What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-09-26 compared with 2024-09-30 · 88 added, 101 removed, 1119 unchanged (14% of the section changed)

12 unchanged sentences

Management, including our CEO and CFO, assessed the effectiveness of the Company’s internal control over financial reporting as of July 31, 2025.

In making this assessment, management used criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013).

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013).

Based on its assessment and those criteria, management has concluded that the Company maintained effective internal control over financial reporting as of July 31, 2025.

1 unchanged sentence

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended July 31, 2024 that materially affected, or are reasonably like to materially affect, our internal control over financial reporting.

In the ordinary course of business, we make changes to our systems and processes to improve controls and increase efficiency while ensuring that we maintain an effective internal control environment.

Changes may include such activities as implementing new, more efficient systems and automating manual processes.

In the first quarter of fiscal 2025, we began implementing a new financial system, which will be completed in stages.

The first stage of the system implementation included our member billing in the United States.

This new financial system is a significant component of our internal control over financial reporting.

We will continue to implement our new financial system, in stages, and each implementation will become a significant component of our internal control over financial reporting.

Except for the new financial system implementation noted above, there have been no changes in our internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably like to materially affect, our internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

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Delinquent Section 16(a) Reports

During fiscal year 2024 we had a delinquent Section 16(a) Report due to an administrative oversight related to certain gift transfers by Mr.

Adair on January 3, 2024, which were reported on April 1, 2024.

There are no other delinquent Section 16(a) Reports during fiscal 2024.

There were no delinquent Section 16(a) Reports during fiscal 2025.

Code of Ethics

2 unchanged sentences

The Code of Ethics applies to our principal executive officer, our principal financial officer, our principal accounting officer or controller, and persons performing similar functions and responsibilities who shall be identified by our Audit Committee from time to time.

The Code of Ethics is available at our website, located at http://www.copart.com .

The Code of Ethics is available on the Investor Relations page at our website, located at http://www.copart.com .

We intend to satisfy disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the Code of Ethics by posting such information on our website, at the address and location specified above, or as otherwise required by the NASDAQ Global Select Market.

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2007 Equity Incentive Plan, as Amended and Restated (2007 EIP)

Current Report on Form 8-K, (File No.

000-23255), Exhibit No.

1 December 22, 2016

— Filed herewith

10.2 * Form of Performance Share Award Agreement for use with 2007 EIP

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10.12 * Outside Director Compensation Program

— Filed herewith

Annual Report on Form 10-K (File No.

000-23255), Exhibit 10.12 September 30, 2024

10.13 Corporate Aircraft Personal Use Policy

17 unchanged sentences

97.1 Compensation Recovery Policy

— Filed herewith

Annual Report on Form 10-K (File No.

000-23255), Exhibit 97.1 September 30, 2024

101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

114 unchanged sentences

Operating and finance lease liabilities, net of current portion 83,870 97,429

Long-term debt and other liabilities, net of discount — 10,903

Total liabilities 883,411 879,209

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Operating expenses:

Yard operations 1,710,084 1,518,029 1,309,497

Facility operations 1,944,318 1,710,084 1,518,029

Cost of vehicle sales 602,997 619,487 614,498

4 unchanged sentences

Interest income (expense), net 178,909 145,673 65,928

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

Other income (expense), net 19,958 ( 3,095 ) 1,831

43 unchanged sentences

Currency translation adjustment — — — ( 1,966 ) — ( 1,966 ) —

Acquisition of controlling interest 2,499,993 — 112,075 — — 112,075 25,217

Exercise of stock options, net of repurchased shares 2,560,852 — 24,260 — ( 6,558 ) 17,702 —

20 unchanged sentences

Gain on extinguishment of liabilities — ( 4,058 ) —

Equity in losses of unconsolidated affiliates 2,241 5,347 284

Equity in (income) losses of unconsolidated affiliates ( 149 ) 2,241 5,347

Stock-based compensation 38,004 35,234 39,673

Gain on sale of property and equipment ( 13,726 ) ( 2,386 ) ( 1,846 )

Loss on extinguishment of debt — — 16,759

Deferred income (benefits) taxes ( 13,440 ) ( 847 ) 9,946

15 unchanged sentences

Investment in held to maturity securities ( 4,001,918 ) ( 4,087,162 ) ( 1,406,588 )

Proceeds from the sale of held to maturity securities 3,645,000 — 374,866

Proceeds from held to maturity securities 3,960,000 3,645,000 —

Investment in unconsolidated affiliate ( 7,148 ) ( 8,755 ) ( 2,744 )

6 unchanged sentences

Principal payments on revolver facility — ( 10,821 ) ( 33,924 )

Debt offering costs — — ( 1,212 )

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

Payments of finance lease obligations ( 49 ) ( 14 ) ( 23 )

Net cash provided by (used in) financing activities 19,273 66,615 ( 382,693 )

Net cash provided by financing activities 52,107 19,273 66,615

Effect of foreign currency translation 2,011 4,958 34,383

Net (decrease) increase in cash, cash equivalents, and restricted cash 556,716 ( 426,841 ) 335,976

Net increase (decrease) in cash, cash equivalents, and restricted cash 1,266,420 556,716 ( 426,841 )

Cash, cash equivalents, and restricted cash at beginning of period 1,514,111 957,395 1,384,236

3 unchanged sentences

Income taxes paid, net of refunds $ 409,003 $ 285,891 $ 257,514

Purchase of property and equipment through settlement of deposit $ 64,050 $ — $ —

The accompanying notes are an integral part of these consolidated financial statements.

4 unchanged sentences

(“the Company”) provides vehicle sellers with a full range of services to process and sell vehicles over the internet through the Company’s Virtual Bidding Third Generation (“VB3”) internet auction-style sales technology.

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

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

The Company sells principally to licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers, exporters, and directly to the general public.

3 unchanged sentences

In the United Kingdom (“U.K.”), Germany, and Spain, the Company operates both as an agent and on a principal basis, in some cases purchasing salvage vehicles outright and reselling the vehicles for its own account.

In Germany and Spain, the Company also derives 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.

In Germany the Company also derives 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.

The consolidated financial statements of the Company include the accounts of the parent company and its wholly-owned subsidiaries.

Significant intercompany transactions and balances have been eliminated in consolidation.

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.

Intercompany transactions and balances have been eliminated in consolidation.

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

The 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 dividends, as of the date earliest presented in these financial statements to the conform to current year presentation.

Use of Estimates

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The Company defers costs that relate directly to the fulfillment of its contracts associated with vehicles consigned to and received by the Company, but not sold as of the end of the period.

The Company quantifies the deferred costs using a calculation that includes the number of vehicles at its facilities at the beginning and end of the period, the number of vehicles sold during the period, and an allocation of certain yard operation costs for the period.

The primary expenses allocated and deferred are inbound transportation costs, titling fees, certain facility costs, labor, and vehicle processing costs.

If the allocation factors change, then yard operation expenses could increase or decrease correspondingly in the future.

These costs are expensed into yard operations expenses as vehicles are sold in subsequent periods on an average cost basis.

If the allocation factors change, then facility operation expenses could increase or decrease correspondingly in the future.

These costs are expensed into facility operations expenses as vehicles are sold in subsequent periods on an average cost basis.

Foreign Currency Translation

10 unchanged sentences

Cumulative loss on foreign currency translation as of July 31, 2023 $ ( 141,006 )

Gain on foreign currency translation 28,359

Cumulative loss on foreign currency translation as of July 31, 2023 $ ( 141,006 )

Loss on foreign currency translation ( 1,966 )

Cumulative loss on foreign currency translation as of July 31, 2024 $ ( 142,972 )

Gain on foreign currency translation 22,689

Cumulative loss on foreign currency translation as of July 31, 2025 $ ( 120,283 )

Fair Value of Financial Instruments

7 unchanged sentences

The amounts recorded for financial instruments in the Company’s consolidated financial statements, which included cash, restricted cash, accounts receivable, accounts payable, accrued liabilities, and amounts outstanding under the Revolving Loan Facility approximated their fair values as of July 31, 2025 and 2024, due to the short-term nature of those instruments and are classified within Level II of the fair value hierarchy.

Cash equivalents and long-term debt are classified within Level II of the fair value hierarchy because they are valued using quoted market prices.

Cash equivalents and long-term debt are classified within Level II of the fair value hierarchy because they are valued using market based inputs.

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.

2 unchanged sentences

Cost of vehicle sales includes the purchase price of vehicles sold for the Company’s own account.

Yard Operations

Yard operations expenses consist primarily of operating personnel (which includes yard management, clerical and yard employees);

vehicle transportation;

property-related taxes;

equipment maintenance and repair;

and marketing costs directly related to the auction process.

Facility Operations

Facility operations expenses consist primarily of:

(i) labor (operating personnel at facilities);

(ii) transportation primarily provided by third-party (miles traveled and fuel rates);

(iii) facilities (maintenance, property-related taxes, rent, and insurance);

(iv) other (marketing and auction related costs);

and (v) costs of vehicles sold.

General and Administrative Expenses

General and administrative expenses consist primarily of executive management, accounting, data processing, sales personnel, professional services, marketing expenses, and system maintenance and enhancements.

All advertising costs are expensed as incurred and are included in yard operations expenses for costs directly related to the auction process and the remainder in general and administrative expenses on the consolidated statements of income.

All advertising costs are expensed as incurred and are included in facility operations expenses for costs directly related to the auction process and the remainder in general and administrative expenses on the consolidated statements of income.

Advertising expenses were $ 33.6 million, $ 26.1 million, and $ 17.8 million for the years ended July 31, 2025, 2024, and 2023, respectively.

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For interests that are redeemable in the future, we recognize changes in the redemption value immediately as they occur.

Shares are redeemable at adjusted fair value from the third anniversary of the acquisition through the 10th anniversary of acquisition, and are redeemable at fair value thereafter.

Cash, Cash Equivalents, and Restricted Cash and Investments

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In accordance with ASC 350, Intangibles—Goodwill and Other (“ASC 350”), goodwill is not amortized but is tested for potential impairment, at a minimum on an annual basis, or when indications of potential impairment exist.

The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a reporting unit.

The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment.

The Company has identified two reporting units, which are consistent with its two operating and reportable segments, U.S.

17 unchanged sentences

Recently Issued Accounting Pronouncements

In March 2023, the Financial Accounting Standards Board (the “FASB”) issued ASU 2023-02, Investments—Equity Method and Joint Ventures (Topic 323) (“ASU 2023-02”), which allows the option for reporting entities to elect to account for their tax equity investments, using the proportional amortization method if certain conditions are met.

In March 2023 the FASB issued ASU 2023-02, Investments—Equity Method and Joint Ventures (Topic 323), which allows the option for reporting entities to elect to account for their tax equity investments, using the proportional amortization method if certain conditions are met.

The amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

Early adoption is permitted.

The Company’s adoption of ASU 2023-02 is not expected to have a material impact on the Company’s consolidated results of operations and financial position.

The Company’s adoption of ASU 2023-02 did not have a material impact on the Company’s consolidated results of operations and financial position.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07’), which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

Management is currently evaluating ASU 2023-07 to determine its impact on the Company's disclosures.

The Company’s adoption of ASU 2023-07 did not have a material impact on the Company’s disclosures.

On December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topics 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”) to expand the disclosure requirements for income taxes, primarily related to the rate reconciliation and income taxes paid.

Improvements to Income Tax Disclosures" to expand the disclosure requirements for income taxes, primarily related to the rate reconciliation and income taxes paid.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted.

Management is currently evaluating ASU 2023-09 to determine its impact on the Company's disclosures.

Management is currently evaluating this ASU to determine its impact on the Company's disclosures.

On November 2024, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40).

ASU 2024-03 requires disclosure of specified information about certain costs and expenses.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted, and the amendments may be applied either prospectively or retrospectively.

Management is currently evaluating this ASU to determine its impact on the Company's disclosures.

Note 2 — Acquisitions

1 unchanged sentence

On October 6, 2023, the Company acquired an 80 % controlling ownership in Purple Wave, an online offsite heavy equipment auction company.

The Company acquired the controlling ownership by issuing 2.5 million shares of the Company’s common stock which was equal to the $ 108.0 million acquisition price divided by the 10-day volume average weighted price of the Company’s common stock prior to closing.

The Company acquired the controlling ownership by issuing 2.5 million shares of the Company’s

common stock which was equal to the $ 108.0 million acquisition price divided by the 10-day volume average weighted price of the Company’s common stock prior to closing.

GAAP, the fair value of the merger consideration paid for Purple Wave was $ 112.1 million and was determined on the basis of the closing price of the Company’s common stock on October 6, 2023.

Substantially all of the merger consideration has preliminarily been allocated to intangible assets, including goodwill.

Substantially all of the merger consideration has been allocated to intangible assets, including goodwill.

The fair value of the 20 % redeemable noncontrolling interest in Purple Wave was $ 25.2 million, and was estimated by applying the transaction method.

3 unchanged sentences

The resulting impact to the balance sheet and income statement were immaterial.

Fiscal year 2022 Transactions

On July 5, 2022, the Company acquired 100 % of the voting stock of ILT Project Limited which conducts business primarily as Hills Motors Co.

the Green Parts Specialists (“Hills”), which is a leading parts recycler in the U.K.

Hills predominantly sells recycled parts to the public.

The purchase price paid for Hills was $ 106.6 million paid with cash on hand.

On July 14, 2023 the U.K.

Competition and Markets Authority approved the merger of Copart and Hills.

With the approval of the merger the Company finalized the allocation of the fair value for acquired assets and liabilities.

The resulting impact to the balance sheet and income statement were immaterial.

NOTE 3 — Accounts Receivable, Net

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Office furniture and equipment 100,894 97,576

Software 105,001 89,575

Internal-use software 120,031 105,001

4,879,678 4,318,084

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Operating leases 8.52 4.29 %

Finance leases 30.35 4.48 %

(1) The Company cannot determine the interest rate implicit in the Company’s leases.

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The annual maturities of the Company’s lease liabilities as of July 31, 2025 were as follows:

Fiscal Year (In thousands) Operating Leases

Fiscal Year (In thousands) Finance Leases Operating Leases

2026 $ 135 $ 22,407

2027 135 18,104

2028 135 16,625

2029 135 13,956

2030 135 8,534

Thereafter 4,536 39,670

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Dollars is SOFR plus certain “spread adjustments” described in the Second Amended and Restated Credit Agreement, (2) Pounds Sterling is SONIA plus certain “spread adjustments” described in the Second Amended and Restated Credit Agreement, (3) the European Union euro is EURIBOR, and (4) Canadian dollars is CDOR.

The Company had $ 0.0 million and $ 11.0 million outstanding borrowings under the Revolving Loan Facility as of July 31, 2024 and July 31, 2023, respectively.

The Company had no outstanding borrowings under the Revolving Loan Facility as of July 31, 2025 and July 31, 2024.

The Company’s obligations under the Second Amended and Restated Credit Agreement are guaranteed by certain of the Company’s domestic subsidiaries meeting materiality thresholds set forth in the Second Amended and Restated Credit Agreement.

2 unchanged sentences

The Company is also required to maintain compliance, measured at the end of each fiscal quarter, with a consolidated total net leverage ratio and a consolidated interest coverage ratio.

defined, both before and after giving effect to any such dividend or restricted payment on a pro forma basis, is less than 3.25 :1, in an unlimited amount, (2) if clause (1) is not available, so long as the consolidated total net leverage ratio both before and after giving effect to any such dividend on a pro forma basis is less than 3.50 :1, in an aggregate amount not to exceed the available amount, as defined, and (3) if clauses (1) and (2) are not available, in an aggregate amount not to exceed $ 50.0 million;

The Second Amended and Restated Credit Agreement contains no restrictions on the payment of dividends and other restricted payments, as defined, as long as (1) the consolidated total net leverage ratio, as defined, both before and after giving effect to any such dividend or restricted payment on a pro forma basis, is less than 3.25 :1,

in an unlimited amount, (2) if clause (1) is not available, so long as the consolidated total net leverage ratio both before and after giving effect to any such dividend on a pro forma basis is less than 3.50 :1, in an aggregate amount not to exceed the available amount, as defined, and (3) if clauses (1) and (2) are not available, in an aggregate amount not to exceed $ 50.0 million;

provided, that, minimum liquidity, as defined, shall be not less than $ 75.0 million both before and after giving effect to any such dividend or restricted payment.

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The Company was in compliance with all covenants related to the Second Amended and Restated Credit Agreement as of July 31, 2025.

In connection with entering into the Second Amended and Restated Credit Agreement, the Company incurred $ 2.7 million in costs, which was capitalized as debt issuance fees.

The debt discount is amortized to interest expense over the term of the respective debt instruments and is included in other assets on the consolidated balance sheets as no amounts are outstanding on the Revolving Loan Facility.

Note Purchase Agreement

On December 3, 2014, the Company entered into a Note Purchase Agreement and sold to certain purchasers (collectively, the “Purchasers”) $ 400.0 million in aggregate principal amount of senior secured notes (the “Senior Notes”) consisting of (i) $ 100.0 million aggregate principal amount of 4.07 % Senior Notes, Series A, due December 3, 2024;

(ii) $ 100.0 million aggregate principal amount of 4.19 % Senior Notes, Series B, due December 3, 2026;

(iii) $ 100.0 million aggregate principal amount of 4.25 % Senior Notes, Series C, due December 3, 2027;

and (iv) $ 100.0 million aggregate principal amount of 4.35 % Senior Notes, Series D, due December 3, 2029.

Interest on each of the Senior Notes was due and payable quarterly, in arrears.

The Company used proceeds from the Note Purchase Agreement for general corporate purposes.

On May 24, 2022, the Company paid $ 420.6 million to retire all of the Senior Notes which included an additional $ 16.8 million make-whole payment to the holders of the Senior Notes and $ 3.8 million in accrued interest.

Related to execution of the Second Amended and Restated Credit Agreement, the Company incurred $ 2.7 million in costs, which were capitalized as debt issuance fees.

The debt discount is amortized to interest expense over the term of the respective debt instruments and is included in other assets on the consolidated balance sheet.

NOTE 10 – Fair Value Measurements

5 unchanged sentences

Total assets $ 4,205,132 $ 4,228,626 $ 3,033,278 $ 3,053,620

Long-term debt, including current portion $ — $ — $ 11,006 $ 11,006

Total liabilities $ — $ — $ 11,006 $ 11,006

The Company has investments in U.S.

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General and administrative $ 29,897 $ 28,284 $ 32,747

Yard operations 6,950 6,926 5,127

Facility operations 8,107 6,950 6,926

Total stock-based compensation $ 38,004 $ 35,234 $ 39,673

Additionally, Purple Wave maintains an equity-based compensation plan for certain executives.

Compensation cost attributable to Purple Wave equity-based compensation plan was $ 1.9 million and $ 0 included in stock based compensation for the fiscal years ended July 31, 2024 and 2023, respectively.

Compensation cost attributable to Purple Wave equity-based compensation plan was $ 2.3 million and $ 1.9 million included in stock based compensation for the fiscal years ended July 31, 2025 and 2024, respectively.

There were no material compensation costs capitalized as part of the cost of an asset as of July 31, 2025 and 2024.

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Federal return to provision adjustment ( 0.1 ) % — % ( 0.1 ) %

Federal amended return adjustment

— % — % ( 1.3 ) %

Other differences ( 0.6 ) % 0.5 % 1.6 %

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Net deferred tax liabilities $ ( 78,445 ) $ ( 92,235 )

On December 22, 2017 legislation, commonly referred to as the Tax Cuts and Jobs Act (the “Act”), was enacted.

The Act contains Global Intangible Low-Taxed Income (“GILTI”) provisions, which first impacted the Company in fiscal year 2019.

The GILTI provisions effectively subject income earned by the Company's foreign subsidiaries to current U.S.

tax at a rate of 10.5%, less foreign tax credits.

GAAP, the Company can make an accounting policy election to either recognize deferred taxes for temporary differences expected to impact GILTI in future years or provide for tax expense related to GILTI in the year the tax is incurred as a period expense.

The Company has elected to treat tax generated by GILTI provisions as a period expense.

The Company has no GILTI inclusion for the fiscal year ended July 31, 2024.

The Act also includes a favorable tax treatment for certain Foreign Derived Intangible Income (“FDII”), effective for the Company starting August 1, 2018.

The Company’s estimate for FDII had a material impact to the effective income tax rate and income tax expense for the fiscal year ended July 31, 2024.

On July 4, 2025, the U.S.

government enacted The One Big Beautiful Bill Act of 2025 (the “OBBBA”) which includes, among other provisions, changes to the U.S.

corporate income tax system including extensions and modifications of the Tax Cuts and Jobs Act of 2017.

The OBBBA did not have a material impact on the Company results of operations and financial position as of and for the fiscal year ended July 31, 2025.

The Company’s effective income tax rates were 18.3 %, 20.5 %, and 20.4 % for fiscal 2025, 2024 and 2023, respectively.

1 unchanged sentence

federal statutory tax rate for fiscal years 2025, 2024, and 2023 was 21.0 %.

The effective tax rate for the fiscal year ended July 31, 2024 was favorably impacted by $ 0.8 million of tax adjustments made in connection with finalizing the Company’s fiscal year 2023 tax return, and favorably impacted by a $ 47.7 million FDII deduction in the current year.

The effective tax rate for the fiscal year ended July 31, 2023 was favorably impacted by $ 1.5 million of tax adjustments made in connection with finalizing the Company’s fiscal year 2022 tax return, and favorably impacted by a $ 42.6 million FDII deduction.

The effective tax rate for the fiscal year ended July 31, 2022 was unfavorably impacted by a $ 8.2 million of tax adjustments made in connection with finalizing the Company’s fiscal year 2021 tax return, favorably impacted by a $ 17.0 million of tax items related to amending previously filed income tax returns, and favorably impacted by a $ 37.2 million FDII deduction.

The effective tax rates were also impacted by the recognition of excess tax benefits from the exercise of employee stock-based compensation of $ 14.8 million, $ 21.0 million, and $ 14.4 million, for the fiscal years ended July 31, 2024, 2023, and 2022, respectively.

The effective tax rate for the fiscal year ended July 31, 2025 was favorably impacted by a $ 55.0 million tax benefit related to the FDII deduction and $ 36.7 million in excess tax benefits from the exercise of employee stock options and negatively impacted by $ 38.6 million related to state income taxes.

The effective tax rate for the fiscal year ended July 31, 2024 was favorably impacted by a $ 47.7 million tax benefit related to the FDII deduction and $ 14.8 million in excess tax benefits from the exercise of employee stock options and negatively impacted by $ 40.6 million related to state income taxes.

The effective tax rate for the fiscal year ended July 31, 2023 was favorably impacted by a tax benefit of $ 42.6 million related to the FDII deduction and $ 21.0 million tax benefits from the exercise of employee stock options and negatively impacted by $ 30.3 million related to state income taxes.

The Company’s ability to realize deferred tax assets is dependent on its ability to generate future taxable income.

Accordingly, the Company has established a valuation allowance in taxable jurisdictions where the utilization of the tax assets is uncertain.

Accordingly, the Company has established a valuation allowance in taxable jurisdictions where the utilization of the tax assets does not meet the more-likely-than-not threshold of recognition.

Additional timing differences or future tax losses may occur which could warrant a need for establishing additional valuation allowances against certain deferred tax assets.

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and International regions are considered two separate operating segments and are disclosed as two reportable segments.

The segments represent geographic areas and reflect how the chief operating decision maker allocates resources and measures results, including total revenues and operating income.

The segments represent geographic areas and reflect how the chief operating decision maker “CODM”, the Company’s Chief Executive Officer, allocates resources and measures results.

The primary financial measures used by the CODM for assessing performance and allocating resources are service revenue, vehicle sales, and operating income.

The following tables present financial information by segment:

4 unchanged sentences

Total service revenues and vehicle sales 3,855,104 791,854 4,646,958

Yard operations 1,440,707 269,377 1,710,084

Facility operations 1,646,183 298,135 1,944,318

Cost of vehicle sales 378,100 224,897 602,997

2 unchanged sentences

Depreciation and amortization, excluding debt costs $ 184,026 $ 31,823 $ 215,849

Interest income 168,641 10,268 178,909

Capital expenditures, including acquisitions 490,965 79,248 570,213

6 unchanged sentences

Total service revenues and vehicle sales 3,464,735 772,088 4,236,823

Yard operations 1,292,527 225,502 1,518,029

Facility operations 1,440,707 269,377 1,710,084

Cost of vehicle sales 313,449 306,038 619,487

2 unchanged sentences

Depreciation and amortization, excluding debt costs $ 161,685 $ 28,076 $ 189,761

Interest income 140,728 4,945 145,673

Capital expenditures, including acquisitions 491,497 113,906 605,403

6 unchanged sentences

Total service revenues and vehicle sales 3,189,648 679,870 3,869,518

Yard operations 1,123,986 185,511 1,309,497

Facility operations 1,292,527 225,502 1,518,029

Cost of vehicle sales 326,764 287,734 614,498

2 unchanged sentences

Depreciation and amortization, excluding debt costs $ 135,804 $ 23,674 $ 159,478

Interest income 64,082 1,846 65,928

Capital expenditures, including acquisitions 373,190 143,446 516,636

20 unchanged sentences

The Company is cooperating with the DOJ’s investigation.

At this time, we are unable to predict the duration, scope, or result of any potential governmental, criminal, or civil proceeding that may result, the imposition of fines and penalties, and/or other remedies, and as a result, are unable to predict the range of possible loss.

At this time, we are unable to predict the duration, scope, or result of any potential governmental, criminal, or civil proceeding that

may result, the imposition of fines and penalties, and/or other remedies, and as a result, are unable to predict the range of possible loss.

NOTE 16 — Guarantees — Indemnifications to Officers and Directors

14 unchanged sentences

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 9A. Controls and Procedures