Document and Entity Information
Document and Entity Information Cover - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Feb. 15, 2024 | Jun. 30, 2023 | Dec. 31, 2022 | |
Cover [Abstract] | ||||
Document type | 10-K | |||
Document annual report | true | |||
Document period end date | Dec. 31, 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 | |||
Title of 12(b) security | Common Stock, par value $0.01 per share | |||
Trading symbol | KAR | |||
Security exchange name | NYSE | |||
Well-known seasoned issuer | Yes | |||
Entity voluntary filers | No | |||
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 | |||
ICFR auditor attestation flag | true | |||
Entity shell company | false | |||
Entity public float | $ 1,639,190,438 | |||
Entity common stock, shares outstanding | 108,045,559 | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Current fiscal year end date | --12-31 | |||
Entity central index key | 0001395942 | |||
Document fiscal year focus | 2023 | |||
Document fiscal period focus | FY | |||
Amendment flag | false | |||
Document Financial Statement Error Correction [Flag] | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Location | Indianapolis, IN |
Auditor Firm ID | 185 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating revenues | |||
Auction fees | $ 395.3 | $ 370.3 | $ 399.2 |
Service revenue | 619.7 | 590.3 | 541.3 |
Purchased vehicle sales | 236.7 | 182.9 | 220.9 |
Finance-related revenue | 393.4 | 375.9 | 289.2 |
Total operating revenues | 1,645.1 | 1,519.4 | 1,450.6 |
Operating expenses | |||
Cost of services (exclusive of depreciation and amortization) | 867.6 | 834.3 | 792.5 |
Selling, general and administrative | 430.4 | 445.1 | 420.7 |
Depreciation and amortization | 101.5 | 100.2 | 109.9 |
Gain on sale of property | 0 | (33.9) | 0 |
Goodwill and other intangibles impairment | 250.8 | 0 | 0 |
Total operating expenses | 1,650.3 | 1,345.7 | 1,323.1 |
Operating profit (loss) | (5.2) | 173.7 | 127.5 |
Interest expense | 155.8 | 119.2 | 125.7 |
Other (income) expense, net | (15.6) | (1.3) | (12.5) |
Loss on extinguishment of debt | 1.1 | 17.2 | 0 |
Income (loss) from continuing operations before income taxes | (146.5) | 38.6 | 14.3 |
Income taxes | 8.3 | 10 | 15.1 |
Income (loss) from continuing operations | (154.8) | 28.6 | (0.8) |
Income from discontinued operations, net of income taxes | 0.7 | 212.6 | 67.3 |
Net income (loss) | $ (154.1) | $ 241.2 | $ 66.5 |
Net income (loss) per share - basic | |||
Income (loss) from continuing operations | $ (1.83) | $ (0.10) | $ (0.27) |
Income from discontinued operations | 0.01 | 1.40 | 0.43 |
Net income (loss) | (1.82) | 1.30 | 0.16 |
Net income (loss) per share - diluted | |||
Income (loss) from continuing operations | (1.83) | (0.10) | (0.27) |
Income from discontinued operations | 0.01 | 1.40 | 0.43 |
Net income (loss) | $ (1.82) | $ 1.30 | $ 0.16 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net income (loss) | $ (154.1) | $ 241.2 | $ 66.5 |
Other comprehensive income (loss), net of tax | |||
Foreign currency translation gain (loss) | 12.8 | (30.5) | (5.8) |
Unrealized gain on interest rate derivatives, net of tax | 0 | 5.7 | 13.8 |
Total other comprehensive income (loss), net of tax | 12.8 | (24.8) | 8 |
Comprehensive income (loss) | $ (141.3) | $ 216.4 | $ 74.5 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 93.5 | $ 225.7 |
Restricted cash | 65.4 | 52 |
Trade receivables, net of allowances of $9.9 and $15.8 | 291.8 | 270.7 |
Finance receivables, net of allowances of $23.0 and $21.5 | 2,282 | 2,395.1 |
Other current assets | 109.2 | 78.9 |
Total current assets | 2,841.9 | 3,022.4 |
Other assets | ||
Goodwill | 1,271.2 | 1,464.5 |
Customer relationships, net of accumulated amortization of $438.5 and $417.3 | 136.1 | 135.9 |
Other intangible assets, net of accumulated amortization of $475.4 and $406.0 | 181.5 | 231.3 |
Operating lease right-of-use assets | 75.9 | 84.8 |
Property and equipment, net of accumulated depreciation of $187.2 and $197.7 | 169.8 | 123.6 |
Other assets | 49.9 | 57.3 |
Total other assets | 1,884.4 | 2,097.4 |
Total assets | 4,726.3 | 5,119.8 |
Current liabilities | ||
Accounts payable | 556.6 | 551.2 |
Accrued employee benefits and compensation expenses | 40.5 | 31.9 |
Accrued interest | 10.1 | 7.8 |
Other accrued expenses | 75.3 | 79.1 |
Income taxes payable | 9.8 | 6.9 |
Obligations collateralized by finance receivables | 1,631.9 | 1,677.6 |
Current maturities of long-term debt | 154.6 | 288.7 |
Total current liabilities | 2,478.8 | 2,643.2 |
Non-current liabilities | ||
Long-term debt | 202.4 | 205.3 |
Deferred income tax liabilities | 20.9 | 54 |
Operating lease liabilities | 70.4 | 79.7 |
Other liabilities | 14.3 | 6.8 |
Total non-current liabilities | 308 | 345.8 |
Commitments and contingencies (Note 19) | ||
Temporary equity | ||
Series A convertible preferred stock (Note 15) | 612.5 | 612.5 |
Stockholders' equity | ||
Common stock, $0.01 par value: Authorized shares: 400,000,000; Issued and outstanding shares: 108,040,704 (2023) 108,914,678 (2022) | 1.1 | 1.1 |
Additional paid-in capital | 738.2 | 743.8 |
Retained earnings | 624.4 | 822.9 |
Accumulated other comprehensive loss | (36.7) | (49.5) |
Total stockholders' equity | 1,327 | 1,518.3 |
Total liabilities, temporary equity and stockholders' equity | $ 4,726.3 | $ 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, 2020 | $ 1,615.8 | $ 1.3 | $ 1,046.5 | $ 600.7 | $ (32.7) |
Beginning balance (in shares) at Dec. 31, 2020 | 129,700,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 66.5 | 66.5 | |||
Other comprehensive income (loss) | 8 | 8 | |||
Issuance of common stock under stock plans | 1.5 | 1.5 | |||
Issuance of common stock under stock plans (in shares) | 500,000 | ||||
Issuance of common stock - private placement | 30 | 30 | |||
Issuance of common stock - private placement (in shares) | 2,000,000 | ||||
Surrender of RSUs for taxes | (2.2) | (2.2) | |||
Surrender of RSUs for taxes (in shares) | (200,000) | ||||
Stock-based compensation expense | 15.6 | 15.6 | |||
Repurchase and retirement of common stock | (180.9) | $ (0.1) | (180.8) | ||
Repurchase and retirement of common stock (in shares) | (10,800,000) | ||||
Dividends earned under stock plans | (0.2) | 0.2 | (0.4) | ||
Dividends on preferred stock | (41.1) | (41.1) | |||
Ending balance at Dec. 31, 2021 | 1,513 | $ 1.2 | 910.8 | 625.7 | (24.7) |
Ending balance (in shares) at Dec. 31, 2021 | 121,200,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 241.2 | 241.2 | |||
Other comprehensive income (loss) | (24.8) | (24.8) | |||
Issuance of common stock under stock plans | 1.4 | 1.4 | |||
Issuance of common stock under stock plans (in shares) | 500,000 | ||||
Surrender of RSUs for taxes | (2.7) | (2.7) | |||
Surrender of RSUs for taxes (in shares) | (200,000) | ||||
Stock-based compensation expense | 16.3 | 16.3 | |||
Repurchase and retirement of common stock | (182.2) | $ (0.1) | (182.1) | ||
Repurchase and retirement of common stock (in shares) | (12,600,000) | ||||
Dividends earned under stock plans | (0.1) | 0.1 | (0.2) | ||
Dividends on preferred stock | (43.8) | (43.8) | |||
Ending balance at Dec. 31, 2022 | $ 1,518.3 | $ 1.1 | 743.8 | 822.9 | (49.5) |
Ending balance (in shares) at Dec. 31, 2022 | 108,914,678 | 108,900,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | $ (154.1) | (154.1) | |||
Other comprehensive income (loss) | 12.8 | 12.8 | |||
Issuance of common stock under stock plans | 2.7 | 2.7 | |||
Issuance of common stock under stock plans (in shares) | 700,000 | ||||
Surrender of RSUs for taxes | (2.6) | (2.6) | |||
Surrender of RSUs for taxes (in shares) | (200,000) | ||||
Stock-based compensation expense | 16.5 | 16.5 | |||
Repurchase and retirement of common stock | (22.2) | (22.2) | |||
Repurchase and retirement of common stock (in shares) | (1,400,000) | ||||
Dividends on preferred stock | (44.4) | (44.4) | |||
Ending balance at Dec. 31, 2023 | $ 1,327 | $ 1.1 | $ 738.2 | $ 624.4 | $ (36.7) |
Ending balance (in shares) at Dec. 31, 2023 | 108,040,704 | 108,000,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities | |||
Net income (loss) | $ (154.1) | $ 241.2 | $ 66.5 |
Net income from discontinued operations | (0.7) | (212.6) | (67.3) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 101.5 | 100.2 | 109.9 |
Provision for credit losses | 59.2 | 18.6 | 7.2 |
Deferred income taxes | (29.8) | (2.3) | 4.4 |
Amortization of debt issuance costs | 8.7 | 10.7 | 12.1 |
Stock-based compensation | 16.5 | 16.6 | 13.2 |
Contingent consideration adjustment | 1.3 | 0 | 24.3 |
Net change in unrealized (gain) loss on investment securities | 0 | 7.1 | (1.4) |
Investment and note receivable impairment | 10.3 | 0 | 0 |
Gain on sale of property | 0 | (33.9) | 0 |
Goodwill and other intangibles impairment | 250.8 | 0 | 0 |
Loss on extinguishment of debt | 1.1 | 17.2 | 0 |
Other non-cash, net | 1 | 0.5 | 2.1 |
Changes in operating assets and liabilities, net of acquisitions: | |||
Trade receivables and other assets | (66) | 107.7 | (81) |
Accounts payable and accrued expenses | 39.8 | (240.8) | 143.9 |
Payments of contingent consideration in excess of acquisition-date fair value | (2.6) | (26.1) | 0 |
Net cash provided by operating activities - continuing operations | 237 | 4.1 | 233.9 |
Net cash provided by (used by) operating activities - discontinued operations | (1.6) | (459.1) | 179.3 |
Investing activities | |||
Net decrease (increase) in finance receivables held for investment | 64.8 | 97.9 | (618.6) |
Acquisition of businesses (net of cash acquired) | (103) | (0.4) | (521.8) |
Purchases of property, equipment and computer software | (52) | (60.9) | (64.2) |
Investments in securities | (1.3) | (6.7) | (22.5) |
Proceeds from sale of investments | 0 | 0.3 | 38.5 |
Proceeds from note receivable | 0.7 | 0 | 0 |
Proceeds from the sale of PWI | 0 | 0 | 2.2 |
Proceeds from the sale of property and equipment | 0.3 | 39.8 | 0 |
Net cash (used by) provided by investing activities - continuing operations | (90.5) | 70 | (1,186.4) |
Net cash provided by (used by) investing activities - discontinued operations | 7 | 2,077.4 | (32.2) |
Financing activities | |||
Net decrease in book overdrafts | (2.3) | (5.7) | (8) |
Net borrowings from (repayments of) lines of credit | 5.9 | 141.9 | (8) |
Net (decrease) increase in obligations collateralized by finance receivables | (55.9) | 1.5 | 424.4 |
Payments for debt issuance costs/amendments | (6.7) | (11.6) | (0.6) |
Payments on long-term debt | 0 | (928.6) | (9.5) |
Payment for early extinguishment of debt | (140.1) | (606.3) | 0 |
Payments on finance leases | (1.9) | (3.9) | (5.6) |
Payments of contingent consideration and deferred acquisition costs | (12.4) | (3.5) | (37.1) |
Issuance of common stock under stock plans | 2.7 | 1.4 | 1.5 |
Issuance of common stock - private placement | 0 | 0 | 30 |
Tax withholding payments for vested RSUs | (2.6) | (2.7) | (2.2) |
Repurchase and retirement of common stock | (22.2) | (182.2) | (180.9) |
Dividends paid on Series A Preferred Stock | (44.4) | (22.2) | 0 |
Net cash (used by) provided by financing activities - continuing operations | (279.9) | (1,621.9) | 204 |
Net cash provided by financing activities - discontinued operations | 0 | 10.8 | 6.4 |
Net change in cash balances of discontinued operations | 0 | 12.4 | 15.6 |
Effect of exchange rate changes on cash | 9.2 | (19.4) | (1.5) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (118.8) | 74.3 | (580.9) |
Cash, cash equivalents and restricted cash at beginning of period | 277.7 | 203.4 | 784.3 |
Cash paid for interest, net of proceeds from interest rate derivatives | 145.2 | 106.4 | 112.7 |
Cash paid for taxes, net of refunds | 35.8 | 25.6 | 24.8 |
Cash, cash equivalents and restricted cash at end of period | 158.9 | 277.7 | 203.4 |
Discontinued Operations | |||
Cash paid for taxes, net of refunds | $ 1.5 | $ 378.1 | $ 1.2 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Trade receivable allowances | $ 9.9 | $ 15.8 |
Finance receivables allowances | 23 | 21.5 |
Customer relationships accumulated amortization | 438.5 | 417.3 |
Other Intangible Assets Accumulated Amortization | 475.4 | 406 |
Property, Plant and Equipment Accumulated Depreciation | $ 187.2 | $ 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 | 108,040,704 | 108,914,678 |
Common Stock, Shares, Issued | 108,040,704 | 108,914,678 |
Organization and Other Matters
Organization and Other Matters | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Other Matters | Organization and Other Matters OPENLANE, Inc., formerly known as KAR Auction Services, Inc., was organized in the State of Delaware on November 9, 2006. 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 (the "Transaction"); • "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 December 31, 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 December 31, 2023 and 2022). Business and Nature of Operations As announced in May 2023, OPENLANE is now 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 December 31, 2023, the Marketplace segment serves a domestic and international customer base through digital marketplaces and 15 vehicle logistics center locations across Canada. For 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, our platform facilitates multiple sale formats, data-driven insights and integrated services to automotive dealers, coast-to-coast in the United States, Canada and Europe. OPENLANE Europe is our digital marketplace serving customers in the United Kingdom and Continental Europe through a consolidated online wholesale used vehicle platform. Marketplace 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 ("independent dealer customers") and this financing is provided through approximately 90 locations (hybrid of physical locations and a digital servicing network) throughout the United States and Canada as of December 31, 2023. Floorplan financing supports independent dealer customers in North America who purchase vehicles at OPENLANE 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 can encompass settling lien holder payoffs. AFC also provides title services for their customers. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of OPENLANE and all of its majority owned subsidiaries. Significant intercompany transactions and balances have been eliminated. Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. 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. Business Segments Our operations are grouped into two operating segments: Marketplace and Finance. The two operating segments also serve as our reportable business segments. Operations are measured through detailed budgeting and monitoring of contributions to consolidated income by each business segment. Derivative Instruments and Hedging Activity We recognize all derivative financial instruments in the consolidated financial statements at fair value in accordance with Accounting Standards Codification ("ASC") 815, Derivatives and Hedging . We most recently used interest rate swaps that were designated and qualified as cash flow hedges to manage the variability of cash flows to be paid due to interest rate movements on our variable rate debt. The fair values of the interest rate derivatives are based on quoted market prices for similar instruments from commercial banks. The fair value of the derivatives were recorded in "Other liabilities" on the consolidated balance sheet. Changes in the fair value of the interest rate derivatives designated as cash flow hedges were recorded as a component of "Accumulated other comprehensive income." The earnings impact of the interest rate derivatives designated as cash flow hedges were recorded upon the recognition of the interest related to the hedged debt. Foreign Currency Translation The local currency is the functional currency for each of our foreign entities. Revenues and expenses denominated in foreign currencies are translated into U.S. dollars at average exchange rates in effect during the year. Assets and liabilities of foreign operations are translated using the exchange rates in effect at year end. Foreign currency transaction gains and losses on intercompany balances are included in the consolidated statements of income within "Other (income) expense, net" and resulted in a gain of $2.9 million for the year ended December 31, 2023, a loss of $2.5 million for the year ended December 31, 2022 and a loss of $3.8 million for the year ended December 31, 2021. Adjustments arising from the translation of net assets located outside the U.S. (gains and losses) are shown as a component of "Accumulated other comprehensive income." Cash Equivalents All highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. These investments are valued at cost, which approximates fair value. Restricted Cash AFC Funding Corporation, a wholly-owned, bankruptcy remote, consolidated, special purpose subsidiary of AFC, is required to maintain a minimum cash reserve of 1 or 3 percent of total receivables sold to the group of bank purchasers as security for the receivables sold. Automotive Finance Canada Inc. ("AFCI") is also required to maintain a minimum cash reserve of 1 or 3 percent of total receivables sold to its securitization facilities. The amount of the cash reserve depends on circumstances which are set forth in the securitization agreements. Such reserves are presented as "Restricted cash" on the consolidated balance sheets. Receivables Trade receivables include the unremitted purchase price of vehicles purchased by third parties through our marketplaces, fees to be collected from those buyers and amounts due for services provided by us related to certain consigned vehicles in our possession. The amounts due with respect to the services provided by us related to certain consigned vehicles are generally deducted from the sales proceeds upon the eventual marketplace sale or other disposition of the related vehicles. Finance receivables include floorplan receivables created by financing dealer purchases of vehicles in exchange for a security interest in those vehicles and special purpose loans. Floorplan receivables become due at the earlier of the dealer subsequently selling the vehicle or a predetermined time period (generally 30 to 90 days). Special purpose loans relate to loans that are either line of credit loans or working capital loans that can be either secured or unsecured based on the facts and circumstances of the specific loans. Due to the nature of our business, substantially all trade and finance receivables are due from vehicle dealers and commercial sellers. We have possession of vehicles or vehicle titles collateralizing a significant portion of the trade and finance receivables. Trade receivables are reported net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on management's evaluation of the receivables under current conditions, the aging of the receivables, review of specific collection issues and such other factors which in management's judgment deserve recognition in estimating losses. We also maintain an allowance for credit losses for estimated losses resulting from the inability of customers to make required payments. AFC’s finance receivables represent revolving line of credit arrangements extended to used car dealers and are secured by collateral which is a key credit quality indicator monitored by the Company. Delinquencies and losses are monitored on an ongoing basis and this historical experience provides the primary basis for estimating the allowance which is estimated using a loss-rate method. We estimate the allowance for credit losses using a methodology that first considers historical loss rates calculated using recorded charge-offs and recoveries over a historical period as well as identified potential loss events as the primary quantitative factors. The allowance for credit losses is also based on management's evaluation of the receivables portfolio under current economic conditions, the size of the portfolio, overall portfolio credit quality, review of specific collection matters and such other factors which, in management's judgment, deserve recognition in estimating losses. Specific collection matters can be impacted by the outcome of negotiations, litigation and bankruptcy proceedings with individual customers. AFC controls credit risk through credit approvals, credit limits, underwriting and collateral management monitoring procedures, including lot audits and holding vehicle titles where permitted. The estimates are based on management’s evaluation of many factors, including AFC’s historical credit loss experience, the value of the underlying collateral, delinquency trends and economic conditions. The estimates are based on information available as of each reporting date and reflect the expected credit losses over the entire expected term of the receivables. Actual losses may differ from the original estimates due to actual results varying from those assumed in our estimates. Other Current Assets Other current assets consist of inventories, prepaid expenses, taxes receivable and other miscellaneous assets. The inventories, which consist of vehicles, supplies and parts, are accounted for on the specific identification method and are stated at the lower of cost or net realizable value. Goodwill Goodwill represents the excess of cost over fair value of identifiable net assets of businesses acquired. Goodwill is tested for impairment annually in the second quarter, or more frequently as impairment indicators arise. ASC 350, Intangibles—Goodwill and Other , permits an entity to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount before applying the goodwill impairment model. If it is determined through the qualitative assessment that a reporting unit's fair value is more likely than not greater than its carrying value, the remaining impairment steps would be unnecessary. The qualitative assessment is optional, allowing companies to go directly to the quantitative assessment. Under the quantitative assessment for goodwill impairment, the fair value of each reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit is less than its carrying value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit's goodwill over the fair value of that goodwill, not to exceed the carrying amount of goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis. Customer Relationships and Other Intangible Assets Customer relationships are amortized on a straight-line basis over the life determined at the time of acquisition. Other intangible assets generally consist of tradenames and computer software, which if amortized, are amortized using the straight-line method over their estimated useful lives. Tradenames with indefinite lives are not amortized. Costs incurred related to software developed or obtained for internal use are capitalized during the application development stage of software development and amortized over their estimated useful lives. The amortization periods of finite-lived intangible assets are re-evaluated periodically when facts and circumstances indicate that revised estimates of useful lives may be warranted. Indefinite-lived tradenames are assessed for impairment, in accordance with ASC 350, annually in the second quarter or more frequently as impairment indicators arise. At the end of each assessment, a determination is made as to whether the tradenames still have an indefinite life. Property and Equipment Property and equipment are stated at historical cost less accumulated depreciation. Depreciation is computed using the straight-line method at rates intended to depreciate the costs of assets over their estimated useful lives. Upon retirement or sale of property and equipment, the cost of the disposed assets and related accumulated depreciation is removed from the accounts and any resulting gain or loss is credited or charged to selling, general and administrative expenses. Expenditures for normal repairs and maintenance are charged to expense as incurred. Additions and expenditures for improving or rebuilding existing assets that extend the useful life are capitalized. Leasehold improvements made either at the inception of the lease or during the lease term are amortized over the shorter of their economic lives or the lease term including any renewals that are reasonably assured. Unamortized Debt Issuance Costs Debt issuance costs reflect the expenditures incurred in conjunction with term loan debt, the revolving credit facility, the senior notes and the U.S. and Canadian receivables purchase agreements. The debt issuance costs are being amortized to interest expense using the effective interest method or the straight-line method, as applicable, over the lives of the related debt issues. Debt issuance costs are presented as a direct reduction from the carrying amount of the related debt liability. Other Assets Other assets consist of investments, deposits, notes receivable, foreign deferred taxes and other long-term assets. Long-Lived Assets Management reviews our property and equipment, customer relationships and other intangible assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. The determination includes evaluation of factors such as current market value, future asset utilization, business climate and future cash flows expected to result from the use of the related assets. If the carrying amount of a long-lived asset exceeds the total amount of the estimated undiscounted future cash flows from that asset, a loss is recognized in the period to the extent that the carrying amount exceeds the fair value of the asset. The impairment analysis is based on our current business strategy, expected growth rates and estimated future economic and regulatory conditions. Leases The Company accounts for leases under ASC 842, Leases . We determine if an arrangement is a lease at inception. Operating leases are included in "Operating lease right-of-use assets," "Other accrued expenses" and "Operating lease liabilities" in our consolidated balance sheets. Finance leases are included in "Property and equipment, net," "Other accrued expenses" and "Other liabilities" in our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term. We use the implicit rate when readily determinable. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The operating lease ROU assets also include any lease payments made and exclude lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain equipment leases, we account for the lease and non-lease components as a single lease component. Accounts Payable Accounts payable include amounts due sellers from the proceeds of the sale of their consigned vehicles less any fees, as well as trade payables and outstanding checks to sellers and vendors. Book overdrafts, representing outstanding checks in excess of funds on deposit, are recorded in "Accounts payable" and amounted to $17.9 million and $20.2 million at December 31, 2023 and 2022, respectively. Self-Insurance Reserves We self-insure our employee medical benefits, as well as a portion of our automobile, general liability and workers' compensation claims. We have insurance coverage that limits the exposure on individual claims. The cost of the insurance is expensed over the contract periods. We record an accrual for the claims related to our employee medical benefits, automobile, general liability and workers' compensation claims based upon the expected amount of all such claims. Accrued medical benefits and workers' compensation expenses are included in "Accrued employee benefits and compensation expenses" while accrued automobile and general liability expenses are included in "Other accrued expenses." Environmental Liabilities Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies. These accruals are adjusted periodically as assessment and remediation efforts progress, or as additional technical or legal information becomes available. Accruals for environmental liabilities are included in "Other accrued expenses" at undiscounted amounts and exclude claims for recoveries from insurance or other third parties. Temporary Equity The Company records shares of convertible preferred stock at their respective fair values on the date of issuance, net of issuance costs. The convertible preferred stock is recorded outside of stockholders' equity on the consolidated balance sheet because the shares contain liquidation features that are not solely within the Company's control. The Company has elected not to adjust the carrying values of the convertible preferred stock to the liquidation preferences of such shares because of the uncertainty of whether or when such an event would occur. Subsequent adjustments to increase the carrying value to the liquidation preferences will be made only when it becomes probable that such a liquidation event will occur. See Note 15 for a discussion of the convertible preferred stock. Revenue Recognition The Company accounts for revenue under ASC 606, Revenue from Contracts with Customers , except for AFC interest and fee income, which is described under AFC below. Revenue is recognized when control of the promised goods or services are transferred to customers in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company generates its revenues from contracts with customers. In contracts with multiple performance obligations, the Company identifies each performance obligation and evaluates whether the performance obligations are distinct within the context of the contract at contract inception. Performance obligations that are not distinct at contract inception are combined. The Company allocates the transaction price to each distinct performance obligation proportionately based on the estimated standalone selling price for each performance obligation. The Company then determines how the goods or services are transferred to the customer in order to determine the timing of revenue recognition. There were no material contract assets, contract liabilities or deferred contract costs recorded on the consolidated balance sheet as of December 31, 2023. For each of our primary revenue streams, cash flows are consistent with the timing of revenue recognition. For the year ended December 31, 2023, revenue recognized from performance obligations related to prior periods was not material. Revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less and contracts where revenue is recognized as invoiced, is not material. Marketplace The performance obligation contained within the marketplace contracts for sellers is facilitating the remarketing of vehicles, including titling, administration and sale through our marketplaces. The remarketing performance obligation is satisfied at the point in time the vehicle is sold through our marketplaces. The ancillary services contracts include services such as inbound and outbound transportation logistics, reconditioning, vehicle inspection and certification, collateral recovery services and technology solutions. The performance obligations related to these services are subject to separate contracts and are satisfied at the point in time the services are completed. Contracts with buyers are generally established via purchase through our marketplaces, subject to standard terms and conditions. These contracts contain a single performance obligation, which is satisfied at a point in time when the vehicle is purchased through our marketplaces. The vehicles sold on our marketplaces generate auction fees from buyers and sellers. The Company generally does not take title to these consigned vehicles and records only its auction fees as revenue ("Auction fees" in the consolidated statement of income (loss)) because it has no influence on the vehicle marketplace selling price agreed to by the seller and the buyer. The Company does not record the gross selling price of the consigned vehicles sold through our marketplaces as revenue. Our buyer fees are typically based on a tiered structure with fees increasing with the sale price of the vehicle, while seller fees are typically fixed. The Company generally enforces its rights to payment for seller transactions through net settlement provisions following the sale of a vehicle. Marketplace services such as inbound and outbound transportation logistics, reconditioning, vehicle inspection and certification, collateral recovery services and technology solutions are generally recognized at the time of service ("Service revenue" in the consolidated statement of income (loss)). The Company also sells vehicles that have been purchased, which represent approximately 1% of the total volume of vehicles sold. For these types of sales, the Company does record the gross selling price of purchased vehicles sold through our marketplaces as revenue ("Purchased vehicle sales" in the consolidated statement of income (loss)) and the gross purchase price of the vehicles as "Cost of services," at the completion of each sale to a third party. Finance AFC's revenue ("Finance-related revenue" in the consolidated statement of income (loss)) is comprised of interest and fee income, provision for credit losses and other revenues associated with our finance receivables. The following table summarizes the primary components of AFC's finance-related revenue: Year Ended December 31, Finance-Related Revenue (in millions) 2023 2022 2021 Interest income $ 248.4 $ 202.8 $ 139.7 Fee income 183.3 171.9 144.4 Other revenue 12.3 11.0 8.6 Provision for credit losses (50.6) (9.8) (3.5) $ 393.4 $ 375.9 $ 289.2 Interest and fee income Revenues associated with interest and fee income are accounted for in accordance with ASC 310-20, Nonrefundable Fees and Other Costs, and therefore are not subject to evaluation under Topic 606. Interest on finance receivables is recognized based on the number of days the vehicle remains financed, adjusted for historical loss rates. Dealers are also charged a fee to floorplan a vehicle ("floorplan fee"), to extend the terms of the receivable ("curtailment fee") and a document processing fee. AFC fee income including floorplan and curtailment fees is recognized over the estimated life of the finance receivable. Other revenue Other revenue includes lot check fees, filing fees, lien holder payoff services and other related program fees, each of which are charged to and collected from AFC's customers. Income Taxes We file federal, state and foreign income tax returns in accordance with the applicable rules of each jurisdiction. We account for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes . The provision for income taxes includes federal, foreign, state and local income taxes payable, as well as deferred taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable amounts in periods in which those temporary differences are expected to be recovered or settled. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Income (Loss) from Continuing Operations per Share 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. Stock options that would have an anti-dilutive effect on income from continuing operations per diluted share, unexercisable market options and PRSUs subject to performance conditions which have not yet been satisfied are excluded from the calculations. Accounting for Stock-Based Compensation The Company accounts for stock-based compensation under ASC 718, Compensation—Stock Compensation . We recognize all stock-based compensation as expense in the financial statements over the vesting period and that cost is measured as the fair value of the award at the grant date for equity-classified awards. We also recognize the impact of forfeitures as they occur and excess tax benefits and tax deficiencies related to employee stock-based compensation within income tax expense. New Accounting Standards In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires additional income tax disclosures on an annual basis, specifically related to the rate reconciliation and income taxes paid. The amendments are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments should be applied on a prospective basis. The Company is currently evaluating the impact the adoption of ASU 2023-09 will have on the consolidated financial statements and related disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 31, 2024. Early adoption is permitted and the amendments should be applied retrospectively to all prior periods presented. The Company is currently evaluating the impact the adoption of ASU 2023-07 will have on the consolidated financial statements and related disclosures. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions 2023 Acquisition In December 2023, the Company acquired Manheim Canada from Cox Automotive. The transaction included the Manheim Montreal facility and auction sales, operations and select staff across Manheim Canada. The acquisition advances OPENLANE's digital strategy by adding inventory, buyers, sellers and corresponding data to the OPENLANE Canada digital marketplace. The purchased assets included property and equipment and customer relationships. Financial results for Manheim Canada have been included in our consolidated financial statements from the date of acquisition. The purchase price for Manheim Canada was approximately $103.0 million. The acquired assets and assumed liabilities of Manheim Canada were recorded at fair value, including $52.4 million to property and equipment and $18.6 million to intangible assets, representing the fair value of acquired customer relationships, which are being amortized over their expected useful lives. The excess earnings method was used to value the customer relationships. This method requires forward looking estimates to determine fair value, including among other assumptions, forecasted revenue growth and estimated customer attrition rates. The acquisition resulted in $25.9 million of goodwill. The factors contributing to the recognition of goodwill were strategic and synergistic benefits that are expected to be realized from the acquisition. The goodwill is recorded in the Marketplace reportable segment and is expected to be deductible for tax purposes. The financial impact of this acquisition, including pro forma financial results, was immaterial to the Company's consolidated results for the year ended December 31, 2023. Acquisition costs of approximately $2.0 million are included in the consolidated statement of income (loss) within "Selling, general and administrative." 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 2023, we made a contingent consideration payment related to the Auction Frontier acquisition of $15.0 million. For the year ended December 31, 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. 2021 Acquisitions CARWAVE Holdings LLC In October 2021, the Company acquired CARWAVE Holdings LLC (“CARWAVE”). CARWAVE was an online dealer-to-dealer marketplace featuring certified mechanical inspections, buyer guarantees and a 24/7, direct offer trading format with live buyer bidding. The acquisition was expected to build on the Company’s growth in the dealer-to-dealer space, enhance the Company’s position in the highly fragmented wholesale used vehicle market and accelerate the Company’s overall transformation to a digital marketplace company. The purchased assets included accounts receivable, other current assets, property and equipment, software, customer relationships and tradenames. Financial results for CARWAVE have been included in our consolidated financial statements from the date of acquisition. The purchase price for CARWAVE, net of cash acquired, was approximately $442.0 million. The acquired assets and assumed liabilities of CARWAVE were recorded at fair value, including $67.5 million to intangible assets, representing the fair value of acquired customer relationships of $62.5 million, software of $4.6 million and tradenames of $0.4 million, which are amortized over their expected useful lives. The acquired software and tradenames are reported in "Other intangible assets" in the accompanying consolidated balance sheet. The excess earnings method was used to value the customer relationships and the relief from royalty method was used to value the software and tradenames. Both of these methods require forward looking estimates to determine fair value, including among other assumptions, forecasted revenue growth, estimated customer attrition rates and estimated royalty and license rates. The acquisition resulted in $373.4 million of goodwill. The factors contributing to the recognition of goodwill were strategic and synergistic benefits that are expected to be realized from the acquisition. The goodwill is recorded in the Marketplace reportable segment and most of it is expected to be deductible for tax purposes. The financial impact of this acquisition, including pro forma financial results, was immaterial to the Company's consolidated results for the year ended December 31, 2021. Acquisition costs are included in the consolidated statement of income (loss) within "Selling, general and administrative." Auction Frontier, LLC In May 2021, the Company acquired Auction Frontier, LLC (“Auction Frontier”). Auction Frontier is the owner and operator of the cloud-based auction simulcast solution Velocicast ® . The acquisition is aligned with the Company’s strategy, as Velocicast powers ADESA Simulcast and Simulcast+ technologies, as well as other wholesale and retail auctions across North America and Australia. The purchased assets included accounts receivable, software, customer relationships and tradenames. The purchase agreement also included additional payments contingent on certain terms and conditions. Financial results for Auction Frontier have been included in our consolidated financial statements from the date of acquisition. The purchase price for Auction Frontier, net of cash acquired, was approximately $92.2 million, which included a net cash payment of $79.8 million and estimated contingent payments with a fair value of $12.4 million based on a probability model (based on Level 3 inputs). The maximum amount of undiscounted contingent payment related to this acquisition could approximate $15.0 million. The acquired assets and assumed liabilities of Auction Frontier were recorded at fair value, including $17.9 million to intangible assets, representing the fair value of acquired customer relationships of $10.0 million, software of $7.6 million and tradenames of $0.3 million, which are being amortized over their expected useful lives. The acquired software and tradenames are reported in "Other intangible assets" in the accompanying consolidated balance sheet. The excess earnings method was used to value the customer relationships and the relief from royalty method was used to value the software and tradenames. Both of these methods require forward looking estimates to determine fair value, including among other assumptions, forecasted revenue growth and estimated royalty and license rates. A probability model, based on the expected retention of significant customers, was used to value the estimated contingent consideration. The acquisition resulted in $73.8 million of goodwill. The factors contributing to the recognition of goodwill were strategic and synergistic benefits that are expected to be realized from the acquisition. The goodwill is recorded in the Marketplace reportable segment and all of it is expected to be deductible for tax purposes. The financial impact of this acquisition, including pro forma financial results, was immaterial to the Company's consolidated results for the year ended December 31, 2021. Acquisition costs are included in the consolidated statement of income (loss) within "Selling, general and administrative." |
Sale of ADESA U.S. Physical Auc
Sale of ADESA U.S. Physical Auction Business and Discontinued Operations | 12 Months Ended |
Dec. 31, 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. In addition, the Company will continue to own the ADESA tradename and the ADESA U.S. physical auctions will continue to utilize the tradename, which had an indefinite life at the time of the Transaction. The tradename continues to generate cash flows pursuant to the purchase and commercial agreements with Carvana and its affiliates, as Carvana now pays a fee to the Company for use of the tradename for the ADESA U.S. physical auctions for a defined period. For the year ended December 31, 2023, the Company received a net cash inflow from the commercial agreement and transition services agreement of approximately $93.9 million, which includes the transportation services noted below. From the completion of the Transaction through December 31, 2022, the Company received a net cash inflow from the commercial agreement and transition services agreement of approximately $57.4 million. The Company provided transportation services of $60.3 million, $73.6 million and $80.3 million to the ADESA U.S. physical auctions for the years ended December 31, 2023, 2022 and 2021, respectively. The transportation amount noted for 2022 includes transactions before and after the sale. 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. Discontinued operations included transaction costs of approximately $37.1 million for the year ended December 31, 2022, in connection with the Transaction. These costs consisted of consulting and professional fees associated with the Transaction. The Transaction resulted in a pretax gain on disposal of approximately $521.8 million or 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) : Year Ended December 31, 2023 2022 2021 Operating revenues $ — $ 305.9 $ 881.3 Operating expenses Cost of services (exclusive of depreciation and amortization) — 224.9 582.4 Selling, general and administrative — 67.8 148.7 Depreciation and amortization — 11.2 73.0 Total operating expenses — 303.9 804.1 Operating profit — 2.0 77.2 Interest expense — 0.1 0.9 Other (income) expense, net — (8.4) (11.0) Income from discontinued operations before gain on disposal and income taxes — 10.3 87.3 Pretax gain on disposal of discontinued operations — 521.8 — Income taxes (0.7) 319.5 20.0 Income from discontinued operations $ 0.7 $ 212.6 $ 67.3 The following table summarizes the major classes of assets and liabilities of the ADESA U.S. physical auction business that were classified as discontinued operations for the period presented (in millions) : May 8, Assets Cash and cash equivalents $ 68.6 Trade receivables, net of allowances 206.3 Inventory 15.5 Other current assets 9.3 Current assets of discontinued operations 299.7 Goodwill 1,099.7 Customer relationships, net of accumulated amortization 81.4 Other intangible assets, net of accumulated amortization 30.7 Operating lease right-of-use assets 223.7 Property and equipment, net of accumulated depreciation 440.1 Other assets 2.4 Non-current assets of discontinued operations 1,878.0 Total assets of discontinued operations $ 2,177.7 Liabilities Accounts payable $ 249.5 Accrued employee benefits and compensation expenses 10.2 Other accrued expenses 28.2 Current portion of operating lease liabilities 27.7 Current liabilities of discontinued operations 315.6 Operating lease liabilities 216.8 Other liabilities 2.0 Non-current liabilities of discontinued operations 218.8 Total liabilities of discontinued operations $ 534.4 |
Stock and Stock-Based Compensat
Stock and Stock-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock and Stock-Based Compensation Plans | Stock and Stock-Based Compensation Plans Our stock-based compensation expense has included 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. In addition, holders of some of these awards received an equivalent number of PRSUs, RSUs and options in IAA as they had in KAR at June 28, 2019. These awards were scheduled to vest over the period from February 2020 to March 2022. In connection with the sale of the ADESA U.S. physical auction business, the ADESA U.S. employees terminated from the Company and became employees of Carvana. For those employees with stock-based compensation awards, all unvested options were forfeited, most of the unvested RSUs were forfeited and unvested PRSUs received pro-rated vesting based on tenure over the measurement periods and achievement of performance. The stock-based compensation expense and adjustments for these awards were recorded as "Selling, general and administrative" within discontinued operations. The compensation cost that was charged against income for all stock-based compensation plans was $16.5 million, $16.6 million and $13.2 million for the years ended December 31, 2023, 2022 and 2021, respectively, and the total income tax benefit recognized in the consolidated statement of income (loss) for options, PRSUs and RSUs was approximately $2.2 million, $1.5 million and $1.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. We did not capitalize any stock-based compensation cost in the years ended December 31, 2023, 2022 or 2021. The following table summarizes our stock-based compensation expense by type of award (in millions) : Year Ended December 31, 2023 2022 2021 PRSUs $ 4.1 $ 3.4 $ 1.6 RSUs 9.0 8.0 5.0 Service options 0.7 0.9 1.0 Market options 2.7 4.3 5.6 Total stock-based compensation expense $ 16.5 $ 16.6 $ 13.2 KAR Auction Services, Inc. Amended and Restated 2009 Omnibus Stock and Incentive Plan - PRSUs, RSUs, Service Options and Market Options 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. The maximum number of shares of the Company's common stock that may be issued pursuant to awards under the Omnibus Plan is approximately 7.3 million, of which approximately 2.8 million shares remained available for future grants as of December 31, 2023. The Omnibus Plan provides for the grant of stock options, restricted stock, stock appreciation rights, other stock-based awards and cash-based awards. The grants described below were made pursuant to the Company's Policy on Granting Equity Awards. PRSUs In the years ended December 31, 2023, 2022 and 2021 we granted a target amount of approximately 0.5 million, 0.5 million and 0.7 million, respectively, PRSUs to certain executive officers of the Company. Three quarters of the PRSUs granted in 2023 vest if and to the extent that the Company's cumulative Adjusted EBITDA ("Adjusted EBITDA PRSUs") attains certain specified goals over three years. The other one quarter of the PRSUs granted in 2023 vest if and to the extent that the Company's total shareholder return over three years relative to that of companies within the S&P SmallCap 600 ("TSR PRSUs") exceeds certain levels. The PRSUs granted in 2022 were set to vest if and to the extent that the Company's cumulative operating adjusted net income per share attains certain specified goals over three years. Following the Transaction, in September 2022 the performance targets and the related award agreements for the 2022 PRSUs were amended to modify the performance metric from operating adjusted net income per share to Adjusted EBITDA. The modification of the 2022 PRSUs affected 13 participants and there was no incremental compensation cost resulting from the modification. Approximately 0.5 million of the PRSUs granted in 2021 vest if and to the extent that the Company's cumulative operating adjusted net income per share attains certain specified goals over three years. Approximately 0.2 million of the PRSUs granted in 2021 vest if and to the extent that certain operational goals are attained by year-end 2023 or 2024. In 2023, the weighted average grant date fair value of the Adjusted EBITDA PRSUs was $14.25 per share, which was determined using the closing price of the Company's common stock on the dates of grant. Additionally in 2023, the weighted average grant date fair value of the TSR PRSUs was $21.62 per share and was developed with Monte Carlo simulations using a multivariate Geometric Brownian Motion. The weighted average grant date fair value of the PRSUs was $18.46 per share and $15.37 per share in 2022 and 2021, respectively, which was determined using the closing price of the Company's common stock on the dates of grant. Dividend equivalents accrue on the PRSUs, as applicable, and are subject to the same vesting and forfeiture terms as the PRSUs. The following table summarizes PRSU activity, including dividend equivalents, under the Omnibus Plan for the year ended December 31, 2023: Performance-Based Restricted Stock Units Number Weighted Average Grant Date Fair Value PRSUs at January 1, 2023 1,456,736 $ 18.24 Granted 540,752 16.09 Vested — N/A Forfeited (418,893) 22.25 PRSUs at December 31, 2023 1,578,595 $ 16.44 The fair value of shares that vested during the years ended December 31, 2023, 2022 and 2021 was $0.0 million, $2.1 million and $2.7 million, respectively. As of December 31, 2023, an estimated $5.3 million of unrecognized compensation expense related to non-vested PRSUs is expected to be recognized over a weighted average term of approximately 1.6 years. RSUs In the years ended December 31, 2023, 2022 and 2021, approximately 0.6 million, 1.2 million and 0.5 million RSUs were granted to certain executive officers and 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 $14.19 per share, $14.82 per share and $13.93 per share in 2023, 2022 and 2021, respectively. Dividend equivalents accrue on the RSUs, as applicable, and are subject to the same vesting and forfeiture terms as the RSUs. The following table summarizes RSU activity, including dividend equivalents, under the Omnibus Plan for the year ended December 31, 2023: Restricted Stock Units Number Weighted Average Grant Date Fair Value RSUs at January 1, 2023 1,365,882 $ 14.88 Granted 606,728 14.19 Vested (544,191) 15.56 Forfeited (78,543) 15.23 RSUs at December 31, 2023 1,349,876 $ 14.27 The fair value of shares that vested during the years ended December 31, 2023, 2022 and 2021 was $8.0 million, $5.3 million and $3.8 million, respectively. As of December 31, 2023, there was approximately $10.6 million of unrecognized compensation expense related to non-vested RSUs which is expected to be recognized over a weighted average term of 1.6 years. Service Options For the years ended December 31, 2023 and 2021, we granted approximately 0.1 million and 1.1 million service options, respectively, with a weighted average exercise price of $14.83 per share and $16.15 per share, respectively, to certain executive officers 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 dates. Service options have been accounted for as equity awards and, as such, compensation expense was measured based on the fair value of the award at the date of grant and is being recognized ratably over the service periods of four years. The weighted average fair value of the service options granted was $7.14 per share and $3.98 per share for the years ended December 31, 2023 and 2021, respectively. The fair value of the service options granted in 2023 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%. The fair values of the service options granted in 2021 were estimated on the dates of grant using the Black-Scholes option pricing model with an expected life of 6.25 years, a weighted average expected volatility of 36.55%, a weighted average expected dividend yield of 3.8% and a weighted average risk free interest rate of 1.06%. The expected life of the service options was calculated in accordance with Staff Accounting Bulletin No. 107, which allows for the use of a simplified method. Under the simplified method, the expected life is based on the midpoint of the average time to vest and the full contractual term of the time-vested options. The computation of expected volatility was based on historical stock volatility. The expected dividend yield is based upon an anticipated return to historical dividends during the life of the time-vested options. The risk free interest rate is based upon observed interest rates appropriate for the term of the options. The following table summarizes service option activity under the Omnibus Plan for the year ended December 31, 2023: Service Options Number Weighted Weighted Aggregate Outstanding at January 1, 2023 1,286,097 $ 14.71 Granted 53,222 14.83 Exercised (156,752) 11.31 Forfeited — N/A Canceled (19,293) 14.05 Outstanding at December 31, 2023 1,163,274 $ 15.18 6.1 years $ 1.1 Exercisable at December 31, 2023 665,409 $ 14.64 5.0 years $ 0.9 The intrinsic value presented in the table above represents the amount by which the market value of the underlying stock exceeds the exercise price of the option at December 31, 2023. The intrinsic value changes continuously based on the fair value of our stock. The market value is based on the Company's closing stock price of $14.81 on December 31, 2023. The total intrinsic value of service options exercised during the years ended December 31, 2023, 2022 and 2021 was $0.5 million, $0.5 million and $0.5 million, respectively. The fair market value of all vested and exercisable service options at December 31, 2023 and 2022 was $9.9 million and $8.1 million, respectively. As of December 31, 2023, there was approximately $1.3 million of unrecognized compensation expense related to non-vested service options which is expected to be recognized over a weighted average term of 2.0 years. Market Options For the years ended December 31, 2023 and 2021, we granted approximately 0.2 million and 4.3 million market options, respectively, with a weighted average exercise price of $14.83 per share and $16.15 per share, respectively, to certain executive officers 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 dates, 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 each respective exercise price, for 20 consecutive trading days. The weighted average fair value of the market options granted for the years ended December 31, 2023 and 2021 was $6.91 per share and $3.91 per share, respectively. 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. The following table summarizes market option activity under the Omnibus Plan for the year ended December 31, 2023: Market Options Number Weighted Weighted Aggregate Outstanding at January 1, 2023 3,557,134 $ 16.09 Granted 212,886 14.83 Exercised — N/A Forfeited — N/A Canceled — N/A Outstanding at December 31, 2023 3,770,020 $ 16.02 7.5 years $ 1.5 Exercisable at December 31, 2023 — N/A N/A N/A The intrinsic value presented in the table above represents the amount by which the market value of the underlying stock exceeds the exercise price of the option at December 31, 2023. The intrinsic value changes continuously based on the fair value of our stock. The market value is based on the Company's closing stock price of $14.81 on December 31, 2023. As of December 31, 2023, there was approximately $2.7 million of unrecognized compensation expense related to non-vested market options which is expected to be recognized over a weighted average term of 2.5 years. KAR Auction Services, Inc. Employee Stock Purchase Plan We adopted the KAR Auction Services, Inc. Employee Stock Purchase Plan ("ESPP") in December 2009. The ESPP, which was approved by our stockholders, is designed to provide an incentive to attract, retain and reward eligible employees and is intended to qualify as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code of 1986, as amended. A maximum of 2,500,000 shares of our common stock have been reserved for issuance under the ESPP, of which 933,673 shares remained available for future ESPP purchases as of December 31, 2023. The ESPP provides for one month offering periods with a 15% discount from the fair market value of a share on the date of purchase. A participant's annual contribution to the ESPP may not exceed $25,000 per year. Unless terminated earlier, the ESPP will terminate on December 31, 2028. In accordance with ASC 718, Compensation—Stock Compensation , the entire 15% purchase discount is recorded as compensation expense. Share Repurchase Program In October 2019, the board of directors authorized a repurchase of up to $300 million of the Company's outstanding common stock, par value $0.01 per share. Since October 2019, the share repurchase program has been amended from time-to-time through subsequent approvals by the board of directors. These amendments have served to increase the size of the share repurchase program and extend its maturity date through December 31, 2024. At December 31, 2023, approximately $125.0 million of the Company's outstanding common stock remained available for repurchase under the 2019 share repurchase program. Repurchases may be made in the open market or through privately negotiated transactions, in accordance with applicable securities laws and regulations, including pursuant to repurchase plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. The timing and amount of any repurchases is subject to market and other conditions. This program does not oblige the Company to repurchase any dollar amount or any number of shares under the authorization, and the program may be suspended, discontinued or modified at any time, for any reason and without notice. In 2023, 2022 and 2021, we repurchased and retired 1,438,859 shares, 12,649,722 shares and 10,847,800 shares of common stock, respectively, in the open market at a weighted average price of $15.43 per share, $14.39 per share and $16.66 per share, respectively. |
Net Income (Loss) from Continui
Net Income (Loss) from Continuing Operations Per Share | 12 Months Ended |
Dec. 31, 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) : Year Ended December 31, 2023 2022 2021 Income (loss) from continuing operations $ (154.8) $ 28.6 $ (0.8) Series A Preferred Stock dividends (44.4) (43.8) (41.1) (Income) loss from continuing operations attributable to participating securities — 3.6 9.0 Income (loss) from continuing operations attributable to common stockholders $ (199.2) $ (11.6) $ (32.9) Weighted average common shares outstanding 109.1 116.3 123.0 Effect of dilutive stock options and restricted stock awards — — — Weighted average common shares outstanding and potential common shares 109.1 116.3 123.0 Income (loss) from continuing operations per share Basic $ (1.83) $ (0.10) $ (0.27) Diluted $ (1.83) $ (0.10) $ (0.27) 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. Stock options that would have an anti-dilutive effect on income from continuing operations per diluted share, unexercisable market options and PRSUs subject to performance conditions which have not yet been satisfied are excluded from the calculations. In accordance with U.S. GAAP, no potential common shares were included in the computation of diluted income from continuing operations per share for the years ended December 31, 2023, 2022 and 2021, because to do so would have been anti-dilutive based on the period undistributed loss from continuing operations. Total options outstanding at December 31, 2023, 2022 and 2021 were 4.9 million, 4.8 million and 5.8 million, respectively. |
Allowance for Credit Losses and
Allowance for Credit Losses and Doubtful Accounts | 12 Months Ended |
Dec. 31, 2023 | |
Allowance for Credit Losses and Doubtful Accounts [Abstract] | |
Allowance for Credit Losses and Doubtful Accounts | 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 ): Year Ended December 31, 2023 2022 2021 Allowance for Credit Losses Balance at beginning of period $ 21.5 $ 23.0 $ 22.0 Provision for credit losses 50.6 9.8 3.5 Recoveries 8.9 9.0 12.6 Less charge-offs (58.1) (20.1) (15.1) Other 0.1 (0.2) — Balance at end of period $ 23.0 $ 21.5 $ 23.0 AFC's allowance for credit losses includes estimated losses for finance receivables currently held on the balance sheet of AFC and its subsidiaries. The following is a summary of changes in the allowance for doubtful accounts related to trade receivables ( in millions ): Year Ended December 31, 2023 2022 2021 Allowance for Doubtful Accounts Balance at beginning of period $ 15.8 $ 9.5 $ 7.1 Provision for credit losses 8.6 8.8 3.7 Less net charge-offs (14.5) (2.5) (1.3) Balance at end of period $ 9.9 $ 15.8 $ 9.5 Recoveries of trade receivables were netted with charge-offs, as they were not material. Changes in the Canadian dollar exchange rate did not have a material effect on the allowance for doubtful accounts. |
Finance Receivables and Obligat
Finance Receivables and Obligations Collateralized by Finance Receivables | 12 Months Ended |
Dec. 31, 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. AFC Funding Corporation had committed liquidity of $2.0 billion for U.S. finance receivables at December 31, 2023. In September 2022, AFC and AFC Funding Corporation entered into the Tenth Amended and Restated Receivables Purchase Agreement (the "Receivables Purchase Agreement"). The Receivables Purchase Agreement increased AFC Funding's U.S. committed liquidity from $1.70 billion to $2.0 billion and extended the facility's maturity date from January 31, 2024 to January 31, 2026. In addition, the discount rate is now based on the SOFR reference rate, provisions designed to provide additional lending and operational flexibility were modified or added and provisions providing for a mechanism for determining an alternative rate of interest were modified. We capitalized approximately $10.5 million of costs in connection with the Receivables Purchase Agreement. We also have an agreement for the securitization of AFCI's receivables. AFCI's committed facility is provided through a third-party conduit (separate from the U.S. facility) and was C$300 million on December 31, 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 $0.6 million of costs in connection with the Canadian Receivables Purchase Agreement. The receivables sold pursuant to both the U.S. and Canadian securitization agreements are accounted for as secured borrowings. In September 2022, AFCI entered into the Sixth Amended and Restated Receivables Purchase Agreement (the "Canadian Sixth Receivables Purchase Agreement"). The Canadian Sixth Receivables Purchase Agreement extended the facility's maturity. In addition, provisions designed to provide additional lending and operational flexibility were modified or added. We capitalized approximately $1.1 million of costs in connection with the Canadian Sixth Receivables Purchase Agreement. 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. December 31, 2023 Net Credit Losses Total Amount of: (in millions) Receivables Receivables Floorplan receivables $ 2,301.4 $ 23.7 $ 49.2 Other loans 3.6 — — Total receivables managed $ 2,305.0 $ 23.7 $ 49.2 December 31, 2022 Net Credit Losses Total Amount of: (in millions) Receivables Receivables Floorplan receivables $ 2,409.9 $ 17.5 $ 11.1 Other loans 6.7 — — Total receivables managed $ 2,416.6 $ 17.5 $ 11.1 AFC's allowance for losses was $23.0 million and $21.5 million at December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, $2,296.4 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: December 31, 2023 2022 Obligations collateralized by finance receivables, gross $ 1,645.4 $ 1,697.0 Unamortized securitization issuance costs (13.5) (19.4) Obligations collateralized by finance receivables $ 1,631.9 $ 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 December 31, 2023, we were in compliance with the covenants in the securitization agreements. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 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, 2021 (1)(2) $ 1,357.1 $ 240.9 $ 1,598.0 Decrease for disposition activity (119.2) — (119.2) Foreign currency (14.3) — (14.3) Balance at December 31, 2022 (1)(2) $ 1,223.6 $ 240.9 $ 1,464.5 Increase for acquisition activity 25.9 — 25.9 Impairment (225.3) — (225.3) Foreign currency 6.1 — 6.1 Balance at December 31, 2023 (1)(2) $ 1,030.3 $ 240.9 $ 1,271.2 (1) Marketplace amounts are net of accumulated goodwill impairment charges of $250.8 million, $25.5 million and $25.5 million at December 31, 2023, 2022 and 2021, respectively. (2) Finance amounts are net of accumulated goodwill impairment charges of $161.5 million at December 31, 2023, 2022 and 2021. Goodwill represents the excess cost over fair value of identifiable net assets of businesses acquired. Goodwill decreased in 2023 primarily as a result of impairment in a few of our reporting units (see discussion below), partially offset by goodwill recognized for acquisition activity. Goodwill decreased in 2022 primarily as a result of the sale of the ADESA U.S. physical auction business, as well as foreign currency changes. As a result of the sale of the ADESA U.S. physical auction business in 2022, we allocated approximately $1.1 billion of goodwill related to the ADESA Auctions operating segment to the disposal group in connection with the disposition of ADESA U.S. The goodwill was initially allocated to the disposal group at the held-for-sale date, and updated at the sale date, based on the relative fair value of ADESA U.S. compared to the fair value of the remainder of the operating segment at both dates, respectively. The Company tests goodwill 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 December 31, 2023, the remaining carrying value of goodwill related to the U.S. Dealer-to-Dealer and Europe reporting units was $87.3 million and $120.8 million, respectively. 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 $36.4 million valuation allowance against the U.S. net deferred tax asset at December 31, 2023. No impairment was identified 2022. Following the sale of ADESA U.S., the Company made certain changes to its reporting structure within the Marketplace segment and realigned its reporting units as of November 30, 2022. This change required goodwill in the Marketplace segment to be allocated to the new reporting units based on their relative fair value. The Company tested goodwill of the new reporting units for impairment both before and following the change in reporting unit structure as of November 30, 2022, by comparing the fair values of the reporting units to their carrying values and no impairment was identified. A summary of customer relationships is as follows ( in millions ): December 31, 2023 December 31, 2022 Useful Gross Accumulated Carrying Gross Accumulated Carrying Customer relationships 5 - 19 $ 574.6 $ (438.5) $ 136.1 $ 553.2 $ (417.3) $ 135.9 The increase in customer relationships in 2023 was primarily related to the Manheim Canada acquisition, partially offset by the amortization of existing customer relationships. The decrease in customer relationships in 2022 was primarily related to the amortization of existing customer relationships. A summary of other intangibles is as follows ( in millions ): December 31, 2023 December 31, 2022 Useful Lives Gross Accumulated Carrying Gross Accumulated Carrying Tradenames 1 - Indefinite $ 123.2 $ (27.9) $ 95.3 $ 148.6 $ (15.2) $ 133.4 Computer software & technology 3 - 13 533.7 (447.5) 86.2 488.7 (390.8) 97.9 Total $ 656.9 $ (475.4) $ 181.5 $ 637.3 $ (406.0) $ 231.3 Other intangibles decreased in 2023 and 2022 primarily as a result of the amortization of existing intangibles, partially offset by computer software additions. The 2023 balance was also impacted by the ADESA tradename impairment and subsequent amortization taken (see discussion below). The carrying amount of tradenames with an indefinite life was approximately $8.7 million and $131.5 million at December 31, 2023 and 2022, respectively. 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 is being amortized over a remaining useful life of approximately 6 years. Amortization expense for customer relationships and other intangibles was $87.7 million, $83.6 million and $89.9 million for the years ended December 31, 2023, 2022 and 2021, respectively. Estimated amortization expense on existing intangible assets for the next five years is $70.4 million for 2024, $54.1 million for 2025, $38.2 million for 2026, $31.7 million for 2027 and $31.6 million for 2028. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following ( in millions ): Useful Lives December 31, 2023 2022 Land $ 84.8 $ 40.1 Buildings 5 - 40 54.6 46.0 Land improvements 5 - 20 32.6 33.2 Building and leasehold improvements 3 - 33 38.3 37.0 Furniture, fixtures and equipment 1 - 15 130.0 143.6 Vehicles 3 - 10 14.9 16.0 Construction in progress 1.8 5.4 357.0 321.3 Accumulated depreciation (187.2) (197.7) Property and equipment, net $ 169.8 $ 123.6 Depreciation expense for the years ended December 31, 2023, 2022 and 2021 was $13.8 million, $16.6 million and $20.0 million, respectively. |
Self Insurance and Retained Los
Self Insurance and Retained Loss Reserves | 12 Months Ended |
Dec. 31, 2023 | |
Self Insurance and Retained Loss Reserves [Abstract] | |
Self Insurance and Retained Loss Reserves | Self-Insurance and Retained Loss Reserves We self-insure our employee medical benefits, as well as a portion of our automobile, general liability and workers' compensation claims. We have insurance coverage that limits the exposure on individual claims. The cost of the insurance is expensed over the contract periods. Utilizing historical claims experience, we record an accrual for the claims based upon the expected amount of all such claims, which includes the cost of claims that have been incurred but not reported. Accrued medical benefits and workers' compensation expenses are included in "Accrued employee benefits and compensation expenses" while accrued automobile and general liability expenses are included in "Other accrued expenses." The following is a summary of the changes in the reserves for self-insurance and the retained losses ( in millions) : Year Ended December 31, 2023 2022 2021 Balance at beginning of period $ 12.5 $ 10.4 $ 10.0 Net payments (33.7) (27.8) (33.5) Expense 28.4 29.9 33.9 Balance at end of period $ 7.2 $ 12.5 $ 10.4 Individual stop-loss coverage for medical benefits was $0.5 million in 2023, 2022 and 2021. There was no aggregate policy limit for medical benefits for the Company in the last three years. The retention for automobile and general liability claims was $1.0 million per occurrence and the retention for workers' compensation claims was $0.5 million per occurrence with a $1.0 million corridor deductible in the 2023, 2022 and 2021 policy years. Once the $1.0 million corridor deductible is met for workers' compensation claims, the deductible reverts back to $0.5 million per occurrence. These retentions were aggregated for workers’ compensation, automobile and general liability claims at approximately $28.5 million in 2022 and 2021. If these aggregates were met, the insurance company would have paid the next $7.5 million. In 2023, the aggregate limit of the general liability primary policy was $3.0 million. After the aggregate limit of the general liability primary policy has been exhausted, the excess layers will respond subject to each policies terms and conditions. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2023 | |
Long-Term Debt, Unclassified [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following (in millions) : December 31, Interest Rate* Maturity 2023 2022 Revolving Credit Facility Adjusted Term SOFR + 2.25% June 23, 2028 $ 137.0 $ — 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 17.6 3.7 Total debt 364.6 498.7 Unamortized debt issuance costs/discounts (7.6) (4.7) Current portion of long-term debt (154.6) (288.7) Long-term debt $ 202.4 $ 205.3 *The interest rates presented in the table above represent the rates in place at December 31, 2023. The weighted average interest rate on our variable rate debt was 8.78% and 6.54% at December 31, 2023 and 2022, respectively. 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 $325 million 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 $6.2 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. 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 on which any loans under the Revolving Credit Facility are outstanding. We were in compliance with the applicable covenants in the Credit Agreement at December 31, 2023. 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 Credit Facility based on the Company’s Consolidated Senior Secured Net Leverage Ratio. As of December 31, 2023 and 2022, $137.0 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 $54.7 million and $19.0 million at December 31, 2023 and 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 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. In August 2022, we conducted a cash tender offer and $600 million of the senior notes were prepaid with proceeds from the Transaction. We incurred a loss on the extinguishment of the senior notes of $9.5 million in 2022 primarily representative of the early repayment premium and the write-off of unamortized debt issuance costs associated with the portion of the senior notes repaid. European Lines of Credit ADESA Europe has lines of credit aggregating $33.1 million (€30 million). The lines of credit had an aggregate $17.6 million and $3.7 million of borrowings outstanding at December 31, 2023 and 2022, respectively. The lines of credit are secured by certain inventory and receivables at ADESA Europe subsidiaries. Future Principal Payments At December 31, 2023, aggregate future principal payments on long-term debt are as follows ( in millions ): 2024 $ 154.6 2025 210.0 2026 — 2027 — 2028 — Thereafter — $ 364.6 The Company has historically included the Revolving Credit Facility in current debt based on its intent to repay the amount outstanding within one year; however, the Company is not contractually obligated to repay the borrowings until the maturity of the Revolving Credit Facility (June 2028). |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2023 | |
Financial Instruments [Abstract] | |
Financial Instruments | Financial Instruments Our derivative activities are initiated within the guidelines of documented corporate risk management policies. We do not enter into any derivative transactions for speculative or trading purposes. Interest Rate Risk Management We are exposed to interest rate risk on our variable rate borrowings. Accordingly, interest rate fluctuations affect the amount of interest expense we are obligated to pay. We have used interest rate derivatives with the objective of managing exposure to interest rate movements, thereby reducing the effect of interest rate changes and the effect they could have on future cash flows. Most recently, interest rate swap agreements have been used to accomplish this objective, and we have used interest rate cap agreements to accomplish this objective in prior years. 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 term of five years. 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." For the year ended December 31, 2021, the Company recorded an unrealized gain on the interest rate swaps of $13.8 million, net of tax of $4.6 million in "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 (loss) 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 (loss) for the three months ended June 30, 2022. For the year ended December 31, 2022, we reclassified $5.7 million of unrealized loss, net of tax of $1.8 million, from "Accumulated other comprehensive income." The amounts reclassified from accumulated other comprehensive income in 2022 related to the repayment of Term Loan B-6 in full. Concentrations of Credit Risk Financial instruments that potentially subject us to credit risk consist principally of interest-bearing investments, finance receivables, trade receivables and interest rate derivatives. We maintain cash and cash equivalents, short-term investments, and certain other financial instruments with various major financial institutions. We perform periodic evaluations of the relative credit standing of these financial institutions and companies and limit the amount of credit exposure with any one institution. Cash and cash equivalents include interest-bearing investments with maturities of three months or less. Due to the nature of our business, substantially all trade and finance receivables are due from vehicle dealers and commercial sellers. We have possession of vehicles or vehicle titles collateralizing a significant portion of the trade and finance receivables. The risk associated with this concentration is limited due to the large number of accounts and their geographic dispersion. We monitor the creditworthiness of customers to which we grant credit terms in the normal course of business. In the event of non-performance by counterparties to financial instruments we are exposed to credit-related losses, but management believes this credit risk is limited by periodically reviewing the creditworthiness of the counterparties to the transactions. Financial Instruments The carrying amounts of trade receivables, finance receivables, other current assets, accounts payable, accrued expenses and borrowings under our short-term revolving line of credit facilities approximate fair value because of the short-term nature of those instruments. As of December 31, 2023 and 2022, the estimated fair value of our long-term debt amounted to $360.4 million and $490.9 million, respectively. The estimates of fair value were based on broker-dealer quotes (Level 2 inputs) for our debt as of December 31, 2023 and 2022. The estimates presented on long-term financial instruments are not necessarily indicative of the amounts that would be realized in a current market exchange. |
Other (Income) Expense, Net
Other (Income) Expense, Net | 12 Months Ended |
Dec. 31, 2023 | |
Other Nonoperating Income (Expense) [Abstract] | |
Other (Income) Expense, Net | Other (Income) Expense, Net Other (income) expense, net consisted of the following ( in millions ): December 31, 2023 2022 2021 Change in realized and unrealized (gains) losses on investment securities, net $ 0.4 $ 7.1 $ (33.4) Contingent consideration valuation 1.3 — 24.3 Foreign currency (gains) losses (2.9) 2.5 3.8 Investment and note receivable impairment 10.3 — — Early termination of contractual arrangement (20.0) — — Other (4.7) (10.9) (7.2) Other (income) expense, net $ (15.6) $ (1.3) $ (12.5) 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. The realized and unrealized gains and losses on these investment securities are shown in the table above. 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 had a readily determinable fair value. As of December 31, 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 $0.0 million. There was no net unrealized loss on these investment securities for the year ended December 31, 2023. The remaining investments held of $26.0 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 $6.6 million, on which we recorded a credit impairment loss in "Other (income) expense, net" in 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. |
Convertible Preferred Stock
Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2023 | |
Temporary Equity Disclosure [Abstract] | |
Convertible Preferred Stock | Convertible Preferred Stock In June 2020, OPENLANE completed the issuance and sale of an aggregate of 550,000 shares of the Company’s Series A Convertible Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), in two closings at a purchase price of $1,000 per share (for the second closing, plus accumulated dividends from and including the first closing date to but excluding June 29, 2020) for an aggregate purchase price of approximately $550 million to an affiliate of Ignition Parent LP (“Apax”) and an affiliate of Periphas Capital GP, LLC (“Periphas”). The Company has authorized 1,500,000 shares of Series A Preferred Stock. The Series A Preferred Stock ranks senior to the shares of the Company’s common stock, par value $0.01 per share, with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. The Series A Preferred Stock has a liquidation preference of $1,000 per share. The holders of the Series A Preferred Stock are entitled to a cumulative dividend at the rate of 7% per annum, payable quarterly in arrears. Dividends were payable in kind through the issuance of additional shares of Series A Preferred Stock for the first eight dividend payments (through June 30, 2022), and thereafter, in cash or in kind, or in any combination of both, at the option of the Company. For the years ended December 31, 2023 and 2022, the holders of the Series A Preferred Stock received cash dividends aggregating $44.4 million and $22.2 million, respectively, and for the years ended December 31, 2022 and 2021, the holders of the Series A Preferred Stock received dividends in kind with a value in the aggregate of approximately $21.6 million and $41.1 million, respectively. The holders of the Series A Preferred Stock are also entitled to participate in dividends declared or paid on our common stock on an as-converted basis. The Series A Preferred Stock will be convertible at the option of the holders thereof at any time after one year into shares of common stock at a conversion price of $17.75 per share of Series A Preferred Stock and a conversion rate of 56.3380 shares of common stock per share of Series A Preferred Stock, subject to certain anti-dilution adjustments. At any time after three years, if the closing price of the common stock exceeds $31.0625 per share, as may be adjusted pursuant to the Certificate of Designations, for at least 20 trading days in any period of 30 consecutive trading days, at the election of the Company, all or any portion of the Series A Preferred Stock will be convertible into the relevant number of shares of common stock. The holders of the Series A Preferred Stock are entitled to vote with the holders of the Company's common stock as a single class on all matters submitted to a vote of the holders of the Company's common stock. At any time after six years, the Company may redeem some or all of the Series A Preferred Stock for a per share amount in cash equal to: (i) the sum of (x) the liquidation preference thereof, plus (y) all accrued and unpaid dividends, multiplied by (ii) (A) 105% if the redemption occurs at any time after the six-year anniversary of June 10, 2020 (the "Initial Closing Date") and prior to the seven-year anniversary of the Initial Closing Date or (B) 100% if the redemption occurs after the seven-year anniversary of the Initial Closing Date. Upon certain change of control events involving the Company, and subject to certain limitations set forth in the Certificate of Designations, each holder of the Series A Preferred Stock will either (i) receive such number of shares of common stock into which such holder is entitled to convert all or a portion of such holder’s shares of Series A Preferred Stock at the then current conversion price, (ii) receive, in respect of all or a portion of such holder’s shares of Series A Preferred Stock, the greater of (x) the amount per share of Series A Preferred Stock that such holder would have received had such holder, immediately prior to such change of control, converted such share of Series A Preferred Stock into common stock and (y) a purchase price per share of Series A Preferred Stock, payable in cash, equal to the product of (A) 105% multiplied by (B) the sum of the liquidation preference and accrued dividends with respect to such share of Series A Preferred Stock, or (iii) unless the consideration in such change of control event is payable entirely in cash, retain all or a portion of such holder’s shares of Series A Preferred Stock. For so long as Apax or its affiliates beneficially own a certain percentage of the shares of Series A Preferred Stock purchased in the Apax issuance on an as-converted basis, Apax will continue to have the right to appoint one individual to the board of directors. Additionally, so long as Apax or its affiliates beneficially own a certain percentage of the shares of Series A Preferred Stock purchased in the Apax issuance on an as-converted basis, Apax will have the right to appoint one non-voting observer to the board of directors. Likewise, so long as Periphas beneficially owns a certain percentage of the shares of Series A Preferred Stock purchased in the Periphas issuance on an as-converted basis, Periphas will have the right to appoint one non-voting observer to the board of directors. Apax is subject to certain standstill restrictions, until the later of three years and the date on which Apax no longer owns 25% of the shares of Series A Preferred Stock purchased in the Apax issuance on an as-converted basis. Periphas is also subject to certain standstill restrictions, until the later of three years and the date on which Periphas no longer owns 50% of the shares of Series A Preferred Stock purchased in the Periphas issuance on an as-converted basis. Subject to certain customary exceptions, Apax and Periphas are restricted from transferring the Series A Preferred Stock for one year. Apax, its affiliates and Periphas have certain customary registration rights with respect to shares of the Series A Preferred Stock and the shares of the common stock held by it issued upon any future conversion of the Series A Preferred Stock. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Lessee, Operating Leases | Leases We lease property, software, automobiles, trucks and trailers pursuant to operating lease agreements. We also lease furniture, fixtures and equipment under finance leases. Our leases have varying remaining lease terms with leases expiring through 2034, some of which include options to extend the leases. The components of lease expense were as follows ( in millions ): Year Ended December 31, 2023 2022 2021 Operating lease cost $ 15.9 $ 17.7 $ 18.6 Finance lease cost: Amortization of right-of-use assets $ 1.3 $ 2.9 $ 7.4 Interest on lease liabilities 0.1 0.3 0.6 Total finance lease cost $ 1.4 $ 3.2 $ 8.0 Supplemental cash flow information related to leases was as follows ( in millions ): Year Ended December 31, 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows related to operating leases $ 15.9 $ 17.5 $ 18.2 Operating cash flows related to finance leases 0.1 0.3 0.6 Financing cash flows related to finance leases 1.9 3.9 5.6 Right-of-use assets obtained in exchange for lease obligations: Operating leases 1.4 4.0 6.7 Finance leases — — 3.7 Supplemental balance sheet information related to leases was as follows ( in millions, except lease term and discount rate ): December 31, 2023 2022 Operating Leases Operating lease right-of-use assets $ 75.9 $ 84.8 Other accrued expenses $ 11.0 $ 10.5 Operating lease liabilities 70.4 79.7 Total operating lease liabilities $ 81.4 $ 90.2 Finance Leases Property and equipment, gross $ 37.6 $ 48.6 Accumulated depreciation (37.3) (47.1) Property and equipment, net $ 0.3 $ 1.5 Other accrued expenses $ 0.9 $ 1.9 Other liabilities — 0.9 Total finance lease liabilities $ 0.9 $ 2.8 Weighted Average Remaining Lease Term Operating leases 8.3 years 9.0 years Finance leases 1.0 year 1.6 years Weighted Average Discount Rate Operating leases 5.9 % 5.9 % Finance leases 4.0 % 4.4 % Maturities of lease liabilities as of December 31, 2023 were as follows ( in millions ): Operating Finance Leases 2024 $ 15.4 $ 0.9 2025 14.7 — 2026 11.6 — 2027 10.8 — 2028 9.2 — Thereafter 42.0 — Total lease payments 103.7 0.9 Less imputed interest (22.3) — Total $ 81.4 $ 0.9 |
Lessee, Finance Leases | Leases We lease property, software, automobiles, trucks and trailers pursuant to operating lease agreements. We also lease furniture, fixtures and equipment under finance leases. Our leases have varying remaining lease terms with leases expiring through 2034, some of which include options to extend the leases. The components of lease expense were as follows ( in millions ): Year Ended December 31, 2023 2022 2021 Operating lease cost $ 15.9 $ 17.7 $ 18.6 Finance lease cost: Amortization of right-of-use assets $ 1.3 $ 2.9 $ 7.4 Interest on lease liabilities 0.1 0.3 0.6 Total finance lease cost $ 1.4 $ 3.2 $ 8.0 Supplemental cash flow information related to leases was as follows ( in millions ): Year Ended December 31, 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows related to operating leases $ 15.9 $ 17.5 $ 18.2 Operating cash flows related to finance leases 0.1 0.3 0.6 Financing cash flows related to finance leases 1.9 3.9 5.6 Right-of-use assets obtained in exchange for lease obligations: Operating leases 1.4 4.0 6.7 Finance leases — — 3.7 Supplemental balance sheet information related to leases was as follows ( in millions, except lease term and discount rate ): December 31, 2023 2022 Operating Leases Operating lease right-of-use assets $ 75.9 $ 84.8 Other accrued expenses $ 11.0 $ 10.5 Operating lease liabilities 70.4 79.7 Total operating lease liabilities $ 81.4 $ 90.2 Finance Leases Property and equipment, gross $ 37.6 $ 48.6 Accumulated depreciation (37.3) (47.1) Property and equipment, net $ 0.3 $ 1.5 Other accrued expenses $ 0.9 $ 1.9 Other liabilities — 0.9 Total finance lease liabilities $ 0.9 $ 2.8 Weighted Average Remaining Lease Term Operating leases 8.3 years 9.0 years Finance leases 1.0 year 1.6 years Weighted Average Discount Rate Operating leases 5.9 % 5.9 % Finance leases 4.0 % 4.4 % Maturities of lease liabilities as of December 31, 2023 were as follows ( in millions ): Operating Finance Leases 2024 $ 15.4 $ 0.9 2025 14.7 — 2026 11.6 — 2027 10.8 — 2028 9.2 — Thereafter 42.0 — Total lease payments 103.7 0.9 Less imputed interest (22.3) — Total $ 81.4 $ 0.9 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of our income (loss) from continuing operations before income taxes and the provision for income taxes are as follows ( in millions ): Year Ended December 31, 2023 2022 2021 Income (loss) from continuing operations before income taxes: Domestic $ (209.7) $ (59.7) $ (55.8) Foreign 63.2 98.3 70.1 Total $ (146.5) $ 38.6 $ 14.3 Income tax expense (benefit): Current: Federal $ 22.1 $ (9.2) $ (16.6) Foreign 16.0 23.1 27.7 State — (1.6) (0.4) Total current provision 38.1 12.3 10.7 Deferred: Federal (29.4) (2.9) 4.6 Foreign 3.2 0.9 0.4 State (3.6) (0.3) (0.6) Total deferred provision (29.8) (2.3) 4.4 Income tax expense $ 8.3 $ 10.0 $ 15.1 The provision for income taxes was different from the U.S. federal statutory rate applied to income before taxes, and is reconciled as follows: Year Ended December 31, 2023 2022 2021 Statutory rate 21.0 % 21.0 % 21.0 % State and local income taxes, net 3.8 % (4.8) % 1.3 % Reserves for tax exposures — % 0.4 % (1.2) % Change in valuation allowance (25.2) % 8.5 % 9.5 % International operations (4.7) % 2.9 % 56.2 % Stock-based compensation (0.1) % — % (5.3) % Impact of law and rate change 0.2 % (5.6) % 1.5 % Excess officer's compensation (1.0) % 5.5 % 7.9 % Transaction costs — % (0.2) % 2.5 % Refund claims — % — % (19.2) % Goodwill and other intangibles impairment (0.9) % — % — % Impact of acquisition and divestiture adjustments 1.3 % — % 34.3 % Other, net (0.1) % (1.8) % (2.9) % Effective rate (5.7) % 25.9 % 105.6 % The effective tax rate in 2023 was unfavorably impacted by the goodwill and other intangibles impairment charges and the recording of valuation allowance against the U.S. net deferred tax asset. The effective tax rate in 2021 was unfavorably impacted by earnings mix between domestic and foreign, and by the expense for the increase in the estimated value of contingent consideration for which no tax benefit was recorded. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax benefits associated with the goodwill and tradename impairments 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 valuation allowance against the U.S. net deferred tax asset at December 31, 2023. We offset all deferred tax assets and liabilities by jurisdiction, as well as any related valuation allowance, and present them as a non-current deferred income tax asset or liability (as applicable). Deferred tax assets (liabilities) are comprised of the following ( in millions ): December 31, 2023 2022 Gross deferred tax assets: Allowances for trade and finance receivables $ 8.1 $ 9.0 Accruals and liabilities 4.3 3.9 Employee benefits and compensation 9.2 7.1 Net operating loss carryforwards 19.9 19.5 Right of use lease liability 20.1 22.4 Other 7.9 5.3 Total deferred tax assets 69.5 67.2 Deferred tax asset valuation allowance (63.2) (25.3) Total 6.3 41.9 Gross deferred tax liabilities: Property and equipment (3.5) (16.1) Goodwill and intangible assets 4.1 (49.9) Right of use lease asset (18.7) (21.0) Other (6.1) (2.6) Total (24.2) (89.6) Net deferred tax liabilities $ (17.9) $ (47.7) The tax benefit from state and federal net operating loss carryforwards expires as follows ( in millions ): 2024 $ 0.1 2025 0.2 2026 0.1 2027 — 2028 — 2029 and after 19.5 $ 19.9 Permanently reinvested undistributed earnings of our foreign subsidiaries were approximately $452.6 million at December 31, 2023. Because these amounts have been or will be permanently reinvested in properties and working capital, we have not recorded the deferred taxes associated with these earnings. If the undistributed earnings of foreign subsidiaries were to be remitted, state and local income tax expense and withholding tax expense would need to be recognized, net of any applicable foreign tax credits. It is not practical for us to determine the additional tax that would be incurred upon remittance of these earnings. We made federal income tax payments, related to continuing operations and net of federal income tax refunds, of $7.5 million, $0.0 million and $0.0 million in 2023, 2022 and 2021, respectively. State and foreign income taxes paid by us, net of refunds, totaled $28.3 million, $25.6 million and $24.8 million in 2023, 2022 and 2021, respectively. We apply the provisions of ASC 740, Income Taxes . ASC 740 clarifies the accounting and reporting for uncertainty in income taxes recognized in an enterprise's financial statements. These provisions prescribe a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken on income tax returns. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows ( in millions ): December 31, 2023 2022 Balance at beginning of period $ 5.8 $ 5.0 Increase in prior year tax positions 9.2 0.4 Increase in current year tax positions 0.7 1.4 Lapse in statute of limitations (0.8) (1.0) Balance at end of period $ 14.9 $ 5.8 The total amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate was $12.3 million and $4.2 million at December 31, 2023 and 2022, respectively. We record interest and penalties associated with the uncertain tax positions within our provision for income taxes on the consolidated statement of income (loss). We had reserves totaling $1.1 million and $0.4 million at December 31, 2023 and 2022 associated with interest and penalties, net of tax. The provision for income taxes involves management judgment regarding interpretation of relevant facts and laws in the jurisdictions in which the Company operates. Future changes in applicable laws, projected levels of taxable income and tax planning could change the effective tax rate and tax balances recorded by us. In addition, U.S. and non-U.S. tax authorities periodically review income tax returns filed by us and can raise issues regarding our filing positions, timing and amount of income or deductions and the allocation of income among the jurisdictions in which we operate. A significant period of time may elapse between the filing of an income tax return and the ultimate resolution of an issue raised by a revenue authority with respect to that return. In the normal course of business we are subject to examination by taxing authorities in the U.S., Canada, Western Europe, United Kingdom, Mexico, Uruguay and the Philippines. In general, the examination of our material tax returns is completed for the years prior to 2020. Based on the potential outcome of the Company's tax examinations and the expiration of the statute of limitations for specific jurisdictions, it is reasonably possible that the currently remaining unrecognized tax benefits will change within the next 12 months. The associated net tax impact on the reserve balance is estimated to be in the range of a $0.0 million to $0.5 million decrease. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
401(K) Plan | Employee Benefit Plans 401(k) Plan We maintain a defined contribution 401(k) plan that covers substantially all U.S. employees. Participants are generally allowed to make non-forfeitable contributions up to the annual IRS limits. The Company matches 100 percent of the amounts contributed by each individual participant up to 4 percent of the participant's compensation. Participants are 100 percent vested in the Company's contributions. For the years ended December 31, 2023, 2022 and 2021 we contributed $6.0 million, $6.3 million and $6.6 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and Contingencies We 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. Legal fees are expensed as incurred. We accrue, as appropriate, for environmental remediation costs anticipated to be incurred at certain of our vehicle logistics center facilities. There were no liabilities for environmental matters included in "Other accrued expenses" at December 31, 2023 or 2022. We store a significant number of vehicles owned by various customers that are consigned to us to be sold through our marketplaces. We are contingently liable for each consigned vehicle until the eventual sale or other disposition, subject to certain natural disaster exceptions. Individual stop loss and aggregate insurance coverage is maintained on the consigned vehicles. These consigned vehicles are not included in the consolidated balance sheets. In the normal course of business, we also enter into various other guarantees and indemnities in our relationships with suppliers, service providers, customers and others. These guarantees and indemnifications do not materially impact our financial condition or results of operations, but indemnifications associated with our actions generally have no dollar limitations and historically have been inconsequential. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 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 ): December 31, 2023 2022 Foreign currency translation loss $ (36.7) $ (49.5) Accumulated other comprehensive loss $ (36.7) $ (49.5) |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 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. Marketplace encompasses all wholesale marketplaces throughout North America and Europe. The Marketplace segment relates to used vehicle remarketing, including marketplace services, remarketing, or make ready services and all are interrelated, synergistic elements along the auto remarketing chain. The Finance segment (through AFC) is primarily engaged in the business of providing short-term, inventory-secured financing to independent dealer customers. AFC conducts business primarily at or near wholesale used vehicle auctions in the U.S. and Canada and other areas where there is a concentration of AFC customers. Financial information regarding our reportable segments is set forth below as of and for the year ended December 31, 2023 (in millions) : Marketplace Finance Consolidated Operating revenues $ 1,251.7 $ 393.4 $ 1,645.1 Operating expenses Cost of services (exclusive of depreciation and amortization) 801.7 65.9 867.6 Selling, general and administrative 380.6 49.8 430.4 Depreciation and amortization 92.2 9.3 101.5 Goodwill and other intangibles impairment 250.8 — 250.8 Total operating expenses 1,525.3 125.0 1,650.3 Operating profit (loss) (273.6) 268.4 (5.2) Interest expense 25.2 130.6 155.8 Other (income) expense, net (15.9) 0.3 (15.6) Loss on extinguishment of debt 1.1 — 1.1 Intercompany expense (income) 33.9 (33.9) — Income (loss) from continuing operations before income taxes (317.9) 171.4 (146.5) Income taxes (40.4) 48.7 8.3 Income (loss) from continuing operations $ (277.5) $ 122.7 $ (154.8) Total assets $ 2,065.6 $ 2,660.7 $ 4,726.3 Capital expenditures $ 46.5 $ 5.5 $ 52.0 Financial information regarding our reportable segments is set forth below as of and for the year ended December 31, 2022 (in millions) : Marketplace Finance Consolidated Operating revenues $ 1,143.5 $ 375.9 $ 1,519.4 Operating expenses Cost of services (exclusive of depreciation and amortization) 771.2 63.1 834.3 Selling, general and administrative 398.6 46.5 445.1 Depreciation and amortization 92.3 7.9 100.2 Gain on sale of property (33.9) — (33.9) Total operating expenses 1,228.2 117.5 1,345.7 Operating profit (loss) (84.7) 258.4 173.7 Interest expense 40.2 79.0 119.2 Other (income) expense, net (8.4) 7.1 (1.3) Loss on extinguishment of debt 17.2 — 17.2 Intercompany expense (income) 8.4 (8.4) — Income (loss) from continuing operations before income taxes (142.1) 180.7 38.6 Income taxes (36.4) 46.4 10.0 Income (loss) from continuing operations $ (105.7) $ 134.3 $ 28.6 Total assets $ 2,297.8 $ 2,822.0 $ 5,119.8 Capital expenditures $ 55.7 $ 5.2 $ 60.9 Financial information regarding our reportable segments is set forth below as of and for the year ended December 31, 2021 (in millions) : Marketplace Finance Consolidated Operating revenues $ 1,161.4 $ 289.2 $ 1,450.6 Operating expenses Cost of services (exclusive of depreciation and amortization) 737.1 55.4 792.5 Selling, general and administrative 385.5 35.2 420.7 Depreciation and amortization 100.5 9.4 109.9 Total operating expenses 1,223.1 100.0 1,323.1 Operating profit (loss) (61.7) 189.2 127.5 Interest expense 86.2 39.5 125.7 Other (income) expense, net 4.5 (17.0) (12.5) Intercompany expense (income) 0.2 (0.2) — Income (loss) from continuing operations before income taxes (152.6) 166.9 14.3 Income taxes (26.4) 41.5 15.1 Income (loss) from continuing operations $ (126.2) $ 125.4 $ (0.8) Total assets $ 2,562.0 $ 2,908.9 $ 5,470.9 Capital expenditures $ 59.6 $ 4.6 $ 64.2 Geographic Information Our foreign operations include Canada, Continental Europe and the U.K. Approximately 58%, 62% and 56% of our foreign operating revenues were from Canada for the years ended December 31, 2023, 2022 and 2021, 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) : Year Ended December 31, 2023 2022 2021 Operating revenues U.S. $ 1,026.1 $ 992.9 $ 847.9 Foreign 619.0 526.5 602.7 $ 1,645.1 $ 1,519.4 $ 1,450.6 December 31, 2023 2022 Long-lived assets U.S. $ 1,074.2 $ 1,787.4 Foreign 810.2 310.0 $ 1,884.4 $ 2,097.4 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2023 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) Information for any one quarterly period is not necessarily indicative of the results that may be expected for the year. 2023 Quarter Ended March 31 June 30 Sept. 30 Dec. 31 Operating revenues $ 420.6 $ 416.9 $ 416.3 $ 391.3 Operating expenses Cost of services (exclusive of depreciation and amortization) 224.2 222.6 216.0 204.8 Selling, general, and administrative 108.0 111.2 107.4 103.8 Depreciation and amortization 23.0 26.8 26.4 25.3 Goodwill and other intangibles impairment — 250.8 — — Total operating expenses 355.2 611.4 349.8 333.9 Operating profit (loss) 65.4 (194.5) 66.5 57.4 Interest expense 38.3 38.8 39.4 39.3 Other (income) expense, net 7.1 (21.3) 1.7 (3.1) Loss on extinguishment of debt — 1.1 — — Income (loss) from continuing operations before income taxes 20.0 (213.1) 25.4 21.2 Income taxes 7.3 (19.3) 12.7 7.6 Income (loss) from continuing operations $ 12.7 $ (193.8) $ 12.7 $ 13.6 Income (loss) from continuing operations per share Basic $ 0.01 $ (1.87) $ 0.01 $ 0.02 Diluted $ 0.01 $ (1.87) $ 0.01 $ 0.02 2022 Quarter Ended March 31 June 30 Sept. 30 Dec. 31 Operating revenues $ 369.4 $ 384.2 $ 393.0 $ 372.8 Operating expenses Cost of services (exclusive of depreciation and amortization) 210.8 211.9 209.6 202.0 Selling, general, and administrative 118.9 124.1 109.1 93.0 Depreciation and amortization 26.0 25.9 24.3 24.0 Gain on sale of property — — — (33.9) Total operating expenses 355.7 361.9 343.0 285.1 Operating profit 13.7 22.3 50.0 87.7 Interest expense 25.6 25.9 32.3 35.4 Other (income) expense, net 1.2 4.0 1.2 (7.7) Loss on extinguishment of debt — 7.7 9.3 0.2 Income (loss) from continuing operations before income taxes (13.1) (15.3) 7.2 59.8 Income taxes (4.7) (9.9) 6.7 17.9 Income (loss) from continuing operations $ (8.4) $ (5.4) $ 0.5 $ 41.9 Income (loss) from continuing operations per share Basic $ (0.16) $ (0.10) $ (0.09) $ 0.21 Diluted $ (0.16) $ (0.10) $ (0.09) $ 0.21 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On January 19, 2024, the Company and ADESA Auctions Canada Corporation, a subsidiary of the Company (the "Canadian Borrower") entered into the First Amendment Agreement (the "First Amendment") to the Credit Agreement. The First Amendment provides for, among other things, (i) a C$175 million revolving credit facility in Canadian dollars (the "Canadian Revolving Credit Facility") and (ii) a C$50 million sub-limit (the "Canadian Sub-limit") under the Company's existing Revolving Credit Facility for borrowings in Canadian dollars. The proceeds from the Canadian Revolving Credit Facility may be used to finance a portion of the Manheim Canada acquisition, to pay for expenses related to the First Amendment and for ongoing working capital and general corporate purposes. Loans under the Canadian Revolving Credit Facility bear interest at a rate calculated based on the type of borrowing (at the Canadian Borrower's election, either Adjusted Term CORRA Rate or Canadian Prime Rate (each as defined in the Credit Agreement, as amended by the First Amendment)) and the Company’s Consolidated Senior Secured Net Leverage Ratio, with such rate ranging from 3.00% to 2.50% for Adjusted Term CORRA loans and from 2.00% to 1.50% for Canadian Prime Rate loans. Loans under the Canadian Sub-limit will bear interest at the Adjusted Term CORRA Rate plus a margin ranging from 2.75% to 2.25% based on the Company’s Consolidated Senior Secured Net Leverage Ratio (the same margin as loans under the existing Revolving Credit Facility). The Canadian Borrower will also pay a commitment fee between 25 to 35 basis points, payable quarterly, on the average daily unused amount of the Canadian Revolving Credit Facility based on the Company’s Consolidated Senior Secured Net Leverage Ratio. The obligations of the Canadian Borrower under the Canadian Revolving Credit Facility are guaranteed by certain of the Company’s domestic and Canadian subsidiaries (the "Canadian Revolving Credit Facility Subsidiary Guarantors") and are secured by substantially all of the assets of the Company, the Canadian Borrower and the Canadian Revolving Credit Facility Subsidiary Guarantors, subject to certain exceptions; provided, however, the Canadian Borrower and the other Canadian subsidiaries of the Company constituting the Canadian Revolving Credit Facility Subsidiary Guarantors shall guarantee and/or provide security for only the Canadian Secured Obligations (as defined in the Credit Agreement, as amended by the First Amendment). |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net income (loss) | $ (154.1) | $ 241.2 | $ 66.5 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | Securities Trading Plans of Directors and Executive Officers During the fourth quarter of 2023, none of the Company’s directors or executive officers adopted a Rule 10b5-1 trading plan, 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 |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of OPENLANE and all of its majority owned subsidiaries. Significant intercompany transactions and balances have been eliminated. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. 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. |
Business Segments | Business Segments Our operations are grouped into two operating segments: Marketplace and Finance. The two operating segments also serve as our reportable business segments. Operations are measured through detailed budgeting and monitoring of contributions to consolidated income by each business segment. |
Derivative Instruments and Hedging Activity | Derivative Instruments and Hedging Activity We recognize all derivative financial instruments in the consolidated financial statements at fair value in accordance with Accounting Standards Codification ("ASC") 815, Derivatives and Hedging . We most recently used interest rate swaps that were designated and qualified as cash flow hedges to manage the variability of cash flows to be paid due to interest rate movements on our variable rate debt. The fair values of the interest rate derivatives are based on quoted market prices for similar instruments from commercial banks. The fair value of the derivatives were recorded in "Other liabilities" on the consolidated balance sheet. Changes in the fair value of the interest rate derivatives designated as cash flow hedges were recorded as a component of "Accumulated other comprehensive income." The earnings impact of the interest rate derivatives designated as cash flow hedges were recorded upon the recognition of the interest related to the hedged debt. |
Foreign Currency Translation | Foreign Currency Translation The local currency is the functional currency for each of our foreign entities. Revenues and expenses denominated in foreign currencies are translated into U.S. dollars at average exchange rates in effect during the year. Assets and liabilities of foreign operations are translated using the exchange rates in effect at year end. Foreign currency transaction gains and losses on intercompany balances are included in the consolidated statements of income within "Other (income) expense, net" and resulted in a gain of $2.9 million for the year ended December 31, 2023, a loss of $2.5 million for the year ended December 31, 2022 and a loss of $3.8 million for the year ended December 31, 2021. Adjustments arising from the translation of net assets located outside the U.S. (gains and losses) are shown as a component of "Accumulated other comprehensive income." |
Cash Equivalents | Cash Equivalents All highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. These investments are valued at cost, which approximates fair value. |
Restricted Cash | Restricted Cash AFC Funding Corporation, a wholly-owned, bankruptcy remote, consolidated, special purpose subsidiary of AFC, is required to maintain a minimum cash reserve of 1 or 3 percent of total receivables sold to the group of bank purchasers as security for the receivables sold. Automotive Finance Canada Inc. ("AFCI") is also required to maintain a minimum cash reserve of 1 or 3 percent of total receivables sold to its securitization facilities. The amount of the cash reserve depends on circumstances which are set forth in the securitization agreements. Such reserves are presented as "Restricted cash" on the consolidated balance sheets. |
Receivables | Receivables Trade receivables include the unremitted purchase price of vehicles purchased by third parties through our marketplaces, fees to be collected from those buyers and amounts due for services provided by us related to certain consigned vehicles in our possession. The amounts due with respect to the services provided by us related to certain consigned vehicles are generally deducted from the sales proceeds upon the eventual marketplace sale or other disposition of the related vehicles. Finance receivables include floorplan receivables created by financing dealer purchases of vehicles in exchange for a security interest in those vehicles and special purpose loans. Floorplan receivables become due at the earlier of the dealer subsequently selling the vehicle or a predetermined time period (generally 30 to 90 days). Special purpose loans relate to loans that are either line of credit loans or working capital loans that can be either secured or unsecured based on the facts and circumstances of the specific loans. Due to the nature of our business, substantially all trade and finance receivables are due from vehicle dealers and commercial sellers. We have possession of vehicles or vehicle titles collateralizing a significant portion of the trade and finance receivables. Trade receivables are reported net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on management's evaluation of the receivables under current conditions, the aging of the receivables, review of specific collection issues and such other factors which in management's judgment deserve recognition in estimating losses. We also maintain an allowance for credit losses for estimated losses resulting from the inability of customers to make required payments. AFC’s finance receivables represent revolving line of credit arrangements extended to used car dealers and are secured by collateral which is a key credit quality indicator monitored by the Company. Delinquencies and losses are monitored on an ongoing basis and this historical experience provides the primary basis for estimating the allowance which is estimated using a loss-rate method. We estimate the allowance for credit losses using a methodology that first considers historical loss rates calculated using recorded charge-offs and recoveries over a historical period as well as identified potential loss events as the primary quantitative factors. The allowance for credit losses is also based on management's evaluation of the receivables portfolio under current economic conditions, the size of the portfolio, overall portfolio credit quality, review of specific collection matters and such other factors which, in management's judgment, deserve recognition in estimating losses. Specific collection matters can be impacted by the outcome of negotiations, litigation and bankruptcy proceedings with individual customers. AFC controls credit risk through credit approvals, credit limits, underwriting and collateral management monitoring procedures, including lot audits and holding vehicle titles where permitted. The estimates are based on management’s evaluation of many factors, including AFC’s historical credit loss experience, the value of the underlying collateral, delinquency trends and economic conditions. The estimates are based on information available as of each reporting date and reflect the expected credit losses over the entire expected term of the receivables. Actual losses may differ from the original estimates due to actual results varying from those assumed in our estimates. |
Other Current Assets | Other Current Assets Other current assets consist of inventories, prepaid expenses, taxes receivable and other miscellaneous assets. The inventories, which consist of vehicles, supplies and parts, are accounted for on the specific identification method and are stated at the lower of cost or net realizable value. |
Goodwill | Goodwill Goodwill represents the excess of cost over fair value of identifiable net assets of businesses acquired. Goodwill is tested for impairment annually in the second quarter, or more frequently as impairment indicators arise. ASC 350, Intangibles—Goodwill and Other |
Customer Relationships and Other Intangible Assets | Customer Relationships and Other Intangible Assets Customer relationships are amortized on a straight-line basis over the life determined at the time of acquisition. Other intangible assets generally consist of tradenames and computer software, which if amortized, are amortized using the straight-line method over their estimated useful lives. Tradenames with indefinite lives are not amortized. Costs incurred related to software developed or obtained for internal use are capitalized during the application development stage of software development and amortized over their estimated useful lives. The amortization periods of finite-lived intangible assets are re-evaluated periodically when facts and circumstances indicate that revised estimates of useful lives may be warranted. Indefinite-lived tradenames are assessed for impairment, in accordance with ASC 350, annually in the second quarter or more frequently as impairment indicators arise. At the end of each assessment, a determination is made as to whether the tradenames still have an indefinite life. |
Property and Equipment | Property and Equipment Property and equipment are stated at historical cost less accumulated depreciation. Depreciation is computed using the straight-line method at rates intended to depreciate the costs of assets over their estimated useful lives. Upon retirement or sale of property and equipment, the cost of the disposed assets and related accumulated depreciation is removed from the accounts and any resulting gain or loss is credited or charged to selling, general and administrative expenses. Expenditures for normal repairs and maintenance are charged to expense as incurred. Additions and expenditures for improving or rebuilding existing assets that extend the useful life are capitalized. Leasehold improvements made either at the inception of the lease or during the lease term are amortized over the shorter of their economic lives or the lease term including any renewals that are reasonably assured. |
Unamortized Debt Issuance Costs | Unamortized Debt Issuance Costs Debt issuance costs reflect the expenditures incurred in conjunction with term loan debt, the revolving credit facility, the senior notes and the U.S. and Canadian receivables purchase agreements. The debt issuance costs are being amortized to interest expense using the effective interest method or the straight-line method, as applicable, over the lives of the related debt issues. Debt issuance costs are presented as a direct reduction from the carrying amount of the related debt liability. |
Other Assets | Other Assets Other assets consist of investments, deposits, notes receivable, foreign deferred taxes and other long-term assets. |
Long-Lived Assets | Long-Lived Assets Management reviews our property and equipment, customer relationships and other intangible assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. The determination includes evaluation of factors such as current market value, future asset utilization, business climate and future cash flows expected to result from the use of the related assets. If the carrying amount of a long-lived asset exceeds the total amount of the estimated undiscounted future cash flows from that asset, a loss is recognized in the period to the extent that the carrying amount exceeds the fair value of the asset. The impairment analysis is based on our current business strategy, expected growth rates and estimated future economic and regulatory conditions. |
Leases | Leases The Company accounts for leases under ASC 842, Leases . We determine if an arrangement is a lease at inception. Operating leases are included in "Operating lease right-of-use assets," "Other accrued expenses" and "Operating lease liabilities" in our consolidated balance sheets. Finance leases are included in "Property and equipment, net," "Other accrued expenses" and "Other liabilities" in our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term. We use the implicit rate when readily determinable. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The operating lease ROU assets also include any lease payments made and exclude lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. |
Accounts Payable | Accounts Payable Accounts payable include amounts due sellers from the proceeds of the sale of their consigned vehicles less any fees, as well as trade payables and outstanding checks to sellers and vendors. Book overdrafts, representing outstanding checks in excess of funds on deposit, are recorded in "Accounts payable" and amounted to $17.9 million and $20.2 million at December 31, 2023 and 2022, respectively. |
Self Insurance Reserves | Self-Insurance Reserves We self-insure our employee medical benefits, as well as a portion of our automobile, general liability and workers' compensation claims. We have insurance coverage that limits the exposure on individual claims. The cost of the insurance is expensed over the contract periods. We record an accrual for the claims related to our employee medical benefits, automobile, general liability and workers' compensation claims based upon the expected amount of all such claims. Accrued medical benefits and workers' compensation expenses are included in "Accrued employee benefits and compensation expenses" while accrued automobile and general liability expenses are included in "Other accrued expenses." |
Environmental Liabilities | Environmental Liabilities Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies. These accruals are adjusted periodically as assessment and remediation efforts progress, or as additional technical or legal information becomes available. Accruals for environmental liabilities are included in "Other accrued expenses" at undiscounted amounts and exclude claims for recoveries from insurance or other third parties. |
Temporary Equity | Temporary Equity The Company records shares of convertible preferred stock at their respective fair values on the date of issuance, net of issuance costs. The convertible preferred stock is recorded outside of stockholders' equity on the consolidated balance sheet because the shares contain liquidation features that are not solely within the Company's control. The Company has elected not to adjust the carrying values of the convertible preferred stock to the liquidation preferences of such shares because of the uncertainty of whether or when such an event would occur. Subsequent adjustments to increase the carrying value to the liquidation preferences will be made only when it becomes probable that such a liquidation event will occur. See Note 15 for a discussion of the convertible preferred stock. |
Revenue Recognition | Revenue Recognition The Company accounts for revenue under ASC 606, Revenue from Contracts with Customers , except for AFC interest and fee income, which is described under AFC below. Revenue is recognized when control of the promised goods or services are transferred to customers in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company generates its revenues from contracts with customers. In contracts with multiple performance obligations, the Company identifies each performance obligation and evaluates whether the performance obligations are distinct within the context of the contract at contract inception. Performance obligations that are not distinct at contract inception are combined. The Company allocates the transaction price to each distinct performance obligation proportionately based on the estimated standalone selling price for each performance obligation. The Company then determines how the goods or services are transferred to the customer in order to determine the timing of revenue recognition. There were no material contract assets, contract liabilities or deferred contract costs recorded on the consolidated balance sheet as of December 31, 2023. For each of our primary revenue streams, cash flows are consistent with the timing of revenue recognition. For the year ended December 31, 2023, revenue recognized from performance obligations related to prior periods was not material. Revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less and contracts where revenue is recognized as invoiced, is not material. Marketplace The performance obligation contained within the marketplace contracts for sellers is facilitating the remarketing of vehicles, including titling, administration and sale through our marketplaces. The remarketing performance obligation is satisfied at the point in time the vehicle is sold through our marketplaces. The ancillary services contracts include services such as inbound and outbound transportation logistics, reconditioning, vehicle inspection and certification, collateral recovery services and technology solutions. The performance obligations related to these services are subject to separate contracts and are satisfied at the point in time the services are completed. Contracts with buyers are generally established via purchase through our marketplaces, subject to standard terms and conditions. These contracts contain a single performance obligation, which is satisfied at a point in time when the vehicle is purchased through our marketplaces. The vehicles sold on our marketplaces generate auction fees from buyers and sellers. The Company generally does not take title to these consigned vehicles and records only its auction fees as revenue ("Auction fees" in the consolidated statement of income (loss)) because it has no influence on the vehicle marketplace selling price agreed to by the seller and the buyer. The Company does not record the gross selling price of the consigned vehicles sold through our marketplaces as revenue. Our buyer fees are typically based on a tiered structure with fees increasing with the sale price of the vehicle, while seller fees are typically fixed. The Company generally enforces its rights to payment for seller transactions through net settlement provisions following the sale of a vehicle. Marketplace services such as inbound and outbound transportation logistics, reconditioning, vehicle inspection and certification, collateral recovery services and technology solutions are generally recognized at the time of service ("Service revenue" in the consolidated statement of income (loss)). The Company also sells vehicles that have been purchased, which represent approximately 1% of the total volume of vehicles sold. For these types of sales, the Company does record the gross selling price of purchased vehicles sold through our marketplaces as revenue ("Purchased vehicle sales" in the consolidated statement of income (loss)) and the gross purchase price of the vehicles as "Cost of services," at the completion of each sale to a third party. Finance AFC's revenue ("Finance-related revenue" in the consolidated statement of income (loss)) is comprised of interest and fee income, provision for credit losses and other revenues associated with our finance receivables. The following table summarizes the primary components of AFC's finance-related revenue: Year Ended December 31, Finance-Related Revenue (in millions) 2023 2022 2021 Interest income $ 248.4 $ 202.8 $ 139.7 Fee income 183.3 171.9 144.4 Other revenue 12.3 11.0 8.6 Provision for credit losses (50.6) (9.8) (3.5) $ 393.4 $ 375.9 $ 289.2 Interest and fee income Revenues associated with interest and fee income are accounted for in accordance with ASC 310-20, Nonrefundable Fees and Other Costs, and therefore are not subject to evaluation under Topic 606. Interest on finance receivables is recognized based on the number of days the vehicle remains financed, adjusted for historical loss rates. Dealers are also charged a fee to floorplan a vehicle ("floorplan fee"), to extend the terms of the receivable ("curtailment fee") and a document processing fee. AFC fee income including floorplan and curtailment fees is recognized over the estimated life of the finance receivable. Other revenue |
Income Taxes | Income Taxes We file federal, state and foreign income tax returns in accordance with the applicable rules of each jurisdiction. We account for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes . The provision for income taxes includes federal, foreign, state and local income taxes payable, as well as deferred taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable amounts in periods in which those temporary differences are expected to be recovered or settled. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. |
Net Income (Loss) from Continuing Operations per Share | Income (Loss) from Continuing Operations per Share 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. Stock options that would have an anti-dilutive effect on income from continuing operations per diluted share, unexercisable market options and PRSUs subject to performance conditions which have not yet been satisfied are excluded from the calculations. |
Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation The Company accounts for stock-based compensation under ASC 718, Compensation—Stock Compensation |
New Accounting Standards | New Accounting Standards In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires additional income tax disclosures on an annual basis, specifically related to the rate reconciliation and income taxes paid. The amendments are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments should be applied on a prospective basis. The Company is currently evaluating the impact the adoption of ASU 2023-09 will have on the consolidated financial statements and related disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 31, 2024. Early adoption is permitted and the amendments should be applied retrospectively to all prior periods presented. The Company is currently evaluating the impact the adoption of ASU 2023-07 will have on the consolidated financial statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of the primary components of Finance-Related revenue | AFC's revenue ("Finance-related revenue" in the consolidated statement of income (loss)) is comprised of interest and fee income, provision for credit losses and other revenues associated with our finance receivables. The following table summarizes the primary components of AFC's finance-related revenue: Year Ended December 31, Finance-Related Revenue (in millions) 2023 2022 2021 Interest income $ 248.4 $ 202.8 $ 139.7 Fee income 183.3 171.9 144.4 Other revenue 12.3 11.0 8.6 Provision for credit losses (50.6) (9.8) (3.5) $ 393.4 $ 375.9 $ 289.2 |
Sale of ADESA U.S. Physical A_2
Sale of ADESA U.S. Physical Auction Business and Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 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) : Year Ended December 31, 2023 2022 2021 Operating revenues $ — $ 305.9 $ 881.3 Operating expenses Cost of services (exclusive of depreciation and amortization) — 224.9 582.4 Selling, general and administrative — 67.8 148.7 Depreciation and amortization — 11.2 73.0 Total operating expenses — 303.9 804.1 Operating profit — 2.0 77.2 Interest expense — 0.1 0.9 Other (income) expense, net — (8.4) (11.0) Income from discontinued operations before gain on disposal and income taxes — 10.3 87.3 Pretax gain on disposal of discontinued operations — 521.8 — Income taxes (0.7) 319.5 20.0 Income from discontinued operations $ 0.7 $ 212.6 $ 67.3 The following table summarizes the major classes of assets and liabilities of the ADESA U.S. physical auction business that were classified as discontinued operations for the period presented (in millions) : May 8, Assets Cash and cash equivalents $ 68.6 Trade receivables, net of allowances 206.3 Inventory 15.5 Other current assets 9.3 Current assets of discontinued operations 299.7 Goodwill 1,099.7 Customer relationships, net of accumulated amortization 81.4 Other intangible assets, net of accumulated amortization 30.7 Operating lease right-of-use assets 223.7 Property and equipment, net of accumulated depreciation 440.1 Other assets 2.4 Non-current assets of discontinued operations 1,878.0 Total assets of discontinued operations $ 2,177.7 Liabilities Accounts payable $ 249.5 Accrued employee benefits and compensation expenses 10.2 Other accrued expenses 28.2 Current portion of operating lease liabilities 27.7 Current liabilities of discontinued operations 315.6 Operating lease liabilities 216.8 Other liabilities 2.0 Non-current liabilities of discontinued operations 218.8 Total liabilities of discontinued operations $ 534.4 |
Stock and Stock-Based Compens_2
Stock and Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 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) : Year Ended December 31, 2023 2022 2021 PRSUs $ 4.1 $ 3.4 $ 1.6 RSUs 9.0 8.0 5.0 Service options 0.7 0.9 1.0 Market options 2.7 4.3 5.6 Total stock-based compensation expense $ 16.5 $ 16.6 $ 13.2 |
PRSUs | |
Stock and Stock-Based Compensation Plans | |
Summary of PRSU activity | The following table summarizes PRSU activity, including dividend equivalents, under the Omnibus Plan for the year ended December 31, 2023: Performance-Based Restricted Stock Units Number Weighted Average Grant Date Fair Value PRSUs at January 1, 2023 1,456,736 $ 18.24 Granted 540,752 16.09 Vested — N/A Forfeited (418,893) 22.25 PRSUs at December 31, 2023 1,578,595 $ 16.44 |
RSUs | |
Stock and Stock-Based Compensation Plans | |
Summary of RSU activity | The following table summarizes RSU activity, including dividend equivalents, under the Omnibus Plan for the year ended December 31, 2023: Restricted Stock Units Number Weighted Average Grant Date Fair Value RSUs at January 1, 2023 1,365,882 $ 14.88 Granted 606,728 14.19 Vested (544,191) 15.56 Forfeited (78,543) 15.23 RSUs at December 31, 2023 1,349,876 $ 14.27 |
Service options | |
Stock and Stock-Based Compensation Plans | |
Summary of option activity | The following table summarizes service option activity under the Omnibus Plan for the year ended December 31, 2023: Service Options Number Weighted Weighted Aggregate Outstanding at January 1, 2023 1,286,097 $ 14.71 Granted 53,222 14.83 Exercised (156,752) 11.31 Forfeited — N/A Canceled (19,293) 14.05 Outstanding at December 31, 2023 1,163,274 $ 15.18 6.1 years $ 1.1 Exercisable at December 31, 2023 665,409 $ 14.64 5.0 years $ 0.9 |
Market Options | |
Stock and Stock-Based Compensation Plans | |
Summary of option activity | The following table summarizes market option activity under the Omnibus Plan for the year ended December 31, 2023: Market Options Number Weighted Weighted Aggregate Outstanding at January 1, 2023 3,557,134 $ 16.09 Granted 212,886 14.83 Exercised — N/A Forfeited — N/A Canceled — N/A Outstanding at December 31, 2023 3,770,020 $ 16.02 7.5 years $ 1.5 Exercisable at December 31, 2023 — N/A N/A N/A |
Net Income (Loss) from Contin_2
Net Income (Loss) from Continuing Operations Per Share (Tables) | 12 Months Ended |
Dec. 31, 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) : Year Ended December 31, 2023 2022 2021 Income (loss) from continuing operations $ (154.8) $ 28.6 $ (0.8) Series A Preferred Stock dividends (44.4) (43.8) (41.1) (Income) loss from continuing operations attributable to participating securities — 3.6 9.0 Income (loss) from continuing operations attributable to common stockholders $ (199.2) $ (11.6) $ (32.9) Weighted average common shares outstanding 109.1 116.3 123.0 Effect of dilutive stock options and restricted stock awards — — — Weighted average common shares outstanding and potential common shares 109.1 116.3 123.0 Income (loss) from continuing operations per share Basic $ (1.83) $ (0.10) $ (0.27) Diluted $ (1.83) $ (0.10) $ (0.27) |
Allowance for Credit Losses a_2
Allowance for Credit Losses and Doubtful Accounts (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Finance receivables | |
Allowance for Credit Losses and Doubtful Accounts | |
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 ): Year Ended December 31, 2023 2022 2021 Allowance for Credit Losses Balance at beginning of period $ 21.5 $ 23.0 $ 22.0 Provision for credit losses 50.6 9.8 3.5 Recoveries 8.9 9.0 12.6 Less charge-offs (58.1) (20.1) (15.1) Other 0.1 (0.2) — Balance at end of period $ 23.0 $ 21.5 $ 23.0 |
Trade receivables | |
Allowance for Credit Losses and Doubtful Accounts | |
Summary of the changes in the allowance for credit losses and doubtful accounts | The following is a summary of changes in the allowance for doubtful accounts related to trade receivables ( in millions ): Year Ended December 31, 2023 2022 2021 Allowance for Doubtful Accounts Balance at beginning of period $ 15.8 $ 9.5 $ 7.1 Provision for credit losses 8.6 8.8 3.7 Less net charge-offs (14.5) (2.5) (1.3) Balance at end of period $ 9.9 $ 15.8 $ 9.5 |
Finance Receivables and Oblig_2
Finance Receivables and Obligations Collateralized by Finance Receivables (Tables) | 12 Months Ended |
Dec. 31, 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. December 31, 2023 Net Credit Losses Total Amount of: (in millions) Receivables Receivables Floorplan receivables $ 2,301.4 $ 23.7 $ 49.2 Other loans 3.6 — — Total receivables managed $ 2,305.0 $ 23.7 $ 49.2 December 31, 2022 Net Credit Losses Total Amount of: (in millions) Receivables Receivables Floorplan receivables $ 2,409.9 $ 17.5 $ 11.1 Other loans 6.7 — — Total receivables managed $ 2,416.6 $ 17.5 $ 11.1 |
Schedule of obligations collateralized by finance receivables | Obligations collateralized by finance receivables consisted of the following: December 31, 2023 2022 Obligations collateralized by finance receivables, gross $ 1,645.4 $ 1,697.0 Unamortized securitization issuance costs (13.5) (19.4) Obligations collateralized by finance receivables $ 1,631.9 $ 1,677.6 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Goodwill consisted of the following ( in millions ): Marketplace Finance Total Balance at December 31, 2021 (1)(2) $ 1,357.1 $ 240.9 $ 1,598.0 Decrease for disposition activity (119.2) — (119.2) Foreign currency (14.3) — (14.3) Balance at December 31, 2022 (1)(2) $ 1,223.6 $ 240.9 $ 1,464.5 Increase for acquisition activity 25.9 — 25.9 Impairment (225.3) — (225.3) Foreign currency 6.1 — 6.1 Balance at December 31, 2023 (1)(2) $ 1,030.3 $ 240.9 $ 1,271.2 (1) Marketplace amounts are net of accumulated goodwill impairment charges of $250.8 million, $25.5 million and $25.5 million at December 31, 2023, 2022 and 2021, respectively. (2) Finance amounts are net of accumulated goodwill impairment charges of $161.5 million at December 31, 2023, 2022 and 2021. |
Summary of customer relationships | A summary of customer relationships is as follows ( in millions ): December 31, 2023 December 31, 2022 Useful Gross Accumulated Carrying Gross Accumulated Carrying Customer relationships 5 - 19 $ 574.6 $ (438.5) $ 136.1 $ 553.2 $ (417.3) $ 135.9 |
Summary of other intangibles | A summary of other intangibles is as follows ( in millions ): December 31, 2023 December 31, 2022 Useful Lives Gross Accumulated Carrying Gross Accumulated Carrying Tradenames 1 - Indefinite $ 123.2 $ (27.9) $ 95.3 $ 148.6 $ (15.2) $ 133.4 Computer software & technology 3 - 13 533.7 (447.5) 86.2 488.7 (390.8) 97.9 Total $ 656.9 $ (475.4) $ 181.5 $ 637.3 $ (406.0) $ 231.3 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following ( in millions ): Useful Lives December 31, 2023 2022 Land $ 84.8 $ 40.1 Buildings 5 - 40 54.6 46.0 Land improvements 5 - 20 32.6 33.2 Building and leasehold improvements 3 - 33 38.3 37.0 Furniture, fixtures and equipment 1 - 15 130.0 143.6 Vehicles 3 - 10 14.9 16.0 Construction in progress 1.8 5.4 357.0 321.3 Accumulated depreciation (187.2) (197.7) Property and equipment, net $ 169.8 $ 123.6 |
Self Insurance and Retained L_2
Self Insurance and Retained Loss Reserves (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Self Insurance and Retained Loss Reserves [Abstract] | |
Summary of the changes in the reserves for self-insurance and the retained losses | The following is a summary of the changes in the reserves for self-insurance and the retained losses ( in millions) : Year Ended December 31, 2023 2022 2021 Balance at beginning of period $ 12.5 $ 10.4 $ 10.0 Net payments (33.7) (27.8) (33.5) Expense 28.4 29.9 33.9 Balance at end of period $ 7.2 $ 12.5 $ 10.4 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Long-Term Debt, Unclassified [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following (in millions) : December 31, Interest Rate* Maturity 2023 2022 Revolving Credit Facility Adjusted Term SOFR + 2.25% June 23, 2028 $ 137.0 $ — 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 17.6 3.7 Total debt 364.6 498.7 Unamortized debt issuance costs/discounts (7.6) (4.7) Current portion of long-term debt (154.6) (288.7) Long-term debt $ 202.4 $ 205.3 |
Schedule of aggregate future principal payments on long-term debt | At December 31, 2023, aggregate future principal payments on long-term debt are as follows ( in millions ): 2024 $ 154.6 2025 210.0 2026 — 2027 — 2028 — Thereafter — $ 364.6 |
Other (Income) Expense, Net (Ta
Other (Income) Expense, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Nonoperating Income (Expense) [Abstract] | |
Schedule of Other (Income) Expense, Net | Other (income) expense, net consisted of the following ( in millions ): December 31, 2023 2022 2021 Change in realized and unrealized (gains) losses on investment securities, net $ 0.4 $ 7.1 $ (33.4) Contingent consideration valuation 1.3 — 24.3 Foreign currency (gains) losses (2.9) 2.5 3.8 Investment and note receivable impairment 10.3 — — Early termination of contractual arrangement (20.0) — — Other (4.7) (10.9) (7.2) Other (income) expense, net $ (15.6) $ (1.3) $ (12.5) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Components of lease expense | The components of lease expense were as follows ( in millions ): Year Ended December 31, 2023 2022 2021 Operating lease cost $ 15.9 $ 17.7 $ 18.6 Finance lease cost: Amortization of right-of-use assets $ 1.3 $ 2.9 $ 7.4 Interest on lease liabilities 0.1 0.3 0.6 Total finance lease cost $ 1.4 $ 3.2 $ 8.0 |
Supplemental cash flow information related to leases | Supplemental cash flow information related to leases was as follows ( in millions ): Year Ended December 31, 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows related to operating leases $ 15.9 $ 17.5 $ 18.2 Operating cash flows related to finance leases 0.1 0.3 0.6 Financing cash flows related to finance leases 1.9 3.9 5.6 Right-of-use assets obtained in exchange for lease obligations: Operating leases 1.4 4.0 6.7 Finance leases — — 3.7 |
Supplementatl balance sheet information related to leases | Supplemental balance sheet information related to leases was as follows ( in millions, except lease term and discount rate ): December 31, 2023 2022 Operating Leases Operating lease right-of-use assets $ 75.9 $ 84.8 Other accrued expenses $ 11.0 $ 10.5 Operating lease liabilities 70.4 79.7 Total operating lease liabilities $ 81.4 $ 90.2 Finance Leases Property and equipment, gross $ 37.6 $ 48.6 Accumulated depreciation (37.3) (47.1) Property and equipment, net $ 0.3 $ 1.5 Other accrued expenses $ 0.9 $ 1.9 Other liabilities — 0.9 Total finance lease liabilities $ 0.9 $ 2.8 Weighted Average Remaining Lease Term Operating leases 8.3 years 9.0 years Finance leases 1.0 year 1.6 years Weighted Average Discount Rate Operating leases 5.9 % 5.9 % Finance leases 4.0 % 4.4 % |
Maturities of lease liabilities | Maturities of lease liabilities as of December 31, 2023 were as follows ( in millions ): Operating Finance Leases 2024 $ 15.4 $ 0.9 2025 14.7 — 2026 11.6 — 2027 10.8 — 2028 9.2 — Thereafter 42.0 — Total lease payments 103.7 0.9 Less imputed interest (22.3) — Total $ 81.4 $ 0.9 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income before income taxes | The components of our income (loss) from continuing operations before income taxes and the provision for income taxes are as follows ( in millions ): Year Ended December 31, 2023 2022 2021 Income (loss) from continuing operations before income taxes: Domestic $ (209.7) $ (59.7) $ (55.8) Foreign 63.2 98.3 70.1 Total $ (146.5) $ 38.6 $ 14.3 Income tax expense (benefit): Current: Federal $ 22.1 $ (9.2) $ (16.6) Foreign 16.0 23.1 27.7 State — (1.6) (0.4) Total current provision 38.1 12.3 10.7 Deferred: Federal (29.4) (2.9) 4.6 Foreign 3.2 0.9 0.4 State (3.6) (0.3) (0.6) Total deferred provision (29.8) (2.3) 4.4 Income tax expense $ 8.3 $ 10.0 $ 15.1 |
Schedule of components of the provision for income taxes | The provision for income taxes was different from the U.S. federal statutory rate applied to income before taxes, and is reconciled as follows: Year Ended December 31, 2023 2022 2021 Statutory rate 21.0 % 21.0 % 21.0 % State and local income taxes, net 3.8 % (4.8) % 1.3 % Reserves for tax exposures — % 0.4 % (1.2) % Change in valuation allowance (25.2) % 8.5 % 9.5 % International operations (4.7) % 2.9 % 56.2 % Stock-based compensation (0.1) % — % (5.3) % Impact of law and rate change 0.2 % (5.6) % 1.5 % Excess officer's compensation (1.0) % 5.5 % 7.9 % Transaction costs — % (0.2) % 2.5 % Refund claims — % — % (19.2) % Goodwill and other intangibles impairment (0.9) % — % — % Impact of acquisition and divestiture adjustments 1.3 % — % 34.3 % Other, net (0.1) % (1.8) % (2.9) % Effective rate (5.7) % 25.9 % 105.6 % |
Schedule of deferred tax assets (liabilities) | Deferred tax assets (liabilities) are comprised of the following ( in millions ): December 31, 2023 2022 Gross deferred tax assets: Allowances for trade and finance receivables $ 8.1 $ 9.0 Accruals and liabilities 4.3 3.9 Employee benefits and compensation 9.2 7.1 Net operating loss carryforwards 19.9 19.5 Right of use lease liability 20.1 22.4 Other 7.9 5.3 Total deferred tax assets 69.5 67.2 Deferred tax asset valuation allowance (63.2) (25.3) Total 6.3 41.9 Gross deferred tax liabilities: Property and equipment (3.5) (16.1) Goodwill and intangible assets 4.1 (49.9) Right of use lease asset (18.7) (21.0) Other (6.1) (2.6) Total (24.2) (89.6) Net deferred tax liabilities $ (17.9) $ (47.7) |
Schedule of expirations of gross tax benefit from state and federal net operating loss carryforwards | The tax benefit from state and federal net operating loss carryforwards expires as follows ( in millions ): 2024 $ 0.1 2025 0.2 2026 0.1 2027 — 2028 — 2029 and after 19.5 $ 19.9 |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows ( in millions ): December 31, 2023 2022 Balance at beginning of period $ 5.8 $ 5.0 Increase in prior year tax positions 9.2 0.4 Increase in current year tax positions 0.7 1.4 Lapse in statute of limitations (0.8) (1.0) Balance at end of period $ 14.9 $ 5.8 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 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 ): December 31, 2023 2022 Foreign currency translation loss $ (36.7) $ (49.5) Accumulated other comprehensive loss $ (36.7) $ (49.5) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 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 year ended December 31, 2023 (in millions) : Marketplace Finance Consolidated Operating revenues $ 1,251.7 $ 393.4 $ 1,645.1 Operating expenses Cost of services (exclusive of depreciation and amortization) 801.7 65.9 867.6 Selling, general and administrative 380.6 49.8 430.4 Depreciation and amortization 92.2 9.3 101.5 Goodwill and other intangibles impairment 250.8 — 250.8 Total operating expenses 1,525.3 125.0 1,650.3 Operating profit (loss) (273.6) 268.4 (5.2) Interest expense 25.2 130.6 155.8 Other (income) expense, net (15.9) 0.3 (15.6) Loss on extinguishment of debt 1.1 — 1.1 Intercompany expense (income) 33.9 (33.9) — Income (loss) from continuing operations before income taxes (317.9) 171.4 (146.5) Income taxes (40.4) 48.7 8.3 Income (loss) from continuing operations $ (277.5) $ 122.7 $ (154.8) Total assets $ 2,065.6 $ 2,660.7 $ 4,726.3 Capital expenditures $ 46.5 $ 5.5 $ 52.0 Financial information regarding our reportable segments is set forth below as of and for the year ended December 31, 2022 (in millions) : Marketplace Finance Consolidated Operating revenues $ 1,143.5 $ 375.9 $ 1,519.4 Operating expenses Cost of services (exclusive of depreciation and amortization) 771.2 63.1 834.3 Selling, general and administrative 398.6 46.5 445.1 Depreciation and amortization 92.3 7.9 100.2 Gain on sale of property (33.9) — (33.9) Total operating expenses 1,228.2 117.5 1,345.7 Operating profit (loss) (84.7) 258.4 173.7 Interest expense 40.2 79.0 119.2 Other (income) expense, net (8.4) 7.1 (1.3) Loss on extinguishment of debt 17.2 — 17.2 Intercompany expense (income) 8.4 (8.4) — Income (loss) from continuing operations before income taxes (142.1) 180.7 38.6 Income taxes (36.4) 46.4 10.0 Income (loss) from continuing operations $ (105.7) $ 134.3 $ 28.6 Total assets $ 2,297.8 $ 2,822.0 $ 5,119.8 Capital expenditures $ 55.7 $ 5.2 $ 60.9 Financial information regarding our reportable segments is set forth below as of and for the year ended December 31, 2021 (in millions) : Marketplace Finance Consolidated Operating revenues $ 1,161.4 $ 289.2 $ 1,450.6 Operating expenses Cost of services (exclusive of depreciation and amortization) 737.1 55.4 792.5 Selling, general and administrative 385.5 35.2 420.7 Depreciation and amortization 100.5 9.4 109.9 Total operating expenses 1,223.1 100.0 1,323.1 Operating profit (loss) (61.7) 189.2 127.5 Interest expense 86.2 39.5 125.7 Other (income) expense, net 4.5 (17.0) (12.5) Intercompany expense (income) 0.2 (0.2) — Income (loss) from continuing operations before income taxes (152.6) 166.9 14.3 Income taxes (26.4) 41.5 15.1 Income (loss) from continuing operations $ (126.2) $ 125.4 $ (0.8) Total assets $ 2,562.0 $ 2,908.9 $ 5,470.9 Capital expenditures $ 59.6 $ 4.6 $ 64.2 |
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) : Year Ended December 31, 2023 2022 2021 Operating revenues U.S. $ 1,026.1 $ 992.9 $ 847.9 Foreign 619.0 526.5 602.7 $ 1,645.1 $ 1,519.4 $ 1,450.6 December 31, 2023 2022 Long-lived assets U.S. $ 1,074.2 $ 1,787.4 Foreign 810.2 310.0 $ 1,884.4 $ 2,097.4 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial data | Information for any one quarterly period is not necessarily indicative of the results that may be expected for the year. 2023 Quarter Ended March 31 June 30 Sept. 30 Dec. 31 Operating revenues $ 420.6 $ 416.9 $ 416.3 $ 391.3 Operating expenses Cost of services (exclusive of depreciation and amortization) 224.2 222.6 216.0 204.8 Selling, general, and administrative 108.0 111.2 107.4 103.8 Depreciation and amortization 23.0 26.8 26.4 25.3 Goodwill and other intangibles impairment — 250.8 — — Total operating expenses 355.2 611.4 349.8 333.9 Operating profit (loss) 65.4 (194.5) 66.5 57.4 Interest expense 38.3 38.8 39.4 39.3 Other (income) expense, net 7.1 (21.3) 1.7 (3.1) Loss on extinguishment of debt — 1.1 — — Income (loss) from continuing operations before income taxes 20.0 (213.1) 25.4 21.2 Income taxes 7.3 (19.3) 12.7 7.6 Income (loss) from continuing operations $ 12.7 $ (193.8) $ 12.7 $ 13.6 Income (loss) from continuing operations per share Basic $ 0.01 $ (1.87) $ 0.01 $ 0.02 Diluted $ 0.01 $ (1.87) $ 0.01 $ 0.02 2022 Quarter Ended March 31 June 30 Sept. 30 Dec. 31 Operating revenues $ 369.4 $ 384.2 $ 393.0 $ 372.8 Operating expenses Cost of services (exclusive of depreciation and amortization) 210.8 211.9 209.6 202.0 Selling, general, and administrative 118.9 124.1 109.1 93.0 Depreciation and amortization 26.0 25.9 24.3 24.0 Gain on sale of property — — — (33.9) Total operating expenses 355.7 361.9 343.0 285.1 Operating profit 13.7 22.3 50.0 87.7 Interest expense 25.6 25.9 32.3 35.4 Other (income) expense, net 1.2 4.0 1.2 (7.7) Loss on extinguishment of debt — 7.7 9.3 0.2 Income (loss) from continuing operations before income taxes (13.1) (15.3) 7.2 59.8 Income taxes (4.7) (9.9) 6.7 17.9 Income (loss) from continuing operations $ (8.4) $ (5.4) $ 0.5 $ 41.9 Income (loss) from continuing operations per share Basic $ (0.16) $ (0.10) $ (0.09) $ 0.21 Diluted $ (0.16) $ (0.10) $ (0.09) $ 0.21 |
Organization and Other Matters
Organization and Other Matters (Details) $ / shares in Units, $ in Millions | Dec. 31, 2023 USD ($) location network $ / shares shares | Jun. 23, 2023 USD ($) | Dec. 31, 2022 USD ($) shares | Jun. 30, 2020 $ / shares | Sep. 19, 2019 USD ($) | May 31, 2017 |
Organization and Other Matters | ||||||
Long-term debt | $ 364.6 | $ 498.7 | ||||
Marketplace | ||||||
Organization and Other Matters | ||||||
Number of vehicle logistics center locations (Canada) | network | 15 | |||||
AFC | ||||||
Organization and Other Matters | ||||||
Number of floorplan financing locations | location | 90 | |||||
Series A Preferred Stock [Member] | ||||||
Organization and Other Matters | ||||||
Series A Preferred Stock par value per share | $ / shares | $ 0.01 | $ 0.01 | ||||
Series A Preferred Stock shares outstanding | shares | 634,305 | 634,305 | ||||
Senior Notes [Member] | ||||||
Organization and Other Matters | ||||||
Long-term debt | $ 210 | $ 350 | ||||
Senior notes stated interest rate | 5.125% | 5.125% | ||||
Credit Agreement | Senior secured revolving credit facility | ||||||
Organization and Other Matters | ||||||
Maximum borrowing capacity | $ 325 | $ 325 | ||||
Long-term debt | 137 | 0 | ||||
Previous Credit Agreement | Term Loan B-6 | ||||||
Organization and Other Matters | ||||||
Long-term debt | $ 950 | |||||
Previous Credit Agreement | Previous Revolving Credit Facility | ||||||
Organization and Other Matters | ||||||
Maximum borrowing capacity | $ 325 | |||||
Long-term debt | $ 0 | $ 145 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Business Segments | |||
Number of operating segments | segment | 2 | ||
Number of reportable segments | segment | 2 | ||
Foreign Currency Translation | |||
Foreign currency transaction gain (loss) on intercompany balances | $ 2.9 | $ (2.5) | $ (3.8) |
Accounts Payable | |||
Book overdrafts | $ 17.9 | 20.2 | |
Income Taxes | |||
Recognized income tax positions measured at largest amount greater than specified percentage being realized | 50% | ||
Operating revenues | |||
Provision for credit losses | $ 50.6 | 9.8 | 3.5 |
Finance-related revenue | $ 393.4 | 375.9 | 289.2 |
Purchased vehicles sold as a percentage of total vehicles sold | 1% | ||
AFC | |||
Operating revenues | |||
Interest income | $ 248.4 | 202.8 | 139.7 |
Fee income | 183.3 | 171.9 | 144.4 |
Other revenue | 12.3 | 11 | 8.6 |
Provision for credit losses | 50.6 | 9.8 | 3.5 |
Finance-related revenue | $ 393.4 | $ 375.9 | $ 289.2 |
Floorplan receivables | Minimum | |||
Receivables | |||
Predetermined time period for financing receivables to become due | 30 days | ||
Floorplan receivables | Maximum | |||
Receivables | |||
Predetermined time period for financing receivables to become due | 90 days | ||
AFC Funding Corporation | Minimum | |||
Restricted Cash | |||
Cash reserve as security for the receivables sold (as a percent) | 1% | ||
Cash reserve as security for the receivables sold - circumstance two (as a percent) | 3% | ||
AFCI | Minimum | |||
Restricted Cash | |||
Cash reserve as security for the receivables sold (as a percent) | 1% | ||
Cash reserve as security for the receivables sold - circumstance two (as a percent) | 3% |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Acquisitions | |||
Payments for Contingent Consideration and deferred Acquisition Costs | $ 12.4 | $ 3.5 | $ 37.1 |
Contingent consideration adjustment | 1.3 | 0 | 24.3 |
Acquisition of businesses (net of cash acquired) | 103 | 0.4 | 521.8 |
Purchase price for the acquired business allocated to intangible assets | 656.9 | 637.3 | |
Goodwill | 1,271.2 | 1,464.5 | 1,598 |
CARWAVE | |||
Acquisitions | |||
Acquisition of businesses (net of cash acquired) | 442 | ||
Purchase price for the acquired business allocated to intangible assets | 67.5 | ||
Goodwill | 373.4 | ||
Auction Frontier | |||
Acquisitions | |||
Fair value of estimated contingent payments | 12.4 | ||
Maximum amount of undiscounted contingent payments related to acquisitions | 15 | ||
Payments for Contingent Consideration and deferred Acquisition Costs | 15 | ||
Contingent consideration adjustment | 1.3 | ||
Acquisition of businesses (net of cash acquired) | 79.8 | ||
Purchase price for the acquired business allocated to intangible assets | 17.9 | ||
Goodwill | 73.8 | ||
Purchase price for business acquired | 92.2 | ||
Manheim Canada | |||
Acquisitions | |||
Acquisition of businesses (net of cash acquired) | 103 | ||
Purchase price for the acquired business allocated to intangible assets | 18.6 | ||
Goodwill | 25.9 | ||
Purchase price for the acquired business allocated to property and equipment | 52.4 | ||
Acquisition costs | 2 | ||
Customer relationships | CARWAVE | |||
Acquisitions | |||
Purchase price for the acquired business allocated to intangible assets | 62.5 | ||
Customer relationships | Auction Frontier | |||
Acquisitions | |||
Purchase price for the acquired business allocated to intangible assets | 10 | ||
Customer relationships | Manheim Canada | |||
Acquisitions | |||
Purchase price for the acquired business allocated to intangible assets | 18.6 | ||
Computer software & technology | |||
Acquisitions | |||
Purchase price for the acquired business allocated to intangible assets | $ 533.7 | $ 488.7 | |
Computer software & technology | CARWAVE | |||
Acquisitions | |||
Purchase price for the acquired business allocated to intangible assets | 4.6 | ||
Computer software & technology | Auction Frontier | |||
Acquisitions | |||
Purchase price for the acquired business allocated to intangible assets | 7.6 | ||
Tradenames | CARWAVE | |||
Acquisitions | |||
Purchase price for the acquired business allocated to intangible assets | 0.4 | ||
Tradenames | Auction Frontier | |||
Acquisitions | |||
Purchase price for the acquired business allocated to intangible assets | $ 0.3 |
Sale of ADESA U.S. Physical A_3
Sale of ADESA U.S. Physical Auction Business and Discontinued Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
May 09, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | May 08, 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 | $ 93.9 | $ 57.4 | |||
Cost of Service - KAR to ADESA U.S. Physical Auctions | 60.3 | 73.6 | $ 80.3 | ||
Service Revenue - KAR to ADESA U.S. Physical Auctions | 60.3 | 73.6 | 80.3 | ||
Professional Fees Associated With Discontinued Operations | 37.1 | ||||
Pretax gain on disposal of discontinued operations | 0 | $ 521.8 | 0 | ||
Effective rate for discontinued operations (as a percent) | 60% | ||||
Deferred income tax liabilities | 20.9 | $ 54 | |||
Discontinued Operations - Results of Operations | |||||
Operating revenues | 0 | 305.9 | 881.3 | ||
Cost of services (exclusive of depreciation and amortization) | 0 | 224.9 | 582.4 | ||
Selling, general and administrative | 0 | 67.8 | 148.7 | ||
Depreciation and amortization | 0 | 11.2 | 73 | ||
Total operating expenses | 0 | 303.9 | 804.1 | ||
Operating profit | 0 | 2 | 77.2 | ||
Interest expense | 0 | 0.1 | 0.9 | ||
Other (income) expense, net | 0 | (8.4) | (11) | ||
Income from discontinued operations before gain on disposal and income taxes | 0 | 10.3 | 87.3 | ||
Pretax gain on disposal of discontinued operations | 0 | 521.8 | 0 | ||
Income taxes | (0.7) | 319.5 | 20 | ||
Income from discontinued operations | $ 0.7 | $ 212.6 | $ 67.3 | ||
Discontinued Operations - Major Classes of Assets and Liabilities | |||||
Cash and cash equivalents | $ 68.6 | ||||
Trade receivables, net of allowances | 206.3 | ||||
Inventory | 15.5 | ||||
Other current assets | 9.3 | ||||
Current assets of discontinued operations | 299.7 | ||||
Goodwill | 1,099.7 | ||||
Customer relationships, net of accumulated amortization | 81.4 | ||||
Other intangible assets, net of accumulated amortization | 30.7 | ||||
Operating lease right-of-use assets | 223.7 | ||||
Property and equipment, net of accumulated depreciation | 440.1 | ||||
Other assets | 2.4 | ||||
Non-current assets of discontinued operations | 1,878 | ||||
Total assets of discontinued operations | 2,177.7 | ||||
Accounts payable | 249.5 | ||||
Accrued employee benefits and compensation expenses | 10.2 | ||||
Other accrued expenses | 28.2 | ||||
Current portion of operating lease liabilities | 27.7 | ||||
Current liabilities of discontinued operations | 315.6 | ||||
Operating lease liabilities | 216.8 | ||||
Other liabilities | 2 | ||||
Non-current liabilities of discontinued operations | 218.8 | ||||
Total liabilities of discontinued operations | $ 534.4 |
Stock and Stock-Based Compens_3
Stock and Stock-Based Compensation Plan Summary (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock and Stock-Based Compensation Plans | |||
Stock-based compensation expense (in dollars) | $ 16.5 | $ 16.6 | $ 13.2 |
Total income tax benefit recognized (in dollars) | 2.2 | 1.5 | 1.6 |
PRSUs | |||
Stock and Stock-Based Compensation Plans | |||
Stock-based compensation expense (in dollars) | 4.1 | 3.4 | 1.6 |
RSUs | |||
Stock and Stock-Based Compensation Plans | |||
Stock-based compensation expense (in dollars) | 9 | 8 | 5 |
Service options | |||
Stock and Stock-Based Compensation Plans | |||
Stock-based compensation expense (in dollars) | 0.7 | 0.9 | 1 |
Market Options | |||
Stock and Stock-Based Compensation Plans | |||
Stock-based compensation expense (in dollars) | $ 2.7 | $ 4.3 | $ 5.6 |
KAR Auction Services, Inc. Stoc
KAR Auction Services, Inc. Stock-Based Compensation Plans (Details) - KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 USD ($) installment $ / shares shares | Dec. 31, 2022 USD ($) employee installment $ / shares shares | Dec. 31, 2021 USD ($) installment $ / shares shares | |
Stock and Stock-Based Compensation Plans | |||
Maximum number of shares to be issued pursuant to awards | 7,300,000 | ||
Remaining shares available | 2,800,000 | ||
PRSUs | |||
Stock and Stock-Based Compensation Plans | |||
Fair value of shares vested during period | $ | $ 0 | $ 2.1 | $ 2.7 |
Unrecognized compensation expense related to nonvested PRSUs and/or RSUs (in dollars) | $ | $ 5.3 | ||
Weighted average term for recognizing unrecognized compensation expense | 1 year 7 months 6 days | ||
Number of PRSUs and/or RSUs | |||
PRSUs and/or RSUs outstanding at the beginning of period (in shares) | 1,456,736 | ||
PRSUs and/or RSUs grants (in shares) | 540,752 | 500,000 | 700,000 |
Vested (in shares) | 0 | ||
Forfeited (in shares) | (418,893) | ||
PRSUs and/or RSUs outstanding at the end of period (in shares) | 1,578,595 | 1,456,736 | |
Weighted Average Grant Date Fair Value | |||
PRSUs and/or RSUs outstanding weighted average grant date fair value | $ / shares | $ 16.44 | $ 18.24 | |
PRSUs and/or RSUs grant date fair value | $ / shares | 16.09 | ||
Forfeited (in dollars per share) | $ / shares | $ 22.25 | ||
RSUs | |||
Stock and Stock-Based Compensation Plans | |||
Fair value of shares vested during period | $ | $ 8 | $ 5.3 | $ 3.8 |
Unrecognized compensation expense related to nonvested PRSUs and/or RSUs (in dollars) | $ | $ 10.6 | ||
Weighted average term for recognizing unrecognized compensation expense | 1 year 7 months 6 days | ||
Number of equal annual installments | installment | 3 | 3 | 3 |
Number of PRSUs and/or RSUs | |||
PRSUs and/or RSUs outstanding at the beginning of period (in shares) | 1,365,882 | ||
PRSUs and/or RSUs grants (in shares) | 606,728 | 1,200,000 | 500,000 |
Vested (in shares) | (544,191) | ||
Forfeited (in shares) | (78,543) | ||
PRSUs and/or RSUs outstanding at the end of period (in shares) | 1,349,876 | 1,365,882 | |
Weighted Average Grant Date Fair Value | |||
PRSUs and/or RSUs outstanding weighted average grant date fair value | $ / shares | $ 14.27 | $ 14.88 | |
PRSUs and/or RSUs grant date fair value | $ / shares | 14.19 | $ 14.82 | $ 13.93 |
Vested (in dollars per share) | $ / shares | 15.56 | ||
Forfeited (in dollars per share) | $ / shares | $ 15.23 | ||
PRSUs - Adjusted EBITDA | |||
Stock and Stock-Based Compensation Plans | |||
PRSUs vesting period | 3 years | 3 years | |
Number of PRSUs and/or RSUs | |||
Number of participants affected by modification | employee | 13 | ||
Incremental cost from modification | $ | $ 0 | ||
Weighted Average Grant Date Fair Value | |||
PRSUs and/or RSUs grant date fair value | $ / shares | $ 14.25 | $ 18.46 | |
PRSUs - Operating Adjusted EPS | |||
Stock and Stock-Based Compensation Plans | |||
PRSUs vesting period | 3 years | ||
Number of PRSUs and/or RSUs | |||
PRSUs and/or RSUs grants (in shares) | 500,000 | ||
Weighted Average Grant Date Fair Value | |||
PRSUs and/or RSUs grant date fair value | $ / shares | $ 15.37 | ||
PRSUs Operational Goals | |||
Number of PRSUs and/or RSUs | |||
PRSUs and/or RSUs grants (in shares) | 200,000 | ||
PRSUs - TSR PRSUs | |||
Stock and Stock-Based Compensation Plans | |||
PRSUs vesting period | 3 years | ||
Weighted Average Grant Date Fair Value | |||
PRSUs and/or RSUs grant date fair value | $ / shares | $ 21.62 |
Service and Market Options (Det
Service and Market Options (Details) | 12 Months Ended | ||
Dec. 31, 2023 USD ($) installment $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Number of Options | |||
Outstanding at the beginning of the period (in shares) | 4,800,000 | 5,800,000 | |
Outstanding at the end of the period (in shares) | 4,900,000 | 4,800,000 | 5,800,000 |
KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan | Service options | |||
Stock and Stock-Based Compensation Plans | |||
Fair value assumption - expected term | 6 years 3 months | 6 years 3 months | |
Closing stock price (in dollars per share) | $ / shares | $ 14.81 | ||
Total intrinsic value of options exercised (in dollars) | $ | $ 500,000 | $ 500,000 | $ 500,000 |
Fair market value of vested and exercisable options (in dollars) | $ | $ 9,900,000 | $ 8,100,000 | |
Weighted average grant date fair value of options granted | $ / shares | $ 7.14 | $ 3.98 | |
Weighted average term for recognizing unrecognized compensation expense | 2 years | ||
Options granted | 53,222 | 1,100,000 | |
Fair value assumption expected - dividend yield | 0% | 3.80% | |
Fair Value Assumptions, Risk Free Interest Rate | 3.38% | 1.06% | |
Fair Value Assumptions, Expected Volatility | 44.31% | 36.55% | |
Number of Options | |||
Outstanding at the beginning of the period (in shares) | 1,286,097 | ||
Granted (in shares) | 53,222 | 1,100,000 | |
Exercised (in shares) | (156,752) | ||
Forfeited (in shares) | 0 | ||
Canceled (in shares) | (19,293) | ||
Outstanding at the end of the period (in shares) | 1,163,274 | 1,286,097 | |
Exercisable at the end of the period (in shares) | 665,409 | ||
Weighted Average Exercise Price | |||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 15.18 | $ 14.71 | |
Exercised (in dollars per share) | $ / shares | 11.31 | ||
Canceled (in dollars per share) | $ / shares | 14.05 | ||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | 14.71 | ||
Exercisable at the end of the period (in dollars per share) | $ / shares | $ 14.64 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding at the end of the period | 6 years 1 month 6 days | ||
Exercisable at the end of the period | 5 years | ||
Aggregate Intrinsic Value | |||
Outstanding at the end of the period (in dollars) | $ | $ 1,100,000 | ||
Exercisable at the end of the period (in dollars) | $ | $ 900,000 | ||
Term of award | 10 years | ||
Number of equal annual installments | installment | 4 | ||
Service Period For Recognition Of Compensation Expense | 4 years | ||
Granted (in dollars per share) | $ / shares | $ 14.83 | $ 16.15 | |
Unrecognized compensation expense related to nonvested options | $ | $ 1,300,000 | ||
KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan | Market Options | |||
Stock and Stock-Based Compensation Plans | |||
Closing stock price (in dollars per share) | $ / shares | $ 14.81 | ||
Weighted average grant date fair value of options granted | $ / shares | $ 6.91 | $ 3.91 | |
Weighted average term for recognizing unrecognized compensation expense | 2 years 6 months | ||
Options granted | 212,886 | 4,300,000 | |
Number of Options | |||
Outstanding at the beginning of the period (in shares) | 3,557,134 | ||
Granted (in shares) | 212,886 | 4,300,000 | |
Exercised (in shares) | 0 | ||
Forfeited (in shares) | 0 | ||
Canceled (in shares) | 0 | ||
Outstanding at the end of the period (in shares) | 3,770,020 | 3,557,134 | |
Exercisable at the end of the period (in shares) | 0 | ||
Weighted Average Exercise Price | |||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 16.02 | $ 16.09 | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 16.09 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding at the end of the period | 7 years 6 months | ||
Aggregate Intrinsic Value | |||
Outstanding at the end of the period (in dollars) | $ | $ 1,500,000 | ||
Term of award | 10 years | ||
Number of equal annual installments | installment | 4 | ||
Granted (in dollars per share) | $ / shares | $ 14.83 | $ 16.15 | |
Percent of options outstanding eligible for exercise | 25% | ||
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 | ||
$5 common stock price hurdle | $ | $ 5 | ||
$10 common stock price hurdle | $ | 10 | ||
$15 common stock price hurdle | $ | 15 | ||
$20 common stock price hurdle | $ | 20 | ||
Unrecognized compensation expense related to nonvested options | $ | $ 2,700,000 |
Employee Stock Purchase Plan (D
Employee Stock Purchase Plan (Details) - KAR Auction Services, Inc. Employee Stock Purchase Plan | 12 Months Ended |
Dec. 31, 2023 USD ($) shares | |
Stock and Stock-Based Compensation Plans | |
Maximum number of shares to be issued pursuant to awards | 2,500,000 |
Remaining shares available | 933,673 |
ESPP offering periods | 1 month |
Discount from fair market value of share (as a percent) | 15% |
Maximum | |
Stock and Stock-Based Compensation Plans | |
Participant's combined payroll deductions and cash payments (in dollars) | $ | $ 25,000 |
Share Repurchase Plan (Details)
Share Repurchase Plan (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 30, 2019 | |
Additional disclosures | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
October 2019 Share Repurchase Program | ||||
Additional disclosures | ||||
Stock repurchase program, authorized amount | $ 300 | |||
Stock repurchase program expiration date | Dec. 31, 2024 | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 125 | |||
Stock repurchased and retired during period (in shares) | 1,438,859 | 12,649,722 | 10,847,800 | |
Stock repurchased and retired weighted average price per share | $ 15.43 | $ 14.39 | $ 16.66 |
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 | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |||||||||||
Income (loss) from continuing operations | $ 13.6 | $ 12.7 | $ (193.8) | $ 12.7 | $ 41.9 | $ 0.5 | $ (5.4) | $ (8.4) | $ (154.8) | $ 28.6 | $ (0.8) |
Series A Preferred Stock dividends | (44.4) | (43.8) | (41.1) | ||||||||
(Income) loss from continuing operations attributable to participating securities | 0 | 3.6 | 9 | ||||||||
Income (loss) from continuing operations attributable to common stockholders | $ (199.2) | $ (11.6) | $ (32.9) | ||||||||
Shares outstanding | |||||||||||
Weighted average common shares outstanding | 109.1 | 116.3 | 123 | ||||||||
Effect of dilutive stock options and restricted stock awards | 0 | 0 | 0 | ||||||||
Weighted average common shares outstanding and potential common shares | 109.1 | 116.3 | 123 | ||||||||
Income (loss) from continuing operations per share - basic | |||||||||||
Basic (in dollars per share) | $ 0.02 | $ 0.01 | $ (1.87) | $ 0.01 | $ 0.21 | $ (0.09) | $ (0.10) | $ (0.16) | $ (1.83) | $ (0.10) | $ (0.27) |
Income (loss) from continuing operations per share - diluted | |||||||||||
Diluted (in dollars per share) | $ 0.02 | $ 0.01 | $ (1.87) | $ 0.01 | $ 0.21 | $ (0.09) | $ (0.10) | $ (0.16) | $ (1.83) | $ (0.10) | $ (0.27) |
Stock options outstanding (in shares) | 4.9 | 4.8 | 4.9 | 4.8 | 5.8 |
Allowance for Credit Losses a_3
Allowance for Credit Losses and Doubtful Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Changes in the allowance for credit losses | |||
Balance at beginning of period | $ 21.5 | $ 23 | $ 22 |
Provision for credit losses | 50.6 | 9.8 | 3.5 |
Recoveries | 8.9 | 9 | 12.6 |
Less charge-offs | (58.1) | (20.1) | (15.1) |
Other | 0.1 | (0.2) | 0 |
Balance at end of period | $ 23 | $ 21.5 | $ 23 |
Allowance for Credit Losses a_4
Allowance for Credit Losses and Doubtful Accounts (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Changes in the allowance for doubtful accounts | |||
Balance at beginning of period | $ 15.8 | $ 9.5 | $ 7.1 |
Provision for credit losses | 8.6 | 8.8 | 3.7 |
Less net charge-offs | (14.5) | (2.5) | (1.3) |
Balance at end of period | $ 9.9 | $ 15.8 | $ 9.5 |
Finance Receivables and Oblig_3
Finance Receivables and Obligations Collateralized by Finance Receivables (Details) $ in Millions, $ in Millions | 12 Months Ended | ||||||||
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2023 CAD ($) | Mar. 31, 2023 CAD ($) | Dec. 31, 2022 CAD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2020 USD ($) | |
Finance Receivables and Obligations Collateralized by Finance Receivables | |||||||||
Cost capitalized in connection with US/Canada RPA | $ 6.7 | $ 11.6 | $ 0.6 | ||||||
Principal amount of receivables | 2,305 | 2,416.6 | |||||||
Principal amount of receivables delinquent | 23.7 | 17.5 | |||||||
Net credit losses | 49.2 | 11.1 | |||||||
Allowance for losses | 23 | 21.5 | $ 23 | $ 22 | |||||
Finance Receivables Pledged as Security | 2,296.4 | 2,396.6 | |||||||
Obligations collateralized by finance receivables, gross | 1,645.4 | 1,697 | |||||||
Obligations collateralized by finance receivables | 1,631.9 | 1,677.6 | |||||||
Finance receivables, net of allowances | 2,282 | 2,395.1 | |||||||
Floorplan receivables | |||||||||
Finance Receivables and Obligations Collateralized by Finance Receivables | |||||||||
Principal amount of receivables | 2,301.4 | 2,409.9 | |||||||
Principal amount of receivables delinquent | 23.7 | 17.5 | |||||||
Net credit losses | 49.2 | 11.1 | |||||||
Other Loans | |||||||||
Finance Receivables and Obligations Collateralized by Finance Receivables | |||||||||
Principal amount of receivables | 3.6 | 6.7 | |||||||
Principal amount of receivables delinquent | 0 | 0 | |||||||
Net credit losses | 0 | 0 | |||||||
AFC | |||||||||
Finance Receivables and Obligations Collateralized by Finance Receivables | |||||||||
Allowance for losses | 23 | 21.5 | |||||||
Unamortized securitization issuance costs | $ (13.5) | (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 | $ 1,700 | ||||||
Cost capitalized in connection with US/Canada RPA | 10.5 | ||||||||
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 | $ 0.6 | $ 1.1 | |||||||
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) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Nov. 30, 2022 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Changes in goodwill | |||||
Balance at the beginning of the year | $ 1,464.5 | $ 1,464.5 | $ 1,598 | ||
Decrease for disposition activity | (119.2) | ||||
Foreign currency | 6.1 | (14.3) | |||
Increase for acquisition activity | 25.9 | ||||
Impairment | $ 0 | (225.3) | 0 | ||
Balance at the end of the year | 1,271.2 | 1,464.5 | $ 1,598 | ||
Deferred income tax expense (benefit) | (29.8) | (2.3) | 4.4 | ||
Deferred Tax Assets, Valuation Allowance | 63.2 | 25.3 | |||
Domestic Tax Authority | |||||
Changes in goodwill | |||||
Deferred Tax Assets, Valuation Allowance | 36.4 | ||||
ADESA Trade Names (Indefinite) | |||||
Changes in goodwill | |||||
Deferred income tax expense (benefit) | (6.5) | ||||
ADESA U.S. physical auctions | |||||
Changes in goodwill | |||||
Decrease for disposition activity | (1,100) | ||||
U.S. Dealer-to-Dealer | |||||
Changes in goodwill | |||||
Impairment | (218.9) | ||||
Balance at the end of the year | 87.3 | ||||
Deferred income tax expense (benefit) | (52.5) | ||||
Europe Reporting Unit | |||||
Changes in goodwill | |||||
Impairment | (6.4) | ||||
Balance at the end of the year | 120.8 | ||||
Marketplace | |||||
Changes in goodwill | |||||
Balance at the beginning of the year | 1,223.6 | 1,223.6 | 1,357.1 | ||
Decrease for disposition activity | (119.2) | ||||
Foreign currency | 6.1 | (14.3) | |||
Increase for acquisition activity | 25.9 | ||||
Impairment | (225.3) | ||||
Balance at the end of the year | 1,030.3 | 1,223.6 | 1,357.1 | ||
Accumulated Goodwill Impairment | 250.8 | 25.5 | 25.5 | ||
Finance | |||||
Changes in goodwill | |||||
Balance at the beginning of the year | $ 240.9 | 240.9 | 240.9 | ||
Decrease for disposition activity | 0 | ||||
Foreign currency | 0 | 0 | |||
Increase for acquisition activity | 0 | ||||
Impairment | 0 | ||||
Balance at the end of the year | 240.9 | 240.9 | 240.9 | ||
Accumulated Goodwill Impairment | $ 161.5 | $ 161.5 | $ 161.5 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Details 2) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Summary of customer relationships | ||
Accumulated amortization | $ (438.5) | $ (417.3) |
Carrying value | 136.1 | 135.9 |
Customer relationships | ||
Summary of customer relationships | ||
Gross carrying amount | 574.6 | 553.2 |
Accumulated amortization | (438.5) | (417.3) |
Carrying value | $ 136.1 | $ 135.9 |
Customer relationships | Minimum | ||
Summary of customer relationships | ||
Useful lives | 5 years | |
Customer relationships | Maximum | ||
Summary of customer relationships | ||
Useful lives | 19 years |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets (Details 3) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Summary of other intangible assets | ||||
Gross carrying amount | $ 656.9 | $ 637.3 | ||
Accumulated amortization | (475.4) | (406) | ||
Carrying value | 181.5 | 231.3 | ||
Indefinite-lived tradenames | 8.7 | 131.5 | ||
ADESA tradename - non-cash impairment charge | $ 25.5 | |||
Deferred income tax expense (benefit) | (29.8) | (2.3) | $ 4.4 | |
Amortization expense for customer relationships and other intangibles | 87.7 | 83.6 | $ 89.9 | |
Estimated amortization expense | ||||
2024 | 70.4 | |||
2025 | 54.1 | |||
2026 | 38.2 | |||
2027 | 31.7 | |||
2028 | 31.6 | |||
ADESA Trade Names (Indefinite) | ||||
Summary of other intangible assets | ||||
Carrying value | 122.8 | |||
Deferred income tax expense (benefit) | (6.5) | |||
Computer software & technology | ||||
Summary of other intangible assets | ||||
Gross carrying amount | 533.7 | 488.7 | ||
Accumulated amortization | (447.5) | (390.8) | ||
Carrying value | $ 86.2 | 97.9 | ||
Computer software & technology | Minimum | ||||
Summary of other intangible assets | ||||
Useful lives | 3 years | |||
Computer software & technology | Maximum | ||||
Summary of other intangible assets | ||||
Useful lives | 13 years | |||
ADESA Trade Names (Finite) | ||||
Summary of other intangible assets | ||||
Carrying value | $ 97.3 | |||
Useful lives | 6 years | |||
Tradenames | ||||
Summary of other intangible assets | ||||
Gross carrying amount | $ 123.2 | 148.6 | ||
Accumulated amortization | (27.9) | (15.2) | ||
Carrying value | $ 95.3 | $ 133.4 | ||
Tradenames | Minimum | ||||
Summary of other intangible assets | ||||
Useful lives | 1 year |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property and equipment | |||
Property and equipment, gross | $ 357 | $ 321.3 | |
Accumulated depreciation | (187.2) | (197.7) | |
Property and equipment, net | 169.8 | 123.6 | |
Depreciation expense | 13.8 | 16.6 | $ 20 |
Land | |||
Property and equipment | |||
Property and equipment, gross | 84.8 | 40.1 | |
Buildings | |||
Property and equipment | |||
Property and equipment, gross | $ 54.6 | 46 | |
Buildings | Minimum | |||
Property and equipment | |||
Useful lives | 5 years | ||
Buildings | Maximum | |||
Property and equipment | |||
Useful lives | 40 years | ||
Land improvements | |||
Property and equipment | |||
Property and equipment, gross | $ 32.6 | 33.2 | |
Land improvements | Minimum | |||
Property and equipment | |||
Useful lives | 5 years | ||
Land improvements | Maximum | |||
Property and equipment | |||
Useful lives | 20 years | ||
Building and leasehold improvements | |||
Property and equipment | |||
Property and equipment, gross | $ 38.3 | 37 | |
Building and leasehold improvements | Minimum | |||
Property and equipment | |||
Useful lives | 3 years | ||
Building and leasehold improvements | Maximum | |||
Property and equipment | |||
Useful lives | 33 years | ||
Furniture, fixtures and equipment | |||
Property and equipment | |||
Property and equipment, gross | $ 130 | 143.6 | |
Furniture, fixtures and equipment | Minimum | |||
Property and equipment | |||
Useful lives | 1 year | ||
Furniture, fixtures and equipment | Maximum | |||
Property and equipment | |||
Useful lives | 15 years | ||
Vehicles | |||
Property and equipment | |||
Property and equipment, gross | $ 14.9 | 16 | |
Vehicles | Minimum | |||
Property and equipment | |||
Useful lives | 3 years | ||
Vehicles | Maximum | |||
Property and equipment | |||
Useful lives | 10 years | ||
Construction in progress | |||
Property and equipment | |||
Property and equipment, gross | $ 1.8 | $ 5.4 |
Self Insurance and Retained L_3
Self Insurance and Retained Loss Reserves (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Changes in the reserves for self-insurance and the retained losses | |||
Balance at beginning of period | $ 12.5 | $ 10.4 | $ 10 |
Net payments | (33.7) | (27.8) | (33.5) |
Expense | 28.4 | 29.9 | 33.9 |
Balance at end of period | 7.2 | 12.5 | 10.4 |
Individual stop-loss coverage for medical benefits | 0.5 | 0.5 | 0.5 |
Retention for automobile and general liability claims | 1 | 1 | 1 |
Retention for workers compensation claims | 0.5 | 0.5 | 0.5 |
Corridor deductible for workers compensation claims | 1 | 1 | 1 |
Deductible amount per occurrence after corridor deductible is met | 0.5 | 0.5 | 0.5 |
Aggregate retention for workers compensation, automobile and garage liability | 28.5 | 28.5 | |
Insurance payments after aggregate retention is met up to specified amount | $ 7.5 | $ 7.5 | |
Aggregate limit for general liability primary policy | $ 3 |
Long-Term Debt Summary and Futu
Long-Term Debt Summary and Future Principal Payments (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 19, 2019 | May 31, 2017 | |
Long-Term Debt | ||||
Total debt | $ 364.6 | $ 498.7 | ||
Unamortized debt issuance costs/discounts | (7.6) | (4.7) | ||
Current portion of long-term debt | (154.6) | (288.7) | ||
Long-term debt | $ 202.4 | $ 205.3 | ||
Weighted average interest rate on variable rate debt (as a percent) | 8.78% | 6.54% | ||
Future Principal Payments | ||||
2024 | $ 154.6 | |||
2025 | 210 | |||
2026 | 0 | |||
2027 | 0 | |||
2028 | 0 | |||
Thereafter | 0 | |||
Total | 364.6 | |||
Senior Notes [Member] | ||||
Long-Term Debt | ||||
Total debt | $ 210 | $ 350 | ||
Senior notes stated interest rate | 5.125% | 5.125% | ||
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% | |||
Credit Agreement | Revolving credit facility | ||||
Long-Term Debt | ||||
Total debt | $ 137 | 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 | $ 17.6 | $ 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 | 12 Months Ended | ||||||||||||
Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2023 EUR (€) | Jun. 23, 2023 USD ($) | Sep. 19, 2019 USD ($) | |
Long-Term Debt | ||||||||||||||
Payments on long-term debt | $ 0 | $ (928.6) | $ (9.5) | |||||||||||
Long-term debt | $ 364.6 | $ 498.7 | 364.6 | 498.7 | ||||||||||
Payment for early extinguishment of debt | (140.1) | (606.3) | 0 | |||||||||||
Loss on extinguishment of debt | 0 | $ 0 | $ 1.1 | $ 0 | 0.2 | $ 9.3 | $ 7.7 | $ 0 | 1.1 | 17.2 | 0 | |||
Payments for debt issuance costs/amendments | $ (6.7) | (11.6) | $ (0.6) | |||||||||||
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% | |||||||||||||
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 | 54.7 | 19 | 54.7 | 19 | ||||||||||
Swing line loans | ||||||||||||||
Long-Term Debt | ||||||||||||||
Maximum borrowing capacity | 60 | 60 | ||||||||||||
Senior Notes [Member] | ||||||||||||||
Long-Term Debt | ||||||||||||||
Long-term debt | 210 | 350 | $ 210 | 350 | ||||||||||
Loss on extinguishment of debt | 0.7 | 9.5 | ||||||||||||
Previous Revolving Credit Facility | Adjusted LIBOR | ||||||||||||||
Long-Term Debt | ||||||||||||||
Interest rate basis (as a percent) | 1.75% | |||||||||||||
Variable rate basis | Adjusted LIBOR | |||||||||||||
Credit Agreement | ||||||||||||||
Long-Term Debt | ||||||||||||||
Payments for debt issuance costs/amendments | $ (6.2) | |||||||||||||
Credit Agreement | Revolving credit facility | ||||||||||||||
Long-Term Debt | ||||||||||||||
Maximum borrowing capacity | 325 | 325 | $ 325 | |||||||||||
Long-term debt | 137 | 0 | $ 137 | 0 | ||||||||||
Frequency of commitment fee payment | quarterly | |||||||||||||
Amount borrowed | 137 | 145 | $ 137 | 145 | ||||||||||
Credit Agreement | Revolving credit facility | Base rate | ||||||||||||||
Long-Term Debt | ||||||||||||||
Variable rate basis | Base Rate | |||||||||||||
European Line of Credit | Foreign line of credit | ||||||||||||||
Long-Term Debt | ||||||||||||||
Maximum borrowing capacity | 33.1 | $ 33.1 | € 30 | |||||||||||
Long-term debt | 17.6 | 3.7 | 17.6 | 3.7 | ||||||||||
Previous Credit Agreement | Term Loan B-6 | ||||||||||||||
Long-Term Debt | ||||||||||||||
Payments on long-term debt | (926.2) | |||||||||||||
Long-term debt | $ 950 | |||||||||||||
Loss on extinguishment of debt | $ 7.7 | |||||||||||||
Previous Credit Agreement | Previous Revolving Credit Facility | ||||||||||||||
Long-Term Debt | ||||||||||||||
Maximum borrowing capacity | $ 325 | |||||||||||||
Long-term debt | $ 0 | $ 145 | $ 0 | $ 145 | ||||||||||
Loss on extinguishment of debt | $ 0.4 | |||||||||||||
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 | 12 Months Ended | ||||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | May 31, 2017 | |
Long-Term Debt | ||||||||||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ 1.1 | $ 0 | $ 0.2 | $ 9.3 | $ 7.7 | $ 0 | $ 1.1 | $ 17.2 | $ 0 | |
Current maturities of long-term debt | $ 154.6 | $ 288.7 | $ 154.6 | 288.7 | ||||||||
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 | $ 600 | ||||||||||
Loss on extinguishment of debt | $ 0.7 | $ 9.5 |
Other Debt (Details)
Other Debt (Details) € in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2023 EUR (€) | |
Long-Term Debt | ||||||||||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ 1.1 | $ 0 | $ 0.2 | $ 9.3 | $ 7.7 | $ 0 | $ 1.1 | $ 17.2 | $ 0 | |
Long-term debt | 364.6 | 498.7 | 364.6 | 498.7 | ||||||||
European Line of Credit | Foreign line of credit | ||||||||||||
Long-Term Debt | ||||||||||||
Maximum borrowing capacity | 33.1 | 33.1 | € 30 | |||||||||
Long-term debt | $ 17.6 | $ 3.7 | $ 17.6 | $ 3.7 | ||||||||
Euribor rate | European Line of Credit | Foreign line of credit | ||||||||||||
Long-Term Debt | ||||||||||||
Interest rate basis (as a percent) | 1.25% |
Financial Instruments (Details)
Financial Instruments (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 23, 2020 USD ($) agreement | Mar. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Fair value of the entity's interest rate derivatives included in the consolidated balance sheet | ||||||
Fixed Interest Rate | 3.69% | |||||
Unrealized gain on interest rate derivatives, net of tax | $ 0 | $ 5.7 | $ 13.8 | |||
January 2020 interest rate swap | ||||||
Fair value of the entity's interest rate derivatives included in the consolidated balance sheet | ||||||
Aggregate notional amount | $ 500 | |||||
Term of interest rate swaps | 5 years | |||||
Derivative Number of Instruments Entered | agreement | 3 | |||||
Derivative, weighted average fixed interest rate | 1.44% | |||||
Tax impact from unrealized gain (loss) on interest rate derivatives | $ 1.8 | $ 4.6 | ||||
Unrealized Gain in "Interest expense" | $ 8.7 | |||||
Realized gain in "Interest expense" | $ 16.7 |
Financial Instruments (Details
Financial Instruments (Details 2) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Long-term Debt, Unclassified [Abstract] | ||
Estimated fair value of long-term debt | $ 360.4 | $ 490.9 |
Other (Income) Expense, Net (De
Other (Income) Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other Nonoperating Income (Expense) [Abstract] | |||||||||||
Change in realized and unrealized (gains) losses on investment securities, net | $ 0.4 | $ 7.1 | $ (33.4) | ||||||||
Contingent consideration valuation | 1.3 | 0 | 24.3 | ||||||||
Foreign currency (gains) losses | (2.9) | 2.5 | 3.8 | ||||||||
Investment and note receivable impairment | 10.3 | 0 | 0 | ||||||||
Early termination of contractual arrangement | (20) | 0 | 0 | ||||||||
Other | (4.7) | (10.9) | (7.2) | ||||||||
Other (income) expense, net | $ (3.1) | $ 1.7 | $ (21.3) | $ 7.1 | $ (7.7) | $ 1.2 | $ 4 | $ 1.2 | (15.6) | (1.3) | (12.5) |
Unrealized (gain) loss on investment securities | 0 | $ 7.1 | $ (1.4) | ||||||||
Fair value of investment securities | 0 | 0 | |||||||||
Investments recorded at cost | $ 26 | 26 | |||||||||
Other than Temporary Impairment | 3.7 | ||||||||||
Note Receivable Impairment | $ 6.6 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Temporary Equity [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Value of preferred stock dividends paid in cash | $ 44.4 | |||
Value of preferred stock dividends paid in-kind | $ 41.1 | |||
Series A Preferred Stock [Member] | ||||
Temporary Equity [Line Items] | ||||
Series A Preferred Stock shares issued | 550,000 | |||
Series A Preferred Stock par value per share | $ 0.01 | $ 0.01 | ||
Purchase price per share | $ 1,000 | |||
Proceeds from issuance of Series A Preferred Stock | $ 550 | |||
Series A Preferred stock shares authorized | 1,500,000 | |||
Liquidation preference per share | $ 1,000 | |||
Cumulative dividend rate | 7% | |||
Number Of dividend payments initially paid in-kind | 8 | |||
Value of preferred stock dividends paid in cash | $ 44.4 | $ 22.2 | ||
Value of preferred stock dividends paid in-kind | $ 21.6 | $ 41.1 | ||
Series A Preferred Stock conversion term for holders | 1 year | |||
Conversion price per share | $ 17.75 | |||
Conversion ratio - number of shares of common stock per share of Series A Preferred Stock | 56.3380 | |||
Series A Preferred Stock conversion term for company | 3 years | |||
Closing price of KAR stock necessary for Series A Preferred Stock to be convertible | $ 31.0625 | |||
Number Of Trading Days Required For Common Stock Price To Be Above A Certain Amount Before Company Can Exercise Conversion Of Series A Preferred Stock | 20 days | |||
Number Of Consecutive Trading Days Within Which 20 Day Requirement Must Be Met For Common Stock Price To Be Above A Certain Amount | 30 days | |||
Series A Preferred Stock Redemption Term For Company | 6 years | |||
Redemption Price By Company Between Six and Seven Years As A Percentage Of Liquidation Preference Plus Accrued And Unpaid Dividends | 105% | |||
Redemption Price By Company After Seven Years As A Percentage Of Liquidation Preference Plus Accrued And Unpaid Dividends | 100% | |||
Redemption Price After Change Of Control As A Percentage of Liquidation Preference And Accrued Dividends | 105% | |||
Minimum | Periphas [Member] | Series A Preferred Stock [Member] | ||||
Temporary Equity [Line Items] | ||||
Standstill restrictions, ownership percentage | 50% | |||
Term of standstill restrictions | 3 years | |||
Minimum | Apax [Member] | Series A Preferred Stock [Member] | ||||
Temporary Equity [Line Items] | ||||
Standstill restrictions, ownership percentage | 25% | |||
Term of standstill restrictions | 3 years |
Components of Lease Expense (De
Components of Lease Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Components of lease expense | |||
Operating lease cost | $ 15.9 | $ 17.7 | $ 18.6 |
Finance lease cost | |||
Amortization of right-of-use assets | 1.3 | 2.9 | 7.4 |
Interest on lease liabilities | 0.1 | 0.3 | 0.6 |
Total finance lease cost | $ 1.4 | $ 3.2 | $ 8 |
Leases Supplemental Cash Flow I
Leases Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Paid For Amounts Included In Measurement Of Lease Liabilities | |||
Operating cash flows related to operating leases | $ 15.9 | $ 17.5 | $ 18.2 |
Operating cash flows related to finance leases | 0.1 | 0.3 | 0.6 |
Financing cash flows related to finance leases | 1.9 | 3.9 | 5.6 |
Right-Of-Use Assets Obtained In Exchange For Lease Obligations | |||
Operating leases | 1.4 | 4 | 6.7 |
Finance leases | $ 0 | $ 0 | $ 3.7 |
Leases Supplemental Balance She
Leases Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of supplemental balance sheet information related to leases | ||
Operating Lease, Right-of-Use Asset | $ 75.9 | $ 84.8 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other accrued expenses | Other accrued expenses |
Other accrued expenses | $ 75.3 | $ 79.1 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Operating lease liabilities | Operating lease liabilities |
Operating lease liabilities | $ 70.4 | $ 79.7 |
Total operating lease liabilities | $ 81.4 | $ 90.2 |
Finance Leased Asset, Type [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Property and equipment, gross | $ 357 | $ 321.3 |
Accumulated depreciation | (187.2) | (197.7) |
Property and equipment, net | $ 169.8 | $ 123.6 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other accrued expenses | Other accrued expenses |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other liabilities | Other liabilities |
Other liabilities | $ 14.3 | $ 6.8 |
Total finance lease liabilities | $ 0.9 | $ 2.8 |
Weighted average remaining lease term for operating leases | 8 years 3 months 18 days | 9 years |
Weighted average remaining lease term for finance leases | 1 year | 1 year 7 months 6 days |
Weighted average discount rate for operating leases | 5.90% | 5.90% |
Weighted average discount rate for finance leases | 4% | 4.40% |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Operating Lease, Right-of-Use Asset | Operating Lease, Right-of-Use Asset |
Operating lease | ||
Schedule of supplemental balance sheet information related to leases | ||
Other accrued expenses | $ 11 | $ 10.5 |
Finance lease | ||
Schedule of supplemental balance sheet information related to leases | ||
Other accrued expenses | 0.9 | 1.9 |
Property and equipment, gross | 37.6 | 48.6 |
Accumulated depreciation | (37.3) | (47.1) |
Property and equipment, net | 0.3 | 1.5 |
Other liabilities | $ 0 | $ 0.9 |
Leases Maturities of Lease Liab
Leases Maturities of Lease Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Lease | ||
2024 | $ 15.4 | |
2025 | 14.7 | |
2026 | 11.6 | |
2027 | 10.8 | |
2028 | 9.2 | |
Thereafter | 42 | |
Total lease payments | 103.7 | |
Less imputed interest | (22.3) | |
Total operating lease liabilities | 81.4 | $ 90.2 |
Finance Lease | ||
2024 | 0.9 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
2028 | 0 | |
Thereafter | 0 | |
Total lease payments | 0.9 | |
Less imputed interest | 0 | |
Total finance lease liabilities | $ 0.9 | $ 2.8 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income (loss) from continuing operations before income taxes: | |||||||||||
Domestic | $ (209,700,000) | $ (59,700,000) | $ (55,800,000) | ||||||||
Foreign | 63,200,000 | 98,300,000 | 70,100,000 | ||||||||
Income (loss) from continuing operations before income taxes | $ 21,200,000 | $ 25,400,000 | $ (213,100,000) | $ 20,000,000 | $ 59,800,000 | $ 7,200,000 | $ (15,300,000) | $ (13,100,000) | (146,500,000) | 38,600,000 | 14,300,000 |
Current: | |||||||||||
Federal | 22,100,000 | (9,200,000) | (16,600,000) | ||||||||
Foreign | 16,000,000 | 23,100,000 | 27,700,000 | ||||||||
State | 0 | (1,600,000) | (400,000) | ||||||||
Total current provision | 38,100,000 | 12,300,000 | 10,700,000 | ||||||||
Deferred: | |||||||||||
Federal | (29,400,000) | (2,900,000) | 4,600,000 | ||||||||
Foreign | 3,200,000 | 900,000 | 400,000 | ||||||||
State | (3,600,000) | (300,000) | (600,000) | ||||||||
Total deferred provision | (29,800,000) | (2,300,000) | 4,400,000 | ||||||||
Income tax expense | 7,600,000 | $ 12,700,000 | $ (19,300,000) | $ 7,300,000 | 17,900,000 | $ 6,700,000 | $ (9,900,000) | $ (4,700,000) | $ 8,300,000 | $ 10,000,000 | $ 15,100,000 |
Reconciliation between provision for income taxes and U.S. federal statutory rate applied to income before taxes | |||||||||||
Statutory rate (as a percent) | 21% | 21% | 21% | ||||||||
State and local income taxes, net (as a percent) | 3.80% | (4.80%) | 1.30% | ||||||||
Reserves for tax exposures (as a percent) | 0% | 0.40% | (1.20%) | ||||||||
Change in valuation allowance (as a percent) | (25.20%) | 8.50% | 9.50% | ||||||||
International operations (as a percent) | (4.70%) | 2.90% | 56.20% | ||||||||
Stock-based compensation (as a percent) | (0.10%) | 0% | (5.30%) | ||||||||
Impact of law and rate change (as a percent) | 0.20% | (5.60%) | 1.50% | ||||||||
Excess officer's compensation (as a percent) | (1.00%) | 5.50% | 7.90% | ||||||||
Transaction costs (as a percent) | 0% | (0.20%) | 2.50% | ||||||||
Refund claims (as a percent) | 0% | 0% | (19.20%) | ||||||||
Goodwill and other intangibles impairment (as a percent) | (0.90%) | 0% | 0% | ||||||||
Impact of acquisition and divestiture adjustments (as a percent) | 1.30% | 0% | 34.30% | ||||||||
Other, net (as a percent) | (0.10%) | (1.80%) | (2.90%) | ||||||||
Effective rate (as a percent) | (5.70%) | 25.90% | 105.60% | ||||||||
Gross deferred tax assets: | |||||||||||
Allowances for trade and finance receivables | 8,100,000 | 9,000,000 | $ 8,100,000 | $ 9,000,000 | |||||||
Accruals and liabilities | 4,300,000 | 3,900,000 | 4,300,000 | 3,900,000 | |||||||
Employee benefits and compensation | 9,200,000 | 7,100,000 | 9,200,000 | 7,100,000 | |||||||
Net operating loss carryforwards | 19,900,000 | 19,500,000 | 19,900,000 | 19,500,000 | |||||||
Right of use lease liability | 20,100,000 | 22,400,000 | 20,100,000 | 22,400,000 | |||||||
Other | 7,900,000 | 5,300,000 | 7,900,000 | 5,300,000 | |||||||
Total deferred tax assets | 69,500,000 | 67,200,000 | 69,500,000 | 67,200,000 | |||||||
Deferred tax asset valuation allowance | (63,200,000) | (25,300,000) | (63,200,000) | (25,300,000) | |||||||
Total | 6,300,000 | 41,900,000 | 6,300,000 | 41,900,000 | |||||||
Gross deferred tax liabilities: | |||||||||||
Property and equipment | (3,500,000) | (16,100,000) | (3,500,000) | (16,100,000) | |||||||
Goodwill and intangible assets | 4,100,000 | (49,900,000) | 4,100,000 | (49,900,000) | |||||||
Right of use lease asset | (18,700,000) | (21,000,000) | (18,700,000) | (21,000,000) | |||||||
Other | (6,100,000) | (2,600,000) | (6,100,000) | (2,600,000) | |||||||
Total | (24,200,000) | (89,600,000) | (24,200,000) | (89,600,000) | |||||||
Net deferred tax liabilities | (17,900,000) | (47,700,000) | (17,900,000) | (47,700,000) | |||||||
Gross tax benefit from state and federal net operating loss carryforwards expire | |||||||||||
2024 | 100,000 | 100,000 | |||||||||
2025 | 200,000 | 200,000 | |||||||||
2026 | 100,000 | 100,000 | |||||||||
2027 | 0 | 0 | |||||||||
2028 | 0 | 0 | |||||||||
2029 and after | 19,500,000 | 19,500,000 | |||||||||
Total | 19,900,000 | $ 19,500,000 | 19,900,000 | $ 19,500,000 | |||||||
Undistributed earnings of foreign subsidiaries | $ 452,600,000 | $ 452,600,000 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income tax payments | |||
Income tax payments, net of income tax refunds | $ 35.8 | $ 25.6 | $ 24.8 |
Federal | |||
Income tax payments | |||
Income tax payments, net of income tax refunds | 7.5 | 0 | 0 |
State and foreign | |||
Income tax payments | |||
Income tax payments, net of income tax refunds | $ 28.3 | $ 25.6 | $ 24.8 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Balance at beginning of period | $ 5.8 | $ 5 |
Increase in prior year tax positions | 9.2 | 0.4 |
Increase in current year tax positions | 0.7 | 1.4 |
Lapse in statute of limitations | (0.8) | (1) |
Balance at end of period | 14.9 | 5.8 |
Unrecognized tax benefits that, if recognized, would affect our effective tax rate | 12.3 | 4.2 |
Reserves, associated with interest and penalties, net of tax | 1.1 | $ 0.4 |
Minimum | ||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Net decrease in tax impact on the reserve balance | 0 | |
Maximum | ||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Net decrease in tax impact on the reserve balance | $ 0.5 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |||
Employer matching contribution (as a percent) | 100% | ||
Maximum percentage of participant's compensation for employer contribution match | 4% | ||
Participant's vesting percentage in employer contribution | 100% | ||
Employer's contribution | $ 6 | $ 6.3 | $ 6.6 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Liabilities for environmental matters | $ 0 | $ 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Foreign currency translation loss | $ (36.7) | $ (49.5) |
Accumulated other comprehensive loss | $ (36.7) | $ (49.5) |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Segment Reporting [Abstract] | |||||||||||
Number of operating segments | segment | 2 | ||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Segment Information | |||||||||||
Operating revenues | $ 391.3 | $ 416.3 | $ 416.9 | $ 420.6 | $ 372.8 | $ 393 | $ 384.2 | $ 369.4 | $ 1,645.1 | $ 1,519.4 | $ 1,450.6 |
Operating expenses | |||||||||||
Cost of services (exclusive of depreciation and amortization) | 204.8 | 216 | 222.6 | 224.2 | 202 | 209.6 | 211.9 | 210.8 | 867.6 | 834.3 | 792.5 |
Selling, general and administrative | 103.8 | 107.4 | 111.2 | 108 | 93 | 109.1 | 124.1 | 118.9 | 430.4 | 445.1 | 420.7 |
Depreciation and amortization | 25.3 | 26.4 | 26.8 | 23 | 24 | 24.3 | 25.9 | 26 | 101.5 | 100.2 | 109.9 |
Gain on sale of property | (33.9) | 0 | 0 | 0 | 0 | (33.9) | 0 | ||||
Goodwill and other intangibles impairment | 0 | 0 | 250.8 | 0 | 250.8 | 0 | 0 | ||||
Total operating expenses | 333.9 | 349.8 | 611.4 | 355.2 | 285.1 | 343 | 361.9 | 355.7 | 1,650.3 | 1,345.7 | 1,323.1 |
Operating profit (loss) | 57.4 | 66.5 | (194.5) | 65.4 | 87.7 | 50 | 22.3 | 13.7 | (5.2) | 173.7 | 127.5 |
Interest expense | 39.3 | 39.4 | 38.8 | 38.3 | 35.4 | 32.3 | 25.9 | 25.6 | 155.8 | 119.2 | 125.7 |
Other (income) expense, net | (3.1) | 1.7 | (21.3) | 7.1 | (7.7) | 1.2 | 4 | 1.2 | (15.6) | (1.3) | (12.5) |
Loss on extinguishment of debt | 0 | 0 | 1.1 | 0 | 0.2 | 9.3 | 7.7 | 0 | 1.1 | 17.2 | 0 |
Intercompany expense (income) | 0 | 0 | 0 | ||||||||
Income (loss) from continuing operations before income taxes | 21.2 | 25.4 | (213.1) | 20 | 59.8 | 7.2 | (15.3) | (13.1) | (146.5) | 38.6 | 14.3 |
Income taxes | 7.6 | 12.7 | (19.3) | 7.3 | 17.9 | 6.7 | (9.9) | (4.7) | 8.3 | 10 | 15.1 |
Income (loss) from continuing operations | 13.6 | $ 12.7 | $ (193.8) | $ 12.7 | 41.9 | $ 0.5 | $ (5.4) | $ (8.4) | (154.8) | 28.6 | (0.8) |
Total assets | 4,726.3 | 5,119.8 | 4,726.3 | 5,119.8 | |||||||
Capital expenditures | 52 | 60.9 | 64.2 | ||||||||
Operating Segments | Marketplace | |||||||||||
Segment Information | |||||||||||
Operating revenues | 1,251.7 | 1,143.5 | 1,161.4 | ||||||||
Operating expenses | |||||||||||
Cost of services (exclusive of depreciation and amortization) | 801.7 | 771.2 | 737.1 | ||||||||
Selling, general and administrative | 380.6 | 398.6 | 385.5 | ||||||||
Depreciation and amortization | 92.2 | 92.3 | 100.5 | ||||||||
Gain on sale of property | (33.9) | ||||||||||
Goodwill and other intangibles impairment | 250.8 | ||||||||||
Total operating expenses | 1,525.3 | 1,228.2 | 1,223.1 | ||||||||
Operating profit (loss) | (273.6) | (84.7) | (61.7) | ||||||||
Interest expense | 25.2 | 40.2 | 86.2 | ||||||||
Other (income) expense, net | (15.9) | (8.4) | 4.5 | ||||||||
Loss on extinguishment of debt | 1.1 | 17.2 | |||||||||
Intercompany expense (income) | 33.9 | 8.4 | 0.2 | ||||||||
Income (loss) from continuing operations before income taxes | (317.9) | (142.1) | (152.6) | ||||||||
Income taxes | (40.4) | (36.4) | (26.4) | ||||||||
Income (loss) from continuing operations | (277.5) | (105.7) | (126.2) | ||||||||
Total assets | 2,065.6 | 2,297.8 | 2,065.6 | 2,297.8 | 2,562 | ||||||
Capital expenditures | 46.5 | 55.7 | 59.6 | ||||||||
Operating Segments | Finance | |||||||||||
Segment Information | |||||||||||
Operating revenues | 393.4 | 375.9 | 289.2 | ||||||||
Operating expenses | |||||||||||
Cost of services (exclusive of depreciation and amortization) | 65.9 | 63.1 | 55.4 | ||||||||
Selling, general and administrative | 49.8 | 46.5 | 35.2 | ||||||||
Depreciation and amortization | 9.3 | 7.9 | 9.4 | ||||||||
Gain on sale of property | 0 | ||||||||||
Goodwill and other intangibles impairment | 0 | ||||||||||
Total operating expenses | 125 | 117.5 | 100 | ||||||||
Operating profit (loss) | 268.4 | 258.4 | 189.2 | ||||||||
Interest expense | 130.6 | 79 | 39.5 | ||||||||
Other (income) expense, net | 0.3 | 7.1 | (17) | ||||||||
Loss on extinguishment of debt | 0 | 0 | |||||||||
Intercompany expense (income) | (33.9) | (8.4) | (0.2) | ||||||||
Income (loss) from continuing operations before income taxes | 171.4 | 180.7 | 166.9 | ||||||||
Income taxes | 48.7 | 46.4 | 41.5 | ||||||||
Income (loss) from continuing operations | 122.7 | 134.3 | 125.4 | ||||||||
Total assets | 2,660.7 | 2,822 | 2,660.7 | 2,822 | 2,908.9 | ||||||
Capital expenditures | 5.5 | 5.2 | 4.6 | ||||||||
Operating Segments | Continuing Operations | |||||||||||
Operating expenses | |||||||||||
Total assets | $ 4,726.3 | $ 5,119.8 | $ 4,726.3 | $ 5,119.8 | $ 5,470.9 |
Segment Information (Details 2)
Segment Information (Details 2) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Geographic Information | |||||||||||
Operating revenues | $ 391.3 | $ 416.3 | $ 416.9 | $ 420.6 | $ 372.8 | $ 393 | $ 384.2 | $ 369.4 | $ 1,645.1 | $ 1,519.4 | $ 1,450.6 |
Long-lived assets | 1,884.4 | 2,097.4 | $ 1,884.4 | 2,097.4 | |||||||
Disclosure of major customers | No single customer accounted for more than ten percent of our total revenues in any fiscal year presented. | ||||||||||
U.S. | |||||||||||
Geographic Information | |||||||||||
Operating revenues | $ 1,026.1 | 992.9 | $ 847.9 | ||||||||
Long-lived assets | 1,074.2 | 1,787.4 | $ 1,074.2 | $ 1,787.4 | |||||||
Foreign | |||||||||||
Geographic Information | |||||||||||
Percent of foreign revenue from Canada | 58% | 62% | 56% | ||||||||
Operating revenues | $ 619 | $ 526.5 | $ 602.7 | ||||||||
Long-lived assets | $ 810.2 | $ 310 | $ 810.2 | $ 310 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Operating revenues | $ 391.3 | $ 416.3 | $ 416.9 | $ 420.6 | $ 372.8 | $ 393 | $ 384.2 | $ 369.4 | $ 1,645.1 | $ 1,519.4 | $ 1,450.6 |
Operating expenses | |||||||||||
Cost of services (exclusive of depreciation and amortization) | 204.8 | 216 | 222.6 | 224.2 | 202 | 209.6 | 211.9 | 210.8 | 867.6 | 834.3 | 792.5 |
Selling, general, and administrative expenses | 103.8 | 107.4 | 111.2 | 108 | 93 | 109.1 | 124.1 | 118.9 | 430.4 | 445.1 | 420.7 |
Depreciation and amortization | 25.3 | 26.4 | 26.8 | 23 | 24 | 24.3 | 25.9 | 26 | 101.5 | 100.2 | 109.9 |
Goodwill and other intangibles impairment | 0 | 0 | 250.8 | 0 | 250.8 | 0 | 0 | ||||
Gain on sale of property | (33.9) | 0 | 0 | 0 | 0 | (33.9) | 0 | ||||
Total operating expenses | 333.9 | 349.8 | 611.4 | 355.2 | 285.1 | 343 | 361.9 | 355.7 | 1,650.3 | 1,345.7 | 1,323.1 |
Operating profit (loss) | 57.4 | 66.5 | (194.5) | 65.4 | 87.7 | 50 | 22.3 | 13.7 | (5.2) | 173.7 | 127.5 |
Interest expense | 39.3 | 39.4 | 38.8 | 38.3 | 35.4 | 32.3 | 25.9 | 25.6 | 155.8 | 119.2 | 125.7 |
Other (income) expense, net | (3.1) | 1.7 | (21.3) | 7.1 | (7.7) | 1.2 | 4 | 1.2 | (15.6) | (1.3) | (12.5) |
Loss on extinguishment of debt | 0 | 0 | 1.1 | 0 | 0.2 | 9.3 | 7.7 | 0 | 1.1 | 17.2 | 0 |
Income (loss) from continuing operations before income taxes | 21.2 | 25.4 | (213.1) | 20 | 59.8 | 7.2 | (15.3) | (13.1) | (146.5) | 38.6 | 14.3 |
Income taxes | 7.6 | 12.7 | (19.3) | 7.3 | 17.9 | 6.7 | (9.9) | (4.7) | 8.3 | 10 | 15.1 |
Income (loss) from continuing operations | $ 13.6 | $ 12.7 | $ (193.8) | $ 12.7 | $ 41.9 | $ 0.5 | $ (5.4) | $ (8.4) | $ (154.8) | $ 28.6 | $ (0.8) |
Basic (in dollars per share) | $ 0.02 | $ 0.01 | $ (1.87) | $ 0.01 | $ 0.21 | $ (0.09) | $ (0.10) | $ (0.16) | $ (1.83) | $ (0.10) | $ (0.27) |
Diluted (in dollars per share) | $ 0.02 | $ 0.01 | $ (1.87) | $ 0.01 | $ 0.21 | $ (0.09) | $ (0.10) | $ (0.16) | $ (1.83) | $ (0.10) | $ (0.27) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - Credit Agreement $ in Millions | Jan. 19, 2024 CAD ($) |
Canadian Revolving Credit Facility | |
Subsequent Event | |
Maximum borrowing capacity | $ 175 |
Frequency of commitment fee payment | quarterly |
Canadian Revolving Credit Facility | Maximum | |
Subsequent Event | |
Commitment fee on the unused amount of the Revolving Credit Facility (as a percent) | 0.35% |
Canadian Revolving Credit Facility | Maximum | Debt Instrument Adjusted Term CORRA | |
Subsequent Event | |
Interest rate basis (as a percent) | 3% |
Canadian Revolving Credit Facility | Maximum | Canadian Prime Rate | |
Subsequent Event | |
Interest rate basis (as a percent) | 2% |
Canadian Revolving Credit Facility | Minimum | |
Subsequent Event | |
Commitment fee on the unused amount of the Revolving Credit Facility (as a percent) | 0.25% |
Canadian Revolving Credit Facility | Minimum | Debt Instrument Adjusted Term CORRA | |
Subsequent Event | |
Interest rate basis (as a percent) | 2.50% |
Canadian Revolving Credit Facility | Minimum | Canadian Prime Rate | |
Subsequent Event | |
Interest rate basis (as a percent) | 1.50% |
Canadian Sub-limit | |
Subsequent Event | |
Maximum borrowing capacity | $ 50 |
Canadian Sub-limit | Maximum | Debt Instrument Adjusted Term CORRA | |
Subsequent Event | |
Interest rate basis (as a percent) | 2.75% |
Canadian Sub-limit | Minimum | Debt Instrument Adjusted Term CORRA | |
Subsequent Event | |
Interest rate basis (as a percent) | 2.25% |