Good day, ladies and gentlemen, and welcome to the KAR Auction Services Incorporated Fourth Quarter Earnings Conference Call. Today’s call is being recorded. Today’s hosts will be Jim Hallett, Chief Executive Officer for KAR Auction Services Incorporated; Eric Loughmiller, Executive Vice President and Chief Financial Officer of KAR Auction Services Incorporated; and Jonathan Peisner, Vice President and Treasurer of KAR Auction Services Incorporated. I would now like to turn the call over to Mr. Peisner. Please go ahead, sir.

Thanks, Nancy and thanks for joining us today for the KAR Auction Services’ fourth quarter and yearend earnings conference call. Today, we will discuss the financial performance of KAR Auction Services for the fourth quarter and year ended December 31st, 2011. After concluding our commentary, we will take questions from participants. We will make every effort to accommodate all of the questions within the hour we have scheduled today. Before Jim kicks off our discussion, I would like to remind you that this conference call contains forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risk and uncertainties that may affect KAR’s business, prospects and results of operations and such risks are fully detailed in our SEC filings. In providing forward-looking statements the company expressed disclaims any obligation to update these statements. Also let me mention that throughout the conference call we will be referencing both GAAP and non-GAAP financial measures. Reconciliations of the non-GAAP financial measures to the applicable GAAP financial measures can be found in the press release that we issued yesterday and is also available in the Investor Relation section of our website. Now, I would like to turn this call over to KAR Auction Services’ CEO, Jim Hallett. Jim?

Good, thank you, Jon, and good morning, ladies and gentlemen. Thank you for joining us today. I would like to start out with talking about our 2011 results. We ended year with adjusted EBITDA of $487.2 million. And in terms of our business units Insurance Auto Auctions had an outstanding year. They were able to grow the revenue by 15% and their adjusted EBITDA grew by 14%. AFC also had another great year. Revenue increased at AFC by 24% and their adjusted EBITDA grew by 28% and I would point out that we did this all while maintaining a portfolio that was 99% current for the entire 2011 year. The performance at ADESA in 2011 was below 2011 and let me try and help you understand what took place there. We knew that volumes were going to be impacted but the volumes that physical auctions were actually impacted a little bit more than we anticipated. The results came in at 7.7 million units sold by physical auctions and OPENLANE sold another 3000 vehicles approximately. OPENLANE will now report their volumes with the ADESA volumes as we report to National Auto Auction Association going forward. Another thing that I would point out is our volumes in Canada hurt the ADESA volumes as well. You may or may not recall that automotive leasing came to a complete standstill in Canada in 2008 and standstill in Canada in 2008 and 2009 and with the very large market share that ADESA and OPENLANE has in Canada. The Canadian market was hit harder than the U.S market. So as much as we were disappointed with the volumes. We were very pleased with our dealer consignment initiatives. ADESA’s dealer consignment grew by 13% in 2011 compared to an industry that grew at 10%. And if we…

Thanks Jim. Let me start by talking about 2011 and I’ve noticed a couple of early reports by analysts have been issued. So I’m going to clarify a couple of things for you that may not have been as clear in our press release. Our consolidated revenue for KAR increased 3.5% in 2011. As Jim mentioned, this reflected strong performances at Insurance Auto Auctions and AFC. At AFC, some have looked at that revenue, I’ll tell you there ‘s been a minor change in our accounting for pass through expenses at AFC, all the years presented in our 10-K will be restated to gross up revenue and gross up expenses for pass through items that previously were netted to zero. This has no impact on the bottom line, whether be adjusted EBITDA operating income or net income. And the net impact on revenue the net impact on revenue is an increase in AFC revenue of approximately $8 million in 2011 $8 million in 2010 and $6 million in 2009. We have in the 10-K or will tonight provide the details with this change including the quarterly impact. So that you can understand how it affected past quarters. We also had the limited supply of used vehicles at wholesale auctions that led us to a 7% decline in volume and a 5% decline in revenue. As Jim pointed out we are now including OPENLANE in the ADESA segment results. So I thought I’d give you a little more color as to what OPENLANE did in the fourth quarter. OPENLANE sold about 50,000 vehicles in Q4 and that gave them about just over 300,000 units sold for the full year. OPENLANE contributed $16 million of revenue and it’s adjusted EBITDA was essentially break-even with the loss for the quarter of just under…

Thank you sir. (Operator Instructions) And we’ll take the first question from Ryan Brinkman from Goldman Sachs. Ryan Brinkman – Goldman Sachs: Hi, good morning. Thanks for taking my call and congratulations on the quarter.

Good. Thank you, Ryan.

Thanks, Ryan. Ryan Brinkman – Goldman Sachs: My first question relates to OPENLANE probably of course, when you first announced the acquisition I believe you’ve guided to $13 million I think of standalone 2011 adjusted EBITDA on revenues roughly $100 million suggesting 13% EBITDA margins on a standalone basis which would compared to the core ADESA business of core somewhere like 24%. And there were some questions as to the modeling implication with that disparity last night we saw a first glimpse of ADESA results with the OPENLANE and it seem like gross margin held in really strong there may be even improved year-over-year. Can we infer from this that OPENLANE gross margins might be similar to ADESA gross margins or may be even higher given the lack of ancillary services and that the lower standalone EBITDA margin at OPENLANE historically might relate to it having been sub scale and if so as grow OPENLANE could the EBITDA margin difference between in OPENLANE and a core ADESA auction narrow over time?

Well Ryan let me take that first. You’re right pointing out the gross profit margin on the OPENLANE transactions is higher. And as I mentioned in my comments it’s because of substantial amount of their cost structure is in SG&A they don’t handle the cars. So it’s higher than what we have in ADESA where you’re constantly moving vehicles at the physical auction sites. And relative to the EBITDA contribution you’re absolutely correct. As you look at the OPENLANE business in its first 10 or 12 years it was focused on growing market share, increasing the top-line. And again I would describe it as not a real focus on the bottom line. And as we put these two businesses together we have an infrastructure in place at KAR Auction Services that’s available to them. And so we’re able to reduce their overhead cost to some regard and we’ve accomplished that as Jim mentioned. We have the ability to look at the sales teams that Jim talked about. So again I think we can see that business as we integrate it beyond 2012 I think you’ll see a profile where you’ll notice a difference as Jim mentioned how the car is sold, it will contribute to our EBITDA and our gross profit fairly consistently and have strong margins going forward because we are running it as one business. Jim anything to add to that?

No I would maybe just add that there are different offsets so obviously when you’re selling the car virtual right you’re also gaining the transportation and some of those services when you are selling the car in the physical auction then you are getting the ancillary services. So at the end of the day I think both of those businesses will have similar revenue growth. Ryan Brinkman – Goldman Sachs: Okay. That’s really helpful. I just had the other thing I was really interested in the results was the strength on salvage volume. It’s really been exceptionally strong in the last couple of quarters but especially in 4Q and I know there is not really good publically available information out there on salvage volume trends like there is for whole car. But from an outsider’s perspective given the trend in miles driven. It would seem that the market should be tracking sort of roughly flat at vast and given that backdrop can you help us better understand the what might be I think I backed into like a plus 15% or 16% year-over-year gain on volumes which is really strong. Does that relate to a specific material win, contract win or smaller wins in aggregate or to a strong charity volumes which I think can be seasonal 4Q. Can you help us understand the drivers and maybe the sustainability of those type of results?

Well I think the number of those things Ryan I think number one is we’ve been successful in growing our non-insurance business that we talked to you about in the past. Also we’ve been able to grow the charity side and then we’ve had strong volumes come from of the hurricanes and another natural disasters that have taken place over the past couple of years. Ryan Brinkman – Goldman Sachs: Okay but fair to say you gain share relative to the industry in the fourth quarter right?

Right. Ryan Brinkman – Goldman Sachs: Okay.

And I think that I think the and then you talk and just reinforce and I said in my comments there is continuous wins and losses throughout the course of the year and of course our goal is to beyond the top side of those wins. Ryan Brinkman – Goldman Sachs: All right. And then just last question, do you think that there is still a trend towards national accounts in the salvage business and that being like one of may be two at most sort of players there that you should gain volumes over time as a result of that trend?

Ryan, let me say that we spend lot of time talking about this sort of thing over the last couple of years and we have said that we don’t get into talking about specific customers and quite frankly we can’t because we are in the confidentiality anyway. But there was a lot of talk a couple of years ago about the major customer, I think the results kind of speak for themselves as we come back with a 9% increase in our volume. So in terms of – there was always going to be wins and losses, insurance customers are always going to look at how they deviate up their business and again I think the results speak for themselves. Ryan Brinkman – Goldman Sachs: Yep, they do. Okay. Thanks so much.

The next question comes from John Lovallo from Merrill Lynch.

Good morning, John. John Lovallo – Merrill Lynch: Hey good morning, thanks for taking the call.

You’re welcome. John Lovallo – Merrill Lynch: First question is I was hoping you could talk a little bit about the opportunity from the recent announcement where you’re going to export salvage vehicles to China. Just hoping you could mention that opportunity a bit?

Yes, John. Listen that’s an excellent opportunity for us having that relationship with the Chinese exporter of scrap metal. But let’s not exaggerate it, again that’s not a major part of the market, I think it’s exciting we have that relationship but I wouldn’t read too much into it I mean we sell salvage vehicles all over the world, they get exported to all kinds of places. And I think the fact that we can support multiple languages and support types of business is great. I don’t want to exaggerate what the level of volumes though that it creates in terms of the salvage market? John Lovallo – Merrill Lynch: Okay. Fair enough.

But they do export a fair amount of scrap metal from the United States to China and that seems to be a trend that occurs when the scrap prices are little lower. John Lovallo – Merrill Lynch: Great. Thanks. If I can just speak one more and hear. There is some industry data that suggest that dealer consignment volume increased in 2011 and I think there were some numbers around 55% of whole car auction volume. That’s seems like a pretty big shift from 2010 I mean can you maybe help us with what could have been driving them?

Well I think John obviously it’s been driven by the shortage of commercial vehicles. If I was to put into one sentence there is no question you’re right the market we feel the markets somewhere right around 53%. When I think I reported to that we grew our business to 42% and we feel we can continue grow that and I think it’s all the question of demand and that’s pretty much it. John Lovallo – Merrill Lynch: Okay. Thanks very much guys.

You’re welcome.

Thanks John.

We’ll go next to Chris Ceraso from Credit Suisse.

Good morning Chris. Chris Ceraso – Credit Suisse: Hey thanks. Good morning. Coupe of things I am sorry if you mention this but it seems like if our numbers are right that you saw a bit of a reversal in trends at ADESA where units were up they have been down but revenue per unit was down and that had been up. Is that do we have that right and what cause that and that something that you expect to continue in that direction?

No, Chris our volumes were down year-over-year not a substantial as previous quarters but they were down. Chris Ceraso – Credit Suisse: Okay.

And our revenue per unit for the fourth quarter remains fairly steady for us. So may be off-line at some point we can go through it in detail, but I think the numbers when you get the 10-K we’ll help you out a little bit. So I am looking at something here. The revenue per unit again we’re nearing, we don’t give a specific number, but we are nearing $600 on the new ADESA business. So that’s pretty strong and been fairly steady through the market. Now as dealer consignment volumes increase that kind of fluctuates that a little bit because you have fewer ancillary services. Chris Ceraso – Credit Suisse: Okay, all right. We’ll go back to that then. The – you sounded pretty bullish about OPENLANE and how the integration is going. Is there an opportunity to leverage that into the IAAI business?

I would say it’s not something that we certainly talked about it and we talked about other possibilities for our other business units and I think we’ve said in the past that we think there may be possibilities to use the platform for other than the obvious. But certainly at this point in time we remain focused on just bringing ADESA and OPENLANE together and once we can put a successful stamp on that then I think we’ll look at other opportunities. Chris Ceraso – Credit Suisse: Okay. You had made a comment Jim about the channel shift, can you expand on that a little bit and what kind of magnitude you’re talking about and whether or not you think that puts any pressure on your EBIT margins?

I had said that there may be a channel shift. We are not exactly sure how that will play out. We’ve seen more and more cars shift to the virtual marketplace over the last few years. But I don’t have any indication of where the sweet spot will be or where that will finish. I don’t think there is going to be any great shift its going to take place, but if I was looking at it I would say may be it may follow some of the trends that we’ve seen in the salvage business over the past five years in terms of how that market has grown from the physical to the online business but I think the most important thing and I’ll repeat is that we are well positioned with the OPENLANE platform. And well positioned with the ADESA physical footprint to sell the car. At the end of the day you just want to make sure that you are able to play at a superior level in both places and OPENLANE gets us there in the virtual side and obviously ADESA gets us there in the physical side. So I don’t know I hopefully try and answer your question. I think there will be, I think there will be some gain and in terms of, in terms of pressure on margins I think we’ve said there isn’t really going to be that much difference when you add up the revenue. And then you take the additional opportunities you get with the virtual cars in terms of the posting fees and in terms of the delivery through CarsArrive and the transportation solution versus the physical with the ancillary services. It kind of balance itself out so I don’t think it does really create any additional pressure on margins or EBITDA levels.

And Chris I would like to add one comment. Not just OPENLANE but we should also remember that LiveBlock is really gaining traction which is basically virtual buyer at the physical auction. He is able to buy without attending and at IAA we have that with our live and online offering which were again we’re simulcasting both the physical auction to the virtual buyers. And that’s where a lot of the online buying is also migrating. There just seems to be less reasons for the buyers to show up at every auction every week yet they want to participate in the auction by the cars. Chris Ceraso – Credit Suisse: Interesting. Okay and then just and what you thought the cash interest expense would be, is there much of a difference in what you book interest expense will be?

Yes, we do have some amortization that typically runs in between $5 million and $10 million per year of debt issuance costs. Chris Ceraso – Credit Suisse: $5 million to $10 million on top of your cash?

Yes, it’s pretty consistent with, when you get the 10-K you will be able to figure it out, Chris. Chris Ceraso – Credit Suisse: Okay, all right. Thank you.

I don’t have it right in front of me. Chris Ceraso – Credit Suisse: Got it.

And the next question comes from Manav Patnaik from Barclays Capital. Manav Patnaik – Barclays Capital: Hey good morning gentlemen.

Good morning. Manav Patnaik – Barclays Capital: Just wanted to clarify a couple of things with the OPENLANE numbers you gave. You said it was 50,000 volumes and 16 million in revenues for the quarter and if I back that out I guess neither the revenue per week you sold that 570 which is short of what you said about 600, just wanted to know what are the moving factors there are between the 600 number you are talking about?

Its nearing 600 Manav and the dealer consignment. Manav Patnaik – Barclays Capital: Okay.

Brings it down – it’s in the upper 500s. Manav Patnaik – Barclays Capital: Okay, fair enough. And then just to clarify as well you had mentioned that you had expected OPENLANE to contribute $20 million to $25 million in EBITDA in ‘12. So does that mean that the 515 million guidance you gave I guess without OPENLANE would imply something in the 490 or are you not factoring that pure 25 in there?

No, I mean again I don’t want to get into breaking the pieces apart because when you have OPENLANE as we’ve integrated the sales teams some of that $20 million to $25 million might have historically been at ADESA but you’re doing the math right, Manav. Manav Patnaik – Barclays Capital: Okay.

The 515 with all of our businesses. Manav Patnaik – Barclays Capital: Okay, fair enough. And I had the loss that you mentioned about the fact that you said was factored into guidance. Would we see like how should we model in the sequentially impact of that loss, so is it going to be more gradual or only towards the end of the year. Can you give us a little more color on how that looks plain?

Also I’d say it’s a recent announcement that will come in over the course of the year. And again it’s not going to have a material impact. Jim only pointed it out because again we’ve had such strong volume growth over the last two years, we’re not expecting to be quite as strong in 2012. Manav Patnaik – Barclays Capital: Okay. And then the last question just housekeeping stuff. Can you – what is the expected stock comp number and also what should we be modeling in for this step up D&A if there is a number you can give us?

That’s the level of guidance Manav that we don’t get into the details. I mean you can see the stepped-up D&A is easy because its straight line. Manav Patnaik – Barclays Capital: Okay.

So it will be consistent with what’s this year although I will tell you 2012 we will fully amortize some of the original assets at five year lives, so it will decline after 2012 by a little bit. Manav Patnaik – Barclays Capital: Okay.

And in terms of stock comp again I don’t want to be projecting the stock price which is what it influences that. So we’ll just have to wait and measure it, it’s been a number that’s been highly variable year-over-year depending on how the stock moves. Manav Patnaik – Barclays Capital: Okay, fair enough. Thank you gentlemen.

Thank you.

And we’ll move next to Gary Prestopino from Barrington Research. Gary Prestopino – Barrington Research: Hey good morning everyone.

Good morning, Gary.

Hi, Gary. Gary Prestopino – Barrington Research: Jim, did you say on the industry outlook that you are looking for a flat year this year in 2012?

Yes. Gary Prestopino – Barrington Research: Okay. So looking at something like $7.7 million cars in this year?

Yes. Gary Prestopino – Barrington Research: Okay. And the industry is not going to count OPENLANE’s cars since you bought them, since you purchased the OPENLANE still going to be physical auctions?

No, the industry will include the OPENLANE numbers in the ADESA reporting. Gary Prestopino – Barrington Research: So that then that the real number would be something where you would still looking for a on a apples to apples basis on an industry basis. You’re still looking for somewhat of a down here in?

No I don’t think it will be down Gary I am saying if you take the 7.7 and you take the 300,000 from OPENLANE you get to 8 million cars this year which would put us flat if we had added them together for the past year. Gary Prestopino – Barrington Research: Okay. So still flat. Okay.

Yeah. Gary Prestopino – Barrington Research: And then in terms of you’ve got have you got the sales forces integrated now with OPENLANE is that what you said or you just finished that up or what?

We have just finished it out and we now have one sales force under one Vice President of sales and marketing that is now brought the sales teams together. They have cross trained some of those sales people have remained from the OPENLANE team some have remained from the ADESA team. We’ve kind of as we would say we’ve taken the best of the best and we’ve completed the training they are integrated they are now speaking with one voice much similar to what we did on the dealer consignment side as well. Gary Prestopino – Barrington Research: So the advantage now is obviously you can do physical as well as virtual like I mean how is the reception been what the with your sales force initially knocking on the doors of the suppliers?

Well I think most of was our customers really wanted to be speaking to one person rather than have an OPENLANE rep called (inaudible) and have an ADESA rep (inaudible) that you could even go further in some cases we had Insurance Auto Auction rep called (inaudible) that was what they didn’t want. They really want one person that could interface with them that could handle the account whether it would be virtual or whether it would be physical or in some cases even some cars to some of the salvage auctions. And that was the goal, that’s what we heard from our customers as we did a lot of these interviews and that the objection we took, which was not originally Gary, which was not originally what we anticipated. Quite frankly we anticipated that we keep two sales teams originally, we keep the ADESA sales team and the OPENLANE sales team and then as we got into with our customers and we listened to what they had to say it made perfect sense that we just merge these under one sales team. Gary Prestopino – Barrington Research: And can you help us in terms of the virtual side of the business, how many vehicles are going through that every year industry basis?

I am sorry, yea, on an industry basis I think its roughly Gary I’d say you’re looking at about a million vehicles.

And that would have been a 2009 number that was in some publication, I suspect that it would have declined with the commercial vehicle declines we’ve had in 2011 right Jim.

Yes, I think in the past year it was around a million and its somewhat we all know what’s happened over the last couple of years here. So I would say the number is down, the only number we know for sure is the OPENLANE number.

And that would be virtual only auctions not us and our competitors that actually sell some online vehicles that got reported in AAA. Gary Prestopino – Barrington Research: Okay. And those are – and that virtual auction business is all very high end institutional vehicles or does it expand the dealer side as well?

No, it – I think it continues to expand, certainly it’s not all high end vehicles, its dominated I think by lease returns right now but we are also seeing repossessions, we are also seeing dealer cars sold on there, rental cars being sold on there. So we see that channel continue to expand into other segments. So I would say that it’s kind of a right across all segments. Gary Prestopino – Barrington Research: Okay then one last question in terms of Insurance Auto Auctions great volumes there. What besides on the non-insurance side. Could you maybe sight three or four markets getting the growth in these cars?

Well number one I think I’ve spoke about the charity that about the charity growth the non-insurance vehicles and then we have a number of our commercial sellers that are chosen to sell some of their very low-end vehicles especially the repossession vehicles as I called some of the push, pull and drags we see a commercial customer selling some of those vehicles in the salvage venue rather than the whole car venue. So there has been a little bit of a shift there.

And Jim you might mention the insurance companies that have or I’ll just go through it. There are some insurance companies where with the economy and then the age of the cars Gary that are not longer carrying collision coverage. I think we are seeing some success when someone has an accident they’ve got this wrecked vehicle the insurance companies not going to process a total loss and we have a couple of situations where we are able to market directly to that customer and so it’s not an insurance vehicle because they didn’t handle the car but it’s a very similar vehicle because it wasn’t an accident. Gary Prestopino – Barrington Research: Thank you.

And we’ll move next to Craig Kennison from Robert W. Baird.

Good morning Craig. Craig Kennison – Robert W. Baird: Good morning. Thanks for taking my questions as well. Hello. Just a follow on the OPENLANE series of questions. What should we monitor as important milestones as you integrate that business and is there a material cost save associated with the migration from deal block to OPENLANE?

Well Craig let me answer the last part of that question first. You say cost savings I hope ultimately there is but really it’s the better allocation of capital because OPENLANE was well ahead of where ADESA was with its platforms. And so once we get through this integration we think we can ultimately reduce the capital allocation to that platform. Beyond that the cost saving, the cost is really much different for any company that operates a virtual platform, you have to support the technology which you have a lot less labor. So again it depends what we want to compare to. There is a lot of lower cost compared to a physical sale of a vehicle, but I don’t know that, that there would be that much of a difference from our previous platforms to the OPENLANE platform to support it. Jim.

Yes.

Any thoughts on that.

No, I’d just follow-up by saying yes but what success looks like. And I think success is a full migration of all of the ADESA e-Business that we currently have going seamlessly on to the OPENLANE platform. And our customers are feeling good about the transition and the integration and I can tell you that we’ve spoken with the customers that we’re going to transition to the OPENLANE platform and not only are they support of but they are excited because it does add additional features and enhancements that may be they weren’t getting on the DealerBlock platform. So if I look at success and look at – I said originally I thought this was going to be a 15-month integration, 18-month integration. As I look at success from a year from now I want to know that the customers were very pleased with the transition, very pleased with the levels of service. And feeling good about their decision on switching over. Craig Kennison – Robert W. Baird: Okay. Thank you. And then shifting gears to AFC I believe one of your larger auction competitors acquired an AFC competitor in January. How should we weigh the risk of that particular dynamic?

I would say that DSC has been a competitor with AFC as well as MAFS have been the competitors with AFC. We’ve competed with them in the past and we will continue to compete with them in the future. I don’t know exactly what their goals are they’d have to speak to that but anecdotally I hear that they are going to continue to run them as two independent businesses. So I think that we see as continuing to compete pretty much the same way we have for the past several years. Craig Kennison – Robert W. Baird: Excellent. Thank you.

You’re welcome.

The next question comes from (inaudible) from Stephens Incorporated.

Good morning.

Good morning. Thanks for taking my question.

You’re welcome.

I just want to come back to the comment around the hurricane. I am just wondering if you experienced any quantifiable list this quarter between volume shifting from the third quarter into the fourth and then also similar question around the holiday calendar that you spoke about last quarter and how that freed up extra days for you or how those shifted into better days for a typical auction?

Well first the hurricanes that were grounded up at the Northeast created a lot of volume and that is being sold off actually into the first quarter of this year. So while Jim commented on the mild weather I will tell you that mild weather will have an impact as we get into the second quarter more so than the first quarter the cars get wrecked and then you got 75 to 90 days before they sell. So again the hurricane we saw a nice volume of cars on the ground at the end of the year and we are selling those off in the first quarter. So Joseph that’s the impact of that, the calendar is very interesting and I will tell you having the weekend holidays this year. And the way that you’re – in essence got another week of sales at IAAI on our calendar. So that was good for their results. And we’ll make it a tough comp in the fourth quarter of 2012 because I believe the holidays are falling on a Tuesday which basically means people start getting ready for them, may be even earlier than that and it’s hard to have a sale, you might lose the better part of half a week there, where this year I would tell you, you lost half a day as people took off a noon on Friday getting ready. So that’s about all I can say. We’ll see how it goes. Again it was a very strong calendar for us especially in the salvage business. And we had a lot of inventory underground so the insurance companies will try and continue to sell those cars because they had probably a little more inventory than we historically would have as we got to year end. That answered your question, Joseph.

Yes, it does. Thank you very much. Majority of my other questions were answered. So thank you for taking the time.

All right. Thank you.

Yep.

And we’ll take the next question from Bill Armstrong from C. L. King & Associates. Bill Armstrong – C. L. King & Associates: Good morning Jim and Eric. In IAAI you had a pretty strong revenue increase – you mentioned an increase in purchased vehicles sold, I don’t think I’ve seen that mentioned before, just wondering if you could give us a sense for how many revenue dollars of the increase came from purchased vehicles, may be just kind of talk about that business a little bit, under what circumstances would you be buying and selling vehicles for your own account versus as an agent?

Yep, Bill, good question. We’re up to about 5% of the vehicles that we’re selling were purchased and we are purchasing them at auction, we are purchasing them – if you look at the insured more to ADESA it doesn’t carry collision coverage, we buy that car from them, we don’t have them wrapping the car. So, we’re typically buying lower end low cost vehicles and then re-marketing on behalf of the person we bought it from and our fees are caught in the process the difference between the auction sale price and what we’ve paid to the consumer. So, and we’re right about 5% we don’t give its not big enough to really call out I will tell you the margins that i.e., were down slightly is because we’ve grown we – record the revenue at the gross sale price at auction and cost of sales includes the purchase price of the car which makes it a very low margin business and we do get impacted with the – up to 5% now is probably taking a point off the margin because of the reporting of the revenue gross sale price. But again it’s still not that material it just influences a little bit and at 5% we disclose that in the third quarter 10-Q and the fourth quarter 10-K will include that same disclosure prior to that it was below 5% and was not disclosed in terms it was typically below 3%. Bill Armstrong – C. L. King & Associates: Okay. Moving on the just you’ve really made a push in the last couple of years successfully in the deal of consignment area as we move through the back half of this year and then even more so next year we’re going to see more trade ins we’re going to see more off-lease vehicles at the same time we’re seeing a lot of dealers especially the publically traded once making a big push to keep a lot of those off-lease and trade in vehicles and we retail them rather than selling them through auctions. What sort of impact are you seeing there, are you seeing this just from the big dealer ship change or is this kind of industry wide and would we be looking at any particular types of cars who would be just newer cars or are we seeing this trend across the board?

I think primarily you are seeing some of the larger groups buying cars and holding cars, I don’t think it’s a trend across the independent network and as you know, there is – I think there is a handful of groups that are buying cars. So I don’t think again I don’t think it’s something that is going to have major effect I think more to your point that as we continue to sell more new cars and we continue to see more commercial cars come back into the marketplace. I think that is only a good generator of more transactions for the auction. So I don’t think it has a major impact. Bill Armstrong – C. L. King & Associates: Got it. Okay, thanks very much.

You are welcome.

And it appears there are no further questions at this time. Mr. Hallett, I would like to turn the conference back over to you for any additional or closing remarks.

Okay. Thank you, Nancy and I’d just say thank you for being on the call today. Again we appreciate your support. We are excited about our business. We feel that we have been through the difficult times and as I say through the trough and it feels good to be knowing that we are heading north. So with that said, appreciate your time and your interest and look forward to catching up with you soon. Thank you.

And that does conclude today’s presentation. Thank you for your participation.