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KAR Auction Services, Inc. – ‘10-K’ for 12/31/19 – ‘R17’

On:  Wednesday, 2/19/20, at 5:29pm ET   ·   For:  12/31/19   ·   Accession #:  1395942-20-18   ·   File #:  1-34568

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  As Of               Filer                 Filing    For·On·As Docs:Size

 2/19/20  KAR Auction Services, Inc.        10-K       12/31/19  108:15M

Annual Report   —   Form 10-K   —   Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                       HTML   2.23M 
 2: EX-4.3      Exhibit 4.3 - Description of the Company's          HTML     36K 
                Securities                                                       
 3: EX-10.13    Exhibit 10.13 - Kar Aip Summary of Terms 2020       HTML     46K 
 4: EX-10.35    Exhibit 10.35 - Form of 2020 Rsu Award Agreement    HTML     55K 
                for Section 16                                                   
 5: EX-10.38    Exhibit 10.38 - Form of 2020 Prsu Award Agreement   HTML     57K 
 6: EX-21.1     Exhibit 21.1 - List of Subsidiaries                 HTML     60K 
 7: EX-23.1     Exhibit 23.1 - Consent of Independent Registered    HTML     30K 
                Public Accounting Firm                                           
 8: EX-31.1     Exhibit 31.1 - CEO Sox 302 Certification            HTML     35K 
 9: EX-31.2     Exhibit 31.2 - CFO Sox 302 Certification            HTML     35K 
10: EX-32.1     Exhibit 32.1 - CEO Sox 906 Certification            HTML     29K 
11: EX-32.2     Exhibit 32.2 - CFO Sox 906 Certification            HTML     29K 
49: R1          Document and Entity Information Cover               HTML     83K 
108: R2          Document and Entity Information                     HTML     36K  
76: R3          Consolidated Statements of Income                   HTML    116K 
33: R4          Consolidated Statements of Comprehensive Income     HTML     40K 
48: R5          Consolidated Balance Sheets                         HTML    164K 
105: R6          Consolidated Balance Sheets (Parenthetical)         HTML     56K  
75: R7          Consolidated Statements of Stockholders' Equity     HTML     91K 
32: R8          Consolidated Statements of Stockholders' Equity     HTML     28K 
                (Parenthetical)                                                  
51: R9          Consolidated Statements of Cash Flows               HTML    152K 
107: R10         Organization and Other Matters                      HTML     46K  
77: R11         Summary of Significant Accounting Policies          HTML     98K 
35: R12         Acquisitions and Equity Method Investments          HTML     47K 
50: R13         IAA Separation and Discontinued Operations          HTML     92K 
106: R14         Stock and Stock-Based Compensation Plans            HTML    135K  
74: R15         Net Income from Continuing Operations Per Share     HTML     52K 
34: R16         Allowance for Credit Losses and Doubtful Accounts   HTML     59K 
47: R17         Finance Receivables and Obligations Collateralized  HTML     67K 
                by Finance Receivables                                           
104: R18         Goodwill and Other Intangible Assets                HTML     93K  
79: R19         Property and Equipment                              HTML     52K 
18: R20         Self Insurance and Retained Loss Reserves           HTML     45K 
57: R21         Long-Term Debt                                      HTML     92K 
88: R22         Financial Instruments                               HTML     56K 
81: R23         Leases                                              HTML     75K 
17: R24         Income Taxes                                        HTML    145K 
56: R25         Employee Benefit Plans                              HTML     31K 
87: R26         Commitments and Contingencies                       HTML     33K 
80: R27         Accumulated Other Comprehensive Loss                HTML     36K 
19: R28         Segment Information                                 HTML    202K 
55: R29         Quarterly Financial Data (Unaudited)                HTML    120K 
52: R30         Subsequent Event                                    HTML     30K 
37: R31         Summary of Significant Accounting Policies          HTML    175K 
                (Policies)                                                       
72: R32         Summary of Significant Accounting Policies          HTML     43K 
                (Tables)                                                         
102: R33         IAA Separation and Discontinued Operations          HTML     94K  
                (Tables)                                                         
53: R34         Stock and Stock-Based Compensation Plans (Tables)   HTML    122K 
38: R35         Net Income from Continuing Operations Per Share     HTML     49K 
                (Tables)                                                         
73: R36         Allowance for Credit Losses and Doubtful Accounts   HTML     63K 
                (Tables)                                                         
103: R37         Finance Receivables and Obligations Collateralized  HTML     63K  
                by Finance Receivables (Tables)                                  
54: R38         Goodwill and Other Intangible Assets (Tables)       HTML     95K 
36: R39         Property and Equipment (Tables)                     HTML     51K 
58: R40         Self Insurance and Retained Loss Reserves (Tables)  HTML     41K 
21: R41         Long-Term Debt (Tables)                             HTML     77K 
85: R42         Financial Instruments (Tables)                      HTML     49K 
92: R43         Leases (Tables)                                     HTML     85K 
60: R44         Income Taxes (Tables)                               HTML    144K 
22: R45         Accumulated Other Comprehensive Loss (Tables)       HTML     35K 
86: R46         Segment Information (Tables)                        HTML    202K 
93: R47         Quarterly Financial Data (Unaudited) (Tables)       HTML    120K 
61: R48         Organization and Other Matters (Details)            HTML     62K 
20: R49         Summary of Significant Accounting Policies          HTML    117K 
                (Details)                                                        
26: R50         Acquisitions (Details)                              HTML     68K 
42: R51         Equity Method Investments (Details)                 HTML     46K 
100: R52         IAA Separation and Discontinued Operations          HTML    140K  
                (Details)                                                        
71: R53         Stock and Stock-Based Compensation Plan Summary     HTML     52K 
                (Details)                                                        
25: R54         KAR Auction Services, Inc. Stock-Based              HTML    100K 
                Compensation Plans (Details)                                     
41: R55         Service and Exit Options (Details)                  HTML    106K 
99: R56         Employee Stock Purchase Plan (Details)              HTML     40K 
70: R57         Share Repurchase Plan (Details)                     HTML     45K 
27: R58         Net Income from Continuing Operations Per Share     HTML     69K 
                (Details)                                                        
39: R59         Allowance for Credit Losses and Doubtful Accounts   HTML     41K 
                (Details)                                                        
91: R60         Allowance for Credit Losses and Doubtful Accounts   HTML     36K 
                (Details 2)                                                      
83: R61         Finance Receivables and Obligations Collateralized  HTML     90K 
                by Finance Receivables (Details)                                 
24: R62         Goodwill and Other Intangible Assets (Details)      HTML     41K 
63: R63         Goodwill and Other Intangible Assets (Details 2)    HTML     43K 
90: R64         Goodwill and Other Intangible Assets (Details 3)    HTML     71K 
82: R65         Property and Equipment (Details)                    HTML     71K 
23: R66         Self Insurance and Retained Loss Reserves           HTML     48K 
                (Details)                                                        
62: R67         Long-Term Debt Summary and Future Principle         HTML    110K 
                Payments (Details)                                               
89: R68         Credit Facilities (Details)                         HTML    159K 
84: R69         Senior Notes (Details)                              HTML     44K 
66: R70         Other Debt (Details)                                HTML     63K 
95: R71         Financial Instruments (Details)                     HTML     60K 
44: R72         Financial Instruments (Details 2)                   HTML     38K 
29: R73         Components of Lease Expense (Details)               HTML     38K 
67: R74         Leases Supplemental Cash Flow Information Related   HTML     42K 
                to Leases (Details)                                              
96: R75         Leases Supplemental Balance Sheet Information       HTML     71K 
                Related to Leases (Details)                                      
45: R76         Leases Maturities of Lease Liabilities (Details)    HTML     68K 
30: R77         Leases Prior Year Leases Under ASC 840 (Details)    HTML     40K 
64: R78         Income Taxes (Details)                              HTML    205K 
98: R79         Income Taxes (Details 2)                            HTML     34K 
65: R80         Income Taxes (Details 3)                            HTML     53K 
94: R81         Employee Benefit Plans (Details)                    HTML     36K 
43: R82         Commitments and Contingencies (Details)             HTML     31K 
28: R83         Accumulated Other Comprehensive Loss) (Details)     HTML     36K 
68: R84         Segment Information (Details)                       HTML    140K 
97: R85         Segment Information (Details 2)                     HTML     49K 
46: R86         Quarterly Financial Data (Unaudited) (Details)      HTML     87K 
31: R87         Subsequent Event Subsequent Event (Details)         HTML     35K 
69: XML         IDEA XML File -- Filing Summary                      XML    192K 
40: XML         XBRL Instance -- kar-20191231x10k_htm                XML   3.54M 
78: EXCEL       IDEA Workbook of Financial Reports                  XLSX    131K 
13: EX-101.CAL  XBRL Calculations -- kar-20191231_cal                XML    306K 
14: EX-101.DEF  XBRL Definitions -- kar-20191231_def                 XML    950K 
15: EX-101.LAB  XBRL Labels -- kar-20191231_lab                      XML   2.48M 
16: EX-101.PRE  XBRL Presentations -- kar-20191231_pre               XML   1.55M 
12: EX-101.SCH  XBRL Schema -- kar-20191231                          XSD    234K 
59: JSON        XBRL Instance as JSON Data -- MetaLinks              502±   755K 
101: ZIP         XBRL Zipped Folder -- 0001395942-20-000018-xbrl      Zip    580K

‘R17’   —   Finance Receivables and Obligations Collateralized by Finance Receivables

This is an IDEA Financial Report.  [ Alternative Formats ]

 
v3.19.3.a.u2
Finance Receivables and Obligations Collateralized by Finance Receivables
 12 Months Ended
Financing Receivable, after Allowance for Credit Loss, Current [Abstract]  
Finance Receivables and Obligations Collateralized by Finance Receivables Finance Receivables and Obligations Collateralized by Finance Receivables
AFC sells the majority of its U.S. dollar denominated finance receivables on a revolving basis and without recourse to a wholly-owned, bankruptcy remote, consolidated, special purpose subsidiary ("AFC Funding Corporation"), established for the purpose of purchasing AFC's finance receivables. A securitization agreement allows for the revolving sale by AFC Funding Corporation to a group of bank purchasers of undivided interests in certain finance receivables subject to committed liquidity. The agreement expires on January 28, 2022. AFC Funding Corporation had committed liquidity of $1.70 billion for U.S. finance receivables at December 31, 2019.
In December 2018, AFC and AFC Funding Corporation entered into the Eighth Amended and Restated Receivables Purchase Agreement (the "Receivables Purchase Agreement"). The Receivables Purchase Agreement increased AFC Funding's U.S. committed liquidity from $1.50 billion to $1.70 billion and extended the facility's maturity date. In addition, the definition of eligible receivables was expanded. We capitalized approximately $11.6 million of costs in connection with the Receivables Purchase Agreement.
We also have an agreement for the securitization of AFCI's receivables, which expires on January 28, 2022. AFCI's committed facility is provided through a third-party conduit (separate from the U.S. facility) and was C$175 million at December 31, 2019. In December 2018, AFCI entered into Amending Agreement No. 2 to the Fourth Amended and Restated Receivables Purchase Agreement (the "Canadian Receivable Purchase Agreement"). The Canadian Receivables Purchase Agreement increased AFCI's committed liquidity from C$125 million to C$175 million and extended the facility's maturity date. In addition, the definition of eligible receivables was expanded. We capitalized approximately $0.9 million of costs in connection with the Canadian Receivables Purchase Agreement. The receivables sold pursuant to both the U.S. and Canadian securitization agreements are accounted for as secured borrowings.
The following tables present quantitative information about delinquencies, credit losses 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.
 
 
Net Credit Losses
During 2019
 
Total Amount of:
 
(in millions)
Receivables
 
Receivables
Delinquent
 
Floorplan receivables
$
2,099.4

 
$
28.8

 
$
34.3

Other loans
15.8

 
—

 
—

Total receivables managed
$
2,115.2

 
$
28.8

 
$
34.3


 
 
Net Credit Losses
During 2018
 
Total Amount of:
 
(in millions)
Receivables
 
Receivables
Delinquent
 
Floorplan receivables
$
2,001.9

 
$
15.9

 
$
31.9

Other loans
12.9

 
—

 
—

Total receivables managed
$
2,014.8

 
$
15.9

 
$
31.9


AFC's allowance for losses was $15.0 million and $14.0 million at December 31, 2019 and 2018, respectively.
As of December 31, 2019 and 2018, $2,061.6 million and $1,973.2 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 agreement.
Obligations collateralized by finance receivables consisted of the following:
 
 
Obligations collateralized by finance receivables, gross
$
1,474.4

 
$
1,464.7

Unamortized securitization issuance costs
(13.2
)
 
(19.4
)
Obligations collateralized by finance receivables
$
1,461.2

 
$
1,445.3


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 Credit Facility. At December 31, 2019, we were in compliance with the covenants in the securitization agreements.

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-K’ Filing    Date    Other Filings
1/28/22
Filed on:2/19/204
For Period end:12/31/198-K
12/31/1810-K
 List all Filings 

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