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KAR Auction Services, Inc. Reports Fourth Quarter And Full Year 2011 Results

KAR Auction Services, Inc. (NYSE: KAR), today reported its fourth quarter and annual financial results for the period ended December 31, 2011. For the fourth quarter of 2011, the company reported revenue of $479.8 million as compared with revenue of $443.2 million for the fourth quarter of 2010, an increase of 8%. Adjusted EBITDA for the quarter ended December 31, 2011 increased 9% to $112.1 million as compared with Adjusted EBITDA of $103.0 million for the quarter ended December 31, 2010. Net income for the fourth quarter of 2011 increased 99% to $14.5 million, or $0.11 per diluted share, as compared with net income of $7.3 million, or $0.05 per diluted share, in the fourth quarter of 2010. As shown on the attached reconciliation table, adjusted net income per share for the fourth quarter of 2011 was $0.21 versus adjusted net income per share of $0.20 for the fourth quarter of 2010, an increase of 5%.

For the year ended December 31, 2011, the company reported revenue of $1,886.3 million as compared with revenue of $1,822.6 million for the year ended December 31, 2010, an increase of 3%. Adjusted EBITDA for the year ended December 31, 2011 increased 3% to $487.2 million as compared with Adjusted EBITDA of $475.2 million for the year ended December 31, 2010. Net income for the year ended December 31, 2011 increased 4% to $72.2 million, or $0.52 per diluted share, as compared with net income of $69.6 million, or $0.51 per diluted share for the year ended December 31, 2010. As shown in the attached reconciliation table, adjusted net income per share for the year ended December 31, 2011 was $1.16 versus adjusted net income per share of $1.05 for the year ended December 31, 2010, an increase of 10%.

2012 Outlook

KAR Auction Services, Inc. expects 2012 Adjusted EBITDA of approximately $515 million. The company also expects net income per share of $0.85 - $0.90 and adjusted net income per share of $1.15 - $1.20, both assuming an effective tax rate of between 30% and 35%. Adjusted net income per share represents GAAP net income per diluted share excluding excess depreciation and amortization and stock-based compensation, both resulting from the 2007 merger, net of taxes, as well as other items shown on the attached reconciliation table. Additionally, the company expects 2012 cash taxes of approximately $70 million, cash interest expense on corporate debt of approximately $95 million and capital expenditures of approximately $90 million. This would result in free cash flow of approximately $260 million.

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