Good day, ladies and gentlemen, and welcome to the KAR Auction Services, Inc. Q4 2012 Quarter Earnings Conference Call. Today's call is being recorded. Today's hosts will be Jim Hallett, Chief Executive Officer of KAR Auction Services, Inc.; Eric Loughmiller, Executive Vice President and Chief Financial Officer of KAR Auction Services, Inc.; and Jonathan Peisner, Vice President and Treasurer of KAR Auction Services, Inc. I would like to now turn the conference to Mr. Peisner. Please go ahead, sir.

Thanks, Augusta. Good morning, and thank you for joining us today for the KAR Auction Services Fourth Quarter Earnings Conference Call. Today, we will discuss the financial performance of KAR Auction Services for the quarter and year ended December 31, 2012. After concluding our commentary, we will take questions from participants. 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 risks 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 expressly disclaims any obligation to update these statements. Lastly, let me mention that throughout this 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 was issued yesterday, which is also available in the Investor Relations section of our website. Now I'd like to turn this call over to KAR Auction Services' CEO, Jim Hallett. Jim?

Great. Thank you, Jon, and good morning, ladies and gentlemen, and welcome to our call. My comments will be a little extended this morning as we do this call; number one, it's our year-end call, and there's been a couple of significant events that have taken place in the quarter that I believe that I should provide you with more color on. So turning now to the summary of our financial statements or results. We finished 2012 with revenue of almost $2 billion on the sale of approximately 3.3 million vehicles. This represented a 4% growth over the prior year. Our adjusted EBITDA came in at just over $500 million, and that gave us an EBITDA margin of 25.5%, and this was the low end of our guidance range, which I'll talk more about here in just a few moments. A couple key items that impacted the 2012 results for ADESA and ultimately for KAR. Number one is we did have an unforeseen weather event take place in the very last week of the year. We had a winter storm that started out in Texas and worked its way all the way through New England during the last week. And typically, during the last week of the year, we put in a conservative budget, but even our conservative budget was missed as dealers just weren't able to get the auctions -- weren't able to get cars to auctions or get cars sold. So that did bring our volumes in lower than we expected for that last week. And then we also had the double whammy effect of the additional expense of having to remove the snow, and this reduced ADESA's EBITDA, and overall, I believe this took us to the bottom of the range. So as we look at the…

Thank you, Jim. First, let me highlight our free cash flow generation for 2012. As Jim mentioned, KAR generated $500.2 million of adjusted EBITDA. We utilized $95.8 million to pay cash interest on our corporate debt, $102 million for capital expenditures and $65.3 million for cash taxes. The net result is free cash flow of $237.1 million. From this free cash flow, we utilized $26 million to pay dividends to shareholders and $85.9 million to repay debt during 2012. We also had an atypical use of cash for working capital at December 31, 2012. This is primarily driven by 2 factors. First, we have significant costs associated with the towing of Sandy vehicles. In addition, we saw strong growth in our AFC loan portfolio. As I have mentioned before, we fund about $0.23 on $1.00 of this growth using company cash. I would also like to point out that our capital expenditures were greater than what we had expected. Approximately $7 million of our capital expenditures relate directly to capital deployed in November and December in order to handle the Superstorm Sandy vehicles. The good news is a substantial amount of the items deployed in New York and New Jersey will be relocated to other sites once we are done processing the Sandy cars. This will include over 40 loaders purchased and the technology equipment put in place at our temporary locations. The increased capital expenditures were partially offset by reduced cash taxes. Many of the costs incurred as a result of Sandy created tax deductions that reduced our cash taxes in the United States. Now let me speak to our overall operating performance. KAR, through its operating businesses, sold over 3.3 million vehicles in 2012, a 6% increase over 2011. Approximately 57% of the vehicles sold were whole cars,…

[Operator Instructions] Our first question will come from Matthew Fassler of Goldman Sachs.

Two questions, and the first to Eric. You essentially alluded to -- a moment ago when you discussed the weather environment, and it relates to the salvage business. So I guess this year, you saw some pressure on adjusted EBITDA even when you back out Sandy for that business. And to your point -- in terms of your point earlier, it had been on a pretty good growth trajectory prior to this. Do you think that the improvement is likely to be manifested in better volumes? Did the -- what do you think happens to operating leverage and the -- given the kind of weather backdrop that you see now, which presumably will be the backdrop that impacts 2013?

Yes, Matt, this is Jim. I would say to you that obviously, with the volume situation, we expect the volumes will increase. Not only will they increase based on some of the climate conditions that Eric spoke to and that we're experiencing with a more normal-type winter taking place and more normal-type weather. But I think also from the gains that we've made with our recent customers on an organic basis, it will -- in terms of increasing our market share, that business will continue to grow and offset.

And Matt, I'd like to clarify a point. The weather impact was really at ADESA. At IAA, I would not attribute much of the performance in 2012 to that last week of the year. And in fact, the bigger impact was they were dedicating so much resource to processing these Sandy cars, that there were -- collision cars or non-Sandy cars were probably slowed down by the insurance companies and processing at a slower pace. But that's all good news because that's just timing, right? I mean...

But alluding, I guess, to the broader weather winter issue, and we've seen it for lots of aftermarket players as well, the lack of a winter in 2012, not that there weren't as many accidents, breakdowns, etcetera. Presumably it will flow through to kind of salvage volume over the course of the year. That was really the essence of the question. And I guess the reference -- I want to make sure I'm interpreting this right -- the reference to the snow that we've seen as a good thing for the flow of goods into that business.

That's right. And we've already seen it in assignments.

Got it. Second question, just to make sure I understand the compensation of the salvage P&Ls. So I guess adjusted EBITDA adds back the impact of Sandy; adjusted net income includes it. As we think about the revenue number, I guess you said that the adjusted EBITDA -- or rather the loss associated with Sandy is offset by the gross profit dollars associated with Sandy-related sales. So as we think about adjusted EBITDA margin, do we need to make any adjustment to revenue to try to get a good look at the real underlying business? Because presumably the revenue number is a bit inflated by some of those Sandy numbers. How do we get the cleanest look at profitability is my real question.

Okay, Matt. But I want to clear -- you said something I want to be clear on. Adjusted earnings per share is adjusted for the impact of Sandy. GAAP earnings per share is not. And...

Okay. So all the adjustment numbers exclude the Sandy impact?

Correct. And you are correct, the impact -- we've talked about -- historically, the average revenue per vehicle in salvage is in the 400s, okay? The Sandy cars tend to be flood cars, and they sell a little bit higher, generate a little bit more revenue, so I'll let you extrapolate your math on about 10,000 cars in the fourth quarter was the revenue impact. And the costs associated were significantly higher in cost of goods sold or cost of services than they normally would be, so the margin there was very, very small. What we will tell you is if you were to exclude the impact of the Sandy cars in all parts of our balance sheet, we continue to have a gross profit that was above 40%, consistent with how we've been performing.

Your next question comes from Chris Ceraso of Crédit Suisse. Christopher J. Ceraso - Crédit Suisse AG, Research Division: Just a couple of things. First on Sandy, is there any anticipation that there's a favorable tail here that we might see, vehicles that didn't get processed, that maybe at some point throughout 2013, you'll be able to process at more reasonable cost levels? Or is this it, it's over, the vehicles are done as of, whatever, Q1, Q2 with the high costs, and you're excluding all of that, and the only positive byproduct is that you won some more business?

Well, we clearly have a positive byproduct of winning more business. And what I was just mentioning in the previous question, a positive byproduct of this is there were -- actually, they slowed down, the insurance companies slowed down title processing to the extent that they were really focusing all their attention on Sandy initially. And that probably pushed some cars out into the pipeline, Chris. Cars that would've been processed perhaps in November and December probably led into the early part of the year. And that's a phenomenon that was actually more than just the Northeast because a lot of these companies were dedicating resources nationwide to get these things processed. In fact, we established 3 centers outside of the New York, New Jersey area just to handle Sandy titles, so we could accelerate the process for our customers. So I do think there's a little bit of a positive move into the year, and we'll just have to wait and see. I'm probably more excited about -- no offense to anybody that's been stuck in the snow and Nemo and all that -- by the winter weather and what that's done to kind of the ongoing volumes of the salvage industry. Christopher J. Ceraso - Crédit Suisse AG, Research Division: Okay. And then second question. So Jim mentioned what we've all been watching is the number of off-lease units should hit a turning point in 2013. That's good for ADESA. Historically, when things start to go better for ADESA, typically, your margins at IAA and AFC tend to be a little bit lower. So is that pattern expected to persist? Are we going to see a better year for ADESA in '13 versus '12, but maybe a weaker year in terms of profit margins at the other 2 businesses?

Chris, that's interesting. And that was kind of the structure of the business. But what's happened is with the acceptance of aftermarket recycled parts in the collision repair industry, there's much stronger support today than there was 5 years ago. That seems to be holding up the salvage values despite, perhaps, softening in used car values. And so what we're seeing right now, and I think you look at some of like an LKQ or companies like that, they're not anticipating that the cost to acquire their inventory will decline because of the strong demand in the collision repair business. So at this point, we are not seeing, perhaps, the weighting shift going from a stronger ADESA leading to a, call it, somewhat weaker performance of IAA. We actually think we're in a market that is well positioned for both to do very well despite both experiencing increasing supply. Christopher J. Ceraso - Crédit Suisse AG, Research Division: And what about AFC, Eric?

Well, AFC, we love it because, as you guys know, when you can make money with money, it's a pretty attractive business. Their average loan value might drop a little bit, but this strong market has really made the credit statistics. Cost of funds are fantastic. I can't think of being in a better position than AFC is in today with their 104 loan origination officers out there touching the customer. We have AutoVIN doing lots of lot checks so we're -- the cars are there, and that's -- you lose money when the car disappears. So I feel very good about AFC will continue its strong performance. And they're gaining -- they seem to be gaining share despite the fairly weak auction business. So I'm really looking forward to when the supply returns, and there's more cars to floorplan. Christopher J. Ceraso - Crédit Suisse AG, Research Division: So maybe some pressure because of softer used car values, but the other inputs to that model seem to be all in favor.

They seem to all be in favor. And again, that pressure on used car values will actually probably mitigate any credit risk because the values are staying fairly consistent. We do not see declining used car values. We see very modest change, if anything. They're talking about 1%, 2% declines. That doesn't impact us. I mean, that's not the level at which we see major changes in any of our businesses. Christopher J. Ceraso - Crédit Suisse AG, Research Division: Okay. And then just lastly, one housekeeping item. Can you bridge for us the adjusted EBITDA to the adjusted EPS? In particular, what is your assumption for book interest expense? I know you gave the cash number. Any kind of other income or expense in the share count?

Again, the share count, other than Treasury method, probably has a little -- a very modest increase. In terms of cash interest, you can look in our financial statements. There's $10 million to $15 million of noncash interest amortization of debt issuance costs, et cetera, and that number is fairly consistent over the term of the debt. And that -- so I don't expect a significant change there. And what was the third? There was a third one, Chris. Did I miss one? Christopher J. Ceraso - Crédit Suisse AG, Research Division: Well, there's the other line, other income or expense. Anything notable there?

On the adjusted EBITDA, again, our credit agreement picks up things such as severance, integration costs. However, those are not adjusted in the earnings per share at all. Only the items I mentioned were adjusted in our guidance on earnings per share, the 3 things: step-up in the D&A was $46 million pretax; $10 million in stock-based comp, and that's just a budget assumption in our expectations. We aren't in the stock prediction business, but we put a number in there, and that's the number that was in our results. And that's added back in both. And then you have the hurricane -- or the Superstorm Sandy impact, pretax of $10 million.

Our next question comes from Gary Prestopino of Barrington Research.

A couple of questions here, Eric. On AFC, could you tell us, or if you have it already, what the ending portfolio was and the amount that's current?

Well, I can tell you it's over 99% current, and -- just a second, I -- Gary, I have to pull something out to tell you that. I didn't actually have that right in front of me. It will be in the K.

Okay, if you don't have it, that's fine. I'm just...

But I can get it, Gary [indiscernible]

[indiscernible] is how much more capacity do you have right now? And then you said you were going to try to increase the capacity. So I'm trying to get an idea of how much bigger it could get or what capacity do you have there to grow it.

We were -- the portfolio, it's in the press release, is the finance receivables net of allowances. So the total portfolio was right at $1 billion, just slightly above $1 billion on a gross basis. And we had -- in terms of obligations, financed $713 million outstanding on the securitizations that currently have a capacity of $750 million with just over another year. And we're very comfortable that we -- that's sufficient. There is a seasonality to the AFC business. It hits its peak around the end of the year or this year, a little bit into January. And by February, you're starting to see the inventories on the dealers' lots as they sell into the tax season decline, comes down, and then it begins growing again, typically, late summer, early fall as they start building inventory for that season. So Gary, we're very comfortable with what we have now. But as we look beyond June of 2014, obviously, we think that the ability to grow the AFC portfolio continues, and we want to expand the capacity in a reasonable number that could take care of us for the next 2 to 3 years.

Okay. But you can't make that public, what you want to -- what you're going to expand it to?

Well, I'd rather maintain my position with the banks that we're dealing with it, other than to tell you we're dealing with it. So no, I'm not ready to give you a number yet, but we will shortly when we have a deal.

Okay, that's fine. And then, Jim, you mentioned on channel maximization with OPENLANE, you get a first shot at a closed auction virtual, then an open virtual, and then a physical, right?

Right.

But you actually control the car on the closed auction. But do you actually control it on the open virtual auction as well, and then control it as well going into the physical? Or is that something you really have to negotiate with the OEM or work with the OEM if it doesn't sell in a closed auction?

Yes, good question, Gary. We control it on the -- obviously, on the closed. We control it on the open. And then the seller has the decision on where it goes physically. We would hope that because we're getting them at the top of the funnel and controlling them to those first 2 stages, we would hope that the -- that when they go to physical, that ADESA could be the first choice there, but that's not always the case.

Can you kind of share with us maybe what percentage of the cars are actually sold under the closed and open virtual that you offer?

I think we've reported that all of our online sales is in the order of 32% overall. That includes open and closed and includes our LiveBlock sales as well.

And all segments, not just commercial. Not just..

From that inference, we could get an idea of just what the amount that you control can be sold, and then what the amount is that the sellers would actually have an option on. And lastly...

And Gary, let me clarify. Of that 32%, about half is LiveBlock, which is sold from physical auction, and about half is online only. And we've talked about that before.

Yes.

But those are rough numbers. So it's really the half that's online only, so I've got your number down in the mid-teens.

Okay, great. And then lastly, can you share what percentage of vehicles Insurance Auto was now doing that are noninsurance?

I think we're pretty much running in that 80-20 range.

Yes, we're a little over 80% insurance. And obviously, with the Sandy cars, it'll probably cause that percent to be a little bit higher because those are all insurance cars.

Right. And you had said in your -- in some of your comments earlier that the revenue or the prices on these cars were better than normal salvage because they're flood. So the whole issue with what happened with Sandy was not really that the cars were not selling at decent prices, it was all expenses?

That's right, Gary. And in many cases, as -- when you think about that New York, New Jersey area, we're dealing with some very high-end vehicles here. And the prices for these flood cars has been above what we would normally see for salvage vehicles.

Our next question comes from Bob Labick at CJS Securities.

Just want to clarify a few things. Eric, in your earlier comment, you mentioned that IAA margins, x Sandy, were north of 40%. Is that for the full year or for the quarter? Because I was calculating closer to the 36% for the quarter, x Sandy.

It would have been for the full year. And I think when you get to the Q, you'll see -- I would tell you I think your margin for the fourth quarter is a little low if you took Sandy out. It was a little better than that.

Okay, great. And once we get more details, I'll dig into it there. And then also, obviously, you guys mentioned, and we certainly know, with many of us living in New York, that it's expensive here. But I was wondering if you could give kind of an order of magnitude in terms of the cost differential from this storm versus previous cats, where you guys have said you've never lost money before. And in terms of that, the storage, towing, labor, I mean where did the -- losing $20 million on this, I think most have come as a surprise to you initially. I guess that's the question, was it a surprise to you? And can you just -- without quantifying the numbers but by order of magnitude, what were the biggest costs versus your expectations?

Yes, there's no question that the storm was so isolated and so heavily concentrated in that New York and New Jersey areas. The biggest cost, no question, was what we provide in terms of towing and also, in terms of securing land. Those are -- and then the team of people that we had to assemble to handle the cat itself made up the bulk of the cost.

And Bob, I'd like -- you said surprise. It was something we didn't expect, but I would not use the term surprise. As we're incurring these costs, we know it. Yes, it was unexpected but not a surprise because that was the market, and we were in that market. And Jim mentioned it in his remarks, our customers are demanding, and we were responding with speed and commitment to getting those cars into our locations and then getting them processed. The best comparison is Katrina as an example, and it was in different part of the U.S. And you know what? At Katrina, we didn't make a lot of money, but we processed a large number of cars for a small amount of profit, and this was a loss. I mean, that kind of quantify -- that $20 million loss, either one of these things, and that's not what you expect.

Let me give you just a couple stats as you compare Sandy and Katrina. At Katrina, we had to secure 110 acres of land; Sandy, over 400. Katrina, we had to bring in 50 additional towers; in Sandy, we had to bring in 600 additional towers. In terms of assignments that we're handling, we were handling 10x as many as Simon's [ph] in the course of the first 3 weeks than we were in Katrina. So everything was just on steroids. It was just a lot more coming at us a lot faster, and people are expecting us to react in a much more expedited manner.

, Okay, that's helpful color. And then particularly with IAA, could you just comment on the purchase core mix in the quarter versus a year ago? I think you commented that you expect it to remain flat at current levels for 2013. But could you tell us what it was in the quarter?

Bob, I don't have that right here handy. It was actually less than it was in previous quarters and not surprisingly because of the activity we were dealing with in the Northeast. And we'll have in our K the amount for the year, but I -- again, I could look it up, but I could follow up with you. But it was a little bit less than previous quarters, and it was above 5%, as I recall.

Our next question will come from John Lovallo of Bank of America Merrill Lynch.

First question would be, just getting back on this Sandy versus Katrina comparison, how would you kind of characterize the quality of the vehicles? I know you said that there's more higher-end vehicles that came through. But in terms of just the reusable parts, would -- is it fair to say that the cars in Sandy probably had more reusable parts because the floodwaters receded more quickly?

There's no question to your first point. The Sandy cars were a higher-dollar car. When you think of higher-dollar cars in that region, you think of the luxury cars, and you can figure those brands, the Mercedes, the Audis, the Lexuses and Porsches and things of that nature. And we're also dealing with saltwater here. And saltwater causes tremendous long-term damage to these vehicles. So I don't think I'm in a position to comment on reusable parts other than the fact that when you're dealing with saltwater, you're dealing with vehicles that are going to have long-term damage.

Okay, that's very helpful. And then if I could maybe just ask one kind of high-level question on just the REIT conversation that you were talking about. Just very broadly speaking -- I mean, when I think of your business, I think of kind of the value that you add would be in creating a market, allowing more eyeballs to see each vehicles, assuring title transfer to the buyer, assuring payment to the seller, those are kind of the main things that I think about. But do you -- would you -- how would you kind of characterize the value associated with storing a vehicle? I mean, is there any way to kind of think about that?

You know what? If you look at the way that we engage with our customers, we charge a sell fee, and the sell fee is -- we've talked about this a long time -- much smaller than the buy fee. And the buyer is clearly not going to pay us through how long that car sat there. And the sell fee is -- I mean, if there was a portion of our fee attributable to the storage of the vehicles, I would think it would be a subset because, John, of all the things you mentioned. Look at all that we're doing for that sell fee, and only a small portion might be attributable to the time we store the vehicle.

We'll go next to Bret Jordan of BB&T Capital Markets. Bret David Jordan - BB&T Capital Markets, Research Division: A couple of quick questions. Number one, I think you'd said that maybe some higher-than-expected CapEx late in the year related to Sandy. Could you give us some more color on how much incremental CapEx you experienced from Sandy? And I think you also felt that maybe some of those assets could be reallocated in 2013. Sort of what was the spending driven by? And as you reallocate those assets, do we have, I guess, lower utilization because you had to build up for the surge in Sandy?

Yes, it was $7 million of the $102 million was specifically for Sandy, and a substantial amount of it will be reallocated, not 100%. There was some that probably related to work we're doing on the temporary side where it may not be cost-effective to move things. But majority will be -- not reallocated, will be utilized, redeployed as part of our plan. And so that's a piece of it, the $102 million. And then there was another piece that I didn't actually put much color on. We were a little above where we started the year because we really went after the OPENLANE integration that Jim talked about. And we did spend a little bit more by plan to accelerate the pace at which we could get to a single site. And so those are the -- really the 2 things that contributed to us being at $102 million versus where we began the year, expecting around $90 million. Bret David Jordan - BB&T Capital Markets, Research Division: Okay, great. And then one last question I guess on the whole car side of the business, and the dealers are focusing pretty intensely on increasing their used ratio of cars sold. Are you seeing sort of headwinds to whole car access as they're trying to keep some of these off-lease vehicles or what typically would have been a wholesale out on their lots to resell as used?

I would say, Bret, we're maybe seeing the opposite of that. What you've got is you've got more supply, more vehicles coming into the market. And where in 2012, dealers were squeezing every vehicle they could, trying to hang on to these vehicles, now with the additional supply coming, I think that we'll see more of those trade-ins making their way to the physical auctions.

We'll go next to John Lawrence of Stephens.

Just a couple questions regarding the wins on the insurance side. Could you broaden that a little bit and give us the profile of those customers? I guess the point is is they continue to use alternative parts as part of their mix, and that continues to grow. Give us a little history there with these 2 guys, and would that be the case in point?

I think we would clarify to saying that they were major insurance companies and probably in the top 10 in the nation. And to your point, they would be users of alternative parts.

And you would sense that that's increasing over time just like the industry has?

Yes, there's been the -- I think Eric mentioned earlier in his conversation -- in his comments is the use of alternative parts is now more -- much more widespread accepted throughout the industry. And we expect that that will only increase.

Right. And secondly, can you give any kind of a sense of -- if you look at the buckets of mix between foreign nameplates sold versus domestic, any sense of what kind of pricing you get differential between those 2 buckets?

Are you talking salvage or whole car?

Either one. Both.

Yes, really, we don't look at that, and we don't break that out. I mean, you can have a high-dollar domestic car, and you can have a low-dollar domestic car. I mean, it's all based on the car and the inventory that we receive, and it's all based on the selling price of the vehicle.

Yes, I just didn't know if you -- when you've put it all together, was there any major differences?

I think -- yes. No, I would say that we don't look at it -- we don't split it like that. When we put it all together, we just look at the overall averages.

Yes, and the industry looks at luxury, not source. I mean, there's no difference between a domestic luxury car and a foreign luxury car. It's the luxury car that gets the premium, John. And I would say generally speaking, I mean, you might have some people that favor one brand over another in a local market, but it's not widespread.

Yes. With that said, though, I would -- I think the point out that I would add is we do have some specific sales in the country that we call high-end sales or luxury brand sales. These are specialized sales, and they occur at specific sites. And because they are all premium cars, we do achieve premium pricing on those cars. But again, it's not a huge part of our business.

Yes, and the turnout [ph] would be lower.

And Jim, wouldn't you say there are more foreign luxury cars than domestic luxury car brands right now, right?

Yes.

So John, there are more foreign luxury brands.

Our next question will come from Bill Armstrong of CL King & Associates. William R. Armstrong - CL King & Associates, Inc., Research Division: On the Sandy vehicles, to what extent can you pass on the towing and storage costs to your sellers?

Well, Bill, as we said, we don't speak specifically to individual contracts, but we've never lost money on a catastrophic event. In fact, we've made money on all these events, and we're expected to handle these events in the normal course of business within our contracts.

And there are provisions for catastrophic vehicles to generate some opportunities for revenue. But I think you can tell from our results, it's not sufficient to cover the costs we incur. William R. Armstrong - CL King & Associates, Inc., Research Division: Normally, not getting into any specifics, but just as a general rule, though, you're always going to have towing costs no matter -- whether it's catastrophic or not, and at least some of those are passed on to -- in your fees, right?

Again, generally, our fee structure encompasses the recovery of our tow costs. They're not passed on on a cost-plus basis, generally. And Bill, let me -- a chance to highlight this. Even in the other catastrophes where we said we did not lose money, they did not generate the same profitability, though, as our normal collision salvage vehicles. They didn't [ph] lose money. William R. Armstrong - CL King & Associates, Inc., Research Division: Yes. Now I seem to recall that the Sandy -- I'm sorry, the Katrina cars, and I think this was a little bit too early, or had a lot of saltwater damage, and they ended up being very low value. Sandy, they weren't sitting in water that much, but still wouldn't that have really done -- killed a lot of value for mechanical or moving parts, and maybe wouldn't have affected the sheet metal, but I would've thought that still those cars would've had maybe less-than-average value?

Well, less-than-average value, I would say, just the nature of the vehicles and the type of vehicles, there was just many more high-dollar cars, which are going to result in high-dollar prices. They're still going to have this extended damage, but I think you're just dealing with a higher-dollar car.

But Jim, you went to the airport and saw the 2 runways. It looked like a new car lot, didn't it?

Yes.

And those cars aren't selling for anywhere near their value as a normal car, right?

Right.

As a whole car.

Yes, they're probably still selling for the same percentage of their original actual cash value. William R. Armstrong - CL King & Associates, Inc., Research Division: Got it. Okay. And then just one last question on going -- shifting to ADESA. You're looking for repos to start to increase again this year. Is that being driven by -- and this is in volume. Is that being driven by lower credit quality and just the expectation of more new car sales and a higher rate of default, or there's other things?

I think it's a couple things. Number one is the new car business is back. The used car business is strong, and credit is back. People are extending consumer credit, and it's just a fact of the numbers. The more credit you extend, the more repos you're going to receive. And it's just the business is back to what we would consider normal levels.

And a part of that would be making loans to lower FICO or Beacon scores, right?

Right.

I mean, that's how you sell more cars. William R. Armstrong - CL King & Associates, Inc., Research Division: Right, got it. And then just in terms of getting some perspective on that, if we're looking at I think it was about 8.4 million units that may get sold this year, about what percentage of that would be repos, roughly?

I think we reported that number last year.

Within the industry, it's likely in the mid-teens, somewhere, as a relative number. At the peak, we know the industry reported, the peak was 1.8 and the bottom is 1.2, so it's somewhere between those 2, right, Jim?

Yes.

Actually, the peak may have hit 1.9, but it's in that magnitude for the industry.

And we are at the top of the hour of our -- or do we have time for another question?

We can take one more question, I think?

Okay, great, and that will come from Colin Daddino with Gabelli & Company. Colin Daddino - Gabelli & Company, Inc.: I guess my first would be kind of maybe another way to ask John and Bill's question about the Sandy vehicles. Do you have a sense for maybe who's buying them? Is it the LKQs or are people just drawing them for kind of scrap or buying them to rebuild them?

I would say, probably the best answer is all of the above. You've got your rebuilders, your recyclers. Obviously, you've got your foreign buyers. I mean, it's -- I think it's just the consistent distribution to all these different constituents that buy salvage vehicles. I don't think there's any one group that is more focused on these vehicles than another.

And let me add one more comment. By buying through the salvage auctions, it's a heavily regulated process. The titles are marked. We feel the salvage industry protects the public. Reported numbers of Sandy cars are more than double what the salvage industry will process. I would focus more on those that aren't running through our auctions and where they're going than -- ours are professional registered dealers who have licensing requirements, and they know what they can and cannot do with those vehicles. Colin Daddino - Gabelli & Company, Inc.: Great. Okay. And then was there -- is there any impact from -- maybe at ADESA from Sandy for dealer inventories that were destroyed? I mean, is that even meaningful? And then would those vehicles then come and show up in the salvage in IAA?

If I understand the question, we -- just let me make sure I understand. Are you asking would some of the Sandy vehicles show up at ADESA? Colin Daddino - Gabelli & Company, Inc.: Vice versa. So did you maybe lose ADESA volume from dealers that had some cars they were thinking about wholesaling and then maybe got destroyed in the quarter, and then would they show up in salvage?

No. I think it would be a very insignificant number. So the truthful answer is that I don't have a number or a number that I could point to, but when you think about the lost sales, Sandy, I think, represented somewhere in the neighborhood of a couple hundred thousand vehicles. And so in the overall scheme of things, we're dealing with a pretty small number.

Yes, it was like 250. And the other thing that I would call, and that I would mention, even at our site, we did not have any damage to any vehicles that were on our sites because we knew it was coming. We made sure they in high ground. I would suspect that the reason the number is small is because of the warning that this was coming and that their lifeblood is their inventory. I'm guessing most of the dealers moved the cars. Colin Daddino - Gabelli & Company, Inc.: Okay. And then last question. You don't have to answer, I guess. After the secondary and the dividend implementation, have you talked to kind of the remaining private equity owners and have a sense for what they're thinking of doing with their remaining holdings?

Colin, I would say that what we're -- what I'm focused on is I'm focused on running the business, and I'll let the private equity guys figure out what their thoughts are going forward.

That does conclude today's conference. Thank you all for your participation.