (972) 391-5000 Securities registered pursuant to Section 12(b) of the Act: | | | | | | | |]

| [removed: Title] [added: Title] of Each [removed: Class | |] [added: Class] | | [removed: Name] [added: Name] of each exchange on which [removed: registered | |] [added: registered] |

| Common Stock, $0.0001 par value | | [removed: | |] The NASDAQ Global Select Market | [removed: | |]

[removed: Securities] [added: Securities] registered pursuant to Section 12(g) of the Act: [removed: None][added: None]

Yes [removed: x] [added: ý] No o

Yes o No [removed: x][added: ý]

See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the [removed: Exchange] Act (check one):

| Large Accelerated Filer x | | [removed: | |] Accelerated Filer o | | [removed: | |] Non-Accelerated Filer o | | [removed: | |] Smaller Reporting Company o | [removed: | |]

| | | | | [removed: | | | |] (Do not check if a smaller reporting company) | | | [removed: | | | |]

The aggregate market value of the voting and non-voting Common Stock held by non-affiliates of the registrant as of January 31, [removed: 2014] [added: 2015] (the last business day of the registrant’s most recently completed second fiscal quarter) was [removed: $3,208,078,100] [added: $3,646,539,300] based upon the closing sales price reported for such date on the NASDAQ Global Select [removed: Market (formerly the NASDAQ National Market).][added: Market.]

As of September [removed: 29, 2014, 126,244,452] [added: 24, 2015, 120,186,984] shares of the registrant’s common stock were outstanding.

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

Portions of our definitive Proxy Statement for the [removed: 2014] [added: 2015] Annual Meeting of Stockholders, also referred to in this Annual Report on Form 10-K as our Proxy Statement, which will be filed with the Securities and Exchange Commission, or SEC, pursuant to Regulation 14A within 120 days after the registrant’s fiscal year end of July 31, [removed: 2014,] [added: 2015,] have been incorporated by reference in Part III hereof.

[removed: Copart,] [added: Copart,] Inc.

For the [removed: Fiscal Year Ended] [added: fiscal year ended] July 31, [removed: 2014][added: 2015]

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

| | | | [removed: | | | | |] Page Number | [removed: | |]

[removed: |] PART I [removed: | | | | | | | | | 1 | |]

| | | [removed: | | Industry Overview | | | | | 4] [added: [Industry Overview](#s32807E5A96B164E8AD148F28EE268EAF)] | [added: [3](#s32807E5A96B164E8AD148F28EE268EAF)] |

| | | [removed: | | Operating] [added: [Operating] and Growth [removed: Strategy | | | | | 5] [added: Strategy](#s810F5FA7589990A2073E8F28EE58ABB8)] | [added: [4](#s810F5FA7589990A2073E8F28EE58ABB8)] |

| | | [removed: | | Our] [added: [Our] Competitive [removed: Advantages | | | | | 6] [added: Advantages](#sC9999FA4F06FCAF7B5D48F28EE799E48)] | [added: [5](#sC9999FA4F06FCAF7B5D48F28EE799E48)] |

| | | [removed: | | Our] [added: [Our] Service [removed: Offerings. | | | | | 7] [added: Offerings](#sEEDB877F7756985244A88F28EEACBBB0)] | [added: [6](#sEEDB877F7756985244A88F28EEACBBB0)] |

| | | [removed: | | Sales | | | | | 10] [added: [Sales](#sA26197A4001D8C8D2F3D8F28EECDA4C6)] | [added: [9](#sA26197A4001D8C8D2F3D8F28EECDA4C6)] |

| | | [removed: | | Members | | | | | 10] [added: [Members](#sB142D0E721739BD976B48F28EEFF853A)] | [added: [9](#sB142D0E721739BD976B48F28EEFF853A)] |

| | | [removed: | | Competition | | | | | 11] [added: [Competition](#sBC09F35000675BCE44B88F28EF20F12A)] | [added: [9](#sBC09F35000675BCE44B88F28EF20F12A)] |

| | | [removed: | | Management] [added: [Management] Information [removed: Systems | | | | | 11] [added: Systems](#s62F878B26E8403D3C4318F28EF5215C0)] | [added: [9](#s62F878B26E8403D3C4318F28EF5215C0)] |

| | | [removed: | | Employees | | | | | 11] [added: [Employees](#s1E550D1E5A23F777789A8F28EF72D1D5)] | [added: [10](#s1E550D1E5A23F777789A8F28EF72D1D5)] |

10-K 1 cprt07312015-10k.htm 10-K

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OR

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for the transition period from to

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(972) 391-5000

Securities registered pursuant to Section 12(b) of the Act:

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Yes ý No o

Yes ý No o

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Yes o No ý

For the Fiscal Year Ended July 31, 2015

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| Item 1 | | [Business](#s9F79E7411FD6AD76AC678F28EE052399) | [1](#s9F79E7411FD6AD76AC678F28EE052399) |

| Item 2. | | [Properties](#s1560DA0C7B11957159DD8F28F0A0246B) | [23](#s1560DA0C7B11957159DD8F28F0A0246B) |

10-K 1 d31671.htm 10-K

OR

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Item 1.

Business 1

Risk Factors 12

Item 1B.

Item 2.

Properties 27

Item 3.

Item 4.

Item 5.

Item 6.

Item 7.

Item 7A.

Item 8.

Item 9.

Item 9A.

Other Information 54

Item 10.

Executive Compensation 55

Item 12.

Item 13.

Item 14.

Item 15.

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In Canada, we own or lease facilities in the provinces of Ontario, [removed: Quebec] [added: Quebec, Alberta] and [removed: Alberta.][added: New Brunswick.]

In Brazil, we own or lease [removed: five] [added: six] operating facilities.

In the U.A.E., [added: Oman and Bahrain,] we lease one operating [removed: facility.][added: facility in each country.]

In Germany and [removed: Spain] [added: Spain,] we operate online platforms.

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[removed: PART II][added: PART II]

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| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |

Market Information

The following table summarizes the high and low sales prices per share of our common stock for each quarter during the last two fiscal years.

As of July 31, 2015, there were 120,156,340 shares outstanding.

Our common stock has been quoted on the NASDAQ Global Select Market under the symbol “CPRT” since March 17, 1994.

As of July 31, 2015, we had 1,130 stockholders of record.

On July 31, 2015, the last reported sale price of our common stock on the NASDAQ Global Select Market was $36.03 per share.

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| | 2015 | | | | | | | | 2014 | | | | | | |

| | High | | | | Low | | | | High | | | | Low | | |

| Fourth Quarter | $ | 36.80 | | | $ | 33.36 | | | $ | 37.15 | | | $ | 33.37 | |

| Third Quarter | $ | 38.50 | | | $ | 35.48 | | | $ | 37.54 | | | $ | 32.59 | |

| Second Quarter | $ | 37.81 | | | $ | 33.14 | | | $ | 36.93 | | | $ | 31.08 | |

| First Quarter | $ | 34.92 | | | $ | 29.93 | | | $ | 34.71 | | | $ | 30.38 | |

Dividend Policies

We have not paid a cash dividend since becoming a public company in 1994.

We currently intend to retain any earnings for use in our business.

We expect to continue to use cash flows from operations to finance our working capital needs and to develop and grow our business.

In addition to our stock repurchase program and our recently completed modified "Dutch Auction" tender offer, we are considering a variety of alternative potential uses for our remaining cash balances and our cash flows from operations.

These alternative potential uses include additional stock repurchases, repayments of long-term debt, the payment of dividends and acquisitions.

Repurchase of Our Common Stock

On September 22, 2011, our Board of Directors approved a 40 million share increase in the stock repurchase program, bringing the total current authorization to 98 million shares.

The repurchases may be effected through solicited or unsolicited transactions in the open market or in privately negotiated transactions.

No time limit has been placed on the duration of the stock repurchase program.

Subject to applicable securities laws, such repurchases will be made at such times and in such amounts as we deem appropriate and may be discontinued at any time.

For fiscal 2015, we repurchased 231,500 shares of our common stock at a weighted average price of $36.02.

For fiscal 2014, we did not repurchase any shares of our common stock.

For fiscal 2013, we repurchased 500,000 shares of our common stock at a weighted average price of $27.77.

As of July 31, 2015, the total number of shares repurchased under the program was 50,518,282 and 47,481,718 shares were available for repurchase under our program.

Additionally, on July 9, 2015, we completed a modified "Dutch Auction" tender offer, or tender offer, to purchase up to 13,888,888 shares of our common stock at a purchase price not greater than $36.00 nor less than $34.75 per share.

In connection with the tender offer, we accepted for payment an aggregate of 6,254,061 shares of our common stock at a purchase price of $36.00 per share for a total value of $225.1 million.

Our directors and executive officers were expressly prohibited from participating in the tender offer by our board of directors under our Insider Trading Policy.

The shares purchased as a result of the tender offer were not part of our repurchase program.

The purchases of the shares of common stock were funded by the proceeds relating to the issuance of long-term debt.

The number and average price of shares purchased in each fiscal year are set forth in the table below:

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The following selected consolidated financial data should be read in conjunction with our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in [removed: Item 7., and “Financial Statements and Supplementary Data” in] [added: Part II,] Item [removed: 8.][added: 7.]

| | [removed: | | |] Fiscal Year Ended July 31, | | | | | | | | | | | | | | | | | | | [removed: |]

| | [added: 2015] | | | [added: |] 2014 | | | | 2013 | | | | 2012 | | | | 2011* | | | [removed: | 2010 | | | |]

| (In thousands, except per share) | | | | | | | | | | | | | | | | | | | | [removed: | | | |]

| [removed: Operating] [added: Operating] Data | | | | | | | | | | | | | | | | | | | | [removed: | | | |]

| Revenues | [added: $] | [added: 1,146,079] | | [added: |] $ | 1,163,489 | | | $ | 1,046,386 | | | $ | 924,191 | | | $ | 872,246 | | [removed: | $ | 772,879 | | |]

| Operating income | [added: 344,401] | | | | 274,934 | | | | 282,992 | | | | 286,353 | | | | 265,290 | | | [removed: | 239,070 | | |]

| Income [removed: from continuing operations] before income taxes | [added: 332,069] | | | | 270,035 | | | | 276,872 | | | | 278,056 | | | | 263,877 | | | [removed: | 239,495 | | |]

| Income [removed: tax expense | | | |] [added: taxes] | [removed: (91,348] [added: 112,286] | [removed: )] | | | [removed: (96,847] [added: 91,348] | [removed: )] | | | [removed: (95,937] [added: 96,847] | [removed: )] | | | [removed: (97,502] [added: 95,937] | [removed: )] | | | [removed: (87,868] [added: 97,502] | [removed: )] | |

| Net income | [added: $] | [added: 219,783] | | [added: |] $ | 178,687 | | | $ | 180,025 | | | $ | 182,119 | | | $ | 166,375 | | [removed: | $ | 151,627 | | |]

| Basic net income per common share | [added: $] | [added: 1.75] | | [added: |] $ | 1.42 | | | $ | 1.44 | | | $ | 1.42 | | | $ | 1.10 | | [removed: | $ | 0.90 | | |]

| Weighted average [added: common] shares [added: outstanding] | [added: 125,914] | | | | 125,693 | | | | 124,912 | | | | 128,120 | | | | 151,298 | | | [removed: | 168,330 | | |]

| Diluted net income per common share | [added: $] | [added: 1.67] | | [added: |] $ | 1.36 | | | $ | 1.39 | | | $ | 1.39 | | | $ | 1.08 | | [removed: | $ | 0.89 | | |]

| [removed: Weighted] [added: Diluted weighted] average [added: common] shares [added: outstanding] | [added: 131,425] | | | | 131,230 | | | | 129,781 | | | | 131,428 | | | | 153,352 | | | [removed: | 170,054 | | |]

| [removed: Balance] [added: Balance] Sheet Data | | | | | | | | | | | | | | | | | | | | [removed: | | | |]

| Cash and cash equivalents | [added: $] | [added: 456,012] | | [added: |] $ | 158,668 | | | $ | 63,631 | | | $ | 140,112 | | | $ | 74,009 | | [removed: | $ | 268,188 | | |]

| Working capital | [added: 521,456] | | | | 168,007 | | | | 67,893 | | | | 134,908 | | | | 75,242 | | | [removed: | 330,191 | | |]

| Total assets | [added: 1,799,952] | | | | 1,506,804 | | | | 1,334,481 | | | | 1,154,000 | | | | 1,084,436 | | | [removed: | 1,228,812 | | |]

| Total debt | [added: 645,806] | | | | 302,901 | | | | 372,457 | | | | 444,120 | | | | 375,756 | | | [removed: | 975 | | |]

| Stockholders’ equity | [added: 964,464] | | | | 1,003,499 | | | | 762,401 | | | | 561,117 | | | | 555,172 | | | [removed: | 1,087,234 | | |]

| * | [removed: |] As a result of the adoption of Accounting Standards Update 2009–13, [removed: _Revenue] [added: Revenue] Arrangements with Multiple [removed: Deliverables_,] [added: Deliverables,] for fiscal 2011, we accelerated recognition of $14.4 million in service revenue and $13.5 million in related yard operation expenses. |

of this 10-K, and “Financial Statements and Supplementary Data” in Part II, Item 8 of this 10-K.

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[removed: Evaluation] [added: Evaluation] of Disclosure Controls and [removed: Procedures][added: Procedures]

[removed: Management’s] [added: Management’s] Report on Internal Control Over Financial [removed: Reporting][added: Reporting]

[removed: Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that in] reasonable [removed: detail accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable] assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.

Management assessed our internal control over financial reporting for the fiscal year ended July 31, [removed: 2014.][added: 2015.]

The certifications of our principal executive officer and principal financial officer attached as Exhibits 31.1 and 31.2 to this [removed: report] [added: Annual Report on Form 10-K] include, in paragraph 4 of such certifications, information concerning our disclosure controls and procedures and internal controls over financial reporting.

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: 2014.][added: 2015.]

[removed: REPORT] [added: REPORT] OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING [removed: FIRM][added: FIRM]

We have audited Copart, Inc.’s internal control over financial reporting as of July 31, [removed: 2014,] [added: 2015,] based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 Framework) (the COSO criteria).

In our opinion, Copart, Inc. maintained, in all material respects, effective internal control over financial reporting as of July 31, [removed: 2014,] [added: 2015,] 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: 2014] [added: 2015] and [removed: 2013,] [added: 2014,] and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended July 31, [removed: 2014] [added: 2015] of Copart, Inc. and our report dated September [removed: 29, 2014] [added: 25, 2015] expressed an unqualified opinion thereon.

[removed: Limitations] [added: Limitations] on the Effectiveness of [removed: Controls][added: Controls]

[removed: Changes] [added: Changes] in Internal Control Over Financial [removed: Reporting][added: Reporting]

Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (2) provide

September 25, 2015

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September 29, 2014

[removed: PART III][added: PART III]

Certain information required by Part III is omitted from this Annual Report on Form 10-K because we intend to file a definitive proxy statement for our [removed: 2014] [added: 2015] Annual Meeting of Stockholders (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.

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Information required by this item is incorporated by reference to the sections entitled “Proposal Number One [added: —] Election of Directors,” “Corporate Governance and Board of Directors” and “Related Person Transactions and Section 16(a) Beneficial Ownership Compliance” in our Proxy Statement.

[removed: _Code] [added: Code] of [removed: Ethics_][added: Ethics]

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The information required by this item is incorporated herein by reference from the Proxy Statement (to be filed with the Securities and Exchange Commission within 120 days of our July 31, [removed: 2014] [added: 2015] fiscal year end) under the heading “Executive Compensation,” “Compensation of [removed: Non-Employee] Directors,” and “Corporate Governance and Board of Directors.”

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The information required by this item is incorporated herein by reference from the Proxy Statement (to be filed with the Securities and Exchange Commission within 120 days of our July 31, [removed: 2014] [added: 2015] fiscal year end) under the headings “Security Ownership” and [removed: “Execution] [added: “Executive] Compensation,” subheading “Equity Compensation Plan Information.”

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The information required by this item is incorporated herein by reference from the Proxy Statement (to be filed with the Securities and Exchange Commission within 120 days of our July 31, [removed: 2014] [added: 2015] fiscal year end) under the heading “Related Person Transactions and Section 16(a) Beneficial Ownership Compliance,” “Corporate Governance and Board of Directors,” and “Proposal Number One Election of Directors.”

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The information required by this item is incorporated herein by reference from the section captioned “Proposal [removed: Four] [added: Number Three] — Ratification of Appointment of Independent Registered Public Accounting Firm” in the Proxy Statement (to be filed with the Securities and Exchange Commission within 120 days of our July 31, [removed: 2014] [added: 2015] fiscal year end).

[removed: PART] [added: PART] IV

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| (a) | [removed: | _Financial statements:_] [added: Financial statements:] |

Our consolidated financial statements at July 31, [removed: 2014] [added: 2015] and [removed: 2013] [added: 2014] and for each of the three years in the period ended July 31, [removed: 2014] [added: 2015] and the notes thereto, together with the report of the independent registered public accounting firm on those consolidated financial statements are hereby filed as part of this annual report on Form 10-K.

| (b) | [removed: | _Financial] [added: Financial] statement [removed: schedules:_] [added: schedules:] |

| (c) | [removed: | _Exhibits:_] [added: Exhibits:] |

[removed: SIGNATURES][added: SIGNATURES]

| | [removed: | | |] Registrant | | | [removed: | | | |]

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

| | [removed: | | |] By: | | [removed: | |] /s/ A. JAYSON ADAIR | [removed: | |]

| | | | [removed: | | | | |] A. Jayson Adair Chief Executive Officer (Principal Executive Officer and Director) | [removed: | |]

Date: September [removed: 29, 2014][added: 25, 2015]

| | [removed: | | |] By: | | [removed: | |] /s/ WILLIAM E. FRANKLIN | [removed: | |]

| | | | [removed: | | | | |] William E. Franklin, Executive Vice [removed: President, United States] [added: President] and Chief Financial Officer (Principal Financial and Accounting Officer) | [removed: | |]

[removed: POWER] [added: POWER] OF [removed: ATTORNEY][added: ATTORNEY]

| Signature | | [removed: | |] Capacity in Which Signed | | [removed: | |] Date | [removed: | |]

| /s/ A. JAYSON [removed: ADAIRA. Jayson Adair | |] [added: ADAIR] | | Chief Executive Officer (Principal Executive Officer and Director) | | [removed: | |] September [removed: 29, 2014 | |] [added: 25, 2015] |

| /s/ WILLIAM E. [removed: FRANKLINWilliam E. Franklin | |] [added: FRANKLIN] | | Executive Vice [removed: President, United States] [added: President] and Chief Financial Officer (Principal Financial and Accounting Officer) | | [removed: | |] September [removed: 29, 2014 | |] [added: 25, 2015] |

| /s/ WILLIS J. [removed: JOHNSONWillis J. Johnson | |] [added: JOHNSON] | | Chairman of the Board | | [removed: | |] September [removed: 29, 2014 | |] [added: 25, 2015] |

| /s/ VINCENT W. [removed: MITZVincent W. Mitz | |] [added: MITZ] | | President and Director | | [removed: | |] September [removed: 29, 2014 | |] [added: 25, 2015] |

| /s/ JAMES E. [removed: MEEKSJames E. Meeks | |] [added: MEEKS] | | Director | | [removed: | |] September [removed: 29, 2014 | |] [added: 25, 2015] |

| /s/ STEVEN D. [removed: COHANSteven D. Cohan | |] [added: COHAN] | | Director | | [removed: | |] September [removed: 29, 2014 | |] [added: 25, 2015] |

| /s/ DANIEL [removed: ENGLANDERDaniel Englander | |] [added: ENGLANDER] | | Director | | [removed: | |] September [removed: 29, 2014 | |] [added: 25, 2015] |

| /s/ THOMAS N. [removed: TRYFOROSThomas N. Tryforos | |] [added: TRYFOROS] | | Director | | [removed: | |] September [removed: 29, 2014 | |] [added: 25, 2015] |

| /s/ MATT [removed: BLUNTMatt Blunt | |] [added: BLUNT] | | Director | | [removed: | |] September [removed: 29, 2014 | |] [added: 25, 2015] |

[removed: Copart, Inc.][added: | | COPART, INC. | | |]

and Financial Statement [removed: Schedule][added: Schedule]

| [removed: Consolidated] [added: Consolidated] Financial Statements | [removed: | | |] Page Number | [removed: | |]

[removed: | Report of Independent Registered Public Accounting Firm | | | | | 60 | |][added: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM]

| [removed: Consolidated] [added: [Consolidated] Balance Sheets as of July 31, [removed: 2014] [added: 2015] and [removed: 2013 | | | | | 61] [added: 2014](#s6289931CCB5FC82BEC108F28D9E157C0)] | [added: [56](#s6289931CCB5FC82BEC108F28D9E157C0)] |

| [removed: Consolidated] [added: [Consolidated] Statements of Income for the years ended July 31, [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012 | | | | | 62] [added: 2013](#sD0A4EBE29F8294EA12418F28D9694748)] | [added: [57](#sD0A4EBE29F8294EA12418F28D9694748)] |

| [removed: Consolidated] [added: [Consolidated] Statements of Comprehensive Income for the years ended July 31, [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012 | | | | | 63] [added: 2013](#s92EE46C9D5F4A00529E58F28D8DC8068)] | [added: [58](#s92EE46C9D5F4A00529E58F28D8DC8068)] |

| [removed: Consolidated] [added: [Consolidated] Statement of Stockholder’s Equity for the years ended July 31, [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012 | | | | | 64] [added: 2013](#sF941EF11A99F131A77E18F28D97E08B7)] | [added: [59](#sF941EF11A99F131A77E18F28D97E08B7)] |

| [removed: Consolidated] [added: [Consolidated] Statements of Cash Flows for the years ended July 31, [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012 | | | | | 65] [added: 2013](#s7501C3653E41D16D335A8F28DA024778)] | [added: [60](#s7501C3653E41D16D335A8F28DA024778)] |

| [removed: Notes] [added: [Notes] to Consolidated Financial [removed: Statements | | | | | 66] [added: Statements](#s8EC1921A6B00AE5A11E68F28F627123F)] | [added: [61](#s8EC1921A6B00AE5A11E68F28F627123F)] |

[removed: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM][added: | [Report of Independent Registered Public Accounting Firm](#s01935067460DD2B2703C8F28F4FBADB2) | [55](#s01935067460DD2B2703C8F28F4FBADB2) |]

We have audited the accompanying consolidated balance sheets of Copart, Inc. as of July 31, [removed: 2014] [added: 2015] and [removed: 2013,] [added: 2014,] and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended July 31, [removed: 2014.][added: 2015.]

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: 2014] [added: 2015] and [removed: 2013,] [added: 2014,] and the consolidated results of its operations and its cash flows for each of the three years in the period ended July 31, [removed: 2014,] [added: 2015,] in conformity with U.S. generally accepted accounting principles.

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: 2014,] [added: 2015,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 Framework) and our report dated September [removed: 29, 2014] [added: 25, 2015] expressed an unqualified opinion thereon.

(in thousands, except share [removed: amounts)][added: amounts)]

| | [removed: | | |] July 31, | | | | | | | [removed: |]

| | [added: 2015] | | | [added: |] 2014 | | | | 2013 | | | [removed: |]

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Date: September 25, 2015

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| A. Jayson Adair | | | | |

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| William E. Franklin | | | | |

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| Willis J. Johnson | | | | |

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| Vincent W. Mitz | | | | |

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| James E. Meeks | | | | |

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| Steven D. Cohan | | | | |

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| Daniel Englander | | | | |

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| Thomas N. Tryforos | | | | |

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| Matt Blunt | | | | |

Copart, Inc.

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September 29, 2014

| Assets held for sale | | | | | 1,345 | | | | 1,929 | | |

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| Balances at July 31, 2011 | | | | | 132,011,034 | | | $ | 13 | | | $ | 313,927 | | | $ | (23,225 | ) | | $ | 264,457 | | | $ | 555,172 | |

| Net income | | | | | — | | | | — | | | | — | | | | — | | | | 182,119 | | | | 182,119 | |

| Exercise of stock options, net of repurchased shares | | | | | 1,165,605 | | | | — | | | | 13,202 | | | | — | | | | (2,777 | ) | | | 10,425 | |

| Shares repurchased | | | | | (8,880,708 | ) | | | (1 | ) | | | (29,057 | ) | | | — | | | | (170,838 | ) | | | (199,896 | ) |

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

criteria for separate units of accounting.

_Bank Overdraft_

_Assets Held for Sale_

The Company has removed certain assets from operations and offered them for sale.

These assets, which include certain real estate, are reflected at their fair market value, less costs to dispose, in the financial statements and are a Level II fair value measurement based on sale transactions of similar assets.

During the year ended July 31, 2012, the Company recorded an impairment of $8.8 million associated with the write down to fair market value of these assets held for sale.

ultimate cost of claims incurred as of the balance sheet date.

In February 2013, the FASB ASU 2013-02, _Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income_, which amends ASC 220, _Comprehensive Income_.

The amended guidance requires entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component.

Additionally, entities are required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income.

The amended guidance does not change the current requirements for reporting net income or other comprehensive income.

In July 2012, the FASB issued ASU 2012-02, _Testing Indefinite-Lived Intangible Assets for Impairment,_ which amended the guidance in ASU 2011-08 to simplify the testing of indefinite-lived intangible assets other than goodwill for impairment.

ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning September 15, 2012.

value of other acquired assets and assumed liabilities, including potential contingencies and the useful lives of the assets.

| Goodwill | | | | | 8,472 | |

The purchase price allocation for the salvage vehicle auction businesses in Canada and Brazil, and the acquired online marketing company, are not final for property and equipment, income taxes, liabilities and intangible assets acquired pending the final valuation by the Company.

| | | | | | 200,569 | | | | 185,397 | | |

| | | | | | 1,077,617 | | | | 1,049,623 | | |

| Beginning balance | | | | $ | 267,463 | | | $ | 196,438 | | |

| Covenants not to compete | | | | $ | 17,656 | | | $ | 12,515 | | | $ | (11,945 | ) | | $ | (10,965 | ) | | $ | 5,711 | | | $ | 1,550 | | | | 4 | | | | 4 | | |

| Supply contracts & customer relationships | | | | | 46,761 | | | | 33,711 | | | | (29,193 | ) | | | (22,152 | ) | | | 17,568 | | | | 11,559 | | | | 4 | | | | 6 | | |

| Trade name | | | | | 2,757 | | | | 2,998 | | | | (1,125 | ) | | | (402 | ) | | | 1,632 | | | | 2,596 | | | | 3 | | | | 4 | | |

| Licenses and databases | | | | | 2,560 | | | | 3,306 | | | | (2,229 | ) | | | (1,305 | ) | | | 331 | | | | 2,001 | | | | 3 | | | | 3 | | |

| Intangibles, net | | | | $ | 69,734 | | | $ | 52,530 | | | $ | (44,492 | ) | | $ | (34,824 | ) | | $ | 25,242 | | | $ | 17,706 | | | | | | | | | | |

| 2015 | | | | $ | 6,491 | |

| 2016 | | | | | 5,976 | |

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

_Market Information_

The following table summarizes the high and low sales prices per share of our common stock for each quarter during the last two fiscal years.

As of July 31, 2014, there were 126,143,366 shares outstanding.

Our common stock has been quoted on the NASDAQ Global Select Market under the symbol “CPRT” since March 17, 1994.

As of July 31, 2014, we had 1,225 stockholders of record.

On July 31, 2014, the last reported sale price of our common stock on the NASDAQ Global Select Market was $33.38 per share.

| | | | | 2014 | | | | | | | | 2013 | | | | | | | |

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

| | | | | High | | | | Low | | | | High | | | | Low | | | |

| Fourth Quarter | | | | $ | 37.15 | | | $ | 33.37 | | | $ | 38.26 | | | $ | 30.11 | | |

| Third Quarter | | | | $ | 37.54 | | | $ | 32.59 | | | $ | 36.93 | | | $ | 31.30 | | |

| Second Quarter | | | | $ | 36.93 | | | $ | 31.08 | | | $ | 37.47 | | | $ | 28.39 | | |

| First Quarter | | | | $ | 34.71 | | | $ | 30.38 | | | $ | 28.98 | | | $ | 23.28 | | |

Dividend Policies

We have not paid a cash dividend since becoming a public company in 1994.

We currently intend to retain any earnings for use in our business.

We expect to continue to use cash flows from operations to finance our working capital needs and to develop and grow our business.

In addition to our stock repurchase program, we are considering a variety of alternative potential uses for our remaining cash balances and our cash flows from operations.

These alternative potential uses include additional stock repurchases, repayments of long-term debt, the payment of dividends and acquisitions.

Repurchase of Our Common Stock

On September 22, 2011, our Board of Directors approved a 40 million share increase in the stock repurchase program, bringing the total current authorization to 98 million shares.

The repurchases may be effected through solicited or unsolicited transactions in the open market or in privately negotiated transactions.

No time limit has been placed on the duration of the stock repurchase program.

Subject to applicable securities laws, such repurchases will be made at such times and in such amounts as we deem appropriate and may be discontinued at any time.

For fiscal 2014, we did not repurchase any shares of our common stock.

For fiscal 2013, we repurchased 500,000 shares of our common stock at a weighted average price of $27.77.

For fiscal 2012, we repurchased 8,880,708 shares of our common stock at a weighted average price of $22.51.

As of July 31, 2014, the total number of shares repurchased under the program was 50,286,782 and 47,713,218 shares were available for repurchase under our program.

Additionally, on January 14, 2011, we completed a tender offer to purchase up to 21,052,630 shares of our common stock at a price of $19.00 per share.

Our directors and executive officers were expressly prohibited from participating in the tender offer by our board of directors under our Insider Trading Policy.

In connection with the tender offer, we accepted for purchase 24,344,176 shares of our common stock.

The shares accepted for purchase are comprised of the 21,052,630 shares we offered to purchase and an additional 3,291,546 shares purchased pursuant to our right to purchase additional shares up to 2% of our outstanding shares.

The shares purchased as a result of the tender offer are not part of our repurchase program.

The purchase of the shares of common stock was funded by the proceeds relating to the issuance of long term debt.

The dilutive earnings per share impact of all repurchased shares on the weighted average number of common shares outstanding for fiscal 2014 is less than $0.01.

The number and average price of shares purchased in each fiscal year are set forth in the table below:

| Period | | | | Total Number of Shares | | | | Average Price Paid Per Share | | | | Total Number of Shares Purchased as Part of Publicly Announced Program | | | | Maximum Number of Shares That May Yet be Purchased Under the Program | | |

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

| _Fiscal 2012 _ | | | | | | | | | | | | | | | | | | |