Slide 1: Q3 2016 & Year-to-Date Earnings Slides
Q3 2016 & Year-to-Date Earnings Slides November 3, 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward looking statements are subject to certain risks, trends, and uncertainties that could cause actual results to differ material
Slide 3: Third Quarter 2016 Highlights Summary
Third Quarter 2016 Highlights Summary Revenue: +16% Adjusted EBITDA: +13% Operating Adjusted EPS: +6% ADESA Revenue: +26% Volume: +17% (+6% excluding acquisitions) Physical volume: +15% (+1% excluding acquisitions) Online only volume: +23% Dealer consignment volume: +10% (-4% excludi
Slide 4: KAR Q3 2016 Highlights
KAR Q3 2016 Highlights 4 ($ in millions, except per share amounts) KAR Q3 2016 Q3 2015 Highlights* Total operating revenues $773.8 $666.7 Gross profit** $330.1 $288.6 SG&A $146.3 $128.5 +$8.6M acquired SG&A EBITDA $182.8 $160.3 Adjusted EBITDA $184.8 $163.1 Net income $54.4 $52.3 Net income per shar
Slide 5: ADESA Q3 2016 Highlights
ADESA Q3 2016 Highlights 5 ($ in millions, except RPU) ADESA Q3 2016 Q3 2015 Highlights* Revenue $441.6 $351.4 +17% volume, +7% RPU, +$35.4M acquisitions Gross profit** $187.9 $152.2 +$15.6M acquisitions Gross profit % 42.5% 43.3% SG&A $80.6 $71.3 +$8.6M acquired SG&A, +$3.1M compensation expense, +
Slide 6: IAA Q3 2016 Highlights
IAA Q3 2016 Highlights 6 ($ in millions) IAA Q3 2016 Q3 2015 Highlights* Revenue $261.0 $246.2 +5% volume, +$2.5M HBC Gross profit** $92.5 $87.3 +$0.8M HBC Gross profit % 35.4% 35.5% SG&A $26.7 $25.6 +$0.4M professional fees, +$0.3M stock-based compensation expense EBITDA $65.8 $60.8 Adjusted EBITDA
Slide 7: AFC Q3 2016 Highlights
($ in millions, except for revenue per loan transaction) AFC Q3 2016 Q3 2015 Highlights* Interest and fee income $68.4 $62.2 Other revenue $2.7 $2.5 Provision for credit losses ($8.0) ($2.7) Increased to 1.8% from 0.7% of avg. managed receivables Other service revenue $8.1 $7.1 +14% in "Other servic
Slide 8: ADESA Incremental Operating Profit Margin Analysis – Q3 2016
ADESA Incremental Operating Profit Margin Analysis – Q3 2016 8 ($ in millions) Reported Impact of Acquisitions ADESA Excluding Acquisitions Q3 2016 Revenue $441.6 $35.4 $406.2 Operating profit $82.0 $4.1 $77.9 Operating profit % 18.6% 11.6% 19.2% Q3 2015 Revenue $351.4 Operating profit $58.6 Operati
Slide 9: Year-to-Date Slides
KAR Year-to-Date Slides AUCTION SERVICES.
Slide 10: KAR Nine Months Ended September 30, 2016 Highlights
KAR Nine Months Ended September 30, 2016 Highlights 10 ($ in millions, except per share amounts) KAR YTD 2016 YTD 2015 Highlights* Total operating revenues $2,290.6 $1,957.4 -$12.0M CAD currency Gross profit** $997.3 $860.7 SG&A $434.3 $373.5 +$20.9M acquired SG&A, -$1.9M CAD currency EBITDA $559.5
Slide 11: ADESA Nine Months Ended September 30, 2016 Highlights
ADESA Nine Months Ended September 30, 2016 Highlights 11 ($ in millions, except RPU) ADESA YTD 2016 YTD 2015 Highlights* Revenue $1,277.2 $1,024.4 +17% volume, +6% RPU (includes -$8.6M CAD currency), +$93.5M acquisitions Gross profit** $555.9 $446.3 +$38.5M acquisitions Gross profit % 43.5% 43.6% SG
Slide 12: IAA Nine Months Ended September 30, 2016 Highlights
IAA Nine Months Ended September 30, 2016 Highlights 12 ($ in millions) IAA YTD 2016 YTD 2015 Highlights* Revenue $795.4 $732.8 +8% volume, +$25.5M HBC, -$2.7M CAD currency Gross profit** $286.1 $272.2 +$2.8M HBC Gross profit % 36.0% 37.1% SG&A $78.9 $72.6 +$1.6M HBC, +$1.0M stock-based compensation,
Slide 13: AFC YTD 2016 Highlights
($ in millions, except for revenue per loan transaction) AFC YTD 2016 YTD 2015 Highlights* Interest and fee income $205.5 $182.9 Other revenue $7.7 $7.0 Provision for credit losses ($19.0) ($10.5) Increased to 1.5% from 1.0% of avg. managed receivables Other service revenue $23.8 $20.8 +14% in "Othe
Slide 14: ADESA Incremental Operating Profit Margin Analysis – Nine Months 2016
ADESA Incremental Operating Profit Margin Analysis – Nine Months Ended September 30, 2016 14 ($ in millions) Reported Impact of Acquisitions ADESA Excluding Acquisitions YTD 2016 Revenue $1,277.2 $93.5 $1,183.7 Operating profit $245.5 $11.7 $233.8 Operating profit % 19.2% 12.5% 19.8% YTD 2015 Revenu
Slide 15: Appendix
KAR ; AUCTION Appendix SERVICES.
Slide 16: EBITDA and Adjusted EBITDA definitions
EBITDA is defined as net income (loss), plus interest expense net of interest income, income tax provision (benefit), depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for the items of income and expense and expected incremental revenue and cost savings as described in the company's
Slide 17: Q3 2016 Adjusted EBITDA Reconciliation
17 Q3 2016 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended September 30, 2016 ADESA IAA AFC Corporate Consolidated Net income (loss) $43.5 $22.0 $21.6 ($32.7) $54.4 Add back: Income taxes 26.3 12.5 13.2 (20.2) 31.8 Interest expense, net of interest income (0.2) – 8.7 27.6 36.1 Depr
Slide 18: Q3 2015 Adjusted EBITDA Reconciliation
18 Q3 2015 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended September 30, 2015 ADESA IAA AFC Corporate Consolidated Net income (loss) $29.6 $19.9 $22.1 ($19.3) $52.3 Add back: Income taxes 16.0 11.4 13.6 (11.4) 29.6 Interest expense, net of interest income 0.1 – 6.6 17.6 24.3 Deprec
Slide 19: YTD 2016 Adjusted EBITDA Reconciliation
19 YTD 2016 Adjusted EBITDA Reconciliation ($ in millions) Nine Months ended September 30, 2016 ADESA IAA AFC Corporate Consolidated Net income (loss) $129.0 $72.1 $68.6 ($92.8) $176.9 Add back: Income taxes 76.7 42.5 41.8 (54.8) 106.2 Interest expense, net of interest income (0.1) – 24.7 75.9 100.5
Slide 20: YTD 2015 Adjusted EBITDA Reconciliation
20 YTD 2015 Adjusted EBITDA Reconciliation ($ in millions) Nine Months ended September 30, 2015 ADESA IAA AFC Corporate Consolidated Net income (loss) $84.1 $69.5 $61.8 ($49.1) $166.3 Add back: Income taxes 48.4 41.3 37.9 (28.6) 99.0 Interest expense, net of interest income 0.4 – 17.2 49.4 67.0 Depr