|
ý
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended March 31, 2017
|
||
OR
|
||
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
(State or other jurisdiction of
incorporation or
organization)
|
|
20-8744739
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
ý
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
(Do not check if a
smaller reporting company)
|
|
Smaller reporting company
o
|
|
Emerging growth company
o
|
|
|
|
Page
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Operating revenues
|
|
|
|
||||
ADESA Auction Services
|
$
|
498.0
|
|
|
$
|
414.8
|
|
IAA Salvage Services
|
297.4
|
|
|
269.6
|
|
||
AFC
|
71.2
|
|
|
73.9
|
|
||
Total operating revenues
|
866.6
|
|
|
758.3
|
|
||
Operating expenses
|
|
|
|
||||
Cost of services (exclusive of depreciation and amortization)
|
501.2
|
|
|
432.0
|
|
||
Selling, general and administrative
|
157.4
|
|
|
141.1
|
|
||
Depreciation and amortization
|
64.5
|
|
|
56.4
|
|
||
Total operating expenses
|
723.1
|
|
|
629.5
|
|
||
Operating profit
|
143.5
|
|
|
128.8
|
|
||
Interest expense
|
40.3
|
|
|
28.7
|
|
||
Other income, net
|
(0.1
|
)
|
|
(1.3
|
)
|
||
Loss on extinguishment of debt
|
—
|
|
|
4.0
|
|
||
Income before income taxes
|
103.3
|
|
|
97.4
|
|
||
Income taxes
|
34.1
|
|
|
36.7
|
|
||
Net income
|
$
|
69.2
|
|
|
$
|
60.7
|
|
Net income per share
|
|
|
|
||||
Basic
|
$
|
0.51
|
|
|
$
|
0.44
|
|
Diluted
|
$
|
0.50
|
|
|
$
|
0.44
|
|
Dividends declared per common share
|
$
|
0.32
|
|
|
$
|
0.29
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Net income
|
$
|
69.2
|
|
|
$
|
60.7
|
|
Other comprehensive income
|
|
|
|
||||
Foreign currency translation gain
|
3.4
|
|
|
8.7
|
|
||
Comprehensive income
|
$
|
72.6
|
|
|
$
|
69.4
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
188.0
|
|
|
$
|
201.8
|
|
Restricted cash
|
18.4
|
|
|
17.9
|
|
||
Trade receivables, net of allowances of $9.4 and $13.0
|
773.0
|
|
|
682.9
|
|
||
Finance receivables, net of allowances of $12.3 and $12.0
|
1,748.4
|
|
|
1,780.2
|
|
||
Other current assets
|
159.8
|
|
|
158.4
|
|
||
Total current assets
|
2,887.6
|
|
|
2,841.2
|
|
||
Other assets
|
|
|
|
||||
Goodwill
|
2,058.3
|
|
|
2,057.0
|
|
||
Customer relationships, net of accumulated amortization of $731.6 and $707.8
|
438.6
|
|
|
461.0
|
|
||
Other intangible assets, net of accumulated amortization of $303.1 and $301.6
|
317.3
|
|
|
320.1
|
|
||
Other assets
|
40.9
|
|
|
35.8
|
|
||
Total other assets
|
2,855.1
|
|
|
2,873.9
|
|
||
Property and equipment, net of accumulated depreciation of $678.9 and $655.6
|
837.5
|
|
|
842.5
|
|
||
Total assets
|
$
|
6,580.2
|
|
|
$
|
6,557.6
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
786.5
|
|
|
$
|
648.5
|
|
Accrued employee benefits and compensation expenses
|
72.3
|
|
|
100.7
|
|
||
Accrued interest
|
1.5
|
|
|
2.2
|
|
||
Other accrued expenses
|
147.6
|
|
|
149.4
|
|
||
Income taxes payable
|
2.0
|
|
|
5.0
|
|
||
Dividends payable
|
43.9
|
|
|
43.7
|
|
||
Obligations collateralized by finance receivables
|
1,241.8
|
|
|
1,280.3
|
|
||
Current maturities of long-term debt
|
38.0
|
|
|
105.2
|
|
||
Total current liabilities
|
2,333.6
|
|
|
2,335.0
|
|
||
Non-current liabilities
|
|
|
|
||||
Long-term debt
|
2,360.5
|
|
|
2,365.1
|
|
||
Deferred income tax liabilities
|
288.7
|
|
|
291.7
|
|
||
Other liabilities
|
167.0
|
|
|
168.5
|
|
||
Total non-current liabilities
|
2,816.2
|
|
|
2,825.3
|
|
||
Commitments and contingencies (Note 8)
|
|
|
|
||||
Stockholders' equity
|
|
|
|
||||
Preferred stock, $0.01 par value:
|
|
|
|
||||
Authorized shares: 100,000,000
|
|
|
|
|
|
||
Issued shares: none
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value:
|
|
|
|
||||
Authorized shares: 400,000,000
|
|
|
|
|
|
||
Issued and outstanding shares:
|
|
|
|
|
|
||
March 31, 2017: 137,129,155
|
|
|
|
|
|
||
December 31, 2016: 136,639,217
|
1.4
|
|
|
1.4
|
|
||
Additional paid-in capital
|
1,376.3
|
|
|
1,371.1
|
|
||
Retained earnings
|
98.6
|
|
|
74.1
|
|
||
Accumulated other comprehensive loss
|
(45.9
|
)
|
|
(49.3
|
)
|
||
Total stockholders' equity
|
1,430.4
|
|
|
1,397.3
|
|
||
Total liabilities and stockholders' equity
|
$
|
6,580.2
|
|
|
$
|
6,557.6
|
|
|
Common
Stock
Shares
|
|
Common
Stock
Amount
|
|
Additional
Paid-In
Capital
|
|
Retained Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
|||||||||||
Balance at Balance at December 31, 2016
|
136.6
|
|
|
$
|
1.4
|
|
|
$
|
1,371.1
|
|
|
$
|
74.1
|
|
|
$
|
(49.3
|
)
|
|
$
|
1,397.3
|
|
Net income
|
|
|
|
|
|
|
|
69.2
|
|
|
|
|
69.2
|
|
||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
3.4
|
|
|
3.4
|
|
||||||||
Issuance of common stock under stock plans
|
0.6
|
|
|
|
|
4.3
|
|
|
|
|
|
|
4.3
|
|
||||||||
Surrender of RSUs for taxes
|
(0.1
|
)
|
|
|
|
(5.7
|
)
|
|
|
|
|
|
(5.7
|
)
|
||||||||
Stock-based compensation expense
|
|
|
|
|
|
5.8
|
|
|
|
|
|
|
5.8
|
|
||||||||
Dividends earned under stock plans
|
|
|
|
|
0.8
|
|
|
(0.8
|
)
|
|
|
|
—
|
|
||||||||
Cash dividends declared to stockholders ($0.32 per share)
|
|
|
|
|
|
|
|
(43.9
|
)
|
|
|
|
(43.9
|
)
|
||||||||
Balance at March 31, 2017
|
137.1
|
|
|
$
|
1.4
|
|
|
$
|
1,376.3
|
|
|
$
|
98.6
|
|
|
$
|
(45.9
|
)
|
|
$
|
1,430.4
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Operating activities
|
|
|
|
||||
Net income
|
$
|
69.2
|
|
|
$
|
60.7
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
64.5
|
|
|
56.4
|
|
||
Provision for credit losses
|
11.6
|
|
|
6.9
|
|
||
Deferred income taxes
|
(3.1
|
)
|
|
(3.5
|
)
|
||
Amortization of debt issuance costs
|
2.5
|
|
|
2.0
|
|
||
Stock-based compensation
|
5.8
|
|
|
5.2
|
|
||
(Gain) loss on disposal of fixed assets
|
(0.3
|
)
|
|
0.1
|
|
||
Loss on extinguishment of debt
|
—
|
|
|
4.0
|
|
||
Other non-cash, net
|
2.9
|
|
|
2.0
|
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
||||
Trade receivables and other assets
|
(94.3
|
)
|
|
(152.4
|
)
|
||
Accounts payable and accrued expenses
|
83.2
|
|
|
88.7
|
|
||
Net cash provided by operating activities
|
142.0
|
|
|
70.1
|
|
||
Investing activities
|
|
|
|
||||
Net decrease (increase) in finance receivables held for investment
|
21.4
|
|
|
(65.6
|
)
|
||
Purchases of property, equipment and computer software
|
(37.2
|
)
|
|
(36.0
|
)
|
||
Advance to equity method investee
|
(5.0
|
)
|
|
—
|
|
||
Proceeds from the sale of property and equipment
|
0.1
|
|
|
—
|
|
||
(Increase) decrease in restricted cash
|
(0.5
|
)
|
|
1.3
|
|
||
Net cash used by investing activities
|
(21.2
|
)
|
|
(100.3
|
)
|
||
Financing activities
|
|
|
|
||||
Net increase in book overdrafts
|
31.4
|
|
|
41.7
|
|
||
Net decrease in borrowings from lines of credit
|
(67.2
|
)
|
|
(140.0
|
)
|
||
Net (decrease) increase in obligations collateralized by finance receivables
|
(41.0
|
)
|
|
8.1
|
|
||
Proceeds from long-term debt
|
—
|
|
|
1,336.5
|
|
||
Payments for debt issuance costs/amendments
|
(0.1
|
)
|
|
(19.5
|
)
|
||
Payments on long-term debt
|
(6.1
|
)
|
|
(637.6
|
)
|
||
Payments on capital leases
|
(7.4
|
)
|
|
(6.2
|
)
|
||
Payments of contingent consideration and deferred acquisition costs
|
(3.0
|
)
|
|
(2.0
|
)
|
||
Issuance of common stock under stock plans
|
4.3
|
|
|
3.1
|
|
||
Tax withholding payments for vested RSUs
|
(3.6
|
)
|
|
(0.9
|
)
|
||
Dividends paid to stockholders
|
(43.7
|
)
|
|
(37.2
|
)
|
||
Net cash (used by) provided by financing activities
|
(136.4
|
)
|
|
546.0
|
|
||
Effect of exchange rate changes on cash
|
1.8
|
|
|
5.5
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(13.8
|
)
|
|
521.3
|
|
||
Cash and cash equivalents at beginning of period
|
201.8
|
|
|
155.0
|
|
||
Cash and cash equivalents at end of period
|
$
|
188.0
|
|
|
$
|
676.3
|
|
Cash paid for interest
|
$
|
37.1
|
|
|
$
|
25.4
|
|
Cash paid for taxes, net of refunds
|
$
|
39.3
|
|
|
$
|
32.9
|
|
•
|
"we," "us," "our" and "the Company" refer, collectively, to KAR Auction Services, Inc. and all of its subsidiaries;
|
•
|
"ADESA" or "ADESA Auctions" refer, collectively, to ADESA, Inc., a wholly-owned subsidiary of KAR Auction Services, and ADESA, Inc.'s subsidiaries, including Openlane, Inc. (together with Openlane, Inc.'s subsidiaries, "Openlane") and ADESA Remarketing Limited (formerly known as GRS Remarketing Limited ("GRS" or "ADESA Remarketing Limited"));
|
•
|
"AFC" refers, collectively, to Automotive Finance Corporation, a wholly-owned subsidiary of ADESA, and Automotive Finance Corporation's subsidiaries and other related entities, including PWI Holdings, Inc.;
|
•
|
"Credit Agreement" refers to the Amended and Restated Credit Agreement, dated March 11, 2014, as amended on March 9, 2016, among KAR Auction Services, as the borrower, the several banks and other financial institutions or entities from time to time parties thereto and the administrative agent;
|
•
|
"Credit Facility" refers to the
three
-year senior secured term loan B-1 facility ("Term Loan B-1"), the
seven
-year senior secured term loan B-2 facility ("Term Loan B-2"), the
seven
-year senior secured term loan B-3 facility ("Term Loan B-3"), the
$300 million
,
five
-year senior secured revolving credit facility (the "revolving credit facility") and the
$250 million
,
five
-year senior secured revolving credit facility (the "old revolving credit facility"), the terms of which are set forth in the Credit Agreement. Term Loan B-1 and the old revolving credit facility were extinguished in March 2016 with proceeds received from Term Loan B-3;
|
•
|
"IAA" refers, collectively, to Insurance Auto Auctions, Inc., a wholly-owned subsidiary of KAR Auction Services, and Insurance Auto Auctions, Inc.'s subsidiaries and other related entities, including HBC Vehicle Services Limited ("HBC"); and
|
•
|
"KAR Auction Services" refers to KAR Auction Services, Inc. and not to its subsidiaries.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
PRSUs
|
|
$
|
3.1
|
|
|
$
|
3.1
|
|
RSUs
|
|
2.2
|
|
|
1.5
|
|
||
Service options
|
|
0.5
|
|
|
0.6
|
|
||
Total stock-based compensation expense
|
|
$
|
5.8
|
|
|
$
|
5.2
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Net income
|
|
$
|
69.2
|
|
|
$
|
60.7
|
|
Weighted average common shares outstanding
|
|
136.8
|
|
|
137.2
|
|
||
Effect of dilutive stock options and restricted stock awards
|
|
1.5
|
|
|
1.8
|
|
||
Weighted average common shares outstanding and potential common shares
|
|
138.3
|
|
|
139.0
|
|
||
Net income per share
|
|
|
|
|
||||
Basic
|
|
$
|
0.51
|
|
|
$
|
0.44
|
|
Diluted
|
|
$
|
0.50
|
|
|
$
|
0.44
|
|
|
March 31, 2017
|
|
Net Credit Losses
Three Months Ended March 31, 2017
|
||||||||
|
Principal Amount of:
|
|
|||||||||
(in millions)
|
Receivables
|
|
Receivables
Delinquent
|
|
|||||||
Floorplan receivables
|
$
|
1,748.0
|
|
|
$
|
15.6
|
|
|
$
|
10.9
|
|
Other loans
|
12.7
|
|
|
—
|
|
|
—
|
|
|||
Total receivables managed
|
$
|
1,760.7
|
|
|
$
|
15.6
|
|
|
$
|
10.9
|
|
|
December 31, 2016
|
|
Net Credit Losses
Three Months Ended March 31, 2016
|
||||||||
|
Principal Amount of:
|
|
|||||||||
(in millions)
|
Receivables
|
|
Receivables
Delinquent
|
|
|||||||
Floorplan receivables
|
$
|
1,781.1
|
|
|
$
|
12.0
|
|
|
$
|
5.3
|
|
Other loans
|
11.1
|
|
|
—
|
|
|
—
|
|
|||
Total receivables managed
|
$
|
1,792.2
|
|
|
$
|
12.0
|
|
|
$
|
5.3
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Obligations collateralized by finance receivables, gross
|
$
|
1,259.9
|
|
|
$
|
1,300.0
|
|
Unamortized securitization issuance costs
|
(18.1
|
)
|
|
(19.7
|
)
|
||
Obligations collateralized by finance receivables
|
$
|
1,241.8
|
|
|
$
|
1,280.3
|
|
|
Interest Rate*
|
|
Maturity
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||
Term Loan B-2
|
Adjusted LIBOR
|
|
+ 3.1875%
|
|
March 11, 2021
|
|
$
|
1,080.0
|
|
|
$
|
1,082.7
|
|
Term Loan B-3
|
Adjusted LIBOR
|
|
+ 3.50%
|
|
March 9, 2023
|
|
1,336.5
|
|
|
1,339.9
|
|
||
Revolving credit facility
|
Adjusted LIBOR
|
|
+ 2.50%
|
|
March 9, 2021
|
|
13.3
|
|
|
80.5
|
|
||
Canadian line of credit
|
CAD Prime
|
|
+ 0.50%
|
|
Repayable upon demand
|
|
—
|
|
|
—
|
|
||
Total debt
|
|
|
|
|
|
|
2,429.8
|
|
|
2,503.1
|
|
||
Unamortized debt issuance costs/discounts
|
|
|
|
|
|
(31.3
|
)
|
|
(32.8
|
)
|
|||
Current portion of long-term debt
|
|
|
|
|
|
|
(38.0
|
)
|
|
(105.2
|
)
|
||
Long-term debt
|
|
|
|
|
|
|
$
|
2,360.5
|
|
|
$
|
2,365.1
|
|
•
|
In March 2017, we entered into
two
interest rate caps with an aggregate notional amount of
$400 million
to manage our exposure to interest rate movements on our variable rate Credit Facility when
three-month LIBOR
exceeds
2.0%
. The interest rate cap agreements each had an effective date of March 31, 2017 and each mature on March 31, 2019. We paid an aggregate amount of approximately
$0.7 million
for the caps in April 2017.
|
•
|
In August 2015, we purchased
three
interest rate caps for an aggregate amount of approximately
$1.5 million
with an aggregate notional amount of
$800 million
to manage our exposure to interest rate movements on our variable rate Credit Facility if/when
three-month LIBOR
(i) exceeded
2.0%
between August 19, 2015 (the effective date) and September 29, 2016 and (ii) exceeds
1.75%
between September 30, 2016 and August 19, 2017 (the maturity date).
|
•
|
In April 2015, we purchased
two
interest rate caps for an aggregate amount of approximately
$0.7 million
with an aggregate notional amount of
$400 million
to manage our exposure to interest rate movements on our variable rate Credit Facility when
three-month LIBOR
exceeded
1.5%
. The interest rate cap agreements each had an effective date of April 16, 2015 and each matured on March 31, 2017.
|
|
|
Asset Derivatives
|
||||||||||
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||
Derivatives Not Designated as Hedging Instruments
|
|
Balance Sheet Location
|
|
Fair Value
|
|
Balance Sheet Location
|
|
Fair Value
|
||||
2017 Interest rate caps
|
|
Other assets
|
|
$
|
0.7
|
|
|
Other assets
|
|
N/A
|
|
|
2015 Interest rate caps
|
|
Other assets
|
|
$
|
—
|
|
|
Other assets
|
|
$
|
—
|
|
|
|
Location of Gain / (Loss) Recognized in Income on Derivatives
|
|
Amount of Gain / (Loss)
Recognized in Income on Derivatives
|
|||||||
|
|
|
Three Months Ended
March 31, |
||||||||
Derivatives Not Designated as Hedging Instruments
|
|
|
2017
|
|
2016
|
||||||
2017 Interest rate caps
|
|
Interest expense
|
|
$
|
(0.1
|
)
|
|
N/A
|
|
||
2015 Interest rate caps
|
|
Interest expense
|
|
$
|
—
|
|
|
$
|
(0.6
|
)
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Foreign currency translation loss
|
$
|
(46.0
|
)
|
|
$
|
(49.4
|
)
|
Unrealized gain on postretirement benefit obligation, net of tax
|
0.1
|
|
|
0.1
|
|
||
Accumulated other comprehensive loss
|
$
|
(45.9
|
)
|
|
$
|
(49.3
|
)
|
|
ADESA
Auctions |
|
IAA
|
|
AFC
|
|
Holding
Company |
|
Consolidated
|
||||||||||
Operating revenues
|
$
|
498.0
|
|
|
$
|
297.4
|
|
|
$
|
71.2
|
|
|
$
|
—
|
|
|
$
|
866.6
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services (exclusive of depreciation and amortization)
|
290.9
|
|
|
189.1
|
|
|
21.2
|
|
|
—
|
|
|
501.2
|
|
|||||
Selling, general and administrative
|
87.3
|
|
|
25.9
|
|
|
7.9
|
|
|
36.3
|
|
|
157.4
|
|
|||||
Depreciation and amortization
|
27.1
|
|
|
23.2
|
|
|
7.8
|
|
|
6.4
|
|
|
64.5
|
|
|||||
Total operating expenses
|
405.3
|
|
|
238.2
|
|
|
36.9
|
|
|
42.7
|
|
|
723.1
|
|
|||||
Operating profit (loss)
|
92.7
|
|
|
59.2
|
|
|
34.3
|
|
|
(42.7
|
)
|
|
143.5
|
|
|||||
Interest expense
|
0.2
|
|
|
—
|
|
|
10.3
|
|
|
29.8
|
|
|
40.3
|
|
|||||
Other (income) expense, net
|
0.4
|
|
|
(0.4
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||||
Intercompany expense (income)
|
11.8
|
|
|
9.4
|
|
|
(8.7
|
)
|
|
(12.5
|
)
|
|
—
|
|
|||||
Income (loss) before income taxes
|
80.3
|
|
|
50.2
|
|
|
32.7
|
|
|
(59.9
|
)
|
|
103.3
|
|
|||||
Income taxes
|
29.0
|
|
|
18.0
|
|
|
11.8
|
|
|
(24.7
|
)
|
|
34.1
|
|
|||||
Net income (loss)
|
$
|
51.3
|
|
|
$
|
32.2
|
|
|
$
|
20.9
|
|
|
$
|
(35.2
|
)
|
|
$
|
69.2
|
|
Total assets
|
$
|
2,994.7
|
|
|
$
|
1,328.9
|
|
|
$
|
2,171.4
|
|
|
$
|
85.2
|
|
|
$
|
6,580.2
|
|
|
ADESA
Auctions
|
|
IAA
|
|
AFC
|
|
Holding
Company
|
|
Consolidated
|
||||||||||
Operating revenues
|
$
|
414.8
|
|
|
$
|
269.6
|
|
|
$
|
73.9
|
|
|
$
|
—
|
|
|
$
|
758.3
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services (exclusive of depreciation and amortization)
|
238.4
|
|
|
173.5
|
|
|
20.1
|
|
|
—
|
|
|
432.0
|
|
|||||
Selling, general and administrative
|
76.6
|
|
|
25.7
|
|
|
7.5
|
|
|
31.3
|
|
|
141.1
|
|
|||||
Depreciation and amortization
|
22.5
|
|
|
21.3
|
|
|
7.7
|
|
|
4.9
|
|
|
56.4
|
|
|||||
Total operating expenses
|
337.5
|
|
|
220.5
|
|
|
35.3
|
|
|
36.2
|
|
|
629.5
|
|
|||||
Operating profit (loss)
|
77.3
|
|
|
49.1
|
|
|
38.6
|
|
|
(36.2
|
)
|
|
128.8
|
|
|||||
Interest expense
|
0.1
|
|
|
—
|
|
|
7.8
|
|
|
20.8
|
|
|
28.7
|
|
|||||
Other (income) expense, net
|
(0.6
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
(1.3
|
)
|
|||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
4.0
|
|
|
4.0
|
|
|||||
Intercompany expense (income)
|
15.2
|
|
|
9.6
|
|
|
(7.8
|
)
|
|
(17.0
|
)
|
|
—
|
|
|||||
Income (loss) before income taxes
|
62.6
|
|
|
39.8
|
|
|
38.6
|
|
|
(43.6
|
)
|
|
97.4
|
|
|||||
Income taxes
|
23.3
|
|
|
14.9
|
|
|
14.6
|
|
|
(16.1
|
)
|
|
36.7
|
|
|||||
Net income (loss)
|
$
|
39.3
|
|
|
$
|
24.9
|
|
|
$
|
24.0
|
|
|
$
|
(27.5
|
)
|
|
$
|
60.7
|
|
Total assets
|
$
|
3,085.4
|
|
|
$
|
1,265.0
|
|
|
$
|
2,068.6
|
|
|
$
|
71.1
|
|
|
$
|
6,490.1
|
|
•
|
our ability to successfully implement our business strategies or realize expected cost savings and revenue enhancements;
|
•
|
our ability to effectively maintain or update information and technology systems;
|
•
|
our ability to implement and maintain measures to protect against cyber-attacks;
|
•
|
significant current competition and the introduction of new competitors;
|
•
|
competitive pricing pressures;
|
•
|
any losses of key personnel;
|
•
|
our ability to meet or exceed customers' expectations, as well as develop and implement information systems responsive to customer needs;
|
•
|
business development activities, including greenfields, acquisitions and integration of acquired businesses;
|
•
|
costs associated with the acquisition of businesses or technologies;
|
•
|
fluctuations in consumer demand for and in the supply of used, leased and salvage vehicles and the resulting impact on auction sales volumes, conversion rates and loan transaction volumes;
|
•
|
our ability to obtain land or renew/enter into new leases at commercially reasonable rates;
|
•
|
decreases in the number of used vehicles sold at physical auctions;
|
•
|
changes in the market value of vehicles auctioned, including changes in the actual cash value of salvage vehicles;
|
•
|
trends in new and used vehicle sales and incentives, including wholesale used vehicle pricing;
|
•
|
the ability of consumers to lease or finance the purchase of new and/or used vehicles;
|
•
|
the ability to recover or collect from delinquent or bankrupt customers;
|
•
|
economic conditions including fuel prices, commodity prices, foreign exchange rates and interest rate fluctuations;
|
•
|
trends in the vehicle remarketing industry;
|
•
|
trends in the number of commercial vehicles being brought to auction, in particular off-lease volumes;
|
•
|
changes in the volume of vehicle production, including capacity reductions at the major original equipment manufacturers;
|
•
|
laws, regulations and industry standards, including changes in regulations governing the sale of used vehicles, the processing of salvage vehicles and commercial lending activities;
|
•
|
our ability to maintain our brand and protect our intellectual property;
|
•
|
the costs of environmental compliance and/or the imposition of liabilities under environmental laws and regulations;
|
•
|
weather, including increased expenses as a result of catastrophic events;
|
•
|
general business conditions;
|
•
|
our substantial amount of debt;
|
•
|
restrictive covenants in our debt agreements;
|
•
|
our assumption of the settlement risk for vehicles sold;
|
•
|
litigation developments;
|
•
|
our self-insurance for certain risks;
|
•
|
interruptions to service from our workforce;
|
•
|
any impairment to our goodwill or other intangible assets;
|
•
|
changes in effective tax rates;
|
•
|
changes to accounting standards; and
|
•
|
other risks described from time to time in our filings with the SEC.
|
•
|
The ADESA Auctions segment serves a domestic and international customer base through live and online auctions and through
77
whole car auction facilities in North America that are developed and strategically located to draw professional sellers and buyers together and allow the buyers to inspect and compare vehicles remotely or in person. Through ADESA.com, powered by Openlane technology, ADESA offers comprehensive private label remarketing solutions to automobile manufacturers, captive finance companies and other institutions to offer vehicles via the Internet prior to arrival at the physical auction. Vehicles at ADESA's auctions are typically sold by commercial fleet operators, financial institutions, rental car companies, new and used vehicle dealers and vehicle manufacturers and their captive finance companies to franchise and independent used vehicle dealers. ADESA also provides value-added ancillary services including inbound and outbound transportation logistics, reconditioning, vehicle inspection and certification, titling, administrative and collateral recovery services. ADESA also includes ADESA Remarketing Limited, an online whole car vehicle remarketing business in the United Kingdom.
|
•
|
The IAA segment serves a domestic and international customer base through live and online auctions and through
173
salvage vehicle auction sites in the United States and Canada at
March 31, 2017
. IAA also includes HBC, which operates from
11
locations in the United Kingdom. The salvage auctions facilitate the remarketing of damaged vehicles designated as total losses by insurance companies, charity donation vehicles, recovered stolen (or theft) vehicles and low value used vehicles. The salvage auction business specializes in providing services such as inbound transportation, titling, salvage recovery and claims settlement administrative services.
|
•
|
The AFC segment provides short-term, inventory-secured financing, known as floorplan financing, primarily to independent used vehicle dealers. At
March 31, 2017
, AFC conducted business at
128
locations in the United States and Canada. The Company also sells vehicle service contracts through Preferred Warranties, Inc. ("PWI").
|
|
Three Months Ended
March 31, |
||||||
(Dollars in millions except per share amounts)
|
2017
|
|
2016
|
||||
Revenues
|
|
|
|
||||
ADESA
|
$
|
498.0
|
|
|
$
|
414.8
|
|
IAA
|
297.4
|
|
|
269.6
|
|
||
AFC
|
71.2
|
|
|
73.9
|
|
||
Total revenues
|
866.6
|
|
|
758.3
|
|
||
Cost of services*
|
501.2
|
|
|
432.0
|
|
||
Gross profit*
|
365.4
|
|
|
326.3
|
|
||
Selling, general and administrative
|
157.4
|
|
|
141.1
|
|
||
Depreciation and amortization
|
64.5
|
|
|
56.4
|
|
||
Operating profit
|
143.5
|
|
|
128.8
|
|
||
Interest expense
|
40.3
|
|
|
28.7
|
|
||
Other income, net
|
(0.1
|
)
|
|
(1.3
|
)
|
||
Loss on extinguishment of debt
|
—
|
|
|
4.0
|
|
||
Income before income taxes
|
103.3
|
|
|
97.4
|
|
||
Income taxes
|
34.1
|
|
|
36.7
|
|
||
Net income
|
$
|
69.2
|
|
|
$
|
60.7
|
|
Net income per share
|
|
|
|
||||
Basic
|
$
|
0.51
|
|
|
$
|
0.44
|
|
Diluted
|
$
|
0.50
|
|
|
$
|
0.44
|
|
|
Three Months Ended
March 31, |
||||||
(Dollars in millions except per vehicle amounts)
|
2017
|
|
2016
|
||||
ADESA revenue
|
$
|
498.0
|
|
|
$
|
414.8
|
|
Cost of services*
|
290.9
|
|
|
238.4
|
|
||
Gross profit*
|
207.1
|
|
|
176.4
|
|
||
Selling, general and administrative
|
87.3
|
|
|
76.6
|
|
||
Depreciation and amortization
|
27.1
|
|
|
22.5
|
|
||
Operating profit
|
$
|
92.7
|
|
|
$
|
77.3
|
|
Vehicles sold
|
818,000
|
|
|
703,000
|
|
||
Physical auction vehicles sold
|
603,000
|
|
|
515,000
|
|
||
Online only vehicles sold
|
215,000
|
|
|
188,000
|
|
||
Dealer consignment mix at physical auctions
|
44
|
%
|
|
47
|
%
|
||
Conversion rate at North American physical auctions
|
61.8
|
%
|
|
61.0
|
%
|
||
Physical auction revenue per vehicle sold, excluding purchased vehicles
|
$
|
755
|
|
|
$
|
737
|
|
Online only revenue per vehicle sold, excluding ADESA Assurance Program vehicles
|
$
|
111
|
|
|
$
|
110
|
|
|
Three Months Ended
March 31, |
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
IAA revenue
|
$
|
297.4
|
|
|
$
|
269.6
|
|
Cost of services*
|
189.1
|
|
|
173.5
|
|
||
Gross profit*
|
108.3
|
|
|
96.1
|
|
||
Selling, general and administrative
|
25.9
|
|
|
25.7
|
|
||
Depreciation and amortization
|
23.2
|
|
|
21.3
|
|
||
Operating profit
|
$
|
59.2
|
|
|
$
|
49.1
|
|
Vehicles sold
|
592,000
|
|
|
534,000
|
|
|
Three Months Ended
March 31, |
||||||
(Dollars in millions except volumes and per loan amounts)
|
2017
|
|
2016
|
||||
AFC revenue
|
|
|
|
||||
Interest and fee income
|
$
|
71.3
|
|
|
$
|
69.4
|
|
Other revenue
|
2.9
|
|
|
2.4
|
|
||
Provision for credit losses
|
(11.1
|
)
|
|
(5.5
|
)
|
||
Other service revenue
|
8.1
|
|
|
7.6
|
|
||
Total AFC revenue
|
71.2
|
|
|
73.9
|
|
||
Cost of services*
|
21.2
|
|
|
20.1
|
|
||
Gross profit*
|
50.0
|
|
|
53.8
|
|
||
Selling, general and administrative
|
7.9
|
|
|
7.5
|
|
||
Depreciation and amortization
|
7.8
|
|
|
7.7
|
|
||
Operating profit
|
$
|
34.3
|
|
|
$
|
38.6
|
|
Loan transactions
|
456,000
|
|
|
454,000
|
|
||
Revenue per loan transaction, excluding "Other service revenue"
|
$
|
138
|
|
|
$
|
146
|
|
|
Three Months Ended
March 31, |
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Selling, general and administrative
|
$
|
36.3
|
|
|
$
|
31.3
|
|
Depreciation and amortization
|
6.4
|
|
|
4.9
|
|
||
Operating loss
|
$
|
(42.7
|
)
|
|
$
|
(36.2
|
)
|
(Dollars in millions)
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2016
|
||||||
Cash and cash equivalents
|
$
|
188.0
|
|
|
$
|
201.8
|
|
|
$
|
676.3
|
|
Restricted cash
|
18.4
|
|
|
17.9
|
|
|
14.9
|
|
|||
Working capital
|
554.0
|
|
|
506.2
|
|
|
950.0
|
|
|||
Amounts available under Credit Facility*
|
286.7
|
|
|
219.5
|
|
|
300.0
|
|
|||
Cash flow from operations for the three months ended
|
142.0
|
|
|
|
|
70.1
|
|
*
|
There were related outstanding letters of credit totaling approximately
$35.9 million
,
$29.7 million
, and $28.0 million at
March 31, 2017
,
December 31, 2016
, and
March 31, 2016
, respectively, which reduced the amount available for borrowings under the revolving credit facility.
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||
(Dollars in millions)
|
ADESA
|
|
IAA
|
|
AFC
|
|
Corporate
|
|
Consolidated
|
||||||||||
Net income (loss)
|
$
|
51.3
|
|
|
$
|
32.2
|
|
|
$
|
20.9
|
|
|
$
|
(35.2
|
)
|
|
$
|
69.2
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income taxes
|
29.0
|
|
|
18.0
|
|
|
11.8
|
|
|
(24.7
|
)
|
|
34.1
|
|
|||||
Interest expense, net of interest income
|
0.1
|
|
|
—
|
|
|
10.3
|
|
|
29.8
|
|
|
40.2
|
|
|||||
Depreciation and amortization
|
27.1
|
|
|
23.2
|
|
|
7.8
|
|
|
6.4
|
|
|
64.5
|
|
|||||
Intercompany interest
|
9.2
|
|
|
9.4
|
|
|
(8.7
|
)
|
|
(9.9
|
)
|
|
—
|
|
|||||
EBITDA
|
116.7
|
|
|
82.8
|
|
|
42.1
|
|
|
(33.6
|
)
|
|
208.0
|
|
|||||
Intercompany charges
|
2.6
|
|
|
—
|
|
|
—
|
|
|
(2.6
|
)
|
|
—
|
|
|||||
Non-cash stock-based compensation
|
1.5
|
|
|
0.9
|
|
|
0.5
|
|
|
3.1
|
|
|
6.0
|
|
|||||
Acquisition related costs
|
1.7
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
2.1
|
|
|||||
Securitization interest
|
—
|
|
|
—
|
|
|
(8.1
|
)
|
|
—
|
|
|
(8.1
|
)
|
|||||
Minority interest
|
1.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|||||
Other
|
0.8
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|||||
Total addbacks
|
8.3
|
|
|
1.0
|
|
|
(7.6
|
)
|
|
0.9
|
|
|
2.6
|
|
|||||
Adjusted EBITDA
|
$
|
125.0
|
|
|
$
|
83.8
|
|
|
$
|
34.5
|
|
|
$
|
(32.7
|
)
|
|
$
|
210.6
|
|
|
Three Months Ended March 31, 2016
|
||||||||||||||||||
(Dollars in millions)
|
ADESA
|
|
IAA
|
|
AFC
|
|
Corporate
|
|
Consolidated
|
||||||||||
Net income (loss)
|
$
|
39.3
|
|
|
$
|
24.9
|
|
|
$
|
24.0
|
|
|
$
|
(27.5
|
)
|
|
$
|
60.7
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income taxes
|
23.3
|
|
|
14.9
|
|
|
14.6
|
|
|
(16.1
|
)
|
|
36.7
|
|
|||||
Interest expense, net of interest income
|
0.1
|
|
|
—
|
|
|
7.8
|
|
|
20.8
|
|
|
28.7
|
|
|||||
Depreciation and amortization
|
22.5
|
|
|
21.3
|
|
|
7.7
|
|
|
4.9
|
|
|
56.4
|
|
|||||
Intercompany interest
|
11.9
|
|
|
9.4
|
|
|
(7.8
|
)
|
|
(13.5
|
)
|
|
—
|
|
|||||
EBITDA
|
97.1
|
|
|
70.5
|
|
|
46.3
|
|
|
(31.4
|
)
|
|
182.5
|
|
|||||
Intercompany charges
|
3.3
|
|
|
0.2
|
|
|
—
|
|
|
(3.5
|
)
|
|
—
|
|
|||||
Non-cash stock-based compensation
|
1.2
|
|
|
0.6
|
|
|
0.4
|
|
|
3.3
|
|
|
5.5
|
|
|||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
4.0
|
|
|
4.0
|
|
|||||
Acquisition related costs
|
1.1
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
2.6
|
|
|||||
Securitization interest
|
—
|
|
|
—
|
|
|
(6.4
|
)
|
|
—
|
|
|
(6.4
|
)
|
|||||
Minority interest
|
0.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|||||
Other
|
0.9
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|||||
Total addbacks
|
7.1
|
|
|
0.6
|
|
|
(6.0
|
)
|
|
5.3
|
|
|
7.0
|
|
|||||
Adjusted EBITDA
|
$
|
104.2
|
|
|
$
|
71.1
|
|
|
$
|
40.3
|
|
|
$
|
(26.1
|
)
|
|
$
|
189.5
|
|
|
Three Months Ended
|
|
Twelve
Months
Ended
|
||||||||||||||||
(Dollars in millions)
|
June 30,
2016
|
|
September 30,
2016
|
|
December 31,
2016 |
|
March 31,
2017 |
|
March 31, 2017
|
||||||||||
Net income (loss)
|
$
|
61.8
|
|
|
$
|
54.4
|
|
|
$
|
45.5
|
|
|
$
|
69.2
|
|
|
$
|
230.9
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income taxes
|
37.7
|
|
|
31.8
|
|
|
26.7
|
|
|
34.1
|
|
|
130.3
|
|
|||||
Interest expense, net of interest income
|
35.7
|
|
|
36.1
|
|
|
37.9
|
|
|
40.2
|
|
|
149.9
|
|
|||||
Depreciation and amortization
|
59.0
|
|
|
60.5
|
|
|
64.7
|
|
|
64.5
|
|
|
248.7
|
|
|||||
EBITDA
|
194.2
|
|
|
182.8
|
|
|
174.8
|
|
|
208.0
|
|
|
759.8
|
|
|||||
Non-cash stock-based compensation
|
4.9
|
|
|
4.7
|
|
|
4.0
|
|
|
6.0
|
|
|
19.6
|
|
|||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
1.4
|
|
|||||
Acquisition related costs
|
3.3
|
|
|
1.3
|
|
|
1.4
|
|
|
2.1
|
|
|
8.1
|
|
|||||
Securitization interest
|
(6.7
|
)
|
|
(7.2
|
)
|
|
(7.7
|
)
|
|
(8.1
|
)
|
|
(29.7
|
)
|
|||||
Minority interest
|
1.0
|
|
|
1.1
|
|
|
1.1
|
|
|
1.7
|
|
|
4.9
|
|
|||||
(Gain)/Loss on asset sales
|
0.4
|
|
|
1.3
|
|
|
0.3
|
|
|
0.5
|
|
|
2.5
|
|
|||||
Other
|
—
|
|
|
0.8
|
|
|
1.2
|
|
|
0.4
|
|
|
2.4
|
|
|||||
Total addbacks
|
2.9
|
|
|
2.0
|
|
|
1.7
|
|
|
2.6
|
|
|
9.2
|
|
|||||
Adjusted EBITDA
|
$
|
197.1
|
|
|
$
|
184.8
|
|
|
$
|
176.5
|
|
|
$
|
210.6
|
|
|
$
|
769.0
|
|
|
Three Months Ended
March 31, |
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Net cash provided by (used by):
|
|
|
|
||||
Operating activities
|
$
|
142.0
|
|
|
$
|
70.1
|
|
Investing activities
|
(21.2
|
)
|
|
(100.3
|
)
|
||
Financing activities
|
(136.4
|
)
|
|
546.0
|
|
||
Effect of exchange rate on cash
|
1.8
|
|
|
5.5
|
|
||
Net (decrease) increase in cash and cash equivalents
|
$
|
(13.8
|
)
|
|
$
|
521.3
|
|
•
|
first quarter 2017 repayments of $67.2 million and $6.1 million on our line of credit and term loans, respectively, compared to the debt refinancing and payment activities in the first quarter of 2016, for which the Company received approximately $558.9 million of cash after the repayment and rollover of debt;
|
•
|
a decrease in the additional obligations collateralized by finance receivables of approximately $49.1 million; and
|
•
|
an increase in dividend payments of $6.5 million.
|
•
|
On May 9, 2017, the Company announced a cash dividend of $0.32 per share that is payable on July 6, 2017, to stockholders of record at the close of business on June 21, 2017.
|
•
|
On February 21, 2017, the Company announced a cash dividend of $0.32 per share that was paid on April 4, 2017, to stockholders of record at the close of business on March 22, 2017.
|
•
|
On
November 3, 2016
, the Company announced a cash dividend of
$0.32
per share that was paid on
January 6, 2017
, to stockholders of record at the close of business on
December 21, 2016
.
|
•
|
Operating lease obligations change in the ordinary course of business. We lease most of our auction facilities, as well as other property and equipment under operating leases. Future operating lease obligations will continue to change if renewal options are exercised and/or if we enter into additional operating lease agreements.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
(Dollars in millions)
|
||||
January 1 - January 31
|
|
—
|
|
|
|
|
—
|
|
|
$
|
419.6
|
|
February 1 - February 28
|
|
—
|
|
|
|
|
—
|
|
|
419.6
|
|
|
March 1 - March 31
|
|
—
|
|
|
|
|
—
|
|
|
419.6
|
|
|
Total
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(1)
|
In October 2016, the board of directors authorized a repurchase of up to $500 million of the Company’s outstanding common stock, par value $0.01 per share, through October 26, 2019. Repurchases may be made in the open market or through privately negotiated transactions, in accordance with applicable securities laws and regulations, including pursuant to repurchase plans designed to comply with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The timing and amount of any repurchases is subject to market and other conditions.
|
a)
|
Exhibits—the exhibit list in the Exhibit Index is incorporated herein by reference as the list of exhibits required as part of this report.
|
|
|
KAR Auction Services, Inc.
|
|
|
(Registrant)
|
|
|
|
Date:
|
May 10, 2017
|
/s/ ERIC M. LOUGHMILLER
|
|
|
Eric M. Loughmiller
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial and
Accounting Officer)
|
|
|
|
|
Incorporated by Reference
|
|
|
|||||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing
Date
|
|
Filed
Herewith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.1a
|
|
|
Asset Purchase Agreement, dated as of February 17, 2016, by and among ADESA, Inc., Brasher’s
Reno Auto Auction, L.L.C., BIAA, L.L.C., Brasher’s Auto Auctions, West Coast Auto Auctions, Inc.
and the other parties thereto
|
|
8-K
|
|
001-34568
|
|
2.1
|
|
2/18/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.1b
|
|
|
First Amendment to Asset Purchase Agreement, dated as of April 1, 2016, to that certain Asset Purchase Agreement dated as of February 17, 2016, by and among ADESA, Inc., Brasher’s Reno Auto Auction, L.L.C., BIAA, L.L.C., Brasher’s Auto Auctions, West Coast Auto Auctions, Inc. and the other parties thereto
|
|
10-Q
|
|
001-34568
|
|
2.1b
|
|
5/4/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.2
|
|
|
Asset Purchase Agreement, dated as of February 17, 2016, by and among ADESA, Inc., Brasher’s
Auto Auctions and the other parties thereto
|
|
8-K
|
|
001-34568
|
|
2.2
|
|
2/18/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.3
|
|
|
Asset Purchase Agreement, dated as of February 17, 2016, by and among ADESA, Inc., West Coast
Auto Auctions, Inc., Brasher’s Cascade Auto Auction, Inc., Brasher’s Northwest Auto Auction, Inc.,
Brasher’s Sacramento Auto Auction, Inc., Brasher’s Fresno Auto Auction, Inc. and the other parties
thereto
|
|
8-K
|
|
001-34568
|
|
2.3
|
|
2/18/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
|
Amended and Restated Certificate of Incorporation of KAR Auction Services, Inc.
|
|
10-Q
|
|
001-34568
|
|
3.1
|
|
8/3/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
|
Second Amended and Restated By-Laws of KAR Auction Services, Inc.
|
|
8-K
|
|
001-34568
|
|
3.1
|
|
11/4/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
|
Form of common stock certificate
|
|
S-1/A
|
|
333-161907
|
|
4.15
|
|
12/10/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1a
|
|
|
Amendment and Restatement Agreement, dated March 11, 2014, among KAR Auction Services, Inc. and certain of its subsidiaries and JPMorgan Chase Bank, N.A., as administrative agent, swingline lender and issuing lender (the Amended and Restated Credit Agreement and the Amended and Restated Guarantee and Collateral Agreement are included as Exhibits A and B thereto, respectively)
|
|
8-K
|
|
001-34568
|
|
10.1
|
|
3/12/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1b
|
|
|
Incremental Commitment Agreement and First Amendment, dated as of March 9, 2016, among KAR Auction Services, Inc., JPMorgan Chase Bank, N.A., as administrative agent, certain subsidiaries of the Company party thereto and the several lenders party thereto
|
|
8-K
|
|
001-34568
|
|
10.1
|
|
3/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
*
|
KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) Stock Incentive Plan
|
|
S-8
|
|
333-164032
|
|
10.1
|
|
12/24/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3
|
|
*
|
Form of Nonqualified Stock Option Agreement of KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) pursuant to the Stock Incentive Plan
|
|
S-4
|
|
333-148847
|
|
10.15
|
|
1/25/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.4
|
|
*
|
Employment Agreement, dated February 27, 2012, between KAR Auction Services, Inc. and James P. Hallett
|
|
10-K
|
|
001-34568
|
|
10.15
|
|
2/28/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.5
|
|
*
|
Employment Agreement, dated April 13, 2015, between KAR Auction Services, Inc. and Stephane St-Hilaire
|
|
10-Q
|
|
001-34568
|
|
10.7
|
|
5/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
|||||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing
Date
|
|
Filed
Herewith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.6
|
|
*
|
Amended and Restated Employment Agreement, dated March 24, 2014, between KAR Auction Services, Inc. and Don Gottwald
|
|
8-K
|
|
001-34568
|
|
10.1
|
|
3/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.7
|
|
*
|
Employment Agreement, dated December 17, 2013, between KAR Auction Services, Inc. and Eric Loughmiller
|
|
8-K
|
|
001-34568
|
|
10.5
|
|
12/17/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.8
|
|
*
|
Employment Agreement, dated May 1, 2014, between KAR Auction Services, Inc. and John Kett
|
|
10-K
|
|
001-34568
|
|
10.10
|
|
2/18/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.9a
|
|
*
|
Employment Agreement, dated December 17, 2013, between KAR Auction Services, Inc. and Peter Kelly
|
|
10-K
|
|
001-34568
|
|
10.9a
|
|
2/24/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.9b
|
|
*
|
Amendment to Employment Agreement, dated December 31, 2014, between KAR Auction Services, Inc. and Peter Kelly
|
|
10-K
|
|
001-34568
|
|
10.9b
|
|
2/24/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.10
|
|
*
|
KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) Annual Incentive Program (2014)
|
|
10-K
|
|
333-148847
|
|
10.29
|
|
3/11/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.11
|
|
*
|
KAR Auction Services, Inc. Annual Incentive Plan Summary of Terms for Plan Year 2015
|
|
10-Q
|
|
001-34568
|
|
10.11
|
|
5/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.12
|
|
*
|
KAR Auction Services, Inc. Annual Incentive Plan Summary of Terms for Plan Year 2016
|
|
10-Q
|
|
001-34568
|
|
10.13
|
|
5/4/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.13
|
|
*
|
KAR Auction Services, Inc. Annual Incentive Program Summary of Terms 2017
|
|
10-K
|
|
001-34568
|
|
10.13
|
|
2/24/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.14a
|
|
^
|
Amended and Restated Purchase and Sale Agreement, dated May 31, 2002, between AFC Funding Corporation and Automotive Finance Corporation
|
|
S-4
|
|
333-148847
|
|
10.32
|
|
1/25/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.14b
|
|
|
Amendment No. 1 to Amended and Restated Purchase and Sale Agreement, dated June 15, 2004
|
|
S-4
|
|
333-148847
|
|
10.33
|
|
1/25/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.14c
|
|
|
Amendment No. 2 to Amended and Restated Purchase and Sale Agreement, dated January 18, 2007
|
|
S-4
|
|
333-148847
|
|
10.34
|
|
1/25/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.14d
|
|
^
|
Amendment No. 3 to Amended and Restated Purchase and Sale Agreement, dated April 20, 2007
|
|
S-4
|
|
333-148847
|
|
10.35
|
|
1/25/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.14e
|
|
|
Amendment No. 4 to Amended and Restated Purchase and Sale Agreement, dated January 30, 2009
|
|
10-K
|
|
001-34568
|
|
10.19e
|
|
2/28/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.14f
|
|
|
Amendment No. 5 to Amended and Restated Purchase and Sale Agreement, dated April 25, 2011
|
|
10-K
|
|
001-34568
|
|
10.19f
|
|
2/28/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.15
|
|
^
|
Seventh Amended and Restated Receivables Purchase Agreement, dated December 20, 2016, among AFC Funding Corporation, Automotive Finance Corporation, the entities from time to time parties hereto as Purchasers or Purchaser Agents and Bank of Montreal
|
|
10-K
|
|
001-34568
|
|
10.15
|
|
2/24/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.16a
|
|
^
|
Fourth Amended and Restated Receivables Purchase Agreement, dated December 20, 2016, between Automotive Finance Canada Inc., KAR Auction Services, Inc. and BNY Trust Company of Canada
|
|
10-K
|
|
001-34568
|
|
10.16
|
|
2/24/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.16b
|
|
|
Amending Agreement No. 1 to Fourth Amended and Restated Receivables Purchase Agreement, dated January 30, 2017, between Automotive Finance Canada Inc., KAR Auction Services, Inc. and BNY Trust Company of Canada
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.17a
|
|
|
Ground Lease, dated September 4, 2008, between ADESA San Diego, LLC and First Industrial L.P. (East 39 Acres at Otay Mesa, California)
|
|
8-K
|
|
333-148847
|
|
10.3
|
|
9/9/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing
Date
|
|
Filed
Herewith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.17b
|
|
Guaranty of Lease, dated September 4, 2008, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial L.P. (East 39 Acres at Otay Mesa, California)
|
|
8-K
|
|
333-148847
|
|
10.11
|
|
9/9/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.18a
|
|
Ground Lease, dated September 4, 2008, between ADESA San Diego, LLC and First Industrial L.P. (West 39 Acres at Otay Mesa, California)
|
|
8-K
|
|
333-148847
|
|
10.4
|
|
9/9/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.18b
|
|
Guaranty of Lease, dated September 4, 2008, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial L.P. (West 39 Acres at Otay Mesa, California)
|
|
8-K
|
|
333-148847
|
|
10.12
|
|
9/9/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.19a
|
|
Ground Lease, dated September 4, 2008, between ADESA California, LLC and ADESA San Diego, LLC and First Industrial Pennsylvania, L.P. (Sacramento, California)
|
|
8-K
|
|
333-148847
|
|
10.5
|
|
9/9/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.19b
|
|
Guaranty of Lease, dated September 4, 2008, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial Pennsylvania, L.P. (Sacramento, California)
|
|
8-K
|
|
333-148847
|
|
10.13
|
|
9/9/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.20a
|
|
Ground Lease, dated September 4, 2008, between ADESA California, LLC and First Industrial Pennsylvania, L.P. (Tracy, California)
|
|
8-K
|
|
333-148847
|
|
10.6
|
|
9/9/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.20b
|
|
Guaranty of Lease, dated September 4, 2008, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial Pennsylvania, L.P. (Tracy, California)
|
|
8-K
|
|
333-148847
|
|
10.14
|
|
9/9/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.21a
|
|
Ground Lease, dated September 4, 2008, between ADESA Washington, LLC and First Industrial, L.P. (Auburn, Washington)
|
|
8-K
|
|
333-148847
|
|
10.7
|
|
9/9/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.21b
|
|
Guaranty of Lease, dated September 4, 2008, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial, L.P. (Auburn, Washington)
|
|
8-K
|
|
333-148847
|
|
10.15
|
|
9/9/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.22a
|
|
Ground Lease, dated September 4, 2008, between ADESA Texas, Inc. and First Industrial, L.P. (Houston, Texas)
|
|
8-K
|
|
333-148847
|
|
10.8
|
|
9/9/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.22b
|
|
Guaranty of Lease, dated September 4, 2008, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial, L.P. (Houston, Texas)
|
|
8-K
|
|
333-148847
|
|
10.16
|
|
9/9/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.23a
|
|
Ground Lease, dated September 4, 2008, between ADESA Florida, LLC and First Industrial Financing Partnership, L.P. (Bradenton, Florida)
|
|
8-K
|
|
333-148847
|
|
10.10
|
|
9/9/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.23b
|
|
Guaranty of Lease, dated September 4, 2008, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial Financing Partnership, L.P. (Bradenton, Florida)
|
|
8-K
|
|
333-148847
|
|
10.18
|
|
9/9/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.24a
|
|
Ground Sublease, dated October 3, 2008, between ADESA Atlanta, LLC and First Industrial, L.P. (Fairburn, Georgia)
|
|
10-Q
|
|
333-148847
|
|
10.21
|
|
11/13/2008
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
|||||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing
Date
|
|
Filed
Herewith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.24b
|
|
|
Guaranty of Lease, dated October 3, 2008, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial, L.P. (Fairburn, Georgia)
|
|
10-Q
|
|
333-148847
|
|
10.22
|
|
11/13/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.25
|
|
|
Form of Indemnification Agreement
|
|
8-K
|
|
001-34568
|
|
10.1
|
|
12/17/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.26a
|
|
*
|
KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan, as Amended June 10, 2014
|
|
DEF 14A
|
|
001-34568
|
|
Appendix A
|
|
4/29/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.26b
|
|
*
|
First Amendment to the KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan
|
|
10-K
|
|
001-34568
|
|
10.24b
|
|
2/18/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.27a
|
|
*
|
KAR Auction Services, Inc. Employee Stock Purchase Plan
|
|
S-8
|
|
333-164032
|
|
10.3
|
|
12/24/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.27b
|
|
*
|
Amendment No. 1 to KAR Auction Services, Inc. Employee Stock Purchase Plan dated March 31, 2010
|
|
10-Q
|
|
001-34568
|
|
10.60
|
|
8/4/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.27c
|
|
*
|
Amendment No. 2 to KAR Auction Services, Inc. Employee Stock Purchase Plan dated April 1, 2010
|
|
10-Q
|
|
001-34568
|
|
10.61
|
|
8/4/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.28
|
|
*
|
KAR Auction Services, Inc. Directors Deferred Compensation Plan, effective December 10, 2009
|
|
10-Q
|
|
001-34568
|
|
10.62
|
|
8/4/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.29
|
|
*
|
Form of Director Restricted Share Agreement
|
|
10-Q
|
|
001-34568
|
|
10.63
|
|
8/4/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.30
|
|
*
|
Form of Nonqualified Stock Option Agreement
|
|
S-1/A
|
|
333-161907
|
|
10.65
|
|
12/4/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.31
|
|
*
|
Form of 2015 Restricted Stock Unit Award Agreement for Section 16 Officers
|
|
10-Q
|
|
001-34568
|
|
10.29a
|
|
5/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.32
|
|
*
|
Form of 2016 Restricted Stock Unit Award Agreement for Section 16 Officers
|
|
10-K
|
|
001-34568
|
|
10.30
|
|
2/18/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.33
|
|
*
|
Form of 2017 Restricted Stock Unit Award Agreement for Section 16 Officers
|
|
10-K
|
|
001-34568
|
|
10.33
|
|
2/24/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.34
|
|
*
|
Form of Performance-Based Restricted Stock Unit Agreement (Total Shareholder Return Percentile Rank vs. S&P 500)
|
|
8-K
|
|
001-34568
|
|
10.2
|
|
12/17/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.35
|
|
*
|
Form of Performance-Based Restricted Stock Unit Agreement (Cumulative Adjusted Net Income Per Share)
|
|
8-K
|
|
001-34568
|
|
10.1
|
|
3/3/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.36
|
|
*
|
Form of 2015 Performance-Based Restricted Stock Unit Agreement (Cumulative Adjusted Net Income Per Share)
|
|
10-Q
|
|
001-34568
|
|
10.32
|
|
5/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.37
|
|
*
|
Form of 2016 Performance-Based Restricted Stock Unit Agreement (Cumulative Operating Adjusted Net Income Per Share)
|
|
10-K
|
|
001-34568
|
|
10.34
|
|
2/18/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.38
|
|
*
|
Form of 2017 Performance-Based Restricted Stock Unit Agreement (Cumulative Operating Adjusted Net Income Per Share)
|
|
10-K
|
|
001-34568
|
|
10.38
|
|
2/24/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1
|
|
|
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
|||||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing
Date
|
|
Filed
Herewith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.2
|
|
|
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
^
|
Portions of this exhibit have been redacted pursuant to a request for confidential treatment filed separately with the Secretary of the Securities and Exchange Commission pursuant to Rule 406 under the Securities Act of 1933, as amended.
|
|
|
*
|
Denotes management contract or compensation plan, contract or arrangement.
|
1.
|
Interpretation
|
1.1
|
All words and expressions defined in the RPA and not otherwise defined in this Agreement (including the recitals hereto) shall have the respective meanings given to them in the RPA.
|
2.
|
Amendments to the RPA
|
2.1
|
Section 1.1 of the RPA is hereby amended as follows:
|
(a)
|
the defined term "DBRS" is deleted in its entirety;
|
(b)
|
the defined term "Eligible Deposit Account" is deleted in its entirety and the following is substituted therefor:
|
(c)
|
the defined term "Eligible Institution" is deleted in its entirety and the following is substituted therefor:
|
(d)
|
the defined term “Eligible Investments” is deleted in its entirety and the following is substituted therefor:
|
(a)
|
direct obligations of, or obligations fully guaranteed as to the timely payment of principal and interest by, the Government of Canada or the government of British Columbia, Alberta or Ontario, provided any such government is rated not less than P-1 by Moody’s;
|
(b)
|
any security having a rating of at least P-1 by Moody’s, but for greater certainty, excluding any security that is extendable by its terms;
|
(c)
|
any other class of investments approved in writing by Moody’s and the Trust (other than those set out in (a) and (b) above); and
|
(d)
|
without limiting the generality of the foregoing, if qualified under (b) or (c) above, securities of the Bank of Montreal and any Affiliate
|
(e)
|
the following defined term "Legal Final Maturity Date" is added to the RPA in its entirety:
|
2.2
|
The following Section 2.18 is added to the RPA in its entirety:
|
2.3
|
The following Section 2.19 is added to the RPA in its entirety:
|
2.4
|
Section 10.4 of the RPA is hereby amended by adding the following section at the end of said Section 10.4:
|
3.
|
Other Documents
|
3.1
|
Any reference to the RPA made in any documents delivered pursuant thereto or in connection therewith shall be deemed to refer to the RPA as amended, extended, modified, renewed or supplemented from time to time, unless the context otherwise requires.
|
4.
|
Miscellaneous
|
4.1
|
As amended by this Agreement, the RPA is in all respects ratified and confirmed and continues in full force and effect, and the RPA as amended by this Agreement shall be read, taken and construed as one and the same instrument.
|
4.2
|
This Agreement shall enure to the benefit of and be binding upon the parties and their respective successors and permitted assigns.
|
4.3
|
This Agreement may be executed in one or more counterparts each of which shall be deemed an original and all of which when, taken together, shall constitute one and the same instrument.
|
4.4
|
This Agreement shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein.
|
AUTOMOTIVE FINANCE CANADA INC.
|
|
|
|
|
|
By:
|
/s/ Amy Wirges
|
|
Name: Amy Wirges
Title: Vice President of Finance & Treasurer
|
KAR AUCTION SERVICES, INC.
|
|
|
|
|
|
By:
|
/s/ Eric M. Loughmiller
|
|
Name: Eric M. Loughmiller
Title: Exec Vice President & CFO
|
|
|
|
|
BNY TRUST COMPANY OF CANADA
, in its capacity as trustee of
PRECISION TRUST
, without personal liability, by its Securitization Agent
BMO NESBITT BURNS INC.
|
|
|
|
|
|
By:
|
/s/ John Vidinovski
|
|
Name: John Vidinovski
Title: Managing Director
|
By:
|
/s/ Kevin Brown
|
|
Name: Kevin Brown
Title: Director
|
1)
|
I have reviewed this Quarterly Report on Form 10-Q of KAR Auction Services, Inc.;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5)
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ JAMES P. HALLETT
|
James P. Hallett
Chief Executive Officer
|
1)
|
I have reviewed this Quarterly Report on Form 10-Q of KAR Auction Services, Inc.;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5)
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ ERIC M. LOUGHMILLER
|
Eric M. Loughmiller
Executive Vice President and Chief Financial Officer
|
1)
|
The report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
|
2)
|
the information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ JAMES P. HALLETT
|
James P. Hallett
Chief Executive Officer
|
1)
|
The report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
|
2)
|
the information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ ERIC M. LOUGHMILLER
|
Eric M. Loughmiller
Executive Vice President and Chief Financial Officer
|