8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 7, 2019

KAR Auction Services, Inc.

(Exact name of Registrant as specified in its charter)

Delaware	001-34568	20-8744739
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

13085 Hamilton Crossing Boulevard

Carmel, Indiana 46032

(Address of principal executive offices)

(Zip Code)

(800) 923-3725

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	KAR	New York Stock Exchange

Item 2.02    Results of Operations and Financial Condition.

On May 7, 2019, KAR Auction Services, Inc. issued a press release announcing its financial results for the three months ended March 31, 2019. KAR Auction Services, Inc. will host an earnings conference call and webcast, Wednesday, May 8, 2019 at 11:00 a.m., Eastern Daylight Time. The conference call may be accessed by calling 1-844-778-4145 and entering participant code 2963875 and the live webcast may be accessed at the investor relations section of www.karauctionservices.com. The call will be hosted by KAR Auction Services, Inc. Chief Executive Officer and Chairman of the Board, Jim Hallett, and Executive Vice President and Chief Financial Officer, Eric Loughmiller. The call will feature a review of operating highlights and financial results for the three months ended March 31, 2019. The press release dated May 7, 2019 is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference in its entirety.

On May 7, 2019, KAR Auction Services, Inc. also posted supplemental financial information for the three months ended March 31, 2019, and Earnings Slides for the three months ended March 31, 2019. The supplemental financial information and Earnings Slides can be located at the investor relations section of www.karauctionservices.com under the quarterly results page. The supplemental financial information and Earnings Slides posted on May 7, 2019 are attached to this Current Report on Form 8-K as Exhibits 99.2 and 99.3, respectively, and are incorporated herein by reference in their entirety.

Item 9.01    Financial Statements and Exhibits.

(d) Exhibits

EXHIBIT NO.DESCRIPTION OF EXHIBIT

99.1 Press release dated May 7, 2019 – “KAR Auction Services, Inc. Reports First Quarter 2019 Financial Results”

99.2 KAR Auction Services, Inc. First Quarter 2019 Supplemental Financial Information – May 7, 2019

99.3 KAR Auction Services, Inc. First Quarter 2019 Earnings Slides – May 7, 2019

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Dated:    May 7, 2019                    KAR Auction Services, Inc.

/s/ Eric M. Loughmiller

Eric M. Loughmiller

Executive Vice President and Chief Financial Officer

EX-99.1

EXHIBIT 99.1

EARNINGS RELEASE

For Immediate Release

Analyst Inquiries:                                                      Media Inquiries:

Mike Eliason                                                             Gene Rodriguez Miller

(317) 249-4559                                                           (317) 343-5243

mike.eliason@karauctionservices.com                     gene.rodriguez@karauctionservices.com

KAR Auction Services, Inc. Reports First Quarter 2019 Financial Results

KAR Announces Dividend of $0.35 per Common Share

Carmel, IN, May 7, 2019 — KAR Auction Services, Inc. (NYSE: KAR), today reported its first quarter financial results for the period ended March 31, 2019. For the first quarter of 2019, the company reported revenue of $1,046.8 million as compared with revenue of $950.5 million for the first quarter of 2018, an increase of 10%. Net income for the first quarter of 2019 decreased 14% to $77.8 million, or $0.58 per diluted share, as compared with net income of $90.0 million, or $0.66 per diluted share, in the first quarter of 2018. Adjusted EBITDA for the quarter ended March 31, 2019 increased 1% to $230.8 million, as compared with Adjusted EBITDA of $229.4 million for the quarter ended March 31, 2018. Operating adjusted net income per diluted share decreased 15% to $0.70 for the quarter ended March 31, 2019, as compared with operating adjusted net income per diluted share of $0.82 for the quarter ended March 31, 2018. KAR incurred operating losses of $16.8 million and $11.1 million for the quarters ended March 31, 2019 and 2018, respectively, which were attributable to the rollout of TradeRev.

"Our first quarter results were in line with our budget and expectations," said Jim Hallett, chairman and CEO of KAR Auction Services, Inc. "We are re-affirming our 2019 annual guidance and advancing the proposed spin-off of IAA."

2019 Outlook

KAR Auction Services' previously stated outlook remains unchanged.

(in millions, except per share amounts)	Annual Guidance
Net income	$330.0 - $355.5
Income tax expense	$122.0 - $131.5
Interest expense, net of interest income	$220
Depreciation and amortization	$281
EBITDA	$953.0 - $988.0
Adjusted EBITDA addbacks, net	($18.0)
Adjusted EBITDA	$935 - $970
Capital expenditures	$200
Cash taxes	$135
Cash interest on corporate debt	$139
Effective tax rate	27%
Net income per share	$2.46 - $2.65
Operating adjusted net income per share	$2.90 - $3.09
Weighted average diluted shares	134

Earnings guidance does not contemplate future items such as business development activities, strategic developments (such as restructurings, spin-offs or dispositions of assets or investments), gains/losses associated with step acquisitions, significant expenses related to litigation and changes in applicable laws and regulations (including significant accounting and tax matters). The timing and amounts of these items are highly variable, difficult to predict, and of a potential size that could have a substantial impact on the company’s reported results for any given period. Prospective quantification of these items is generally not practicable. Forward-looking non-GAAP guidance excludes amortization expense associated with acquired intangible assets, as well as one-time charges, net of taxes. See reconciliations of the company's guidance on pages 8 and 9.

Dividend Announcement

The company announced a cash dividend today of $0.35 per share on the company’s common stock. The dividend is payable on June 17, 2019, to stockholders of record as of the close of business on June 3, 2019.

Potential Spin-off of IAA

In February 2018, the company announced that its board of directors had approved a plan to pursue the separation of its salvage auction business, currently operated by IAA, through a spin-off. The company also announced that the separation was subject to customary regulatory approvals, the execution of intercompany agreements between the company and the new salvage auction company, final approval of the board of directors and other customary matters. The company continues to work on and evaluate the spin-off and the options available to the company for maximizing shareholder value. While at this time the company expects to complete the spin-off in June 2019, the company may, at any time and for any reason until the proposed transaction is complete, abandon, modify or change the terms of the spin-off.

It is currently expected that IAA Spinco will have total net debt of approximately 3.5 times Adjusted EBITDA. The actual amount of debt that will be issued by IAA Spinco will be determined at a future date when capital is raised for IAA Spinco. This is subject to approval by the board of directors at the time of the issuance of debt and completion of the spin-off. The total net leverage levels for IAA Spinco and KAR are expected to maintain the current corporate debt rating of BB-/B1 currently held by KAR for both entities. The company expects to provide additional information on the expected dividend policies and the target leverage levels of each enterprise as we get closer to completion of the spin-off. There can be no assurance as to whether or when the spin-off will occur. IAA Spinco filed its initial Registration Statement on Form 10 on June 28, 2018, Amendment No. 1 to its Registration Statement on Form 10 on August 30, 2018, Amendment No. 2 to its Registration Statement on Form 10 on November 20, 2018 and Amendment No. 3 to its Registration Statement on Form 10 on March 5, 2019.

2

Earnings Conference Call Information

KAR Auction Services, Inc. will be hosting an earnings conference call and webcast on Wednesday, May 8, 2019 at 11:00 a.m. EDT (10:00 a.m. CDT). The call will be hosted by KAR Auction Services, Inc.’s Chief Executive Officer and Chairman of the Board, Jim Hallett, and Executive Vice President and Chief Financial Officer, Eric Loughmiller. The conference call may be accessed by calling 1-844-778-4145 and entering participant passcode 2963875, while the live web cast will be available at the investor relations section of www.karauctionservices.com. Supplemental financial information for KAR Auction Services’ first quarter 2019 results is available at the investor relations section of www.karauctionservices.com under the quarterly results page.

A replay of the call will be available for two weeks via telephone starting approximately 30 minutes after the completion of the call. The replay may be accessed by calling 1-855-859-2056and entering passcode 2963875. The archive of the web cast will also be available following the call and will be available at the investor relations section of www.karauctionservices.com for a limited time.

About KAR Auction Services

KAR Auction Services (NYSE: KAR) provides sellers and buyers across the global wholesale used vehicle industry with innovative, technology-driven remarketing solutions. KAR’s unique end-to-end platform supports whole car, salvage, financing, logistics and other ancillary and related services, including the sale of approximately 6 million units valued at over $40 billion through our auctions. Our integrated physical, online and mobile marketplaces reduce risk, improve transparency and streamline transactions for customers in more than 130 countries. Headquartered in Carmel, Ind., KAR has more than 18,000 employees across the United States, Canada, Mexico and Europe. For more information go to www.karauctionservices.com. For the latest KAR news follow us on Twitter @KARSpeaks.

Forward Looking Statements

Certain statements contained in this release include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and which are subject to certain risks, trends and uncertainties. In particular, statements made that are not historical facts may be forward-looking statements. Words such as “should,” “may,” “will,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and similar expressions identify forward-looking statements. Such statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results projected, expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include those matters disclosed in the Company’s Securities and Exchange Commission filings. The Company does not undertake any obligation to update any forward-looking statements.

3

KAR Auction Services, Inc.

Condensed Consolidated Statements of Income

(In millions) (Unaudited)

	Three Months Ended March 31,
	2019			2018
Operating revenues
ADESA Auction Services	$	599.7		$	528.1
IAA Salvage Services	357.2			337.3
AFC	89.9			85.1
Total operating revenues	1,046.8			950.5
Operating expenses
Cost of services (exclusive of depreciation and amortization)	612.3			535.0
Selling, general and administrative	207.6			187.4
Depreciation and amortization	66.1			70.3
Total operating expenses	886.0			792.7
Operating profit	160.8			157.8
Interest expense	56.9			41.5
Other income, net	(2.0		)	(0.1		)
Income before income taxes	105.9			116.4
Income taxes	28.1			26.4
Net income	$	77.8		$	90.0
Net income per share
Basic	$	0.58		$	0.67
Diluted	$	0.58		$	0.66
Dividends declared per common share	$	0.35		$	0.35

4

KAR Auction Services, Inc.

Condensed Consolidated Balance Sheets

(In millions) (Unaudited)

	March 31, 2019		December 31, 2018
Cash and cash equivalents	$	265.6	$	337.1
Restricted cash	24.3		27.6
Trade receivables, net of allowances	962.5		765.6
Finance receivables, net of allowances	1,974.8		2,000.8
Other current assets	233.0		183.1
Total current assets	3,460.2		3,314.2
Goodwill	2,374.0		2,213.7
Customer relationships, net of accumulated amortization	311.7		302.3
Intangible and other assets	407.4		399.8
Operating lease right-of-use assets	942.5		—
Property and equipment, net of accumulated depreciation	828.3		976.2
Total assets	$	8,324.1	$	7,206.2
Current liabilities, excluding obligations collateralized by      finance receivables and current maturities of debt	$	1,458.7	$	1,166.4
Obligations collateralized by finance receivables	1,360.6		1,445.3
Current maturities of debt	126.3		13.1
Total current liabilities	2,945.6		2,624.8
Long-term debt	2,650.9		2,654.3
Operating lease liabilities	919.7		—
Other non-current liabilities	305.4		462.9
Stockholders’ equity	1,502.5		1,464.2
Total liabilities and stockholders’ equity	$	8,324.1	$	7,206.2

5

KAR Auction Services, Inc.

Condensed Consolidated Statements of Cash Flows

(In millions) (Unaudited)

	Three Months Ended March 31,
	2019			2018
Operating activities
Net income	$	77.8		$	90.0
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	66.1			70.3
Provision for credit losses	10.3			9.6
Deferred income taxes	3.4			2.4
Amortization of debt issuance costs	2.6			2.7
Stock-based compensation	7.4			6.4
Loss (gain) on disposal of fixed assets	0.1			(0.1		)
Other non-cash, net	4.2			(4.4		)
Changes in operating assets and liabilities, net of acquisitions:
Trade receivables and other assets	(214.4		)	(249.9		)
Accounts payable and accrued expenses	136.2			225.3
Net cash provided by operating activities	93.7			152.3
Investing activities
Net decrease (increase) in finance receivables held for investment	18.6			(29.6		)
Acquisition of businesses (net of cash acquired)	(120.7		)	(23.3		)
Purchases of property, equipment and computer software	(54.0		)	(38.7		)
Proceeds from the sale of property and equipment	0.1			0.1
Net cash used by investing activities	(156.0		)	(91.5		)
Financing activities
Net increase in book overdrafts	38.4			23.1
Net increase in borrowings from lines of credit	108.8			—
Net decrease in obligations collateralized by finance receivables	(88.5		)	(3.0		)
Payments on long-term debt	(10.7		)	—
Payments on capital leases	(10.3		)	(7.8		)
Payments of contingent consideration and deferred acquisition costs	—			(3.0		)
Issuance of common stock under stock plans	0.7			5.6
Tax withholding payments for vested RSUs	(10.2		)	(9.7		)
Dividends paid to stockholders	(46.5		)	(47.0		)
Net cash used by financing activities	(18.3		)	(41.8		)
Effect of exchange rate changes on cash	5.8			(4.2		)
Net (decrease) increase in cash, cash equivalents and restricted cash	(74.8		)	14.8
Cash, cash equivalents and restricted cash at beginning of period	364.7			336.6
Cash, cash equivalents and restricted cash at end of period	$	289.9		$	351.4
Cash paid for interest, net of proceeds from interest rate caps	$	35.7		$	29.8
Cash paid for taxes, net of refunds	$	29.3		$	28.6

6

KAR Auction Services, Inc.

Reconciliation of Non-GAAP Financial Measures

EBITDA, Adjusted EBITDA, operating adjusted net income and operating adjusted net income per share as presented herein are supplemental measures of our performance that are not required by, or presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). They are not measurements of our financial performance under GAAP and should not be considered as substitutes for net income (loss) or any other performance measures derived in accordance with GAAP. Management believes that these measures provide investors additional meaningful methods to evaluate certain aspects of the company’s results period over period and for the other reasons set forth below.

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 our senior secured credit agreement covenant calculations. Management believes that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA is appropriate to provide additional information to investors about one of the principal measures of performance used by our creditors. In addition, management uses EBITDA and Adjusted EBITDA to evaluate our performance.

Depreciation expense for property and equipment and amortization expense of capitalized internally developed software costs relate to ongoing capital expenditures; however, amortization expense associated with acquired intangible assets, such as customer relationships, software, tradenames and noncompete agreements are not representative of ongoing capital expenditures, but have a continuing effect on our reported results. Non-GAAP financial measures of operating adjusted net income and operating adjusted net income per share, in the opinion of the company, provide comparability of the company's performance to other companies that may not have incurred these types of non-cash expenses or that report a similar measure. In addition, operating adjusted net income and operating adjusted net income per share may include adjustments for certain other charges.

EBITDA, Adjusted EBITDA, operating adjusted net income and operating adjusted net income per share have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of the results as reported under GAAP. These measures may not be comparable to similarly titled measures reported by other companies.

The following table reconciles EBITDA and Adjusted EBITDA to net income for the periods presented:

	Three Months Ended March 31,
(in millions), (unaudited)	2019			2018
Net income	$	77.8		$	90.0
Add back:
Income taxes	28.1			26.4
Interest expense, net of interest income	56.3			41.3
Depreciation and amortization	66.1			70.3
EBITDA	228.3			228.0
Non-cash stock-based compensation	7.7			6.7
Acquisition related costs	3.9			2.2
Securitization interest	(14.8		)	(11.4		)
Severance	3.9			1.5
IAA separation costs	0.8			1.1
Foreign currency gains/losses	(0.5		)	—
Other	1.5			1.3
Total addbacks	2.5			1.4
Adjusted EBITDA	$	230.8		$	229.4

7

The following table reconciles operating adjusted net income and operating adjusted net income per share to net income and net income per share for the periods presented:

	Three Months Ended March 31,
(in millions, except per share amounts), (unaudited)	2019			2018
Net income	$	77.8		$	90.0
Acquired amortization expense	21.2			26.9
IAA separation costs	0.8			1.1
Income taxes (1)	(5.8		)	(6.3		)
Operating adjusted net income	$	94.0		$	111.7
Net income per share – diluted	$	0.58		$	0.66
Acquired amortization expense	0.16			0.20
IAA separation costs	—			0.01
Income taxes	(0.04		)	(0.05		)
Operating adjusted net income per share – diluted	$	0.70		$	0.82
Weighted average diluted shares	133.8			135.8

(1) The effective tax rate at the end of each period presented was used to determine the amount of income tax benefit on the adjustments to net income.

The following table reconciles EBITDA and Adjusted EBITDA to net income for the 2019 guidance presented:

	2019 Outlook
(in millions), (unaudited)	Low			High
Net income	$	330.0		$	355.5
Add back:
Income tax expense	122.0			131.5
Interest expense, net of interest income	220.0			220.0
Depreciation and amortization	281.0			281.0
EBITDA	953.0			988.0
Total addbacks, net	(18.0		)	(18.0		)
Adjusted EBITDA	$	935.0		$	970.0

8

The following table reconciles operating adjusted net income and operating adjusted net income per share to net income and net income per share for the 2019 guidance presented:

	2019 Outlook
(in millions, except per share amounts), (unaudited)	Low			High
Net income	$	330.0		$	355.5
Acquired amortization expense	80.0			80.0
Income taxes	(21.6		)	(21.6		)
Operating adjusted net income	$	388.4		$	413.9
Net income per share – diluted	$	2.46		$	2.65
Acquired amortization expense	0.60			0.60
Income taxes	(0.16		)	(0.16		)
Operating adjusted net income per share – diluted	$	2.90		$	3.09
Weighted average diluted shares	134			134

9

EX-99.2

EXHIBIT 99.2

KAR Auction Services, Inc.    

First Quarter 2019 Supplemental Financial Information

May 7, 2019

KAR Auction Services, Inc.

EBITDA and Adjusted EBITDA Measures

EBITDA and Adjusted EBITDA as presented herein are supplemental measures of our performance that are not required by, or presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). They are not measurements of our financial performance under GAAP and should not be considered as substitutes for net income (loss) or any other performance measures derived in accordance with GAAP.

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 our senior secured credit agreement covenant calculations. Management believes that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA is appropriate to provide additional information to investors about one of the principal measures of performance used by our creditors. In addition, management uses EBITDA and Adjusted EBITDA to evaluate our performance. EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of the results as reported under GAAP. These measures may not be comparable to similarly titled measures reported by other companies.

The following tables reconcile EBITDA and Adjusted EBITDA to net income (loss) for the periods presented:

	Three Months Ended March 31, 2019
(Dollars in millions), (Unaudited)	ADESA			IAA		AFC			Corporate			Consolidated
Net income (loss)	$	42.4		$	56.4	$	30.5		$	(51.5	)	$	77.8
Add back:
Income taxes	15.9			19.2		10.8			(17.8		)	28.1
Interest expense, net of interest income	0.4			—		16.9			39.0			56.3
Depreciation and amortization	35.0			21.8		2.4			6.9			66.1
Intercompany interest	7.1			9.4		(1.2		)	(15.3		)	—
EBITDA	100.8			106.8		59.4			(38.7		)	228.3
Intercompany charges	3.2			0.6		—			(3.8		)	—
Non-cash stock-based compensation	2.4			1.1		0.5			3.7			7.7
Acquisition related costs	1.6			—		—			2.3			3.9
Securitization interest	—			—		(14.8		)	—			(14.8		)
Severance	2.7			0.2		—			1.0			3.9
IAA separation costs	—			—		—			0.8			0.8
Foreign currency gains/losses	(0.6		)	0.1		—			—			(0.5		)
Other	0.7			0.8		—			—			1.5
Total addbacks	10.0			2.8		(14.3		)	4.0			2.5
Adjusted EBITDA	$	110.8		$	109.6	$	45.1		$	(34.7	)	$	230.8

2

	Three Months Ended March 31, 2018
(Dollars in millions), (Unaudited)	ADESA		IAA		AFC			Corporate			Consolidated
Net income (loss)	$	54.2	$	50.3	$	25.7		$	(40.2	)	$	90.0
Add back:
Income taxes	15.5		16.3		8.4			(13.8		)	26.4
Interest expense, net of interest income	0.4		—		13.4			27.5			41.3
Depreciation and amortization	31.2		24.1		7.8			7.2			70.3
Intercompany interest	7.7		9.4		(0.5		)	(16.6		)	—
EBITDA	109.0		100.1		54.8			(35.9		)	228.0
Intercompany charges	4.4		—		—			(4.4		)	—
Non-cash stock-based compensation	2.1		1.0		0.5			3.1			6.7
Acquisition related costs	1.4		—		—			0.8			2.2
Securitization interest	—		—		(11.4		)	—			(11.4		)
Severance	1.5		—		—			—			1.5
IAA separation costs	—		—		—			1.1			1.1
Other	0.7		0.6		—			—			1.3
Total addbacks	10.1		1.6		(10.9		)	0.6			1.4
Adjusted EBITDA	$	119.1	$	101.7	$	43.9		$	(35.3	)	$	229.4

Certain of our loan covenant calculations utilize financial results for the most recent four consecutive fiscal quarters. The following table reconciles EBITDA and Adjusted EBITDA to net income for the periods presented:

	Three Months Ended												Twelve Months Ended
(Dollars in millions), (Unaudited)	June 30, 2018			September 30, 2018			December 31, 2018			March 31, 2019			March 31, 2019
Net income (loss)	$	93.2		$	77.5		$	67.3		$	77.8		$	315.8
Add back:
Income taxes	35.2			25.1			21.0			28.1			109.4
Interest expense, net of      interest income	47.5			47.8			51.5			56.3			203.1
Depreciation and amortization	66.9			65.6			67.1			66.1			265.7
EBITDA	242.8			216.0			206.9			228.3			894.0
Non-cash stock-based      compensation	5.3			6.8			5.5			7.7			25.3
Acquisition related costs	1.5			1.5			2.1			3.9			9.0
Securitization interest	(12.7		)	(12.9		)	(14.5		)	(14.8		)	(54.9		)
(Gain)/Loss on asset sales	0.3			0.2			0.2			0.5			1.2
Severance	1.0			1.5			1.8			3.9			8.2
IAA separation costs	3.6			2.1			1.3			0.8			7.8
Foreign currency gains/losses	—			—			3.9			(0.5		)	3.4
Other	0.4			0.5			(0.6		)	1.0			1.3
Total addbacks	(0.6		)	(0.3		)	(0.3		)	2.5			1.3
Adjusted EBITDA	$	242.2		$	215.7		$	206.6		$	230.8		$	895.3

3

Results of Operations

KAR Results

	Three Months Ended March 31,
(Dollars in millions, except per share amounts)	2019			2018
Revenues
ADESA	$	599.7		$	528.1
IAA	357.2			337.3
AFC	89.9			85.1
Total revenues	1,046.8			950.5
Cost of services*	612.3			535.0
Gross profit*	434.5			415.5
Selling, general and administrative	207.6			187.4
Depreciation and amortization	66.1			70.3
Operating profit	160.8			157.8
Interest expense	56.9			41.5
Other income, net	(2.0		)	(0.1		)
Income before income taxes	105.9			116.4
Income taxes	28.1			26.4
Net income	$	77.8		$	90.0
Net income per share
Basic	$	0.58		$	0.67
Diluted	$	0.58		$	0.66

* Exclusive of depreciation and amortization

Overview of KAR Results for the Three Months Ended March 31, 2019 and 2018

Overview

For the three months ended March 31, 2019, we had revenue of $1,046.8 million compared with revenue of $950.5 million for the three months ended March 31, 2018, an increase of 10%. Businesses acquired accounted for an increase in revenue of $31.8 million or 3% of revenue. For a further discussion of revenues, gross profit and selling, general and administrative expenses, see the segment results discussions below.

Depreciation and Amortization

Depreciation and amortization decreased $4.2 million, or 6%, to $66.1 million for the three months ended March 31, 2019, compared with $70.3 million for the three months ended March 31, 2018. The decrease in depreciation and amortization was primarily the result of certain intangible assets that became fully amortized in the first quarter of 2019 and an approximately $2 million decrease resulting from the derecognition of fixed assets associated with certain sale leaseback transactions associated with the adoption of Topic 842, partially offset by certain assets placed in service over the last twelve months and depreciation and amortization for the assets of businesses acquired in 2018 and 2019.

Interest Expense

Interest expense increased $15.4 million, or 37%, to $56.9 million for the three months ended March 31, 2019, compared with $41.5 million for the three months ended March 31, 2018. The increase was primarily attributable to an increase of approximately $121 million in the average outstanding balance of corporate debt for the three months ended March 31, 2019 compared with the three months ended March 31, 2018, as well as an increase in the weighted average interest rate for the same period of approximately 0.71%. In addition, there was an increase in interest expense at AFC of $3.7 million, which resulted from an increase in interest rates under the U.S. securitization agreement for the three months ended March 31, 2019, as compared with the three months ended March 31, 2018. The increases in interest expense were partially offset by $2.4 million received from the counterparties to the interest rate cap agreements.

4

Income Taxes

We had an effective tax rate of 26.5% for the three months ended March 31, 2019, compared with an effective tax rate of 22.7% for the three months ended March 31, 2018. Excluding the effect of discrete items, our effective tax rate for the three months ended March 31, 2019 and 2018 would have been 28.2% and 27.5%, respectively.

Impact of Foreign Currency

The strengthening of the U.S dollar has impacted the reporting of our Canadian operations in U.S. dollars. For the three months ended March 31, 2019, fluctuations in the Canadian exchange rate decreased revenue by $5.5 million, operating profit by $1.1 million, net income by $0.6 million and net income per diluted share by less than $0.01.

ADESA Results

	Three Months Ended March 31,
(Dollars in millions, except per vehicle amounts)	2019			2018
ADESA revenue	$	599.7		$	528.1
Cost of services*	370.7			306.0
Gross profit*	229.0			222.1
Selling, general and administrative	126.6			108.8
Depreciation and amortization	35.0			31.2
Operating profit	$	67.4		$	82.1
Vehicles sold	945,000			878,000
Physical auction vehicles sold in North America	555,000			557,000
Online only vehicles sold in North America	367,000			309,000
Vehicles sold in Europe	23,000			12,000
Dealer consignment mix at physical auctions	38		%	41		%
Conversion rate at North American physical auctions	63.8		%	62.6		%
Physical auction revenue per vehicle sold, excluding purchased vehicles	$	875		$	820
Online only revenue per vehicle sold, excluding purchased vehicles	$	144		$	117

* Exclusive of depreciation and amortization

Overview of ADESA Results for the Three Months Ended March 31, 2019 and 2018

Revenue

Revenue from ADESA increased $71.6 million, or 14%, to $599.7 million for the three months ended March 31, 2019, compared with $528.1 million for the three months ended March 31, 2018. The increase in revenue was primarily a result of an 8% increase in the number of vehicles sold (6% increase excluding acquisitions) and average revenue per vehicle sold increased 5%. Businesses acquired in the last 12 months accounted for an increase in revenue of $31.8 million.

The increase in vehicles sold was primarily attributable to a 12% increase in institutional volume, including vehicles sold on our online only platform, partially offset by a 3% decrease in dealer consignment units sold (5% decrease excluding acquisitions) for the three months ended March 31, 2019 compared with the three months ended March 31, 2018. Online sales volume for ADESA represented approximately 57% of the total vehicles sold in the first quarter of 2019, compared with approximately 52% in the first quarter of 2018. "Online sales" includes the following: (i) selling vehicles directly from a dealership or other interim storage location (upstream selling); (ii) online solutions that offer vehicles for sale while in transit to auction locations (midstream selling); (iii) vehicles sold on the TradeRev platform; (iv) vehicle sales in Europe, including units sold by COTW; (v) simultaneously broadcasting video and audio of the physical auctions to online bidders (LiveBlock^®); and (vi) bulletin-board or real-time online auctions (DealerBlock^®). Upstream selling, midstream selling and TradeRev sales, which represent online only

5

sales, accounted for approximately 71% of ADESA's North American online sales volume. ADESA sold approximately 367,000 (including approximately 31,000 from TradeRev) and 309,000 (including approximately 22,000 from TradeRev) vehicles through its North American online only offerings in the first quarter of 2019 and 2018, respectively. For the three months ended March 31, 2019, dealer consignment vehicles represented approximately 38% of used vehicles sold at ADESA physical auction locations, compared with approximately 41% for the three months ended March 31, 2018. Vehicles sold at physical auction locations in the first quarter of 2019 were consistent with the first quarter of 2018. The used vehicle conversion percentage at North American physical auction locations, calculated as the number of vehicles sold as a percentage of the number of vehicles entered for sale at our ADESA auctions, increased to 63.8% for the three months ended March 31, 2019, compared with 62.6% for the three months ended March 31, 2018.

Physical auction revenue per vehicle sold increased $55, or 7%, to $875 for the three months ended March 31, 2019, compared with $820 for the three months ended March 31, 2018. Physical auction revenue per vehicle sold includes revenue from seller and buyer auction fees and ancillary and other related services, which includes non-auction services and excludes the sale of purchased vehicles. The increase in physical auction revenue per vehicle sold was primarily attributable to an increase in lower margin ancillary and other related services revenue and auction fees related to higher average transaction prices, partially offset by a decrease in physical auction revenue per vehicle sold of $5 due to fluctuations in the Canadian exchange rate.

Online only auction revenue per vehicle sold increased $75 to $206 for the three months ended March 31, 2019, compared with $131 for the three months ended March 31, 2018. The increase in online only auction revenue per vehicle sold was attributable to an increase in purchased vehicles associated with the ADESA Assurance Program and the inclusion of TradeRev and CarsOnTheWeb sales. Excluding vehicles purchased as part of the ADESA Assurance Program and vehicles purchased by CarsOnTheWeb, online only revenue per vehicle would have been $144 and $117 for the three months ended March 31, 2019 and 2018, respectively. The $27 increase in online only revenue per vehicle was attributable to increased revenue per vehicle for units sold on the TradeRev platform and the addition of CarsOnTheWeb.

Gross Profit

For the three months ended March 31, 2019, gross profit for ADESA increased $6.9 million, or 3%, to $229.0 million, compared with $222.1 million for the three months ended March 31, 2018. Gross profit for ADESA was 38.2% of revenue for the three months ended March 31, 2019, compared with 42.1% of revenue for the three months ended March 31, 2018. Gross profit as a percentage of revenue decreased for the three months ended March 31, 2019 as compared with the three months ended March 31, 2018 as a result of an increase in purchase vehicles primarily related to the acquisition of COTW and increased activity under ADESA Assurance, as well as an increase in lower margin related services. Excluding purchased vehicles, gross profit as a percentage of revenue was 42.2% and 44.2% for the three months ended March 31, 2019 and 2018, respectively. Businesses acquired in the last 12 months accounted for an increase in cost of services of $26.9 million for the three months ended March 31, 2019.

Selling, General and Administrative

Selling, general and administrative expenses for the ADESA segment increased $17.8 million, or 16%, to $126.6 million for the three months ended March 31, 2019, compared with $108.8 million for the three months ended March 31, 2018, primarily due to increases in costs associated with TradeRev aggregating $8.0 million, acquisitions of $4.6 million, compensation expense of $2.7 million, incentive-based compensation $1.8 million, information technology costs of $1.5 million, benefit related expense of $0.6 million, and other miscellaneous expenses aggregating $1.0 million, partially offset by fluctuations in the Canadian exchange rate of $1.2 million and a decrease in supplies expense of $1.2 million.

6

IAA Results

	Three Months Ended March 31,
(Dollars in millions)	2019		2018
IAA revenue	$	357.2	$	337.3
Cost of services*	218.4		206.7
Gross profit*	138.8		130.6
Selling, general and administrative	31.3		30.5
Depreciation and amortization	21.8		24.1
Operating profit	$	85.7	$	76.0
Vehicles sold	649,000		643,000

* Exclusive of depreciation and amortization

Overview of IAA Results for the Three Months Ended March 31, 2019 and 2018

Revenue

Revenue from IAA increased $19.9 million, or 6%, to $357.2 million for the three months ended March 31, 2019, compared with $337.3 million for the three months ended March 31, 2018. The increase in revenue was a result of an increase in vehicles sold of approximately 1% for the three months ended March 31, 2019. Revenue per vehicle sold increased 5% for the three months ended March 31, 2019 compared with the three months ended March 31, 2018, and included a decrease in revenue of $1.8 million due to fluctuations in the Canadian exchange rate, as well as a decrease in revenue of $1.5 million from HBC, which included a decrease in revenue of $0.6 million due to fluctuations in the U.K. exchange rate. IAA's North American same-store total loss vehicle inventory increased approximately 10% at March 31, 2019, as compared to March 31, 2018. Vehicles sold under purchase agreements were approximately 4% of total salvage vehicles sold for the three months ended March 31, 2019 and 2018. North American online sales volumes for IAA for the three months ended March 31, 2019 and 2018 each represented over 60% of the total vehicles sold by IAA.

Gross Profit

For the three months ended March 31, 2019, gross profit at IAA increased to $138.8 million, or 38.9% of revenue, compared with $130.6 million, or 38.7% of revenue, for the three months ended March 31, 2018. The increase in gross profit was mainly attributable to a 6% increase in revenue, partially offset by a 6% increase in cost of services, which included costs associated with purchase contract vehicles, additional lease expense related to lease agreements previously impacting depreciation expense and organic volume growth. 

Excluding HBC, IAA's gross profit margin was 39.3% and 39.2% for the three months ended March 31, 2019 and 2018, respectively. For the three months ended March 31, 2019 and 2018, HBC had revenue of approximately $8.2 million and $9.7 million, respectively, and cost of services of approximately $6.5 million and $7.6 million, respectively, as fewer of HBC's vehicles were sold under purchase contracts. The entire selling and purchase price of the vehicle is recorded as revenue and cost of services for purchase contracts.

Selling, General and Administrative

Selling, general and administrative expenses at IAA increased $0.8 million, or 3%, to $31.3 million for the three months ended March 31, 2019, compared with $30.5 million for the three months ended March 31, 2018. The increase in selling, general and administrative expenses was primarily attributable to increases in compensation expense of $0.8 million and other miscellaneous expenses aggregating $0.6 million, partially offset by a decrease in incentive-based compensation expense of $0.6 million.

7

AFC Results

	Three Months Ended March 31,
(Dollars in millions except volumes and per loan amounts)	2019		2018
AFC revenue	$	89.9	$	85.1
Cost of services*	23.2		22.3
Gross profit*	66.7		62.8
Selling, general and administrative	7.2		8.0
Depreciation and amortization	2.4		7.8
Operating profit	$	57.1	$	47.0
Loan transactions	461,000		464,000
Revenue per loan transaction, excluding “Other service revenue”	$	177	$	166

* Exclusive of depreciation and amortization

Overview of AFC Results for the Three Months Ended March 31, 2019 and 2018

Revenue

For the three months ended March 31, 2019, AFC revenue increased $4.8 million, or 6%, to $89.9 million, compared with $85.1 million for the three months ended March 31, 2018. The increase in revenue was primarily the result of a 7% increase in revenue per loan transaction.

Revenue per loan transaction, which includes both loans paid off and loans curtailed, increased $11, or 7%. Approximately $12 of the increase in revenue per loan transaction was the result of increases in interest yield and fee revenue as a result of prime rate increases, as well as an increase in average loan values. The increase in provision for credit losses, which is a reduction of revenue, resulted in a decrease in revenue per loan transaction of $1 for the three months ended March 31, 2019. Revenue per loan transaction excludes "Other service revenue."

The provision for credit losses remained constant at 1.6% of the average managed receivables for the three months ended March 31, 2019 and 2018. The provision for credit losses is expected to be under 2%, annually, of the average managed receivables balance. However, the actual losses in any particular quarter could deviate from this range.

Gross Profit

For the three months ended March 31, 2019, gross profit for the AFC segment increased $3.9 million, or 6%, to $66.7 million, or 74.2% of revenue, compared with $62.8 million, or 73.8% of revenue, for the three months ended March 31, 2018, primarily as a result of a 6% increase in revenue, partially offset by a 4% increase in cost of services. The increase in cost of services was the result of increases in PWI expenses of $0.6 million, compensation expense of $0.3 million and other miscellaneous expenses aggregating $0.4 million, partially offset by a decrease in lot checks of $0.4 million.

Selling, General and Administrative

Selling, general and administrative expenses at AFC decreased $0.8 million, or 10%, to $7.2 million for the three months ended March 31, 2019, compared with $8.0 million for the three months ended March 31, 2018, primarily as a result of decreases in compensation expense of $0.3 million, incentive-based compensation of $0.3 million and travel expenses of $0.3 million, partially offset by an increase in other miscellaneous expenses aggregating $0.1 million.

8

Holding Company Results

	Three Months Ended March 31,
(Dollars in millions)	2019			2018
Selling, general and administrative	$	42.5		$	40.1
Depreciation and amortization	6.9			7.2
Operating loss	$	(49.4	)	$	(47.3	)

Overview of Holding Company Results for the Three Months Ended March 31, 2019 and 2018

Selling, General and Administrative

For the three months ended March 31, 2019, selling, general and administrative expenses at the holding company increased $2.4 million, or 6%, to $42.5 million, compared with $40.1 million for the three months ended March 31, 2018, primarily as a result of increases in compensation expense of $1.1 million, information technology costs of $1.0 million, stock-based compensation expense of $0.7 million and incentive-based compensation of $0.6 million, partially offset by a decrease in other miscellaneous expenses aggregating $1.0 million.

LIQUIDITY AND CAPITAL RESOURCES

The company believes that the significant indicators of liquidity for its business are cash on hand, cash flow from operations, working capital and amounts available under its Credit Facility. The company's principal sources of liquidity consist of cash generated by operations and borrowings under its revolving credit facility.

(Dollars in millions)	March 31, 2019		December 31, 2018		March 31, 2018
Cash and cash equivalents	$	265.6	$	337.1	$	330.8
Restricted cash	24.3		27.6		20.6
Working capital	514.6		689.4		783.2
Amounts available under Credit Facility*	256.5		350.0		350.0
Cash flow from operations for the three months ended	93.7				152.3

* KAR Auction Services, Inc. has a $350 million revolving line of credit as part of the company's Credit Agreement. There were related outstanding letters of credit totaling approximately $32.9 million at March 31, 2019 and December 31, 2018 and $32.4 at March 31, 2018, which reduced the amount available for borrowings under the revolving credit facility.

We regularly evaluate alternatives for our capital structure and liquidity given our expected cash flows, growth and

operating capital requirements as well as capital market conditions.

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Summary of Cash Flows

	Three Months Ended March 31,
(Dollars in millions)	2019			2018
Net cash provided by (used by):
Operating activities	$	93.7		$	152.3
Investing activities	(156.0		)	(91.5		)
Financing activities	(18.3		)	(41.8		)
Effect of exchange rate on cash	5.8			(4.2		)
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(74.8	)	$	14.8

Cash flow from operating activities was $93.7 million for the three months ended March 31, 2019, compared with $152.3 millionfor the three months ended March 31, 2018. The decrease in operating cash flow was primarily attributable to changes in operating assets and liabilities as a result of the timing of collections and the disbursement of funds to consignors for auctions held near period-ends, as well as decreased profitability, partially offset by a net increase in non-cash item adjustments.

Net cash used by investing activities was $156.0 million for the three months ended March 31, 2019, compared with $91.5 million for the three months ended March 31, 2018. The increase in net cash used by investing activities was primarily attributable to:

• an increase in cash used for acquisitions of approximately $97.4 million; and

• an increase in cash used for capital expenditures of approximately $15.3 million;

partially offset by:

• a net decrease in finance receivables held for investment of approximately $48.2 million.

Net cash used by financing activities was $18.3 million for the three months ended March 31, 2019, compared with $41.8 million for the three months ended March 31, 2018. The decrease in net cash used by financing activities was primarily attributable to:

• a $108.8 million increase in borrowings from lines of credit; and

• a larger net increase in book overdrafts in 2018 compared with 2017, resulting in an increase of approximately $15.3 million;

partially offset by:

• a net decrease in the obligations collateralized by finance receivables of approximately $85.5 million; and

• an increase in the payments on long-term debt of $10.7 million.

Non-GAAP Financial Measures

The company provides the following non-GAAP measures on a forward-looking basis: Adjusted EBITDA and operating adjusted net income per share. Management believes that these measures provide investors additional meaningful methods to evaluate certain aspects of the company’s results period over period and for the other reasons set forth previously.

Earnings guidance also does not contemplate future items such as business development activities, strategic developments (such as restructurings, spin-offs or dispositions of assets or investments), gains/losses associated with step acquisitions, significant expenses related to litigation and changes in applicable laws and regulations (including significant accounting and tax matters). The timing and amounts of these items are highly variable, difficult to predict, and of a potential size that could have a substantial impact on the company’s reported results for any given period. Prospective quantification of these items is generally not practicable. Forward-looking non-GAAP guidance excludes amortization expenses associated with acquired intangible assets, as well as one-time charges, net of taxes.

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EX-99.3

First Quarter 2019 Earnings Slides May 7, 2019

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 materially from those projected, expressed or implied by such forward-looking statements. Many of these risk factors are outside of the company’s control, and as such, they involve risks which are not currently known to the company that could cause actual results to differ materially from forecasted results. Factors that could cause or contribute to such differences include those matters disclosed in the company’s Securities and Exchange Commission filings. The forward-looking statements in this document are made as of the date hereof and the company does not undertake to update its forward-looking statements. 2

Q1 Highlights Revenues Highlights Fundamentals $950.5 $1,046.8 • Revenue growth +10% • Diversified and complementary 89.9 85.1 • Operating Adjusted EPS -15% business services model 357.2 337.3 KAR • Adjusted EBITDA +1% 528.1 599.7 2018 2019 • Revenue +14% • Off-lease supply driving volume growth AFC 9% • Total volume growth +8% • Revenue per unit growth largely due to ancillary services growth IAA • Physical auction RPU +$55 34% ADESA • Adjusted EBITDA decline due to ADESA 57% • Adjusted EBITDA -7% continued TradeRev rollout. TradeRev volumes increased over 40% Q1 2019 (31,000) vs Q1 2018 (22,000) AFC • Revenue +6% • Total Loss 19.2% Q1 2019 vs. 18.8% 9% • Volume growth +1% Q1 2018 (CCC) IAA • Scrap pricing -11% (American 34% • North American inventory +10% IAA ADESA Recycler, Q1 2019 vs. Q1 2018) 57% • Adjusted EBITDA +8% • Miles driven +0.8% (FHWA, YTD • Incremental operating profit margin 49% through February 2019 vs. 2018) AFC • Revenue +6% • Conservative portfolio management 9% • Revenue per LTU +7% • Increasing gross revenue per loan transaction due to higher average loan IAA • Provision for credit losses as a percent of AFC 34% ADESA balances 57% managed receivables 1.6% • Adjusted EBITDA +3% 3

2019 Outlook ANNUAL GUIDANCE 2019 Low 2019 High 2018 Net income $330.0 $355.5 $328.0 Add back: Income tax expense $122.0 $131.5 $107.7 Interest expense, net of interest income $220.0 $220.0 $188.1 Depreciation and amortization $281.0 $281.0 $269.9 EBITDA $953.0 $988.0 $893.7 Total Adjusted EBITDA addbacks, net ($18.0) ($18.0) $0.2 Adjusted EBITDA $935.0 $970.0 $893.9 Effective tax rate 27% 27% 25% Net income per share – diluted $2.46 $2.65 $2.42 Capital expenditures $200.0 $200.0 $198.0 Cash taxes $135.0 $135.0 $109.8 Cash interest on corporate debt $139.0 $139.0 $129.0 Operating adjusted net income per share - diluted $2.90 $3.09 $2.96 Weighted average diluted shares 134 134 136 4

Separation of IAA Salvage Auction Business Unit Update Next Steps Capital Structure • Issue Spinco debt • Maintain BB-/B1 corporate credit rating • Equity roadshow and when-issued trading • 3.5x Net debt / Adjusted EBITDA • Effective with SEC • Targeted debt structure • Distribution • ~$1.3B total debt and ~$225M undrawn revolver • Combination of Term B Loan and Senior Secured Notes Expenses 2018 IAA Spinco Operating Metrics • $9.5M of shared services expenses $1.3B 190+ incurred by KAR Corporate segment on Revenue Locations behalf of IAA Spinco Inc. in 2018 • An estimated $5.5M of additional operating $284M ~3,600 costs expected for Spinco Operating Profit Employees ~40% Market Share ~2.5M North American Vehicles Sold 5

KAR Q1 2019 Highlights ($ in millions, except per share amounts) Q1 Q1 KAR Highlights* 2019 2018 Total operating revenues $1,046.8 $950.5 $31.8M acquisitions Gross profit** $434.5 $415.5 % of revenue 41.5% 43.7% SG&A $207.6 $187.4 TradeRev +$8.0M, $4.6M acquired SG&A EBITDA $228.3 $228.0 Adjusted EBITDA $230.8 $229.4 Net Income $77.8 $90.0 Higher interest expense Net income per share - diluted $0.58 $0.66 Operating adjusted net income per share - $0.70 $0.82 diluted Weighted average diluted shares 133.8 135.8 Dividends declared per common share $0.35 $0.35 Effective tax rate 26.5% 22.7% Capital expenditures $54.0 $38.7 * For a more complete explanation of these changes, see the MD&A in the company's supplemental financial information and Form 10-Q, both for the three months ended March 31, 2019. ** Exclusive of depreciation and amortization 6

ADESA Q1 2019 Highlights ($ in millions, except RPU) Q1 Q1 ADESA Highlights* 2019 2018 Revenue $599.7 $528.1 $31.8M acquisitions Gross profit** $229.0 $222.1 Increased purchased vehicles from COTW and ADESA % of revenue 38.2% 42.1% Assurance reduced margins ~2% SG&A $126.6 $108.8 TradeRev +$8.0M, $4.6M of acquired SG&A EBITDA $100.8 $109.0 Adjusted EBITDA $110.8 $119.1 % of revenue 18.5% 22.6% Vehicles sold 945,000 878,000 12% increase in institutional volume Physical vehicles sold in North America 555,000 557,000 19% growth (Includes TradeRev volume of 31,000 in Q1 Online only volume in North America 367,000 309,000 2019 and 22,000 in Q1 2018) Vehicles sold in Europe 23,000 12,000 Continued off-lease increase displaced dealer Dealer consignment mix % (physical only) 38% 41% consignment Total online volume % 57% 52% Includes physical auction sales to online buyers Physical RPU $875 $820 Excludes purchased vehicles Online only RPU $144 $117 Excludes purchased vehicles * For a more complete explanation of these changes, see the MD&A in the company's supplemental financial information and Form 10-Q, both for the three months ended March 31, 2019. ** Exclusive of depreciation and amortization 7

IAA Q1 2019 Highlights ($ in millions) Q1 Q1 IAA Highlights* 2019 2018 Revenue $357.2 $337.3 +5% RPU growth Gross profit** $138.8 $130.6 % of revenue 38.9% 38.7% Excluding HBC 39.3% in Q1 2019 and 39.2% in Q1 2018 SG&A $31.3 $30.5 EBITDA $106.8 $100.1 Adjusted EBITDA $109.6 $101.7 8% increase % of revenue 30.7% 30.2% Vehicles sold 649,000 643,000 +1% volume Inventory growth (N.A.) 10% 4% % Purchased contract vehicles 4% 4% * For a more complete explanation of these changes, see the MD&A in the company's supplemental financial information and Form 10-Q, both for the three months ended March 31, 2019. ** Exclusive of depreciation and amortization 8

AFC Q1 2019 Highlights ($ in millions, except for revenue per loan transaction) Q1 Q1 Highlights* AFC 2019 2018 Interest and fee income $86.9 $81.9 Other revenue $2.8 $2.9 Provision for credit losses ($8.2) ($7.7) Other service revenue $8.4 $8.0 PWI revenue Total AFC revenue $89.9 $85.1 +7% revenue per LTU Gross profit** $66.7 $62.8 % of revenue 74.2% 73.8% Decrease in compensation expense, including incentive- SG&A $7.2 $8.0 based compensation EBITDA $59.4 $54.8 Adjusted EBITDA $45.1 $43.9 3% increase Loan transactions 461,000 464,000 Revenue per loan transaction*** $177 $166 Provision for credit losses % of finance receivables 1.6% 1.6% Managed receivables $1,989.1 $1,933.2 Increasing vehicle values $1,360.6 $1,354.2 Obligations collateralized by finance receivables * For a more complete explanation of these changes, see the MD&A in the company’s supplemental financial information and Form 10-Q, both for the three months ended March 31, 2019. ** Exclusive of depreciation and amortization 9 *** Excludes "Other service revenue"

H I S T O R I C A L D A T A APPENDIX 10

ADESA Metrics - Annual 2018 2017 2016 2015 2014 Revenue2 $2,101.9 $1,937.5 $1,765.3 $1,427.8 $1,271.0 Total Volume 3,472 3,180 2,885 2,465 2,198 Online Only Volume 1,304 938 743 592 495 Total Online Volume %3 54% 46% 42% 40% 38% Physical Conversion % (N.A.) 61.6% 60.4% 58.0% 58.3% 58.2% Dealer Consignment Mix % (Physical) 42% 45% 48% 50% 51% Physical RPU1 $844 $775 $753 $701 $685 Online Only RPU1 $121 $113 $110 $102 $104 Gross Margin2 41.4% 42.0% 41.3% 41.4% 41.3% 1 Excluding Acquired Vehicles 2 Includes purchased vehicles 3 Includes LiveBlock and DealerBlock volume 11

ADESA Metrics - Quarter 1Q19 4Q18 3Q18 2Q18 1Q18 4Q17 3Q17 2Q17 1Q17 Revenue2 $599.7 $508.5 $527.0 $538.3 $528.1 $473.2 $477.1 $489.2 $498.0 Total Volume 945 811 876 907 878 744 788 830 818 Online Only Volume 367 306 343 346 309 237 241 245 215 Total Online Volume %3 57% 54% 54% 54% 52% 49% 46% 46% 44% Physical Conversion % 63.8% 58.5% 62.9% 62.4% 62.6% 57.3% 61.3% 61.1% 61.8% (N.A.) Dealer Consignment Mix 38% 40% 44% 43% 41% 44% 47% 46% 44% % (Physical) Physical RPU1 $875 $868 $850 $839 $820 $822 $781 $748 $755 Online Only RPU1 $144 $122 $126 $118 $117 $122 $112 $105 $111 Gross Margin2 38.2% 39.1% 41.6% 42.9% 42.1% 40.5% 42.9% 43.0% 41.6% 1 Excluding Acquired Vehicles 2 Includes purchased vehicles 3 Includes LiveBlock and DealerBlock volume 12

IAA Metrics - Annual 2018 2017 2016 2015 2014 Revenue $1,326.8 $1,219.2 $1,098.0 $994.4 $895.9 Total Volume 2,480 2,369 2,184 1,970 1,732 Inventory Growth (North America) 1% 3% 25% 14% 20% Purchased Vehicle Mix % 4% 5% 7% 7% 6% Gross Profit $505.6 $441.1 $390.0 $360.8 $340.2 Gross Margin (IAA) 38.1% 36.2% 35.5% 36.3% 38.0% Gross Margin (North America) 38.6% 36.9% 36.7% 37.0% 38.0% 13

IAA Metrics - Quarter 1Q19 4Q18 3Q18 2Q18 1Q18 4Q17 3Q17 2Q17 1Q17 Revenue $357.2 $335.2 $321.1 $333.2 $337.3 $335.4 $287.7 $298.7 $297.4 Total Volume 649 617 597 623 643 635 562 580 592 Inventory Growth (North 10% 1% -9% 2% 4% 3% 12% 9% 17% America) Purchased Vehicle Mix % 4% 4% 4% 4% 4% 4% 5% 5% 5% Gross Profit $138.8 $124.3 $118.6 $132.1 $130.6 $112.7 $102.9 $117.2 $108.3 Gross Margin (IAA) 38.9% 37.1% 36.9% 39.6% 38.7% 33.6% 35.8% 39.2% 36.4% Gross Margin (North 39.3% 37.5% 37.4% 40.2% 39.2% 33.9% 36.3% 40.2% 37.4% America) 14

IAA Q1 2019 Gross Profit ($ in millions) Three Months Ended Three Months Ended March 31, 2019 March 31, 2018 IAA HBC Total IAA HBC Total Revenue $349.0 $8.2 $357.2 $327.6 $9.7 $337.3 Cost of Services** $211.9 $6.5 $218.4 $199.1 $7.6 $206.7 Gross Profit** $137.1 $1.7 $138.8 $128.5 $2.1 $130.6 % of Revenue 39.3% 20.7% 38.9% 39.2% 21.6% 38.7% * For a more complete explanation of these changes, see the MD&A in the company's supplemental financial information and Form 10-Q, both for the three months ended March 31, 2019. ** Exclusive of depreciation and amortization 15

AFC Metrics - Annual 2018 2017 2016 2015 2014 Revenue $340.9 $301.3 $286.8 $268.4 $250.1 Loan Transaction Units (LTU) 1,760 1,688 1,718 1,607 1,445 Revenue per Loan Transaction, $175 $159 $148 $150 $155 Excluding “Other Service Revenue” Ending Managed Finance Receivables $2,014.8 $1,912.6 $1,792.2 $1,641.0 $1,371.1 Ending Obligations Collateralized by $1,445.3 $1,358.1 $1,280.3 $1,189.0 $859.3 Finance Receivables % Vehicles Purchased at Auction 83% 85% 83% 84% 84% Active Dealers 12,300 12,400 12,200 11,300 10,100 Vehicles per active dealer 15 15 15 16 16 Average Credit Line $270,000 $250,000 $260,000 $230,000 $219,000 Avg Value Outstanding per Vehicle $10,200 $9,900 $9,500 $9,100 $8,630 16

AFC Metrics - Quarter 1Q19 4Q18 3Q18 2Q18 1Q18 4Q17 3Q17 2Q17 1Q17 Revenue $89.9 $85.3 $85.4 $85.1 $85.1 $81.8 $78.2 $70.1 $71.2 Loan Transaction Units 461 428 433 435 464 414 402 416 456 (LTU) Revenue per Loan Transaction, Excluding $177 $180 $177 $177 $166 $178 $174 $148 $138 “Other Service Revenue” Ending Managed Finance $1,989.1 $2,014.8 $1,979.7 $1,958.6 $1,933.2 $1,912.6 $1,809.2 $1,736.5 $1,760.7 Receivables Ending Obligations Collateralized by Finance $1,360.6 $1,445.3 $1,366.3 $1,358.0 $1,354.2 $1,358.1 $1,259.3 $1,224.9 $1,241.8 Receivables 17

AFC Provision for Credit Losses - Annual 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Ending Managed $2,014.8 $1,912.6 $1,792.2 $1,641.0 $1,371.1 $1,107.6 $1,004.2 $883.2 $771.6 $613.0 $506.6 $847.9 Receivables Average Managed $1,959.8 $1,802.2 $1,732.5 $1,474.9 $1,208.4 $1,051.4 $925.8 $798.8 $688.6 $516.4 $744.4 $835.3 Receivables Provision for Credit $32.9 $33.9 $30.7 $16.0 $12.3 $9.6 $7.2 $6.1 $11.2 $17.1 $44.7 $25.0 Losses % of Managed 1.7% 1.9% 1.8% 1.1% 1.0% 0.9% 0.8% 0.8% 1.6% 3.3% 6.0% 3.0% Receivables 18

AFC Provision for Credit Losses - Quarterly 1Q19 4Q18 3Q18 2Q18 1Q18 4Q17 3Q17 2Q17 1Q17 Ending Managed $1,989.1 $2,014.8 $1,979.7 $1,958.6 $1,933.2 $1,912.6 $1,809.2 $1,736.5 $1,760.7 Receivables Average Managed $2,002.0 $1,997.3 $1,969.2 $1,945.9 $1,922.9 $1,860.9 $1,772.9 $1,748.6 $1,776.5 Receivables Provision for $8.2 $10.8 $7.3 $7.1 $7.7 $6.4 $5.0 $11.4 $11.1 Credit Losses % of Managed 1.6% 2.2% 1.5% 1.5% 1.6% 1.4% 1.1% 2.6% 2.5% Receivables 19

A P P E N D I X APPENDIX 20

Non-GAAP Financial Measures 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 senior secured credit agreement covenant calculations. Management believes that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA is appropriate to provide additional information to investors about one of the principal measures of performance used by the company’s creditors. In addition, management uses EBITDA and Adjusted EBITDA to evaluate the company’s performance. Depreciation expense for property and equipment and amortization expense of capitalized internally developed software costs relate to ongoing capital expenditures; however, amortization expense associated with acquired intangible assets, such as customer relationships, software, tradenames and non-compete agreements are not representative of ongoing capital expenditures, but have a continuing effect on our reported results. Non-GAAP financial measures of operating adjusted net income and operating adjusted net income per share, in the opinion of the company, provide comparability to other companies that may not have incurred these types of non-cash expenses or that report a similar measure. In addition, net income and net income per share have been adjusted for certain other charges, as seen in the following reconciliation. EBITDA, Adjusted EBITDA, operating adjusted net income and operating adjusted net income per share have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of the results as reported under GAAP. These measures may not be comparable to similarly titled measures reported by other companies. 21

Q1 2019 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended March 31, 2019 ADESA IAA AFC Corporate Consolidated Net income (loss) $42.4 $56.4 $30.5 ($51.5) $77.8 Add back: Income taxes 15.9 19.2 10.8 (17.8) 28.1 Interest expense, net of interest income 0.4 - 16.9 39.0 56.3 Depreciation and amortization 35.0 21.8 2.4 6.9 66.1 Intercompany interest 7.1 9.4 (1.2) (15.3) - EBITDA $100.8 $106.8 $59.4 ($38.7) $228.3 Intercompany charges 3.2 0.6 - (3.8) - Non-cash stock-based compensation 2.4 1.1 0.5 3.7 7.7 Acquisition related costs 1.6 - - 2.3 3.9 Securitization interest - - (14.8) - (14.8) Severance 2.7 0.2 - 1.0 3.9 IAA separation costs - - - 0.8 0.8 Foreign currency gains/losses (0.6) 0.1 - - (0.5) Other 0.7 0.8 - - 1.5 Total Addbacks 10.0 2.8 (14.3) 4.0 2.5 Adjusted EBITDA $110.8 $109.6 $45.1 ($34.7) $230.8 Revenue $599.7 $357.2 $89.9 – $1,046.8 Adjusted EBITDA % margin 18.5% 30.7% 50.2% 22.0% 22

Q1 2018 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended March 31, 2018 ADESA IAA AFC Corporate Consolidated Net income (loss) $54.2 $50.3 $25.7 ($40.2) $90.0 Add back: Income taxes 15.5 16.3 8.4 (13.8) 26.4 Interest expense, net of interest income 0.4 - 13.4 27.5 41.3 Depreciation and amortization 31.2 24.1 7.8 7.2 70.3 Intercompany interest 7.7 9.4 (0.5) (16.6) - EBITDA $109.0 $100.1 $54.8 ($35.9) $228.0 Intercompany charges 4.4 - - (4.4) - Non-cash stock-based compensation 2.1 1.0 0.5 3.1 6.7 Acquisition related costs 1.4 - - 0.8 2.2 Securitization interest - - (11.4) - (11.4) Severance 1.5 - - - 1.5 IAA separation costs - - - 1.1 1.1 Other 0.7 0.6 - - 1.3 Total Addbacks 10.1 1.6 (10.9) 0.6 1.4 Adjusted EBITDA $119.1 $101.7 $43.9 ($35.3) $229.4 Revenue $528.1 $337.3 $85.1 – $950.5 Adjusted EBITDA % margin 22.6% 30.2% 51.6% 24.1% 23

Operating Adjusted Net Income per Share Reconciliation ($ in millions, except per share amounts), (unaudited) Three Months ended March 31, 2019 2018 Net income $77.8 $90.0 Acquired amortization expense 21.2 26.9 IAA separation costs 0.8 1.1 Income taxes (1) (5.8) (6.3) Operating adjusted net income $94.0 $111.7 Net income per share − diluted $0.58 $0.66 Acquired amortization expense 0.16 0.20 IAA separation costs 0.00 0.01 Income taxes (0.04) (0.05) Operating adjusted net income per share − diluted $0.70 $0.82 Weighted average diluted shares 133.8 135.8 (1) The effective tax rate at the end of each period presented was used to determine the amount of income tax benefit on the adjustments to net income. 24

Q1 2019 ADESA Incremental Operating Profit Margin Analysis Incremental Operating Profit % ($ in millions) ADESA IMPACT OF REPORTED EXCLUDING ACQUISITIONS ACQUISITIONS Q1 2019 Revenue $599.7 $31.8 $567.9 Operating Profit $67.4 ($0.9) $68.3 Operating Profit % 11.2% (-2.8%) 12.0% Q1 2018 Revenue $528.1 Operating Profit $82.1 Operating Profit % 15.5% Q1 2019 Reported Growth Reported Revenue Growth $71.6 Reported Operating Profit Growth ($14.7) Incremental Operating Margin (20.5%) Q1 2019 Excluding Acquisitions Revenue Growth $39.8 Operating Profit Growth ($13.8) Incremental Operating Margin -34.7% 25

Q1 2019 IAA Incremental Operating Profit Margin Analysis Incremental Operating Profit % ($ in millions) REPORTED Q1 2019 Revenue $357.2 Operating Profit $85.7 Operating Profit % 24.0% Q1 2018 Revenue $337.3 Operating Profit $76.0 Operating Profit % 22.5% Q1 2019 Reported Growth Reported Revenue Growth $19.9 Reported Operating Profit Growth $9.7 Incremental Operating Margin 48.7% 26