On May 9, 2022, the Company completed its previously announced acquisition of 100% of the equity interests in the U.S. physical auction business of ADESA from KAR Auction Services, Inc. for approximately $2.2 billion in cash. Proceeds from the issuance and sale of the 2030 Notes were used to fund the acquisition. The acquisition included 56 auction sites throughout the U.S. with 6.5 million square feet of buildings on more than 4,000 acres of land, significantly expanding the Company's infrastructure and enhancing its customer offering by facilitating a broader selection of vehicles and faster delivery times.

The following table summarizes the allocation of the purchase price consideration to identifiable assets acquired and liabilities assumed as of December 31, 2022:


	Purchase Price Allocation
	(in millions)
Assets Acquired
Current assets	$	208
Property and equipment	1,281
Operating lease right-of-use assets	188
Intangible assets	79
Other assets	1
Total Assets Acquired	1,757

Liabilities Assumed
Current liabilities	233
Operating lease liabilities	167

Total Liabilities Assumed	400

Net Assets Acquired	1,357
Purchase price consideration	2,195
Goodwill	$	838

Customer relationships were valued using the multi-period excess earnings method of the income approach. Developed technology was valued using the replacement cost method of the cost approach. Significant assumptions used in the valuations were revenues and attrition rate and are classified as Level 3 due to the lack of observable market data. No residual values were assigned to the customer relationships and developed technology intangible assets and they are amortized on an economic useful life basis commensurate with future anticipated cash flows and straight line, respectively. As of December 31, 2022, the remaining weighted-average amortization period for the intangible assets acquired was approximately 6.6 years.

Real property was valued using market comparable transactions of the market approach, for which the key assumption is the similarity of the acquired property to market comparable transactions. Personal property was valued using the replacement cost method of the cost approach, for which the key assumptions are the costs of similar personal property in new condition and economic obsolescence rates.

The acquisition resulted in the recognition of $838 million of goodwill, which is deductible for tax purposes and represents the future economic benefits expected to arise from anticipated synergies and intangible assets that do not qualify for separate recognition, including an assembled workforce, non-contractual relationships and other agreements.

For the year ended December 31, 2022, the Company recognized $490 million of wholesale sales and revenues, $472 million of cost of sales, and a net loss of $101 million from ADESA operations, which includes $83 million of depreciation and amortization, including acquired intangible assets amortization expense of $15 million.

The following unaudited pro forma combined results of operations information for the year ended December 31, 2022 and 2021 have been prepared as if the ADESA Acquisition occurred on January 1, 2021:


	Unaudited
	Year ended December 31,
	2022		2021

	(in millions)
Revenues	$	13,903	$	13,675
Net loss	$	(3,024)	$	(571)
Net loss attributable to non-controlling interests	(1,343)		(276)
Net loss attributable to Carvana Co.	$	(1,681)	$	(295)
Net loss per share of Class A common stock - basic and diluted	$	(15.89)	$	(3.00)
Weighted-average shares of Class A common stock - basic and diluted	105,808		98,459


	Unaudited
	Year ended December 31,
	2022		2021

	(in millions)
Interest expense	$	123	$	345
Lease expense	$	5	$	(16)
Depreciation and amortization expense	$	13	$	(6)
Intercompany revenues and cost of sales	$	(7)	$	(20)

The unaudited pro forma combined results of operations information is provided for informational purposes only and is not necessarily intended to represent the results that would have been achieved had the ADESA Acquisition been consummated on January 1, 2021 or indicative of the results that may be achieved in the future.