Copart (CPRT) 10-K risk factor changes: FY2023 vs FY2022

Although no single customer accounted for more than 10% of our consolidated revenues for fiscal [added: 2023,] 2022, [removed: 2021,] or [removed: 2020,] [added: 2021,] 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 2018, and a parts recycler in [added: the] 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 [added: adverse effect on our future operating results.]

[removed: Moreover, success in opening and operating facilities in new markets can be dependent] upon establishing new relationships with buyers and sellers, and our failure to establish those relationships could have an adverse effect on our consolidated results of operations and future operating results.

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

For example, in fiscal [removed: 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.

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. [added: In fiscal 2023, we opened one new operational facility in Brazil, one new operational facility in Germany, one new operational facility in Canada, and eight 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 [removed: CMA.][added: U.K. Competition and Markets Authority (“CMA”).]

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

During periods of mild weather conditions, our ability to increase our revenues and improve our operating results and related growth will be increasingly [added: 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 these sections.]

For example, during fiscal [removed: 2022,] [added: 2023,] we recognized substantial additional costs associated with Hurricane [removed: Ida.][added: Ian.]

Weather events have 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. [removed: These additional costs were characterized as “abnormal” under ASC 330, *Inventory,* and included premiums for subhaulers, payroll, equipment, and facilities expenses directly related to the operating conditions created by the hurricanes.]

[removed: Jayson Adair and Jeffrey Liaw,] [added: If we lose the service of one or more of] our [removed: Co-Chief Executive Officers,] [added: senior executives] or [added: key employees, or] if one or more of [removed: these] [added: the senior] executives [added: or key employees] 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.

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 (“FCPA”), [added: the] U.K. Bribery Act, Brazil Clean Companies Act, India’s Prevention of Corruption Act, 1988 or similar local anti-bribery laws.

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 [added: the] U.K. markets, there can be no assurance that the CMA will agree with us if it decides to make an inquiry.

[added: Similarly, the California Consumer Privacy Act, or AB375 (“CCPA”), the California Privacy Act] (“CPRA”), the Colorado Privacy 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.

As a [removed: result] [added: result,] our foreign buyers may be subject to a variety of foreign laws and regulations, including the imposition of import duties by foreign countries.

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

For [removed: example] [added: 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.

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

[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.

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

While we maintain insurance coverage that may, subject to policy terms and conditions, cover certain aspects of these cyber risks, [added: an insurer may deny or exclude from coverage certain types of claims or] our insurance coverage may be insufficient to cover all losses and would not remedy damage to our reputation.

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

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

We have [removed: further] [added: also] enhanced our security protocols based on the investigation we conducted [added: and] in response to [removed: the security incident.][added: our prior attacks and service interruptions.]

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

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

In the event of [removed: a] [added: another] ransomware attack, we could suffer significant financial and reputational harm, regardless of whether we choose to pay the ransom amount.

Our executive officers, directors and their affiliates beneficially own, in the aggregate, more than [removed: 11%] [added: 10%] of our issued and outstanding common stock as of July 31, [removed: 2022.][added: 2023.]

Moreover, success in opening and operating facilities in new markets can be dependent

For example, in March 2023 one of our immaterial subsidiaries suffered a ransomware attack.

Although the impacted subsidiary successfully maintained its operations during this event and the attack did not affect the rest of our business, future cyber-attacks could result in material adverse impacts to our business and our consolidated results of operations.

However, any future such attempt may cause material service interruptions or otherwise adversely affect our business and financial results.

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

adverse effect on our future operating results.

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 these sections.

In the event that we were to again experience extremely adverse weather or other anomalous conditions that result in an abnormally high number of salvage vehicles in one or more of our markets, those conditions could have an adverse effect on our future operating results.

If we lose the service of one or more of our executive officers or key employees, in particular Willis J.

Johnson, our Chairman, and A.

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

time.

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

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

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

- the impact of potential negative interest rates on our cash reserves;

*This Annual Report on Form 10-K for the fiscal year ended July 31, [removed: 2022,] [added: 2023,] 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 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 [removed: the New York metropolitan area] [added: South Florida] in the wake of Hurricane [removed: Ida] [added: Ian] in the fall of [removed: 2021.][added: 2022.]

[removed: These auction and auction related services may include a combination of vehicle purchasing fees, vehicle] listing fees, and vehicle selling fees that can be based on a predetermined percentage of the vehicle sales price, tiered vehicle sales price driven fees, or at a fixed fee based on the sale of each vehicle regardless of the selling price of the vehicle; transportation fees for the cost of transporting the vehicle to or from our facility; title processing and preparation fees; vehicle storage fees; bidding fees; and vehicle loading fees.

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

The average age of cars on the road has continued to increase, growing from [removed: 9.6] [added: 9.7] years in [removed: 2002] [added: 2003] to [removed: 12.2] [added: 12.5] years in [removed: 2022.][added: 2023.]

*Other [removed: (Expense) Income:*] [added: Income (Expense):*] Other [removed: (expense)] income [added: (expense)] consists primarily of interest [added: income on Treasury bills, interest] expense on long-term debt, see Notes to Consolidated Financial Statements, *Note 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 primary factors affecting cash operating results are: (i) seasonality; (ii) market wins and losses; (iii) supplier mix; (iv) accident frequency; (v) total loss frequency; (vi) volume from our existing suppliers; (vii) commodity pricing; (viii) used car pricing; (ix) foreign currency exchange rates; (x) product mix; (xi) contract mix to the extent applicable; (xii) our capital expenditures; and (xiii) other macroeconomic [removed: factors such as COVID-19.][added: factors.]

The following tables set forth operational facilities that we have opened and are now operational from August 1, [removed: 2019] [added: 2020] through July 31, [removed: 2022:][added: 2023:]

The following table sets forth the operational facilities obtained through business acquisitions from August 1, [removed: 2019] [added: 2020] through July 31, [removed: 2022:][added: 2023:]

In addition to growth through business acquisitions, we seek to increase revenues and profitability by, among other things, (i) acquiring and developing additional vehicle storage facilities in key markets, including foreign markets; (ii) pursuing global, national, and regional vehicle seller agreements; (iii) increasing our service offerings; and (iv) expanding the application of [removed: VB3 into new markets.]

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: 2022, 2021] [added: 2023, 2022] and [removed: 2020:][added: 2021:]

| (In percentages) | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Service revenues | | | | | | [removed: 81] [added: 83] | | % | | | | [removed: 85] [added: 81] | | % | | | | [removed: 88] [added: 85] | | % |

| Vehicle sales | | | | | | [removed: 19] [added: 17] | | % | | | | [removed: 15] [added: 19] | | % | | | | [removed: 12] [added: 15] | | % |

| Yard operations | | | | | | [removed: 37] [added: 39] | | % | | | | 37 | | % | | | | [removed: 44] [added: 37] | | % |

| Cost of vehicle sales | | | | | | [removed: 17] [added: 15] | | % | | | | [removed: 13] [added: 17] | | % | | | | [removed: 10] [added: 13] | | % |

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

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

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

| Total other [removed: expense] [added: income (expense)] | | | | | | [removed: (1)] [added: 3] | | % | | | | (1) | | % | | | | (1) | | % |

| Income before income taxes | | | | | | [removed: 38] [added: 42] | | % | | | | [removed: 41] [added: 38] | | % | | | | [removed: 36] [added: 41] | | % |

| Income tax expense | | | | | | [removed: 7] [added: 8] | | % | | | | [removed: 6] [added: 7] | | % | | | | [removed: 4] [added: 6] | | % |

| Net income | | | | | | [removed: 31] [added: 34] | | % | | | | [removed: 35] [added: 31] | | % | | | | [removed: 32] [added: 35] | | % |

Comparison of Fiscal Years ended July 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020][added: 2021]

The following table presents a comparison of service revenues for fiscal [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020:][added: 2021:]

| | | | | | | | | | Year Ended July 31, | | | | | | | | | | | | | | | | | | [removed: 2022] [added: 2023] vs. [removed: 2021] [added: 2022] | | | | | | | | | | | | [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] | | | | | | | | |

| (In thousands) | | | | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | Change | | | | | | % Change | | | | | | Change | | | | | | % Change | | |

| | | | United States | | | | | | $ | [removed: 2,533,165] [added: 2,841,641] | | | | | $ | [removed: 2,017,504] [added: 2,533,165] | | | | | $ | [removed: 1,714,724] [added: 2,017,504] | | | | | $ | [removed: 515,661] [added: 308,476] | | | | | [removed: 25.6] [added: 12.2] | | % | | | | $ | [removed: 302,780] [added: 515,661] | | | | | [removed: 17.7] [added: 25.6] | | % |

| | | | International | | | | | | [removed: 319,875] [added: 356,487] | | | | | | [removed: 274,363] [added: 319,875] | | | | | | [removed: 232,416] [added: 274,363] | | | | | | [removed: 45,512] [added: 36,612] | | | | | | [removed: 16.6] [added: 11.4] | | % | | | | [removed: 41,947] [added: 45,512] | | | | | | [removed: 18.0] [added: 16.6] | | % |

| Total service revenues | | | | | | | | | $ | [removed: 2,853,040] [added: 3,198,128] | | | | | $ | [removed: 2,291,867] [added: 2,853,040] | | | | | $ | [removed: 1,947,140] [added: 2,291,867] | | | | | $ | [removed: 561,173] [added: 345,088] | | | | | [removed: 24.5] [added: 12.1] | | % | | | | $ | [removed: 344,727] [added: 561,173] | | | | | [removed: 17.7] [added: 24.5] | | % |

Service Revenues. The increase in service revenues for fiscal [removed: 2022] [added: 2023] of [removed: $561.2] [added: $345.1] million, or [removed: 24.5%] [added: 12.1%] as compared to fiscal [removed: 2021] [added: 2022] came from (i) an increase in the U.S. of [removed: $515.7] [added: $308.5] million, and (ii) an increase in International of [removed: $45.5] [added: $36.6] million.

The growth in the U.S. was driven primarily by (i) an increase in revenue per car [removed: partially driven by the scarcity of vehicles] due to [added: higher auction selling prices, which we believe is due to a change in mix of vehicles sold and restrictions within the] global supply chain [removed: disruptions] [added: for automobiles] and (ii) an increase in [removed: volume resulting from higher miles driven due to the reopening of the United States economy.][added: volume.]

[removed: Excluding] [added: The growth in International, excluding] the unfavorable impact of [removed: $8.3] [added: $22.6] million due to changes in foreign currency exchange rates, primarily from the change in the [removed: British pound and] European Union [removed: euro] [added: euro, Canadian dollar and British pound] to U.S. dollar exchange [removed: rates net] [added: rates, netting] against [added: a] favorable [removed: change in] [added: impact of the] Brazilian real to [added: the] U.S. dollar [removed: exchange, the growth in International] [added: exchange rate,] was driven primarily by an increase in revenue per car [removed: partially driven by the scarcity of vehicles] due to [removed: global supply chain disruptions] [added: a change in mix of vehicles sold] and an increase in [removed: volume resulting from higher miles driven due to the reopening of the International economies.][added: volume.]

The following table presents a comparison of vehicle sales for fiscal [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020:][added: 2021:]

| | | | United States | | | | | | $ | [removed: 411,985] [added: 348,007] | | | | | $ | [removed: 254,568] [added: 411,985] | | | | | $ | [removed: 145,962] [added: 254,568] | | | | | $ | [removed: 157,417] [added: (63,978)] | | | | | [removed: 61.8] [added: (15.5)] | | % | | | | $ | [removed: 108,606] [added: 157,417] | | | | | [removed: 74.4] [added: 61.8] | | % |

| | | | International | | | | | | [removed: 235,896] [added: 323,383] | | | | | | [removed: 146,076] [added: 235,896] | | | | | | [removed: 112,481] [added: 146,076] | | | | | | [removed: 89,820] [added: 87,487] | | | | | | [removed: 61.5] [added: 37.1] | | % | | | | [removed: 33,595] [added: 89,820] | | | | | | [removed: 29.9] [added: 61.5] | | % |

| Total vehicle sales | | | | | | | | | $ | [removed: 647,881] [added: 671,390] | | | | | $ | [removed: 400,644] [added: 647,881] | | | | | $ | [removed: 258,443] [added: 400,644] | | | | | $ | [removed: 247,237] [added: 23,509] | | | | | [removed: 61.7] [added: 3.6] | | % | | | | $ | [removed: 142,201] [added: 247,237] | | | | | [removed: 55.0] [added: 61.7] | | % |

Vehicle Sales. The increase in vehicle sales for fiscal [removed: 2022] [added: 2023] of [removed: $247.2] [added: $23.5] million, or [removed: 61.7%] [added: 3.6%] as compared to fiscal [removed: 2021] [added: 2022] came from (i) [removed: an increase] [added: a decrease] in the U.S. of [removed: $157.4] [added: $64.0] million and (ii) an increase in International of [removed: $89.8] [added: $87.5] million.

The [removed: increase] [added: decrease] in the U.S. was primarily the result of [removed: increased] [added: a decrease in] volume [removed: and] [added: as a result of a proactive approach to mitigate principal unit exposure, offset by] higher average [removed: auction selling] [added: purchase] prices, which [removed: we believe] was [added: primarily] due to [added: increased demand and] a change in the mix of vehicles [removed: sold, increased demand and reduced supply.][added: sold.]

[removed: Excluding] [added: The increase in International, excluding] an unfavorable impact of [removed: $13.9] [added: $21.5] million due to changes in foreign currency exchange rates, [added: which was driven] primarily from the unfavorable change in the [removed: British pound and] European Union [removed: euro] [added: euro, Canadian dollar and British pound] to [removed: the] U.S. dollar exchange [removed: rate, the increase in International] [added: rates,] was primarily the result of higher average auction selling [removed: prices and an increase in volume resulting from higher miles driven] [added: prices, which largely was] due to [removed: the reopening] [added: a change in mix] of [added: vehicles sold combined with increased prices resulting from] the [removed: International economies and] restrictions within the global supply chain for [removed: automobiles.][added: automobiles and an increase in volume.]

| Anchorage, Alaska | | | | | | August 2022 | | |

| Rapid City, South Dakota | | | | | | August 2022 | | |

| Kansas City, Missouri | | | | | | September 2022 | | |

| Grenada, Mississippi | | | | | | January 2023 | | |

| Windham, New England | | | | | | March 2023 | | |

| Las Vegas West, Nevada | | | | | | June 2023 | | |

| Akron, Ohio | | | | | | July 2023 | | |

| Wayland, Michigan | | | | | | July 2023 | | |

| Brasília, Brazil | | | | | | Brazil | | | | | | September 2022 | | |

| Büdingen, Hesse | | | | | | Germany | | | | | | January 2023 | | |

| Ottawa, Ontario | | | | | | Canada | | | | | | February 2023 | | |

VB3 into new markets.

| | | | | | | | | | Year Ended July 31, | | | | | | | | | | | | | | | | | | 2023 vs. 2022 | | | | | | | | | | | | 2022 vs. 2021 | | | | | | | | |

| (In thousands) | | | | | | | | | 2023 | | | | | | 2022 | | | | | | 2021 | | | | | | Change | | | | | | % Change | | | | | | Change | | | | | | % Change | | |

| | | | | | | | | | Year Ended July 31, | | | | | | | | | | | | | | | | | | 2023 vs. 2022 | | | | | | | | | | | | 2022 vs. 2021 | | | | | | | | |

| (In thousands) | | | | | | | | | 2023 | | | | | | 2022 | | | | | | 2021 | | | | | | Change | | | | | | % Change | | | | | | Change | | | | | | % Change | | |

| | | | | | | | | | Year Ended July 31, | | | | | | | | | | | | | | | | | | 2023 vs. 2022 | | | | | | | | | | | | 2022 vs. 2021 | | | | | | | | |

| (In thousands) | | | | | | | | | 2023 | | | | | | 2022 | | | | | | 2021 | | | | | | Change | | | | | | % Change | | | | | | Change | | | | | | % Change | | |

| | | | | | | Year Ended July 31, | | | | | | | | | | | | | | | | | | 2023 vs. 2022 | | | | | | | | | | | | 2022 vs. 2021 | | | | | | | | |

| (In thousands) | | | | | | 2023 | | | | | | 2022 | | | | | | 2021 | | | | | | Change | | | | | | % Change | | | | | | Change | | | | | | % Change | | |

Other Expenses. The increase in total other income for fiscal 2023 of $101.8 million, or 299.0% as compared to fiscal 2022 was primarily due to higher interest income earned from Treasury Bills, realized and unrealized foreign currency gains, net against a decrease in interest expense and decrease of extinguishment of debt offset by losses from equity method investments.

| (In thousands) | | | | | | 2023 | | | | | | 2022 | | | | | | 2021 | | | | | | Change | | | | | | % Change | | | | | | Change | | | | | | % Change | | |

| | | | | | | Year Ended July 31, | | | | | | | | | | | | | | | | | | 2023 vs. 2022 | | | | | | | | | | | | 2022 vs. 2021 | | | | | | | | |

| (In thousands) | | | | | | 2023 | | | | | | 2022 | | | | | | 2021 | | | | | | Change | | | | | | % Change | | | | | | Change | | | | | | % Change | | |

Our primary source of cash generated by operations

The change in operating assets and liabilities was primarily the result of an increase in funds received in income tax receivable of $63.1 million, inventory of $37.4 million, deferred revenue of $6.5 million and income tax payable of $21.8 million, partially offset by accounts receivable of $25.5 million, accounts payable of $18.3 million, and vehicle pooling costs of $7.4 million.

| FY 2021—Q4 | | | | | | 360,000 | | | | | | 4.43 | | | | | | 49,464 | | | | | | 117,396 | | | | | | 193,140 | | | | | | 32.25 | | | | | | 3,786 | | |

| FY 2023 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

These auction and auction related services may include a combination of vehicle purchasing fees, vehicle

| (In thousands) | | | | | | | | | 2023 | | | | | | 2022 | | | | | | 2021 | | |

Income Taxes

calculation of tax provisions and the resultant tax liabilities.

Deferred income tax assets and liabilities are recognized based on differences between the financial reporting and income tax basis of assets and liabilities and are measured using the tax rates and laws enacted at the time of such determination.

We regularly review our deferred tax assets for recoverability and a valuation allowance is provided when it is more likely than not that some portion of a deferred tax asset will not be realized.

In assessing the need for a valuation allowance, we make estimates and assumptions regarding projected future taxable income, the reversal of deferred tax liabilities and implementation of tax planning strategies.

Changes in our assumptions could cause an increase or decrease to the valuation allowance resulting in an increase or decrease in our effective tax rate.

We recognize liabilities when we determine a tax position is not more likely than not to be sustained upon examination by the tax authorities.

We recognize penalties and interest accrued related to income taxes as a component of the provision for income taxes.

We recognize liabilities, if any, related to global low-taxed intangible income (“GILTI”) in the year in which the liability arises and not as a deferred tax liability.

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

Beginning in March 2020, our business and operations began to experience the impact of the worldwide COVID-19 pandemic.

In materially all of our jurisdictions, we have been deemed by local authorities an essential business because our operations ensure the removal of vehicles from repair shops, impound yards, and streets and highways, enabling the critical function of road infrastructure.

As a result, we have continued to operate our facilities as well as our online-only auctions, while following appropriate health and safety protocols to ensure safe working conditions for our employees as well as for our sellers, buyers, and other business partners with whom we come in contact.

From a financial perspective, our operating results were adversely affected by lower processed vehicle volume, but these adverse effects were more than offset by corresponding increases in vehicle average sales prices.

Although we initially saw substantial declines in vehicle assignments following the onset of the COVID-19 pandemic, which we attribute principally to reduced accident volume as miles driven dramatically declined in response to shelter-in-place orders across the globe, we have generally seen vehicle assignment volumes steadily recovering; however additional subsequent shelter-in-place orders have occasionally stalled or regressed the assignment volume commensurate with the severity and duration of such orders.

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.

We adjusted, but did not make material modifications to, our operating expenses to be able to continue providing employment for our employees, service to our sellers, and process incoming vehicles for sale in future quarters.

The pandemic may have an adverse effect on our future revenues, with the magnitude and timing of these effects dependent upon the extent and duration of suspended economic activity across our markets.

We believe that the longer-term impact on our business will depend on 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, and the potential availability, among other things, of vaccines or treatments, none of which we can predict.

For a further discussion of risks to our business and operating results arising from the pandemic, please see the section of this Annual Report on Form 10-K captioned “Risk Factors.”

| Fort Wayne, Indiana | | | | | | February 2020 | | |

| Concord, North Carolina | | | | | | March 2020 | | |

| Salt Lake City, Utah | | | | | | May 2020 | | |

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

| Niederlehme, Brandenburg (Berlin) | | | | | | Germany | | | | | | November 2019 | | |

| Pilsting, Bavaria (Munich) | | | | | | Germany | | | | | | December 2019 | | |

| São Paulo, São Paulo | | | | | | Brazil | | | | | | May 2020 | | |

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.

During the

The change in operating assets and liabilities was primarily the result of an increase in funds received in accounts receivable of $29.8 million and a increase in cash generated from the sale of inventory of $13.8 million, partially offset by net income taxes receivable of $36.6 million primarily related to excess tax benefits from stock option exercises and an investment in solar investment tax credit, and decreases in funds used to pay accounts payable of $8.3 million.

Capitalized software development costs were $12.0 million, $13.6 million, and $13.2 million for fiscal 2022, 2021 and 2020, respectively.

If, at any time it is determined that capitalized software provides a reduced economic benefit, the unamortized portion of the capitalized development costs will be impaired.

See Notes to Consolidated Financial Statements, *Capitalized Software Costs* in *Note 1 — Summary of Significant Accounting Policies.*

In fiscal 2020, our Chief Executive Officer (now Co-CEO) exercised all of his vested stock options through a cashless exercise.

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

| FY 2021—Q4 | | | | | | 90,000 | | | | | | 17.73 | | | | | | 12,366 | | | | | | 29,349 | | | | | | 48,285 | | | | | | 129.01 | | | | | | 3,786 | | |

Uncertain Tax Positions

In the ordinary course of global business, there may be transactions and calculations where the ultimate tax outcome is uncertain.

In addition, our actual and forecasted earnings are subject to change due to economic, political and other conditions, such as new COVID-19 variants.

Our effective tax rates could be affected by numerous factors such as changes in our business operations; acquisitions; investments; entry into new businesses and geographies; intercompany transactions; the relative amount of our foreign earnings, including earnings being lower than anticipated in jurisdictions where we have lower statutory rates and higher than anticipated in jurisdictions where we have higher statutory rates; losses incurred in jurisdictions for which we are not able to realize related tax benefits; the applicability of special tax regimes; changes in foreign currency exchange rates; changes in our stock price; changes to our forecasts of income and loss and the mix of jurisdictions to which they relate; changes in our deferred tax assets and liabilities and their valuation; changes in the laws, regulations, administrative practices, principles, and interpretations related to tax, including changes to the global tax framework; competition; and other laws and accounting rules in various jurisdictions.

In addition, a number of countries have enacted or are actively pursuing changes to their tax laws applicable to corporate multinationals.

Development in an audit, investigation, or other tax controversy could have a material effect on our operating results or cash flows in the period or periods for which that development occurs, as well as for prior and subsequent periods.

We recognize potential liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on an estimate of the ultimate resolution of whether, and the extent to which, additional taxes will be due.

Although we believe the estimates are reasonable, no assurance can be given

We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

To achieve this objective in the current uncertain global financial markets, all cash and cash equivalents were held in bank deposits, U.S. Treasury Bills, and money market funds as of July 31, [removed: 2022.][added: 2023.]

As of July 31, [removed: 2022,] [added: 2023,] 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: 2022,] [added: 2023,] 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 [removed: zero] [added: $11.0 million] as of July 31, [removed: 2022.][added: 2023.]

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: $12.0] [added: $11.5] million for fiscal [removed: 2022.][added: 2023.]

At July 31, [removed: 2022,] [added: 2023,] the cumulative effect of foreign exchange rate fluctuations on our consolidated financial position was a net translation loss of [removed: $169.4] [added: $141.0] million.

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

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

[removed: And finally, some of our vehicles are returned to their raw material] 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 [removed: the New York metropolitan area] [added: South Florida] in the wake of Hurricane [removed: Ida] [added: Ian] in the fall of [removed: 2021.][added: 2022.]

For fiscal [removed: 2022,] [added: 2023,] sales of U.S. vehicles, on a unit basis, to members registered outside the state where the vehicle was located accounted for [removed: 66.1%] [added: 66.2%] of total vehicles sold; of which [removed: 29.7%] [added: 32.2%] of vehicles were sold to out of state members within the U.S. and [removed: 36.4%] [added: 34.0%] were sold to International members, based on the IP address utilized during the auction process.

For fiscal [removed: 2022,] [added: 2023,] our revenues were [removed: $3.5] [added: $3.9] billion and our operating income was [removed: $1.4] [added: $1.5] billion.

In fiscal [removed: 2020,] [added: 2023,] we opened [removed: two] [added: one] new operational [removed: facilities] [added: facility] in [added: Brazil, one new operational facility in] Germany, one new operational facility in [removed: Brazil,] [added: Canada,] and [removed: three] [added: eight] new operational facilities in the U.S.

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. [removed: As for strategic acquisitions of complementary businesses, we] [added: We also] acquired a parts recycler in the U.K. that has four operating facilities.

Our revenues for the year ended July 31, [removed: 2022] [added: 2023] were distributed as follows: U.S. [removed: 84.1%] [added: 82.4%] and International [removed: 15.9%.][added: 17.6%.]

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: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] are presented in the tables in Note *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. [removed: and Canada,] [added: segment,] we perform transportation services through a combination of third-party vehicle transport companies and our [removed: fleet of over 350 vehicles.][added: fleet.]

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

No single customer accounted for more than 10% of our consolidated revenues for fiscal [added: 2023,] 2022, [removed: 2021,] or [removed: 2020] [added: 2021] and our business does not depend on any particular customer to remain profitable.

We obtained [added: 83%,] 80%, [removed: 77%,] and [removed: 81%] [added: 77%] of the total number of vehicles processed during fiscal [added: 2023,] 2022, [removed: 2021,] and [removed: 2020,] [added: 2021,] respectively, from insurance company sellers.

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

LKQ, in addition to trade groups of dismantlers such as the American Recycling [removed: Association and the] [added: Association,] United Recyclers [removed: Group,] [added: Group] LLC, [added: other regional, and local dismantlers] may purchase salvage vehicles directly from insurance companies, thereby bypassing vehicle remarketing companies entirely.

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 [added: auction process.]

[removed: The data centers are] located in areas generally considered to be free of frequent weather-related disasters and earthquakes.

As of July 31, [removed: 2022,] [added: 2023,] we had approximately [removed: 9,500] [added: 10,200] full and part-time employees, of which approximately [removed: 70%] [added: 68%] were located in the U.S. and [removed: 30%] [added: 32%] located within our International segment.

Of the approximately [removed: 6,600] [added: 6,900] full and part-time employees based in the U.S, approximately [removed: 48%] [added: 46%] of them identify as [removed: female.][added: male, 42% as female, and 12% are undisclosed.]

As of July 31, [removed: 2022,] [added: 2023,] our U.S. workforce consisted of approximately [removed: 50%] [added: 40%] individuals identifying as White, [removed: 21%] [added: 17%] as Hispanic or Latino, [removed: 15%] [added: 12%] as Black or African American, [removed: 6%] [added: 4%] as Asian, [removed: 3%] [added: 2%] as two or more races and [removed: 5%] [added: 25%] as not disclosed.

Additionally, of the approximately [removed: 711] [added: 400] employees serving [removed: in the U.S.] [added: Internationally] in management roles and above, up to and including executives, [removed: 67%] [added: 65%] identify as [removed: male and] [added: male,] 33% identify as [removed: female.][added: female and 2% identify as not disclosed.]

Of the approximately [removed: 2,800] [added: 3,300] employees based within the International segment, approximately [removed: 34%] [added: 63%] of them identify as [removed: female.][added: male, 36% as female, and 1% are undisclosed.]

As of July 31, [removed: 2022,] [added: 2023,] our International workforce consisted of approximately [removed: 58%] [added: 53%] individuals identifying as White, [removed: 32%] [added: 34%] as Asian, 4% as Black or African, [removed: 2%] [added: 3%] as Hispanic or Latino, 1% as [removed: Other, and 3%] [added: two or more races, 5%] as [added: Other or as] Not Disclosed.

Additionally, of the approximately [removed: 273] [added: 1,400] employees serving [removed: Internationally] in [added: the U.S. in] management roles and above, up to and including executives, [removed: 71%] [added: 60%] identify as [removed: male and 29%] [added: male, 37%] identify as [removed: female.][added: female, and 3% choose not to disclose.]

Our executive compensation structure aligns incentives with our [added: company’s] strategic growth objectives, including long-term share price appreciation.

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: 2022] [added: 2023] Proxy Statement.

[removed: We have designed our] [added: Copart’s benefit] plans [added: are designed] around [removed: the following four pillars:] Health, Financial Security, [removed: Life,] [added: Life] and Education.

[removed: Our Health benefits include: multiple] [added: These include a variety of] medical plans, dental and vision coverage, and wellness programs [removed: combined with] [added: in addition to] external support networks.

And finally, some of our vehicles are returned to their raw material

Our international network and transportation capabilities provide cost and time savings to our vehicle sellers throughout Europe, Brazil and Middle east market.

The largest national or regional vehicle auctioneers in the U.S., including Ritchie Bros.

The data centers are

At Copart, our Human Resources (HR) function known as People and Culture, plays a vital role in creating a supportive and productive work environment for all employees.

Our People and Culture department is dedicated to fostering a culture of growth, collaboration, and employee well-being with a “people first” mindset.

We understand that our people are our most valuable asset, and our People and Culture team is committed to providing comprehensive support across various aspects of the employee lifecycle.

We identify and attract top talent that aligns with our values and objectives.

We carefully manage the recruitment process, from drafting job descriptions and posting vacancies to conducting interviews and making hiring decisions.

We leverage online search tools, recruiting firms, employee referral programs and university recruiting.

We offer a combination of competitive salaries, equity incentives and bonus plans.

Once a new team member joins us, our People and Culture department works to provide for a seamless onboarding process, helping them integrate into our culture and hit the ground running.

The People and Culture team oversees performance management processes that help employees understand their goals and expectations.

We facilitate regular performance discussions, feedback sessions, and goal setting to ensure alignment with the company's objectives, driving a clear path to advancement.

We prioritize the well-being and satisfaction of our employees.

We organize various engagement initiatives, including team-building events, wellness programs, and recognition efforts to celebrate achievements and milestones.

We are dedicated to maintaining a positive and inclusive work environment where every employee feels valued and supported.

We provide comprehensive, generous benefits and compensation packages, ensuring that they remain competitive within the industry.

We address inquiries about benefits, such as healthcare, retirement plans, and other rewards, to guarantee that our employees have access to the resources they need for a fulfilling work-life balance.

Copart pays a sizable portion of the benefit premiums related to healthcare.

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

again reducing new and aftermarket parts manufacturing.

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

In Germany, we perform transportation services through our fleet of over 45 vehicles and third-party vehicle transport companies.

auction process.

We intend to continue development of this system and implement it in certain additional locations in the future.

Our human capital objective is to attract, retain, develop, and motivate talented employees.

We use online search tools, specialized recruiting firms, employee referral programs, job postings in various media platforms, and university recruiting to cast a wide and varied net for talented candidates.

In order to promote the success of our company and increase stockholder value, among other elements in the total of mix of employee compensation, we offer a combination of competitive base salary, equity incentives, and bonus plans that are designed to motivate and reward personnel.

We value the health and well-being of our employees, and provide generous benefit options to best suit our employees and their families.

Within our U.S. segment, we pay a significant portion of the benefit premiums related to our health benefits.

In many cases, employees are offered certain benefits at no charge to them or their families.

Our U.S. benefit platform is built from a whole person model, meaning we offer options that assist in keeping the whole person healthy.

Employees and their families can select from a wide range of benefits from traditional health and dental

insurance to financial wellness and estate planning.

The Financial Security benefits program includes: 401K plan with employer match options; an Employee Stock Purchase Program (“ESPP”) that offers employees the option to purchase Copart shares at a discounted price and become stockholders of the Company; access to both health and dependent care flexible spending accounts; and an overall financial wellness platform.

Our Life program provides a range of insurance products, employee assistance programs as well as identity protection and legal services.

Finally, our Education program includes tuition support for employees and scholarship opportunities for employees’ children.

This is combined with our global training and development program that focuses on leadership development, as well as training in various topics including diversity, anti-harassment, ethics, and regulatory compliance.

Within our International segment, we also offer a variety of benefit plans similar to the U.S. segment, albeit adjusted to reflect local market conditions.

For a discussion of Legal Proceedings that affect us, refer to the Notes to Consolidated Financial Statements, *[Note [removed: 1](#i988317c7021a4a8fa66f2208a2958f7e_226)[5](#i988317c7021a4a8fa66f2208a2958f7e_226) [—] [added: 15 —] Commitments and [removed: Contingencies](#i988317c7021a4a8fa66f2208a2958f7e_226)*] [added: Contingencies](#ib7e7440f02e4426d8e51e9fe6f9a4cef_232)*] included in [Part IV, Item [removed: 16](#i988317c7021a4a8fa66f2208a2958f7e_226)] [added: 16](#ib7e7440f02e4426d8e51e9fe6f9a4cef_232)] of this report.

For the fiscal year ended July 31, [removed: 2022][added: 2023]

The aggregate market value of the voting and non-voting Common Stock held by non-affiliates of the registrant as of January 31, [removed: 2022] [added: 2023] (the last business day of the registrant’s most recently completed second fiscal quarter) was [removed: $27,584,161,726] [added: $28,538,154,732] based upon the closing sales price reported for such date on the NASDAQ Global Select Market.

As of September [removed: 26, 2022, 238,056,756] [added: 27, 2023, 957,355,633] shares of the registrant’s common stock were outstanding.

Portions of our definitive Proxy Statement for the [removed: 2022] [added: 2023] 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: 2022,] [added: 2023,] have been incorporated by reference in Part III hereof.

| Item 1 | | | | | | [removed: [Business](#i988317c7021a4a8fa66f2208a2958f7e_19)] [added: [Business](#ib7e7440f02e4426d8e51e9fe6f9a4cef_19)] | | | [removed: [1](#i988317c7021a4a8fa66f2208a2958f7e_19)] [added: [1](#ib7e7440f02e4426d8e51e9fe6f9a4cef_19)] | | |

| | | | | | | [Industry [removed: Overview](#i988317c7021a4a8fa66f2208a2958f7e_22)] [added: Overview](#ib7e7440f02e4426d8e51e9fe6f9a4cef_22)] | | | [removed: [3](#i988317c7021a4a8fa66f2208a2958f7e_22)] [added: [3](#ib7e7440f02e4426d8e51e9fe6f9a4cef_22)] | | |

| | | | | | | [Operating and Growth [removed: Strategy](#i988317c7021a4a8fa66f2208a2958f7e_25)] [added: Strategy](#ib7e7440f02e4426d8e51e9fe6f9a4cef_25)] | | | [removed: [5](#i988317c7021a4a8fa66f2208a2958f7e_25)] [added: [5](#ib7e7440f02e4426d8e51e9fe6f9a4cef_25)] | | |

| | | | | | | [Our Competitive [removed: Advantages](#i988317c7021a4a8fa66f2208a2958f7e_28)] [added: Advantages](#ib7e7440f02e4426d8e51e9fe6f9a4cef_28)] | | | [removed: [5](#i988317c7021a4a8fa66f2208a2958f7e_28)] [added: [5](#ib7e7440f02e4426d8e51e9fe6f9a4cef_28)] | | |

| | | | | | | [Our Business [removed: Segments](#i988317c7021a4a8fa66f2208a2958f7e_31)] [added: Segments](#ib7e7440f02e4426d8e51e9fe6f9a4cef_31)] | | | [removed: [7](#i988317c7021a4a8fa66f2208a2958f7e_31)] [added: [7](#ib7e7440f02e4426d8e51e9fe6f9a4cef_31)] | | |

| | | | | | | [Our Service [removed: Offerings](#i988317c7021a4a8fa66f2208a2958f7e_34)] [added: Offerings](#ib7e7440f02e4426d8e51e9fe6f9a4cef_34)] | | | [removed: [7](#i988317c7021a4a8fa66f2208a2958f7e_34)] [added: [7](#ib7e7440f02e4426d8e51e9fe6f9a4cef_34)] | | |

| | | | | | | [Management Information [removed: Systems](#i988317c7021a4a8fa66f2208a2958f7e_46)] [added: Systems](#ib7e7440f02e4426d8e51e9fe6f9a4cef_46)] | | | [removed: [11](#i988317c7021a4a8fa66f2208a2958f7e_46)] [added: [11](#ib7e7440f02e4426d8e51e9fe6f9a4cef_46)] | | |

| | | | | | | [Employees and Human [removed: Capital](#i988317c7021a4a8fa66f2208a2958f7e_49)] [added: Capital](#ib7e7440f02e4426d8e51e9fe6f9a4cef_49)] | | | [removed: [12](#i988317c7021a4a8fa66f2208a2958f7e_49)] [added: [12](#ib7e7440f02e4426d8e51e9fe6f9a4cef_49)] | | |

| | | | | | | [Environmental [removed: Matters](#i988317c7021a4a8fa66f2208a2958f7e_52)] [added: Matters](#ib7e7440f02e4426d8e51e9fe6f9a4cef_52)] | | | [removed: [13](#i988317c7021a4a8fa66f2208a2958f7e_52)] [added: [13](#ib7e7440f02e4426d8e51e9fe6f9a4cef_52)] | | |

| | | | | | | [Governmental [removed: Regulations](#i988317c7021a4a8fa66f2208a2958f7e_55)] [added: Regulations](#ib7e7440f02e4426d8e51e9fe6f9a4cef_55)] | | | [removed: [13](#i988317c7021a4a8fa66f2208a2958f7e_55)] [added: [13](#ib7e7440f02e4426d8e51e9fe6f9a4cef_55)] | | |

| | | | | | | [Intellectual Property and Proprietary [removed: Rights](#i988317c7021a4a8fa66f2208a2958f7e_58)] [added: Rights](#ib7e7440f02e4426d8e51e9fe6f9a4cef_58)] | | | [removed: [14](#i988317c7021a4a8fa66f2208a2958f7e_58)] [added: [13](#ib7e7440f02e4426d8e51e9fe6f9a4cef_58)] | | |

| Item 1A. | | | | | | [Risk [removed: Factors](#i988317c7021a4a8fa66f2208a2958f7e_64)] [added: Factors](#ib7e7440f02e4426d8e51e9fe6f9a4cef_64)] | | | [removed: [14](#i988317c7021a4a8fa66f2208a2958f7e_64)] [added: [14](#ib7e7440f02e4426d8e51e9fe6f9a4cef_64)] | | |

| Item 1B. | | | | | | [Unresolved Staff [removed: Comments](#i988317c7021a4a8fa66f2208a2958f7e_67)] [added: Comments](#ib7e7440f02e4426d8e51e9fe6f9a4cef_67)] | | | [removed: [27](#i988317c7021a4a8fa66f2208a2958f7e_67)] [added: [27](#ib7e7440f02e4426d8e51e9fe6f9a4cef_67)] | | |

| Item 2. | | | | | | [removed: [Properties](#i988317c7021a4a8fa66f2208a2958f7e_70)] [added: [Properties](#ib7e7440f02e4426d8e51e9fe6f9a4cef_70)] | | | [removed: [27](#i988317c7021a4a8fa66f2208a2958f7e_70)] [added: [27](#ib7e7440f02e4426d8e51e9fe6f9a4cef_70)] | | |

| Item 3. | | | | | | [Legal [removed: Proceedings](#i988317c7021a4a8fa66f2208a2958f7e_73)] [added: Proceedings](#ib7e7440f02e4426d8e51e9fe6f9a4cef_73)] | | | [removed: [27](#i988317c7021a4a8fa66f2208a2958f7e_73)] [added: [27](#ib7e7440f02e4426d8e51e9fe6f9a4cef_73)] | | |

| Item 4. | | | | | | [Mine Safety [removed: Disclosure](#i988317c7021a4a8fa66f2208a2958f7e_76)] [added: Disclosure](#ib7e7440f02e4426d8e51e9fe6f9a4cef_76)] | | | [removed: [27](#i988317c7021a4a8fa66f2208a2958f7e_76)] [added: [27](#ib7e7440f02e4426d8e51e9fe6f9a4cef_76)] | | |

| Item 5. | | | | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i988317c7021a4a8fa66f2208a2958f7e_82)] [added: Securities](#ib7e7440f02e4426d8e51e9fe6f9a4cef_82)] | | | [removed: [28](#i988317c7021a4a8fa66f2208a2958f7e_82)] [added: [28](#ib7e7440f02e4426d8e51e9fe6f9a4cef_82)] | | |

| Item 6. | | | | | | [removed: [Reserved](#i988317c7021a4a8fa66f2208a2958f7e_85)] [added: [Reserved](#ib7e7440f02e4426d8e51e9fe6f9a4cef_85)] | | | [removed: [29](#i988317c7021a4a8fa66f2208a2958f7e_85)] [added: [29](#ib7e7440f02e4426d8e51e9fe6f9a4cef_85)] | | |

| Item 7. | | | | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i988317c7021a4a8fa66f2208a2958f7e_88)] [added: Operations](#ib7e7440f02e4426d8e51e9fe6f9a4cef_88)] | | | [removed: [30](#i988317c7021a4a8fa66f2208a2958f7e_88)] [added: [30](#ib7e7440f02e4426d8e51e9fe6f9a4cef_88)] | | |

| Item 7A. | | | | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i988317c7021a4a8fa66f2208a2958f7e_106)] [added: Risk](#ib7e7440f02e4426d8e51e9fe6f9a4cef_106)] | | | [removed: [42](#i988317c7021a4a8fa66f2208a2958f7e_106)] [added: [42](#ib7e7440f02e4426d8e51e9fe6f9a4cef_106)] | | |

| Item 8. | | | | | | [Financial Statements and Supplementary [removed: Data](#i988317c7021a4a8fa66f2208a2958f7e_109)] [added: Data](#ib7e7440f02e4426d8e51e9fe6f9a4cef_109)] | | | [removed: [43](#i988317c7021a4a8fa66f2208a2958f7e_109)] [added: [43](#ib7e7440f02e4426d8e51e9fe6f9a4cef_109)] | | |

| Item 9. | | | | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i988317c7021a4a8fa66f2208a2958f7e_112)] [added: Disclosure](#ib7e7440f02e4426d8e51e9fe6f9a4cef_112)] | | | [removed: [43](#i988317c7021a4a8fa66f2208a2958f7e_112)] [added: [43](#ib7e7440f02e4426d8e51e9fe6f9a4cef_112)] | | |

| Item 9A. | | | | | | [Controls and [removed: Procedures](#i988317c7021a4a8fa66f2208a2958f7e_115)] [added: Procedures](#ib7e7440f02e4426d8e51e9fe6f9a4cef_115)] | | | [removed: [43](#i988317c7021a4a8fa66f2208a2958f7e_115)] [added: [43](#ib7e7440f02e4426d8e51e9fe6f9a4cef_115)] | | |

| Item 9B. | | | | | | [Other [removed: Information](#i988317c7021a4a8fa66f2208a2958f7e_118)] [added: Information](#ib7e7440f02e4426d8e51e9fe6f9a4cef_118)] | | | [removed: [46](#i988317c7021a4a8fa66f2208a2958f7e_118)] [added: [46](#ib7e7440f02e4426d8e51e9fe6f9a4cef_118)] | | |

| [PART [removed: III](#i988317c7021a4a8fa66f2208a2958f7e_121)] [added: III](#ib7e7440f02e4426d8e51e9fe6f9a4cef_121)] | | | | | | | | | [removed: [47](#i988317c7021a4a8fa66f2208a2958f7e_121)] [added: [47](#ib7e7440f02e4426d8e51e9fe6f9a4cef_121)] | | |

| Item 10. | | | | | | [Directors, Executive Officers and Corporate [removed: Governance](#i988317c7021a4a8fa66f2208a2958f7e_124)] [added: Governance](#ib7e7440f02e4426d8e51e9fe6f9a4cef_124)] | | | [removed: [47](#i988317c7021a4a8fa66f2208a2958f7e_124)] [added: [47](#ib7e7440f02e4426d8e51e9fe6f9a4cef_124)] | | |

| Item 11. | | | | | | [Executive [removed: Compensation](#i988317c7021a4a8fa66f2208a2958f7e_127)] [added: Compensation](#ib7e7440f02e4426d8e51e9fe6f9a4cef_127)] | | | [removed: [47](#i988317c7021a4a8fa66f2208a2958f7e_127)] [added: [47](#ib7e7440f02e4426d8e51e9fe6f9a4cef_127)] | | |

| Item 12. | | | | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i988317c7021a4a8fa66f2208a2958f7e_130)] [added: Matters](#ib7e7440f02e4426d8e51e9fe6f9a4cef_130)] | | | [removed: [47](#i988317c7021a4a8fa66f2208a2958f7e_130)] [added: [47](#ib7e7440f02e4426d8e51e9fe6f9a4cef_130)] | | |

| Item 13. | | | | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i988317c7021a4a8fa66f2208a2958f7e_133)] [added: Independence](#ib7e7440f02e4426d8e51e9fe6f9a4cef_133)] | | | [removed: [47](#i988317c7021a4a8fa66f2208a2958f7e_133)] [added: [47](#ib7e7440f02e4426d8e51e9fe6f9a4cef_133)] | | |

| Item 14. | | | | | | [Principal Accounting Fees and [removed: Services](#i988317c7021a4a8fa66f2208a2958f7e_136)] [added: Services](#ib7e7440f02e4426d8e51e9fe6f9a4cef_136)] | | | [removed: [47](#i988317c7021a4a8fa66f2208a2958f7e_136)] [added: [47](#ib7e7440f02e4426d8e51e9fe6f9a4cef_136)] | | |

| [PART [removed: IV](#i988317c7021a4a8fa66f2208a2958f7e_139)] [added: IV](#ib7e7440f02e4426d8e51e9fe6f9a4cef_139)] | | | | | | | | | [removed: [48](#i988317c7021a4a8fa66f2208a2958f7e_139)] [added: [48](#ib7e7440f02e4426d8e51e9fe6f9a4cef_139)] | | |

| Item 15. | | | | | | [Exhibits, Financial Statement [removed: Schedules](#i988317c7021a4a8fa66f2208a2958f7e_142)] [added: Schedules](#ib7e7440f02e4426d8e51e9fe6f9a4cef_142)] | | | [removed: [48](#i988317c7021a4a8fa66f2208a2958f7e_142)] [added: [48](#ib7e7440f02e4426d8e51e9fe6f9a4cef_142)] | | |

| Item 16. | | | | | | [Form 10-K [removed: Summary](#i988317c7021a4a8fa66f2208a2958f7e_145)] [added: Summary](#ib7e7440f02e4426d8e51e9fe6f9a4cef_145)] | | | [removed: [48](#i988317c7021a4a8fa66f2208a2958f7e_145)] [added: [48](#ib7e7440f02e4426d8e51e9fe6f9a4cef_145)] | | |

| [removed: [Signatures](#i988317c7021a4a8fa66f2208a2958f7e_151)] [added: [Signatures](#ib7e7440f02e4426d8e51e9fe6f9a4cef_151)] | | | | | | | | | [removed: [51](#i988317c7021a4a8fa66f2208a2958f7e_151)] [added: [51](#ib7e7440f02e4426d8e51e9fe6f9a4cef_151)] | | |

*This Annual Report on Form 10-K for the fiscal year ended July 31, [removed: 2022,] [added: 2023,] 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 [removed: Act”), including forward-looking statements concerning the potential impact of the COVID-19 pandemic on our business, operations, and operating results.][added: Act”).]

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

For the Fiscal Year Ended July 31, 2023

| [PART I](#ib7e7440f02e4426d8e51e9fe6f9a4cef_13) | | | | | | | | | [1](#ib7e7440f02e4426d8e51e9fe6f9a4cef_13) | | |

| | | | | | | [Sales](#ib7e7440f02e4426d8e51e9fe6f9a4cef_37) | | | [10](#ib7e7440f02e4426d8e51e9fe6f9a4cef_37) | | |

| | | | | | | [Members](#ib7e7440f02e4426d8e51e9fe6f9a4cef_40) | | | [11](#ib7e7440f02e4426d8e51e9fe6f9a4cef_40) | | |

| | | | | | | [Competition](#ib7e7440f02e4426d8e51e9fe6f9a4cef_43) | | | [11](#ib7e7440f02e4426d8e51e9fe6f9a4cef_43) | | |

| | | | | | | [Seasonality](#ib7e7440f02e4426d8e51e9fe6f9a4cef_61) | | | [14](#ib7e7440f02e4426d8e51e9fe6f9a4cef_61) | | |

| [PART II](#ib7e7440f02e4426d8e51e9fe6f9a4cef_79) | | | | | | | | | [28](#ib7e7440f02e4426d8e51e9fe6f9a4cef_79) | | |

or

| [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)

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

As of July 31, [removed: 2022,] [added: 2023,] there were [removed: 238,040,974] [added: 957,344,162] shares of our common stock issued and outstanding.

As of September [removed: 26, 2022,] [added: 27, 2023,] we had [removed: 765] [added: 751] holders of record of our common stock.

On July 31, [removed: 2022,] [added: 2023,] the last reported sale price of our common stock on the NASDAQ Global Select Market was [removed: $128.10] [added: $44.19] per share.

On September 22, 2011, our Board of Directors approved an [removed: 80] [added: 320] million share increase in the stock repurchase program, bringing the total current authorization to [removed: 196] [added: 784] million shares.

For fiscal [added: 2023,] 2022, [removed: 2021,] and [removed: 2020,] [added: 2021,] we did not repurchase any shares of our common stock under the program.

As of July 31, [removed: 2022,] [added: 2023,] the total number of shares repurchased under the program was [removed: 114,549,198,] [added: 458,196,792,] and [removed: 81,450,802] [added: subject to applicable limitations under Delaware law, 325,803,208] shares were available for repurchase under our program.

In fiscal [removed: 2022,] [added: 2022 and 2023,] no employees exercised stock options through a cashless exercise.

We remitted $0.0 [removed: million, $3.8 million, and $101.3] million during the years ended July 31, [added: 2023 and] 2022, [removed: 2021] and [removed: 2020, respectively,] [added: $3.8 million during the year ended July 31, 2021] to the proper taxing authorities in satisfaction of the employees’ statutory withholding requirements.

There were no issuances of unregistered securities in the year ended July 31, [removed: 2022.][added: 2023.]

The following is a line graph comparing the cumulative total return to stockholders of our common stock at July 31, [removed: 2022] [added: 2023] since July 31, [removed: 2017,] [added: 2018,] 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: 2017] [added: 2018] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2022] [added: 2023] | | |

* Assumes that $100.00 was invested on July 31, [removed: 2017] [added: 2018] 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: 2022] [added: 2023] Standard & Poor's, a division of S&P Global.

| FY 2021—Q4 | | | | | | 360,000 | | | | | | 4.43 | | | | | | 49,464 | | | | | | 117,396 | | | | | | 193,140 | | | | | | 32.25 | | | | | | 3,786 | | |

| FY 2023 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

| Copart, Inc. | | | | | | $ | 100.00 | | | | | $ | 135.09 | | | | | $ | 162.48 | | | | | $ | 256.14 | | | | | $ | 223.21 | | | | | $ | 308.03 | |

| NASDAQ Composite | | | | | | $ | 100.00 | | | | | $ | 107.74 | | | | | $ | 143.06 | | | | | $ | 196.76 | | | | | $ | 167.33 | | | | | $ | 187.82 | |

| NASDAQ Industrial | | | | | | $ | 100.00 | | | | | $ | 100.97 | | | | | $ | 136.47 | | | | | $ | 170.84 | | | | | $ | 139.66 | | | | | $ | 145.91 | |

| S&P 500 Index | | | | | | $ | 100.00 | | | | | $ | 107.99 | | | | | $ | 120.90 | | | | | $ | 164.96 | | | | | $ | 157.31 | | | | | $ | 177.78 | |

In fiscal 2020, our Chief Executive officer now Co-CEO exercised all of his vested stock options through a cashless exercise.

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

| FY 2021—Q4 | | | | | | 90,000 | | | | | | 17.73 | | | | | | 12,366 | | | | | | 29,349 | | | | | | 48,285 | | | | | | 129.01 | | | | | | 3,786 | | |

[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 | |

[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 Co-CEO and our [removed: Principal] [added: Chief] Financial [removed: Officer.][added: Officer (“CFO”).]

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

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

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

Management assessed our internal control over financial reporting as of July 31, [removed: 2022.][added: 2023.]

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: 2022.][added: 2023.]

We have audited Copart, Inc.’s internal control over financial reporting as of July 31, [removed: 2022,] [added: 2023,] 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. [added: (the Company)] maintained, in all material respects, effective internal control over financial reporting as of July 31, [removed: 2022,] [added: 2023,] 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: 2022] [added: 2023] consolidated financial statements of the Company, and our report dated September [removed: 27, 2022] [added: 28, 2023,] expressed an unqualified opinion thereon.

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

September 28, 2023

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

September 27, 2022

Without limiting the generality of the foregoing, during the three months ended July 31, 2023, no director or officer of the Company adopted or terminated any “Rule 10b5-1 trading arrangement,” or any “non-Rule 10b-5 trading arrangement,” as such terms are defined in Item 408(a) of Regulation S-K.

None.

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

PART III

Certain information required by Part III is omitted from this Annual Report on Form 10-K because we intend to file a definitive proxy statement for our 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.

None.

PART III

Certain information required by Part III is omitted from this Annual Report on Form 10-K because we intend to file a definitive proxy statement for our 2023 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.

There were no delinquent Section 16(a) Reports during fiscal [removed: 2022.][added: 2023.]

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: 2022] [added: 2023] 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: 2022] [added: 2023] 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: 2022] [added: 2023] 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: 2022] [added: 2023] fiscal year end).

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

Our consolidated financial statements at July 31, [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] and for each of the three years in the period ended July 31, [removed: 2022] [added: 2023] 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](#i988317c7021a4a8fa66f2208a2958f7e_148)] [added: Index](#ib7e7440f02e4426d8e51e9fe6f9a4cef_148)] included herein.

| 3.1 | | | | | | [removed: [Copart, Inc.] [added: [Amended and Restated] Certificate of [removed: Incorporation](http://www.sec.gov/Archives/edgar/data/900075/000090007516000018/cprt01312016-ex31.htm)] [added: Incorporation of Copart, Inc.](https://www.sec.gov/Archives/edgar/data/900075/000090007522000056/amendedandrestatedcertific.htm)] | | | | | | [removed: Quarterly] [added: Current] Report on Form [removed: 10-Q,] [added: 8-K] (File No. 000-23255), Exhibit No. 3.1 | | | | | | [removed: February 25, 2016] [added: November 2, 2022] | | |

| 3.2 | | | | | | [removed: [Certificate] [added: [Amended and Restated Bylaws] of [removed: Amendment to the] Copart, [removed: Inc. Certificate of Incorporation](http://www.sec.gov/Archives/edgar/data/900075/000090007516000136/cprt12162016certificateofa.htm)] [added: Inc.](https://www.sec.gov/Archives/edgar/data/900075/000090007522000017/restatedbylaws33022.htm)] | | | | | | Current Report on Form [removed: 8-K,] [added: 8-K] (File No. 000-23255), Exhibit No. [removed: 2] [added: 3.1] | | | | | | [removed: December 22, 2016] [added: March 31, 2022] | | |

| 10.7 | | | * | | | [Form of Indemnification Agreement signed by executive officers and [removed: directors](http://www.sec.gov/Archives/edgar/data/900075/000114544312001120/d29549_ex10-17.htm)] [added: directors](https://www.sec.gov/Archives/edgar/data/900075/000162828023019929/formofindemnificationagree.htm)] | | | | | | [removed: Annual] [added: Current] Report on Form [removed: 10-K] [added: 8-K] (File No. 000-23255), Exhibit No. [removed: 10.17] [added: 10.1] | | | | | | [removed: October 1, 2012] [added: May 26, 2023] | | |

| 10.10 | | | | | | [removed: [Second](https://www.sec.gov/Archives/edgar/data/900075/000090007521000043/secondamendedandrestatedcr.htm) [Amended] [added: [Second Amended] and Restated Credit Agreement, dated as [removed: 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)[,] [added: of December 21, 2021,] by and among Copart, certain subsidiaries of Copart. the lenders party thereto, and Bank of America,N.A., as administrative 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 | | | | | | December 27, 2021 | | |

| 21.1 | | | | | | [List of subsidiaries of [removed: Registrant](https://www.sec.gov/Archives/edgar/data/900075/000090007522000050/cprt07312022-ex211.htm)] [added: Registrant](https://www.sec.gov/Archives/edgar/data/900075/000090007523000034/cprt07312023-ex211.htm)] | | | | | | — | | | | | | Filed herewith | | |

| 23.1 | | | | | | [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/900075/000090007522000050/cprt07312022-ex231.htm)] [added: Firm](https://www.sec.gov/Archives/edgar/data/900075/000090007523000034/cprt07312023-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/900075/000090007522000050/cprt07312022-ex311.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007523000034/cprt07312023-ex311.htm)] | | | | | | — | | | | | | Filed herewith | | |

| 31.2 | | | | | | [Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007522000050/cprt07312022-ex312.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007523000034/cprt07312023-ex312.htm)] | | | | | | — | | | | | | Filed herewith | | |

| 31.3 | | | | | | [Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007522000050/cprt07312022-ex313.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007523000034/cprt07312023-ex313.htm)] | | | | | | — | | | | | | Filed herewith | | |

| 32.1 | | | (1) | | | [Certification of [removed: Chief] [added: Co-Chief] Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007522000050/cprt07312022-ex321.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007523000034/cprt07312023-ex321.htm)] | | | | | | — | | | | | | Filed herewith | | |

| 32.2 | | | (1) | | | [Certification of [removed: Chief] [added: Co-Chief] Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007522000050/cprt07312022-ex322.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007523000034/cprt07312023-ex322.htm)] | | | | | | — | | | | | | Filed herewith | | |

| 32.3 | | | (1) | | | [Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007522000050/cprt07312022-ex323.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/900075/000090007523000034/cprt07312023-ex323.htm)] | | | | | | — | | | | | | Filed herewith | | |

Date: September [removed: 27, 2022][added: 28, 2023]

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

Jayson Adair, and Jeffrey Liaw and [removed: Gavin Renfrew,] [added: Leah Stearns,] 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 | | | | | | Co-Chief Executive Officer (Principal Executive Officer), Director | | | | | | September [removed: 27, 2022] [added: 28, 2023] | | |

| /s/ JEFFREY LIAW | | | | | | Co-Chief Executive Officer (Principal Executive Officer) | | | | | | September [removed: 27, 2022] [added: 28, 2023] | | |

| /s/ WILLIS J. JOHNSON | | | | | | Chairman of the Board | | | | | | September [removed: 27, 2022] [added: 28, 2023] | | |

| /s/ MATT BLUNT | | | | | | Director | | | | | | September [removed: 27, 2022] [added: 28, 2023] | | |

| /s/ STEVEN D. COHAN | | | | | | Director | | | | | | September [removed: 27, 2022] [added: 28, 2023] | | |

| /s/ DANIEL ENGLANDER | | | | | | Director | | | | | | September [removed: 27, 2022] [added: 28, 2023] | | |

| /s/ STEPHEN FISHER | | | | | | Director | | | | | | September [removed: 27, 2022] [added: 28, 2023] | | |

| /s/ CHERYLYN HARLEY LEBON | | | | | | Director | | | | | | September [removed: 27, 2022] [added: 28, 2023] | | |

| /s/ JAMES E. MEEKS | | | | | | Director | | | | | | September [removed: 27, 2022] [added: 28, 2023] | | |

| /s/ DIANE M. MOREFIELD | | | | | | Director | | | | | | September [removed: 27, 2022] [added: 28, 2023] | | |

| /s/ CARL SPARKS | | | | | | Director | | | | | | September [removed: 27, 2022] [added: 28, 2023] | | |

| /s/ THOMAS N. TRYFOROS | | | | | | Director | | | | | | September [removed: 27, 2022] [added: 28, 2023] | | |

| [Report of Independent Registered Public Accounting Firm (PCAOB [removed: ID:](#i988317c7021a4a8fa66f2208a2958f7e_157) 42[)](#i988317c7021a4a8fa66f2208a2958f7e_157)] [added: ID:](#ib7e7440f02e4426d8e51e9fe6f9a4cef_160) 42[)](#ib7e7440f02e4426d8e51e9fe6f9a4cef_160)] | | | | | | [removed: [55](#i988317c7021a4a8fa66f2208a2958f7e_157)] [added: [55](#ib7e7440f02e4426d8e51e9fe6f9a4cef_160)] | | |

| [Consolidated Balance Sheets as of July 31, [removed: 2022] [added: 2023] and [removed: 2021](#i988317c7021a4a8fa66f2208a2958f7e_160)] [added: 2022](#ib7e7440f02e4426d8e51e9fe6f9a4cef_163)] | | | | | | [removed: [57](#i988317c7021a4a8fa66f2208a2958f7e_160)] [added: [56](#ib7e7440f02e4426d8e51e9fe6f9a4cef_163)] | | |

| [Consolidated Statements of Income for the years ended July 31, [removed: 202](#i988317c7021a4a8fa66f2208a2958f7e_166)[2](#i988317c7021a4a8fa66f2208a2958f7e_166)[, 202](#i988317c7021a4a8fa66f2208a2958f7e_166)[1](#i988317c7021a4a8fa66f2208a2958f7e_166) [and 20](#i988317c7021a4a8fa66f2208a2958f7e_166)[20](#i988317c7021a4a8fa66f2208a2958f7e_166)] [added: 2023, 2022 and 2021](#ib7e7440f02e4426d8e51e9fe6f9a4cef_169)] | | | | | | [removed: [58](#i988317c7021a4a8fa66f2208a2958f7e_166)] [added: [57](#ib7e7440f02e4426d8e51e9fe6f9a4cef_169)] | | |

| [Consolidated Statements of Comprehensive Income for the years ended July 31, [removed: 202](#i988317c7021a4a8fa66f2208a2958f7e_169)[2](#i988317c7021a4a8fa66f2208a2958f7e_169)[, 202](#i988317c7021a4a8fa66f2208a2958f7e_169)[1](#i988317c7021a4a8fa66f2208a2958f7e_169) [and 20](#i988317c7021a4a8fa66f2208a2958f7e_169)[20](#i988317c7021a4a8fa66f2208a2958f7e_169)] [added: 2023, 2022 and 2021](#ib7e7440f02e4426d8e51e9fe6f9a4cef_172)] | | | | | | [removed: [59](#i988317c7021a4a8fa66f2208a2958f7e_169)] [added: [58](#ib7e7440f02e4426d8e51e9fe6f9a4cef_172)] | | |

| [Consolidated Statements of Stockholders' Equity for the years ended July 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020](#i988317c7021a4a8fa66f2208a2958f7e_172)] [added: 2021](#ib7e7440f02e4426d8e51e9fe6f9a4cef_175)] | | | | | | [removed: [60](#i988317c7021a4a8fa66f2208a2958f7e_172)] [added: [59](#ib7e7440f02e4426d8e51e9fe6f9a4cef_175)] | | |

| [Consolidated Statements of Cash Flows for the years ended July 31, [removed: 202](#i988317c7021a4a8fa66f2208a2958f7e_175)[2](#i988317c7021a4a8fa66f2208a2958f7e_175)[, 202](#i988317c7021a4a8fa66f2208a2958f7e_175)[1](#i988317c7021a4a8fa66f2208a2958f7e_175) [and 20](#i988317c7021a4a8fa66f2208a2958f7e_175)[20](#i988317c7021a4a8fa66f2208a2958f7e_175)] [added: 2023, 2022 and 2021](#ib7e7440f02e4426d8e51e9fe6f9a4cef_178)] | | | | | | [removed: [61](#i988317c7021a4a8fa66f2208a2958f7e_175)] [added: [60](#ib7e7440f02e4426d8e51e9fe6f9a4cef_178)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i988317c7021a4a8fa66f2208a2958f7e_178)] [added: Statements](#ib7e7440f02e4426d8e51e9fe6f9a4cef_181)] | | | | | | [removed: [62](#i988317c7021a4a8fa66f2208a2958f7e_178)] [added: [61](#ib7e7440f02e4426d8e51e9fe6f9a4cef_181)] | | |

We have audited the accompanying consolidated balance sheets of Copart, Inc. (the Company) as of July 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] 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: 2022,] [added: 2023,] 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 [removed: consolidated] financial position of the Company at July 31, [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] and the results of its operations and its cash flows for each of the three years in the period ended July 31, [removed: 2022,] [added: 2023,] 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: 2022,] [added: 2023,] 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 [removed: 27, 2022] [added: 28, 2023] expressed an unqualified opinion thereon.

Critical Audit [removed: Matter][added: Matters]

[removed: The critical] [added: Critical] audit [removed: matter communicated below is a matter] [added: matters are matters] arising from the current period audit of the financial statements that [removed: was] [added: were] communicated or required to be communicated to the audit committee and that: (1) [removed: relates] [added: relate] to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, [removed: subjective] [added: subjective,] or complex judgments.

We have served as the Company’s auditor since [removed: fiscal year] 2006.

| 10.11 | | | | | | [Executive Officer Employment Agreement, effective December 5, 2022, between the registrant and Leah Stearns](https://www.sec.gov/Archives/edgar/data/900075/000090007523000010/cprtex10executiveofficerem.htm) | | | | | | Quarterly Report on Form 10-Q (File No. 000-23255), Exhibit No. 10 | | | | | | February 24, 2023 | | |

| 10.12 | | | * | | | [Outside Director Compensation Program](https://www.sec.gov/Archives/edgar/data/900075/000090007523000034/cprt07312023-ex1012.htm) | | | | | | — | | | | | | Filed herewith | | |

| 19.1 | | | | | | [Insider Trading Policy](https://www.sec.gov/Archives/edgar/data/900075/000090007523000034/cprt07312023-ex191.htm) | | | | | | — | | | | | | Filed herewith | | |

| 97.1 | | | | | | [Compensation Recovery Policy](https://www.sec.gov/Archives/edgar/data/900075/000090007523000034/cprt07312023-ex971.htm) | | | | | | — | | | | | | Filed herewith | | |

Date: September 28, 2023

| | | | By: | | | | | | /s/ LEAH STEARNS | | |

Date: September 28, 2023

| /s/ LEAH STEARNS | | | | | | Chief Financial Officer (Principal Financial and Accounting Officer) | | | | | | September 28, 2023 | | |

| Leah Stearns | | | | | | | | | | | | | | |

We determined that there are no critical audit matters.

September 28, 2023

| | | | | | | 2023 | | | | | | 2022 | | |

| Investment in held to maturity securities | | | | | | 1,406,589 | | | | | | — | | |

| Goodwill | | | | | | 394,289 | | | | | | 401,954 | | |

| Weighted average common shares outstanding | | | | | | 953,574 | | | | | | 949,676 | | | | | | 945,008 | | |

| Diluted weighted average common shares outstanding | | | | | | 966,647 | | | | | | 964,604 | | | | | | 961,160 | | |

| Net income | | | | | | $ | 1,237,741 | | | | | $ | 1,090,130 | | | | | $ | 936,495 | |

| Net income | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,237,741 | | | | | | | | | | | | 1,237,741 | | |

| Exercise of stock options, net of repurchased shares | | | | | | 4,473,888 | | | | | | — | | | | | | 49,679 | | | | | | — | | | | | | (4,709) | | | | | | | | | | | | 44,970 | | |

| Employee stock-based compensation | | | | | | 257,700 | | | | | | — | | | | | | 39,673 | | | | | | — | | | | | | — | | | | | | | | | | | | 39,673 | | |

| Balances at July 31, 2023 | | | | | | 957,344,162 | | | | | | $ | 96 | | | | | $ | 938,910 | | | | | $ | (141,006) | | | | | $ | 5,189,440 | | | | | | | | | | | $ | 5,987,440 | |

| Net income | | | | | | $ | 1,237,741 | | | | | $ | 1,090,130 | | | | | $ | 936,495 | |

| Issuance of principal on revolver facility | | | | | | 44,494 | | | | | | — | | | | | | — | | |

| Principal payments on revolver facility | | | | | | (33,924) | | | | | | — | | | | | | — | | |

On October 3, 2022, the Company’s Board of Directors approved a two-for-one common stock split effected in the form of a stock dividend subject to and contingent upon, among other things, obtaining stockholder approval of an amendment to the Company’s certificate of incorporation to increase the number of authorized shares of common stock.

On October 31, 2022, the Company’s stockholders approved such increase at a special meeting of stockholders.

As such, on November 3, 2022, the Company effected the two-for-one stock dividend to stockholders of record as of October 6, 2022.

On August 4, 2023, the Company’s Board of Directors approved a two-for-one common stock split effected in the form of a stock dividend entitling each stockholder of record to receive one additional share of common stock for every one share owned.

On August 21, 2023, the Company effected the two-for-one stock dividend to stockholders of record as of August 14, 2023.

Both stock dividend increased the number of shares of common stock outstanding and all share and per share amounts have been retroactively adjusted for the stock dividend, as of the date earliest presented in these financial statements to conform to current year presentation.

registration fees.

| Balance as of July 31, 2023 | | | | | | $ | 25,726 | |

Held to maturity investments are classified within level I of the fair value hierarchy because they are valued at quoted prices for identical assets that are traded in active markets.

The Company has held to maturity securities comprised of U.S. Treasury Bills.

These investments are classified as held to maturity as the Company has the intent and ability to hold these investments until they mature.

The held to maturity securities mature within the next 12 months.

The table below shows the amortized cost, associated gross unrealized gains and associated fair value of held to maturity securities (In thousands).

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

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

| | | | Amortized Cost | | | | | | Gross Unrealized Gains | | | | | | Fair Value | | |

| 3.3 | | | | | | [Bylaws of Copart, Inc.](http://www.sec.gov/Archives/edgar/data/900075/000162828021018786/copartinc-bylawsasamendeds.htm) | | | | | | Current Report on Form 8-K, (File No. 000-23255), Exhibit No. 3.1 | | | | | | September 16, 2021 | | |

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

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

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

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

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

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

| | | | | | |

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

| | | | Uncertain Tax Positions | | |

| *Description of the Matter* | | | As discussed in Note 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 $64.6 million as of July 31, 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. | | |

| | | | Auditing management’s analysis and accounting for the Company’s uncertain tax positions involved significant auditor judgment and use of tax professionals with specialized skills and knowledge to evaluate the Company’s interpretation of, and compliance with, tax laws across its multiple subsidiaries located in multiple taxing jurisdictions. Each tax position involves unique facts and circumstances that must be evaluated, and there may be many uncertainties around initial recognition and de-recognition of tax positions, including regulatory changes, litigation and examination activity. In addition, a higher degree of auditor judgment was required in evaluating 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. | | |

| *How We Addressed the Matter in Our Audit* | | | We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls that address the risks of material misstatement relating to uncertain tax positions. For example, we tested controls over management’s identification of uncertain tax positions and its application of the recognition and measurement principles, including management’s review of the inputs and calculations of unrecognized tax benefits resulting from uncertain tax positions. | | |

| 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 13 in relation to these matters. | | | | | |

September 27, 2022

| Weighted average common shares outstanding | | | | | | 237,419 | | | | | | 236,252 | | | | | | 233,202 | | |

| Diluted weighted average common shares outstanding | | | | | | 241,151 | | | | | | 240,290 | | | | | | 238,656 | | |

| Balances at July 31, 2019 | | | | | | 229,790,268 | | | | | | $ | 23 | | | | | $ | 572,559 | | | | | $ | (132,529) | | | | | $ | 1,338,328 | | | | | | | | | | | $ | 1,778,381 | |

| Net income | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 699,907 | | | | | | | | | | | | 699,907 | | |

| Exercise of stock options, net of repurchased shares | | | | | | 5,364,166 | | | | | | 1 | | | | | | 68,570 | | | | | | — | | | | | | (100,382) | | | | | | | | | | | | (31,811) | | |

| Other liabilities | | | | | | — | | | | | | — | | | | | | 498 | | |

Certain prior year amounts have been reclassified to conform to current year presentation.

| Balance as of July 31, 2020 | | | | | | $ | 10,080 | |

Recently Issued Accounting Pronouncements

*Adopted*

In December 2019, the FASB issued ASU 2019-12, *Simplifying the Accounting for Income Taxes*.

ASU 2019-12 eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

It also clarifies and simplifies other aspects of the accounting for income taxes.

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

Hills predominantly sells recycled parts to the public.

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

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

| Accounts receivable and prepaid expenses | | | 5,348 | | |

| Inventory | | | 4,913 | | |

| Intangible assets | | | 15,931 | | |

| Goodwill | | | 56,051 | | |

| Liabilities assumed | | | (6,858) | | |

| Fair value of net assets and liabilities acquired | | | $ | 106,604 | |

The Hills acquisition was undertaken for the strategic fit to the Company.

This acquisition has been accounted for using the purchase method in accordance with ASC 805, Business Combinations, which resulted in the recognition of goodwill in the Company’s consolidated financial statements.