What changed in this filing

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Item 1. Business

2021-09-27 compared with 2020-09-28 · 115 added, 64 removed, 356 unchanged (33% of the section changed)

Corporate Information

We were incorporated in California in 1982, became a public company in 1994 and were reincorporated into Delaware in January 2012.

Our principal executive offices are located at 14185 Dallas Parkway, Suite 300, Dallas, Texas 75254 and our telephone number there is (972) 391-5000.

We were incorporated in California in 1982, became a public company in 1994, and were reincorporated in Delaware in January 2012.

Our principal executive offices are located at 14185 Dallas Parkway, Suite 300, Dallas, Texas 75254 and our telephone number is (972) 391-5000.

Our website is www.copart.com .

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We provide free of charge, through a link on our website, access to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as amendments to those reports, as soon as reasonably practical after the reports are electronically filed with, or furnished to, the SEC.

Copart ® , VB 2® , BID4U ® , CI & Design ® , DRIVE Auto Auctions ™ , 1-800 CAR BUYER ® , CA$HFORCARS.COM ® , COPART & DESIGN ® , VB 2 & DESIGN ® , VB3 & DESIGN ® , VB3 ® and CrashedToys.com ® are trademarks of Copart, Inc.

Copart ® , BID4U ® , CI & Design ® , DRIVE Auto Auctions ™ , 1-800 CAR BUYER ® , CA$HFORCARS.COM ® , COPART & DESIGN ® , VB3 & DESIGN ® , VB3 ® , NPA, and CrashedToys.com ® are trademarks of Copart, Inc.

or one of its direct or indirect wholly-owned subsidiaries.

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We are not responsible for the carbon emissions resulting from new vehicle manufacturing, governmental fuel emissions standards or vehicle use by consumers.

Each vehicle that enters our business operations is an existing fact, with whatever fuel technology and efficiency it was designed and built to have, and the substantial carbon emissions associated with the vehicle’s manufacture are already sunk costs.

Each vehicle that enters our business operations already exists, with whatever fuel technology and efficiency it was designed and built to have, and the substantial carbon emissions associated with the vehicle’s manufacture have already occurred.

However, upon our receipt of an existing vehicle, we help decrease its total environmental impact by extending its useful life and thereby avoiding the carbon emissions associated with the alternative of new vehicle and auto parts manufacturing.

For example, many of the cars we process and remarket are subsequently restored to drivable condition, reducing the new vehicle manufacturing burden the world would otherwise face.

Many of our cars are purchased by dismantlers, who recycle and refurbish parts for vehicle repairs, again

reducing new and aftermarket parts manufacturing.

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, many of the cars we process and remarket are subsequently restored to driveable condition, reducing the new vehicle manufacturing burden the world would otherwise face.

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

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

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

In each of these cases, our business reduces the carbon and other environmental footprint of the global transportation industry.

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We provide vehicle sellers with a full range of services to process and sell vehicles primarily over the internet through our Virtual Bidding Third Generation internet auction-style sales technology, which we refer to as VB3.

Vehicle sellers consist primarily of insurance companies, but also include banks, finance companies, charities, fleet operators, dealers and from individuals.

We sell the vehicles principally to licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers, exporters, and in some jurisdictions, to the general public.

Vehicle sellers consist primarily of insurance companies, but also include banks, finance companies, charities, fleet operators, dealers, vehicle rental companies, and individuals.

We sell the vehicles principally to licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers, exporters, and to the general public.

The majority of the vehicles sold on behalf of insurance companies are either damaged vehicles deemed a total loss;

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In Germany and Spain, we also derive revenue from listing vehicles on behalf of insurance companies and insurance experts to determine the vehicle’s residual value and/or to facilitate a sale for the insured.

Through our Virtual Bidding Third Generation (VB3) auction platform, our sales process is open to registered buyers (whom we refer to as “members”) anywhere in the world with access to the internet.

Through our VB3 auction platform, our sales process is open to registered buyers (whom we refer to as “members”) anywhere in the world with access to the internet.

This technology and model employ a two-step bidding process.

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

For fiscal 2020, our revenues were $2.2 billion and our operating income was $816.1 million.

In fiscal 2018, we opened three new operational facilities in the U.S., a new operational facility in the U.K., a new operational facility in Germany, and acquired four locations in Finland.

In fiscal 2019, we opened one new operational facility in Brazil;

seven new operational facilities in Germany;

and eleven new operational facilities in the U.S., and acquired an operational facility in Greenville, Kentucky.

For fiscal 2021, our revenues were $2.7 billion and our operating income was $1.1 billion.

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

In fiscal 2020, we opened two new operational facilities in Germany, one new operational facility in Brazil, and three new operational facilities in the U.S.

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

Our service revenue consists of auction and auction related sales transaction fees charged for vehicle remarketing services.

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While companies in this industry remarket vehicles through a physical auction or a hybrid internet and physical auction, we sell virtually all our vehicles on our internet selling platform VB3, thus eliminating the requirement for buyers to travel to an auction location to participate in the sales process.

Although there are other sellers of vehicles, such as banks, finance companies, charities, fleet operators, dealers and from individuals, our primary sellers of vehicles are insurance companies.

The primary buyers of vehicles at our auctions are vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers, exporters, and in some jurisdictions, the general public.

Although there are other sellers of vehicles, such as banks, finance companies, charities, fleet operators, dealers, vehicle rental companies, and individuals, our primary sellers of vehicles are insurance companies.

The primary buyers of vehicles at our auctions are vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers, exporters, and the general public.

Vehicle dismantlers, which we believe are the largest group of vehicle buyers, based on volume of vehicles purchased, either dismantle a salvage vehicle and sell parts individually or sell the entire vehicle to rebuilders, used vehicle dealers, or the general public.

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Typically, the damaged vehicle is towed to a storage facility or a vehicle repair facility for temporary storage pending insurance company examination.

The vehicle is inspected by the insurance company’s adjuster, who estimates the costs of repairing the vehicle and gathers information regarding the damaged vehicle’s mileage, options and condition in order to estimate its PAV, otherwise known as actual cash value (“ACV”).

The adjuster determines whether to pay for repairs or to classify the vehicle as a total loss based upon the adjuster’s estimate of repair costs, vehicle’s salvage value, and the PAV, as well as customer service considerations.

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The insurance company will thereafter assign the vehicle to a vehicle auction and remarketing services company, settle with the insured and receive title to the vehicle.

Automobile manufacturers continuously incorporate new standard features, including unibody construction utilizing exotic metals, passenger safety cages with surrounding crumple zones to absorb impacts, plastic and ceramic components, airbags, adaptive headlights, computer systems, advanced cameras, collision warning systems, and navigation systems.

Automobile manufacturers continuously incorporate new standard features, including unibody construction utilizing exotic metals;

passenger safety cages with surrounding crumple zones to absorb impacts;

plastic and ceramic components;

adaptive headlights;

computer and navigation systems;

advanced cameras, including backup camera systems;

collision warning systems;

dynamic cruise control;

lane departure warning systems;

automatic braking;

and blind spot detection systems.

We believe that one effect of these additional features is that newer vehicles involved in accidents are more costly to repair and, accordingly, more likely to be deemed a total loss for insurance purposes.

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Under these circumstances, insurance companies will generally award the contract to the company that is willing to pay the highest price for the vehicles.

Generally, upon receipt of the pickup order (the assignment), we arrange for the transportation of a vehicle to our nearest facility.

Generally, upon receipt of the pickup order, or the assignment, we arrange for the transportation of a vehicle to our nearest facility.

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

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In the U.K., upon release of interest by the vehicle owner, the insurance company notifies us that the vehicle is available for sale.

Generally, sellers of non-salvage vehicles will arrange to deliver the vehicle to one of our locations.

Generally, sellers of non-salvage vehicles will arrange to deliver the vehicle to one of our locations, although we may offer transportation services to obtain the vehicle.

At that time, the vehicle information will be uploaded to our system and made available for buyers to review online.

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Pursue Global, National, and Regional Vehicle Supply Agreements

Our broad global presence enhances our ability to enter into local, regional, national or global supply agreements with vehicle sellers.

We actively seek to establish global, national, and regional supply agreements with insurance companies by promoting our ability to achieve high net returns and broader access to buyers through our national coverage and electronic commerce capabilities.

Our broad global presence enhances our ability to enter into global, national, or regional supply agreements with vehicle sellers.

We actively seek to establish supply agreements with insurance companies by promoting our ability to achieve high net returns and broader access to buyers through our national coverage and electronic commerce capabilities.

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

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• Make An Offer, which provides an option to our members to submit an offer amount on certain selected vehicles and if the offer is accepted, purchase the vehicle before the live auction process;

• online payment capabilities via our ePay product, credit cards and dealer financing programs;

• email notifications available in numerous languages to potential buyers of vehicles that match desired characteristics;

• online payment capabilities via our ePay product, credit cards, and third-party financing programs;

• email and text notifications available in numerous languages to potential buyers of vehicles that match desired characteristics;

• sophisticated vehicle processing at storage sites, including digital imaging of each vehicle and the scanning of each vehicle’s title and other significant documents such as body shop invoices, all of which are available from us over the internet;

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Transportation Services

and Canada, we perform transportation services through a combination of our fleet of over 90 vehicles and predominately using third-party vehicle transport companies.

and Canada, we perform transportation services through a combination of third-party vehicle transport companies and our fleet of over 140 vehicles.

We maintain contracts with third-party vehicle transport companies, which enable us to pick up most of our sellers’ vehicles within 24 hours.

Our national network and transportation capabilities provide cost and time savings to our vehicle sellers and ensure on-time vehicle pick up and prompt response to catastrophes and natural disasters in the U.S.

Our national network and transportation capabilities provide cost and time savings to our vehicle sellers and offer timely vehicle pick up and prompt response to catastrophes and natural disasters in the U.S.

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

In Germany, we perform transportation services through our fleet of over 25 vehicles.

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

Vehicle Inspection Stations

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We also facilitate the title transfer from the original owner or financial institutions on behalf of some of our sellers to streamline the documentation and vehicle auction process.

We can quickly and electronically obtain up-to-date loan payoff information from hundreds of automotive lenders, including the remaining balance due and per diem on a vehicle loan, to expedite the loan payoff and title transfer process.

We can obtain up-to-date loan payoff information electronically from hundreds of automotive lenders, including the remaining balance due and per diem on a vehicle loan, to expedite the loan payoff and title transfer process.

Flexible Vehicle Processing Programs

At the election of the seller, we sell vehicles pursuant to our Percentage Incentive Program, which we refer to as PIP, Consignment Program, or Purchase Program.

At the election of the seller, we sell vehicles pursuant to our Percentage Incentive Program (“PIP”), Consignment Program, or Purchase Program.

Under each program we may provide merchandising services such as covering or taping openings to protect vehicle interiors from weather, washing vehicle exteriors, vacuuming vehicle interiors, cleaning and polishing dashboards and tires, making keys for driveable vehicles, and identifying driveable vehicles.

We believe our merchandising efforts increase the sales prices of the vehicles, thereby increasing the return on vehicles to both vehicle sellers and us.

Percentage Incentive Program.

Our Percentage Incentive Program is an innovative processing program designed to broadly serve the needs of vehicle sellers.

Under PIP, we agree to sell all of the vehicles of a seller in a specified market, usually for a predetermined percentage of the vehicle sales price.

Because our revenues under PIP are directly linked to the vehicle’s sale price, we have an incentive to actively merchandise those vehicles to maximize the net return.

We provide the vehicle seller, at our expense, with transportation of the vehicle to our nearest facility, as well as DMV document and title processing.

In addition, we provide merchandising services such as covering or taping openings to protect vehicle interiors from weather, washing vehicle exteriors, vacuuming vehicle interiors, cleaning and polishing dashboards and tires, making keys for drivable

vehicles, and identifying drivable vehicles.

We believe our merchandising efforts increase the sales prices of the vehicles, thereby increasing the return on salvage vehicles to both vehicle sellers and us.

We provide the vehicle seller, at our expense, with transportation of the vehicle to our nearest facility.

Consignment Program.

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Purchase Program.

Under the Purchase Program, we purchase vehicles from a vehicle seller at a formula price, based on a percentage of the vehicles’ estimated PAV, otherwise known as ACV, and sell the vehicles for our own account.

Under the Purchase Program, we purchase vehicles from a vehicle seller at a formula price, based on a percentage of the vehicles’ estimated PAV, and sell the vehicles for our own account.

Currently, the purchase program is offered primarily in the U.K.

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We offer a flexible and unique sales process designed to maximize the sale prices of the vehicles utilizing VB3.

VB3 opens our sales process to members and to individuals who have not registered to view auctions via our website and our mobile application anywhere in the world where internet access is available.

VB3 opens our sales process to members and the general public to view auctions via our website and our mobile application anywhere in the world where internet access is available.

The VB3 technology and model employs a two-step bidding process.

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CashForCars.ca;

or CashForCars.de and arrange to obtain a valid offer to purchase their vehicle.

CashForCars.de, CashForCars.co.uk, or Cash-for-cars.ie and arrange to obtain a valid offer to purchase their vehicle.

Upon acceptance of our offer to purchase their vehicle, we provide them payment for their vehicle and then sell the vehicle on our own behalf.

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Copart locations.

This capability was expanded out to the U.K.

in fiscal 2021.

Interested buyers can view everything from the backseat to the dashboard to the tires.

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Guest Member Benefits

Guest members can sign up for free to add their favorite vehicles to their Watchlist, set up Vehicle Alerts to get notified when we add specific vehicles they’re looking for and view our inventory from their desktop or mobile device via our Mobile App.

Basic Member Benefits

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Whether a visitor is at a location to make a payment or preview a vehicle, the Virtual Queue lets them conveniently maintain social distancing practices.

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

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

We notify them via text message when it is their turn to speak to a customer service agent.

We process vehicles from hundreds of different vehicle sellers.

No single customer accounted for more than 10% of our consolidated revenues for fiscal 2020, 2019 and 2018.

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

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

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Our arrangements generally provide that we will sell total loss and recovered stolen vehicles generated by the vehicle seller in a designated geographic area.

We market our services to vehicle sellers through an in-house sales force that utilizes a variety of sales techniques, including targeted mailing of our sales literature, telemarketing, follow-up personal sales calls, internet search engines, employee referrals, tow shop referrals, participation in trade shows and vehicle and insurance industry conventions.

We market our services to vehicle sellers through an in-house sales force that utilizes a variety of sales techniques, including personal sales calls, internet search engines, employee referrals, tow shop referrals, and participation in trade shows and vehicle and insurance industry conventions, targeted mailing of our sales literature, and telemarketing.

We market our services to franchise and independent dealerships, as well as the general public.

We may, when appropriate, provide vehicle sellers with detailed analysis of the net return on vehicles and a proposal setting forth ways in which we believe that we can improve net returns on vehicles and reduce administrative costs and expenses.

During the last three years, most of our revenue was generated within the U.S.

During our last three fiscal years, most of our revenue was generated within the U.S.

and a majority of our long-lived assets are located within the U.S.

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We believe that we have established a broad international and domestic buyer base by providing members with a variety of programs and services.

To become a registered member, a person or business must complete a basic application either online or through our mobile applications.

To become a registered member, a person or business must complete a basic application either online or through our mobile application.

Before any member may purchase a vehicle, they must provide copies of current government issued photo identification.

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Registration entitles a member to transact business at any of our sales, subject to local licensing and permitting requirements.

In certain jurisdictions, we may sell to the general public either directly or members may purchase a vehicle offered at Copart through a registered broker who meets local licensing and permitting requirements.

We may sell to the general public either directly or members may purchase a vehicle offered at Copart through a registered broker who meets local licensing and permitting requirements.

Strict admission procedures are intended to prevent frivolous bids that will not result in a completed sale.

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We face significant competition from other remarketers of both salvage and non-salvage vehicles.

Against these other vehicle remarketers, we face competition for long-term contractual commitments and various supply agreements with sellers, in addition to competition for the acquisition of vehicle storage facilities.

We believe our principal competitors include vehicle auction and sales companies and vehicle dismantlers.

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The largest national or regional vehicle auctioneers in the U.S.

include Insurance Auto Auctions, Inc (“IAA”).;

include Insurance Auto Auctions, Inc.

KAR Auction Services, Inc.

(“KAR”) (including its subsidiary ADESA, Inc.);

Auction Broadcasting Company, LLC;

and Manheim, Inc.

Manheim, Inc., and ACV Auctions Inc.

The largest national dismantler is LKQ Corporation (“LKQ”).

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

As of July 31, 2020, we had 7,600 full-time employees, of whom 1,388 were engaged in general and administrative functions and 6,212 were engaged in yard operations.

We are not currently subject to any collective bargaining agreements and believe our relationships with our employees are good.

Employees per geographic region are as follows:

United States 5,395

International 2,205

Total employees 7,600

Employees and Human Capital

Our ability to build long-term value depends on our ability to attract, retain, develop, and motivate talented personnel at all levels within our global enterprise.

Our employees are our greatest asset.

Our goal is to create a strong culture built upon our foundational core values:

act with integrity;

challenge the norm;

and celebrate our people.

We have a diverse, multi-cultural workforce and we celebrate our diversity by promoting inclusion across our global organization.

As of July 31, 2021, we had approximately 8,600 full and part-time employees, of which approximately 71% were located in the U.S.

and 29% located within our International segment.

Of the approximately 6,100 full and part-time employees based in the U.S, approximately 49% of them identify as female.

We also believe our workforce is ethnically diverse.

As of July 31, 2021, our U.S.

workforce consisted of approximately 49% individuals identifying as White, 20% as Hispanic or Latino, 15% as Black or African American, 5% as Asian, 3% as two or more races, Native American or Alaska Native, Native Hawaiian or Pacific Islander, and 8% as Not Disclosed.

Additionally, of the approximately 870 employees serving in the U.S.

in management roles and above, up to and including executives, 64% identify as male and 36% identify as female

Of the approximately 2,500 employees based within the International segment, approximately 33% of them identify as female.

We also believe our workforce is ethnically diverse.

As of July 31, 2021, our International workforce consisted of approximately 59% individuals identifying as White, 28% as Asian, 3% as Black or African, 2% as Hispanic or Latino, 2% as Other, and 5% as Not Disclosed.

Additionally, of the approximately 277 employees serving Internationally in management roles and above, up to and including executives, 69% identify as male and 31% identify as female.

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.

Our executive compensation structure aligns incentives with our strategic growth objectives, including long-term share price appreciation.

In that regard, our executive compensation programs place greater weighting on equity compensation than other forms of compensation offered to all employees.

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 2021 Proxy Statement.

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.

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.

We have designed our plans around the following four pillars:

Health, Financial Security, Life, and Education.

Our Health benefits include:

multiple medical plans, dental and vision coverage, and wellness programs combined with external support networks.

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.

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

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

Environmental Matters

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

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

In some cases, we may acquire land with existing environmental issues, including landfills as an example.

In the salvage vehicle remarketing industry, large numbers of wrecked vehicles are stored at storage facilities, requiring us to actively monitor and manage potential environmental impacts.

In the U.K., we provide vehicle de-pollution and crushing services for end-of-life program vehicles.

In the U.K., we provide vehicle de-pollution and crushing services for end-of-life vehicles.

We could incur substantial expenditures for preventative, investigative, or remedial action and could be exposed to liability arising from our operations, contamination by previous users of certain of our acquired facilities or facilities which we may acquire in the future, or the disposal of our waste at off-site locations.

In addition to conducting environmental diligence on new site acquisitions, we also take such actions as may be necessary under laws in the U.S.

to avoid liability for activities of prior owners, and we have from time to time acquired insurance with respect to acquired facilities with known environmental risks.

In addition to conducting environmental diligence on new site acquisitions, we also take such appropriate actions as may be necessary to avoid liability for activities of prior owners, and we have from time to time acquired insurance with respect to acquired facilities with known environmental risks.

There can be no assurances, however, that these efforts to mitigate environmental risk will prove sufficient if we were to face material liabilities.

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Governmental Regulations

Our operations are subject to regulation, supervision and licensing under various federal, national, international, provincial, state and local statutes, ordinances and regulations.

The acquisition and sale of damaged and recovered stolen vehicles is regulated by various state, provincial and foreign motor vehicle departments.

In addition to the regulation of sales and acquisitions of vehicles, we are also subject to various local zoning requirements with regard to the location of our storage facilities.

Our operations are subject to regulation, supervision and licensing under various international, federal, provincial, state, and local statutes, ordinances and regulations that may impact our capital expenditures, earnings, and competitive position.

The acquisition and sale of vehicles is regulated by various state, provincial and foreign motor vehicle departments, and the steps required to process vehicle titles is a significant cost of our business.

At the same time, our know-how in the area of title processing is a competitive advantage.

In addition to the regulation of sales and acquisitions of vehicles, we are also subject to various local zoning requirements with regard to the location of our storage facilities, which generally make it more challenging and expensive to identify, acquire and develop new facilities.

These zoning requirements vary from location to location.

At various times, we may be involved in disputes with local governmental officials regarding the development and/or operation of our business facilities.

At various times, we may be involved in disputes with governmental officials regarding the development and/or operation of our business facilities.

We believe that we are in compliance, in all material respects, with applicable regulatory requirements.

We may be subject to similar types of regulations by federal, national, international, provincial, state and local governmental agencies in new markets.

We may be subject to similar types of regulations by international, federal, provincial, state, and local governmental agencies in new markets.

Intellectual Property and Proprietary Rights

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During the winter months we tend to have higher demand for our services because there are more weather-related accidents.

Severe weather events, including but not limited to tornadoes, floods, hurricanes, and hailstorms, can also impact our volumes.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business