Unless otherwise indicated or unless the context otherwise requires, the following terms used in this Annual Report on Form 10-K have the following meanings:

We are a leading provider ofdigital marketplace for used vehicle auctionsvehicles, connecting sellers and related vehicle remarketing services inbuyers across North America and Europe. We leverage technologyEurope to facilitate an efficient marketplace by providing auction services for sellersfast, easy and transparent transactions. Our portfolio of used, or "whole car," vehicles throughintegrated technology, data analytics, financing, logistics, reconditioning and other remarketing solutions, combined with our digital marketplaces supported by more than 70 vehicle logistics center locations across North America at December 31, 2021. centers in Canada, help advance our purpose: to make wholesale easy so our customers can be more successful.

In 2021, we2023, our marketplaces facilitated the sale of approximately 2.61.3 million used vehicles. Our revenuesvehicles, making OPENLANE a leading digital-only wholesale marketplace for used vehicles in North America. Vehicles on our marketplaces are generatedtypically sold by commercial sellers including vehicle manufacturers and their captive finance companies, financial institutions, commercial fleet operators and rental car companies (collectively "commercial customers"), as well as used vehicle dealers, to franchised and independent used vehicle dealers (collectively "dealer customers"). We generate revenue through auction fees from bothcharged to vehicle buyerssellers and sellers,buyers as well as by providing value-added ancillary products and services, including transportation logistics, reconditioning, inspections, marshalling,vehicle inspection and certification, titling, administrative and collateral recovery services and floorplan financing. We facilitate the transfer of ownership directly from seller to buyer and, generally, we do not take title to, ornor ownership of, vehicles sold through our auctions.marketplaces. However, we also sell vehicles that have been purchased, for which we do take title and record the gross selling price of the vehicle sold through our marketplaces as revenue.

Our end-to-endFor commercial sellers, our software platform serves thesupports more than 40 private label digital remarketing needs of OEMs, dealers, fleet operators, rental companiessites and financial institutions. We are an auction company that provides advancedcomprehensive solutions to our commercial customers. For dealer customers, our platform facilitates multiple sale formats, data-driven insights and integrated mobile, digital and on-premise marketplaces. We are a technology company that delivers next generation tools to accelerate and simplify remarketing. We also leverage data to inform and empower our customers with clear, actionable insights.

OPENLANE Europe is providing short-term inventory-secured financing, known as floorplan financing, primarily to independent used vehicle dealers through our wholly-owned subsidiary, AFC, which has approximately 100 locations throughout North America.

KAR Auction Services, Inc., doing business as KAR Global, was incorporated in 2006 and commenced operations in 2007. ADESA entered the vehicle remarketing industry in 1989 and first became a public company in 1992. In 1994, ADESA acquired AFC. ADESA remained a public company until 1995, when ALLETE, Inc. purchased a majority of its outstanding equity interests. In 2004, ALLETE, Inc. sold 20% of ADESA to the public and then spun off their remaining 80% interest to shareholders.became public again in 2004. KAR Auction Services, Inc. ("KAR") was incorporated in 2006 and acquired ADESA was acquired by the Companyand IAA in 2007. At that time the Company also acquired Insurance Auto Auctions, Inc. ("IAA"),2007, taking ADESA private. KAR became a North American salvage auction business. In a series of transactions between 2012 and 2013, our former owners (private equity investors) sold all of their common stockpublic company in secondary offerings.2009. In 2019, IAA was separated from KAR Auction Services through a tax-free spin-off and now operates as a separate entity (NYSE: IAA).spin-off. In 2022, KAR sold the ADESA U.S. physical auction business to Carvana. In 2023, KAR rebranded to OPENLANE.

Auctions are the hub of the remarketing system forWholesale used vehicles bringing professionalare generally sold through marketplaces that bring together sellers and buyers together and creating a marketplace for the sale of these vehicles. Whole car auctionto facilitate transactions. Wholesale used vehicles include vehicles from dealers turning their inventory, off-lease vehicles, vehicles repossessed by financial institutions and rental and other fleet vehicles that have reached a predetermined age or mileage. The following are key industry highlights:

Whole car auction volumesWe believe the U.S. and Canadian wholesale used vehicle industry has a total addressable market of approximately 15 million vehicles, which can fluctuate depending on seasonality and a variety of other macro-economic and industry factors. This wholesale used vehicle industry consists of the commercial market (commercial sellers that sell to franchise and independent dealers) and the dealer-to-dealer market (franchise and independent dealers that both buy and sell vehicles). The Company supports the majority of commercial sellers in North America including off-premise volumeswith our technology and mobile application volumes, were approximately 10.3 million in 2020. Datawe believe digital applications may provide an opportunity to expand the total addressable market for the whole car auction industry is collected by the National Auto Auction Association ("NAAA") through an annual survey. NAAA industry volumes for 2021 have not yet been released, but we expect that volumes in 2021 were lower than in 2020.dealer-to-dealer transactions. The NAAA industry volumes collected by the annual survey do not include off-premise volumes or mobile application volumes (e.g., Openlane, BacklotCars, CARWAVE, TradeRevsupply chain issues and their respective competitors), but we have included estimates of these volumes in our industry totals. The COVID-19 pandemic and current

market conditions facing the automotive industry in recent years, including the disruption of new vehicle production, low new vehicle supply and historically high used vehicle pricing have had a material impact on the whole car auction industry and we are unable to estimate future volumes.wholesale used vehicle industry.

The North American used vehicle auction market is largely consolidated. Manheim, a subsidiary of Cox Enterprises, Inc. and ADESA are the two largest auction providers inIn the North American whole car auction market. The remainingwholesale used vehicle marketplace industry, the largest providers of physical auctions include Manheim by Cox Automotive ("Manheim"), Carvana's used vehicle auctions operated as ADESA and America's Auto Auction. In the North American wholesale used vehicle marketplace industry, the largest providers of digital marketplaces include the Company and ACV Auctions. There are several other providers in the market of varying size. Over the last several years, industry transactions have been increasingly shifting from physical marketplace venues to digital marketplace channels. This shift has attracted the entry of several new technology-driven marketplace participants, who are substantiallygenerally smaller in size.size and service more select segments of buyers and sellers.

An important component of the whole car auctionwholesale used vehicle industry is providingthe availability of short-term inventory-secured financing, known as floorplan financing. By providing buyers (primarily independent used vehicle dealers)dealer customers) access to capital, the independent used vehicle dealersdealer customers are able to place inventory on their lots. AFC and its competitors play a significant role in the whole car auctionwholesale used vehicle industry by providing liquidity in the auction lanes.our marketplaces. AFC's floorplan financing also supports independent dealer customers with non-auction purchases. In addition, AFC offers value-added services that generate fee-based, non-interest revenue.

KAR’sOPENLANE’s strategy is to bebuild the world’s leadinggreatest digital marketplacemarketplaces for used vehicles.vehicles, and we are advancing this strategy by fulfilling our purpose, to make wholesale easy so our customers can be more successful. This progressive strategy reflects the shifting landscape of the remarketing industry and automotive sector, the evolving needs and expectations of our customers and the opportunities that emergedpotential power and accelerated with the onset of the global COVID-19 pandemiccustomer benefits inherent in 2020.a fully digital marketplace. The strategy builds on KAR’sOPENLANE’s integrated technology, andbroad data analytics capabilities, while leveragingand portfolio of financing, logistics, reconditioning and other remarketing solutions.

In 2023, we took meaningful steps towards achieving our vision by consolidating all of our marketplace platforms under the Company’s broad geographic footprintOPENLANE brand to create a single, unified marketplace within each of our geographies – bringing together all of the buyers, all of the sellers and physical infrastructure.all of the vehicles all in one place.

We are committed to the digital transformation of wholesale remarketing. We believe digital platforms benefit sellers by attracting a larger buyer-base, providing greater flexibility around when and where to launch sales and enablingattracting a larger, more advanced and targeted marketing techniques.engaged buyer-base, providing confidence that they are receiving the best market-based price available. We believe buyers benefit from digital platforms through greater transparency, access to inventory beyond their local auction market, and the ability to browse, bid and buy safely and conveniently from any location, on any device, at any time. For KAR,OPENLANE, going digital enables a faster, more agile and efficientasset-light operating model, which should in turn deliver greater value to our stakeholders.

KAROPENLANE has identified fourfive strategic priorities that we believe will advance thisour strategy and continue to position our company for the future. Those priorities are:

We operate as two reportable business segments: ADESA AuctionsMarketplace and AFC.Finance. Our revenues for the year ended December 31, 20212023 were distributed as follows: ADESA 87%Marketplace 76% and AFC 13%Finance 24%.

We are the second largest provider of whole car auctions and related services to theOPENLANE is a leading digital-only wholesale used vehicle remarketing industrymarketplace in North America. We serveOPENLANE is committed to leading the digital transformation of the wholesale automotive remarketing industry and supporting our customers by providing fast and transparent digital marketplaces for buying and selling used vehicles. The Marketplace segment serves a domestic and international customer base through digital marketplaces and strategically located vehicle logistics centersfor wholesale vehicles that are developed to draw professional sellers and buyers together and allow the buyers to inspect and compare vehicles remotely via ADESA.com or in person.vehicles. Our online servicemarketplace offerings allow us to offer vehicles for sale from any location. On-premise marketplace sales are initiated online for vehicles at one of our locations across North America and include ADESA Simulcast, Simulcast+ and DealerBlock sales. Off-premiseDigital marketplace sales are initiated online and include Openlane, BacklotCars, CARWAVE, TradeRevOPENLANE US, OPENLANE Canada and ADESAOPENLANE Europe sales.

Vehicles available aton our auctionsmarketplaces include vehicles from commercial customers such as off-lease vehicles, repossessed vehicles, rental vehicles and other fleet vehicles that have reached a predetermined age or mileage, as well as vehicles from used vehicle dealersdealer customers turning their inventory. The number of vehicles offered for sale at auctionon our marketplaces is thea key driver of our costs incurred, in the whole car auction process, and the number of vehicles sold is the key driver of the related feesrevenues generated by the remarketing process.our marketplaces.

We offer both on-premiseonline and off-premisemobile wholesale vehicle marketplaces, as well as value-enhancing ancillary services in an effective and efficient manner to maximize returns for the sellers of used vehicles. We quickly transfer the vehicles and ownership to the buyer and the net funds to the seller. Vehicles are typically offered for sale at on-premise marketplaces on at least a weekly basis at most ADESA locations and the auctions are simulcast over the Internet with streaming audio and video (ADESA Simulcast) so that remote bidders can participate via our online products. Our online auctions (DealerBlock, BacklotCars, CARWAVE and TradeRev)marketplaces function 24 hours a day, 7 days a week, providing our customers with maximum exposure for their vehicles and the flexibility to offer vehicles at "buy now" prices or in auctionsvia marketplace sales that last for a few hours, days or even weeks.certain amount of time. We also provide customized "private label" selling systems (including "buy now" functionality as well as other online auctions)sales formats) for our customers. At OPENLANE Canada vehicle logistics center locations, vehicles are typically offered for sale on at least a weekly basis and the marketplace sales are streamed using a simulcast technology so that remote bidders can participate via our online products.

We generate revenue from auction fees paid by vehicle buyers and sellers, as well as fees from related services. Generally, we do not take title to, or bear the risk of loss for, vehicles sold at whole car auctions.on our marketplaces. Our buyer fees are typically based on a tiered structure with fees increasing with the sale price of the vehicle, while seller fees are typically fixed. We add buyer fees to the gross sales price paid by buyers for each vehicle, and generally customers do not receive title and/or possession of vehicles after purchase until payment is received, proof of floorplan financing is provided or credit is approved. We generally deduct seller fees and other ancillary service fees to sellers from the gross sales price of each vehicle before remitting the net amount to the seller. ADESA

We also sellssell vehicles that have been purchased, which represent approximately 1% of the total volume of vehicles sold.

Suppliers of vehicles to our whole car auctionsdigital marketplaces primarily include (i) large institutions, such as vehicle manufacturers and their captive finance subsidiaries, vehicle rental companies, financial institutions, and commercial fleets and fleet management companies (collectively "commercial customers");customers; and (ii) franchised and independent used vehicle dealers (collectively "dealer customers").dealer customers. Buyers of vehicles on our auctionmarketplace platforms primarily include franchised and independent used vehicle dealers.dealer customers.

Our whole car auctionsdigital marketplaces also provide a full range of innovative and value-added services to sellers and buyers that enable us to serve as a "one-stop shop."shop" to service our customers' needs. These services include pre and post-sale inspections, key replacement, transportation and logistics, title services and floorplan financing. For vehicles at our vehicle logistics centers, we can also provide reconditioning and mechanical work. Many of these services may be provided or purchased independently from the auction process,marketplaces, including:

Our sales and marketing approach at ADESA is to develop strong, relationshipsmutually beneficial and interactive dialoguelong-lasting relationships with our customers. We have relationship managers for the various commercial customers, including vehicle manufacturers, fleet companies, rental car companies, finance companies and others. These relationship managers focus on current trends and customer needs for their respective customers in order to better coordinate our sales effort and service offerings.

Through our KAR Global Analytical Services department, weWe also provide market analysis to our customers, as they use analytical techniques in making their remarketing decisions.

In the North American whole car auctionwholesale used vehicle industry, we compete with physical auction providers including Manheim a subsidiary of Cox Enterprises, Inc., OVE.com (Manheim's "Online Vehicle Exchange"), RMS Automotive (a subsidiary of Cox Enterprises, Inc.), SmartAuction (a subsidiary of Ally Bank), as well asand Carvana who now owns and operates ADESA. We also compete with several smaller chains of auctions, independent auctionsdigital marketplace providers, including ACV Auctions and a number of digital auction platforms, including Auction Edge, ACV and EBlock auctions.others. In addition, used car retailers, such as CarMax, and Carvana, have developed proprietary auction platforms for selling vehicles to other dealers. In the United States, competition is strongest with Manheim for the supply of used vehicles from national commercial customers. In Canada, we are the largest provider of whole carwholesale used vehicle auction services.marketplace operator. The supply of vehicles from dealers is dispersed among all of the auctionsmarketplace and auction competitors in the used vehicle market.

The whole car auctionwholesale used vehicle industry is highly fragmented in Europe where weEurope. Our digital marketplaces primarily compete primarily with British Car Auctionslarge European digital remarketers, including BCA Group and Manheim.others. There are also a number of small independent auction operations throughout Europe.

We areAFC is a leading provider of floorplan financing to independent used vehicle dealers.dealer customers. We provide short-term inventory-secured financing, known as floorplan financing, to independent used vehicle dealersdealer customers through a hybrid of physical locations and a digital servicing network throughout North America. In 2021,2023, AFC serviced approximately 1.41.6 million loan transactions, which includes both loans paid off and loans extended, or curtailed. We sell the majority of our U.S. dollar-denominated finance receivables without recourse to a wholly-owned bankruptcy remote special purpose entity, which sells an undivided participation interest in such finance receivables to a group of bank purchasers on a revolving basis. We also securitize the majority of our Canadian dollar denominated finance receivables through a separate third-party facility. We generate a significant portion of our revenues from fees. These fees include origination, floorplan, curtailment and other related program fees. When the loan is extended or paid in full, AFC collects all accrued fees and interest.

Floorplan financing primarily supports independent used vehicle dealersdealer customers in North America who purchase vehicles fromon our auctions, other auctionsmarketplaces or those of our competitors and for non-auction purchases. In 2021,2023, approximately 90%86% of the vehicles floorplanned by AFC were vehicles purchased by dealers at any auction.on our marketplaces or through a competitor. Our ability to provide floorplan financing facilitates the growth of vehicle sales at auction.on our marketplaces. As of December 31, 2021,2023, we serviced auctionscustomers through approximately 10090 locations which are conveniently located at or within close proximity(hybrid of auctions held by ADESAphysical locations and other auctions, which allows dealers to reduce transaction time by providing immediate payment for vehicles purchased at auction. We provide availability lists on behalfa digital servicing network) in markets with a significant concentration of our customers to auction representatives regarding the financing capacity of our customers, thereby increasing the purchasing potential at auctions. In addition, we normally have the ability to send finance representatives on-site to most approved independent auctions during auction sale-days, as well as maintaining a presence at the ADESA auctions.AFC customers. Geographic proximity to the customers gives our employees the ability to stay in close contact with outstanding accounts, thereby better enabling them to manage credit risk.risk and build customer relationships. In addition, the majority of U.S. titles are processed and held in a centralized location, enabling field personnel more time to focus on our dealers.

As of December 31, 2021,2023, AFC had approximately 11,40012,000 active dealers with an average line of credit of approximately $350,000$370,000 and no one dealer representing greater than 1.5%1.3% of our portfolio. An average of approximately 1415 vehicles per active dealer were floorplanned with an approximate average value outstanding of $15,300$12,800 per vehicle as of December 31, 2021.2023.

AFC approaches and seeks to expand its share of the independent dealer floorplan market through a number of methods and channels. We target and solicit new dealers through both direct sales efforts at the dealer's place of business as well as auction-basedlocation-based sales and customer service representatives, who service our dealers at auctionsour vehicle logistics centers or competitors where they replenish and rotate vehicle inventory. These largely local efforts are handled by field personnel. AFC's corporate-level team and Business Development Center also provide sales and marketing support to AFC field personnel by helping to identify new dealer opportunityopportunities, generating new leads through digital channels, and coordinating promotional activity with our marketplace platforms, competitor auctions and other vehicle supply sources. AFC also relies on the utilization of actionable data to drive the business forward (predictive modeling from historical and real-time data).

Our procedures, proprietary systems and proprietary computer-based systemdata enable us to manage our credit risk by tracking each vehicle from origination to payoff, while expediting services through our field network. Typically, we assess a floorplan fee at the inception of a loan and we collect all accrued fees and interest when the loan is extended or repaid in full. In addition, AFC generally holds the title or other evidence of ownership to all vehicles which are floorplanned. Typical loan terms are 30 to 90 days, each with a possible loan extension. For an additional fee, this loan extension allows the dealer to extend the duration of the loan beyond the original term for another 30 to 90 days, ifand generally requires the dealer makesto make payment towards the principal and payspayment of accrued fees and interest.

The extension of a credit line to a dealer starts with the underwriting process. Credit lines up to $600,000 are extended using a proprietary scoring model developed internally by AFC. Credit lines in excess of $600,000 may be extended using underwriting guidelines which generally require dealership and personal financial statements, monthly bank statements, sales reports and tax returns. The underwriting of each line of credit requires an analysis, write-up and recommendation by the credit department and, in the case of credit lines in excess of $600,000, final review by a credit committee.

Collateral management is an integral part of daily operations at each AFC location, including our corporate headquarters. AFC's proprietary computer-based system facilitates this daily collateral management by providing real-time access to dealer information and enables field and corporate personnel to assess and manage potential collection issues. Restrictions are automatically placed on customer accounts in the event of a delinquency, payments by dealers from bank accounts with insufficient funds or poor audit results. Field personnel are proactive in managing collateral by monitoring loans and notifying dealers that payments are coming due.changes in payoff activity. In addition, approximately 50,000over 58,000 routine audits, or inventory audits, are performed annually on the dealers' lots through our AutoVIN subsidiary. The audit reconciliation process is now centralized in order to better mitigate risk and free upmake field personnel time available to focus on the customer. Poor results from inventory audits typically require personnel to take actions to determine the status of missing collateral, including visiting the dealer personally, verifying units held off-site and collecting payments for units sold. Audits also identify troubled accounts, triggering the involvement of AFC's collectionsrisk department.

AFC operates twothree divisions which are organized into ten regions in North America. Each division and region is monitored by managers who oversee daily operations. At the corporate level, AFC employs full-time collectionrisk specialists and collection attorneys who are assigned to specific regions and monitor collection activity for these areas. CollectionRisk specialists work closely with the field officespersonnel to track trends before an account becomes a troubled account and to determine, together with collection attorneys, the best strategy to secure the collateral once a troubled account is identified. In addition, many of our dealers with significant credit lines are managed by a centralized team to provide customized customer service as well as enhanced risk oversight.

AFC sells the majority of its U.S. dollar denominated finance receivables on a revolving basis and without recourse to a wholly-owned, bankruptcy remote, consolidated, special purpose subsidiary ("AFC Funding Corporation"), established for the purpose of purchasing AFC's finance receivables. A securitization agreement allows for the revolving sale by AFC Funding Corporation to a group of bank purchasers of undivided interests in certain finance receivables subject to committed liquidity. AFC's securitization facility has been in place since 1996. AFC Funding Corporation had a committed facility of $1.70$2.0 billion from a third-party facility for U.S. finance receivables at December 31, 2021.2023. The agreement expires on January 31, 2024.2026.

We also have an agreement in place for the securitization of Automotive Finance Canada Inc.'s ("AFCI") receivables. This securitization facility provides up to C$225300 million in financing for eligible finance receivables through a third-party conduit (separate from the U.S. facility). The agreement expires on January 31, 2024.2026. The receivables sold pursuant to both the U.S. and Canadian securitization agreements are accounted for as secured borrowings.

AFC primarily provides short-term dealer floorplan financing of wholesale vehicles primarily to independent vehicle dealers in North America. At the national level, AFC's competition includes NextGear Capital a subsidiary ofby Cox Enterprises, Inc.Automotive ("NextGear Capital"), other specialty lenders, banks and financial institutions. At the local level, AFC faces competition from banks, credit unions and independent auctions who may offer floorplan financing to local auction customers. Such entities typically service only one or a small number of auctions.

Some of our industrywholesale used vehicle marketplace competitors who operate whole car auctions on a national scale may endeavor to capture a larger portion of the floorplan financing market. AFC competes primarily on a relationship basis, focusing on quality of service, convenience of payment, scope of services offered to solve customer pain points and consistent commitment to the sector. This and our long-term relationships with customers have been established over time and act as a competitive strength for us.

The volume of vehicles sold through our auctionsmarketplaces generally fluctuates from quarter to quarter. This seasonality is caused by several factors including weather, the timing of used vehicles available for sale from selling customers, holidays, and the seasonality of the retail market for used vehicles, which affects the demand side of the auction industry. UsedWholesale used vehicle auction volumes tend to decline during prolonged periods of winter weather conditions. As a result, revenues and operating expenses related to volume will fluctuate accordingly on a quarterly basis. TheIn North America, the fourth calendar quarter typically experiences lower used vehicle auction volume as well as additional costs associated with the holidays and winter weather.

Our operations are subject to regulation, supervision and licensing under various federal, state, provincial, local and foreign authorities, agencies, statutes and ordinances, which, among other things, require us to obtain and maintain certain licenses, permits and qualifications, provide certain disclosures and notices, limit interest rates, fees and other charges and protect personal data. Some examples of the regulations and laws that impact our company are included in Item 1A. "Risk Factors" under the risk: "We are subject to a complex framework of federal, state, local and foreign laws and regulations, including vehicle brokerage and auction laws and currency reporting obligations, which have in the past, and could in the future, subject us to claims, challenge our business model, or otherwise harm our business." Changes in government regulations or interpretations of existing regulations could result in increased costs, reduced vehicle prices and decreased profitability for us. In addition, failure to comply with present or future regulations or changes in existing regulations or in their interpretation could have a material adverse effect on our operating results and financial condition.

Our operations are subject to various foreign, federal, state and local environmental, health and safety laws and regulations, including those governing the emission or discharge of pollutants into the air or water, the generation, treatment, storage and release of hazardous materials and wastes and the investigation and remediation of contamination. Our failure to comply with current or future environmental, health or safety laws or to obtain and comply with permits required under such laws, could subject us to liability, damage our reputation and require costly investigative, remedial or corrective actions.

In the used vehicle remarketing industry, large numbers of vehicles are stored and/or refurbished at auction facilities and during that time releases of fuel, motor oil and other materials may occur. We have investigated or remediated, or are currently investigating or remediating, contamination resulting from various sources, including gasoline, fuel additives (such as methyl tertiary butyl ether, or MTBE), motor oil, petroleum products and other hazardous materials released from aboveground or underground storage tanks or in connection with current or former operations conducted at our facilities. Some of the facilities on which we operate are impacted by recognized environmental concerns and pollution conditions. We have incurred and may in the future incur expenditures relating to compliance and risk mitigation efforts, releases of hazardous materials, investigative, remedial or corrective actions, claims by third parties and other environmental issues, and such expenditures, individually or in the aggregate, could be significant.

At December 31, 2021,2023, we had approximately 9,6004,500 employees, of which approximately 7,1002,100 were located in the U.S. and approximately 2,5002,400 were located in Canada, Europe, Mexico, Uruguay and the Philippines. Approximately 86%85% of our workforce consists of full-time employees. Currently, less than 1%None of our employees participate in collective bargaining agreements. Weagreements, but we have also established a works council in Belgium pursuant to local law. In addition to the employee workforce, we utilize independent contractors and temporary labor services to provide certain services.

Our people have been criticaldrive our business, so we strive to our digital transformation.attract, develop and retain high-performing talent. Led by our Chief People Officer, we have programs and practices in place to onboard, support and retain our talent, and to source new talent in a highly competitive environment. We recognize the importance of our workforce and the employee experience, and strive to offer competitive compensation and benefits while fostering a culture of open dialogue, inclusion and belonging. Additionally, we enable support functions and people managers that are dedicated to the growth and development of our teams.

Our web address is www.karglobal.com.corporate.openlane.com. Our electronic filings with the Securities and Exchange Commission ("SEC") (including all Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and if applicable, amendments to those reports) are available free of charge on the website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. In addition, our Corporate Governance Guidelines, Code of Business Conduct and Ethics, Code of Ethics for Principal Executive and Senior Financial Officers and charters of the audit committee, the compensation committee, the nominating and corporate governance committee the risk committee and the compensationrisk committee of our board of directors are available on our website and available in print to any shareholderstockholder who requests it. The information posted on our website is not incorporated into this Annual Report.

The SEC maintains a website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that site is www.sec.gov.

Our Series A Preferred Stock has rights, preferences and privileges that are not held by, and are preferential to, the rights of our common stockholders, which could adversely affect our liquidity and financial condition, and may result in the interests of the holders of our Series A Preferred Stock differing from those of our common stockholders.

None.

TheOur corporate headquarters of KAR Auction Services, ADESA and AFC areis located in Carmel, Indiana. The facilities are leased properties, withIndiana, where we lease office space being leased throughpursuant to a lease that expires in 2034. At December 31, 2021,2023, we also owned or leased other properties in the United States, Canada, Europe, the United Kingdom, Uruguay and the Philippines.

Facilities utilized by the ADESA businessMarketplace segment primarily include more than 7015 vehicle logistics center locations in North America,across Canada at December 31, 2023, which are either owned or leased. Each vehicle logistics centerThe OPENLANE Canada facilities consist on average of approximately 60 acres of land per site and have parking areas to store vehicles and may have additional buildings for reconditioning, registration, maintenance, bodywork, and other ancillary and administrative services. Each vehicle logistics center also

In our Finance segment, AFC has secure parking areas to store vehicles. The ADESA facilities in North America consist on average of approximately 75 acres of land per site.

We regularly evaluatebelieve that our capacity in allcurrent facilities are suitable and adequate to meet our marketscurrent needs, and where appropriate, seekif we require additional or substitute space, we anticipate we will be able to increase capacity through the acquisition ofobtain additional land andsuitable facilities. Capacity at our facilities varies from period to period and by region as a result of various factors.

We are involved in litigation and disputes arising in the ordinary course of business, such asbusiness. Although the outcome of litigation cannot be accurately predicted, based on evaluation of information presently available, our management does not currently believe that the ultimate resolution of these actions related to injuries; property damage; handling, storage or disposal of vehicles; environmental laws and regulations; and other litigation incidental to the business such as employment matters and dealer disputes. Such litigation is generally not, in the opinion of management, likely towill have a material adverse effect on our financial condition, results of operations or cash flows.

Not applicable.

KAR Auction Services'OPENLANE's common stock is traded on the New York Stock Exchange ("NYSE") under the symbol "KAR" and has been traded on the NYSE since December 11, 2009. As of February 15, 2022,2024, there were 115 stockholders of record. Because many shares of our common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by the holders of record.

The information requiredThere were no unregistered sales of equity securities made by Item 701 of Regulation S-K was previously disclosed (forOPENLANE during the sale of Series A Preferred Stock) in the Company's Current Reports on Form 8-K, filed with the SEC on June 10, 2020 and June 30, 2020.

The following table provides information about purchases by KAR Auction ServicesOPENLANE, Inc. of its shares of common stock during the quarter ended December 31, 2021:2023:

The graph below shows the cumulative total stockholder return, assuming an investment of $100 and dividend reinvestment (and taking into account the value of the IAA, Inc. common shares distributed in the spin-off), for the period beginning on December 31, 20162018 and ending on December 31, 2021,2023, on each of KAR Auction Services'OPENLANE's common stock, the Standard & Poor's 400 MidcapSmallCap 600 Index and the Standard and Poor's 500 Index. Our stock price performance shown in the following graph is not indicative of future stock price performance.

This Annual Report on Form 10-K contains 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 in this report on Form 10-K that are not historical facts (including, but not limited to, expectations, estimates, assumptions and projections regarding the industry, business, future operating results, potential acquisitions and anticipated cash requirements) may be forward-looking statements. Words such as "should," "may," "will," "can," "of the opinion," "confident," "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates" "continues," "outlook," initiatives," "goals," "opportunities," and similar expressions identify forward-looking statements. Such statements, including statements regarding the potential impacts of the COVID-19 pandemic;adverse market conditions; our future growth; anticipated cost savings, revenue increases, credit losses and capital expenditures; contractual obligations; dividend declarations and payments; common stock repurchases; tax rates and assumptions; strategic initiatives, greenfieldsacquisitions and acquisitions;dispositions; our competitive position and retention of customers; and our continued investment in information technology, 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, but are not limited to, those discussed in Item 1A. "Risk Factors" of this Annual Report on Form 10-K and those described from time to time in our future reports filed with the Securities and Exchange Commission. Many of these risk factors are outside of our control, and as such, they involve risks which are not currently known that could cause actual results to differ materially from those discussed or implied herein. The forward-looking statements in this document are made as of the date on which they are made and we do not undertake to update our forward-looking statements.

However, macroeconomic factors, including inflationary pressures, rising interest rates, volatility of oil and natural gas prices and declining consumer confidence continue to impact the shortage of semiconductors. This reduction in supply of new vehicles has caused increasedaffordability and demand for new and used vehicle prices, as well as increased demand for used vehicles. More lessees and dealers are therefore purchasing vehicles at residual value, thus decreasing the number of off-lease vehicles coming to auction. Further, government support and loan accommodations have resulted in fewer repossessed vehicles coming to auction. These factors have contributedDeclining economic conditions present a risk to our commercial vehicle volumes declining in 2021operations and are expected to continue for the foreseeable future.

We provide whole car auction services inare a leading digital marketplace for used vehicles, connecting sellers and buyers across North America and Europe.Europe to facilitate fast, easy and transparent transactions. Our business is divided into two reportable business segments, each of which is an integral part of the wholesale used vehicle remarketing industry: ADESA AuctionsMarketplace and AFC.Finance.

Since the Company also sold vehicle service contracts through Preferred Warranties, Inc. ("PWI").

AFC works with independent used vehicle dealersdealer customers to improve their results by providing a comprehensive set of business and financial solutions that leverage its local presence of branches and in-market representatives, industry experience and scale, as well as KAROPENLANE affiliations. AFC's North American dealer base was comprised of approximately 14,50014,200 dealers in 2021, and loan transactions, which includes both loans paid off and loans curtailed, were approximately 1.4 million in 2021.2023.

Key challenges for the independent used vehicle dealer customers include demand for used vehicles, disruptions in pricing of used vehicle inventory, access to consumer financing, increased interest rates and increased used car retail activity of franchise and public dealerships (most of which do not utilize AFC or its competitors for floorplan financing), as well as the ability to operate in locations experiencing pandemic shelter-in-place orders.. These same challenges, to the extent they occur, could result in a material negative impact on AFC's results of operations. A significant decline in used vehicle sales would result in a decrease in consumer auto loan originations and an increased number of dealers defaulting on their loans. In addition, volatility in wholesale vehicle pricing impacts the value of recovered collateral on defaulted loans and the resulting severity of credit losses at AFC. A decrease in wholesale used car pricing could lead to increased losses if dealers are unable to satisfy their obligations.

The volume of vehicles sold through our auctionsmarketplaces generally fluctuates from quarter-to-quarter. This seasonality is caused by several factors including weather, the timing of used vehicles available for sale from selling customers, holidays, and the seasonality of the retail market for used vehicles, which affects the demand side of the auction industry. UsedWholesale used vehicle auction volumes tend to decline during prolonged periods of winter weather conditions. As a result, revenues and operating expenses related to volume will fluctuate accordingly on a quarterly basis. TheIn North America, the fourth calendar quarter typically experiences lower used vehicle auction volume as well as additional costs associated with the holidays and winter weather.

OurThe vehicles sold on our marketplaces generate auction fees from buyers and sellers. The Company generally does not take title to these consigned vehicles and records only its auction fees as revenue ("Auction fees" in the consolidated statement of income (loss)) because it has no influence on the vehicle auction selling price agreed to by the seller and the buyer at the auction. The Company does not record the gross selling price of the consigned vehicles sold at auction as revenue. The Company generally enforces its rights to payment for seller transactions through net settlement provisions following the sale of a vehicle. Marketplace services such as inbound and outbound transportation logistics, reconditioning, vehicle inspection and certification, collateral recovery services and technology solutions are generally recognized at the time of service ("Service revenue" in the consolidated statement of income (loss)). The Company also sells vehicles that have been purchased, which represent approximately 1% of the total volume of vehicles sold. For these types of sales, the Company does record the gross selling price of purchased vehicles sold at auction as revenue ("Purchased vehicle sales" in the consolidated statement of income (loss)) and the gross purchase price of the vehicles as "Cost of services." AFC's revenue ("Finance-related revenue" in the consolidated statement of income (loss)) is derived fromcomprised of interest and fee income, provision for credit losses and other revenues associated with our finance receivables.

Although Marketplace revenues primarily include auction fees and various on-premise and off-premise services, and from dealer financing fees, interest income and otherservice revenue, at AFC. Although auction revenues primarily include the auction services and related fees, our related receivables and payables include the gross value of the vehicles sold. Trade receivables include the unremitted purchase price of vehicles purchased by third parties through our marketplaces, fees to be collected from those buyers and amounts due for services provided by us related to certain consigned vehicles. The amounts due with respect to the services provided by us related to certain consigned vehicles are generally deducted from the sales proceeds upon the eventual auction or other disposition of the related vehicles. Accounts payable include amounts due sellers from the proceeds of the sale of their consigned vehicles less any fees.

Our operating expenses consist of cost of services, selling, general and administrative and depreciation and amortization. Cost of services is composed of payroll and related costs, subcontract services, the cost of vehicles purchased, supplies, insurance, property taxes, utilities, service contract claims, maintenance and lease expense related to the auction sites and loan offices. Cost of services excludes depreciation and amortization. Selling, general and administrative expenses are composedcomprised of payroll and related costs, sales and marketing, information technology services and professional fees.

For the year ended December 31, 2021,2023, we had revenue of $2,251.6$1,645.1 million compared with revenue of $2,187.7$1,519.4 million for the year ended December 31, 2020,2022, an increase of 3%8%. Businesses acquired since the fourth quarter of 2020 accounted for an increase in revenue of $139.1 million or 6% 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 decreased $8.3increased $1.3 million, or 4%1%, to $183.0$101.5 million for the year ended December 31, 2021,2023, compared with $191.3$100.2 million for the year ended December 31, 2020.2022. The decreaseincrease in depreciation and amortization was primarily the result of fixedthe amortization of the ADESA tradename, which was previously an indefinite-lived asset, partially offset by assets that have become fully depreciated and a reduction in assets placed in service.

In October 2022, the second quarterCompany closed on the sale of 2020excess land in Montreal which resulted in a $25.5 million non-cash goodwill impairment charge and a $4.3 million non-cash customer relationship impairment charge were recorded in our ADESA Remarketing Limited reporting unit (doing business as ADESA U.K.). The impairments resulted from the changes in economic circumstances which caused the outlook for the business to be significantly reduced.gain of $33.9 million.

Interest expense decreased $2.3increased $36.6 million, or 2%31%, to $126.6$155.8 million for the year ended December 31, 2021,2023, compared with $128.9$119.2 million for the year ended December 31, 2020. The decrease2022. Interest expense increased $51.6 million at AFC and the increase was primarily attributable to a decreasean increase in the weighted average interest rate on corporate debt and a decrease ofthe AFC securitization obligations to approximately $9.2 million in the average outstanding balance of corporate debt7.4% for the year ended December 31, 2021,2023, as compared with approximately 4.0% for the year ended December 31, 2020. This2022. In addition, in 2022, there was a realized gain of $16.7 million related to the discontinuance of hedge accounting and termination of the interest rate swaps. These items were partially offset by an increasea decrease in interest expense at AFCresulting from repayments of $0.4term loan and senior note debt in 2022 and 2023.

In 2023, we replaced the Previous Revolving Credit Facility and also prepaid a portion of the senior notes. As a result of these items, we recorded a loss on extinguishment of debt totaling $1.1 million. The loss was primarily the result of the write-off of unamortized debt issuance costs associated with lenders not participating in the Revolving Credit Facility and unamortized debt issuance costs associated with the portion of the senior notes repaid.

We had an effective tax rate of 34.5%-5.7% resulting in expense on a pre-tax loss for the year ended December 31, 2021,2023, compared with an effective tax rate of 90.7%25.9% for the year ended December 31, 2020.2022. The 2021effective tax rate was unfavorably impacted by the expense for the increase in the estimated value of contingent consideration for which no tax benefits have been recorded, partially offset by the benefit of discrete items. The 2020 rateyear ended December 31, 2023 was unfavorably impacted by the goodwill and other intangibles impairment chargecharges and expense forresulting $59.0 million deferred tax benefit recorded with respect to the increase inimpairment of tax deductible goodwill and the estimated valueimpairment of contingent consideration for which no tax benefits have been recorded, as well as significantly reduced earnings and a greater proportion of earnings in higher tax jurisdictions. These wereother intangibles, partially offset by the $36.4 million deferred tax benefitexpense associated with the recording of valuation allowance against the U.S. net deferred tax asset.

For the year ended December 31, 2021, fluctuations2023 compared with the year ended December 31, 2022, the change in the Canadian dollar exchange rate increaseddecreased revenue by $20.0$13.9 million, operating profit by $6.7$3.5 million and net income by $3.6$1.5 million. For the year ended December 31, 2021, fluctuations2023 compared with the year ended December 31, 2022, the change in the Europeaneuro exchange rate increased revenue by $7.7$7.0 million, operating profit by $0.4$0.5 million and decreased net income by $0.3 million.

For the year ended December 31, 2021,2023, gross profit for ADESAfrom the Marketplace segment increased $3.5$77.7 million, or less than 1%21%, to $717.9$450.0 million, compared with $714.4$372.3 million for the year ended December 31, 2020.2022. Revenue increased 9% for the year ended December 31, 2023, while cost of services increased 4% during the same period. Gross profit for ADESAfrom the Marketplace segment was 36.6%36.0% of revenue for the year ended December 31, 2021,2023, compared with 37.2%32.6% of revenue for the year ended December 31, 2020. We have taken measures to reduce expenses to help protect our business and vehicles sold online require less labor. In 2021 we also recorded a benefit of $3.7 million taken under the Canada Emergency Wage Subsidy as compared with an aggregate of $14.2 million taken under the CARES Act and the Canada Emergency Wage Subsidy in 2020. On March 20, 2020 our on-premise auctions were shut down in response to the COVID-19 pandemic. While revenue decreased during the closure, cost of services remained consistent, as all non-essential auction employees were paid during the closure. In addition, our gross profit as a percentage of revenue is impacted by purchased vehicles.2022. Excluding purchased vehicle sales, gross profit as a percentage of revenue was 45.3%44.3% and 44.0%38.8% for the years ended December 31, 20212023 and 2020,2022, respectively. The entire selling and purchase price of the vehicle is recorded as revenue and cost of services for purchased vehicles sold. Businesses acquired since the fourth quarter

Gross profit as a percentage of 2020 accounted for an increase in cost of services of $80.4 millionrevenue increased for the year ended December 31, 2021.2023 as compared with the year ended December 31, 2022, primarily due to improved transportation margins, improved profitability in our dealer-to-dealer platforms, cost savings initiatives and an increase in third-party fees for platform services.

Selling, general and administrative expenses forfrom the ADESAMarketplace segment increased $14.1decreased $18.0 million, or 3%5%, to $522.9$380.6 million for the year ended December 31, 2021,2023, compared with $508.8$398.6 million for the year ended December 31, 2020,2022, primarily due to increasesas a result of decreases in selling, general and administrative expenses associated with acquisitionsprofessional fees of $77.3$9.8 million, severance of $5.9 million, fluctuations in the Canadian exchange rate of $4.6$5.5 million, stock-based compensationtelecom expenses of $1.2$3.0 million, and information technology costs of $1.1$1.6 million and stock-based compensation of $1.0 million, partially offset by decreasesincreases in compensation expense of $35.9 million, incentive-based compensation of $10.9 million, professional fees of $6.4 million, telecom expenses of $4.2 million, severance of $3.8$3.4 million, marketing costs of $3.1$2.8 million, bad debtcompensation expense of $3.0 million, supplies expense of $1.8 million, travel expenses of $1.8$1.3 million and other miscellaneous expenses aggregating $1.4$1.3 million.

In addition,October 2022, the Employee Retention Credit provided under the CARES Act and the Canada Emergency Wage Subsidy was $7.7 million less for the year ended December 31, 2021, compared with the year ended December 31, 2020. Likewise, there were net gainsCompany closed on the salessale of assets aggregating $4.2 million for the year ended December 31, 2021, compared with net losses on the salesexcess land in Montreal which resulted in a gain of assets aggregating $1.3 million for the year ended December 31, 2020.$33.9 million.

InSee the second quarterabove discussion of 2020 a $25.5 million non-cash goodwill and other intangibles impairment charge and a $4.3 million non-cash customer relationship impairment charge were recorded in our ADESA Remarketing Limited reporting unit (doing business as ADESA U.K.). The impairments resulted from the changes in economic circumstances which caused the outlookconsolidated results of operations for the business to be significantly reduced.OPENLANE, Inc.

For the year ended December 31, 2021, AFC2023, the Finance segment revenue increased $21.6$17.5 million, or 8%5%, to $289.2$393.4 million, compared with $267.6$375.9 million for the year ended December 31, 2020.2022. The increase in revenue was primarily the result of a 31%4% increase in revenue per loan transaction, largely as a result of a decrease in the provision for credit losses, partially offset by a 6% decrease in loan transactions and the elimination of Warranty contract revenue as a result of the sale of PWI in December 2020.transactions.

Revenue per loan transaction, which includes both loans paid off and loans curtailed, increased $48,$1, or 31%less than 1%, primarily as a result of a decrease in provision for credit losses for the year ended December 31, 2021, an increase in loan values and an increase in interest yields driven by an increase in prime rates (Federal Reserve raised interest rates 100 basis points in 2023), and an increase in other fee income per unit, partially offset by an increase in net credit losses and a decrease in average portfolio duration.loan values.

The provision for credit losses decreasedincreased to 0.2%2.1% of the average managed receivables for the year ended December 31, 20212023 from 2.1%0.4% for the year ended December 31, 2020.2022. The increased loss rate was due to significant used vehicle value declines, interest rate increases and tightening retail credit availability that impacted used retail sales. The provision for credit losses is expected to be approximately 2% or under, on a long-term basis, of the average managed receivables balance. However, the actual losses in any particular quarter or year could deviate from this range.

For the year ended December 31, 2021,2023, gross profit for the AFCFinance segment increased $45.3$14.7 million, or 24%5%, to $233.8$327.5 million, or 80.8%83.2% of revenue, compared with $188.5$312.8 million, or 70.4%83.2% of revenue, for the year ended December 31, 2020. Excluding PWI for the year ended December 31, 2020, AFC's gross profit as a percent of revenue was 76.3%.2022. The increase in gross profit as a percent of revenue was primarily the result of a 30% decrease5% increase in revenue, partially offset by a 4% increase in cost of services. The decreaseincrease in cost of services of $2.8 million was primarily the result of decreasesincreases in PWI expenses of $23.1 million, compensation expense of $2.1$2.2 million, and lot check expenses of $0.6 million partially offset by increases in incentive-based compensation of $1.1 million, rent expense of $0.5 million, collection expenses of $0.4 million and other miscellaneous expenses aggregating $0.1$1.3 million, partially offset by a decrease in incentive-based compensation of $1.3 million.

Selling, general and administrative expenses at AFC decreased $1.4for the Finance segment increased $3.3 million, or 4%7%, to $35.2$49.8 million for the year ended December 31, 2021,2023, compared with $36.6$46.5 million for the year ended December 31, 20202022 primarily as a result of decreasesincreases in PWI expensespostage expense of $2.7$2.8 million, information technology costs of $0.8 million, stock-based compensation of $0.8 million and other miscellaneous expenses aggregating $0.5$0.1 million, partially offset by increasesdecreases in information technology costsprofessional fees of $1.3$0.4 million, incentive-based compensation of $0.4 million and compensation expensecontract labor of $0.5$0.4 million.

An overview of the results of KAR Auction Services,OPENLANE, Inc. for the year ended December 31, 20192021 was included in Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2020,2022, as filed with the SEC on February 18, 2021.March 9, 2023.

For the three months ended December 31, 2021,2023, we had revenue of $549.4$391.3 million compared with revenue of $529.6$372.8 million for the three months ended December 31, 2020,2022, an increase of 4%5%. Businesses acquired since the fourth quarter of 2020 accounted for an increase in revenue of $35.4 million or 6% 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 decreased $4.7increased $1.3 million, or 9%5%, to $45.9$25.3 million for the three months ended December 31, 2021,2023, compared with $50.6$24.0 million for the three months ended December 31, 2020.2022. The decreaseincrease in depreciation and amortization was primarily the result of fixed assets that have become fully depreciated and a reductionthe amortization of the ADESA tradename, which was previously an indefinite-lived asset.

In October 2022, the Company closed on the sale of excess land in assets placed in service.

Interest expense increased $3.9 million, or 11%, to $39.3 million for the three months ended December 31, 2021. The Company had a net reduction in unrealized gains of $9.32023, compared with $35.4 million for the three months ended December 31, 2021, as a result of2022. Interest expense increased $5.8 million at AFC and the change in fair value for one of these investment securities which had a recent public offering. Any future changesincrease was attributable to an increase in the fair valueaverage interest rate on the AFC securitization obligations to approximately 7.7% for the three months ended December 31, 2023, as compared with approximately 6.2% for the three months ended December 31, 2022. These items were partially offset by a decrease in interest expense resulting from the repayment of these investment securities will be reflected as unrealized gains or losses until these securities are sold.senior note debt in 2023.

We had an effective tax rate of 40.7%35.8% for the three months ended December 31, 2021,2023, compared with an effective tax rate of 16.6% on a pre-tax loss29.9% for the three months ended December 31, 2020.2022. The effective tax rate for the three months ended December 31, 20212023 was unfavorably impacted by the expense for thean increase in the estimated valuevaluation allowance related to current year movement of contingent consideration for which nothe adjusted U.S. net deferred tax benefitsasset and tax expense related to current and planned distribution of foreign earnings.

For the three months ended December 31, 2021, fluctuations2023 compared with the three months ended December 31, 2022, the change in the Canadianeuro exchange rate increased revenue by $3.2$3.6 million, operating profit by $1.1$0.3 million and net income by $0.7$0.2 million. For the three months ended December 31, 2021, fluctuations2023 compared with the three months ended December 31, 2022, the change in the EuropeanCanadian dollar exchange rate decreased revenue by $2.4$0.3 million, operating profit by $0.1 million and had no impact on net loss by $0.1 million.income.

Revenue from ADESAthe Marketplace segment increased $6.0$22.6 million, or 1%8%, to $470.2$294.7 million for the three months ended December 31, 2021,2023, compared with $464.2$272.1 million for the three months ended December 31, 2020. The increase in revenue was the result of an increase in average revenue per vehicle sold, partially offset by a decrease in the number of vehicles sold. Businesses acquired since the fourth quarter of 2020 accounted for an increase in revenue of $35.4 million.2022. The change in revenue included the impact of an increase in revenue of $2.9$3.6 million due to fluctuations in the euro exchange rate, partially offset by a decrease in revenue of $0.3 million due to fluctuations in the Canadian exchange rate and a decrease of $2.4 million due to fluctuations in the Europeandollar exchange rate. The increase in revenue was primarily attributable to the increases in purchased vehicle sales and auction fees (discussed below).

On-premise marketplace sales are initiated online for vehicles at any of our locations across North America and include ADESA Simulcast, Simulcast+ and DealerBlock sales. Off-premise marketplace sales are initiated online and include Openlane, BacklotCars, CARWAVE, TradeRev and ADESA Europe sales. The 20% decrease10% increase in the number of vehicles sold was comprised of a decline21% increase in both on-premise and off-premise commercial volumes aggregating 44%, partially offset by an increaseand a 2% decrease in both on-premise and off-premise dealer consignment volumes aggregating 34%.volumes. The decrease inGMV of vehicles sold for the three months ended December 31, 2023 was approximately $5.7 billion.

Auction fees increased $9.2 million, or 11%, to $90.0 million for the three months ended December 31, 2023, compared with $80.8 million for the three months ended December 31, 2022. The number of vehicles sold was driven by a lack of supply caused by high vehicle values.

Service revenue decreased $5.3$1.8 million, or 3%1%, to $144.5 million for the three months ended December 31, 2023 compared with $146.3 million for the three months ended December 31, 2022, primarily as a result of a decrease in transportation revenue of $13.0 million, partially offset by increases in repossession and remarketing fees of $6.9 million, inspection service revenue of $1.4 million and transportation revenue resulting froma net increase in other miscellaneous service revenues aggregating approximately $2.9 million.

Purchased vehicle sales, which include the decrease in vehicles sold, partially offset byentire selling price of the vehicle, increased $15.2 million, or 34%, to $60.2 million for the three months ended December 31, 2023, compared with $45.0 million for the three months ended December 31, 2022, primarily as a result of an increase in reconditioning revenue. Typically consignedthe number of purchased vehicles located at our facilities utilize our service offerings at a higher rate than off-premise vehicles.sold.

For the three months ended December 31, 2021,2023, gross profit for ADESAthe Marketplace segment increased $5.6$20.4 million, or 4%24%, to $161.4$106.2 million, compared with $155.8$85.8 million for the three months ended December 31, 2020. Cost of services2022. Revenue increased less than 1%8% for the three months ended December 31, 2021,2023, while revenuecost of services increased 1% during the same period. Gross profit for ADESAthe Marketplace segment was 34.3%36.0% of revenue for the three months ended December 31, 2021,2023, compared with 33.6%31.5% of revenue for the three months ended December 31, 2020.2022. Excluding purchased vehicle sales, gross profit as a percentage of revenue was 43.0%45.3% and 40.9%37.8% for the three months ended December 31, 20212023 and 2020,2022, respectively. The entire selling and purchase price of the vehicle is recorded as revenue and cost of services for purchased vehicles sold. Businesses acquired since the fourth quarter

Gross profit as a percentage of 2020 accounted for an increase in cost of services of $20.0 millionrevenue increased for the three months ended December 31, 2021.2023 as compared with the three months ended December 31, 2022, primarily due to improved mix in our transportation services, improved profitability in our dealer-to-dealer platforms and cost savings initiatives.

Selling, general and administrative expenses for the ADESAMarketplace segment decreased $4.9increased $8.9 million, or 4%11%, to $125.7$91.7 million for the three months ended December 31, 2021,2023, compared with $130.6$82.8 million for the three months ended December 31, 2020,2022, primarily due to decreasesas a result of increases in incentive-basedstock-based compensation of $14.0$7.4 million, information technology costs of $2.4 million and compensation expense of $6.9 million, professional fees of $2.5 million, telecom expenses of $1.1 million and stock-based compensation of $1.0$1.6 million, partially offset by increasesdecreases in selling, general and administrative expenses associated with acquisitionsseverance of $14.2 million, bad debt expense of $2.4 million, medical expenses of $2.1 million, travel expenses of $0.6 million, fluctuations in the Canadian exchange rate of $0.6$1.9 million and other miscellaneous expenses aggregating $1.3$0.6 million.

In addition,October 2022, the Employee Retention Credit provided under the Canada Emergency Wage Subsidy was $0.6 million less for the three months ended December 31, 2021, compared with the three months ended December 31, 2020. Likewise, there were net gainsCompany closed on the salessale of assets aggregating $1.0 million for the three months ended December 31, 2021, compared with net losses on the salesexcess land in Montreal which resulted in a gain of assets aggregating $0.2 million for the three months ended December 31, 2020.$33.9 million.

For the three months ended December 31, 2021, AFC2023, the Finance segment revenue increased $13.8decreased $4.1 million, or 21%4%, to $79.2$96.6 million, compared with $65.4$100.7 million for the three months ended December 31, 2020.2022. The increasedecrease in revenue was primarily the result of a 25%an increase in revenue per loan transaction andthe provision for credit losses, partially offset by a 5%1% increase in loan transactions, partially offset by the elimination of Warranty contract revenue as a result of the sale of PWI in December 2020.transactions.

Revenue per loan transaction, which includes both loans paid off and loans curtailed, increased $46,decreased $14, or 25%5%, primarily as a result of an increase in loan values,net credit losses, a decrease in loan values and a decrease in average portfolio duration, partially offset by an increase in interest yields driven by an increase in prime rates (Federal Reserve raised interest rates 100 basis points since December 31, 2022), and an increase in other fee income per unit.

The provision for credit losses for the three months ended December 31, 2021, an increase in floorplan fee and other fee income per unit and an increase in average portfolio duration.

For the three months ended December 31, 2021,2023, gross profit for the AFCFinance segment increased $16.4decreased $4.7 million, or 34%6%, to $64.8$80.3 million, or 81.8%83.1% of revenue, compared with $48.4$85.0 million, or 74.0%84.4% of revenue, for the three months ended December 31, 2020. Excluding PWI for the three months ended December 31, 2020, AFC's gross profit as a percent of revenue was 78.7%.2022. The increasedecrease in gross profit as a percent of revenue was primarily the result of a 15%4% decrease in revenue. In addition, there was a 4% increase in cost of services. The decreaseincrease in cost of services of $0.6 million was primarily the result of a decrease in PWI expenses of $4.1 million, partially offset by increases in compensation expense of $0.5 million, incentive-based compensation of $0.4 million, professional fees of $0.2 million and travel expenses of $0.2 million, partially offset by a decrease in other miscellaneous expenses aggregating $0.6$0.2 million.

Selling, general and administrative expenses at AFC were $9.1for the Finance segment increased $1.9 million, or 19%, to $12.1 million for both the three months ended December 31, 20212023, compared with $10.2 million for the three months ended December 31, 2022 primarily as a result of increases in stock-based compensation of $1.9 million, postage expense of $1.1 million and 2020. Fluctuations between the periods included an increaseinformation technology costs of $0.2 million, partially offset by decreases in compensation expense of $1.0$0.2 million, an increase inincentive-based compensation of $0.2 million and other miscellaneous expenses aggregating $0.1 million, a decrease in incentive-based compensation of $0.6 million and a decrease in PWI expenses of $0.5$0.9 million.

We believe that the significant indicators of liquidity for our business are cash on hand, cash flow from operations, working capital and amounts available under our Revolving Credit Facility. Our principal sources of liquidity consist of cash generated by operations and borrowings under our Revolving Credit Facility.

A substantial amount of our working capital is generated from the payments received for services provided. The majority of our working capital needs are short-term in nature, usually less than a week in duration. Most of the financial institutions place a temporary hold on the availability of the funds deposited that generally can range up to two business days, resulting in cash in our accounts and on our balance sheet that is unavailable for use until it is made available by the various financial institutions. There are outstanding checks (book overdrafts) to sellers and vendors included in current liabilities. Because a portion of these outstanding checks for operations in the U.S. are drawn upon bank accounts at financial institutions other than the financial institutions that hold the cash, we cannot offset all the cash and the outstanding checks on our balance sheet. Changes in working capital vary from quarter-to-quarter as a result of the timing of collections and disbursements of funds to consignors from auctionsmarketplace sales held near period end.

Approximately $84.7$31.6 million of available cash was held by our foreign subsidiaries at December 31, 2021.2023. If funds held by our foreign subsidiaries were to be repatriated, we expectstate and local income tax expense and withholding tax expense would need to be recognized, net of any applicable taxes to be minimal.foreign tax credits.

AFC offers short-term inventory-secured financing, also known as floorplan financing, to independent used vehicle dealers.dealer customers. Financing is primarily provided for terms of 30 to 90 days. AFC principally generates its funding through the sale of its receivables. The receivables sold pursuant to the securitization agreements are accounted for as secured borrowings. For further discussion of AFC's securitization arrangements, see "Securitization Facilities."

On May 29, 2020,June 23, 2023, we entered into the Fourth Amendment to the Credit Agreement, (the "Fourth Amendment"). The Fourth Amendment (1) provided a financial covenant “holiday” throughwhich replaces the Previous Credit Agreement, and including June 30, 2021; (2) for purposes of determining compliance with the financial covenant for the fiscal quarters ending September 30, 2021 and December 31, 2021, permitted the Consolidated EBITDA for the applicable test period to be calculated on an annualized basis, excluding results prior to April 1, 2021; (3) established a monthly minimum liquidity covenant of $225.0 million through and including September 30, 2021; and (4) effectively placed certain limitations on the ability to make certain investments, junior debt repayments, acquisitions and restricted payments and to incur additional secured indebtedness until October 1, 2021.

The obligations of the Company under the Revolving Credit Facility are guaranteed by certain of our domestic subsidiaries (the "Subsidiary Guarantors") and are secured by substantially all of the assets of the Company and the Subsidiary Guarantors, including but not limited to: (a) pledges of and first priority security interests in 100% of the equity interests of certain of the Company's and the Subsidiary Guarantors' domestic subsidiaries and 65% of the equity interests of certain of the Company's and the Subsidiary Guarantors' first tier foreign subsidiaries and (b) first priority security interests in substantially all other tangible and intangible assets of the Company and each Subsidiary Guarantor, subject to certain exceptions.

AFC sells the majority of its U.S. dollar denominated finance receivables on a revolving basis and without recourse to AFC Funding Corporation. A securitization agreement allows for the revolving sale by AFC Funding Corporation to a group of bank purchasers of undivided interests in certain finance receivables subject to committed liquidity. The agreement expires on January 31, 2024. In December 2021,2026. AFC Funding Corporation'sCorporation had committed liquidity was increased from $1.60 billion to $1.70of $2.0 billion for U.S. finance receivables.

We also have an agreement for the securitization of AFCI's receivables.receivables, which expires on January 31, 2026. AFCI's committed facility is provided through a third-party conduit (separate from the U.S. facility) and was increased from C$175300 million to C$225 million onat December 31, 2021.2023. In September 2020,March 2023, AFCI entered into the Fifth Amended and Restated Receivables Purchase Agreement (the "Canadian Receivables Purchase Agreement"). The Canadian Receivables Purchase Agreement extendedincreased AFCI's committed liquidity from C$225 million to C$300 million and the facility's maturity date from January 28, 2022 toremains January 31, 2024.2026. In addition, provisions designed to provide additional credit enhancement to the purchasers upon the occurrence of the certain events related to the payment rate and net spread on the receivables portfolio were added, certain portfolio performance metrics that could result in a requirement to increase the cash reserve or constitute a termination event were amended to the benefit of AFC Funding and provisions providing for a mechanism for determining an alternative raterates of interest were added. We capitalized approximately $1.0$0.6 million of costs in connection with the Canadian Receivables Purchase Agreement. The receivables sold pursuant to both the U.S. and Canadian securitization agreements are accounted for as secured borrowings.