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Related Party Transactions and Net Investment By Former Parent
 12 Months Ended
Dec. 31, 2023
Related Party Transactions [Abstract]  
Related Party Transactions and Net Investment By Former Parent

NOTE 16 - RELATED PARTY TRANSACTIONS AND NET INVESTMENT BY FORMER PARENT

For periods prior to the Separation, the Consolidated Financial Statements have been prepared on a standalone basis and were derived from the consolidated financial statements and accounting records of the Former Parent. The following disclosure summarizes activity prior to the Separation between the Company and the Former Parent, including affiliates of the Former Parent that were not part of the Separation.

Allocation of Corporate Expenses

Prior to Separation, the Consolidated Financial Statements included expenses for certain management and support functions which were provided on a centralized basis within the Former Parent, as described in Note 2—Summary of Significant Accounting Policies. These management and support functions include, but are not limited to, executive management, sales and marketing, finance, legal, information technology, employee benefits administration, stock-based compensation, treasury, risk management, procurement and other shared services. These allocations were made on a direct usage basis when identifiable, with the remainder allocated on a pro rata basis of billing, revenue, headcount or other measures of the Company and the Former Parent.

The amount of these allocations from the Former Parent was $47.6 million, which included $3.0 million for depreciation expenses and $44.6 million for selling, general and administrative for the year ended December 31, 2022; and $59.7 million, which included $4.6 million for depreciation expense, and $55.1 million for selling, general and administrative expense for the year ended December 31, 2021.

Management believes these cost allocations are a reasonable reflection of the utilization of services provided to, or the benefit derived by, the Company during the periods presented. The allocations may not, however, be indicative of the actual expenses that would have been incurred had the Company operated as a standalone public company. Actual costs that may have been incurred if the Company had been a standalone public company would depend on a number of factors, such as the chosen organizational structure, whether functions were outsourced or performed by the Company’s employees, and strategic decisions made in areas such as selling, information technology and infrastructure.

Net Transfers from Former Parent

A reconciliation of Net transfers from the Former Parent on the Consolidated Statements of Equity to the corresponding amount on the Consolidated Statements of Cash Flows was as follows (in thousands):

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

Total net transfers from Former Parent per Consolidated Statements of Equity

 

$

100,915

 

 

$

116,830

 

Stock-based compensation

 

 

(45,303

)

 

 

(33,509

)

Net proceeds from capital contributions by Former Parent

 

 

83,235

 

 

 

—

 

Issuance of equity to noncontrolling interest

 

 

(1,423

)

 

 

9

 

Other

 

 

(1,387

)

 

 

—

 

Total net transfers from Former Parent per Consolidated Statements of Cash Flows

 

$

136,037

 

 

$

83,330