Document and Entity Information
Document and Entity Information Cover - $ / shares | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 31, 2023 | Dec. 31, 2022 | |
Cover [Abstract] | |||
Document type | 10-Q | ||
Document quarterly report | true | ||
Document period end date | Jun. 30, 2023 | ||
Document transition report | false | ||
Commission file number | 001-34568 | ||
Entity registrant name | OPENLANE, Inc. | ||
Entity incorporation state | DE | ||
Entity tax identification number | 20-8744739 | ||
Entity address, address line one | 11299 N. Illinois Street | ||
Entity address, city | Carmel | ||
Entity address, state | IN | ||
Entity address, postal zip code | 46032 | ||
City area code | 800 | ||
Local phone number | 923-3725 | ||
Entity Information, Former Legal or Registered Name | KAR Auction Services, Inc. | ||
Title of 12(b) security | Common Stock, par value $0.01 per share | ||
Trading symbol | KAR | ||
Security exchange name | NYSE | ||
Entity current reporting status | Yes | ||
Entity interactive data current | Yes | ||
Entity filer category | Large Accelerated Filer | ||
Entity small business | false | ||
Entity emerging growth company | false | ||
Entity shell company | false | ||
Entity common stock, shares outstanding | 109,454,886 | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Entity central index key | 0001395942 | ||
Current fiscal year end date | --12-31 | ||
Document fiscal year focus | 2023 | ||
Document fiscal period focus | Q2 | ||
Amendment flag | false |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating revenues | ||||
Auction fees | $ 103.3 | $ 99.2 | $ 203.2 | $ 200.6 |
Service revenue | 155.7 | 147.3 | 321.3 | 284.8 |
Purchased vehicle sales | 60.4 | 45.8 | 115.9 | 92.1 |
Finance-related revenue | 97.5 | 91.9 | 197.1 | 176.1 |
Total operating revenues | 416.9 | 384.2 | 837.5 | 753.6 |
Operating expenses | ||||
Cost of services (exclusive of depreciation and amortization) | 222.6 | 211.9 | 446.8 | 422.7 |
Selling, general and administrative | 111.2 | 124.1 | 219.2 | 243 |
Depreciation and amortization | 26.8 | 25.9 | 49.8 | 51.9 |
Goodwill and other intangibles impairment | 250.8 | 0 | 250.8 | 0 |
Total operating expenses | 611.4 | 361.9 | 966.6 | 717.6 |
Operating profit (loss) | (194.5) | 22.3 | (129.1) | 36 |
Interest expense | 38.8 | 25.9 | 77.1 | 51.5 |
Other (income) expense, net | (21.3) | 4 | (14.2) | 5.2 |
Loss on Extinguishment of Debt | 1.1 | 7.7 | 1.1 | 7.7 |
Income (loss) from continuing operations before income taxes | (213.1) | (15.3) | (193.1) | (28.4) |
Income taxes | (19.3) | (9.9) | (12) | (14.6) |
Income (loss) from continuing operations | (193.8) | (5.4) | (181.1) | (13.8) |
Income from discontinued operations, net of income taxes | 0 | 215.6 | 0 | 223.7 |
Net income (loss) | $ (193.8) | $ 210.2 | $ (181.1) | $ 209.9 |
Net income (loss) per share - basic | ||||
Income (loss) from continuing operations | $ (1.87) | $ (0.10) | $ (1.86) | $ (0.23) |
Income from discontinued operations | 0 | 1.38 | 0 | 1.44 |
Net income (loss) | (1.87) | 1.28 | (1.86) | 1.21 |
Net income (loss) per share - diluted | ||||
Income (loss) from continuing operations | (1.87) | (0.10) | (1.86) | (0.23) |
Income from discontinued operations | 0 | 1.38 | 0 | 1.44 |
Net income (loss) | $ (1.87) | $ 1.28 | $ (1.86) | $ 1.21 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Net income (loss) | $ (193.8) | $ 210.2 | $ (181.1) | $ 209.9 |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation gain (loss) | 9 | (15.4) | 11.4 | (14.3) |
Unrealized gain (loss) on interest rate derivatives, net of tax | 0 | (3.4) | 0 | 5.7 |
Total other comprehensive income (loss), net of tax | 9 | (18.8) | 11.4 | (8.6) |
Comprehensive income (loss) | $ (184.8) | $ 191.4 | $ (169.7) | $ 201.3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 242.4 | $ 225.7 |
Restricted cash | 30.1 | 52 |
Trade receivables, net of allowances of $19.6 and $15.8 | 314.7 | 270.7 |
Finance receivables, net of allowances of $21.0 and $21.5 | 2,397.3 | 2,395.1 |
Other current assets | 99.6 | 78.9 |
Total current assets | 3,084.1 | 3,022.4 |
Other assets | ||
Goodwill | 1,243.6 | 1,464.5 |
Customer relationships, net of accumulated amortization of $429.4 and $417.3 | 126.2 | 135.9 |
Other intangible assets, net of accumulated amortization of $439.4 and $406.0 | 196.3 | 231.3 |
Operating lease right-of-use assets | 79.8 | 84.8 |
Property and equipment, net of accumulated depreciation of $188.8 and $197.7 | 118.9 | 123.6 |
Other assets | 48.5 | 57.3 |
Total other assets | 1,813.3 | 2,097.4 |
Total assets | 4,897.4 | 5,119.8 |
Current liabilities | ||
Accounts payable | 625.7 | 551.2 |
Accrued employee benefits and compensation expenses | 34.4 | 31.9 |
Accrued interest | 8 | 7.8 |
Other accrued expenses | 70.5 | 79.1 |
Income taxes payable | 2.3 | 6.9 |
Obligations collateralized by finance receivables | 1,717.4 | 1,677.6 |
Current maturities of long-term debt | 187.9 | 288.7 |
Total current liabilities | 2,646.2 | 2,643.2 |
Non-current liabilities | ||
Long-term debt | 201 | 205.3 |
Deferred income tax liabilities | 22 | 54 |
Operating lease liabilities | 74.9 | 79.7 |
Other liabilities | 6.4 | 6.8 |
Total non-current liabilities | 304.3 | 345.8 |
Commitments and contingencies (Note 11) | ||
Temporary equity | ||
Series A convertible preferred stock | 612.5 | 612.5 |
Stockholders' equity | ||
Common stock, $0.01 par value: Authorized shares: 400,000,000; Issued and outstanding shares: June 30, 2023: 109,434,886 December 31, 2022: 108,914,678 | 1.1 | 1.1 |
Additional paid-in capital | 751.8 | 743.8 |
Retained earnings | 619.6 | 822.9 |
Accumulated other comprehensive loss | (38.1) | (49.5) |
Total stockholders' equity | 1,334.4 | 1,518.3 |
Total liabilities, temporary equity and stockholders' equity | $ 4,897.4 | $ 5,119.8 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance at Dec. 31, 2021 | $ 1,513 | $ 1.2 | $ 910.8 | $ 625.7 | $ (24.7) |
Beginning balance (in shares) at Dec. 31, 2021 | 121,200,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 209.9 | 209.9 | |||
Other comprehensive income (loss) | (8.6) | (8.6) | |||
Issuance of common stock under stock plans | 0.9 | 0.9 | |||
Issuance of common stock under stock plans (in shares) | 500,000 | ||||
Surrender of RSUs for taxes | (2.5) | (2.5) | |||
Surrender of RSUs for taxes (in shares) | (200,000) | ||||
Stock-based compensation expense | 20 | 20 | |||
Repurchase and retirement of common stock | (82.1) | (82.1) | |||
Repurchased and retirement of common stock (in shares) | (5,400,000) | ||||
Dividends earned under stock plans | (0.1) | 0.1 | (0.2) | ||
Dividends on preferred stock paid-in-kind | (21.6) | (21.6) | |||
Ending balance at Jun. 30, 2022 | 1,628.9 | $ 1.2 | 847.2 | 813.8 | (33.3) |
Ending balance (in shares) at Jun. 30, 2022 | 116,100,000 | ||||
Beginning balance at Mar. 31, 2022 | 1,515.9 | $ 1.2 | 914.6 | 614.6 | (14.5) |
Beginning balance (in shares) at Mar. 31, 2022 | 121,500,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 210.2 | 210.2 | |||
Other comprehensive income (loss) | (18.8) | (18.8) | |||
Issuance of common stock under stock plans | 0.3 | 0.3 | |||
Stock-based compensation expense | 14.4 | 14.4 | |||
Repurchase and retirement of common stock | (82.1) | (82.1) | |||
Repurchased and retirement of common stock (in shares) | (5,400,000) | ||||
Dividends earned under stock plans | (0.1) | (0.1) | |||
Dividends on preferred stock paid-in-kind | (10.9) | (10.9) | |||
Ending balance at Jun. 30, 2022 | 1,628.9 | $ 1.2 | 847.2 | 813.8 | (33.3) |
Ending balance (in shares) at Jun. 30, 2022 | 116,100,000 | ||||
Beginning balance at Dec. 31, 2022 | $ 1,518.3 | $ 1.1 | 743.8 | 822.9 | (49.5) |
Beginning balance (in shares) at Dec. 31, 2022 | 108,914,678 | 108,900,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | $ (181.1) | (181.1) | |||
Other comprehensive income (loss) | 11.4 | 11.4 | |||
Issuance of common stock under stock plans | 1.6 | 1.6 | |||
Issuance of common stock under stock plans (in shares) | 700,000 | ||||
Surrender of RSUs for taxes | (2.5) | (2.5) | |||
Surrender of RSUs for taxes (in shares) | (200,000) | ||||
Stock-based compensation expense | 8.9 | 8.9 | |||
Dividends on preferred stock paid in cash | (22.2) | (22.2) | |||
Ending balance at Jun. 30, 2023 | $ 1,334.4 | $ 1.1 | 751.8 | 619.6 | (38.1) |
Ending balance (in shares) at Jun. 30, 2023 | 109,434,886 | 109,400,000 | |||
Beginning balance at Mar. 31, 2023 | $ 1,525.9 | $ 1.1 | 747.4 | 824.5 | (47.1) |
Beginning balance (in shares) at Mar. 31, 2023 | 109,200,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | (193.8) | (193.8) | |||
Other comprehensive income (loss) | 9 | 9 | |||
Issuance of common stock under stock plans | 0.3 | 0.3 | |||
Issuance of common stock under stock plans (in shares) | 300,000 | ||||
Surrender of RSUs for taxes | (1.2) | (1.2) | |||
Surrender of RSUs for taxes (in shares) | (100,000) | ||||
Stock-based compensation expense | 5.3 | 5.3 | |||
Dividends on preferred stock paid in cash | (11.1) | (11.1) | |||
Ending balance at Jun. 30, 2023 | $ 1,334.4 | $ 1.1 | $ 751.8 | $ 619.6 | $ (38.1) |
Ending balance (in shares) at Jun. 30, 2023 | 109,434,886 | 109,400,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Operating activities | ||
Net income (loss) | $ (181.1) | $ 209.9 |
Net income from discontinued operations | 0 | (223.7) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 49.8 | 51.9 |
Provision for credit losses | 28.4 | 5.5 |
Deferred income taxes | (29.1) | (2.7) |
Amortization of debt issuance costs | 4.4 | 6 |
Stock-based compensation | 8.9 | 19.3 |
Contingent consideration adjustment | 1.3 | 0 |
Net change in unrealized (gain) loss on investment securities | (0.1) | 6.2 |
Investment and note receivable impairment | 11 | 0 |
Goodwill and other intangibles impairment | 250.8 | 0 |
Loss on Extinguishment of Debt | 1.1 | 7.7 |
Other non-cash, net | 0.8 | 0.2 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Trade receivables and other assets | (76.2) | (19.1) |
Accounts payable and accrued expenses | 75.2 | (64.3) |
Payments of contingent consideration in excess of acquisition-date fair value | (2.6) | (26.1) |
Net cash provided by (used by) operating activities - continuing operations | 142.6 | (29.2) |
Net cash used by operating activities - discontinued operations | (0.1) | (310.1) |
Investing activities | ||
Net increase in finance receivables held for investment | (24.4) | (156.4) |
Purchases of property, equipment and computer software | (26.9) | (31.5) |
Investments in securities | (0.6) | (5.6) |
Proceeds from sale of investments | 0 | 0.3 |
Proceeds from the sale of property and equipment | 0.3 | 0 |
Net cash used by investing activities - continuing operations | (51.6) | (193.2) |
Net cash provided by investing activities - discontinued operations | 7 | 2,066.4 |
Financing activities | ||
Net (decrease) increase in book overdrafts | (2.2) | 3.7 |
Net increase in borrowings from lines of credit | 39.2 | 4.1 |
Net increase in obligations collateralized by finance receivables | 33.1 | 88.5 |
Payments for debt issuance costs/amendments | (5.3) | 0 |
Payments on long-term debt | 0 | (928.6) |
Payment for early extinguishment of debt | (140.1) | 0 |
Payments on finance leases | (1.1) | (2.4) |
Payments for Contingent Consideration and deferred Acquisition Costs - financing activities | (12.4) | (3.5) |
Issuance of common stock under stock plans | 1.6 | 0.9 |
Tax withholding payments for vested RSUs | (2.5) | (2.5) |
Repurchase and retirement of common stock | 0 | (82.1) |
Dividends paid on Series A Preferred Stock | (22.2) | 0 |
Net cash used by financing activities - continuing operations | (111.9) | (921.9) |
Net cash provided by financing activities - discontinued operations | 0 | 10.8 |
Net change in cash balances of discontinued operations | 0 | 12.4 |
Effect of exchange rate changes on cash | 8.8 | (6.1) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (5.2) | 629.1 |
Cash, cash equivalents and restricted cash at beginning of period | 277.7 | 203.4 |
Cash paid for interest, net of proceeds from interest rate derivatives | 72.8 | 45 |
Cash paid for taxes, net of refunds | 21.4 | 243.2 |
Cash, cash equivalents and restricted cash at end of period | $ 272.5 | $ 832.5 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Trade receivable allowances | $ 19.6 | $ 15.8 |
Finance receivables allowances | 21 | 21.5 |
Customer relationships accumulated amortization | 429.4 | 417.3 |
Other Intangible Assets Accumulated Amortization | 439.4 | 406 |
Property, Plant and Equipment Accumulated Depreciation | $ 188.8 | $ 197.7 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 |
Common Stock, Shares, Outstanding | 109,434,886 | 108,914,678 |
Common Stock, Shares, Issued | 109,434,886 | 108,914,678 |
Basis of Presentation and Natur
Basis of Presentation and Nature of Operations | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Nature of Operations | Basis of Presentation and Nature of Operations Defined Terms Unless otherwise indicated or unless the context otherwise requires, the following terms used herein shall have the following meanings: • "we," "us," "our," "OPENLANE" and "the Company" refer, collectively, to OPENLANE, Inc. (f/k/a KAR Auction Services, Inc.) and its subsidiaries, unless the context requires otherwise; • "ADESA" or "ADESA Auctions" refer, collectively, to ADESA, Inc., a wholly-owned subsidiary of OPENLANE, and ADESA, Inc.'s subsidiaries, including OPENLANE US, Inc. (together with OPENLANE US, Inc.'s subsidiaries, "OPENLANE US"), BacklotCars, Inc. ("BacklotCars"), CARWAVE LLC ("CARWAVE"), Nth Gen Software Inc. ("TradeRev"), ADESA Remarketing Limited ("ADESA U.K.") and ADESA Europe NV and its subsidiaries ("ADESA Europe"); • "ADESA U.S. physical auction business," "ADESA U.S. physical auctions" and "ADESA U.S." refer to the auction sales, operations and staff at ADESA’s U.S. vehicle logistics centers, which were sold to Carvana Group, LLC (together with Carvana Co. and its subsidiaries, "Carvana") in May 2022; • "AFC" refers, collectively, to Automotive Finance Corporation, a wholly-owned subsidiary of ADESA, and Automotive Finance Corporation's subsidiaries and other related entities; • "Credit Agreement" refers to the Credit Agreement, dated June 23, 2023 (as amended, amended and restated, modified or supplemented from time to time), among the Company, as the borrower, the several banks and other financial institutions or entities from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent. The Credit Agreement provides for a $325 million senior secured revolving credit facility due June 23, 2028 (the "Revolving Credit Facility"); • "Previous Credit Agreement" refers to the Amended and Restated Credit Agreement, dated March 11, 2014 (as amended, amended and restated, modified or supplemented prior to the date of the Credit Agreement), among the Company, as the borrower, the several banks and other financial institutions or entities party thereto and JPMorgan Chase Bank N.A., as administrative agent. The Previous Credit Agreement provided for a $950 million senior secured term loan B-6 facility due September 19, 2026 ("Term Loan B-6"), of which the outstanding amount was fully repaid in May 2022, and a $325 million senior secured revolving credit facility due September 19, 2024 (the "Previous Revolving Credit Facility"), which was replaced by the Revolving Credit Facility in June 2023; • "IAA" refers, collectively, to Insurance Auto Auctions, Inc., formerly a wholly-owned subsidiary of OPENLANE, and Insurance Auto Auctions, Inc.'s subsidiaries and other related entities; • "OPENLANE, Inc." refers to the Company and not to its subsidiaries; • "Senior notes" refers to the 5.125% senior notes due 2025 ($210 million aggregate principal was outstanding at June 30, 2023); and • "Series A Preferred Stock" refers to the Series A Convertible Preferred Stock, par value $0.01 per share (634,305 shares of Series A Preferred Stock were outstanding at June 30, 2023 and December 31, 2022. Business and Nature of Operations As announced in May 2023, over the next several months, OPENLANE is becoming the go-to-market brand for the Company's digital marketplaces throughout the U.S., Canada and Europe. OPENLANE is a leading digital marketplace for used vehicles, connecting sellers and buyers across North America and Europe to facilitate fast, easy and transparent transactions. Our portfolio of integrated technology, data analytics, financing, logistics, reconditioning and other remarketing solutions, combined with our vehicle logistics centers in Canada, help advance our purpose: to make wholesale easy so our customers can be more successful. As of June 30, 2023, the Marketplace segment serves a domestic and international customer base through digital marketplaces and 14 vehicle logistics center locations across Canada. For our commercial sellers, our software platform supports private label digital remarketing sites and provides comprehensive solutions to our automobile manufacturer, captive finance company and other commercial customers. For dealer customers, the Company also operates BacklotCars and OPENLANE Canada digital marketplace platforms that facilitate real-time transactions between automotive dealers, coast-to-coast in the United States and Canada. The CARWAVE digital auction platform was integrated with BacklotCars in the fourth quarter of 2022, adding additional features and functionality to the BacklotCars marketplace, including a live auction format that allows dealers to sell and source inventory in a fast-paced, head-to-head bidding environment. In Europe, our digital marketplaces also include ADESA U.K. and ADESA Europe, serving customers in the United Kingdom and Continental Europe through a consolidated online wholesale used vehicle platform. Remarketing services include a variety of activities designed to facilitate the transfer of used vehicles between sellers and buyers throughout the vehicle life cycle. We facilitate the exchange of these vehicles through our marketplaces, which aligns sellers and buyers. As an agent for customers, the Company generally does not take title to or ownership of vehicles sold through our marketplaces. Generally, fees are earned from the seller and buyer on each successful marketplace transaction in addition to fees earned for ancillary services. 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. We also provide services such as inbound and outbound transportation logistics, reconditioning, vehicle inspection and certification, titling, administrative and collateral recovery services. We are able to serve the diverse and multi-faceted needs of our customers through the wide range of services offered. AFC is a leading provider of floorplan financing primarily to independent used vehicle dealers and this financing is provided through approximately 100 locations throughout the United States and Canada as of June 30, 2023. Floorplan financing supports independent used vehicle dealers in North America who purchase vehicles at BacklotCars (including CARWAVE), OPENLANE Canada (ADESA and TradeRev), and other used vehicle and salvage auctions. In addition, AFC provides financing for dealer inventory purchased directly from wholesalers, other dealers and directly from consumers, as well as providing liquidity for customer trade-ins which encompasses settling lien holder payoffs. AFC also provides title services for their customers. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for annual financial statements. Operating results for interim periods are not necessarily indicative of results that may be expected for the year as a whole. In the opinion of management, the consolidated financial statements reflect all adjustments, generally consisting of normal recurring accruals, necessary for a fair statement of our results of operations, cash flows and financial position for the periods presented. These consolidated financial statements and condensed notes to consolidated financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission on March 9, 2023. The 2022 year-end consolidated balance sheet data included in this Form 10-Q was derived from the audited financial statements referenced above and does not include all disclosures required by U.S. GAAP for annual financial statements. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates based in part on assumptions about current, and for some estimates, future economic and market conditions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period. Although the current estimates contemplate current conditions and expected future changes, as appropriate, it is reasonably possible that future conditions could differ from these estimates, which could materially affect our results of operations and financial position. Among other effects, such changes could result in future impairments of goodwill, intangible assets and long-lived assets, incremental losses on finance receivables, additional allowances on accounts receivable and deferred tax assets and changes in litigation and other loss contingencies. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisition Contingent Payment Related to Prior Year Acquisition Some of the purchase agreements related to prior year acquisitions have included additional payments over a specified period, including contingent payments based on certain conditions and performance. In the second quarter of 2023, we made a contingent consideration payment related to the Auction Frontier acquisition of $15.0 million. For the three months ended June 30, 2023, adjustments to estimated contingent consideration associated with the Auction Frontier acquisition increased contingent consideration and impacted “Other (income) expense, net” by approximately $1.3 million. |
Sale of ADESA U.S. Physical Auc
Sale of ADESA U.S. Physical Auction Business and Discontinued Operations | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of ADESA U.S. Physical Auction Business and Discontinued Operations | Sale of ADESA U.S. Physical Auction Business and Discontinued Operations In February 2022, the Company announced that it had entered into a definitive agreement with Carvana, pursuant to which Carvana would acquire the ADESA U.S. physical auction business from the Company (the "Transaction"). The Transaction was completed in May 2022 for approximately $2.2 billion in cash and included all auction sales, operations and staff at ADESA’s U.S. vehicle logistics centers and use of the ADESA.com marketplace in the U.S. The net proceeds received in connection with the Transaction were included in "Net cash provided by investing activities - discontinued operations" in the consolidated statement of cash flow for the year ended December 31, 2022. In connection with the Transaction, the Company and Carvana entered into various agreements to provide a framework for their relationship after the Transaction, including a transition services agreement for a transitional period and a commercial agreement for a term of 7 years that provides for platform and other fees for services rendered. For the six months ended June 30, 2023, the Company has received a net cash inflow from the commercial agreement and transition services agreement of approximately $57.0 million, which includes the transportation services noted below. The Company provided transportation services of $21.0 million and $42.9 million to the ADESA U.S. physical auctions for the three and six months ended June 30, 2023, respectively, and $18.4 million and $36.1 million for the three and six months ended June 30, 2022, respectively. The financial results of the ADESA U.S. physical auction business have been accounted for as discontinued operations for all periods presented. The business was formerly included in the Company’s Marketplace reportable segment. Goodwill was allocated to the ADESA U.S. physical auctions based on relative fair value. The Transaction resulted in a pretax gain on disposal of approximately $521.8 million for the year ended December 31, 2022. The effective tax rate for discontinued operations was approximately 60% primarily due to non-deductible goodwill recognized in the Transaction. The following table presents the results of operations for the ADESA U.S. physical auction business that have been reclassified to discontinued operations for all periods presented (in millions) : Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Operating revenues $ — $ 85.9 $ — $ 305.9 Operating expenses Cost of services (exclusive of depreciation and amortization) — 66.3 — 224.9 Selling, general and administrative — 24.9 — 68.8 Depreciation and amortization — — — 11.2 Total operating expenses — 91.2 — 304.9 Operating profit (loss) — (5.3) — 1.0 Interest expense — — — 0.1 Other (income) expense, net — (2.3) — (8.4) Income (loss) from discontinued operations before gain on disposal and income taxes — (3.0) — 9.3 Pretax gain on disposal of discontinued operations — 533.7 — 533.7 Income taxes — 315.1 — 319.3 Income (loss) from discontinued operations $ — $ 215.6 $ — $ 223.7 |
Stock and Stock-Based Compensat
Stock and Stock-Based Compensation Plans | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock and Stock-Based Compensation Plans | Stock and Stock-Based Compensation Plans The KAR Auction Services, Inc. Amended and Restated 2009 Omnibus Stock and Incentive Plan ("Omnibus Plan") is intended to provide equity and/or cash-based awards to our executive officers and key employees. Our stock-based compensation expense includes expense associated with service-based options ("service options"), market-based options ("market options"), performance-based restricted stock units ("PRSUs") and service-based restricted stock units ("RSUs"). We have determined that the service options, market options, PRSUs and RSUs should be classified as equity awards. The following table summarizes our stock-based compensation expense by type of award (in millions) : Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 PRSUs $ 2.0 $ 11.9 $ 1.9 $ 13.8 RSUs 2.4 1.1 5.2 2.5 Service options 0.1 0.2 0.3 0.4 Market options 0.8 1.1 1.5 2.6 Total stock-based compensation expense $ 5.3 $ 14.3 $ 8.9 $ 19.3 PRSUs In the first six months of 2023, we granted a target amount of approximately 0.5 million PRSUs to certain executive officers of the Company. Three quarters of the PRSUs vest if and to the extent that the Company's three-year cumulative Adjusted EBITDA ("Adjusted EBITDA PRSUs") attains certain specified goals. The other one quarter of the PRSUs vest if and to the extent that the Company's total shareholder return relative to that of companies within the S&P SmallCap 600 ("TSR PRSUs") exceeds certain levels over the three-year period ending December 31, 2025. The weighted average grant date fair value of the Adjusted EBITDA PRSUs was $14.22 per share, which was determined using the closing price of the Company's common stock on the dates of grant. The weighted average grant date fair value of the TSR PRSUs was $21.58 per share and was developed with a Monte Carlo simulation using a multivariate Geometric Brownian Motion. RSUs In the first six months of 2023, approximately 0.6 million RSUs were granted to certain management members of the Company. The RSUs are contingent upon continued employment and generally vest in three equal annual installments. The fair value of RSUs is the value of the Company's common stock at the date of grant and the weighted average grant date fair value of the RSUs was $14.17 per share. Service Options In the second quarter of 2023, we granted approximately 0.1 million service options with a weighted average exercise price of $14.83 per share to a new executive officer of the Company. The service options have a life of ten years and vest in equal annual installments on each of the first four anniversaries of the grant date. The weighted average fair value of the service options granted in the second quarter of 2023 was $7.14 per share. The fair value of the service options granted was estimated on the date of grant using the Black-Scholes option pricing model with an expected life of 6.25 years, an expected volatility of 44.31%, an expected dividend yield of 0.0% and a weighted average risk-free interest rate of 3.38%. Market Options In the second quarter of 2023, we granted approximately 0.2 million market options with a weighted average exercise price of $14.83 per share to a new executive officer of the Company. The market options have a life of ten years and have a service component along with an additional market component. The market options become eligible to vest and become exercisable in equal increments, each upon the later to occur of (i) the first four anniversaries of the grant date, respectively, and (ii) for each respective 25% increment, the attainment of the Company's closing stock price at or above $5, $10, $15 and $20 over the exercise price, for 20 consecutive trading days. The weighted average fair value of the market options granted in the second quarter of 2023 was $6.91 per share. The fair value and requisite service period of the market options was developed with a Monte Carlo simulation using a multivariate Geometric Brownian Motion with a drift equal to the risk-free rate. Share Repurchase Program |
Net Income (Loss) from Continui
Net Income (Loss) from Continuing Operations Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) from Continuing Operations Per Share | Income (Loss) from Continuing Operations Per Share The following table sets forth the computation of income (loss) from continuing operations per share (in millions except per share amounts) : Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income (loss) from continuing operations $ (193.8) $ (5.4) $ (181.1) $ (13.8) Series A Preferred Stock dividends (11.1) (10.9) (22.2) (21.6) Income from continuing operations attributable to participating securities — 3.8 — 8.0 Income (loss) from continuing operations attributable to common stockholders $ (204.9) $ (12.5) $ (203.3) $ (27.4) Weighted average common shares outstanding 109.6 119.5 109.4 120.4 Effect of dilutive stock options and restricted stock awards — — — — Weighted average common shares outstanding and potential common shares 109.6 119.5 109.4 120.4 Income (loss) from continuing operations per share Basic $ (1.87) $ (0.10) $ (1.86) $ (0.23) Diluted $ (1.87) $ (0.10) $ (1.86) $ (0.23) The Company includes participating securities (Series A Preferred Stock) in the computation of income from continuing operations per share pursuant to the two-class method. The two-class method of calculating income from continuing operations per share is an allocation method that calculates earnings per share for common stock and participating securities. Under the two-class method, total dividends provided to the holders of the Series A Preferred Stock and undistributed earnings allocated to participating securities are subtracted from income from continuing operations in determining income attributable to common stockholders. The effect of stock options and restricted stock on income from continuing operations per share-diluted is determined through the application of the treasury stock method, whereby net proceeds received by the Company based on assumed exercises are hypothetically used to repurchase our common stock at the average market price during the period. As a result of the spin-off, there are IAA employees who hold OPENLANE equity awards included in the calculation. Stock options that would have an anti-dilutive effect on income from continuing operations per diluted share, unexercisable market options and PRSUs subject to |
Finance Receivables and Obligat
Finance Receivables and Obligations Collateralized by Finance Receivables | 6 Months Ended |
Jun. 30, 2023 | |
Financing Receivable, after Allowance for Credit Loss, Current [Abstract] | |
Finance Receivables and Obligations Collateralized by Finance Receivables | Finance Receivables and Obligations Collateralized by Finance Receivables 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. The agreement expires on January 31, 2026. AFC Funding Corporation had committed liquidity of $2.0 billion for U.S. finance receivables at June 30, 2023. We also have an agreement for the securitization of Automotive Finance Canada Inc.'s ("AFCI") receivables. AFCI's committed facility is provided through a third-party conduit (separate from the U.S. facility) and was C$300 million on June 30, 2023. In March 2023, AFCI entered into the Receivables Purchase Agreement (the "Canadian Receivables Purchase Agreement"). The Canadian Receivables Purchase Agreement increased AFCI's committed liquidity from C$225 million to C$300 million and the facility's maturity date remains January 31, 2026. In addition, provisions providing a mechanism for determining alternative rates of interest were added. We capitalized approximately $0.5 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. The following tables present quantitative information about delinquencies, credit loss charge-offs less recoveries ("net credit losses") and components of securitized financial assets and other related assets managed. For purposes of this illustration, delinquent receivables are defined as receivables 31 days or more past due. June 30, 2023 Net Credit Losses Net Credit Losses Total Amount of: (in millions) Receivables Receivables Floorplan receivables $ 2,414.7 $ 14.4 $ 12.2 $ 24.7 Other loans 3.6 — — — Total receivables managed $ 2,418.3 $ 14.4 $ 12.2 $ 24.7 December 31, 2022 Net Credit Losses Net Credit Losses Total Amount of: (in millions) Receivables Receivables Floorplan receivables $ 2,409.9 $ 17.5 $ 1.4 $ 2.8 Other loans 6.7 — — — Total receivables managed $ 2,416.6 $ 17.5 $ 1.4 $ 2.8 The following is a summary of the changes in the allowance for credit losses related to finance receivables ( in millions ): June 30, June 30, Allowance for Credit Losses Balance at December 31 $ 21.5 $ 23.0 Provision for credit losses 24.2 1.3 Recoveries 4.2 4.5 Less charge-offs (28.9) (7.3) Balance at end of period $ 21.0 $ 21.5 As of June 30, 2023 and December 31, 2022, $2,416.7 million and $2,396.6 million, respectively, of finance receivables and a cash reserve of 1 or 3 percent of the obligations collateralized by finance receivables served as security for the obligations collateralized by finance receivables. The amount of the cash reserve depends on circumstances which are set forth in the securitization agreements. Obligations collateralized by finance receivables consisted of the following: June 30, December 31, 2022 Obligations collateralized by finance receivables, gross $ 1,734.1 $ 1,697.0 Unamortized securitization issuance costs (16.7) (19.4) Obligations collateralized by finance receivables $ 1,717.4 $ 1,677.6 Proceeds from the revolving sale of receivables to the bank facilities are used to fund new loans to customers. AFC, AFC Funding Corporation and AFCI must maintain certain financial covenants including, among others, limits on the amount of debt AFC and AFCI can incur, minimum levels of tangible net worth, and other covenants tied to the performance of the finance receivables portfolio. The securitization agreements also incorporate the financial covenants of our Previous Credit Agreement. At June 30, 2023, we were in compliance with the covenants in the securitization agreements. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill consisted of the following ( in millions ): Marketplace Finance Total Balance at December 31, 2022 (1)(2) $ 1,223.6 $ 240.9 $ 1,464.5 Impairment (225.3) — (225.3) Foreign currency 4.4 — 4.4 Balance at June 30, 2023 (1)(2) $ 1,002.7 $ 240.9 $ 1,243.6 (1) Marketplace amounts are net of accumulated goodwill impairment charges of $25.5 million and $250.8 million at December 31, 2022 and June 30, 2023, respectively. (2) Finance amounts are net of accumulated goodwill impairment charges of $161.5 million and $161.5 million at December 31, 2022 and June 30, 2023, respectively. Goodwill represents the excess cost over fair value of identifiable net assets of businesses acquired. The Company tests goodwill and indefinite-lived tradenames for impairment at the reporting unit level annually during the second quarter, or more frequently if events or changes in circumstances indicate that impairment may exist. When performing the impairment assessment, the fair value of the Company's reporting units are estimated using the expected present value of future cash flows (Level 3 inputs). As part of this annual process, in the second quarter of 2023 the Company updated its forecasts for all of its reporting units, including an updated estimate for near-term and long-term revenue growth rates reflecting a slower overall recovery in vehicle volumes. Discount rates and other cash flow assumptions used in the valuations were also adjusted. As a result of this impairment assessment, it was determined that the fair value was lower than the carrying value for our U.S. Dealer-to-Dealer and Europe reporting units (both within the Marketplace segment). Accordingly, the Company recorded non-cash goodwill impairment charges totaling $218.9 million related to our U.S. Dealer-to-Dealer reporting unit and $6.4 million related to our Europe reporting unit. The goodwill impairment charge related to our U.S. Dealer-to-Dealer reporting unit relates to tax deductible goodwill, and as such the impairment resulted in a deferred tax benefit of $52.5 million. The goodwill impairment related to our U.S. Dealer-to-Dealer reporting unit was primarily driven by lower near-term and long-term revenue growth associated with a slower overall recovery in vehicle volumes. The goodwill impairment related to our Europe reporting unit was driven by combining two previously separate reporting units (ADESA U.K. and ADESA Europe) into a single reporting unit. Including ADESA U.K. in the reporting unit resulted in a reduction in the overall fair value of the combined reporting unit, resulting in an impairment charge. Goodwill impairment was not identified in any other reporting unit in the second quarter of 2023. The impairment charges were reported as a component of "Goodwill and other intangibles impairment" in the consolidated statements of income. As a result of the second quarter 2023 impairment charges, the carrying value of the U.S. Dealer-to-Dealer and Europe reporting units now approximate fair value. As of June 30, 2023, the remaining carrying value of goodwill related to the U.S. Dealer-to-Dealer and Europe reporting units was $87.3 million and $119.4 million, respectively. In addition, the second quarter 2023 announcement of the rebrand to an OPENLANE branded marketplace from the ADESA branded marketplaces served as a triggering event requiring a re-evaluation of the useful life and impairment of the ADESA tradename. As such, the Company evaluated the $122.8 million carrying amount of its indefinite-lived ADESA tradename, resulting in a non-cash impairment charge totaling $25.5 million in the second quarter of 2023 and associated deferred tax benefit of $6.5 million (within the Marketplace segment). The impairment charge was reported as a component of "Goodwill and other intangibles impairment" in the consolidated statements of income. The ADESA tradename is expected to continue to generate cash flows pursuant to the purchase and commercial agreements with Carvana and its affiliates for a defined period. The fair value of the ADESA tradename was estimated using the royalty savings method (Level 3 inputs). Furthermore, as a result of the rebrand to OPENLANE, the ADESA tradename is no longer deemed to have an indefinite life and its remaining carrying amount of $97.3 million will be amortized over a remaining useful life of approximately 6 years. The deferred tax benefits of $52.5 million and $6.5 million associated with the goodwill and tradename impairments, respectively, resulted in the U.S. being in a net deferred tax asset position. Due to the three year cumulative loss related to U.S. operations, we recorded a $29.6 million valuation allowance against the U.S. net deferred tax asset. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2023 | |
Long-Term Debt, Unclassified [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following (in millions) : Interest Rate* Maturity June 30, December 31, 2022 Revolving Credit Facility Adjusted Term SOFR + 2.25% June 23, 2028 $ 162.0 $ — Previous Revolving Credit Facility Adjusted LIBOR + 1.75% September 19, 2024 — 145.0 Senior notes 5.125% June 1, 2025 210.0 350.0 European lines of credit Euribor + 1.25% Repayable upon demand 25.9 3.7 Total debt 397.9 498.7 Unamortized debt issuance costs/discounts (9.0) (4.7) Current portion of long-term debt (187.9) (288.7) Long-term debt $ 201.0 $ 205.3 *The interest rates presented in the table above represent the rates in place at June 30, 2023. Credit Facilities On June 23, 2023, we entered into the Credit Agreement, which replaces the Previous Credit Agreement, and provides for, among other things, the Revolving Credit Facility. As a result of replacing the Previous Revolving Credit Facility, we incurred a non-cash loss on the extinguishment of debt of $0.4 million in the second quarter of 2023. The loss was the result of the write-off of unamortized debt issuance costs associated with lenders that are not participating in the Revolving Credit Facility. We capitalized approximately $6.6 million of debt issuance costs in connection with the Credit Agreement. In May 2022, the Company prepaid the $926.2 million outstanding balance on Term Loan B-6 (part of the Previous Credit Agreement) with proceeds from the Transaction. As a result of the prepayment, we incurred a non-cash loss on the extinguishment of debt of $7.7 million in the second quarter of 2022. The loss was primarily a result of the write-off of unamortized debt issuance costs/discounts associated with Term Loan B-6. The Revolving Credit Facility is available for letters of credit, working capital, permitted acquisitions and general corporate purposes. The Revolving Credit Facility also includes a $65 million sub-limit for the issuance of letters of credit and a $60 million sub-limit for swingline loans. Loans under the Revolving Credit Facility bear interest at a rate calculated based on the type of borrowing (at the Company's election, either Adjusted Term SOFR Rate or Base Rate (each as defined in the Credit Agreement)) and the Company’s Consolidated Senior Secured Net Leverage Ratio (as defined in the Credit Agreement), with such rate ranging from 2.75% to 2.25% for Adjusted Term SOFR Rate loans and from 1.75% to 1.25% for Base Rate loans. The Company also pay s a commitment fee between 25 to 35 basis points, payable quarterly, on the average daily unused amount of the Revolving Facility based on the Company’s Consolidated Senior Secured Net Leverage Ratio. 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 assets of the Company and each Subsidiary Guarantor, subject to certain exceptions. The Credit Agreement contains affirmative and negative covenants that we believe are usual and customary for a senior secured credit agreement. The negative covenants include, among other things, limitations on asset sales, mergers and acquisitions, indebtedness, liens, dividends, investments and transactions with our affiliates. The Credit Agreement also requires us to maintain a maximum Consolidated Senior Secured Net Leverage Ratio, not to exceed 3.5 as of the last day of each fiscal quarter (commencing with September 30, 2023) on which any loans under the Revolving Credit Facility are outstanding. We were in compliance with the applicable covenants in the Credit Agreement at June 30, 2023. As of June 30, 2023 and December 31, 2022, $162.0 million and $145.0 million was drawn on the Revolving Credit Facility and the Previous Revolving Credit Facility, respectively. In addition, we had related outstanding letters of credit in the aggregate amount of $58.0 million and $19.0 million at June 30, 2023 and December 31, 2022, respectively, which reduce the amount available for borrowings under the respective revolving credit facility. Senior Notes On May 31, 2017, we issued $950 million of 5.125% senior notes due June 1, 2025. The Company pays interest on the senior notes semi-annually in arrears on June 1 and December 1 of each year. The senior notes may be redeemed at par as of June 1, 2023. The senior notes are guaranteed by the Subsidiary Guarantors. In June 2023, in connection with a previously announced offer to purchase, we prepaid $140 million of the senior notes at par with proceeds from the Transaction. We incurred a loss on the extinguishment of the senior notes of $0.7 million in the second quarter of 2023 primarily representative of the write-off of unamortized debt issuance costs associated with the portion of the senior notes repaid, as well as purchase offer expenses. European Lines of Credit ADESA Europe has lines of credit aggregating $32.7 million (€30 million). The lines of credit have an aggregate $25.9 million and $3.7 million of borrowings outstanding at June 30, 2023 and December 31, 2022, respectively. The lines of credit are secured by certain inventory and receivables at ADESA Europe subsidiaries. Fair Value of Debt As of June 30, 2023, the estimated fair value of our long-term debt amounted to $392.9 million. The estimates of fair value were based on broker-dealer quotes (Level 2 inputs) for our debt as of June 30, 2023. The estimates presented on long-term financial instruments are not necessarily indicative of the amounts that would be realized in a current market exchange. |
Derivatives
Derivatives | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives In January 2020, we entered into three pay-fixed interest rate swaps with an aggregate notional amount of $500 million to swap variable rate interest payments under our term loan for fixed interest payments bearing a weighted average interest rate of 1.44%, for a total interest rate of 3.69%. The interest rate swaps had a five-year term, each maturing on January 23, 2025. We originally designated the interest rate swaps as cash flow hedges. The changes in the fair value of the interest rate swaps that were included in the assessment of hedge effectiveness were recorded as a component of "Accumulated other comprehensive income." The earnings impact of the interest rate derivatives designated as cash flow hedges was recorded upon the recognition of the interest related to the hedged debt. In February 2022, we discontinued hedge accounting as we concluded that the forecasted interest rate payments were no longer probable of occurring in consideration of the Transaction and expected repayment of Term Loan B-6. As a result, the increase in the fair value of the swaps from the time of hedge accounting discontinuance to March 31, 2022 was recognized as an $8.7 million unrealized gain in "Interest expense" in the consolidated statement of income for the three months ended March 31, 2022. In connection with the repayment of Term Loan B-6 in May 2022, we entered into swap termination agreements. We received $16.7 million to settle and terminate the swaps, which was recognized as a realized gain in "Interest expense" in the consolidated statement of income for the three and six months ended June 30, 2022. For the three months ended June 30, 2022, we reclassified $3.4 million of unrealized gain, net of tax of $1.2 million, from accumulated other comprehensive income and for the six months ended June 30, 2022, we reclassified $5.7 million of unrealized loss, net of tax of $1.8 million. The amounts reclassified from accumulated other comprehensive income in the three- and six-month periods related to the repayment of Term Loan B-6 in full and the recognition of interest and the repayment of Term Loan B-6 in full, respectively. |
Other (Income) Expense, Net
Other (Income) Expense, Net | 6 Months Ended |
Jun. 30, 2023 | |
Other Nonoperating Income (Expense) [Abstract] | |
Other (Income) Expense, Net | Other (Income) Expense, Net Other (income) expense, net consisted of the following ( in millions ): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Change in realized and unrealized (gains) losses on investment securities, net $ (0.2) $ 3.2 $ (0.1) $ 6.2 Foreign currency (gains) losses 0.3 3.3 0.4 4.5 Investment and note receivable impairment — — 11.0 — Early termination of contractual arrangement (20.0) — (20.0) — Contingent consideration valuation (Note 2) 1.3 — 1.3 — Other (2.7) (2.5) (6.8) (5.5) Other (income) expense, net $ (21.3) $ 4.0 $ (14.2) $ 5.2 Fair Value Measurement of Investments The Company invests in certain early-stage automotive companies and funds that relate to the automotive industry. We believe these investments have resulted in the expansion of relationships in the vehicle remarketing industry. There were no realized gains on these investments for the three and six months ended June 30, 2023 and 2022. The Company had unrealized gains of $0.2 million and $0.1 million for the three and six months ended June 30, 2023, respectively. The Company had unrealized losses of $3.2 million and $6.2 million for the three and six months ended June 30, 2022, respectively. ASC 820, Fair Value Measurement , defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A small portion of finance receivables for one entity were converted to investment securities during the first quarter of 2021. This entity became publicly traded during the first quarter of 2021 and as a result has a readily determinable fair value. As of June 30, 2023, investment securities measured at fair value are based on quoted market prices for identical assets (Level 1 of the fair value hierarchy) and approximated $0.5 million. The net unrealized gain on these investment securities was $0.1 million for the six months ended June 30, 2023. The remaining investments held of $25.3 million do not have readily determinable fair values and the Company has elected to apply the measurement alternative to these investments and present them at cost. Investments are reported in "Other assets" in the accompanying consolidated balance sheets. Realized and unrealized gains and losses are reported in "Other (income) expense, net" in the consolidated statements of income. In late March 2023, one of the investees we presented at cost filed to reorganize its operations through the bankruptcy process. Based on this information, we recorded an other than temporary impairment of approximately $3.7 million in "Other (income) expense, net" representing our entire equity investment in the company. In addition, we also had a note receivable with this investee for $7.3 million, on which we recorded a credit impairment loss in "Other (income) expense, net" in the first quarter of 2023. In the second quarter of 2023, the Company received $20.0 million in connection with the early termination of a contractual arrangement with IAA. This amount was considered non-operating income and was recorded in "Other (income) expense, net" in the second quarter of 2023. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and ContingenciesWe are involved in litigation and disputes arising in the ordinary course of business, such as 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. Management considers the likelihood of loss or the incurrence of a liability, as well as the ability to reasonably estimate the amount of loss, in determining loss contingencies. We accrue an estimated loss contingency when it is probable that a liability has been incurred and the amount of loss (or range of possible losses) can be reasonably estimated. Management regularly evaluates current information available to determine whether accrual amounts should be adjusted. Accruals for contingencies including litigation and environmental matters are included in "Other accrued expenses" at undiscounted amounts and exclude claims for recoveries from insurance or other third parties. These accruals are adjusted periodically as assessment and remediation efforts progress, or as additional technical or legal information becomes available. If the amount of an actual loss is greater than the amount accrued, this could have an adverse impact on our operating results in that period. 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 will have a material adverse effect on our financial condition, results of operations or cash flows. Legal fees are expensed as incurred. There has been no significant change in the legal and regulatory proceedings which were disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Accumulated other comprehensive loss consisted of the following ( in millions ): June 30, December 31, 2022 Foreign currency translation loss $ (38.1) $ (49.5) Accumulated other comprehensive loss $ (38.1) $ (49.5) |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information ASC 280, Segment Reporting , requires reporting of segment information that is consistent with the manner in which the chief operating decision maker operates and views the Company. Our operations are grouped into two operating segments: Marketplace and Finance, which also serve as our reportable business segments. These reportable business segments offer different services and have fundamental differences in their operations. Beginning in the first quarter of 2022, results of the ADESA U.S. physical auctions are reported as discontinued operations (see Note 3). Financial information regarding our reportable segments is set forth below as of and for the three months ended June 30, 2023 (in millions) : Marketplace Finance Consolidated Operating revenues $ 319.4 $ 97.5 $ 416.9 Operating expenses Cost of services (exclusive of depreciation and amortization) 206.1 16.5 222.6 Selling, general and administrative 98.5 12.7 111.2 Depreciation and amortization 24.5 2.3 26.8 Goodwill and other intangibles impairment 250.8 — 250.8 Total operating expenses 579.9 31.5 611.4 Operating profit (loss) (260.5) 66.0 (194.5) Interest expense 6.7 32.1 38.8 Other (income) expense, net (21.0) (0.3) (21.3) Loss on extinguishment of debt 1.1 — 1.1 Intercompany expense (income) 8.1 (8.1) — Income (loss) from continuing operations before income taxes (255.4) 42.3 (213.1) Income taxes (36.0) 16.7 (19.3) Income (loss) from continuing operations $ (219.4) $ 25.6 $ (193.8) Total assets $ 2,105.0 $ 2,792.4 $ 4,897.4 Financial information regarding our reportable segments is set forth below as of and for the three months ended June 30, 2022 (in millions) : Marketplace Finance Consolidated Operating revenues $ 292.3 $ 91.9 $ 384.2 Operating expenses Cost of services (exclusive of depreciation and amortization) 195.7 16.2 211.9 Selling, general and administrative 110.5 13.6 124.1 Depreciation and amortization 23.8 2.1 25.9 Total operating expenses 330.0 31.9 361.9 Operating profit (loss) (37.7) 60.0 22.3 Interest expense 9.7 16.2 25.9 Other (income) expense, net 0.8 3.2 4.0 Loss on extinguishment of debt 7.7 — 7.7 Intercompany expense (income) 0.6 (0.6) — Income (loss) from continuing operations before income taxes (56.5) 41.2 (15.3) Income taxes (20.2) 10.3 (9.9) Income (loss) from continuing operations $ (36.3) $ 30.9 $ (5.4) Total assets $ 3,086.7 $ 3,039.3 $ 6,126.0 Financial information regarding our reportable segments is set forth below for the six months ended June 30, 2023 (in millions) : Marketplace Finance Consolidated Operating revenues $ 640.4 $ 197.1 $ 837.5 Operating expenses Cost of services (exclusive of depreciation and amortization) 413.9 32.9 446.8 Selling, general and administrative 194.1 25.1 219.2 Depreciation and amortization 45.7 4.1 49.8 Goodwill and other intangibles impairment 250.8 — 250.8 Total operating expenses 904.5 62.1 966.6 Operating profit (loss) (264.1) 135.0 (129.1) Interest expense 14.7 62.4 77.1 Other (income) expense, net (14.0) (0.2) (14.2) Loss on extinguishment of debt 1.1 — 1.1 Intercompany expense (income) 14.5 (14.5) — Income (loss) from continuing operations before income taxes (280.4) 87.3 (193.1) Income taxes (39.9) 27.9 (12.0) Income (loss) from continuing operations $ (240.5) $ 59.4 $ (181.1) Financial information regarding our reportable segments is set forth below for the six months ended June 30, 2022 (in millions) : Marketplace Finance Consolidated Operating revenues $ 577.5 $ 176.1 $ 753.6 Operating expenses Cost of services (exclusive of depreciation and amortization) 391.5 31.2 422.7 Selling, general and administrative 218.9 24.1 243.0 Depreciation and amortization 47.7 4.2 51.9 Total operating expenses 658.1 59.5 717.6 Operating profit (loss) (80.6) 116.6 36.0 Interest expense 23.0 28.5 51.5 Other (income) expense, net (1.0) 6.2 5.2 Loss on extinguishment of debt 7.7 — 7.7 Intercompany expense (income) 0.7 (0.7) — Income (loss) from continuing operations before income taxes (111.0) 82.6 (28.4) Income taxes (35.3) 20.7 (14.6) Income (loss) from continuing operations $ (75.7) $ 61.9 $ (13.8) Geographic Information Our foreign operations include Canada, Continental Europe and the U.K. Approximately 60% and 60% of our foreign operating revenues were from Canada for the three and six months ended June 30, 2023, respectively, and approximately 63% and 64% of our foreign operating revenues were from Canada for the three and six months ended June 30, 2022, respectively. Most of the remaining foreign operating revenues were generated from Continental Europe. Information regarding the geographic areas of our operations is set forth below (in millions) : Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Operating revenues U.S. $ 250.7 $ 248.7 $ 522.8 $ 479.8 Foreign 166.2 135.5 314.7 273.8 $ 416.9 $ 384.2 $ 837.5 $ 753.6 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net income (loss) | $ (193.8) | $ 210.2 | $ (181.1) | $ 209.9 |
Insider Trading Arrangements
Insider Trading Arrangements | 6 Months Ended |
Jun. 30, 2023 shares | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | Securities Trading Plans of Directors and Executive Officers On June 9, 2023, James P. Hallett, a member of OPENLANE’s Board of Directors, entered into an equity trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (the “Rule 10b5-1 Trading Plan”). The Rule 10b5-1 Trading Plan provides for the potential net exercise of 194,404 OPENLANE stock options between February 23, 2024 and February 27, 2024 (the expiration date of the stock options). During the second quarter of 2023, none of the Company’s executive officers adopted Rule 10b5-1 trading plans and none of the Company’s directors or executive officers terminated or modified a Rule 10b5-1 trading plan or adopted, modified or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K). |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Adoption Date | June 9, 2023 |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Aggregate Available | 194,404 |
James P. Hallett [Member] | |
Trading Arrangements, by Individual | |
Name | James P. Hallett |
Title | a member of OPENLANE’s Board of Directors |
Rule 10b5-1 Arrangement Adopted | true |
Basis of Presentation and Nat_2
Basis of Presentation and Nature of Operations Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for annual financial statements. Operating results for interim periods are not necessarily indicative of results that may be expected for the year as a whole. In the opinion of management, the consolidated financial statements reflect all adjustments, generally consisting of normal recurring accruals, necessary for a fair statement of our results of operations, cash flows and financial position for the periods presented. These consolidated financial statements and condensed notes to consolidated financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission on March 9, 2023. The 2022 year-end consolidated balance sheet data included in this Form 10-Q was derived from the audited financial statements referenced above and does not include all disclosures required by U.S. GAAP for annual financial statements. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates based in part on assumptions about current, and for some estimates, future economic and market conditions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period. Although the current estimates contemplate current conditions and expected future changes, as appropriate, it is reasonably possible that future conditions could differ from these estimates, which could materially affect our results of operations and financial position. Among other effects, such changes could result in future impairments of goodwill, intangible assets and long-lived assets, incremental losses on finance receivables, additional allowances on accounts receivable and deferred tax assets and changes in litigation and other loss contingencies. |
Sale of ADESA U.S. Physical A_2
Sale of ADESA U.S. Physical Auction Business and Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | The following table presents the results of operations for the ADESA U.S. physical auction business that have been reclassified to discontinued operations for all periods presented (in millions) : Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Operating revenues $ — $ 85.9 $ — $ 305.9 Operating expenses Cost of services (exclusive of depreciation and amortization) — 66.3 — 224.9 Selling, general and administrative — 24.9 — 68.8 Depreciation and amortization — — — 11.2 Total operating expenses — 91.2 — 304.9 Operating profit (loss) — (5.3) — 1.0 Interest expense — — — 0.1 Other (income) expense, net — (2.3) — (8.4) Income (loss) from discontinued operations before gain on disposal and income taxes — (3.0) — 9.3 Pretax gain on disposal of discontinued operations — 533.7 — 533.7 Income taxes — 315.1 — 319.3 Income (loss) from discontinued operations $ — $ 215.6 $ — $ 223.7 |
Stock and Stock-Based Compens_2
Stock and Stock-Based Compensation Plans (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of stock-based compensation expense by type of award | The following table summarizes our stock-based compensation expense by type of award (in millions) : Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 PRSUs $ 2.0 $ 11.9 $ 1.9 $ 13.8 RSUs 2.4 1.1 5.2 2.5 Service options 0.1 0.2 0.3 0.4 Market options 0.8 1.1 1.5 2.6 Total stock-based compensation expense $ 5.3 $ 14.3 $ 8.9 $ 19.3 |
Net Income (Loss) from Contin_2
Net Income (Loss) from Continuing Operations Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of computation of net income (loss) from continuing operations per share | The following table sets forth the computation of income (loss) from continuing operations per share (in millions except per share amounts) : Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income (loss) from continuing operations $ (193.8) $ (5.4) $ (181.1) $ (13.8) Series A Preferred Stock dividends (11.1) (10.9) (22.2) (21.6) Income from continuing operations attributable to participating securities — 3.8 — 8.0 Income (loss) from continuing operations attributable to common stockholders $ (204.9) $ (12.5) $ (203.3) $ (27.4) Weighted average common shares outstanding 109.6 119.5 109.4 120.4 Effect of dilutive stock options and restricted stock awards — — — — Weighted average common shares outstanding and potential common shares 109.6 119.5 109.4 120.4 Income (loss) from continuing operations per share Basic $ (1.87) $ (0.10) $ (1.86) $ (0.23) Diluted $ (1.87) $ (0.10) $ (1.86) $ (0.23) |
Finance Receivables and Oblig_2
Finance Receivables and Obligations Collateralized by Finance Receivables (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Financing Receivable, after Allowance for Credit Loss, Current [Abstract] | |
Schedule of quantitative information about delinquencies, credit losses less recoveries ("net credit losses") and components of securitized financial assets and other related assets managed | The following tables present quantitative information about delinquencies, credit loss charge-offs less recoveries ("net credit losses") and components of securitized financial assets and other related assets managed. For purposes of this illustration, delinquent receivables are defined as receivables 31 days or more past due. June 30, 2023 Net Credit Losses Net Credit Losses Total Amount of: (in millions) Receivables Receivables Floorplan receivables $ 2,414.7 $ 14.4 $ 12.2 $ 24.7 Other loans 3.6 — — — Total receivables managed $ 2,418.3 $ 14.4 $ 12.2 $ 24.7 December 31, 2022 Net Credit Losses Net Credit Losses Total Amount of: (in millions) Receivables Receivables Floorplan receivables $ 2,409.9 $ 17.5 $ 1.4 $ 2.8 Other loans 6.7 — — — Total receivables managed $ 2,416.6 $ 17.5 $ 1.4 $ 2.8 |
Summary of the changes in the allowance for credit losses and doubtful accounts | The following is a summary of the changes in the allowance for credit losses related to finance receivables ( in millions ): June 30, June 30, Allowance for Credit Losses Balance at December 31 $ 21.5 $ 23.0 Provision for credit losses 24.2 1.3 Recoveries 4.2 4.5 Less charge-offs (28.9) (7.3) Balance at end of period $ 21.0 $ 21.5 |
Schedule of obligations collateralized by finance receivables | Obligations collateralized by finance receivables consisted of the following: June 30, December 31, 2022 Obligations collateralized by finance receivables, gross $ 1,734.1 $ 1,697.0 Unamortized securitization issuance costs (16.7) (19.4) Obligations collateralized by finance receivables $ 1,717.4 $ 1,677.6 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill | |
Schedule of goodwill | Goodwill consisted of the following ( in millions ): Marketplace Finance Total Balance at December 31, 2022 (1)(2) $ 1,223.6 $ 240.9 $ 1,464.5 Impairment (225.3) — (225.3) Foreign currency 4.4 — 4.4 Balance at June 30, 2023 (1)(2) $ 1,002.7 $ 240.9 $ 1,243.6 (1) Marketplace amounts are net of accumulated goodwill impairment charges of $25.5 million and $250.8 million at December 31, 2022 and June 30, 2023, respectively. (2) Finance amounts are net of accumulated goodwill impairment charges of $161.5 million and $161.5 million at December 31, 2022 and June 30, 2023, respectively. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Long-Term Debt, Unclassified [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following (in millions) : Interest Rate* Maturity June 30, December 31, 2022 Revolving Credit Facility Adjusted Term SOFR + 2.25% June 23, 2028 $ 162.0 $ — Previous Revolving Credit Facility Adjusted LIBOR + 1.75% September 19, 2024 — 145.0 Senior notes 5.125% June 1, 2025 210.0 350.0 European lines of credit Euribor + 1.25% Repayable upon demand 25.9 3.7 Total debt 397.9 498.7 Unamortized debt issuance costs/discounts (9.0) (4.7) Current portion of long-term debt (187.9) (288.7) Long-term debt $ 201.0 $ 205.3 |
Other (Income) Expense, Net (Ta
Other (Income) Expense, Net (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Other Nonoperating Income (Expense) [Abstract] | |
Schedule of Other (Income) Expense, Net | Other (income) expense, net consisted of the following ( in millions ): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Change in realized and unrealized (gains) losses on investment securities, net $ (0.2) $ 3.2 $ (0.1) $ 6.2 Foreign currency (gains) losses 0.3 3.3 0.4 4.5 Investment and note receivable impairment — — 11.0 — Early termination of contractual arrangement (20.0) — (20.0) — Contingent consideration valuation (Note 2) 1.3 — 1.3 — Other (2.7) (2.5) (6.8) (5.5) Other (income) expense, net $ (21.3) $ 4.0 $ (14.2) $ 5.2 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive loss | Accumulated other comprehensive loss consisted of the following ( in millions ): June 30, December 31, 2022 Foreign currency translation loss $ (38.1) $ (49.5) Accumulated other comprehensive loss $ (38.1) $ (49.5) |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of financial information regarding the entity's reportable segments | Financial information regarding our reportable segments is set forth below as of and for the three months ended June 30, 2023 (in millions) : Marketplace Finance Consolidated Operating revenues $ 319.4 $ 97.5 $ 416.9 Operating expenses Cost of services (exclusive of depreciation and amortization) 206.1 16.5 222.6 Selling, general and administrative 98.5 12.7 111.2 Depreciation and amortization 24.5 2.3 26.8 Goodwill and other intangibles impairment 250.8 — 250.8 Total operating expenses 579.9 31.5 611.4 Operating profit (loss) (260.5) 66.0 (194.5) Interest expense 6.7 32.1 38.8 Other (income) expense, net (21.0) (0.3) (21.3) Loss on extinguishment of debt 1.1 — 1.1 Intercompany expense (income) 8.1 (8.1) — Income (loss) from continuing operations before income taxes (255.4) 42.3 (213.1) Income taxes (36.0) 16.7 (19.3) Income (loss) from continuing operations $ (219.4) $ 25.6 $ (193.8) Total assets $ 2,105.0 $ 2,792.4 $ 4,897.4 Financial information regarding our reportable segments is set forth below as of and for the three months ended June 30, 2022 (in millions) : Marketplace Finance Consolidated Operating revenues $ 292.3 $ 91.9 $ 384.2 Operating expenses Cost of services (exclusive of depreciation and amortization) 195.7 16.2 211.9 Selling, general and administrative 110.5 13.6 124.1 Depreciation and amortization 23.8 2.1 25.9 Total operating expenses 330.0 31.9 361.9 Operating profit (loss) (37.7) 60.0 22.3 Interest expense 9.7 16.2 25.9 Other (income) expense, net 0.8 3.2 4.0 Loss on extinguishment of debt 7.7 — 7.7 Intercompany expense (income) 0.6 (0.6) — Income (loss) from continuing operations before income taxes (56.5) 41.2 (15.3) Income taxes (20.2) 10.3 (9.9) Income (loss) from continuing operations $ (36.3) $ 30.9 $ (5.4) Total assets $ 3,086.7 $ 3,039.3 $ 6,126.0 Financial information regarding our reportable segments is set forth below for the six months ended June 30, 2023 (in millions) : Marketplace Finance Consolidated Operating revenues $ 640.4 $ 197.1 $ 837.5 Operating expenses Cost of services (exclusive of depreciation and amortization) 413.9 32.9 446.8 Selling, general and administrative 194.1 25.1 219.2 Depreciation and amortization 45.7 4.1 49.8 Goodwill and other intangibles impairment 250.8 — 250.8 Total operating expenses 904.5 62.1 966.6 Operating profit (loss) (264.1) 135.0 (129.1) Interest expense 14.7 62.4 77.1 Other (income) expense, net (14.0) (0.2) (14.2) Loss on extinguishment of debt 1.1 — 1.1 Intercompany expense (income) 14.5 (14.5) — Income (loss) from continuing operations before income taxes (280.4) 87.3 (193.1) Income taxes (39.9) 27.9 (12.0) Income (loss) from continuing operations $ (240.5) $ 59.4 $ (181.1) Financial information regarding our reportable segments is set forth below for the six months ended June 30, 2022 (in millions) : Marketplace Finance Consolidated Operating revenues $ 577.5 $ 176.1 $ 753.6 Operating expenses Cost of services (exclusive of depreciation and amortization) 391.5 31.2 422.7 Selling, general and administrative 218.9 24.1 243.0 Depreciation and amortization 47.7 4.2 51.9 Total operating expenses 658.1 59.5 717.6 Operating profit (loss) (80.6) 116.6 36.0 Interest expense 23.0 28.5 51.5 Other (income) expense, net (1.0) 6.2 5.2 Loss on extinguishment of debt 7.7 — 7.7 Intercompany expense (income) 0.7 (0.7) — Income (loss) from continuing operations before income taxes (111.0) 82.6 (28.4) Income taxes (35.3) 20.7 (14.6) Income (loss) from continuing operations $ (75.7) $ 61.9 $ (13.8) |
Schedule of information regarding the geographic areas of entity's operations | Information regarding the geographic areas of our operations is set forth below (in millions) : Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Operating revenues U.S. $ 250.7 $ 248.7 $ 522.8 $ 479.8 Foreign 166.2 135.5 314.7 273.8 $ 416.9 $ 384.2 $ 837.5 $ 753.6 |
Basis of Presentation and Nat_3
Basis of Presentation and Nature of Operations (Details) $ / shares in Units, $ in Millions | Jun. 30, 2023 USD ($) location network $ / shares shares | Jun. 23, 2023 USD ($) | Dec. 31, 2022 USD ($) shares | Sep. 19, 2019 USD ($) | May 31, 2017 |
Basis of Presentation and Nature of Operations [Abstract] | |||||
Long-term debt | $ 397.9 | $ 498.7 | |||
Marketplace | |||||
Basis of Presentation and Nature of Operations [Abstract] | |||||
Number of vehicle logistics center locations (Canada) | network | 14 | ||||
AFC | |||||
Basis of Presentation and Nature of Operations [Abstract] | |||||
Number of floorplan financing locations | location | 100 | ||||
Series A Preferred Stock [Member] | |||||
Basis of Presentation and Nature of Operations [Abstract] | |||||
Series A Preferred Stock par value per share | $ / shares | $ 0.01 | ||||
Series A Preferred Stock shares outstanding | shares | 634,305 | 634,305 | |||
Senior Notes [Member] | |||||
Basis of Presentation and Nature of Operations [Abstract] | |||||
Long-term debt | $ 210 | $ 350 | |||
Senior notes stated interest rate | 5.125% | 5.125% | |||
Credit Agreement | Senior secured revolving credit facility | |||||
Basis of Presentation and Nature of Operations [Abstract] | |||||
Long-term debt | $ 162 | 0 | |||
Maximum borrowing capacity | $ 325 | ||||
Previous Credit Agreement | Term Loan B-6 | |||||
Basis of Presentation and Nature of Operations [Abstract] | |||||
Long-term debt | $ 950 | ||||
Previous Credit Agreement | Previous Revolving Credit Facility | |||||
Basis of Presentation and Nature of Operations [Abstract] | |||||
Long-term debt | $ 0 | $ 145 | |||
Maximum borrowing capacity | $ 325 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Acquisitions | ||||
Contingent consideration adjustment | $ 1.3 | $ 0 | $ 1.3 | $ 0 |
Auction Frontier | ||||
Acquisitions | ||||
Payments for Contingent Consideration and deferred Acquisition Costs | 15 | |||
Contingent consideration adjustment | $ 1.3 |
Sale of ADESA U.S. Physical A_3
Sale of ADESA U.S. Physical Auction Business and Discontinued Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
May 09, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Discontinued Operations | ||||||
Proceeds from divestiture of business | $ 2,200 | |||||
Term of commercial agreement | 7 years | |||||
Net cash inflow from the commercial agreement and transition services | $ 57 | |||||
Pretax gain on disposal of discontinued operations | $ 0 | $ 533.7 | 0 | $ 533.7 | $ 521.8 | |
Effective rate for discontinued operations (as a percent) | 60% | |||||
Service Revenue - KAR to ADESA U.S. Physical Auctions | 21 | 18.4 | 42.9 | 36.1 | ||
Cost of Service - KAR to ADESA U.S. Physical Auctions | 21 | 18.4 | 42.9 | 36.1 | ||
Discontinued Operations - Results of Operations | ||||||
Operating revenues | 0 | 85.9 | 0 | 305.9 | ||
Cost of services (exclusive of depreciation and amortization) | 0 | 66.3 | 0 | 224.9 | ||
Selling, general and administrative | 0 | 24.9 | 0 | 68.8 | ||
Depreciation and amortization | 0 | 0 | 0 | 11.2 | ||
Total operating expenses | 0 | 91.2 | 0 | 304.9 | ||
Operating profit (loss) | 0 | (5.3) | 0 | 1 | ||
Interest expense | 0 | 0 | 0 | 0.1 | ||
Other (income) expense, net | 0 | (2.3) | 0 | (8.4) | ||
Income (loss) from discontinued operations before gain on disposal and income taxes | 0 | (3) | 0 | 9.3 | ||
Pretax gain on disposal of discontinued operations | 0 | 533.7 | 0 | 533.7 | $ 521.8 | |
Income taxes | 0 | 315.1 | 0 | 319.3 | ||
Income (loss) from discontinued operations | $ 0 | $ 215.6 | $ 0 | $ 223.7 |
Stock and Stock-Based Compens_3
Stock and Stock-Based Compensation Plan Summary (Details) $ / shares in Units, shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) installment $ / shares shares | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) installment $ / shares shares | Jun. 30, 2022 USD ($) | |
Stock and Stock-Based Compensation Plans | ||||
Stock-based compensation expense (in dollars) | $ 5,300,000 | $ 14,300,000 | $ 8,900,000 | $ 19,300,000 |
PRSUs | ||||
Stock and Stock-Based Compensation Plans | ||||
Stock-based compensation expense (in dollars) | 2,000,000 | 11,900,000 | 1,900,000 | 13,800,000 |
RSUs | ||||
Stock and Stock-Based Compensation Plans | ||||
Stock-based compensation expense (in dollars) | 2,400,000 | 1,100,000 | 5,200,000 | 2,500,000 |
Service options | ||||
Stock and Stock-Based Compensation Plans | ||||
Stock-based compensation expense (in dollars) | 100,000 | 200,000 | 300,000 | 400,000 |
Market Options | ||||
Stock and Stock-Based Compensation Plans | ||||
Stock-based compensation expense (in dollars) | $ 800,000 | $ 1,100,000 | $ 1,500,000 | $ 2,600,000 |
KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan | PRSUs | ||||
Stock and Stock-Based Compensation Plans | ||||
PRSUs and/or RSUs grants | shares | 0.5 | |||
KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan | RSUs | ||||
Stock and Stock-Based Compensation Plans | ||||
PRSUs and/or RSUs grants | shares | 0.6 | |||
Number of equal annual installments | installment | 3 | |||
PRSUs and/or RSUs grant date fair value | $ / shares | $ 14.17 | |||
KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan | Service options | ||||
Stock and Stock-Based Compensation Plans | ||||
Number of equal annual installments | installment | 4 | |||
Options granted | shares | 0.1 | |||
Weighted average exercise price of options granted | $ / shares | $ 14.83 | |||
Term of award | 10 years | |||
Weighted average grant date fair value of options granted | $ / shares | $ 7.14 | |||
Fair value assumption - expected term | 6 years 3 months | |||
Fair Value Assumptions - Expected Volatility | 44.31% | |||
Fair value assumption expected - dividend yield | 0% | |||
Fair Value Assumptions - Risk Free Interest Rate | 3.38% | |||
KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan | Market Options | ||||
Stock and Stock-Based Compensation Plans | ||||
Number of equal annual installments | installment | 4 | |||
Options granted | shares | 0.2 | |||
Weighted average exercise price of options granted | $ / shares | $ 14.83 | |||
Term of award | 10 years | |||
Weighted average grant date fair value of options granted | $ / shares | $ 6.91 | |||
Percent of options outstanding eligible for exercise | 25% | 25% | ||
$5 common stock price hurdle | $ 5 | $ 5 | ||
$10 common stock price hurdle | 10 | 10 | ||
$15 common stock price hurdle | 15 | 15 | ||
$20 common stock price hurdle | $ 20 | $ 20 | ||
Consecutive trading day period required for entity's common stock to be at or above a certain amount as part of vesting conditions. | 20 days | |||
KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan | PRSUs - Adjusted EBITDA | ||||
Stock and Stock-Based Compensation Plans | ||||
PRSUs and/or RSUs grant date fair value | $ / shares | $ 14.22 | |||
Award vesting period | 3 years | |||
KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan | PRSUs - TSR PRSUs | ||||
Stock and Stock-Based Compensation Plans | ||||
PRSUs and/or RSUs grant date fair value | $ / shares | $ 21.58 | |||
Award vesting period | 3 years |
Share Repurchase Plan (Details)
Share Repurchase Plan (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Apr. 27, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Oct. 30, 2019 | |
Additional disclosures | |||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||
October 2019 Share Repurchase Program | |||||||
Additional disclosures | |||||||
Stock repurchase program, authorized amount | $ 200 | $ 300 | |||||
Stock repurchase program expiration date | Dec. 31, 2023 | ||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 126.9 | $ 126.9 | |||||
Stock repurchased and retired during period (in shares) | 0 | 5,430,789 | 0 | 5,430,789 | |||
Stock Repurchased and Retired Weighted Average Price Per Share | $ 15.11 | $ 15.11 |
Net Income (Loss) from Contin_3
Net Income (Loss) from Continuing Operations Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Income (loss) from continuing operations | $ (193.8) | $ (5.4) | $ (181.1) | $ (13.8) |
Series A Preferred Stock dividends | (11.1) | (10.9) | (22.2) | (21.6) |
Income from continuing operations attributable to participating securities | 0 | 3.8 | 0 | 8 |
Income (loss) from continuing operations attributable to common stockholders | $ (204.9) | $ (12.5) | $ (203.3) | $ (27.4) |
Shares outstanding | ||||
Weighted average common shares outstanding | 109.6 | 119.5 | 109.4 | 120.4 |
Effect of dilutive stock options and restricted stock awards | 0 | 0 | 0 | 0 |
Weighted average common shares outstanding and potential common shares | 109.6 | 119.5 | 109.4 | 120.4 |
Income (loss) from continuing operations per share - basic | ||||
Basic (in dollars per share) | $ (1.87) | $ (0.10) | $ (1.86) | $ (0.23) |
Income (loss) from continuing operations per share - diluted | ||||
Diluted (in dollars per share) | $ (1.87) | $ (0.10) | $ (1.86) | $ (0.23) |
Stock options outstanding (in shares) | 5 | 5 | 5 | 5 |
Finance Receivables and Oblig_3
Finance Receivables and Obligations Collateralized by Finance Receivables (Details) $ in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 CAD ($) | Mar. 31, 2023 CAD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 CAD ($) | |
Finance Receivables and Obligations Collateralized by Finance Receivables | ||||||||
Cost capitalized in connection with US/Canada RPA | $ 5.3 | $ 0 | ||||||
Principal amount of receivables | $ 2,418.3 | 2,418.3 | $ 2,416.6 | |||||
Principal amount of receivables delinquent | 14.4 | 14.4 | 17.5 | |||||
Net credit losses | 12.2 | $ 1.4 | 24.7 | 2.8 | ||||
Finance Receivables Pledged as Security | 2,416.7 | 2,416.7 | 2,396.6 | |||||
Obligations collateralized by finance receivables, gross | 1,734.1 | 1,734.1 | 1,697 | |||||
Obligations collateralized by finance receivables | 1,717.4 | 1,717.4 | 1,677.6 | |||||
Changes in the allowance for credit losses | ||||||||
Balance at beginning of period | 21.5 | 23 | ||||||
Provision for credit losses | 24.2 | 1.3 | ||||||
Recoveries | 4.2 | 4.5 | ||||||
Less charge-offs | (28.9) | (7.3) | ||||||
Balance at end of period | 21 | 21.5 | 21 | 21.5 | ||||
Floorplan receivables | ||||||||
Finance Receivables and Obligations Collateralized by Finance Receivables | ||||||||
Principal amount of receivables | 2,414.7 | 2,414.7 | 2,409.9 | |||||
Principal amount of receivables delinquent | 14.4 | 14.4 | 17.5 | |||||
Net credit losses | 12.2 | 1.4 | 24.7 | 2.8 | ||||
Other Loans | ||||||||
Finance Receivables and Obligations Collateralized by Finance Receivables | ||||||||
Principal amount of receivables | 3.6 | 3.6 | 6.7 | |||||
Principal amount of receivables delinquent | 0 | 0 | 0 | |||||
Net credit losses | 0 | $ 0 | 0 | $ 0 | ||||
AFC | ||||||||
Finance Receivables and Obligations Collateralized by Finance Receivables | ||||||||
Unamortized securitization issuance costs | (16.7) | $ (16.7) | $ (19.4) | |||||
AFC | Minimum | ||||||||
Finance Receivables and Obligations Collateralized by Finance Receivables | ||||||||
Period to define financing receivables as past due (in days) | 31 days | |||||||
AFC Funding Corporation | ||||||||
Finance Receivables and Obligations Collateralized by Finance Receivables | ||||||||
Committed liquidity | $ 2,000 | $ 2,000 | ||||||
AFC Funding Corporation | Minimum | ||||||||
Finance Receivables and Obligations Collateralized by Finance Receivables | ||||||||
Cash reserve as security for obligations of collateralized financing receivables (as a percent) | 1% | |||||||
Cash reserve as security for obligations of collateralized financing receivables - circumstance two (as a percent) | 3% | |||||||
AFCI | ||||||||
Finance Receivables and Obligations Collateralized by Finance Receivables | ||||||||
Committed liquidity | $ 300 | $ 300 | $ 225 | |||||
Cost capitalized in connection with US/Canada RPA | $ 0.5 | |||||||
AFCI | Minimum | ||||||||
Finance Receivables and Obligations Collateralized by Finance Receivables | ||||||||
Cash reserve as security for obligations of collateralized financing receivables (as a percent) | 1% | |||||||
Cash reserve as security for obligations of collateralized financing receivables - circumstance two (as a percent) | 3% |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Changes in goodwill | |
Balance at the beginning of the year | $ 1,464.5 |
Impairment | (225.3) |
Foreign currency | 4.4 |
Balance at the end of the year | 1,243.6 |
U.S. Dealer-to-Dealer | |
Changes in goodwill | |
Impairment | (218.9) |
Balance at the end of the year | 87.3 |
Europe | |
Changes in goodwill | |
Impairment | (6.4) |
Balance at the end of the year | 119.4 |
Marketplace | |
Changes in goodwill | |
Balance at the beginning of the year | 1,223.6 |
Impairment | (225.3) |
Foreign currency | 4.4 |
Balance at the end of the year | 1,002.7 |
Finance | |
Changes in goodwill | |
Balance at the beginning of the year | 240.9 |
Impairment | 0 |
Foreign currency | 0 |
Balance at the end of the year | $ 240.9 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Details 2) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Goodwill | |||
Deferred Income Tax Expense (Benefit) | $ (29.1) | $ (2.7) | |
Deferred Tax Assets, Valuation Allowance | 29.6 | ||
U.S. Dealer-to-Dealer | |||
Goodwill | |||
Deferred Income Tax Expense (Benefit) | (52.5) | ||
Marketplace | |||
Goodwill | |||
Accumulated goodwill impairment | 250.8 | $ 25.5 | |
Finance | |||
Goodwill | |||
Accumulated goodwill impairment | $ 161.5 | $ 161.5 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets (Details 3) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Finite Lived and Indefinite Lived Intangible Assets by Major Class | |||
Other Intangible Assets, Net | $ 196.3 | $ 231.3 | |
Deferred Income Tax Expense (Benefit) | (29.1) | $ (2.7) | |
ADESA Trade Names (Finite) | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class | |||
Other Intangible Assets, Net | $ 97.3 | ||
Useful lives | 6 years | ||
ADESA Trade Names (Indefinite) | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class | |||
Other Intangible Assets, Net | $ 122.8 | ||
Deferred Income Tax Expense (Benefit) | (6.5) | ||
ADESA tradename - non-cash impairment charge | $ 25.5 |
Long-Term Debt Summary (Details
Long-Term Debt Summary (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Jun. 30, 2023 | Dec. 31, 2022 | Sep. 19, 2019 | May 31, 2017 | |
Long-Term Debt | ||||
Total debt | $ 397.9 | $ 498.7 | ||
Unamortized debt issuance costs/discounts | (9) | (4.7) | ||
Current portion of long-term debt | (187.9) | (288.7) | ||
Long-term debt | $ 201 | 205.3 | ||
Revolving credit facility | Debt Instrument Adjusted Term SOFR | ||||
Long-Term Debt | ||||
Variable rate basis | Adjusted Term SOFR | |||
Interest rate basis (as a percent) | 2.25% | |||
Previous Revolving Credit Facility | Adjusted LIBOR | ||||
Long-Term Debt | ||||
Variable rate basis | Adjusted LIBOR | |||
Interest rate basis (as a percent) | 1.75% | |||
Senior Notes [Member] | ||||
Long-Term Debt | ||||
Senior notes stated interest rate | 5.125% | 5.125% | ||
Total debt | $ 210 | 350 | ||
Credit Agreement | Revolving credit facility | ||||
Long-Term Debt | ||||
Total debt | 162 | 0 | ||
Previous Credit Agreement | Term Loan B-6 | ||||
Long-Term Debt | ||||
Total debt | $ 950 | |||
Previous Credit Agreement | Previous Revolving Credit Facility | ||||
Long-Term Debt | ||||
Total debt | 0 | 145 | ||
European Line of Credit | Foreign line of credit | ||||
Long-Term Debt | ||||
Total debt | $ 25.9 | $ 3.7 | ||
European Line of Credit | Foreign line of credit | Euribor rate | ||||
Long-Term Debt | ||||
Variable rate basis | Euribor | |||
Interest rate basis (as a percent) | 1.25% |
Credit Facilities (Details)
Credit Facilities (Details) € in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) item | Jun. 30, 2022 USD ($) | Jun. 30, 2023 EUR (€) | Jun. 23, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 19, 2019 USD ($) | |
Long-Term Debt | ||||||||
Long-term debt | $ 397.9 | $ 397.9 | $ 498.7 | |||||
Loss on Extinguishment of Debt | 1.1 | $ 7.7 | 1.1 | $ 7.7 | ||||
Payments for debt issuance costs/amendments | (5.3) | 0 | ||||||
Payments on long-term debt | $ 0 | (928.6) | ||||||
Percentage of equity interests of certain of the company's and the Subsidiary Guarantors' domestic subsidiaries pledged under the Credit Facility | 100% | |||||||
Percentage of equity interests of certain of the company's and the Subsidiary Guarantors' first-tier foreign subsidiaries pledged under the Credit Facility | 65% | |||||||
Estimated fair value of long-term debt | 392.9 | $ 392.9 | ||||||
Capitalized Debt Issuance Costs | 6.6 | $ 6.6 | ||||||
Revolving credit facility | Debt Instrument Adjusted Term SOFR | ||||||||
Long-Term Debt | ||||||||
Interest rate basis (as a percent) | 2.25% | |||||||
Variable rate basis | Adjusted Term SOFR | |||||||
Letters of credit | ||||||||
Long-Term Debt | ||||||||
Maximum borrowing capacity | 65 | $ 65 | ||||||
Outstanding letters of credit | 58 | 58 | 19 | |||||
Swing line loans | ||||||||
Long-Term Debt | ||||||||
Maximum borrowing capacity | 60 | 60 | ||||||
Senior Notes [Member] | ||||||||
Long-Term Debt | ||||||||
Long-term debt | 210 | $ 210 | 350 | |||||
Loss on Extinguishment of Debt | 0.7 | |||||||
Previous Revolving Credit Facility | Adjusted LIBOR | ||||||||
Long-Term Debt | ||||||||
Interest rate basis (as a percent) | 1.75% | |||||||
Variable rate basis | Adjusted LIBOR | |||||||
Credit Agreement | Revolving credit facility | ||||||||
Long-Term Debt | ||||||||
Long-term debt | 162 | $ 162 | 0 | |||||
Maximum borrowing capacity | $ 325 | |||||||
Frequency of commitment fee payment | quarterly | |||||||
Amount borrowed | 162 | $ 162 | ||||||
Credit Agreement | Revolving credit facility | Base Rate | ||||||||
Long-Term Debt | ||||||||
Variable rate basis | Base Rate | |||||||
Previous Credit Agreement | Term Loan B-6 | ||||||||
Long-Term Debt | ||||||||
Long-term debt | $ 950 | |||||||
Loss on Extinguishment of Debt | $ 7.7 | |||||||
Payments on long-term debt | $ (926.2) | |||||||
Previous Credit Agreement | Previous Revolving Credit Facility | ||||||||
Long-Term Debt | ||||||||
Long-term debt | 0 | $ 0 | 145 | |||||
Maximum borrowing capacity | $ 325 | |||||||
Loss on Extinguishment of Debt | 0.4 | |||||||
Amount borrowed | 145 | |||||||
European Line of Credit | Foreign line of credit | ||||||||
Long-Term Debt | ||||||||
Long-term debt | 25.9 | 25.9 | $ 3.7 | |||||
Maximum borrowing capacity | $ 32.7 | $ 32.7 | € 30 | |||||
Maximum | ||||||||
Long-Term Debt | ||||||||
Credit facility consolidated senior secured net leverage ratio | item | 3.5 | |||||||
Maximum | Credit Agreement | Revolving credit facility | ||||||||
Long-Term Debt | ||||||||
Commitment fee on the unused amount of the Revolving Credit Facility (as a percent) | 0.35% | |||||||
Maximum | Credit Agreement | Revolving credit facility | Base Rate | ||||||||
Long-Term Debt | ||||||||
Interest rate basis (as a percent) | 1.75% | |||||||
Maximum | Credit Agreement | Revolving credit facility | Debt Instrument Adjusted Term SOFR | ||||||||
Long-Term Debt | ||||||||
Interest rate basis (as a percent) | 2.75% | |||||||
Minimum | Credit Agreement | Revolving credit facility | ||||||||
Long-Term Debt | ||||||||
Commitment fee on the unused amount of the Revolving Credit Facility (as a percent) | 0.25% | |||||||
Minimum | Credit Agreement | Revolving credit facility | Base Rate | ||||||||
Long-Term Debt | ||||||||
Interest rate basis (as a percent) | 1.25% | |||||||
Minimum | Credit Agreement | Revolving credit facility | Debt Instrument Adjusted Term SOFR | ||||||||
Long-Term Debt | ||||||||
Interest rate basis (as a percent) | 2.25% |
Senior Notes (Details)
Senior Notes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | May 31, 2017 | |
Long-Term Debt | |||||
Loss on Extinguishment of Debt | $ 1.1 | $ 7.7 | $ 1.1 | $ 7.7 | |
Senior Notes [Member] | |||||
Long-Term Debt | |||||
Senior notes face amount | $ 950 | ||||
Senior notes stated interest rate | 5.125% | 5.125% | 5.125% | ||
Face amount of senior notes repurchased | $ 140 | $ 140 | |||
Loss on Extinguishment of Debt | $ 0.7 |
Derivatives (Details)
Derivatives (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jan. 23, 2020 USD ($) agreement | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | |
Fair value of the entity's interest rate derivatives included in the consolidated balance sheet | ||||||
Fixed Interest Rate | 3.69% | |||||
Unrealized gain (loss) on interest rate derivatives, net of tax | $ 0 | $ (3.4) | $ 0 | $ 5.7 | ||
January 2020 interest rate swap | ||||||
Fair value of the entity's interest rate derivatives included in the consolidated balance sheet | ||||||
Derivative Number of Instruments Entered | agreement | 3 | |||||
Aggregate notional amount | $ 500 | |||||
Term of interest rate swaps | 5 years | |||||
Derivative, weighted average fixed interest rate | 1.44% | |||||
Tax impact from unrealized gain (loss) on interest rate derivatives | (1.2) | 1.8 | ||||
Unrealized Gain in "Interest expense" | $ 8.7 | |||||
Realized gain in "Interest expense" | $ 16.7 | $ 16.7 |
Other (Income) Expense, Net (De
Other (Income) Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Other Nonoperating Income (Expense) [Abstract] | |||||
Change in realized and unrealized (gains) losses on investment securities, net | $ (0.2) | $ 3.2 | $ (0.1) | $ 6.2 | |
Foreign currency (gains) losses | 0.3 | 3.3 | 0.4 | 4.5 | |
Investment and note receivable impairment | 0 | 0 | 11 | 0 | |
Early termination of contractual arrangement | (20) | 0 | (20) | 0 | |
Contingent consideration valuation | 1.3 | 0 | 1.3 | 0 | |
Other | (2.7) | (2.5) | (6.8) | (5.5) | |
Other (income) expense, net | (21.3) | 4 | (14.2) | 5.2 | |
Realized (gains) losses on investments | 0 | 0 | 0 | 0 | |
Unrealized (gain) loss on investment securities | (0.2) | $ 3.2 | (0.1) | $ 6.2 | |
Fair value of investment securities | 0.5 | 0.5 | |||
Investments recorded at cost | $ 25.3 | $ 25.3 | |||
Note Receivable Impairment | $ 7.3 | ||||
Other than Temporary Impairment | $ 3.7 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Significant Change In Legal And Regulatory Proceedings | $ 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Foreign currency translation loss | $ (38.1) | $ (49.5) |
Accumulated other comprehensive loss | $ (38.1) | $ (49.5) |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Segment Reporting [Abstract] | |||||
Number of operating segments | segment | 2 | ||||
Number of reportable segments | segment | 2 | ||||
Segment Information | |||||
Operating revenues | $ 416.9 | $ 384.2 | $ 837.5 | $ 753.6 | |
Operating expenses | |||||
Cost of services (exclusive of depreciation and amortization) | 222.6 | 211.9 | 446.8 | 422.7 | |
Selling, general and administrative | 111.2 | 124.1 | 219.2 | 243 | |
Depreciation and amortization | 26.8 | 25.9 | 49.8 | 51.9 | |
Goodwill and other intangibles impairment | 250.8 | 0 | 250.8 | 0 | |
Total operating expenses | 611.4 | 361.9 | 966.6 | 717.6 | |
Operating profit (loss) | (194.5) | 22.3 | (129.1) | 36 | |
Interest expense | 38.8 | 25.9 | 77.1 | 51.5 | |
Other (income) expense, net | (21.3) | 4 | (14.2) | 5.2 | |
Loss on Extinguishment of Debt | 1.1 | 7.7 | 1.1 | 7.7 | |
Intercompany expense (income) | 0 | 0 | 0 | 0 | |
Income (loss) from continuing operations before income taxes | (213.1) | (15.3) | (193.1) | (28.4) | |
Income taxes | (19.3) | (9.9) | (12) | (14.6) | |
Income (loss) from continuing operations | (193.8) | (5.4) | (181.1) | (13.8) | |
Total assets | 4,897.4 | 6,126 | 4,897.4 | 6,126 | $ 5,119.8 |
Operating Segments | Marketplace | |||||
Segment Information | |||||
Operating revenues | 319.4 | 292.3 | 640.4 | 577.5 | |
Operating expenses | |||||
Cost of services (exclusive of depreciation and amortization) | 206.1 | 195.7 | 413.9 | 391.5 | |
Selling, general and administrative | 98.5 | 110.5 | 194.1 | 218.9 | |
Depreciation and amortization | 24.5 | 23.8 | 45.7 | 47.7 | |
Goodwill and other intangibles impairment | 250.8 | 250.8 | |||
Total operating expenses | 579.9 | 330 | 904.5 | 658.1 | |
Operating profit (loss) | (260.5) | (37.7) | (264.1) | (80.6) | |
Interest expense | 6.7 | 9.7 | 14.7 | 23 | |
Other (income) expense, net | (21) | 0.8 | (14) | (1) | |
Loss on Extinguishment of Debt | 1.1 | 7.7 | 1.1 | 7.7 | |
Intercompany expense (income) | 8.1 | 0.6 | 14.5 | 0.7 | |
Income (loss) from continuing operations before income taxes | (255.4) | (56.5) | (280.4) | (111) | |
Income taxes | (36) | (20.2) | (39.9) | (35.3) | |
Income (loss) from continuing operations | (219.4) | (36.3) | (240.5) | (75.7) | |
Total assets | 2,105 | 3,086.7 | 2,105 | 3,086.7 | |
Operating Segments | Finance | |||||
Segment Information | |||||
Operating revenues | 97.5 | 91.9 | 197.1 | 176.1 | |
Operating expenses | |||||
Cost of services (exclusive of depreciation and amortization) | 16.5 | 16.2 | 32.9 | 31.2 | |
Selling, general and administrative | 12.7 | 13.6 | 25.1 | 24.1 | |
Depreciation and amortization | 2.3 | 2.1 | 4.1 | 4.2 | |
Goodwill and other intangibles impairment | 0 | 0 | |||
Total operating expenses | 31.5 | 31.9 | 62.1 | 59.5 | |
Operating profit (loss) | 66 | 60 | 135 | 116.6 | |
Interest expense | 32.1 | 16.2 | 62.4 | 28.5 | |
Other (income) expense, net | (0.3) | 3.2 | (0.2) | 6.2 | |
Loss on Extinguishment of Debt | 0 | 0 | 0 | 0 | |
Intercompany expense (income) | (8.1) | (0.6) | (14.5) | (0.7) | |
Income (loss) from continuing operations before income taxes | 42.3 | 41.2 | 87.3 | 82.6 | |
Income taxes | 16.7 | 10.3 | 27.9 | 20.7 | |
Income (loss) from continuing operations | 25.6 | 30.9 | 59.4 | 61.9 | |
Total assets | $ 2,792.4 | $ 3,039.3 | $ 2,792.4 | $ 3,039.3 |
Segment Information (Details 2)
Segment Information (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Geographic Information | ||||
Operating revenues | $ 416.9 | $ 384.2 | $ 837.5 | $ 753.6 |
U.S. | ||||
Geographic Information | ||||
Operating revenues | $ 250.7 | $ 248.7 | $ 522.8 | $ 479.8 |
Foreign | ||||
Geographic Information | ||||
Percent of foreign revenue from Canada | 60% | 63% | 60% | 64% |
Operating revenues | $ 166.2 | $ 135.5 | $ 314.7 | $ 273.8 |