Jay Adair – President Will Franklin – SVP and CFO

Tony Cristello – BB&T Capital Markets Bob Labick – CJS Securities Scott Stember – Sidoti & Company Bill Armstrong – CL King & Associates Matt Nemer – Thomas Weisel Partners Craig Kennison – Robert W. Baird Ivan Holman – RBC Capital Partners Gary Prestopino – Barrington Research Edward Hemmelgarn – Shaker Investments Charles Weissman – Chilton Investment Company

Thanks Will. Well, again, good morning, everyone. As we discussed in the first quarter when we started to see a lot of these trends take place. We expected back then that volumes would be up, we expected that ACVs would continue to decline, and we've seen that. So just to give you a little flavor, a little feel for what's going on there, basically ACVs for 2008 were roughly the same, meaning that you can go back May, June, July, August, they were roughly the same number, and we started to see that dip after September. So in October we saw the first decline in ACV values. That continued into November, it continued into December and actually hit the low point in December. It has modestly come up for January, February and March. So it's probably right where it's going to be from what we can see. Obviously, used car values have come back a little more in February. But I think – yes, when we look at ACVs, I think the number is kind of where it's going to be.I think we're pretty comfortable with that. Obviously, lower ACVs drive volume and we've seen volume up. We've seen a pretty good trend there with respect to increased volumes. Volumes increase inventory for Copart, obviously, as we pick cars up in Q2 and then we sell those cars off in Q3, and we've always said basically we convert cash into receivables in Q2 and then we'll convert the cars into cash in Q3. So we finished the quarter with roughly $22 million in cash and we will finish Q3 – we're talking a month and a half from now, we should be something north of $70 million in cash. That's what we're expecting today from what we can see. So that's kind of volume and ACV related; now we get into returns.I think this is the exciting part for Copart. We're pretty jazzed up about this. Returns are up for us and I'd say they're up materially, looking at the returns right now, just to give you a flavor for that. Again, returns started to decline from September into October into November into December and they hit the low point in December, as well. Those returns have increased. Average selling prices increased in January, up again in February, up again in March. Looking at where we're currently at compared to our low point, we're up about 10%. So I think the worst is over, A, but B, more importantly, I think we're outpacing the market. From what we can see that's out there today from talking to industry participants, from talking to clients, it appears the market is relatively flat, and we are hearing that maybe it's up modestly in the first quarter, and so we're excited about that, because we're up significantly and we're looking at that and saying, okay this is good. Obviously, our clients are very focused on returns right now. They're focused on money that they can get for these vehicles and improvements there, and we think we're outpacing the market.It makes sense to us. We've got a friction-free platform. You open up a browser, you're in the sale. There's no physically attending, there's none of that. So from kind of a gut visceral [ph] perspective it makes a lot of sense to us. From a competitive standpoint it really puts us outside, above, and with a real advantage compared to other players in the industry, not only returns but the strength of our balance sheet, and I think that's a big deal. We're sitting today with no debt. Obviously got a $200 million line that's untapped and the odds are we won't tap it. We'll be finishing April north of $70 million, that's our estimate, and we'll be generating cash again in Q4. So as we sit here and we look, we're the Company that's out there today that has a very strong product, we're the Company today that has a very strong platform and a very strong balance sheet, and so a lot of prospective clients out there today are looking at Copart and seeing if this is an alternative from what they're currently doing.In addition, we're investing in IT and I think this is important. When you're in an economy like this I think people just tend to pull in their horns and they may not have a choice. If you've got significant debt or you've got significant requirements that you've got to pay you may not have the option of investing in facilities and investing in technology, and we're doing that. We think that by investing in IT and building a lot of new products, like the new web page that we launched, we're going to change the way that we sell vehicles, again. And so you are going to see a lot of improvements, a lot of enhancements in the next six months and a lot in the next 12 months for Copart. Now G&A is up because we've invested in adding so many folks in IT. We were going to actually increase it even more, but as of October we put a hold in on the expansion, as I discussed in Q1. We will not increase the number; however, at the same time we will not be reducing it at this time. I guess it just basically boils down to the fact that we're not strapped for cash. We've got a lot of ideas, we've got a lot of great improvements to make, and we want to improve the customer experience at Copart. We want to make it a better environment for selling cars and we've just got a lot of things that we – a lot of ideas that we want to invest in, a lot of ideas that we want to bring to market, and so we'll be doing that and I think that's going to drive even further volume. The good news is, as we discussed in Q1, that we've got ample capacity across the organization. We finished the quarter with a $28 million investment in CapEx. That was for some additional land. So as I say to you, on one hand, that we've got ample capacity across the organization that is, in general, for all the stores. Now, if we – as a percentage. If we look out store by store there's a handful of stores that we've got a handful of yards that are nearing capacity and so we bought additional land in those markets. We are sitting on a number of sites, over a dozen sites today that we never discuss. They're mothballed, they're land that we own, it's zoned, it's ready, and if we get additional volume in that market and we run out of space then we'll turn that location on and add it to our network. And so that's, again, why we made some of that investment.Now looking at Q3, we don't see a lot of investment in CapEx. So our target right now is roughly $5 million for CapEx and that will change if we were to get a major account somewhere and we had to expand a location or develop it. Some of the land isn't developed. We just own the land. It's sitting there and it's a Greenfield waiting to be improved. So we're in that kind of position right now where we've got a lot of capacity, we've got a lot of locations, we can take on new business, we've got great products, we're seeing returns that are up. So we're looking forward to a great, great year, especially considering and comparing to how the US economy is going right now. So I think we're in a good position there.So that's US. Looking at the UK, just to give you an update on that, we are sitting today with the nation's best network in that market. We are today picking up cars in one day across the nation. That's amazing, because if you go back over two years ago it wasn't uncommon to pick a car up in three, four, five days. So we have gone in there and said, nope, that's not good enough, we're going to be picking them up in 24 hours. We get an assignment today, we pick it up today or we pick it up tomorrow and that reduces, obviously, storage. You've got direct costs of 20 pounds, 25 pounds, 30 pounds a day; sometimes it is 50 pounds a day, that's being billed, especially as you get into some of the London locations. But kind of even on the low end, you're looking at 15 pounds a day storage rate, so you shave that number off by a day or two you're talking about a huge savings for our clients. In addition, we're reducing cycle time, and I think that's a big deal. Obviously always wanting to shrink that and decrease that cycle time across the life of the car.We recently – the other thing I want to point out, we recently had one of our largest clients switch from purchase to consignment model. This is the second large, large client to do this in the last two quarters. I think this trend is going to continue and it's pretty simple. If you're on a purchase you use the purchase number as the average, so you use that as the average for whether or not you should fix or total the car. I discussed this in the last call. So I won't elaborate too much and if there are questions on it I can explain it again. But in an effort not to kind of repeat things call after call I think most of us on the call understand that if you're averaging a car at 22% that car may be worth 30%, it may be worth 15%. You're not accurately totaling the right car. Sometimes you're totaling a car you should have fixed, and sometimes you're fixing a car you should have totaled.So what we do is we implement ProQuote, and because we're selling so many cars – we've sold now over 200,000 cars in the UK, obviously, and because we've got such large volumes we can produce real empirical evidence. This is what the cars have sold for recently, this is what your car is worth and now you can factor that into the repair estimate. So because of that we think there's going to be a continued trend to see clients moving off of the purchase model, moving on to a real ProQuote model, where you get the real value on the car, and we'll report as we see further movement in that. Now, with respect to currency conversion, the British Pound to the US Dollar, and how that impacts revenues, I'm going to pass on that. Will will talk about that in his portion, but obviously it did impact us seeing the decline in the pound and the strengthening of the dollar.And then finally, I just want to announce that we did come to an agreement with Auto Auction Services Corp. They operate the Auto IMS system. We just announced that recently and this is a good thing for Copart, because Auto IMS basically is the electronic link for fleet operators, banks, finance companies, leasing companies. They interact with Auto IMS then Auto IMS assigns the car to the auction. And so we have – obviously we've for years handled finance company cars, repos and leasing companies, and that type of business, but we've had to do it outside of Auto IMS, and now that we've come to an agreement with them, we'll be taking our assignments electronically through them. So literally a bank will be able to click a button on the Auto IMS platform and the car goes to Copart now. So this should drive additional volume for the company. So things look great. We're happy about where we're sitting right now. We think things are going to be doing a lot better going forward, and with that, let me turn it over to Will Franklin, CFO, for an update on the financial side.

Thank you, Jay. During our second quarter we felt the full impact of the reductions in commodity pricing, the decline in used car pricing, and the strengthening of the dollar, especially relative to the peso on our revenues. These factors led to a decline in the average selling price of the vehicles that we remarket, and, as more than half of our revenue is tied in some manner to the selling price of the vehicle, they have led to a reduction in our revenues per transaction on a sequential quarter basis. On a consolidated basis, revenue for our second quarter was $169.9 million compared to $173.5 million for the same quarter last year, a decrease of 2.1%.In North America, we generated $138.6 million for the second quarter compared to $137.6 million for the same quarter last year, an increase of $1 million, or 0.7%. The growth came solely from increased volume, as revenue per transaction remained relatively flat. Volume grew despite the reductions in miles driven, which would suggest a reduction in accident rates. We believe the decline in used car pricing has led to higher percentage of cars involved in accidents ultimately being totaled, and growth in our insurance volumes. Units remarketed for the insurance industry represented 83% of total North American volume compared to 81% in the previous quarter and 82% in the same quarter last year. We believe the weaker economy has had a negative impact on volumes from certain non-insurance suppliers. Same-store sales in North America were down 0.8%.In the UK, revenue was $31.2 million for the quarter compared to $35.8 million for the same quarter last year, a decline of $4.6 million, or 12.8%. The decline resulted solely from the change in the pound to dollar exchange rate, which was $1.49 to the pound in our current quarter, but $2.2 to the pound in the same quarter last year. At the prior-period's exchange rate, revenue would have been $42.2 million, an increase of $6.4 million, or 18%. In the UK, volume was up 13.5%. In addition, both gross proceeds and the net revenue per transaction were up relative to the same quarter last year. Net revenue is either fees generated for vehicles sold on the agency model or the gross selling price less the cost of the vehicle per unit sold on our own account. We believe this is due to the impact of VB2. VB2 has had a significant impact on the international transactions, as sales to international buyers expressed in gross proceeds has grown from 16% in the same quarter last year to over 22% in the current quarter, an increase of almost 38%.Revenue from the sales of cars for our own account was $28.3 million and units sold for own account represented 8.2% of all units sold. Our consolidated gross margin percentage remained constant at 39.6% of revenue, as gains in revenue yield in the UK were offset by increased processing cost per vehicle in the US. In the US, we experienced higher subhauling cost as we have not yet recovered all the price increasing, the price increases given to our subhaulers during the period of peak diesel fuel pricing. We have also experienced higher fixed costs, primarily payroll, equipment leasing and facility costs, as we increased our facilities network by six sites over the same period last year.Operations depreciation expense was $8 million compared to $7.8 million for the same quarter last year. General and administrative costs, excluding depreciation, were $19.5 million compared to $18.4 million for the same quarter last year. Included in G&A costs in the current quarter was the establishment of a reserve for the settlement of a lawsuit of $1 million. The beneficial impact of foreign currency translation rates of $0.6 million was offset by increased costs associated with additional development and network resources and the expansion of our IT system, as we continue to enhance VB2 and our seller interfaces. General and administrative depreciation was $2.2 million compared to $3 million for the same period last year.Our operating income decreased from $47.2 million to $45.6 million, or 3.5%. Our other income line contains the impact of the impairment of a note receivable of $1.2 million and the loss on the sale of assets of $1.2 million, of which $1 million was the loss on the sale of an airplane in the UK. The note receivable was associated with the sale of the MAG business in 2006. Fully-diluted EPS was $0.32 per share compared to $0.35 per share in the same quarter last year. Excluding the impact of the note impairment, the loss on the sale of the airplane and the establishment of the reserve for legal settlement, all totaling $3.2 million, diluted EPS would have been $0.35. Income tax expense for the period was $17 million for an effective tax rate of 38.5%. Our cash was approximately $22.4 million. Relative to our first quarter, accounts receivable, inventory, and vehicle pulling costs all increased as the inventory grew. Accounts payable and accrued liabilities declined primarily due to the timing of payroll-related expenses and certain seller payments. We continued to have a strong balance sheet with no debt, a current ratio of 2-to-1, and we expect to increase cash significantly during the next two quarters, as we sell off winter inventory. In the quarter we consumed four – excuse me – we consumed $7.6 million from operations. Net income plus non-cash expenses, like depreciation and equity compensation of $40 million, was offset by cash consumed for inventories and tax payments. During the quarter, we made tax payments of over $37 million. Capital expenditures for the quarter were $27.8 million and we collected $4.7 million from the sale of assets, giving us a net capital outlay of $23.1 million. Finally, during the quarter we repurchased 223,000 shares of our common stock at an average price of $26.93. We have approximately 15.4 million shares remaining on our current share repurchase authorization.That concludes my comments. At this time, I'll turn the call back over to you, Carolyn, to moderate the question-and-answer portion of the call.

Tony Cristello – BB&T Capital Partners:

Hi. Good morning, Tony.

Hi, Tony. Tony Cristello – BB&T Capital Partners:

Tony Cristello – BB&T Capital Partners:

Tony Cristello – BB&T Capital Partners:

Tony Cristello – BB&T Capital Partners:

Tony Cristello – BB&T Capital Partners:

Tony Cristello – BB&T Capital Partners:

Tony Cristello – BB&T Capital Partners:

Bob Labick – CJS Securities:

Hi, Bob.

Good morning Bob. Bob Labick – CJS Securities:

Bob Labick – CJS Securities:

Bob Labick – CJS Securities:

Bob Labick – CJS Securities:

Scott Stember – Sidoti & Company:

Scott Stember – Sidoti & Company:

Scott Stember – Sidoti & Company:

Scott Stember – Sidoti & Company:

Scott Stember – Sidoti & Company:

Scott Stember – Sidoti & Company:

Scott Stember – Sidoti & Company:

It's both. It's both, and charities. So it's your franchise independent dealers, your individual consignors and your charities, primarily. Scott Stember – Sidoti & Company:

Scott Stember – Sidoti & Company:

Scott Stember – Sidoti & Company:

Scott Stember – Sidoti & Company:

Scott Stember – Sidoti & Company:

And our next question comes from Bill Armstrong with CL King & Associates. Bill Armstrong – CL King & Associates:

Bill Armstrong – CL King & Associates:

Bill Armstrong – CL King & Associates:

Bill Armstrong – CL King & Associates:

Bill Armstrong – CL King & Associates:

Bill Armstrong – CL King & Associates:

Matt Nemer – Thomas Weisel Partners:

Matt Nemer – Thomas Weisel Partners:

Matt Nemer – Thomas Weisel Partners:

Matt Nemer – Thomas Weisel Partners:

Matt Nemer – Thomas Weisel Partners:

Matt Nemer – Thomas Weisel Partners:

Matt Nemer – Thomas Weisel Partners:

Matt Nemer – Thomas Weisel Partners:

Craig Kennison – Robert W. Baird:

Craig Kennison – Robert W. Baird:

Craig Kennison – Robert W. Baird:

Craig Kennison – Robert W. Baird:

Craig Kennison – Robert W. Baird:

Craig Kennison – Robert W. Baird:

Craig Kennison – Robert W. Baird:

Craig Kennison – Robert W. Baird:

Craig Kennison – Robert W. Baird:

Craig Kennison – Robert W. Baird:

Craig Kennison – Robert W. Baird:

Craig Kennison – Robert W. Baird:

Ivan Holman – RBC Capital Partners:

Ivan Holman – RBC Capital Partners:

Ivan Holman – RBC Capital Partners:

Ivan Holman – RBC Capital Partners:

Ivan Holman – RBC Capital Partners:

Gary Prestopino – Barrington Research:

Gary Prestopino – Barrington Research:

Gary Prestopino – Barrington Research:

Gary Prestopino – Barrington Research:

Gary Prestopino – Barrington Research:

Gary Prestopino – Barrington Research:

Gary Prestopino – Barrington Research:

Gary Prestopino – Barrington Research:

Edward Hemmelgarn – Shaker Investments:

Edward Hemmelgarn – Shaker Investments:

Edward Hemmelgarn – Shaker Investments:

Edward Hemmelgarn – Shaker Investments:

Edward Hemmelgarn – Shaker Investments:

Edward Hemmelgarn – Shaker Investments:

Edward Hemmelgarn – Shaker Investments:

Edward Hemmelgarn – Shaker Investments:

Edward Hemmelgarn – Shaker Investments:

Charles Weissman – Chilton Investment Company:

Charles Weissman – Chilton Investment Company:

Charles Weissman – Chilton Investment Company:

And that does conclude today's conference. Thank you everyone for your participation.