Segment Information |
Segment InformationASC 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. Prior to the spin-off of IAA, our operations were grouped into three operating segments: ADESA Auctions, IAA and AFC, which also served as our reportable business segments. Beginning in the second quarter of 2019, after the completion of the spin-off, the Company began operating under two reportable business segments: ADESA Auctions and AFC. These reportable business segments offer different services and have fundamental differences in their operations. Results of the former IAA segment and spin-related costs are now reported as discontinued operations (see Note 4). Segment results for prior periods have been reclassified to conform with the new presentation of segments. ADESA Auctions encompasses all physical and online wholesale auctions throughout North America (U.S., Canada and Mexico) and Europe. Beginning in 2019, the ADESA Auctions Segment includes COTW, an online auction company serving the wholesale vehicle sector in Continental Europe. Beginning in October 2017, the ADESA Auctions segment includes TradeRev, an online automotive remarketing system where dealers can launch and participate in real-time vehicle auctions at any time. ADESA Auctions relates to used vehicle remarketing, including auction services, remarketing, or make ready services and all are interrelated, synergistic elements along the auto remarketing chain. AFC is primarily engaged in the business of providing short-term, inventory-secured financing to independent, used vehicle dealers. AFC also includes other businesses and ventures that AFC may enter into, focusing on providing independent used vehicle dealer customers with other related services and products, including vehicle service contracts. AFC conducts business primarily at or near wholesale used vehicle auctions in the U.S. and Canada. The holding company is maintained separately from the reportable segments and includes expenses associated with the corporate offices, such as salaries, benefits and travel costs for the corporate management team, certain human resources, information technology and accounting costs, and certain insurance, treasury, legal and risk management costs. Holding company interest expense includes the interest expense incurred on finance leases and the corporate debt structure. Intercompany charges relate primarily to interest on intercompany debt or receivables and certain administrative costs allocated by the holding company. Financial information regarding our reportable segments is set forth below as of and for the year ended December 31, 2019 (in millions): | | | | | | | | | | | | | | | | | | ADESA Auctions | | AFC | | Holding Company | | Consolidated | Operating revenues | $ | 2,429.0 |
| | $ | 352.9 |
| | $ | — |
| | $ | 2,781.9 |
| Operating expenses | | | | | | | | Cost of services (exclusive of depreciation and amortization) | 1,520.7 |
| | 96.4 |
| | — |
| | 1,617.1 |
| Selling, general and administrative | 494.3 |
| | 25.6 |
| | 142.1 |
| | 662.0 |
| Depreciation and amortization | 149.9 |
| | 10.3 |
| | 28.5 |
| | 188.7 |
| Total operating expenses | 2,164.9 |
| | 132.3 |
| | 170.6 |
| | 2,467.8 |
| Operating profit (loss) | 264.1 |
| | 220.6 |
| | (170.6 | ) | | 314.1 |
| Interest expense | 3.7 |
| | 64.2 |
| | 121.6 |
| | 189.5 |
| Other (income) expense, net | (6.4 | ) | | (0.4 | ) | | (0.9 | ) | | (7.7 | ) | Loss on extinguishment of debt | — |
| | — |
| | 2.2 |
| | 2.2 |
| Intercompany expense (income) | 25.2 |
| | (5.1 | ) | | (20.1 | ) | | — |
| Income (loss) from continuing operations before income taxes | 241.6 |
| | 161.9 |
| | (273.4 | ) | | 130.1 |
| Income taxes | 67.3 |
| | 41.9 |
| | (71.5 | ) | | 37.7 |
| Net income (loss) from continuing operations | $ | 174.3 |
| | $ | 120.0 |
| | $ | (201.9 | ) | | $ | 92.4 |
| Total assets | $ | 3,658.4 |
| | $ | 2,565.7 |
| | $ | 357.1 |
| | $ | 6,581.2 |
| Capital expenditures | $ | 95.2 |
| | $ | 7.0 |
| | $ | 59.4 |
| | $ | 161.6 |
|
Financial information regarding our reportable segments is set forth below as of and for the year ended December 31, 2018 (in millions): | | | | | | | | | | | | | | | | | | ADESA Auctions | | AFC | | Holding Company | | Consolidated | Operating revenues | $ | 2,101.9 |
| | $ | 340.9 |
| | $ | — |
| | $ | 2,442.8 |
| Operating expenses | | | | | | | | Cost of services (exclusive of depreciation and amortization) | 1,230.8 |
| | 90.7 |
| | — |
| | 1,321.5 |
| Selling, general and administrative | 435.8 |
| | 30.7 |
| | 142.3 |
| | 608.8 |
| Depreciation and amortization | 127.5 |
| | 16.0 |
| | 28.9 |
| | 172.4 |
| Total operating expenses | 1,794.1 |
| | 137.4 |
| | 171.2 |
| | 2,102.7 |
| Operating profit (loss) | 307.8 |
| | 203.5 |
| | (171.2 | ) | | 340.1 |
| Interest expense | 2.2 |
| | 59.6 |
| | 129.4 |
| | 191.2 |
| Other (income) expense, net | (1.9 | ) | | (0.3 | ) | | (0.8 | ) | | (3.0 | ) | Intercompany expense (income) | 35.1 |
| | (3.2 | ) | | (31.9 | ) | | — |
| Income (loss) from continuing operations before income taxes | 272.4 |
| | 147.4 |
| | (267.9 | ) | | 151.9 |
| Income taxes | 69.1 |
| | 35.4 |
| | (70.2 | ) | | 34.3 |
| Net income (loss) from continuing operations | $ | 203.3 |
| | $ | 112.0 |
| | $ | (197.7 | ) | | $ | 117.6 |
| Total assets | $ | 3,097.7 |
| | $ | 2,446.1 |
| | $ | 155.6 |
| | $ | 5,699.4 |
| Capital expenditures | $ | 95.1 |
| | $ | 7.1 |
| | $ | 29.1 |
| | $ | 131.3 |
|
Financial information regarding our reportable segments is set forth below as of and for the year ended December 31, 2017 (in millions): | | | | | | | | | | | | | | | | | | ADESA Auctions | | AFC | | Holding Company | | Consolidated | Operating revenues | $ | 1,937.5 |
| | $ | 301.3 |
| | $ | — |
| | $ | 2,238.8 |
| Operating expenses | | | | | | | | Cost of services (exclusive of depreciation and amortization) | 1,123.9 |
| | 85.2 |
| | — |
| | 1,209.1 |
| Selling, general and administrative | 360.0 |
| | 30.9 |
| | 140.8 |
| | 531.7 |
| Depreciation and amortization | 113.1 |
| | 31.3 |
| | 27.1 |
| | 171.5 |
| Total operating expenses | 1,597.0 |
| | 147.4 |
| | 167.9 |
| | 1,912.3 |
| Operating profit (loss) | 340.5 |
| | 153.9 |
| | (167.9 | ) | | 326.5 |
| Interest expense | 1.2 |
| | 43.6 |
| | 118.4 |
| | 163.2 |
| Other (income) expense, net | (0.3 | ) | | — |
| | (0.7 | ) | | (1.0 | ) | Loss on extinguishment of debt | — |
| | — |
| | 27.5 |
| | 27.5 |
| Gain on previously held equity interest value | (21.6 | ) | | — |
| | — |
| | (21.6 | ) | Intercompany expense (income) | 47.4 |
| | (20.2 | ) | | (27.2 | ) | | — |
| Income (loss) from continuing operations before income taxes | 313.8 |
| | 130.5 |
| | (285.9 | ) | | 158.4 |
| Income taxes | 52.9 |
| | 26.6 |
| | (95.1 | ) | | (15.6 | ) | Net income (loss) from continuing operations | $ | 260.9 |
| | $ | 103.9 |
| | $ | (190.8 | ) | | $ | 174.0 |
| Total assets | $ | 3,132.3 |
| | $ | 2,315.6 |
| | $ | 98.0 |
| | $ | 5,545.9 |
| Capital expenditures | $ | 66.9 |
| | $ | 6.1 |
| | $ | 24.3 |
| | $ | 97.3 |
|
Geographic Information Our foreign operations include Canada, Mexico Continental Europe and the U.K. Most of our operations outside the U.S. are in Canada. Approximately 62%, 96% and 96% of our foreign operating revenues were from Canada for the year ended December 31, 2019, 2018 and 2017, respectively. The 2019 acquisition of COTW has increased the percentage of operating revenues from Europe. Information regarding the geographic areas of our operations is set forth below (in millions): | | | | | | | | | | | | | | | | 2019 | | 2018 | | 2017 | Operating revenues | | | | | | U.S. | $ | 2,267.5 |
| | $ | 2,078.2 |
| | $ | 1,912.3 |
| Foreign | 514.4 |
| | 364.6 |
| | 326.5 |
| | $ | 2,781.9 |
| | $ | 2,442.8 |
| | $ | 2,238.8 |
|
| | | | | | | | | | | | 2019 | | 2018 | Long-lived assets | | | | U.S. | $ | 2,877.8 |
| | $ | 2,564.3 |
| Foreign | 458.9 |
| | 274.4 |
| | $ | 3,336.7 |
| | $ | 2,838.7 |
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No single customer accounted for more than ten percent of our total revenues in any fiscal year presented.
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