XML 22 R9.htm IDEA: XBRL DOCUMENT v3.7.0.1
Description of Business
3 Months Ended
Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Business
NOTE 1 — DESCRIPTION OF BUSINESS

Carvana Group, LLC and its wholly-owned subsidiaries (the “Company”) is a leading eCommerce platform for buying used cars. The Company is transforming the used car buying experience by giving consumers a wide selection, great value and quality, transparent pricing and a simple, no pressure transaction. Using the Company’s website, consumers can research and identify a vehicle, inspect it using the Company’s proprietary 360-degree vehicle imaging technology, obtain financing and warranty coverage, purchase the vehicle, and schedule delivery or pick-up, all from their desktop or mobile devices.

The Company was formed as an Arizona limited liability company by DriveTime Automotive Group, Inc. (together with its subsidiaries and affiliates “DriveTime”) and commenced operations in 2012. On March 10, 2015, the Company converted to a Delaware limited liability company. Prior to November 1, 2014, the Company was a wholly-owned subsidiary of DriveTime. On November 1, 2014 (the “Distribution Date”), DriveTime distributed its member units in the Company to the unit holders of DriveTime on a pro rata basis (the “Distribution”). The Company accounted for the Distribution as a spinoff transaction in accordance with ASC 505-60, Equity — Spinoffs and Reverse Spinoffs and reflected assets and liabilities before and after the Distribution Date at their historical basis.

Carvana Co. is a holding company that was formed as a Delaware corporation on November 29, 2016 for the purpose of completing a public offering and related transactions in order to carry on the business of the Company. On May 3, 2017, Carvana Co. completed an initial public offering ("IPO") of 15,000,000 shares of Class A common stock at a public offering price of $15.00 per share. Carvana Co. received $210.7 million in proceeds, net of underwriting discounts and commissions. Carvana Co. contributed the net proceeds to its wholly owned subsidiary, Carvana Sub, LLC ("Carvana Sub"), and Carvana Sub used such proceeds to purchase 18,750,000 Class A Units of the Company, of which approximately 170,000 LLC Units were transferred to Ernest Garcia, II, in exchange for his 0.1% ownership interest in Carvana, LLC. Subsequent to the IPO, Carvana Co. is the sole managing member of Carvana Sub, and Carvana Sub is the sole manager of the Company.