Copart (CPRT) 10-K risk factor changes: FY2022 vs FY2021

Although no single customer accounted for more than 10% of our consolidated revenues for fiscal [added: 2022,] 2021, [removed: 2020,] or [removed: 2019,] [added: 2020,] a limited number of vehicle sellers historically have collectively accounted for a substantial portion of our revenues.

Subsequently, in fiscal 2007 and fiscal 2008 we made significant acquisitions in the U.K., followed by acquisitions in the U.A.E., Brazil, Germany, and Spain in fiscal 2013, expansions into Bahrain and Oman in fiscal 2015, expansion into the Republic of Ireland and India in fiscal 2016, and an acquisition in Finland in fiscal [removed: 2018.][added: 2018, and a parts recycler in U.K. in fiscal 2022.]

Integration of our respective operations, including information technology and financial and administrative functions, may not proceed as anticipated and could result in unanticipated costs or expenses such as capital expenditures that could have an [removed: adverse effect on our future operating results.]

- the need to localize our [added: mix of] product [removed: offerings,] [added: and service offerings in response to customer requirements,] particularly the need to implement our online auction platform in foreign countries;

- repatriation of funds currently held in foreign jurisdictions to the [removed: U.S.] [added: U.S., which] may result in higher effective tax rates;

We believe that the implementation of our proprietary auction technologies across our operations [removed: over the last decade] had a favorable impact on our results of operations by increasing the size and geographic scope of our buyer base, increasing the average selling price for vehicles sold through our sales, and lowering expenses associated with vehicle sales.

[removed: We] [added: For example, we] implemented our online system across all of our U.S., Canada, and U.K. salvage yards between [added: in] fiscal 2004 and fiscal [removed: 2008,] [added: 2008] and experienced increases in revenues and average selling prices, as well as improved operating efficiencies in those markets.

For example, [removed: Hurricanes Katrina, Rita, Sandy, and Harvey] [added: Hurricane Ida] had, in certain quarters, an adverse effect on our operating results, in part because of yard capacity constraints in the impacted areas of the U.S. We regularly evaluate our capacity in all our markets and where [removed: appropriate] [added: appropriate,] seek to increase capacity through the acquisition of additional land and yards.

We seek to increase our sales and profitability through the acquisition of [added: complementary businesses,] additional facilities and the development of new facilities.

For example, in fiscal [removed: 2019,] [added: 2020,] we opened [added: two new operational facilities in Germany,] one new operational facility in Brazil, [removed: seven] [added: and three] new operational facilities in [added: the U.S. In fiscal 2021, we opened one new operational facility in] Germany, [removed: eleven] [added: one] new operational [added: facility in Spain, ten new operational] facilities in the U.S., and acquired an operational facility in [removed: Greenville, Kentucky.][added: Des Moines, Iowa.]

We cannot assure that these indemnification provisions will protect us fully or at all, and as a [added: result we may face unexpected liabilities that adversely affect our financial statements.]

In addition to using independent subhaulers, in the [added: U.S. and the] U.K. we utilize a fleet of company trucks to pick up and deliver vehicles from our [removed: U.K.] storage [removed: facilities.][added: facilities in those geographies.]

In connection therewith, we are subject to the risks associated with providing trucking services, including [added: but not limited to] inclement weather, disruptions in transportation infrastructure, accidents and related injury claims, availability and price of fuel, any of which could result in an increase in our operating expenses and reduction in our net income.

[removed: conditions, our ability to increase our revenues and improve our operating results and related growth will be increasingly] dependent on our ability to obtain additional vehicle sellers and to compete more effectively in the market, each of which is subject to the other risks and uncertainties described in [removed: this Annual Report on Form 10-K.][added: these sections.]

For example, during fiscal [removed: 2006, fiscal 2013 and fiscal 2018,] [added: 2022,] we recognized substantial additional costs associated with [removed: Hurricanes Katrina, Rita, Sandy, and Harvey.][added: Hurricane Ida.]

Johnson, our Chairman, [added: and] A.

Jayson [removed: Adair, our Chief Executive Officer,] [added: Adair] and Jeffrey Liaw, our [removed: President,] [added: Co-Chief Executive Officers,] or if one or more of these executives decide to join a competitor or otherwise compete directly or indirectly with us, we may not be able to successfully manage our business or achieve our business objectives.

Certain of our competitors may [added: currently or in the future] have greater financial resources than we [removed: do currently or will have in the future.][added: do.]

These potential new competitors may include consolidators of automobile dismantling businesses, organized salvage vehicle buying groups, automobile manufacturers, automobile [removed: auctioneers,] [added: auctioneers] and software companies.

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, consolidated results of [removed: operations,] [added: operations] and financial position.

[added: Although we believe we generally enjoy positive community relationships and political] support in our range of operations, shifting public opinion sentiments and sociopolitical dynamics could have an adverse effect on our business and reputation.

In many countries outside of the United States, particularly in those with developing economies, it may be common for persons to engage in business practices prohibited by laws and regulations applicable to us, such as the U.S. Foreign Corrupt Practices Act [removed: (“FCPA”);] [added: (“FCPA”),] U.K. Bribery [removed: Act;] [added: Act,] Brazil Clean Companies [removed: Act;] [added: Act,] India’s Prevention of Corruption Act, [removed: 1988;] [added: 1988] or similar local anti-bribery laws.

In addition, certain acquisitions in the U.K. may be reviewed by the [removed: Competition and Markets Authority (“U.K. Regulator”).][added: CMA.]

If an inquiry is made by the [removed: U.K. Regulator,] [added: CMA,] we may be required to demonstrate that our acquisitions will not result, or be expected to result, in a substantial lessening of competition in the U.K. market.

Although we believe that there will not be a substantial lessening of competition in the U.K. market, based on our analysis of the relevant U.K. markets, there can be no assurance that the [removed: U.K. Regulator] [added: CMA] will agree with us if it decides to make an inquiry.

If the [removed: U.K. Regulator] [added: CMA] determines that by our acquisitions of certain assets, there is or likely will be a substantial lessening of competition in the U.K. market, we could be required to divest some portion of our U.K. assets.

In the event of a divestiture order by the [removed: U.K. Regulator,] [added: CMA,] the assets disposed may be sold for substantially less than their carrying value.

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

[removed: Some] [added: Certain] of [removed: our target markets outside] the [removed: U.S. operate in a manner substantially different than our historic market] [added: vehicles that we remarket] in the U.S. [removed: For example, new] [added: and foreign] markets may [removed: operate] [added: be transacted] either wholly or partially on the principal model, in which the vehicle is purchased and then resold for our own account, rather than the agency [removed: model employed in the U.S.,] [added: model,] in which we generally act as a sales agent for the legal owner of vehicles.

As we expand into markets outside the U.S., Canada, and the U.K., including Germany in particular, we cannot predict whether markets will readily adapt to our strategy of online auctions [added: of automobiles sourced principally through vehicle insurers.]

[removed: Similarly,] [added: (“CPRA”),] the [removed: California Consumer] [added: Colorado] Privacy [removed: Act, or AB375 (“CCPA”)] [added: Act (“CPA”), the Virginia Consumer Data Protection Act (“VCDPA”)] and the Brazilian General Data Protection Law (“LGPD”), were also recently enacted and became effective in 2020 and these laws create new data privacy rights for individuals.

Complying with the GDPR, the CCPA, the [added: CPRA, the CPA, the VCDPA, the] LGPD, and similar emerging and changing privacy and data protection requirements may cause us to incur substantial costs or require us to change our business practices.

[added: For example, in March 2008, a decree issued by the president of Mexico became effective that] placed restrictions on the types of vehicles that can be imported into Mexico from the U.S. The adoption of similar laws or regulations in other jurisdictions that have the effect of reducing or curtailing our activities abroad, changes in the interpretation, application, and enforcement of laws, regulations, or treaties, any failure to comply with non-U.S. laws or regulatory interpretations, or any legal or regulatory interpretations or governmental actions that significantly increase our costs or the costs of our buyers could have a material adverse effect on our consolidated results of operations and financial position by reducing the demand for our products and services and our ability to compete in non-U.S. markets.

Our operations are subject to international, federal, provincial, [removed: state,] [added: state] and local laws and regulations regarding the protection of the environment in the countries in which we have storage facilities.

We have incurred expenses for environmental remediation in the past, and environmental laws and regulations could become more stringent over [removed: time.]

Changes in federal, state and local, or foreign tax laws, changing interpretations of existing tax laws, or adverse determinations by tax authorities could increase our tax burden or otherwise adversely affect our results of [removed: operations] [added: operations,] and financial condition.

Although we believe our tax positions are reasonable, we are subject to audit by the Internal Revenue Service, [removed: or IRS,] [added: “IRS”,] in the United States, HM Revenue and Customs in the United Kingdom, state tax authorities in the states in which we operate, and other similar tax authorities in international jurisdictions.

Recent U.S. Supreme Court precedent potentially restricts patentability of software inventions by affirming that patent claims merely requiring application of an abstract idea on standard computers utilizing generic computer [removed: functions are patent ineligible, which may impact our ability to enforce our issued patent and obtain new patents.]

Any disruptions relating to our system enhancements or any problems with the implementation, particularly any disruptions impacting our operations or our ability to accurately report our financial performance on a timely [added: basis during the implementation period, could materially and adversely affect our business.]

[removed: Disruptions to] [added: Disruptions to] our information technology systems, including failure to prevent outages, maintain security, and prevent unauthorized access to our information technology systems and other confidential information, could disrupt our business and materially and adversely affect our reputation, consolidated results of operations, and financial condition.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

adverse effect on our future operating results.

- military conflicts, including the Russian invasion of Ukraine;

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

In fiscal 2022, we opened one new operational facility in Canada, one new operational facility in Spain, and five new operational facilities in the U.S. As for strategic acquisitions of complementary businesses, we acquired National Powersport Auctions in fiscal 2017, and in fiscal 2022 we acquired Hills Motors (“Hills”) a used, or “green” parts recycler in the U.K. that has four operating facilities.

The Hills acquisition is currently undergoing review by the CMA.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

During periods of mild weather conditions, our ability to increase our revenues and improve our operating results and related growth will be increasingly

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

More generally, our future success also depends on our ability to attract and retain a talented workforce.

The labor market is highly competitive, and our business could be adversely affected if we are unable to attract and retain talented personnel in our organization at appropriate staffing levels.

In addition, because our core technology platform is internally developed, we face heightened risks relating to workforce recruitment and retention of key personnel with subject matter expertise relating to our technology platform.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

Similarly, the California Consumer Privacy Act, or AB375 (“CCPA”), the California Privacy Act

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

time.

For example on August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 which includes changes to the U.S. corporate income tax system, including a 15% minimum tax based on “adjusted financial statement income” for certain large corporations which will not be effective until fiscal year 2024 and a 1% excise tax on share repurchases after December 31, 2022.

We are currently assessing the potential impact of these legislative changes.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

functions are patent ineligible, which may impact our ability to enforce our issued patent and obtain new patents.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

- variations in total loss frequency rates;

- crimes committed against us, including theft, forgery, and counterfeit payments;

- military conflicts, including the Russian invasion of Ukraine;

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

Similarly, a reduction in total loss frequency rates, due to among other things, sharp increases in used car prices that make it less economical for insurance company sellers to declare a vehicle involved in an accident a total loss, could also have a material impact on revenue growth.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

The worldwide COVID-19 pandemic may have an adverse impact on our near-term revenues principally as a result of lower auction inventories.

The geographic extent, length, and economic impact of the pandemic is unknown, but it has the potential to adversely affect our business and operating results.

After the initial onset of the COVID-19 pandemic in March 2020, we saw substantial declines in vehicle assignments, which we attribute principally to reduced accident volume as miles driven dramatically declined in response to shelter-in-place orders across the globe.

We cannot predict how the pandemic will continue to develop, whether and to what extent new shelter-in-place orders will be issued, or to what extent the pandemic may have longer term unanticipated impacts on our markets, including, for example, the risk of long-term reductions in miles driven.

Although we have been deemed an “essential business” in the jurisdictions in which we operate and have largely been able to continue our yard operations, we have been required to make adjustments in our business processes that may reduce efficiency or increase operating expenses, particularly if the pandemic continues over a long period of time.

Certain of the jurisdictions in which we operate, such as the U.K., have had more restrictive governmental actions than others, and subsequent shelter-in-place orders have occasionally stalled or regressed our assignment volumes commensurate with the severity and

duration of such orders.

To date, we have not made modifications that materially affect our operating expenses, and while we regularly monitor them, we may not be able to respond with sufficient speed to align revenues and operating expenses when necessary, which could result in a drop in our stock price as a result of our operating or net income for one or more fiscal periods being less than market expectations.

Additional, non-exclusive examples of pandemic-related factors that could adversely affect our future business or operating results include the potential adverse operational impacts from outbreaks of COVID-19 at any of our locations; additional outbreaks of COVID-19 in one or more of our geographic markets; a reduction in miles driven due to one or more factors relating to the COVID-19 pandemic; the relationship of supply and demand for newly manufactured vehicles, on the one hand, and used and salvage vehicles, on the other hand, due to reduced manufacturing capacity and broader supply chain disruptions during the COVID-19 pandemic and the effects of these supply and demand relationships on the average sale prices obtained at auction for the vehicles assigned to us for remarketing; further government actions in response to COVID-19 outbreaks that restrict business activity or travel; disruptions of governmental administrative operations due to COVID-19 outbreaks that adversely impact our core business activities, such as vehicle title processing; and deteriorating economic conditions generally.

- military actions;

In fiscal 2020, we opened two new operational facilities in Germany, one new operational facility in Brazil, and three new operational facilities in the U.S. In fiscal 2021, we opened one new operational facility in Germany, one new operational facility in Spain, ten new operational facilities in the U.S., and acquired an operational facility in Des Moines, Iowa.

result we may face unexpected liabilities that adversely affect our financial statements.

During periods of mild weather

Although we believe we generally enjoy positive community relationships and political

On January 29, 2020, the European Parliament approved the U.K.’s withdrawal from the European Union, commonly referred to as “Brexit.” The U.K. officially left the European Union on January 31, 2020.

Although we have not experienced any material disruptions in our business as a result of Brexit to date, the ultimate effects of Brexit on us are still difficult to predict, and adverse consequences concerning Brexit or the European Union could include deterioration in global economic conditions, instability in global financial markets, political uncertainty, volatility in currency exchange rates, or adverse changes in the cross-border agreements currently in place, any of which could have an adverse impact on our financial results in the future.

We face risks associated with the implementation of our auction model in markets that may not operate on the same terms as the U.S. market.

of automobiles sourced principally through vehicle insurers.

For example, in March 2008, a decree issued by the president of Mexico became effective that

The Tax Cuts and Jobs Act (“Tax Reform” or “Tax Act”) was enacted on December 22, 2017.

The Tax Act significantly revamped U.S. taxation of corporations, including a reduction of the federal income tax rate from 35% to 21%, a repeal of the exceptions to the $1.0 million deduction limitation for performance-based compensation to covered employees, and a new tax regime for foreign earnings.

Any subsequent repeal of the Tax Act could adversely affect our financial condition or results of operations.

Many of the provisions of the Tax Act are highly complex and may be subject to further interpretive guidance from the IRS or others.

Some of the provisions of the Tax Act may be changed by a future Congress or challenged by the World

Trade Organization (“WTO”).

Although we cannot predict the nature or outcome of such future interpretive guidance, or actions by a future Congress or WTO, they could adversely impact our consolidated results of operations and financial position.

basis during the implementation period, could materially and adversely affect our business.

Decreased utility of internally developed capitalized software could adversely affect our consolidated results of operations and financial condition.

We capitalize certain costs associated with the development of new software products, new software for internal use and major software enhancements to existing software.

These costs are amortized over the estimated useful life of the software beginning with its introduction or roll-out.

As of July 31, 2021, the net amount of capitalized software development costs shown on our consolidated balance sheet is $22.8 million.

If, at any time, it is determined that capitalized software provides a reduced economic benefit, the unamortized portion of the capitalized development costs could be expensed, in part or in full.

the investigation we conducted in response to the security incident.

- forthcoming cessation of the LIBOR interest rate standard;

New accounting pronouncements or new interpretations of existing standards could require us to make adjustments to accounting policies that could adversely affect the consolidated financial statements.

The Financial Accounting Standards Board, the Public Company Accounting Oversight Board, and the SEC, from time to time issue new pronouncements or new interpretations of existing accounting standards that require changes to our accounting policies and procedures.

To date, we do not believe any new pronouncements or interpretations have had a material adverse effect on our consolidated results of operations and financial position, but future pronouncements or interpretations could require a change or changes in our policies or procedures.

*This Annual Report on Form 10-K for the fiscal year ended July 31, [removed: 2021,] [added: 2022,] 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”), including forward-looking statements concerning the potential impact of the COVID-19 pandemic on our business, operations, and operating results.

We are a leading [added: global] provider of online auctions and vehicle remarketing services with operations in the United States (“U.S.”), Canada, the United Kingdom (“U.K.”), Brazil, the Republic of Ireland, Germany, Finland, the United Arab Emirates (“U.A.E.”), Oman, Bahrain, and Spain.

For example, we mobilized our people, entered into emergency leases, and engaged with a multitude of service providers to timely retrieve, store, and remarket tens of thousands of flood-damaged vehicles in the [removed: Houston, Texas] [added: New York] metropolitan area in the wake of Hurricane [removed: Harvey] [added: Ida] in the [removed: summer] [added: fall] of [removed: 2017.][added: 2021.]

Over the [removed: last several years,] [added: past 30 years] we believe there has been an increase in overall growth in the salvage market driven by an increase in total loss frequency.

[removed: The] [added: This] increase in total loss frequency may have been driven by [removed: the change] [added: changes] in used car values and repair [removed: costs,] [added: costs over the same long-term horizon,] which we believe are generally trending upward.

[removed: Changes] [added: In the near term changes] in used car prices and repair [removed: costs,] [added: cost,] may [removed: impact] [added: tend to reduce] total loss frequency and [added: thereby] affect our growth rate.

The average age of cars on the road [added: has] continued to increase, growing from 9.6 years in 2002 to [removed: 12.1] [added: 12.2] years in [removed: 2021.][added: 2022.]

The factors that can influence repair costs, used car pricing, and auction returns are many and varied and we cannot predict their [removed: movements.][added: movements with precision.]

*Other (Expense) Income:* Other (expense) income consists primarily of interest expense on long-term debt, see Notes to Consolidated Financial Statements, *Note [removed: 8] [added: 9] — Long-Term Debt;* foreign exchange rate gains and losses; gains and losses from the disposal of assets, which will fluctuate based on the nature of these activities each period; and earnings from unconsolidated affiliates.

The following tables set forth operational facilities that we have opened and are now operational from August 1, [removed: 2018] [added: 2019] through July 31, [removed: 2021:][added: 2022:]

The following table sets forth the operational facilities obtained through business acquisitions from August 1, [removed: 2018] [added: 2019] through July 31, [removed: 2021:][added: 2022:]

The following table shows certain data from our consolidated statements of income expressed as a percentage of total service revenues and vehicle sales for fiscal [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019:][added: 2020:]

| (In percentages) | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Service revenues | | | | | | [removed: 85] [added: 81] | | % | | | | [removed: 88] [added: 85] | | % | | | | [removed: 86] [added: 88] | | % |

| Vehicle sales | | | | | | [removed: 15] [added: 19] | | % | | | | [removed: 12] [added: 15] | | % | | | | [removed: 14] [added: 12] | | % |

| Yard operations | | | | | | 37 | | % | | | | [removed: 44] [added: 37] | | % | | | | [removed: 43] [added: 44] | | % |

| Cost of vehicle sales | | | | | | [removed: 13] [added: 17] | | % | | | | [removed: 10] [added: 13] | | % | | | | [removed: 13] [added: 10] | | % |

| General and administrative | | | | | | [removed: 8] [added: 7] | | % | | | | [removed: 9] [added: 8] | | % | | | | 9 | | % |

| Total operating expenses | | | | | | [removed: 58] [added: 61] | | % | | | | [removed: 63] [added: 58] | | % | | | | [removed: 65] [added: 63] | | % |

| Operating income | | | | | | [removed: 42] [added: 39] | | % | | | | [removed: 37] [added: 42] | | % | | | | [removed: 35] [added: 37] | | % |

| Income before income taxes | | | | | | [removed: 41] [added: 38] | | % | | | | [removed: 36] [added: 41] | | % | | | | [removed: 34] [added: 36] | | % |

| Income tax expense | | | | | | [removed: 6] [added: 7] | | % | | | | [removed: 4] [added: 6] | | % | | | | [removed: 5] [added: 4] | | % |

| Net income | | | | | | [removed: 35] [added: 31] | | % | | | | [removed: 32] [added: 35] | | % | | | | [removed: 29] [added: 32] | | % |

Comparison of Fiscal Years ended July 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019][added: 2020]

The following table presents a comparison of service revenues for fiscal [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019:][added: 2020:]

| | | | | | | | | | Year Ended July 31, | | | | | | | | | | | | | | | | | | [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] | | | | | | | | | | | | [removed: 2020] [added: 2021] vs. [removed: 2019] [added: 2020] | | | | | | | | |

| (In thousands) | | | | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | Change | | | | | | % Change | | | | | | Change | | | | | | % Change | | |

| | | | United States | | | | | | $ | [removed: 2,017,504] [added: 2,533,165] | | | | | $ | [removed: 1,714,724] [added: 2,017,504] | | | | | $ | [removed: 1,537,431] [added: 1,714,724] | | | | | $ | [removed: 302,780] [added: 515,661] | | | | | [removed: 17.7] [added: 25.6] | | % | | | | $ | [removed: 177,293] [added: 302,780] | | | | | [removed: 11.5] [added: 17.7] | | % |

| | | | International | | | | | | [removed: 274,363] [added: 319,875] | | | | | | [removed: 232,416] [added: 274,363] | | | | | | [removed: 218,263] [added: 232,416] | | | | | | [removed: 41,947] [added: 45,512] | | | | | | [removed: 18.0] [added: 16.6] | | % | | | | [removed: 14,153] [added: 41,947] | | | | | | [removed: 6.5] [added: 18.0] | | % |

| Total service revenues | | | | | | | | | $ | [removed: 2,291,867] [added: 2,853,040] | | | | | $ | [removed: 1,947,140] [added: 2,291,867] | | | | | $ | [removed: 1,755,694] [added: 1,947,140] | | | | | $ | [removed: 344,727] [added: 561,173] | | | | | [removed: 17.7] [added: 24.5] | | % | | | | $ | [removed: 191,446] [added: 344,727] | | | | | [removed: 10.9] [added: 17.7] | | % |

Service Revenues. The increase in service revenues for fiscal [removed: 2021] [added: 2022] of [removed: $344.7] [added: $561.2] million, or [removed: 17.7%] [added: 24.5%] as compared to fiscal [removed: 2020] [added: 2021] came from (i) an increase in the U.S. of [removed: $302.8] [added: $515.7] million, and (ii) an increase in International of [removed: $41.9] [added: $45.5] million.

Excluding the [removed: beneficial] [added: unfavorable] impact of [removed: $12.0] [added: $8.3] million due to changes in foreign currency exchange rates, primarily from the change in the British pound and [added: European Union euro to U.S. dollar exchange rates net against favorable change in] Brazilian real to U.S. dollar [removed: exchange rates,] [added: exchange,] the growth in International [removed: of $29.9 million] was driven primarily by [removed: increased] [added: an increase in] revenue per [removed: car,] [added: car] partially [removed: offset by decreased volume] driven by the [removed: COVID-19 pandemic, which reduced accident] [added: scarcity of vehicles due to global supply chain disruptions and an increase in] volume [removed: as] [added: resulting from higher] miles driven [removed: decreased.][added: due to the reopening of the International economies.]

The following table presents a comparison of vehicle sales for fiscal [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019:][added: 2020:]

| | | | United States | | | | | | $ | [removed: 254,568] [added: 411,985] | | | | | $ | [removed: 145,962] [added: 254,568] | | | | | $ | [removed: 119,138] [added: 145,962] | | | | | $ | [removed: 108,606] [added: 157,417] | | | | | [removed: 74.4] [added: 61.8] | | % | | | | $ | [removed: 26,824] [added: 108,606] | | | | | [removed: 22.5] [added: 74.4] | | % |

| | | | International | | | | | | [removed: 146,076] [added: 235,896] | | | | | | [removed: 112,481] [added: 146,076] | | | | | | [removed: 167,125] [added: 112,481] | | | | | | [removed: 33,595] [added: 89,820] | | | | | | [removed: 29.9] [added: 61.5] | | % | | | | [removed: (54,644)] [added: 33,595] | | | | | | [removed: (32.7)] [added: 29.9] | | % |

| Total vehicle sales | | | | | | | | | $ | [removed: 400,644] [added: 647,881] | | | | | $ | [removed: 258,443] [added: 400,644] | | | | | $ | [removed: 286,263] [added: 258,443] | | | | | $ | [removed: 142,201] [added: 247,237] | | | | | [removed: 55.0] [added: 61.7] | | % | | | | $ | [removed: (27,820)] [added: 142,201] | | | | | [removed: (9.7)] [added: 55.0] | | % |

Vehicle Sales. The increase in vehicle sales for fiscal [removed: 2021] [added: 2022] of [removed: $142.2] [added: $247.2] million, or [removed: 55.0%] [added: 61.7%] as compared to fiscal [removed: 2020] [added: 2021] came from (i) an increase in the U.S. of [removed: $108.6] [added: $157.4] million and (ii) an increase in International of [removed: $33.6] [added: $89.8] million.

The [removed: growth] [added: increase] in the U.S. was primarily the result of [removed: (i)] increased volume and [removed: (ii)] higher average auction selling prices, which we believe was due to a change in the mix of vehicles [removed: sold;] [added: sold,] increased [removed: demand;] [added: demand] and reduced supply.

Excluding [removed: a beneficial] [added: the favorable] impact of [removed: $10.2] [added: $12.8] million due to changes in foreign currency exchange rates, primarily from the [added: a positive] change in the British pound and European Union euro to U.S. dollar exchange [removed: rates,] [added: rate,] the increase in International [removed: of $23.4 million] was primarily the result of higher average [removed: auction selling prices partially offset by decreased volume driven by contractual shifts from] purchase [removed: contracts to fee based service contracts] [added: prices] and [removed: COVID-19’s impact on] [added: an increase in] volume, which [added: we believe was due to a change in the mix of vehicles sold, increased demand; and] reduced [removed: accident volume as miles driven declined.][added: supply.]

The following table presents a comparison of yard operations expense for fiscal [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019:][added: 2020:]

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

Recently we have noted fluctuations in total loss frequency.

Nonetheless, we believe the long-term trend of increases in total loss frequency will continue.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

| Mobile South, Alabama | | | | | | August 2021 | | |

| Madison, Wisconsin | | | | | | October 2021 | | |

| Augusta, Georgia | | | | | | April 2022 | | |

| Milwaukee South, Wisconsin | | | | | | May 2022 | | |

| Punta Gorda, Florida | | | | | | June 2022 | | |

| Halifax, Novia Scotia | | | | | | Canada | | | | | | April 2022 | | |

| Barcelona, Spain | | | | | | Spain | | | | | | September 2021 | | |

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

| Skelmersdale, England | | | | | | United Kingdom | | | | | | July 2022 | | |

| Dumfries, England | | | | | | United Kingdom | | | | | | July 2022 | | |

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

The growth in the U.S. was driven primarily by (i) an increase in revenue per car partially driven by the scarcity of vehicles due to global supply chain disruptions and (ii) an increase in volume resulting from higher miles driven due to the reopening of the United States economy.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

| | | | | | | | | | Year Ended July 31, | | | | | | | | | | | | | | | | | | 2022 vs. 2021 | | | | | | | | | | | | 2021 vs. 2020 | | | | | | | | |

| (In thousands) | | | | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | Change | | | | | | % Change | | | | | | Change | | | | | | % Change | | |

Yard Operations Expenses. The increase in yard operations expenses for fiscal 2022 of $306.2 million, or 30.5% as compared to fiscal 2021 resulted from (i) an increase in the U.S. of $274.9 million, and (ii) increase in international of $31.3 million.

Excluding depreciation and amortization, the increase in the U.S. compared to the same period last year relates to an increase in volume as a result of the reopening of the United States economy combined with an increase in the cost to process each car.

The increase in cost to process each car was driven by increased subhaul costs, and labor costs, combined with an increase in premiums for catastrophic event related to subhaul, labor costs incurred from overtime, and increased travel, lodging, and equipment lease cost associated with Hurricane Ida.

The increase in International was primarily driven by the increase in volume following the reopening of economies and the increase in subhaul and fuel costs and combined with an favorable impact of $6.0 million due to a positive change in British pound and European Union euro to U.S. dollar exchange rate net against the unfavorable changes in the Brazilian real to U.S. dollar exchange rate.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

| | | | | | | | | | Year Ended July 31, | | | | | | | | | | | | | | | | | | 2022 vs. 2021 | | | | | | | | | | | | 2021 vs. 2020 | | | | | | | | |

| (In thousands) | | | | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | Change | | | | | | % Change | | | | | | Change | | | | | | % Change | | |

| | | | | | | | | | Year Ended July 31, | | | | | | | | | | | | | | | | | | 2022 vs. 2021 | | | | | | | | | | | | 2021 vs. 2020 | | | | | | | | |

| (In thousands) | | | | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | Change | | | | | | % Change | | | | | | Change | | | | | | % Change | | |

| | | | | | | Year Ended July 31, | | | | | | | | | | | | | | | | | | 2022 vs. 2021 | | | | | | | | | | | | 2021 vs. 2020 | | | | | | | | |

| (In thousands) | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | Change | | | | | | % Change | | | | | | Change | | | | | | % Change | | |

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

Other Expenses. The increase in total other expenses for fiscal 2022 of $19.5 million, or 133.5% as compared to fiscal 2021 was primarily due to costs associated with a one time extinguishment of debt of $16.7 million in the period and an increase in currency losses.

The effective tax rate for fiscal year ending July 31, 2022 was unfavorably impacted by $8.2 million of discrete tax adjustments made in connection with finalizing our fiscal year 2021 tax return.

For a discussion of fiscal 2021 as compared to fiscal 2020, please refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our [Form 10-K](http://www.sec.gov/ix?doc=/Archives/edgar/data/900075/000090007520000021/cprt-20200731.htm) for the fiscal year ended July 31, 2021, filed with the SEC on [September 2](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000900075/000090007521000022/cprt-20210731.htm)[7](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000900075/000090007521000022/cprt-20210731.htm)[, 20](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000900075/000090007521000022/cprt-20210731.htm)[21](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000900075/000090007521000022/cprt-20210731.htm).

| (In thousands) | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | Change | | | | | | % Change | | | | | | Change | | | | | | % Change | | |

| | | | | | | Year Ended July 31, | | | | | | | | | | | | | | | | | | 2022 vs. 2021 | | | | | | | | | | | | 2021 vs. 2020 | | | | | | | | |

| (In thousands) | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | Change | | | | | | % Change | | | | | | Change | | | | | | % Change | | |

| Acquisitions | | | | | | (106,604) | | | | | | (5,000) | | | | | | (11,702) | | | | | | (101,604) | | | | | | (2,032.1) | | % | | | | 6,702 | | | | | | 57.3 | | % |

During the

Accordingly, we cannot predict future trends in total loss frequency.

| Spartanburg, South Carolina | | | | | | August 2018 | | |

| Madison, Wisconsin | | | | | | September 2018 | | |

| Harleyville, South Carolina | | | | | | January 2019 | | |

| Macon, Georgia | | | | | | January 2019 | | |

| Mocksville, North Carolina | | | | | | January 2019 | | |

| Antelope, California | | | | | | January 2019 | | |

| Sacramento, California | | | | | | March 2019 | | |

| Fredericksburg, Virginia | | | | | | April 2019 | | |

| West Mifflin, Pennsylvania | | | | | | May 2019 | | |

| Hartford, Connecticut | | | | | | July 2019 | | |

| Buffalo, New York | | | | | | July 2019 | | |

| Curitiba, Paraná | | | | | | Brazil | | | | | | September 2018 | | |

| Mannheim, Rhineland-Palatinate | | | | | | Germany | | | | | | October 2018 | | |

| Stuttgart, Baden-Württemberg | | | | | | Germany | | | | | | November 2018 | | |

| Frankfurt, Hessen | | | | | | Germany | | | | | | November 2018 | | |

| Itzehoe, Schleswig-Holstein (Hamburg) | | | | | | Germany | | | | | | November 2018 | | |

| Furth, Bavaria (Nuremberg) | | | | | | Germany | | | | | | November 2018 | | |

| Massen, Brandenburg (Berlin) | | | | | | Germany | | | | | | November 2018 | | |

| Friesack, Brandenburg (Berlin) | | | | | | Germany | | | | | | December 2018 | | |

| Greenville, Kentucky | | | | | | United States | | | | | | March 2019 | | |

The growth in the U.S. was driven primarily by an increase in revenue per car, partially offset by a decrease in volume.

The decrease in volume in the U.S. was driven by the COVID-19 pandemic, which reduced accident volume as miles driven declined.

Yard Operations Expenses. The increase in yard operations expenses for fiscal 2021 of $30.8 million, or 3.2% as compared to fiscal 2020 resulted from (i) an increase in the U.S. of $21.0 million, primarily from a $20.0 million increase in depreciation and an increase in the cost to process each car partially offset by a decline in volume driven by the COVID-19 pandemic, which reduced accident volume as miles driven declined; and (ii) an increase in International of $9.8 million related primarily from the detrimental impact of $7.6 million due to changes in foreign currency exchange rates, driven by changes in the British pound, Brazilian real, and European Union euro to U.S. dollar exchange rate; and an increase in the cost to process each car, partially offset by a decrease in volume driven by the COVID-19 pandemic.

Other Expenses. The decrease in total other expenses for fiscal 2021 of $0.7 million, or 4.5% as compared to fiscal 2020 was primarily due to a decrease in currency losses, primarily due to the change in the British pound and Brazilian real to U.S. dollar exchange rate, lower gains on the disposal of certain non-operating assets in the current year, and lower interest income earned in the current year, partially offset by higher earnings of unconsolidated affiliates.

The effective tax rate for fiscal year ending July 31, 2020 was negatively impacted by $1.7 million of discrete tax items related to amending previously filed income tax returns.

| Acquisitions, net of cash acquired | | | | | | (5,000) | | | | | | (11,702) | | | | | | (745) | | | | | | 6,702 | | | | | | 57.3 | | % | | | | (10,957) | | | | | | (1,470.7) | | % |

The COVID-19 pandemic may also impact our liquidity, with the magnitude and timing of these effects dependent upon the extent and duration of suspended economic activity across our markets.

The COVID-19 pandemic may impact our processed vehicle volume and corresponding vehicle average selling prices.

Costs to develop a new yard can range from $3.0 to $50.0 million, depending on size, location and developmental infrastructure requirements.

For fiscal 2019, we repurchased 7,635,596 shares of our common stock under the program at a weighted average price of $47.81 per share totaling $365.0 million.

| FY 2019—Q3 | | | | | | 3,000,000 | | | | | | $ | 17.81 | | | | | 945,162 | | | | | | 806,039 | | | | | | 1,248,799 | | | | | | $ | 56.53 | | | | | $ | 45,565 | |

The carrying amount of the Credit Agreement is comprised of borrowings under which interest accrues under a fluctuating interest rate structure.

Accordingly, the carrying value approximated fair value at July 31, 2021, and was classified within Level II of the fair value hierarchy.

The interest rate as of July 31, 2021 on our Revolving Loan Facility was the Eurodollar Rate of 0.75% plus an applicable margin of 1.50%.

Amounts borrowed under the Revolving Loan Facility may be repaid and reborrowed until the maturity date of July 21, 2023.

The Note Purchase Agreement contains customary affirmative and negative covenants and we were in compliance with all covenants related to the Note Purchase Agreement as of July 31, 2021.

To achieve this objective in the current uncertain global financial markets, all cash and cash equivalents were held in bank [removed: deposits] [added: deposits, U.S. Treasury Bills,] and money market funds as of July 31, [removed: 2021.][added: 2022.]

As of July 31, [removed: 2021,] [added: 2022,] 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: 2021,] [added: 2022,] a hypothetical 10% adverse change in our interest yield would not have materially affected our operating results.

Our total borrowings under the Revolving Loan Facility under the Credit Agreement were zero as of July 31, [removed: 2021.][added: 2022.]

The Revolving Loan Facility under the Credit Agreement bears 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 [removed: Prime Rate in effect on such day; (ii)] [added: Federal Funds Rate, which is defined as a fluctuating rate per annum to] the [added: greatest of (A) the] Federal Funds Rate in effect on such date plus [removed: 0.50%;] [added: 0.50%] or [removed: (iii)] [added: (B)] the [removed: Eurodollar Rate plus 1.0%, subject to an interest] rate [removed: floor] of [removed: 0.75%,] [added: interest] in [removed: each case] [added: effect for such day as publicly announced from time to time by Bank of America as its “prime rate;” and (ii) SOFR for a one-month interest period for such date] plus [added: 1.0%, plus] an applicable margin ranging from [removed: 0.50%] [added: 0.00%] to [removed: 1.25%] [added: 0.75%] based on our consolidated total net leverage ratio during the preceding fiscal quarter; or (b) the [removed: Eurodollar Rate] [added: SOFR] plus an applicable margin ranging from [removed: 1.50%] [added: 1.00%] to [removed: 2.25%] [added: 1.75%] depending on our consolidated total net leverage ratio during the preceding fiscal quarter.

Interest is due and payable, [removed: in] arrears, at the end of each calendar quarter 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 [removed: Eurodollar Rate] [added: SOFR] Loans.

A hypothetical 10% adverse change in the value of the U.S. dollar relative to the British pound, Canadian dollar, Brazilian real, European Union euro, U.A.E. dirham, Omani rial, and Bahraini dinar would have resulted in a decrease in operating income of [removed: $11.0] [added: $12.0] million for fiscal [removed: 2021.][added: 2022.]

At July 31, [removed: 2021,] [added: 2022,] the cumulative effect of foreign exchange rate fluctuations on our consolidated financial position was a net translation loss of [removed: $100.9] [added: $169.4] million.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

On January 29, 2020, the European Parliament approved the U.K.’s withdrawal from the European Union, commonly referred to as “Brexit.” The U.K. officially left the European Union on January 31, 2020.

Although we have not experienced any material disruptions in our business as a result of Brexit to date, the ultimate effects of Brexit on us are still difficult to predict, and adverse consequences concerning Brexit or the European Union could include deterioration in global economic conditions, instability in global financial markets, political uncertainty, volatility in currency exchange rates, or adverse changes in the cross-border agreements currently in place, any of which could have an adverse impact on our financial results in the future.

Copart®, BID4U®, CI & Design®, DRIVE Auto Auctions™, 1-800 CAR BUYER®, CA$HFORCARS.COM®, COPART & DESIGN®, VB3 & DESIGN®, VB3®, [added: National Powersports Auctions,] NPA, and CrashedToys.com® are trademarks of Copart, Inc. or one of its direct or indirect wholly-owned subsidiaries.

We are a leading [added: global] provider of online auctions and vehicle remarketing services with operations in the United States (“U.S.”), Canada, the United Kingdom (“U.K.”), Brazil, the Republic of Ireland, Germany, Finland, the United Arab Emirates (“U.A.E.”), Oman, Bahrain, and Spain.

Many of our cars are purchased by dismantlers, who recycle and refurbish parts for vehicle repairs, [removed: again reducing new and aftermarket parts manufacturing.]

And finally, some of our vehicles are returned to their raw material [added: inputs through scrapping, reducing the need for further new resource extraction.]

For example, we mobilized our people, entered into emergency leases, and engaged with a multitude of service providers to timely retrieve, store, and remarket tens of thousands of flood-damaged vehicles in the [removed: Houston, Texas] [added: New York] metropolitan area in the wake of Hurricane [removed: Harvey] [added: Ida] in the [removed: summer] [added: fall] of [removed: 2017.][added: 2021.]

The first step is an open preliminary bidding feature that allows members to enter bids [removed: either at a bidding station at the storage facility or] over the internet during the preview period.

For fiscal [removed: 2021,] [added: 2022,] sales of U.S. vehicles, on a unit basis, to members registered outside the state where the vehicle was located accounted for [removed: 64.1%] [added: 66.1%] of total vehicles sold; of which 29.7% of vehicles were sold to out of state members within the U.S. and [removed: 34.4%] [added: 36.4%] were sold to International members, based on the IP address utilized during the auction process.

- applying technology to enhance operating efficiency through internet bidding, web-based order processing, salvage value quotes, electronic communication with members and sellers, and vehicle [removed: imaging; and][added: imaging.]

For fiscal [removed: 2021,] [added: 2022,] our revenues were [removed: $2.7] [added: $3.5] billion and our operating income was [removed: $1.1] [added: $1.4] billion.

Most of our vehicles are sold on behalf of insurance companies and are usually vehicles involved in an accident or [removed: to] a [removed: lesser extent a] natural disaster.

Automobile manufacturers continuously incorporate new standard features, including unibody construction utilizing exotic metals; passenger safety cages with surrounding crumple zones to absorb impacts; plastic and ceramic components; airbags; adaptive headlights; computer and navigation systems; advanced cameras, including backup camera systems; collision warning systems; dynamic cruise control; lane departure warning systems; automatic braking; [removed: and] blind spot detection [removed: systems.][added: systems; and electrification of drivetrains.]

Our revenues for the year ended July 31, [removed: 2021] [added: 2022] were distributed as follows: U.S. [removed: 84.4%] [added: 84.1%] and International [removed: 15.6%.][added: 15.9%.]

Geographic information as well as comparative segment revenues and related financial information pertaining to the U.S. and International segments for the years ended July 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019] [added: 2020] are presented in the tables in Note [removed: *13] [added: *14] — Segments and Other Geographic Reporting*, to the Notes to Consolidated Financial Statements, which are included in Part II, Item 8 of this Form 10-K.

In the U.S. and Canada, we perform transportation services through a combination of third-party vehicle transport companies and our fleet of over [removed: 140] [added: 350] vehicles.

In the U.K., we perform transportation services through a combination of our fleet of over [removed: 240] [added: 270] vehicles and third-party vehicle transport companies.

In the U.K., we have [removed: two] [added: six] facilities from which the public can purchase parts from salvaged and end-of-life vehicles.

The Virtual Queue, available in multiple languages, [removed: is a safe way to secure] [added: secures] a place in line while visiting one of our locations.

Whether a visitor is at a location to make a payment or preview a vehicle, the Virtual Queue lets them conveniently [removed: maintain social distancing practices.][added: save their place and receive an estimated wait time, using our mobile application, in the comfort of their own vehicle.]

No single customer accounted for more than 10% of our consolidated revenues for fiscal [added: 2022,] 2021, [removed: 2020,] or [removed: 2019] [added: 2020] and our business does not depend on any particular customer to remain profitable.

We obtained [added: 80%,] 77%, [removed: 81%,] and [removed: 80%] [added: 81%] of the total number of vehicles processed during fiscal [added: 2022,] 2021, [removed: 2020] and [removed: 2019,] [added: 2020,] respectively, from insurance company sellers.

During our last three fiscal years, most of our revenue was generated within the U.S. and a majority of our long-lived assets are located within the U.S. Please see *Note [removed: 13] [added: 14] — Segments and Other Geographic Reporting* in our Notes to Consolidated Financial Statements for information regarding the geographic location of our sales and our long-lived assets.

The largest national or regional vehicle auctioneers in the U.S. include Insurance Auto Auctions, Inc. [removed: (“IAA”).;] [added: (“IAA”);] KAR Auction Services, Inc. (“KAR”) (including its subsidiary ADESA, Inc.); Manheim, Inc., and ACV Auctions Inc. The largest national dismantler is LKQ Corporation (“LKQ”).

It can also be integrated with the seller’s system and enables the sellers to monitor their vehicles and analyze the progression of vehicles through the [removed: auction process.]

As of July 31, [removed: 2021,] [added: 2022,] we had approximately [removed: 8,600] [added: 9,500] full and part-time employees, of which approximately [removed: 71%] [added: 70%] were located in the U.S. and [removed: 29%] [added: 30%] located within our International segment.

Of the approximately [removed: 6,100] [added: 6,600] full and part-time employees based in the U.S, approximately [removed: 49%] [added: 48%] of them identify as female.

As of July 31, [removed: 2021,] [added: 2022,] our U.S. workforce consisted of approximately [removed: 49%] [added: 50%] individuals identifying as White, [removed: 20%] [added: 21%] as Hispanic or Latino, 15% as Black or African American, [removed: 5%] [added: 6%] as Asian, 3% as two or more [removed: races, Native American or Alaska Native, Native Hawaiian or Pacific Islander,] [added: races] and [removed: 8%] [added: 5%] as [removed: Not Disclosed.][added: not disclosed.]

Additionally, of the approximately [removed: 870] [added: 711] employees serving in the U.S. in management roles and above, up to and including executives, [removed: 64%] [added: 67%] identify as male and [removed: 36%] [added: 33%] identify as [removed: female][added: female.]

Of the approximately [removed: 2,500] [added: 2,800] employees based within the International segment, approximately [removed: 33%] [added: 34%] of them identify as female.

As of July 31, [removed: 2021,] [added: 2022,] our International workforce consisted of approximately [removed: 59%] [added: 58%] individuals identifying as White, [removed: 28%] [added: 32%] as Asian, [removed: 3%] [added: 4%] as Black or African, 2% as Hispanic or Latino, [removed: 2%] [added: 1%] as Other, and [removed: 5%] [added: 3%] as Not Disclosed.

Additionally, of the approximately [removed: 277] [added: 273] employees serving Internationally in management roles and above, up to and including executives, [removed: 69%] [added: 71%] identify as male and [removed: 31%] [added: 29%] identify as female.

For more details regarding our executive compensation, refer to information incorporated by reference from the information set forth under the captions “Executive Compensation” and “Compensation Discussion and Analysis” in our [removed: 2021] [added: 2022] Proxy Statement.

Employees and their families can select from a wide range of benefits from traditional health and dental [removed: insurance to financial wellness and estate planning.]

Our operations are subject to international, federal, provincial, [removed: state,] [added: state] and local laws and regulations regarding the protection of the environment in the countries in which we have storage facilities.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

again reducing new and aftermarket parts manufacturing.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

In fiscal 2022, we opened one new operational facility in Canada, one new operational facility in Spain, and five new operational facilities in the U.S. As for strategic acquisitions of complementary businesses, we acquired a parts recycler in the U.K. that has four operating facilities.

This acquisition is currently undergoing review by the U.K. Competition and Markets Authority (the”CMA”).

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

Copart Recycling

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

auction process.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

insurance to financial wellness and estate planning.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

inputs through scrapping, reducing the need for further new resource extraction.

- providing a venue for insurance customers through our Virtual Insured Exchange (“VIX”) product to contingently sell a vehicle through our auction process to assess true market value, equipping our insurance customers with market data in its negotiations with owners who wish to retain their damaged vehicles.

In fiscal 2019, we opened one new operational facility in Brazil, seven new operational facilities in Germany, eleven new operational facilities in the U.S., and acquired an operational facility in Greenville, Kentucky.

Virtual Insured Exchange (VIX)

We provide a venue for insurance customers through our Virtual Insured Exchange (“VIX”) product to contingently sell a vehicle through our auction process to assess true market value, equipping our insurance customers with market data in its negotiations with owners who wish to retain their damaged vehicles.

U-Pull-It

We always strive to maintain the highest safety guidelines to protect the health and well-being of our members and employees.

As soon as COVID-19 began impacting businesses globally, we rolled out the Virtual Queue at all locations to reinforce safety measures.

Rather than wait in line inside a location, our visitors can save their place and receive an estimated wait time, using our mobile application, in the comfort of their own vehicle.

In fiscal 2021, our ongoing focus on workplace safety and regulatory compliance has enabled us to maintain business continuity while promoting a safe work environment during the COVID-19 pandemic.

Specifically, we introduced work-from-home arrangements for a substantial portion of our workforce and social distancing for those that have returned to the office, in accordance with local health authority guidelines.

For a discussion of Legal Proceedings that affect us, refer to the Notes to Consolidated Financial Statements, [removed: *[Note](#if6b1fc25c1c944ab86fa7c3f77022338_226) [](#if6b1fc25c1c944ab86fa7c3f77022338_226)[14 —] [added: *[Note 1](#i988317c7021a4a8fa66f2208a2958f7e_226)[5](#i988317c7021a4a8fa66f2208a2958f7e_226) [—] Commitments and [removed: Contingencies](#if6b1fc25c1c944ab86fa7c3f77022338_226)*] [added: Contingencies](#i988317c7021a4a8fa66f2208a2958f7e_226)*] included in [Part [removed: I](#if6b1fc25c1c944ab86fa7c3f77022338_226)[V](#if6b1fc25c1c944ab86fa7c3f77022338_226)[,] [added: IV,] Item [removed: 1](#if6b1fc25c1c944ab86fa7c3f77022338_226)[6](#if6b1fc25c1c944ab86fa7c3f77022338_226)] [added: 16](#i988317c7021a4a8fa66f2208a2958f7e_226)] of this report.

For the fiscal year ended July 31, [removed: 2021][added: 2022]

The aggregate market value of the voting and non-voting Common Stock held by non-affiliates of the registrant as of January 31, [removed: 2021] [added: 2022] (the last business day of the registrant’s most recently completed second fiscal quarter) was [removed: $22,942,885,751] [added: $27,584,161,726] based upon the closing sales price reported for such date on the NASDAQ Global Select Market.

As of September [removed: 23, 2021, 237,100,519] [added: 26, 2022, 238,056,756] shares of the registrant’s common stock were outstanding.

Portions of our definitive Proxy Statement for the [removed: 2021] [added: 2022] 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: 2021,] [added: 2022,] have been incorporated by reference in Part III hereof.

| Item 1 | | | | | | [removed: [Business](#if6b1fc25c1c944ab86fa7c3f77022338_19)] [added: [Business](#i988317c7021a4a8fa66f2208a2958f7e_19)] | | | [removed: [1](#if6b1fc25c1c944ab86fa7c3f77022338_19)] [added: [1](#i988317c7021a4a8fa66f2208a2958f7e_19)] | | |

| | | | | | | [Industry [removed: Overview](#if6b1fc25c1c944ab86fa7c3f77022338_22)] [added: Overview](#i988317c7021a4a8fa66f2208a2958f7e_22)] | | | [removed: [3](#if6b1fc25c1c944ab86fa7c3f77022338_22)] [added: [3](#i988317c7021a4a8fa66f2208a2958f7e_22)] | | |

| | | | | | | [Operating and Growth [removed: Strategy](#if6b1fc25c1c944ab86fa7c3f77022338_25)] [added: Strategy](#i988317c7021a4a8fa66f2208a2958f7e_25)] | | | [removed: [5](#if6b1fc25c1c944ab86fa7c3f77022338_25)] [added: [5](#i988317c7021a4a8fa66f2208a2958f7e_25)] | | |

| | | | | | | [Our Competitive [removed: Advantages](#if6b1fc25c1c944ab86fa7c3f77022338_28)] [added: Advantages](#i988317c7021a4a8fa66f2208a2958f7e_28)] | | | [removed: [5](#if6b1fc25c1c944ab86fa7c3f77022338_28)] [added: [5](#i988317c7021a4a8fa66f2208a2958f7e_28)] | | |

| | | | | | | [Our Business [removed: Segments](#if6b1fc25c1c944ab86fa7c3f77022338_31)] [added: Segments](#i988317c7021a4a8fa66f2208a2958f7e_31)] | | | [removed: [7](#if6b1fc25c1c944ab86fa7c3f77022338_31)] [added: [7](#i988317c7021a4a8fa66f2208a2958f7e_31)] | | |

| | | | | | | [Our Service [removed: Offerings](#if6b1fc25c1c944ab86fa7c3f77022338_34)] [added: Offerings](#i988317c7021a4a8fa66f2208a2958f7e_34)] | | | [removed: [7](#if6b1fc25c1c944ab86fa7c3f77022338_34)] [added: [7](#i988317c7021a4a8fa66f2208a2958f7e_34)] | | |

| | | | | | | [Management Information [removed: Systems](#if6b1fc25c1c944ab86fa7c3f77022338_46)] [added: Systems](#i988317c7021a4a8fa66f2208a2958f7e_46)] | | | [removed: [12](#if6b1fc25c1c944ab86fa7c3f77022338_46)] [added: [11](#i988317c7021a4a8fa66f2208a2958f7e_46)] | | |

| | | | | | | [Employees and Human [removed: Capital](#if6b1fc25c1c944ab86fa7c3f77022338_49)] [added: Capital](#i988317c7021a4a8fa66f2208a2958f7e_49)] | | | [removed: [12](#if6b1fc25c1c944ab86fa7c3f77022338_49)] [added: [12](#i988317c7021a4a8fa66f2208a2958f7e_49)] | | |

| | | | | | | [Environmental [removed: Matters](#if6b1fc25c1c944ab86fa7c3f77022338_52)] [added: Matters](#i988317c7021a4a8fa66f2208a2958f7e_52)] | | | [removed: [13](#if6b1fc25c1c944ab86fa7c3f77022338_52)] [added: [13](#i988317c7021a4a8fa66f2208a2958f7e_52)] | | |

| | | | | | | [Governmental [removed: Regulations](#if6b1fc25c1c944ab86fa7c3f77022338_55)] [added: Regulations](#i988317c7021a4a8fa66f2208a2958f7e_55)] | | | [removed: [14](#if6b1fc25c1c944ab86fa7c3f77022338_55)] [added: [13](#i988317c7021a4a8fa66f2208a2958f7e_55)] | | |

| | | | | | | [Intellectual Property and Proprietary [removed: Rights](#if6b1fc25c1c944ab86fa7c3f77022338_58)] [added: Rights](#i988317c7021a4a8fa66f2208a2958f7e_58)] | | | [removed: [14](#if6b1fc25c1c944ab86fa7c3f77022338_58)] [added: [14](#i988317c7021a4a8fa66f2208a2958f7e_58)] | | |

| Item 1A. | | | | | | [Risk [removed: Factors](#if6b1fc25c1c944ab86fa7c3f77022338_64)] [added: Factors](#i988317c7021a4a8fa66f2208a2958f7e_64)] | | | [removed: [14](#if6b1fc25c1c944ab86fa7c3f77022338_64)] [added: [14](#i988317c7021a4a8fa66f2208a2958f7e_64)] | | |

| Item 1B. | | | | | | [Unresolved Staff [removed: Comments](#if6b1fc25c1c944ab86fa7c3f77022338_67)] [added: Comments](#i988317c7021a4a8fa66f2208a2958f7e_67)] | | | [removed: [29](#if6b1fc25c1c944ab86fa7c3f77022338_67)] [added: [27](#i988317c7021a4a8fa66f2208a2958f7e_67)] | | |

| Item 2. | | | | | | [removed: [Properties](#if6b1fc25c1c944ab86fa7c3f77022338_70)] [added: [Properties](#i988317c7021a4a8fa66f2208a2958f7e_70)] | | | [removed: [29](#if6b1fc25c1c944ab86fa7c3f77022338_70)] [added: [27](#i988317c7021a4a8fa66f2208a2958f7e_70)] | | |

| Item 3. | | | | | | [Legal [removed: Proceedings](#if6b1fc25c1c944ab86fa7c3f77022338_73)] [added: Proceedings](#i988317c7021a4a8fa66f2208a2958f7e_73)] | | | [removed: [29](#if6b1fc25c1c944ab86fa7c3f77022338_73)] [added: [27](#i988317c7021a4a8fa66f2208a2958f7e_73)] | | |

| Item 4. | | | | | | [Mine Safety [removed: Disclosure](#if6b1fc25c1c944ab86fa7c3f77022338_76)] [added: Disclosure](#i988317c7021a4a8fa66f2208a2958f7e_76)] | | | [removed: [29](#if6b1fc25c1c944ab86fa7c3f77022338_76)] [added: [27](#i988317c7021a4a8fa66f2208a2958f7e_76)] | | |

| Item 5. | | | | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#if6b1fc25c1c944ab86fa7c3f77022338_82)] [added: Securities](#i988317c7021a4a8fa66f2208a2958f7e_82)] | | | [removed: [30](#if6b1fc25c1c944ab86fa7c3f77022338_82)] [added: [28](#i988317c7021a4a8fa66f2208a2958f7e_82)] | | |

| Item 6. | | | | | | [removed: [Reserved](#if6b1fc25c1c944ab86fa7c3f77022338_85)] [added: [Reserved](#i988317c7021a4a8fa66f2208a2958f7e_85)] | | | [removed: [32](#if6b1fc25c1c944ab86fa7c3f77022338_85)] [added: [29](#i988317c7021a4a8fa66f2208a2958f7e_85)] | | |

| Item 7. | | | | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#if6b1fc25c1c944ab86fa7c3f77022338_88)] [added: Operations](#i988317c7021a4a8fa66f2208a2958f7e_88)] | | | [removed: [33](#if6b1fc25c1c944ab86fa7c3f77022338_88)] [added: [30](#i988317c7021a4a8fa66f2208a2958f7e_88)] | | |

| Item 7A. | | | | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#if6b1fc25c1c944ab86fa7c3f77022338_106)] [added: Risk](#i988317c7021a4a8fa66f2208a2958f7e_106)] | | | [removed: [46](#if6b1fc25c1c944ab86fa7c3f77022338_106)] [added: [42](#i988317c7021a4a8fa66f2208a2958f7e_106)] | | |

| Item 8. | | | | | | [Financial Statements and Supplementary [removed: Data](#if6b1fc25c1c944ab86fa7c3f77022338_109)] [added: Data](#i988317c7021a4a8fa66f2208a2958f7e_109)] | | | [removed: [47](#if6b1fc25c1c944ab86fa7c3f77022338_109)] [added: [43](#i988317c7021a4a8fa66f2208a2958f7e_109)] | | |

| Item 9. | | | | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#if6b1fc25c1c944ab86fa7c3f77022338_112)] [added: Disclosure](#i988317c7021a4a8fa66f2208a2958f7e_112)] | | | [removed: [47](#if6b1fc25c1c944ab86fa7c3f77022338_112)] [added: [43](#i988317c7021a4a8fa66f2208a2958f7e_112)] | | |

| Item 9A. | | | | | | [Controls and [removed: Procedures](#if6b1fc25c1c944ab86fa7c3f77022338_115)] [added: Procedures](#i988317c7021a4a8fa66f2208a2958f7e_115)] | | | [removed: [47](#if6b1fc25c1c944ab86fa7c3f77022338_115)] [added: [43](#i988317c7021a4a8fa66f2208a2958f7e_115)] | | |

| Item 9B. | | | | | | [Other [removed: Information](#if6b1fc25c1c944ab86fa7c3f77022338_118)] [added: Information](#i988317c7021a4a8fa66f2208a2958f7e_118)] | | | [removed: [50](#if6b1fc25c1c944ab86fa7c3f77022338_118)] [added: [46](#i988317c7021a4a8fa66f2208a2958f7e_118)] | | |

| [PART [removed: III](#if6b1fc25c1c944ab86fa7c3f77022338_121)] [added: III](#i988317c7021a4a8fa66f2208a2958f7e_121)] | | | | | | | | | [removed: [51](#if6b1fc25c1c944ab86fa7c3f77022338_121)] [added: [47](#i988317c7021a4a8fa66f2208a2958f7e_121)] | | |

| Item 10. | | | | | | [Directors, Executive Officers and Corporate [removed: Governance](#if6b1fc25c1c944ab86fa7c3f77022338_124)] [added: Governance](#i988317c7021a4a8fa66f2208a2958f7e_124)] | | | [removed: [51](#if6b1fc25c1c944ab86fa7c3f77022338_124)] [added: [47](#i988317c7021a4a8fa66f2208a2958f7e_124)] | | |

| Item 11. | | | | | | [Executive [removed: Compensation](#if6b1fc25c1c944ab86fa7c3f77022338_127)] [added: Compensation](#i988317c7021a4a8fa66f2208a2958f7e_127)] | | | [removed: [51](#if6b1fc25c1c944ab86fa7c3f77022338_127)] [added: [47](#i988317c7021a4a8fa66f2208a2958f7e_127)] | | |

| Item 12. | | | | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#if6b1fc25c1c944ab86fa7c3f77022338_130)] [added: Matters](#i988317c7021a4a8fa66f2208a2958f7e_130)] | | | [removed: [51](#if6b1fc25c1c944ab86fa7c3f77022338_130)] [added: [47](#i988317c7021a4a8fa66f2208a2958f7e_130)] | | |

| Item 13. | | | | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#if6b1fc25c1c944ab86fa7c3f77022338_133)] [added: Independence](#i988317c7021a4a8fa66f2208a2958f7e_133)] | | | [removed: [51](#if6b1fc25c1c944ab86fa7c3f77022338_133)] [added: [47](#i988317c7021a4a8fa66f2208a2958f7e_133)] | | |

| Item 14. | | | | | | [Principal Accounting Fees and [removed: Services](#if6b1fc25c1c944ab86fa7c3f77022338_136)] [added: Services](#i988317c7021a4a8fa66f2208a2958f7e_136)] | | | [removed: [51](#if6b1fc25c1c944ab86fa7c3f77022338_136)] [added: [47](#i988317c7021a4a8fa66f2208a2958f7e_136)] | | |

| [PART [removed: IV](#if6b1fc25c1c944ab86fa7c3f77022338_139)] [added: IV](#i988317c7021a4a8fa66f2208a2958f7e_139)] | | | | | | | | | [removed: [52](#if6b1fc25c1c944ab86fa7c3f77022338_139)] [added: [48](#i988317c7021a4a8fa66f2208a2958f7e_139)] | | |

| Item 15. | | | | | | [Exhibits, Financial Statement [removed: Schedules](#if6b1fc25c1c944ab86fa7c3f77022338_142)] [added: Schedules](#i988317c7021a4a8fa66f2208a2958f7e_142)] | | | [removed: [52](#if6b1fc25c1c944ab86fa7c3f77022338_142)] [added: [48](#i988317c7021a4a8fa66f2208a2958f7e_142)] | | |

| Item 16. | | | | | | [Form 10-K [removed: Summary](#if6b1fc25c1c944ab86fa7c3f77022338_145)] [added: Summary](#i988317c7021a4a8fa66f2208a2958f7e_145)] | | | [removed: [52](#if6b1fc25c1c944ab86fa7c3f77022338_145)] [added: [48](#i988317c7021a4a8fa66f2208a2958f7e_145)] | | |

| [removed: [Signatures](#if6b1fc25c1c944ab86fa7c3f77022338_151)] [added: [Signatures](#i988317c7021a4a8fa66f2208a2958f7e_151)] | | | | | | | | | [removed: [56](#if6b1fc25c1c944ab86fa7c3f77022338_151)] [added: [51](#i988317c7021a4a8fa66f2208a2958f7e_151)] | | |

*This Annual Report on Form 10-K for the fiscal year ended July 31, [removed: 2021,] [added: 2022,] 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”), including forward-looking statements concerning the potential impact of the COVID-19 pandemic on our business, operations, and operating results.

For the Fiscal Year Ended July 31, 2022

| [PART I](#i988317c7021a4a8fa66f2208a2958f7e_13) | | | | | | | | | [1](#i988317c7021a4a8fa66f2208a2958f7e_13) | | |

| | | | | | | [Sales](#i988317c7021a4a8fa66f2208a2958f7e_37) | | | [11](#i988317c7021a4a8fa66f2208a2958f7e_37) | | |

| | | | | | | [Members](#i988317c7021a4a8fa66f2208a2958f7e_40) | | | [11](#i988317c7021a4a8fa66f2208a2958f7e_40) | | |

| | | | | | | [Competition](#i988317c7021a4a8fa66f2208a2958f7e_43) | | | [11](#i988317c7021a4a8fa66f2208a2958f7e_43) | | |

| | | | | | | [Seasonality](#i988317c7021a4a8fa66f2208a2958f7e_61) | | | [14](#i988317c7021a4a8fa66f2208a2958f7e_61) | | |

| [PART II](#i988317c7021a4a8fa66f2208a2958f7e_79) | | | | | | | | | [28](#i988317c7021a4a8fa66f2208a2958f7e_79) | | |

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

| [PART I](#if6b1fc25c1c944ab86fa7c3f77022338_13) | | | | | | | | | [1](#if6b1fc25c1c944ab86fa7c3f77022338_13) | | |

| | | | | | | [Sales](#if6b1fc25c1c944ab86fa7c3f77022338_37) | | | [11](#if6b1fc25c1c944ab86fa7c3f77022338_37) | | |

| | | | | | | [Members](#if6b1fc25c1c944ab86fa7c3f77022338_40) | | | [11](#if6b1fc25c1c944ab86fa7c3f77022338_40) | | |

| | | | | | | [Competition](#if6b1fc25c1c944ab86fa7c3f77022338_43) | | | [11](#if6b1fc25c1c944ab86fa7c3f77022338_43) | | |

| | | | | | | [Seasonality](#if6b1fc25c1c944ab86fa7c3f77022338_61) | | | [14](#if6b1fc25c1c944ab86fa7c3f77022338_61) | | |

| [PART II](#if6b1fc25c1c944ab86fa7c3f77022338_79) | | | | | | | | | [30](#if6b1fc25c1c944ab86fa7c3f77022338_79) | | |

In the U.K., we own or lease [removed: eighteen] [added: twenty two] operating facilities.

In [removed: Germany] [added: Germany,] we operate an online platform and own or lease eleven operating facilities.

In Spain, we operate an online platform, own one operating facility and lease [removed: six] [added: four] additional storage locations.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

As of July 31, [removed: 2021,] [added: 2022,] there were [removed: 237,014,273] [added: 238,040,974] shares of our common stock issued and outstanding.

As of September [removed: 23, 2021,] [added: 26, 2022,] we had [removed: 806] [added: 765] holders of record of our common stock.

On July 31, [removed: 2021,] [added: 2022,] the last reported sale price of our common stock on the NASDAQ Global Select Market was [removed: $147.00] [added: $128.10] per share.

For fiscal [removed: 2021] [added: 2022, 2021,] and 2020, we did not repurchase any shares of our common stock under the program.

As of July 31, [removed: 2021,] [added: 2022,] the total number of shares repurchased under the program was 114,549,198, and 81,450,802 shares were available for repurchase under our program.

In fiscal [removed: 2019,] [added: 2020,] our [removed: former President] [added: Chief Executive officer now Co-CEO] exercised all of his vested stock options through a cashless exercise.

In fiscal [removed: 2020, our Chief Executive Officer] [added: 2022, no employees] exercised [removed: all of his vested] stock options through a cashless exercise.

We remitted [removed: $3.8] [added: $0.0] million, [removed: $101.3] [added: $3.8] million, and [removed: $45.6] [added: $101.3] million during the years ended July 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019,] [added: 2020,] respectively, to the proper taxing authorities in satisfaction of the employees’ statutory withholding requirements.

| FY 2020—Q1 | | | | | | 4,000,000 | | | | | | [removed: 17.81] [added: $] | [added: 17.81] | | | | | 865,719 | | | | | | 1,231,595 | | | | | | 1,902,686 | | | | | | [added: $ |] 82.29 | | | | | [added: $] | 101,348 | | [removed: |]

For further detail see Notes to Consolidated Financial Statements, *Note [removed: 8] [added: 9] — Long-Term Debt* and *Note [removed: 11] [added: 12] — Stockholders’ Equity* and under the subheadings “*Credit Agreement*” and “*Note Purchase Agreement*” in the Liquidity and Capital Resources sections of this Annual Report on Form 10-K*.*

There were no issuances of unregistered securities in the year ended July 31, [removed: 2021.][added: 2022.]

The following is a line graph comparing the cumulative total return to stockholders of our common stock at July 31, [removed: 2021] [added: 2022] since July 31, [removed: 2016,] [added: 2017,] to the cumulative total return over such period of (i) the NASDAQ Composite Index, (ii) the NASDAQ Industrial Index, and (iii) the S&P 500 Index.

[removed: ][added: ]

| | | | | | | [removed: 2016] [added: 2017] | | | | | | [removed: 2017] [added: 2018] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2021] [added: 2022] | | |

* Assumes that $100.00 was invested on July 31, [removed: 2016] [added: 2017] in our common stock, in the NASDAQ Composite Index, the NASDAQ Industrial Index, and the S&P 500 Index and that all dividends were reinvested.

Copyright© [removed: 2019] [added: 2022] Standard & Poor's, a division of S&P Global.

| FY 2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

| Copart, Inc. | | | | | | $ | 100.00 | | | | | $ | 182.25 | | | | | $ | 246.21 | | | | | $ | 296.13 | | | | | $ | 466.81 | | | | | $ | 406.80 | |

| NASDAQ Composite | | | | | | $ | 100.00 | | | | | $ | 122.13 | | | | | $ | 131.59 | | | | | $ | 174.72 | | | | | $ | 240.30 | | | | | $ | 204.37 | |

| NASDAQ Industrial | | | | | | $ | 100.00 | | | | | $ | 104.12 | | | | | $ | 104.79 | | | | | $ | 143.13 | | | | | $ | 190.28 | | | | | $ | 164.05 | |

| S&P 500 Index | | | | | | $ | 100.00 | | | | | $ | 116.24 | | | | | $ | 125.52 | | | | | $ | 140.53 | | | | | $ | 191.75 | | | | | $ | 182.85 | |

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 2019, we repurchased 7,635,596 shares of our common stock under the program at a weighted average price of $47.81 per share totaling $365.0 million.

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

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

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

| Period | | | | | | Total Number of Shares Purchased | | | | | | 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(1) | | |

| *Fiscal 2019* | | | | | | | | | | | | | | | | | | | | | | | | | | |

| First Quarter | | | | | | — | | | | | | $ | — | | | | | — | | | | | | 89,086,398 | | |

| Second Quarter | | | | | | 7,635,596 | | | | | | $ | 47.81 | | | | | 7,635,596 | | | | | | 81,450,802 | | |

| Third Quarter | | | | | | — | | | | | | $ | — | | | | | — | | | | | | 81,450,802 | | |

| Fourth Quarter | | | | | | — | | | | | | $ | — | | | | | — | | | | | | 81,450,802 | | |

| *Fiscal 2020* | | | | | | | | | | | | | | | | | | | | | | | | | | |

| First Quarter | | | | | | — | | | | | | $ | — | | | | | — | | | | | | 81,450,802 | | |

| Second Quarter | | | | | | — | | | | | | $ | — | | | | | — | | | | | | 81,450,802 | | |

| *Fiscal 2021* | | | | | | | | | | | | | | | | | | | | | | | | | | |

| May 1, 2021 through May 31, 2021 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | 81,450,802 | | |

| June 1, 2021 through June 30, 2021 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | 81,450,802 | | |

| July 1, 2021 through July 31, 2021 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | 81,450,802 | | |

(1)Our stock repurchase program was announced on February 20, 2003.

On September 22, 2011, our Board of Directors approved an 80 million share increase in our stock repurchase program, bringing the total current authorization to 196 million shares.

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

| FY 2019—Q3 | | | | | | 3,000,000 | | | | | | $ | 17.81 | | | | | 945,162 | | | | | | 806,039 | | | | | | 1,248,799 | | | | | | $ | 56.53 | | | | | $ | 45,565 | |

| Copart, Inc. | | | | | | $ | 100.00 | | | | | $ | 124.86 | | | | | $ | 227.56 | | | | | $ | 307.41 | | | | | $ | 369.75 | | | | | $ | 582.87 | |

| NASDAQ Composite | | | | | | $ | 100.00 | | | | | $ | 124.41 | | | | | $ | 151.94 | | | | | $ | 163.71 | | | | | $ | 217.38 | | | | | $ | 298.96 | |

| NASDAQ Industrial | | | | | | $ | 100.00 | | | | | $ | 118.86 | | | | | $ | 145.63 | | | | | $ | 154.22 | | | | | $ | 199.55 | | | | | $ | 258.21 | |

| S&P 500 Index | | | | | | $ | 100.00 | | | | | $ | 116.04 | | | | | $ | 134.89 | | | | | $ | 145.66 | | | | | $ | 163.08 | | | | | $ | 222.51 | |

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

This evaluation, or Controls Evaluation, was performed under the supervision and with the participation of management, including our [removed: Chief Executive Officer (“CEO”)] [added: Co-CEO] and our [removed: Chief] [added: Principal] Financial [removed: Officer (“CFO”).][added: Officer.]

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 accumulated and communicated to our management, including our [removed: CEO] [added: Co-CEO] and [removed: CFO,] [added: Principal Financial Officer,] or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Based upon the Controls Evaluation, our [removed: CEO] [added: Co-CEO] and [removed: CFO] [added: Principal Financial Officer] have concluded that, as of the end of the period covered by this 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 [removed: CEO] [added: Co-CEO] and [removed: CFO,] [added: Principal Financial Officer,] to allow timely decisions regarding required disclosure, and that such information is recorded, processed, summarized and reported within the time periods specified by the SEC.

Management assessed our internal control over financial reporting [removed: for the fiscal year ended] [added: as of] July 31, [removed: 2021.][added: 2022.]

The certifications of our principal executive officer and principal financial officer attached as Exhibits [removed: 31.1 and] [added: 31.1,] 31.2 [added: and 31.3] to this 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: 2021.][added: 2022.]

We have audited [removed: the] [added: Copart, Inc.’s] internal control over financial reporting [removed: of Copart, Inc. (the Company)] as of July 31, [removed: 2021,] [added: 2022,] based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 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: 2021,] [added: 2022,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the [removed: 2021] [added: 2022] consolidated financial statements of the Company, and our report dated September 27, [removed: 2021] [added: 2022] expressed an unqualified opinion thereon.

Our management, including our [removed: CEO] [added: Co-CEO] and [removed: CFO,] [added: Principal Financial Officer,] does not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

September 27, 2022

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

September 27, 2021

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: 2021] [added: 2022] 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.

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

There were no delinquent Section 16(a) Reports during fiscal [removed: 2021.][added: 2022.]

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: 2021] [added: 2022] fiscal year end) under the heading “Executive Compensation,” “Compensation of Directors,” and “Corporate Governance and Board of Directors.”

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: 2021] [added: 2022] fiscal year end) under the headings “Security Ownership” and “Executive Compensation,” subheading “Equity Compensation Plan Information.”

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: 2021] [added: 2022] fiscal year end) under the heading “Related Person Transactions and Section 16(a) Beneficial Ownership Compliance,” “Corporate Governance and Board of Directors,” and under the proposal captioned “Election of Directors.”

The information required by this item is incorporated herein by reference from the proposal captioned “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: 2021] [added: 2022] fiscal year end).

[Table](#i988317c7021a4a8fa66f2208a2958f7e_10) [](#i988317c7021a4a8fa66f2208a2958f7e_10)[of](#i988317c7021a4a8fa66f2208a2958f7e_10) [Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)

Our consolidated financial statements at July 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] and for each of the three years in the period ended July 31, [removed: 2021] [added: 2022] 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.

Refer to [Exhibit [removed: Index](#if6b1fc25c1c944ab86fa7c3f77022338_148)] [added: Index](#i988317c7021a4a8fa66f2208a2958f7e_148)] included herein.

| [removed: 10.08] [added: 10.8] | | | [added: *] | | | [removed: [Note] [added: [Copart, Inc. 2014 Employee Stock] Purchase [removed: Agreement among the Registrant and each of the purchasers listed on Schedule B dated as of December 3, 2014](http://www.sec.gov/Archives/edgar/data/900075/000114544314001444/d31887_ex10-3.htm)] [added: Plan](http://www.sec.gov/Archives/edgar/data/900075/000114544314001453/d31889_ex10-1.htm)] | | | | | | Current Report on Form 8-K (File No. 000-23255), Exhibit No. [removed: 10.3] [added: 10.1] | | | | | | December [removed: 4,] [added: 5,] 2014 | | |

| [removed: 10.10] [added: 10.9] | | | * | | | [Executive Officer Employment Agreement, effective January 4, 2016, between the Registrant and Jeffrey Liaw.](http://www.sec.gov/Archives/edgar/data/900075/000162828015008945/cprt10312015-ex1026executi.htm) | | | | | | Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.26 | | | | | | November 23, 2015 | | |

| [removed: 10.11] [added: 10.10] | | | | | | [removed: [First Amendment to] [added: [Second](https://www.sec.gov/Archives/edgar/data/900075/000090007521000043/secondamendedandrestatedcr.htm) [Amended and Restated] Credit Agreement, dated as [removed: of March 15, 2016,] [added: of](https://www.sec.gov/Archives/edgar/data/900075/000090007521000043/secondamendedandrestatedcr.htm) [December](https://www.sec.gov/Archives/edgar/data/900075/000090007521000043/secondamendedandrestatedcr.htm) [21, 202](https://www.sec.gov/Archives/edgar/data/900075/000090007521000043/secondamendedandrestatedcr.htm)[1](https://www.sec.gov/Archives/edgar/data/900075/000090007521000043/secondamendedandrestatedcr.htm)[,] by and among Copart, [removed: Inc., the] [added: certain] subsidiaries of [removed: Copart, Inc. party thereto,] [added: Copart.] the lenders party thereto, and [removed: Wells Fargo Bank, National Association,] [added: Bank of America,N.A.,] as administrative [removed: agent.](http://www.sec.gov/Archives/edgar/data/900075/000090007516000021/cprt031516-ex101.htm)] [added: agent.](https://www.sec.gov/Archives/edgar/data/900075/000090007521000043/secondamendedandrestatedcr.htm)] | | | | | | Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.1 | | | | | | [removed: March 17, 2016] [added: December 27, 2021] | | |

| 21.1 | | | | | | [List of subsidiaries of [removed: Registrant](https://www.sec.gov/Archives/edgar/data/900075/000090007521000022/cprt07312021-ex211.htm)] [added: Registrant](https://www.sec.gov/Archives/edgar/data/900075/000090007522000050/cprt07312022-ex211.htm)] | | | | | | — | | | | | | Filed herewith | | |

| 23.1 | | | | | | [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/900075/000090007521000022/cprt07312021-ex231.htm)] [added: Firm](https://www.sec.gov/Archives/edgar/data/900075/000090007522000050/cprt07312022-ex231.htm)] | | | | | | — | | | | | | Filed herewith | | |

| 31.1 | | | | | | [Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007521000022/cprt07312021-ex311.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007522000050/cprt07312022-ex311.htm)] | | | | | | — | | | | | | Filed herewith | | |

| 31.2 | | | | | | [Certification of [removed: Chief Financial] [added: Principal Executive] Officer pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007521000022/cprt07312021-ex312.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007522000050/cprt07312022-ex312.htm)] | | | | | | — | | | | | | Filed herewith | | |

| 32.1 | | | (1) | | | [Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007521000022/cprt07312021-ex321.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007522000050/cprt07312022-ex321.htm)] | | | | | | — | | | | | | Filed herewith | | |

| 32.2 | | | (1) | | | [Certification of Chief [removed: Financial] [added: Executive] Officer pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007521000022/cprt07312021-ex322.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007522000050/cprt07312022-ex322.htm)] | | | | | | — | | | | | | Filed herewith | | |

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

Date: September 27, [removed: 2021][added: 2022]

| | | | | | | | | | [removed: John North, Chief Financial Officer] [added: Gavin Renfrew Vice President of Global Accounting] (Principal Financial and Accounting Officer and duly Authorized Officer) | | |

Jayson [removed: Adair] [added: Adair,] and [removed: John North,] [added: Jeffrey Liaw] and [added: Gavin Renfrew, and] each of them, as his or her true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

| /s/ A. JAYSON ADAIR | | | | | | [removed: Chief] [added: Co-Chief] Executive Officer (Principal Executive [removed: Officer and Director)] [added: Officer), Director] | | | | | | September 27, [removed: 2021] [added: 2022] | | |

| /s/ WILLIS J. JOHNSON | | | | | | Chairman of the Board | | | | | | September 27, [removed: 2021] [added: 2022] | | |

| /s/ MATT BLUNT | | | | | | Director | | | | | | September 27, [removed: 2021] [added: 2022] | | |

| /s/ STEVEN D. COHAN | | | | | | Director | | | | | | September 27, [removed: 2021] [added: 2022] | | |

| /s/ DANIEL ENGLANDER | | | | | | Director | | | | | | September 27, [removed: 2021] [added: 2022] | | |

| /s/ STEPHEN FISHER | | | | | | Director | | | | | | September 27, [removed: 2021] [added: 2022] | | |

| /s/ CHERYLYN HARLEY LEBON | | | | | | Director | | | | | | September 27, [removed: 2021] [added: 2022] | | |

| /s/ JAMES E. MEEKS | | | | | | Director | | | | | | September 27, [removed: 2021] [added: 2022] | | |

| /s/ DIANE M. MOREFIELD | | | | | | Director | | | | | | September 27, [removed: 2021] [added: 2022] | | |

| /s/ CARL SPARKS | | | | | | Director | | | | | | September 27, [removed: 2021] [added: 2022] | | |

| /s/ THOMAS N. TRYFOROS | | | | | | Director | | | | | | September 27, [removed: 2021] [added: 2022] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#if6b1fc25c1c944ab86fa7c3f77022338_157)] [added: Firm (PCAOB ID:](#i988317c7021a4a8fa66f2208a2958f7e_157) 42[)](#i988317c7021a4a8fa66f2208a2958f7e_157)] | | | | | | [removed: [59](#if6b1fc25c1c944ab86fa7c3f77022338_157)] [added: [55](#i988317c7021a4a8fa66f2208a2958f7e_157)] | | |

| [Consolidated Balance Sheets as of July 31, [removed: 2021] [added: 2022] and [removed: 2020](#if6b1fc25c1c944ab86fa7c3f77022338_160)] [added: 2021](#i988317c7021a4a8fa66f2208a2958f7e_160)] | | | | | | [removed: [61](#if6b1fc25c1c944ab86fa7c3f77022338_160)] [added: [57](#i988317c7021a4a8fa66f2208a2958f7e_160)] | | |

| [Consolidated Statements of Income for the years ended July 31, [removed: 2021, 2020 and 2019](#if6b1fc25c1c944ab86fa7c3f77022338_166)] [added: 202](#i988317c7021a4a8fa66f2208a2958f7e_166)[2](#i988317c7021a4a8fa66f2208a2958f7e_166)[, 202](#i988317c7021a4a8fa66f2208a2958f7e_166)[1](#i988317c7021a4a8fa66f2208a2958f7e_166) [and 20](#i988317c7021a4a8fa66f2208a2958f7e_166)[20](#i988317c7021a4a8fa66f2208a2958f7e_166)] | | | | | | [removed: [62](#if6b1fc25c1c944ab86fa7c3f77022338_166)] [added: [58](#i988317c7021a4a8fa66f2208a2958f7e_166)] | | |

| [Consolidated Statements of Comprehensive Income for the years ended July 31, [removed: 2021, 2020 and 2019](#if6b1fc25c1c944ab86fa7c3f77022338_169)] [added: 202](#i988317c7021a4a8fa66f2208a2958f7e_169)[2](#i988317c7021a4a8fa66f2208a2958f7e_169)[, 202](#i988317c7021a4a8fa66f2208a2958f7e_169)[1](#i988317c7021a4a8fa66f2208a2958f7e_169) [and 20](#i988317c7021a4a8fa66f2208a2958f7e_169)[20](#i988317c7021a4a8fa66f2208a2958f7e_169)] | | | | | | [removed: [63](#if6b1fc25c1c944ab86fa7c3f77022338_169)] [added: [59](#i988317c7021a4a8fa66f2208a2958f7e_169)] | | |

| [Consolidated Statements of [removed: Stockholder’s] [added: Stockholders'] Equity for the years ended July 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019](#if6b1fc25c1c944ab86fa7c3f77022338_172)] [added: 2020](#i988317c7021a4a8fa66f2208a2958f7e_172)] | | | | | | [removed: [64](#if6b1fc25c1c944ab86fa7c3f77022338_172)] [added: [60](#i988317c7021a4a8fa66f2208a2958f7e_172)] | | |

| [Consolidated Statements of Cash Flows for the years ended July 31, [removed: 2021, 2020 and 2019](#if6b1fc25c1c944ab86fa7c3f77022338_175)] [added: 202](#i988317c7021a4a8fa66f2208a2958f7e_175)[2](#i988317c7021a4a8fa66f2208a2958f7e_175)[, 202](#i988317c7021a4a8fa66f2208a2958f7e_175)[1](#i988317c7021a4a8fa66f2208a2958f7e_175) [and 20](#i988317c7021a4a8fa66f2208a2958f7e_175)[20](#i988317c7021a4a8fa66f2208a2958f7e_175)] | | | | | | [removed: [65](#if6b1fc25c1c944ab86fa7c3f77022338_175)] [added: [61](#i988317c7021a4a8fa66f2208a2958f7e_175)] | | |

| [Notes to Consolidated Financial [removed: Statements](#if6b1fc25c1c944ab86fa7c3f77022338_178)] [added: Statements](#i988317c7021a4a8fa66f2208a2958f7e_178)] | | | | | | [removed: [66](#if6b1fc25c1c944ab86fa7c3f77022338_178)] [added: [62](#i988317c7021a4a8fa66f2208a2958f7e_178)] | | |

We have audited the accompanying consolidated balance sheets of Copart, Inc. (the Company) as of July 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] 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: 2021,] [added: 2022,] and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company at July 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] and the results of its operations and its cash flows for each of the three years in the period ended July 31, [removed: 2021,] [added: 2022,] 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) (PCAOB), the Company’s internal control over financial reporting as of July 31, [removed: 2021,] [added: 2022,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated September 27, [removed: 2021] [added: 2022] expressed an unqualified opinion thereon.

| *Description of the Matter* | | | As discussed in Note [removed: 12] [added: 13] to the consolidated financial statements, the Company has recorded a liability for unrecognized tax benefits resulting from uncertain tax positions, including accrued interest and penalties, of [removed: $54.3] [added: $64.6] million as of July 31, [removed: 2021.] [added: 2022.] The Company’s uncertain tax positions are subject to audit by federal, state and local taxing authorities, and the resolution of such audits may span multiple years. The Company uses significant judgment to (1) determine whether, based on the technical merits, a tax position is more likely than not to be sustained and (2) measure the amount of tax benefit that qualifies for recognition. Tax law is complex and often subject to varied interpretations. Accordingly, the ultimate outcome with respect to taxes the Company may owe may differ from the amounts recognized. | | |

| We involved our tax professionals to assess the technical merits of the Company’s tax positions. Our substantive audit procedures included, among others, evaluating changes in tax law that occurred during the year and assessing the Company’s interpretation of those changes under the relevant jurisdiction’s tax law. In addition, we inspected correspondence, assessments, and settlements from taxing authorities to assess the Company’s determination of the likelihood of its tax positions to be sustained upon examination and the Company’s measurement of the largest amount of benefit, considered on a cumulative probability basis, which is more likely than not to be realized upon settlement. We also evaluated the Company’s income tax disclosures included in Note [removed: 12] [added: 13] in relation to these matters. | | | | | |

| | | | | | | [added: 2022 | | | | | |] 2021 | | | | | | 2020 | | |

| Cash, cash equivalents, and restricted cash [removed: |] [added: at beginning of period] | | | | | [removed: $] | 1,048,260 | | | | | [removed: $] | 477,718 | | [added: | | | | 186,319 | | |]

| Accounts receivable, net | | | | | | [removed: 480,628] [added: 578,573] | | | | | | [removed: 350,207] [added: 480,628] | | |

| Vehicle pooling costs | | | | | | [removed: 94,449] [added: 112,242] | | | | | | [removed: 73,684] [added: 94,449] | | |

| 31.3 | | | | | | [Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007522000050/cprt07312022-ex313.htm) | | | | | | — | | | | | | Filed herewith | | |

| 32.3 | | | (1) | | | [Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007522000050/cprt07312022-ex323.htm) | | | | | | — | | | | | | Filed herewith | | |

| | | | By: | | | | | | /s/ JEFFREY LIAW | | |

| | | | | | | | | | Jeffrey Liaw Co-Chief Executive Officer (Principal Executive Officer) | | |

Date: September 27, 2022

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

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

| | | | COPART, INC. | | | | | | | | |

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

| | | | By: | | | | | | /s/ GAVIN RENFREW | | |

Date: September 27, 2022

| /s/ JEFFREY LIAW | | | | | | Co-Chief Executive Officer (Principal Executive Officer) | | | | | | September 27, 2022 | | |

| Jeffrey Liaw | | | | | | | | | | | | | | |

| /s/ GAVIN RENFREW | | | | | | Vice President of Global Accounting (Principal Financial and Accounting Officer) | | | | | | September 27, 2022 | | |

| Gavin Renfrew | | | | | | | | | | | | | | |

| | | | | | | 2022 | | | | | | 2021 | | |

| Goodwill | | | | | | 401,954 | | | | | | 355,717 | | |

| Loss on extinguishment of debt | | | | | | (16,759) | | | | | | — | | | | | | — | | |

| Net income | | | | | | $ | 1,090,130 | | | | | $ | 936,495 | | | | | $ | 699,907 | |

| Net income | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,090,130 | | | | | | | | | | | | 1,090,130 | | |

| Exercise of stock options, net of repurchased shares | | | | | | 905,247 | | | | | | — | | | | | | 28,108 | | | | | | — | | | | | | (1,925) | | | | | | | | | | | | 26,183 | | |

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

| Balances at July 31, 2022 | | | | | | 238,040,974 | | | | | | $ | 24 | | | | | $ | 838,532 | | | | | $ | (169,365) | | | | | $ | 3,956,408 | | | | | | | | | | | $ | 4,625,599 | |

| Net income | | | | | | $ | 1,090,130 | | | | | $ | 936,495 | | | | | $ | 699,907 | |

| Loss on extinguishment of debt | | | | | | 16,759 | | | | | | — | | | | | | — | | |

| Investment in unconsolidated affiliate | | | | | | (2,591) | | | | | | — | | | | | | — | | |

| Purchase of held to maturity securities | | | | | | (374,866) | | | | | | — | | | | | | — | | |

| Proceeds from the sale of held to maturity securities | | | | | | 374,866 | | | | | | — | | | | | | — | | |

| Principal payments on long-term debt | | | | | | (416,759) | | | | | | — | | | | | | — | | |

| Balance as of July 31, 2022 | | | | | | $ | 4,778 | |

Note 2 — Acquisitions

Fiscal Year 2022 Transactions.

On July 5, 2022, the Company acquired 100% of the voting stock of ILT Project Limited which conducts business primarily as Hills Motors (“Hills”), a leading parts recycler in the United Kingdom.

Hills predominantly sells recycled parts to the public.

The purchase price paid for Hills was $106.6 million.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed for Hills (in thousands).

| | | | | | |

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

| | | | | | |

| Cash | | | $ | 8,960 | |

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

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

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

| Exhibit Number | | | | | | Description | | | | | | Form | | | | | | Date | | |

| 10.09 | | | * | | | [Copart, Inc. 2014 Employee Stock Purchase Plan](http://www.sec.gov/Archives/edgar/data/900075/000114544314001453/d31889_ex10-1.htm) | | | | | | Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.1 | | | | | | December 5, 2014 | | |

| 10.12 | | | | | | [Second Amendment to Credit Agreement, dated as of July 21, 2016, by and among Copart, Inc., the subsidiaries of Copart, Inc. party thereto, the lenders party thereto, and Bank of America, N.A., as administrative agent.](http://www.sec.gov/Archives/edgar/data/900075/000090007516000054/cprt072716ex101.htm) | | | | | | Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.1 | | | | | | July 27, 2016 | | |

| 10.13 | | | | | | [First Amendment to Note Purchase Agreement, dated as of July 21, 2016, by and among Copart, Inc., the subsidiaries of Copart, Inc. party thereto and the purchasers party thereto.](http://www.sec.gov/Archives/edgar/data/900075/000090007516000054/cprt072716ex102.htm) | | | | | | Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.2 | | | | | | July 27, 2016 | | |

| 10.14 | | | | | | [First Amended and Restated Credit Agreement, dated as of July 21, 2020, by and among Copart, certain subsidiaries of Copart. the lenders party thereto, and Bank of America,N.A., as administrative agent.](http://www.sec.gov/Archives/edgar/data/900075/000162828020010649/firstamendedandrestate.htm) | | | | | | Current Report on Form 8-K (File No. 000-23255), Exhibit No. 10.1 | | | | | | July 27, 2020 | | |

| 10.15 | | | * | | | [Executive Officer Employment Agreement, effective October 5, 2020, between the Registrant and John North](http://www.sec.gov/Archives/edgar/data/900075/000090007520000029/cprtex101executiveoffi.htm) | | | | | | Quarterly Report on Form 10-Q (File No. 000-23255), Exhibit No. 10.1 | | | | | | November 20, 2020 | | |

| | | | By: | | | | | | /s/ JOHN NORTH | | |

| /s/ JOHN NORTH | | | | | | Chief Financial Officer (Principal Financial and Accounting Officer) | | | | | | September 27, 2021 | | |

| John North | | | | | | | | | | | | | | |

| | | | | | | | | |

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

September 27, 2021

| Balances at July 31, 2018 | | | | | | 233,898,841 | | | | | | $ | 23 | | | | | $ | 526,858 | | | | | $ | (107,928) | | | | | $ | 1,162,146 | | | | | | | | | | | $ | 1,581,099 | |

| Net income | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 591,693 | | | | | | | | | | | | 591,693 | | |

| Cumulative effect of change in accounting standard | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (22,954) | | | | | | | | | | | | (22,954) | | |

| Exercise of stock options, net of repurchased shares | | | | | | 3,349,980 | | | | | | — | | | | | | 32,500 | | | | | | — | | | | | | (44,987) | | | | | | | | | | | | (12,487) | | |

| Shares repurchased | | | | | | (7,635,596) | | | | | | — | | | | | | (17,427) | | | | | | — | | | | | | (347,570) | | | | | | | | | | | | (364,997) | | |

| Repurchases of common stock | | | | | | — | | | | | | — | | | | | | (364,997) | | |

| Balance as of July 31, 2019 | | | | | | $ | 10,574 | |

As of July 31, 2021 and 2020, no customer accounted for more than 10% of the Company’s consolidated accounts receivable.

In January 2017, the FASB issued ASU 2017-04, *Intangibles-Goodwill and Other (Topic 350).* ASU 2017-04 amends the requirement that entities compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test.

As a result, entities should perform their annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment if the carrying amount exceeds the reporting unit’s fair value.

ASU 2017-04 was effective for fiscal years beginning after December 15, 2019.

In June 2016, the FASB issued ASU 2016-13, *Financial Instruments – Credit Losses (Topic 326).* ASU 2016-13 requires entities to use a current lifetime expected credit loss methodology to measure impairments of certain financial assets.

Using this methodology will result in earlier recognition of losses than the previous incurred loss approach, which required waiting to recognize a loss until it was probable of having been incurred.

There are other provisions within the standard that affect how impairments of other financial assets may be recorded and presented, and that expand disclosures.

This pronouncement was effective for fiscal years beginning after December 15, 2019, and was required to be applied on a modified retrospective basis.

The Company’s adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated results of operations, financial position, and related disclosures.

*Pending*

This guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.

The Company’s adoption of ASU 2019-12 is not expected to have a material impact on the Company’s consolidated results of operations and financial position.

| | | | | | | 486,264 | | | | | | 356,597 | | |

| Balance at beginning of year | | | | | | $ | 6,390 | | | | | $ | 4,942 | | | | | $ | 5,444 | |

| Charged to costs and expenses | | | | | | 3,454 | | | | | | 5,591 | | | | | | 2,409 | | |

| Write-offs | | | | | | (4,208) | | | | | | (4,143) | | | | | | (2,911) | | |

| Balance at end of year | | | | | | $ | 5,636 | | | | | $ | 6,390 | | | | | $ | 4,942 | |

| | | | | | | 3,027,396 | | | | | | 2,566,260 | | |