Document and Entity Information

9 Months Ended

Sep. 30, 2014

Oct. 24, 2014

Document and Entity Information [Abstract]

Document Type

10-Q

Amendment Flag

false

Document Period End Date

Sep. 30, 2014

Document Fiscal Year Focus

2014

Document Fiscal Period Focus

Q3

Trading Symbol

LKQ

Entity Registrant Name

LKQ CORP

Entity Central Index Key

0001065696

Current Fiscal Year End Date

--12-31

Entity Filer Category

Large Accelerated Filer

Entity Common Stock, Shares Outstanding

303,035,573

Unaudited Condensed Consolidated Balance Sheets (USD $)

In Thousands, unless otherwise specified

Sep. 30, 2014

Dec. 31, 2013

Current Assets:

Cash and equivalents

$ 244,646

$ 150,488

Receivables, net

609,434

458,094

Inventory

1,341,325

1,076,952

Deferred income taxes

73,997

63,938

Prepaid expenses and other current assets

76,136

50,345

Total Current Assets

2,345,538

1,799,817

Property and Equipment, net

612,292

546,651

Intangible Assets:

Goodwill

2,257,153

1,937,444

Other intangibles, net

221,049

153,739

Other Assets

98,546

81,123

Total Assets

5,534,578

4,518,774

Current Liabilities:

Accounts payable

403,587

349,069

Accrued expenses:

Accrued payroll-related liabilities

88,082

58,695

Sales taxes payable

45,098

30,701

Other accrued expenses

127,838

109,373

Contingent consideration liabilities

2,288

52,465

Other current liabilities

31,587

36,115

Current portion of long-term obligations

72,908

41,535

Total Current Liabilities

771,388

677,953

Long-Term Obligations, Excluding Current Portion

1,825,133

1,264,246

Deferred Income Taxes

159,270

133,822

Other Noncurrent Liabilities

111,093

92,008

Stockholders’ Equity:

Common stock, $0.01 par value,1,000,000,000 shares authorized, 303,031,358 and 300,805,276 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively

3,030

3,008

Additional paid-in capital

1,044,004

1,006,084

Retained earnings

1,622,692

1,321,642

Accumulated other comprehensive (loss) income

(2,032)

20,011

Total Stockholders’ Equity

2,667,694

2,350,745

Total Liabilities and Stockholders’ Equity

$ 5,534,578

$ 4,518,774

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) (USD $)

Sep. 30, 2014

Dec. 31, 2013

Statement of Financial Position [Abstract]

Common stock, par value

$ 0.01

Common stock, shares authorized

1,000,000,000

Common stock, shares issued

303,031,358

300,805,276

Common stock, shares outstanding

303,031,358

300,805,276

Unaudited Condensed Consolidated Statements of Income (USD $)

In Thousands, except Per Share data, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Income Statement [Abstract]

Revenue

$ 1,721,024

$ 1,298,094

$ 5,055,933

$ 3,745,839

Cost of goods sold

1,056,613

780,187

3,068,579

2,216,110

Gross margin

664,411

517,907

1,987,354

1,529,729

Facility and warehouse expenses

133,330

108,349

387,995

311,480

Distribution expenses

148,572

109,593

432,445

320,033

Selling, general and administrative expenses

192,229

153,546

563,344

436,614

Restructuring and acquisition related expenses

3,594

2,206

12,816

7,391

Depreciation and amortization

30,498

20,818

87,136

57,850

Operating income

156,188

123,395

503,618

396,361

Other expense (income):

Interest expense, net

16,394

15,200

48,140

36,287

Loss on debt extinguishment

0

324

2,795

Change in fair value of contingent consideration liabilities

(12)

(712)

2,000

(1,765)

Other income, net

(18)

(1,562)

(1,021)

(1,737)

Total other expense, net

16,388

14,350

45,443

39,110

Income before provision for income taxes

139,800

109,045

458,175

357,251

Provision for income taxes

47,564

35,600

155,926

123,492

Equity in earnings of unconsolidated subsidiaries

(721)

0

(1,199)

0

Net income

$ 91,515

$ 73,445

$ 301,050

$ 233,759

Earnings per share:

Basic

$ 0.30

$ 0.24

$ 1.00

$ 0.78

Diluted

$ 0.30

$ 0.24

$ 0.98

$ 0.77

Unaudited Condensed Consolidated Statements of Comprehensive Income (USD $)

In Thousands, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Statement of Comprehensive Income [Abstract]

Net income

$ 91,515

$ 73,445

$ 301,050

$ 233,759

Other comprehensive income (loss), net of tax:

Foreign currency translation

(39,329)

28,514

(24,013)

6,330

Net change in unrecognized gains/losses on derivative instruments, net of tax

817

625

2,067

3,986

Change in unrealized gain on pension plan, net of tax

(30)

0

(97)

0

Total other comprehensive (loss) income

(38,542)

29,139

(22,043)

10,316

Total comprehensive income

$ 52,973

$ 102,584

$ 279,007

$ 244,075

Unaudited Condensed Consolidated Statements of Cash Flows (USD $)

In Thousands, unless otherwise specified

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$ 301,050

$ 233,759

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

90,647

61,868

Stock-based compensation expense

16,967

16,292

Excess tax benefit from stock-based payments

(14,455)

(15,998)

Other

3,440

7,424

Changes in operating assets and liabilities, net of effects from acquisitions:

Receivables

(69,680)

(35,287)

Inventory

(55,266)

(18,207)

Prepaid income taxes/income taxes payable

20,858

40,551

Accounts payable

1,433

1,641

Other operating assets and liabilities

27,648

48,886

Net cash provided by operating activities

322,642

340,929

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

(100,191)

(61,126)

Proceeds from sales of property and equipment

3,174

1,459

Investments in unconsolidated subsidiaries

(2,240)

(9,136)

Acquisitions, net of cash acquired

(650,614)

(395,974)

Net cash used in investing activities

(749,871)

(464,777)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of stock options

6,520

13,647

Excess tax benefit from stock-based payments

14,455

15,998

Proceeds from issuance of senior notes

0

600,000

Borrowings under revolving credit facility

1,299,821

399,758

Repayments under revolving credit facility

(808,039)

(745,313)

Borrowings under term loans

11,250

35,000

Repayments under term loans

(11,250)

Borrowings under receivables securitization facility

80,000

41,500

Repayments under receivables securitization facility

0

(111,500)

Repayments of other long-term debt

(20,532)

(19,518)

Payments of other obligations

(41,934)

(32,091)

Other financing activities, net

(6,881)

(16,912)

Net cash provided by financing activities

523,410

169,319

Effect of exchange rate changes on cash and equivalents

(2,023)

2,096

Net increase in cash and equivalents

94,158

47,567

Cash and equivalents, beginning of period

150,488

59,770

Cash and equivalents, end of period

244,646

107,337

Supplemental disclosure of cash paid for:

Income taxes, net of refunds

135,447

82,536

Interest

38,399

22,853

Supplemental disclosure of noncash investing and financing activities:

Notes payable and other obligations, including notes issued and debt assumed in connection with business acquisitions

87,731

10,728

Contingent consideration liabilities

5,854

3,854

Non-cash property and equipment additions

$ 4,852

$ 2,657

Unaudited Condensed Consolidated Statements of Stockholders' Equity (USD $)

In Thousands, except Share data

Total

Common Stock

Additional Paid-In Capital

Retained Earnings

Accumulated Other Comprehensive (Loss) Income

Beginning Balance at Dec. 31, 2013

$ 2,350,745

$ 3,008

$ 1,006,084

$ 1,321,642

$ 20,011

Beginning Balance, shares at Dec. 31, 2013

300,805,000

Net income

301,050

Other comprehensive income (loss)

(22,043)

Restricted stock units vested, shares

975,000

Restricted stock units vested, value

10

(10)

Stock-based compensation expense

16,967

Exercise of stock options, shares

1,250,620

1,251,000

Exercise of stock options, value

6,520

12

6,508

Excess tax benefit from stock-based payments

14,455

Ending Balance at Sep. 30, 2014

$ 2,667,694

$ 3,030

$ 1,044,004

$ 1,622,692

$ (2,032)

Ending Balance, shares at Sep. 30, 2014

303,031,000

Interim Financial Statements

The unaudited financial statements presented in this report represent the consolidation of LKQ Corporation, a Delaware corporation, and its subsidiaries. LKQ Corporation is a holding company and all operations are conducted by subsidiaries. When the terms "LKQ," "the Company," "we," "us," or "our" are used in this document, those terms refer to LKQ Corporation and its consolidated subsidiaries.

We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to interim financial statements. Accordingly, certain information related to our significant accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These unaudited condensed consolidated financial statements reflect, in the opinion of management, all material adjustments (which include only normally recurring adjustments) necessary to fairly state, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Operating results for interim periods are not necessarily indicative of the results that can be expected for any subsequent interim period or for a full year. These interim financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto included in our most recent Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on March 3, 2014.

As described in Note 8, "Business Combinations," on January 3, 2014, we completed our acquisition of Keystone Automotive Holdings, Inc. ("Keystone Specialty"), a distributor and marketer of specialty aftermarket equipment and accessories in North America. With our acquisition of Keystone Specialty, we present an additional reportable segment, Specialty. Our unaudited condensed consolidated financial statements reflect the impact of Keystone Specialty from the date of acquisition through September 30, 2014.

Financial Statement Information

Summary of Significant Accounting Policies

Revenue Recognition

The majority of our revenue is derived from the sale of vehicle parts. Revenue is recognized when the products are shipped to, delivered to or picked up by customers and title has transferred, subject to an allowance for estimated returns, discounts and allowances that we estimate based upon historical information. We recorded a reserve for estimated returns, discounts and allowances of approximately $30.0 million and $26.6 million at September 30, 2014 and December 31, 2013, respectively. We present taxes assessed by governmental authorities collected from customers on a net basis. Therefore, the taxes are excluded from revenue on our Unaudited Condensed Consolidated Statements of Income and are shown as a current liability on our Unaudited Condensed Consolidated Balance Sheets until remitted. We recognize revenue from the sale of scrap, cores and other metals when title has transferred, which typically occurs upon delivery to the customer.

Allowance for Doubtful Accounts

We recorded a reserve for uncollectible accounts of approximately $19.1 million and $14.4 million at September 30, 2014 and December 31, 2013, respectively.

Inventory

Inventory consists of the following (in thousands):



	September 30,		December 31,
	2014		2013
Aftermarket and refurbished products	$	944,451	$	706,600
Salvage and remanufactured products	396,874		370,352
	$	1,341,325	$	1,076,952

Our acquisitions completed during the first nine months of 2014 and adjustments to preliminary valuations of inventory for certain of our 2013 acquisitions contributed $217.3 million of the increase in our aftermarket and refurbished products inventory and $13.0 million of the increase in our salvage and remanufactured products inventory during the nine months ended September 30, 2014. See Note 8, "Business Combinations," for further information on our acquisitions.

Intangible Assets

Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer relationships, software and other technology related assets and covenants not to compete.

The changes in the carrying amount of goodwill by reportable segment during the nine months ended September 30, 2014 are as follows (in thousands):



	North America			Europe			Specialty		Total
Balance as of January 1, 2014	$	1,358,937		$	578,507		$	—	$	1,937,444
Business acquisitions and adjustments to previously recorded goodwill	44,981			73,959			233,998		352,938
Exchange rate effects	(6,332		)	(26,898		)	1		(33,229		)
Balance as of September 30, 2014	$	1,397,586		$	625,568		$	233,999	$	2,257,153

The components of other intangibles are as follows (in thousands):



	September 30, 2014							December 31, 2013
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Trade names and trademarks	$	165,262	$	(33,643	)	$	131,619	$	143,577	$	(27,950	)	$	115,627
Customer relationships	71,345		(21,906		)	49,439		29,583		(10,770		)	18,813
Software and other technology related assets	45,513		(8,657		)	36,856		20,384		(2,718		)	17,666
Covenants not to compete	6,199		(3,064		)	3,135		3,979		(2,346		)	1,633
	$	288,319	$	(67,270	)	$	221,049	$	197,523	$	(43,784	)	$	153,739

During the nine months ended September 30, 2014, we recorded preliminary intangible asset valuations resulting from our 2014 acquisitions and adjustments to certain preliminary intangible asset valuations from our 2013 acquisitions, which included $24.7 million of trade names, $42.8 million of customer relationships, $26.8 million of software and other technology related assets and $2.4 million of covenants not to compete. The trade names, customer relationships, and software and technology related assets recorded in the nine months ended September 30, 2014 included $20.9 million, $23.1 million and $26.8 million, respectively, related to our acquisition of Keystone Specialty, as discussed in Note 8, "Business Combinations."

Trade names and trademarks are amortized over a useful life ranging from 10 to 30 years on a straight-line basis. Customer relationships are amortized over the expected period to be benefited (5 to 15 years) on an accelerated basis. Software and other technology related assets are amortized on a straight-line basis over the expected period to be benefited (five to six years). Covenants not to compete are amortized over the lives of the respective agreements, which range from one to five years, on a straight-line basis. Amortization expense for intangibles was $24.4 million and $9.0 million during the nine month periods ended September 30, 2014 and 2013, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2018 is $32.4 million, $29.4 million, $26.1 million, $23.7 million and $18.7 million, respectively.

Warranty Reserve

Some of our salvage mechanical products are sold with a standard six month warranty against defects. Additionally, some of our remanufactured engines are sold with a standard three year warranty against defects. We also provide a limited lifetime warranty for certain of our aftermarket products that is supported by certain of the suppliers of those products. We record the estimated warranty costs at the time of sale using historical warranty claim information to project future warranty claims activity. The changes in the warranty reserve during the nine month period ended September 30, 2014 were as follows (in thousands):



Balance as of January 1, 2014	$	12,447
Warranty expense	22,890
Warranty claims	(20,514		)
Balance as of September 30, 2014	$	14,823

Investments in Unconsolidated Subsidiaries

As of September 30, 2014, the carrying value of our investments in unconsolidated subsidiaries was $9.5 million; of this amount, $7.6 million relates to our investment in ACM Parts Pty Ltd ("ACM Parts"). In August 2013, we entered into an agreement with Suncorp Group, a leading general insurance group in Australia and New Zealand, to develop ACM Parts, an alternative vehicle replacement parts business in those countries. We hold a 49% equity interest in the entity and will contribute our experience to help establish automotive parts recycling operations and to facilitate the procurement of aftermarket parts; Suncorp Group holds a 51% equity interest and will supply salvage vehicles to the venture as well as assist in establishing relationships with repair shops as customers. We are accounting for our interest in this subsidiary using the equity method of accounting, as our investment gives us the ability to exercise significant influence, but not control, over the investee. The total of our investment in ACM Parts and other unconsolidated subsidiaries is included within Other Assets on our Unaudited Condensed Consolidated Balance Sheets. Our equity in the net earnings of the investees for the three and nine months ended September 30, 2014 was not material.

Depreciation Expense

Included in Cost of Goods Sold on the Unaudited Condensed Consolidated Statements of Income is depreciation expense associated with our refurbishing, remanufacturing, and furnace operations as well as our distribution centers.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). This update outlines a new comprehensive revenue recognition model which supersedes most current revenue recognition guidance, and requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Entities adopting the standard have the option of using either a full retrospective or modified retrospective approach in the application of this guidance. ASU 2014-09 will be effective for the Company during the first quarter of our fiscal year 2017. Early adoption is not permitted. We are still evaluating the impact that ASU 2014-09 will have on our consolidated financial statements and related disclosures.

In June 2014, the FASB issued Accounting Standards Update 2014-12, "Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period" ("ASU 2014-12"). This update requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition, and requires the recognition of compensation cost in the period in which it becomes probable that the performance target will be achieved. ASU 2014-12 will be effective for the Company during the first quarter of our fiscal year 2016. Early adoption is permitted. The new standard can be applied either prospectively to all awards granted or modified after the effective date or retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements as an adjustment to opening retained earnings. We do not anticipate the adoption of this guidance will have a material impact on our financial position, results of operations, cash flows, or disclosures.

Equity Incentive Plans

In order to attract and retain employees, non-employee directors, consultants, and other persons associated with us, we may grant qualified and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares and performance units under the LKQ Corporation 1998 Equity Incentive Plan (the “Equity Incentive Plan”). We have granted RSUs, stock options, and restricted stock under the Equity Incentive Plan. We expect to issue new shares of common stock to cover past and future equity grants.

RSUs

RSUs vest over periods of up to five years. RSUs may contain either a time-based vesting condition or a combination of a performance-based vesting condition and a time-based vesting condition, in which case both conditions must be met before any RSUs vest. For RSUs containing a performance-based vesting condition, the Company must report positive diluted earnings per share, subject to certain adjustments, during any fiscal year period within five years following the grant date. Each RSU converts into one share of LKQ common stock on the applicable vesting date. The grant date fair value of RSUs is based on the market price of LKQ stock on the grant date.

During the nine months ended September 30, 2014, we granted 664,897 RSUs to employees. The fair value of RSUs that vested during the nine months ended September 30, 2014 was approximately $27.7 million.

Stock Options

Stock options vest over periods of up to five years, subject to a continued service condition. Stock options expire either 6 or 10 years from the date they are granted. During the nine months ended September 30, 2014, we granted 126,755 stock options to employees. The grant date fair value of these options was immaterial to the financial statements.

Restricted Stock

Restricted stock vests over a five year period, subject to a continued service condition. Shares of restricted stock may not be sold, pledged or otherwise transferred until they vest.

A summary of transactions in our stock-based compensation plans is as follows:



	Shares Available For Grant		RSUs				Stock Options				Restricted Stock
	Shares Available For Grant		Number Outstanding		Weighted Average Grant Date Fair Value		Number Outstanding		Weighted Average Exercise Price		Number Outstanding		Weighted Average Grant Date Fair Value
Balance, January 1, 2014	13,965,440		2,558,213		$	16.63	6,832,331		$	7.04	20,000		$	9.30
Granted	(791,652	)	664,897		31.82		126,755		32.31		—		—
Exercised	—		—		—		(1,250,620	)	5.21		—		—
Vested	—		(975,462	)	17.01		—		—		(10,000	)	9.30
Canceled	142,887		(89,138	)	20.49		(53,749	)	13.42		—		—
Balance, September 30, 2014	13,316,675		2,158,510		$	20.98	5,654,717		$	7.95	10,000		$	9.30

For the RSU grants that contain both a performance-based vesting condition and a time-based vesting condition, we recognize compensation expense under the accelerated attribution method, pursuant to which expense is recognized over the requisite service period for each separate vesting tranche of the award. During the three and nine months ended September 30, 2014, we recognized $1.8 million and $6.5 million of stock based compensation expense, respectively, related to the RSUs containing a performance-based vesting condition. During the three and nine months ended September 30, 2013 we recognized $2.3 million and $6.0 million of stock based compensation expense, respectively, related to the RSUs containing a performance-based vesting condition. For all other awards, which are subject to only a time-based vesting condition, we recognize compensation expense on a straight-line basis over the requisite service period of the entire award.

In all cases, compensation expense is adjusted to reflect estimated forfeitures. When estimating forfeitures, we consider voluntary and involuntary termination behavior as well as analysis of historical forfeitures.

The components of pre-tax stock-based compensation expense are as follows (in thousands):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
RSUs	$	4,434	$	4,559	$	14,625	$	12,674
Stock options	703		1,124		2,203		3,457
Restricted stock	47		47		139		161
Total stock-based compensation expense	$	5,184	$	5,730	$	16,967	$	16,292

The following table sets forth the classification of total stock-based compensation expense included in our Unaudited Condensed Consolidated Statements of Income (in thousands):



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Cost of goods sold	$	105		$	98		$	308		$	294
Facility and warehouse expenses	527			687			1,672			2,058
Selling, general and administrative expenses	4,552			4,945			14,987			13,940
	5,184			5,730			16,967			16,292
Income tax benefit	(1,996		)	(2,235		)	(6,532		)	(6,354		)
Total stock-based compensation expense, net of tax	$	3,188		$	3,495		$	10,435		$	9,938

We have not capitalized any stock-based compensation costs during either of the nine month periods ended September 30, 2014 or 2013.

As of September 30, 2014, unrecognized compensation expense related to unvested RSUs and stock options is expected to be recognized as follows (in thousands):



	RSUs		Stock Options		Total
Remainder of 2014	$	4,292	$	724	$	5,016
2015	13,459		396		13,855
2016	8,433		331		8,764
2017	5,049		9		5,058
2018	2,553		—		2,553
2019	110		—		110
Total unrecognized compensation expense	$	33,896	$	1,460	$	35,356

Long-Term Obligations

Long-Term Obligations consist of the following (in thousands):



	September 30,			December 31,
	2014			2013
Senior secured credit agreement:
Term loans payable	$	438,750		$	438,750
Revolving credit facility	693,299			233,804
Senior notes	600,000			600,000
Receivables securitization facility	80,000			—
Notes payable through October 2018 at weighted average interest rates of 1.1%	53,994			15,730
Other long-term debt at weighted average interest rates of 2.9% and 3.5%, respectively	31,998			17,497
	1,898,041			1,305,781
Less current maturities	(72,908		)	(41,535		)
	$	1,825,133		$	1,264,246

Senior Secured Credit Agreement

On March 27, 2014, LKQ Corporation, LKQ Delaware LLP, and certain other subsidiaries (collectively, the "Borrowers") entered into a third amended and restated credit agreement (the "Credit Agreement") with the several lenders from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent; Bank of America, N.A., as syndication agent; The Bank of Tokyo-Mitsubishi UFJ, LTD. ("BTMU") and RBS Citizens, N.A., as co-documentation agents; and Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, BTMU, and RBS Citizens, N.A., as joint bookrunners and joint lead arrangers. The Credit Agreement retains many of the terms of the Company’s second amended and restated credit agreement dated May 3, 2013 while also modifying certain terms to (1) extend the maturity date by one year to May 3, 2019; (2) increase the total availability under the Credit Agreement from $1.8 billion to $2.3 billion (composed of $1.69 billion in the revolving credit facility's multicurrency component, $165 million in the revolving credit facility's U.S. dollar only component, and $450 million of term loans); (3) reduce the applicable margin on outstanding borrowings under the Credit Agreement; (4) reduce the commitment fee percentage we pay on average daily unused amounts under the revolving credit facility; (5) allow for additional unsecured foreign borrowings; (6) adjust certain limitations on our ability to make restricted payments; and (7) make other immaterial or clarifying modifications and amendments to the terms of the Company's second amended and restated credit agreement. The Credit Agreement allows the Company to increase the amount of the revolving credit facility or obtain incremental term loans up to the greater of $400 million or the amount that may be borrowed while maintaining a senior secured leverage ratio of less than or equal to 2.50 to 1.00, subject to the agreement of the lenders. The proceeds of the Credit Agreement were used to repay outstanding revolver borrowings and to pay fees related to the amendment and restatement.

Amounts under the revolving credit facility are due and payable upon maturity of the Credit Agreement on May 3, 2019. Term loan borrowings are due and payable in quarterly installments equal to 1.25% of the original principal amount beginning on June 30, 2014 with the remaining balance due and payable on the maturity date of the Credit Agreement. We are required to prepay the term loan by amounts equal to proceeds from the sale or disposition of certain assets if the proceeds are not reinvested within twelve months. We also have the option to prepay outstanding amounts under the Credit Agreement without penalty.

The Credit Agreement contains customary representations and warranties, and contains customary covenants that provide limitations and conditions on our ability to enter into certain transactions. The Credit Agreement also contains financial and affirmative covenants under which we (i) may not exceed a maximum net leverage ratio of 3.50 to 1.00 except in connection with permitted acquisitions with aggregate consideration in excess of $200 million during any period of four consecutive fiscal quarters in which case the maximum net leverage ratio may increase to 4.00 to 1.00 for the subsequent four fiscal quarters and (ii) are required to maintain a minimum interest coverage ratio of 3.00 to 1.00.

Borrowings under the Credit Agreement bear interest at variable rates, which depend on the currency and duration of the borrowing elected, plus an applicable margin. The applicable margin is subject to change in increments of 0.25% depending on our net leverage ratio. Interest payments are due on the last day of the selected interest period or quarterly in arrears depending on the type of borrowing. Including the effect of the interest rate swap agreements described in Note 5, "Derivative Instruments and Hedging Activities," the weighted average interest rates on borrowings outstanding under the Credit Agreement at September 30, 2014 and December 31, 2013 were 2.35% and 3.05%, respectively. We also pay a commitment fee based on the average daily unused amount of the revolving credit facility. The commitment fee is subject to change in increments of 0.05% depending on our net leverage ratio. In addition, we pay a participation commission on outstanding letters of credit at an applicable rate based on our net leverage ratio, as well as a fronting fee of 0.125% to the issuing bank, which are due quarterly in arrears. Borrowings under the Credit Agreement totaled $1.1 billion and $672.6 million at September 30, 2014 and December 31, 2013, respectively, of which $22.5 million was classified as current maturities at both September 30, 2014 and December 31, 2013. As of September 30, 2014, there were letters of credit outstanding in the aggregate amount of $60.4 million. The amounts available under the revolving credit facility are reduced by the amounts outstanding under letters of credit, and thus availability under the revolving credit facility at September 30, 2014 was $1.1 billion.

Related to the execution of the Credit Agreement in March 2014, we incurred $3.7 million of fees, of which $3.4 million were capitalized within Other Assets on our Unaudited Condensed Consolidated Balance Sheet and are amortized over the term of the agreement. The remaining $0.3 million of fees were expensed during the nine months ended September 30, 2014 as a loss on debt extinguishment. Related to the execution of the second amended and restated credit agreement in May 2013, we incurred $7.2 million of fees, of which $6.1 million were capitalized within Other Assets on our Unaudited Condensed Consolidated Balance Sheet. The remaining $1.1 million of fees, together with $1.7 million of capitalized debt issuance costs related to the original credit agreement, were expensed during the nine months ended September 30, 2013 as a loss on debt extinguishment.

Senior Notes

On May 9, 2013, LKQ Corporation completed an offering of $600 million aggregate principal amount of senior notes due May 15, 2023 (the "Original Notes") in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933. In April 2014, LKQ Corporation completed an offer to exchange $600 million aggregate principal amount of registered 4.75% Senior Notes due 2023 (the "Notes") for the Original Notes. The Notes are governed by the Indenture dated as of May 9, 2013 among LKQ Corporation, certain of our subsidiaries (the "Guarantors") and U.S. Bank National Association, as trustee. The Notes are substantially identical to the Original Notes, except the Notes are registered under the Securities Act of 1933, and the transfer restrictions, registration rights, and related additional interest provisions applicable to the Original Notes do not apply to the Notes.

The Notes bear interest at a rate of 4.75% per year from the date of the original issuance or from the most recent payment date on which interest has been paid or provided for. Interest on the Notes is payable in arrears on May 15 and November 15 of each year. The first interest payment was made on November 15, 2013. The Notes are fully and unconditionally guaranteed, jointly and severally, by the Guarantors.

The Notes and the guarantees are, respectively, LKQ Corporation's and each Guarantor's senior unsecured obligations and are subordinated to all of the Guarantors' existing and future secured debt to the extent of the assets securing that secured debt. In addition, the Notes are effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the Notes to the extent of the assets of those subsidiaries.

Receivables Securitization Facility

On September 28, 2012, we entered into a three year receivables securitization facility with BTMU as Administrative Agent. Under the facility, LKQ sells an ownership interest in certain receivables, related collections and security interests to BTMU for the benefit of conduit investors and/or financial institutions for up to $80 million in cash proceeds. Upon payment of the receivables by customers, rather than remitting to BTMU the amounts collected, LKQ retains such collections as proceeds for the sale of new receivables generated by certain of the ongoing operations of the Company. On September 29, 2014, the parties amended the terms of the facility to: (i) extend the term of the facility to October 2, 2017; (ii) increase the maximum amount available to $97 million; and (iii) make other clarifying and updating changes.

The sale of the ownership interest in the receivables is accounted for as a secured borrowing in our Unaudited Condensed Consolidated Balance Sheets, under which the receivables included in the program collateralize the amounts invested by BTMU, the conduit investors and/or financial institutions (the "Purchasers"). The receivables are held by LKQ Receivables Finance Company, LLC ("LRFC"), a wholly owned bankruptcy-remote special purpose subsidiary of LKQ, and therefore, the receivables are available first to satisfy the creditors of LRFC, including the investors. As of September 30, 2014, $123.4 million of net receivables were collateral for the investment under the receivables facility. There were no borrowings outstanding under the receivables facility as of December 31, 2013.

Under the receivables facility, we pay variable interest rates plus a margin on the outstanding amounts invested by the Purchasers. The variable rates are based on (i) commercial paper rates, (ii) the London InterBank Offered Rate ("LIBOR"), or (iii) base rates, and are payable monthly in arrears. Commercial paper rates will be the applicable variable rate unless conduit investors are not available to invest in the receivables at commercial paper rates. In such case, financial institutions will invest at the LIBOR rate or at base rates. We also pay a commitment fee on the excess of the investment maximum over the average daily outstanding investment, payable monthly in arrears. As of September 30, 2014, the interest rate under the receivables facility was based on commercial paper rates and was 0.92%. The outstanding balance of $80 million as of September 30, 2014 was classified as long-term on the Unaudited Condensed Consolidated Balance Sheets because we have the ability and intent to refinance these borrowings on a long-term basis.

Derivative Instruments and Hedging Activities

We are exposed to market risks, including the effect of changes in interest rates, foreign currency exchange rates and commodity prices. Under our current policies, we use derivatives to manage our exposure to variable interest rates on our senior secured debt, changing foreign exchange rates for certain foreign currency denominated transactions and changes in metals prices. We do not hold or issue derivatives for trading purposes.

Cash Flow Hedges

At September 30, 2014, we had interest rate swap agreements in place to hedge a portion of the variable interest rate risk on our variable rate borrowings under our Credit Agreement, with the objective of minimizing the impact of interest rate fluctuations and stabilizing cash flows. Under the terms of the interest rate swap agreements, we pay the fixed interest rate and receive payment at a variable rate of interest based on LIBOR or the Canadian Dealer Offered Rate (“CDOR”) for the respective currency of each interest rate swap agreement’s notional amount. The effective portion of changes in the fair value of the interest rate swap agreements is recorded in Accumulated Other Comprehensive Income (Loss) and is reclassified to interest expense when the underlying interest payment has an impact on earnings. The ineffective portion of changes in the fair value of the interest rate swap agreements is reported in interest expense. Our interest rate swap contracts have maturity dates ranging from 2015 through 2016.

From time to time, we may hold foreign currency forward contracts related to certain foreign currency denominated intercompany transactions, with the objective of minimizing the impact of changing exchange rates on these future cash flows, as well as minimizing the impact of fluctuating exchange rates on our results of operations through the respective dates of settlement. Under the terms of the foreign currency forward contracts, we will sell the foreign currency in exchange for U.S. dollars at a fixed rate on the maturity dates of the contracts. The effective portion of the changes in fair value of the foreign currency forward contracts is recorded in Accumulated Other Comprehensive Income (Loss) and reclassified to other income (expense) when the underlying transaction has an impact on earnings. In the nine months ended September 30, 2014, we settled these foreign currency forward contracts through payments to the counterparties totaling $20.0 million. At that time, we also settled the underlying intercompany debt transactions.

The following table summarizes the notional amounts and fair values of our designated cash flow hedges as of September 30, 2014 and December 31, 2013 (in thousands):



	Notional Amount				Fair Value at September 30, 2014 (USD)		Fair Value at December 31, 2013 (USD)
	September 30, 2014		December 31, 2013		Other Noncurrent Liabilities		Other Accrued Expenses		Other Noncurrent Liabilities
Interest rate swap agreements
USD denominated	$	420,000	$	420,000	$	5,128	$	—	$	8,099
GBP denominated	£	50,000	£	50,000	396		—		345
CAD denominated	C$	25,000	C$	25,000	32		—		26
Foreign currency forward contracts
EUR denominated	€	—	€	149,976	—		11,632		—
GBP denominated	£	—	£	70,000	—		10,186		—
Total cash flow hedges					$	5,556	$	21,818	$	8,470

While our derivative instruments executed with the same counterparty are subject to master netting arrangements, we present our cash flow hedge derivative instruments on a gross basis in our Unaudited Condensed Consolidated Balance Sheets. The impact of netting the fair values of these contracts would not have a material effect on our Unaudited Condensed Consolidated Balance Sheets at September 30, 2014 or December 31, 2013.

The activity related to our cash flow hedges is included in Note 12, "Accumulated Other Comprehensive Income (Loss)." Ineffectiveness related to our cash flow hedges was immaterial to our results of operations during the three and nine months ended September 30, 2014 and September 30, 2013. We do not expect future ineffectiveness related to our cash flow hedges to have a material impact on our results of operations.

As of September 30, 2014, we estimate that $3.6 million of derivative losses (net of tax) included in Accumulated Other Comprehensive Income will be reclassified into our consolidated statements of income within the next 12 months.

Other Derivative Instruments

We hold other short-term derivative instruments, including foreign currency forward contracts to manage our exposure to variability related to inventory purchases and intercompany financing transactions denominated in a non-functional currency, as well as commodity forward contracts to manage our exposure to fluctuations in metals prices. We have elected not to apply hedge accounting for these transactions, and therefore the contracts are adjusted to fair value through our results of operations as of each balance sheet date, which could result in volatility in our earnings. The notional amount and fair value of these contracts at September 30, 2014 and December 31, 2013, along with the effect on our results of operations during each of the nine month periods ended September 30, 2014 and September 30, 2013, were immaterial.

Fair Value Measurements

Financial Assets and Liabilities Measured at Fair Value

We use the market and income approaches to value our financial assets and liabilities, and during the nine months ended September 30, 2014, there were no significant changes in valuation techniques or inputs related to the financial assets or liabilities that we have historically recorded at fair value. The tiers in the fair value hierarchy include: Level 1, defined as observable inputs such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation inputs we utilized to determine such fair value as of September 30, 2014 and December 31, 2013 (in thousands):



	Balance as of September 30, 2014		Fair Value Measurements as of September 30, 2014
	Balance as of September 30, 2014		Level 1		Level 2		Level 3
Assets:
Cash surrender value of life insurance policies	$	26,438	$	—	$	26,438	$	—
Total Assets	$	26,438	$	—	$	26,438	$	—
Liabilities:
Contingent consideration liabilities	$	7,301	$	—	$	—	$	7,301
Deferred compensation liabilities	25,834		—		25,834		—
Interest rate swaps	5,556		—		5,556		—
Total Liabilities	$	38,691	$	—	$	31,390	$	7,301



	Balance as of December 31, 2013		Fair Value Measurements as of December 31, 2013
	Balance as of December 31, 2013		Level 1		Level 2		Level 3
Assets:
Cash surrender value of life insurance policies	$	25,745	$	—	$	25,745	$	—
Total Assets	$	25,745	$	—	$	25,745	$	—
Liabilities:
Contingent consideration liabilities	$	55,653	$	—	$	—	$	55,653
Deferred compensation liabilities	25,232		—		25,232		—
Foreign currency forward contracts	21,818		—		21,818		—
Interest rate swaps	8,470		—		8,470		—
Total Liabilities	$	111,173	$	—	$	55,520	$	55,653

The cash surrender value of life insurance policies and deferred compensation liabilities are included in Other Assets and Other Noncurrent Liabilities, respectively, on our Unaudited Condensed Consolidated Balance Sheets. The contingent consideration liabilities are classified as a separate line item in current liabilities and within Other Noncurrent Liabilities on our Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments. The balance sheet classification of the interest rate swaps and foreign currency forward contracts is presented in Note 5, "Derivative Instruments and Hedging Activities."

Our Level 2 assets and liabilities are valued using inputs from third parties and market observable data. We obtain valuation data for the cash surrender value of life insurance and deferred compensation liabilities from third party sources, which determine the net asset values for our accounts using quoted market prices, investment allocations and reportable trades. We value our derivative instruments using a third party valuation model that performs a discounted cash flow analysis based on the terms of the contracts and market observable inputs such as current and forward interest rates and current and forward foreign exchange rates.

Our contingent consideration liabilities are related to our business acquisitions as further described in Note 8, "Business Combinations." Under the terms of the contingent consideration agreements, payments may be made at specified future dates depending on the performance of the acquired business subsequent to the acquisition. The liabilities for these payments are classified as Level 3 liabilities because the related fair value measurement, which is determined using an income approach, includes significant inputs not observable in the market. These unobservable inputs include internally-developed assumptions of the probabilities of achieving specified targets, which are used to determine the resulting cash flows, and the applicable discount rate. Our Level 3 fair value measurements are established and updated quarterly by our corporate accounting department using current information about these key assumptions, with the input and oversight of our operational and executive management teams. We evaluate the performance of the business during the period compared to our previous expectations, along with any changes to our future projections, and update the estimated cash flows accordingly. In addition, we consider changes to our cost of capital and changes to the probability of achieving the earnout payment targets when updating our discount rate on a quarterly basis.

The significant unobservable inputs used in the fair value measurements of our Level 3 contingent consideration liabilities were as follows:



	September 30,		December 31,
	2014		2013
Unobservable Input	(Weighted Average)
Probability of achieving payout targets	78.7	%	70.6	%
Discount rate	7.5	%	6.5	%

A decrease in the assessed probabilities of achieving the targets or an increase in the discount rate, in isolation, would result in a lower fair value measurement. Changes in the values of the liabilities are recorded in Change in Fair Value of Contingent Consideration Liabilities within Other Expense (Income) on our Unaudited Condensed Consolidated Statements of Income.

Changes in the fair value of our contingent consideration obligations are as follows (in thousands):



	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2014			2013		2014			2013
Beginning Balance	$	8,762		$	49,473	$	55,653		$	90,009
Contingent consideration liabilities recorded for business acquisitions	(1,203		)	1,204		5,854			3,854
Payments	—			—		(52,305		)	(38,349		)
Increase (decrease) in fair value included in earnings	12			712		(2,000		)	1,765
Exchange rate effects	(270		)	3,096		99			(2,794		)
Ending Balance	$	7,301		$	54,485	$	7,301		$	54,485

The purchase price for our 2011 acquisition of Euro Car Parts Holdings Limited included contingent payments depending on the achievement of certain annual performance targets in 2012 and 2013. The performance target for each of the measurement periods was exceeded, and therefore, we settled the liabilities related to the 2012 and 2013 performance periods for the maximum amounts of £25 million and £30 million, respectively. During April 2014, we settled the liability for the 2013 performance period through a cash payment of $44.8 million (£26.9 million) and the issuance of notes for $5.1 million (£3.1 million). The liability for the 2012 performance period was settled during the three months ended March 31, 2013 through a cash payment of $33.9 million (£22.4 million) and the issuance of notes for $3.9 million (£2.6 million). During the three months ended September 30, 2014, we finalized our acquisition-date estimates of the likelihood of payment for certain of our contingent payment arrangements, which resulted in a reduction to our contingent consideration liabilities of $1.2 million, with the offset recorded as a reduction of goodwill.

Of the amounts included in earnings for the nine months ended September 30, 2014, $0.2 million of gains were related to contingent consideration obligations outstanding as of September 30, 2014; all of the amounts included in earnings for the three months ended September 30, 2014 related to contingent consideration obligations outstanding as of September 30, 2014. Substantially all of the gains included in earnings during the three and nine months ended September 30, 2013 related to contingent consideration obligations that were settled by September 30, 2014. The changes in the fair value of contingent consideration obligations included in earnings during the respective periods in 2014 and 2013 reflect the quarterly reassessment of each obligation's fair value, including an analysis of the significant inputs used in the valuation, as well as the accretion of the present value discount.

Financial Assets and Liabilities Not Measured at Fair Value

Our debt is reflected on the Unaudited Condensed Consolidated Balance Sheets at cost. Based on market conditions as of September 30, 2014 and December 31, 2013, the fair value of our credit agreement borrowings reasonably approximated the carrying value of $1.1 billion and $673 million, respectively. In addition, based on market conditions, the fair value of the outstanding borrowings under the receivables facility reasonably approximated the carrying value of $80 million at September 30, 2014; we did not have any borrowings outstanding under the receivables facility as of December 31, 2013. As of September 30, 2014, the fair value of our senior notes was approximately $581 million compared to a carrying value of $600 million.

The fair value measurements of the borrowings under our credit agreement and receivables facility are classified as Level 2 within the fair value hierarchy since they are determined based upon significant inputs observable in the market, including interest rates on recent financing transactions with similar terms and maturities. We estimated the fair values by calculating the upfront cash payment a market participant would require to assume these obligations. The fair value of our senior notes is classified as Level 1 within the fair value hierarchy since it is determined based upon observable market inputs including quoted market prices in an active market.

Commitments and Contingencies

Operating Leases

We are obligated under noncancelable operating leases for corporate office space, warehouse and distribution facilities, trucks and certain equipment.

The future minimum lease commitments under these leases at September 30, 2014 are as follows (in thousands):



Three months ending December 31, 2014	$	35,353
Years ending December 31:
2015	134,572
2016	114,205
2017	95,568
2018	78,838
2019	63,638
Thereafter	251,142
Future Minimum Lease Payments	$	773,316

Litigation and Related Contingencies

We have certain contingencies resulting from litigation, claims and other commitments and are subject to a variety of environmental and pollution control laws and regulations incident to the ordinary course of business. We currently expect that the resolution of such contingencies will not materially affect our financial position, results of operations or cash flows.

Business Combinations

On January 3, 2014, we completed our acquisition of Keystone Specialty, which is a leading distributor and marketer of specialty aftermarket equipment and accessories in North America serving the following six product segments: truck and off-road; speed and performance; recreational vehicle; towing; wheels, tires and performance handling; and miscellaneous accessories. Total acquisition date fair value of the consideration for our Keystone Specialty acquisition was $471.1 million, composed of $427.1 million of cash (net of cash acquired), $31.5 million of notes payable and $12.6 million of other purchase price obligations (non-interest bearing). We recorded $234.0 million of goodwill related to our acquisition of Keystone Specialty, which we do not expect to be deductible for income tax purposes. In the period between January 3, 2014 and September 30, 2014, Keystone Specialty generated approximately $595.2 million of revenue and $24.4 million of net income.

In addition to our acquisition of Keystone Specialty, we made 19 acquisitions during the nine months ended September 30, 2014, including 9 wholesale businesses in North America, 8 wholesale businesses in Europe, and 2 self service retail operations. Our European acquisitions included seven aftermarket parts distribution businesses in the Netherlands, five of which were customers of and distributors for our Netherlands subsidiary, Sator Beheer B.V. ("Sator"). Our European acquisitions were completed with the objective of expanding our distribution network in the Netherlands; our other acquisitions completed during the nine months ended September 30, 2014 enabled us to expand into new product lines and enter new markets. Total acquisition date fair value of the consideration for these additional acquisitions was $233.6 million, composed of $210.7 million of cash (net of cash acquired), $11.8 million of notes payable, $0.3 million of other purchase price obligations (non-interest bearing), $5.9 million for the estimated value of contingent payments to former owners (with maximum potential payments totaling $8.3 million), and $4.9 million of pre-existing balances between us and the acquired entities considered to be effectively settled as a result of the acquisitions. During the nine months ended September 30, 2014, we recorded $118.9 million of goodwill related to these acquisitions and immaterial adjustments to preliminary purchase price allocations related to certain of our 2013 acquisitions. We expect $32.2 million of the $118.9 million of goodwill recorded to be deductible for income tax purposes. In the period between the acquisition dates and September 30, 2014, these acquisitions generated revenue of $142.7 million and a net loss of $1.5 million.

In October 2014, we completed the acquisition of two businesses in our Specialty segment: a supplier of replacement parts, supplies and accessories for recreational vehicles, and a specialty aftermarket vehicle equipment and accessories distributor. These acquisitions allowed us to expand our market share in these product categories. The preliminary aggregate purchase price for these acquisitions was approximately $112 million, net of cash acquired. We are in the process of completing the purchase accounting for our October 2014 acquisitions, and as a result, we are unable to disclose the amounts recognized for each major class of assets acquired and liabilities assumed, or the pro forma effect of the acquisitions on our results of operations.

On May 1, 2013, we acquired the shares of Sator, a vehicle mechanical aftermarket parts distribution company based in the Netherlands, with operations in the Netherlands, Belgium and Northern France. With the acquisition of Sator, we expanded our geographic presence in the European vehicle mechanical aftermarket products market into continental Europe to complement our existing U.K. operations. Total acquisition date fair value of the consideration for the acquisition of Sator was €209.8 million ($272.8 million) of cash, net of cash acquired. We recorded $142.7 million of goodwill related to our acquisition of Sator, which we do not expect will be deductible for income tax purposes.

In addition to our acquisition of Sator, we made 19 acquisitions during 2013, including 10 wholesale businesses in North America, 7 wholesale businesses in Europe and 2 self service retail operations. Our European acquisitions included five automotive paint distribution businesses in the U.K., which enabled us to expand our collision product offerings. Our other acquisitions completed during 2013 enabled us to expand into new product lines and enter new markets. Total acquisition date fair value of the consideration for these additional 2013 acquisitions was $146.1 million, composed of $134.6 million of cash (net of cash acquired), $7.5 million of notes payable, $0.2 million of other purchase price obligations (non-interest bearing) and $3.9 million for the estimated value of contingent payments to former owners (with maximum potential payments totaling $5.0 million). During the year ended December 31, 2013, we recorded $92.7 million of goodwill related to these acquisitions and immaterial adjustments to preliminary purchase price allocations related to certain of our 2012 acquisitions. We expect $18.3 million of the $92.7 million of goodwill recorded to be deductible for income tax purposes.

Our acquisitions are accounted for under the purchase method of accounting and are included in our unaudited condensed consolidated financial statements from the dates of acquisition. The purchase prices were allocated to the net assets acquired based upon estimated fair market values at the dates of acquisition. The purchase price allocations for the acquisitions made during the nine months ended September 30, 2014 and the last three months of 2013 are preliminary as we are in the process of determining the following: 1) valuation amounts for certain receivables, inventories and fixed assets acquired; 2) valuation amounts for certain intangible assets acquired; 3) the acquisition date fair value of certain liabilities assumed; and 4) the final estimation of the tax basis of the entities acquired. We have recorded preliminary estimates for certain of the items noted above and will record adjustments, if any, to the preliminary amounts upon finalization of the valuations.

The preliminary purchase price allocations for the acquisitions completed during the nine months ended September 30, 2014 and the year ended December 31, 2013 are as follows (in thousands):



	Nine Months Ended									Year Ended
	September 30, 2014									December 31, 2013
	Keystone Specialty			Other Acquisitions			Total			Sator			Other Acquisitions			Total
Receivables	$	48,473		$	57,191		$	105,664		$	61,639		$	38,685		$	100,324
Receivable reserves	(4,403		)	(2,817		)	(7,220		)	(8,563		)	(3,246		)	(11,809		)
Inventory	151,013			79,260			230,273			71,784			26,455			98,239
Income taxes receivable	13,972			—			13,972			—			—			—
Prepaid expenses and other current assets	8,339			3,266			11,605			7,184			1,933			9,117
Property and equipment	38,080			16,389			54,469			19,484			14,015			33,499
Goodwill	233,998			118,940			352,938			142,721			92,726			235,447
Other intangibles	70,830			25,897			96,727			45,293			12,353			57,646
Other assets	7,805			5,623			13,428			2,049			1,251			3,300
Deferred income taxes	(17,418		)	429			(16,989		)	(14,100		)	(564		)	(14,664		)
Current liabilities assumed	(65,439		)	(34,880		)	(100,319		)	(49,593		)	(36,799		)	(86,392		)
Debt assumed	—			(26,425		)	(26,425		)	—			(664		)	(664		)
Other noncurrent liabilities assumed	(14,147		)	(9,282		)	(23,429		)	(5,074		)	—			(5,074		)
Contingent consideration liabilities	—			(5,854		)	(5,854		)	—			(3,854		)	(3,854		)
Other purchase price obligations	(12,553		)	(313		)	(12,866		)	—			(214		)	(214		)
Notes issued	(31,500		)	(11,842		)	(43,342		)	—			(7,482		)	(7,482		)
Settlement of pre-existing balances	—			(4,922		)	(4,922		)	—			—			—
Cash used in acquisitions, net of cash acquired	$	427,050		$	210,660		$	637,710		$	272,824		$	134,595		$	407,419

The primary reason for our acquisitions made during the nine months ended September 30, 2014 and the year ended December 31, 2013 was to create economic value for our stockholders by enhancing our position as a leading source for alternative collision and mechanical repair products and expanding into other product lines and businesses that may benefit from our operating strengths. Our acquisition of Keystone Specialty allows us to enter into new product lines and increase the size of our addressable market. In addition, we believe that the acquisition creates potential cross-selling opportunities and logistics and administrative cost synergies, which contributed to the goodwill recorded on the Keystone Specialty acquisition. Our other acquisitions enabled us to further expand our market presence, including continental Europe through the Sator acquisition, as well as to widen our product offerings such as paint and related equipment in the U.K. We believe that our Sator acquisition will allow for synergies within our European operations, most notably in procurement, warehousing and product management. These projected synergies contributed to the goodwill recorded on the Sator acquisition.

When we identify potential acquisitions, we attempt to target companies with a leading market share, an experienced management team and a workforce that provide a fit with our existing operations and strong cash flows. For certain of our acquisitions, we have identified cost savings and synergies as a result of integrating the company with our existing business that provide additional value to the combined entity. In many cases, acquiring companies with these characteristics can result in purchase prices that include a significant amount of goodwill.

The following pro forma summary presents the effect of the businesses acquired during the nine months ended September 30, 2014 as though they had been acquired as of January 1, 2013 and the businesses acquired during the year ended December 31, 2013 as though they had been acquired as of January 1, 2012. The pro forma adjustments are based upon unaudited financial information of the acquired entities (in thousands, except per share data):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Revenue, as reported	$	1,721,024	$	1,298,094	$	5,055,933	$	3,745,839
Revenue of purchased businesses for the period prior to acquisition:
Keystone Specialty	—		177,324		3,443		540,826
Sator	—		—		—		126,309
Other acquisitions	4,815		101,971		116,326		371,312
Pro forma revenue	$	1,725,839	$	1,577,389	$	5,175,702	$	4,784,286

Net income, as reported	$	91,515	$	73,445	$	301,050	$	233,759
Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments:
Keystone Specialty	180		7,142		514		24,769
Sator	—		—		—		5,712
Other acquisitions	3,623		5,059		8,053		11,505
Pro forma net income	$	95,318	$	85,646	$	309,617	$	275,745

Earnings per share-basic, as reported	$	0.30	$	0.24	$	1.00	$	0.78
Effect of purchased businesses for the period prior to acquisition:
Keystone Specialty	0.00		0.02		0.00		0.08
Sator	—		—		—		0.02
Other acquisitions	0.01		0.02		0.03		0.04
Pro forma earnings per share-basic ^(a)	$	0.31	$	0.29	$	1.03	$	0.92

Earnings per share-diluted, as reported	$	0.30	$	0.24	$	0.98	$	0.77
Effect of purchased businesses for the period prior to acquisition:
Keystone Specialty	0.00		0.02		0.00		0.08
Sator	—		—		—		0.02
Other acquisitions	0.01		0.02		0.03		0.04
Pro forma earnings per share-diluted ^(a)	$	0.31	$	0.28	$	1.01	$	0.91

(a) The sum of the individual earnings per share amounts may not equal the total due to rounding.

Unaudited pro forma supplemental information is based upon accounting estimates and judgments that we believe are reasonable. The unaudited pro forma supplemental information includes the effect of purchase accounting adjustments, such as the adjustment of inventory acquired to net realizable value, adjustments to depreciation on acquired property and equipment, adjustments to rent expense for above or below market leases, adjustments to amortization on acquired intangible assets, adjustments to interest expense, and the related tax effects. The pro forma impact of our other acquisitions includes an adjustment for intercompany sales between Sator and the five Netherlands distributors that would have been reflected as intercompany transactions if the acquisitions had occurred on January 1, 2013. Our cost of sales in the initial months after the acquisitions reflects the increased valuation of acquired inventory, which has the impact of temporarily reducing our gross margin. Moving this negative gross margin impact to the nine months ended September 30, 2013 for our pro forma disclosure has the effect of increasing our pro forma net income during the three and nine months ended September 30, 2014. Additionally, the pro forma impact of our acquisitions reflects the elimination of acquisition related expenses totaling $0.5 million and $2.3 million for the three and nine months ended September 30, 2014, respectively, primarily related to our May 2014 acquisitions of five aftermarket parts distribution businesses in the Netherlands. The pro forma impact of our acquisition related expenses for the three and nine months ended September 30, 2013 totaled $2.0 million and $6.0 million, respectively, primarily related to our May 2013 acquisition of Sator and our August 2013 acquisition of five U.K.-based paint distribution businesses. Refer to Note 9, "Restructuring and Acquisition Related Expenses," for further information on our acquisition related expenses. These pro forma results are not necessarily indicative of what would have occurred if the acquisitions had been in effect for the periods presented or of future results.

Restructuring and Acquisition Related Expenses

Acquisition Related Expenses

Acquisition related expenses, which include external costs such as legal, accounting and advisory fees, totaled $1.3 million and $3.2 million for the three and nine months ended September 30, 2014, respectively. These expenses were primarily related to our 2014 acquisitions of seven aftermarket parts distribution businesses in the Netherlands, as well as other potential acquisitions. Expenses incurred during the three and nine months ended September 30, 2013 totaled $2.0 million and $6.0 million, respectively. Of these amounts, we incurred $1.4 million in the three and nine months ended September 30, 2013 related to our August 2013 acquisitions of five U.K.-based paint distribution businesses. Expenses for the nine months ended September 30, 2013 also included $3.6 million related to our May 2013 acquisition of Sator. These costs are expensed as incurred.

Acquisition Integration Plans

During the three and nine months ended September 30, 2014, we incurred $0.4 million and $5.8 million, respectively, of restructuring expenses as a result of the integration of our acquisition of Keystone Specialty into our existing business. These integration activities included the closure of duplicate facilities, termination of employees in connection with the consolidation of overlapping facilities with our existing business, and moving expenses. Future expenses to complete our integration plan are not expected to be material.

We incurred other restructuring costs related to our acquisitions during the three and nine months ended September 30, 2014 totaling $0.3 million and $2.2 million, respectively. Restructuring costs incurred during the three and nine months ended September 30, 2013 totaled $0.2 million and $1.4 million, respectively. These costs are a result of activities to integrate our acquisitions into our existing business, including the closure of duplicate facilities, termination of employees in connection with the consolidation of overlapping facilities with our existing business, moving expenses, and other third party services directly related to our acquisitions.

We expect to incur additional integration expenses related to the integration of certain of our acquisitions into our existing operations in the fourth quarter of 2014 and 2015. These integration activities are expected to include the closure of duplicate facilities, termination of employees in connection with the consolidation of overlapping facilities with our existing business, and moving expenses. Future expenses to complete these integration plans are not expected to be material.

European Restructuring Plan

In the third quarter of 2014, we initiated restructuring activities to eliminate overlapping positions within certain of our European operations. As a result of these restructuring activities, we incurred $1.6 million of expenses during the three months ended September 30, 2014, primarily for severance costs to terminated employees. While we do not expect material incremental expenses for this portion of the integration plan, we may incur additional expenses in the future as we continue to rationalize our European operations.

Earnings Per Share

The following chart sets forth the computation of earnings per share (in thousands, except per share amounts):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Net Income	$	91,515	$	73,445	$	301,050	$	233,759
Denominator for basic earnings per share—Weighted-average shares outstanding	302,724		300,223		302,058		299,213
Effect of dilutive securities:
RSUs	658		883		804		775
Stock options	2,817		3,564		2,988		3,765
Restricted stock	7		15		7		18
Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding	306,206		304,685		305,857		303,771
Earnings per share, basic	$	0.30	$	0.24	$	1.00	$	0.78
Earnings per share, diluted	$	0.30	$	0.24	$	0.98	$	0.77

The following table sets forth the number of employee stock-based compensation awards outstanding but not included in the computation of diluted earnings per share because their effect would have been antidilutive for the three and nine months ended September 30, 2014 and 2013 (in thousands).



	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2014	2013	2014	2013
Antidilutive securities:
RSUs	389	—	265	—
Stock Options	115	—	120	—

Income Taxes

At the end of each interim period, we estimate our annual effective tax rate and apply that rate to our interim earnings. We also record the tax impact of certain unusual or infrequently occurring items, including changes in judgment about valuation allowances and the effects of changes in tax laws or rates, in the interim period in which they occur.

The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in state and foreign jurisdictions, permanent and temporary differences between book and taxable income, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the tax environment changes.

Our effective income tax rate for the nine months ended September 30, 2014 was 34.0% compared with 34.6% for the comparable prior year period. In 2014, we expect a larger proportion of our annual pretax income to be generated in lower tax rate jurisdictions as a result of our expanding international operations. The effective income tax rate during the nine months ended September 30, 2013 reflects favorable discrete tax adjustments of $2.6 million. These favorable discrete tax adjustments included $1.6 million related to the revaluation of our net U.K. deferred tax liabilities as a result of reductions in the U.K. corporate income tax rate. In addition, we recorded a $0.9 million favorable deferred tax adjustment during the nine months ended September 30, 2013 resulting from changes in state tax legislation.

Accumulated Other Comprehensive Income (Loss)

The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):



	Three Months Ended												Three Months Ended
	September 30, 2014												September 30, 2013
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Change in Unrealized Gain on Pension Plan			Accumulated Other Comprehensive Income (Loss)			Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Accumulated Other Comprehensive Income (Loss)
Beginning balance	$	40,222		$	(4,346	)	$	634		$	36,510		$	(11,334	)	$	(6,730	)	$	(18,064	)
Pretax income (loss)	(39,329		)	(186		)	—			(39,515		)	28,514			(15,315		)	13,199
Income tax effect	—			(7		)	—			(7		)	—			5,647			5,647
Reclassification of unrealized loss (gain)	—			1,554			(39		)	1,515			—			15,956			15,956
Reclassification of deferred income taxes	—			(544		)	9			(535		)	—			(5,849		)	(5,849		)
Hedge ineffectiveness	—			—			—			—			—			293			293
Income tax effect	—			—			—			—			—			(107		)	(107		)
Ending balance	$	893		$	(3,529	)	$	604		$	(2,032	)	$	17,180		$	(6,105	)	$	11,075



	Nine Months Ended												Nine Months Ended
	September 30, 2014												September 30, 2013
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Change in Unrealized Gain on Pension Plan			Accumulated Other Comprehensive Income (Loss)			Foreign Currency Translation		Unrealized Gain (Loss) on Cash Flow Hedges			Accumulated Other Comprehensive Income (Loss)
Beginning balance	$	24,906		$	(5,596	)	$	701		$	20,011		$	10,850	$	(10,091	)	$	759
Pretax income (loss)	(24,013		)	(362		)	—			(24,375		)	6,330		(14,170		)	(7,840		)
Income tax effect	—			39			—			39			—		5,305			5,305
Reclassification of unrealized loss (gain)	—			3,647			(129		)	3,518			—		19,771			19,771
Reclassification of deferred income taxes	—			(1,257		)	32			(1,225		)	—		(7,211		)	(7,211		)
Hedge ineffectiveness	—			—			—			—			—		460			460
Income tax effect	—			—			—			—			—		(169		)	(169		)
Ending balance	$	893		$	(3,529	)	$	604		$	(2,032	)	$	17,180	$	(6,105	)	$	11,075

Unrealized losses on our interest rate swap contracts totaling $1.6 million and $4.6 million were reclassified to interest expense in our Unaudited Condensed Consolidated Statements of Income during the three and nine months ended September 30, 2014, respectively. During the three and nine months ended September 30, 2013, unrealized losses of $1.5 million and $4.7 million, respectively, related to our interest rate swaps were reclassified to interest expense. The remaining reclassification of unrealized gains and losses during these periods related to our foreign currency forward contracts and were recorded to other income in our Unaudited Condensed Consolidated Statements of Income. These gains offset the remeasurement of certain of our intercompany balances as discussed in Note 5, "Derivative Instruments and Hedging Activities." The deferred income taxes related to our cash flow hedges were reclassified from Accumulated Other Comprehensive Income to income tax expense.

Segment and Geographic Information

We have four operating segments: Wholesale – North America; Wholesale – Europe; Self Service; and Specialty. Our Specialty operating segment was formed with our January 3, 2014 acquisition of Keystone Specialty, as discussed in Note 8, "Business Combinations." Our Wholesale – North America and Self Service operating segments are aggregated into one reportable segment, North America, because they possess similar economic characteristics and have common products and services, customers, and methods of distribution. Therefore, we present three reportable segments: North America, Europe and Specialty.

The following tables present our financial performance by reportable segment for the periods indicated (in thousands):



	North America		Europe		Specialty		Eliminations			Consolidated
Three Months Ended September 30, 2014
Revenue:
Third Party	$	1,024,835	$	495,776	$	200,413	$	—		$	1,721,024
Intersegment	132		—		594		(726		)	—
Total segment revenue	$	1,024,967	$	495,776	$	201,007	$	(726	)	$	1,721,024
Segment EBITDA	$	131,851	$	41,726	$	17,977	$	—		$	191,554
Depreciation and amortization	18,029		9,411		4,314		—			31,754
Three Months Ended September 30, 2013
Revenue:
Third Party	$	928,307	$	369,787	$	—	$	—		$	1,298,094
Intersegment	—		—		—		—			—
Total segment revenue	$	928,307	$	369,787	$	—	$	—		$	1,298,094
Segment EBITDA	$	108,863	$	40,457	$	—	$	—		$	149,320
Depreciation and amortization	16,417		5,740		—		—			22,157



	North America		Europe		Specialty		Eliminations			Consolidated
Nine Months Ended September 30, 2014
Revenue:
Third Party	$	3,080,090	$	1,380,663	$	595,180	$	—		$	5,055,933
Intersegment	266		—		1,250		(1,516		)	—
Total segment revenue	$	3,080,356	$	1,380,663	$	596,430	$	(1,516	)	$	5,055,933
Segment EBITDA	$	415,139	$	128,826	$	64,137				$	608,102
Depreciation and amortization	52,682		24,868		13,097		—			90,647
Nine Months Ended September 30, 2013
Revenue:
Third Party	$	2,865,613	$	880,226	$	—	$	—		$	3,745,839
Intersegment	—		—		—		—			—
Total segment revenue	$	2,865,613	$	880,226	$	—	$	—		$	3,745,839
Segment EBITDA	$	363,411	$	103,946	$	—	$	—		$	467,357
Depreciation and amortization	48,555		13,313		—		—			61,868

The key measure of segment profit or loss reviewed by our chief operating decision maker, who is our Chief Executive Officer, is Segment EBITDA. Segment EBITDA includes revenue and expenses that are controllable by the segment. Corporate and administrative expenses are allocated to the segments based on usage, with shared expenses apportioned based on the segment's percentage of consolidated revenue. Segment EBITDA excludes restructuring and acquisition related expenses, depreciation, amortization, interest, change in fair value of contingent consideration liabilities, taxes and equity in earnings of unconsolidated subsidiaries. Loss on debt extinguishment is considered a component of interest in calculating Segment EBITDA, as the write-off of debt issuance costs is similar to the treatment of debt issuance cost amortization.

The table below provides a reconciliation from Segment EBITDA to Net Income (in thousands):



	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2014			2013		2014			2013
Segment EBITDA	$	191,554		$	149,320	$	608,102		$	467,357
Deduct:
Restructuring and acquisition related expenses⁽¹⁾	3,594			2,206		12,816			7,391
Change in fair value of contingent consideration liabilities ⁽²⁾	12			712		(2,000		)	1,765
Add:
Equity in earnings of unconsolidated subsidiaries	(721		)	—		(1,199		)	—
EBITDA	187,227			146,402		596,087			458,201
Depreciation and amortization	31,754			22,157		90,647			61,868
Interest expense, net	16,394			15,200		48,140			36,287
Loss on debt extinguishment	—			—		324			2,795
Provision for income taxes	47,564			35,600		155,926			123,492
Net income	$	91,515		$	73,445	$	301,050		$	233,759

⁽¹⁾ See Note 9, "Restructuring and Acquisition Related Expenses," for further information.

⁽²⁾ See Note 6, "Fair Value Measurements," for further information on our contingent consideration liabilities.

The following table presents capital expenditures, which includes additions to property and equipment, by reportable segment (in thousands):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Capital Expenditures
North America	$	20,986	$	14,960	$	61,262	$	48,662
Europe	8,652		6,015		32,927		12,464
Specialty	3,222		—		6,002		—
	$	32,860	$	20,975	$	100,191	$	61,126

The following table presents assets by reportable segment (in thousands):



	September 30, 2014		December 31, 2013
Receivables, net
North America	$	318,575	$	277,395
Europe	235,791		180,699
Specialty	55,068		—
Total receivables, net	609,434		458,094
Inventory
North America	787,884		748,167
Europe	389,941		328,785
Specialty	163,500		—
Total inventory	1,341,325		1,076,952
Property and Equipment, net
North America	449,824		447,528
Europe	123,211		99,123
Specialty	39,257		—
Total property and equipment, net	612,292		546,651
Other unallocated assets	2,971,527		2,437,077
Total assets	$	5,534,578	$	4,518,774

We report net receivables, inventories, and net property and equipment by segment as that information is used by the chief operating decision maker in assessing segment performance. These assets provide a measure for the operating capital employed in each segment. Unallocated assets include cash, prepaid and other current and noncurrent assets, goodwill, intangibles and income taxes.

The majority of our operations are conducted in the U.S. Our European operations are located in the U.K., the Netherlands, Belgium, and France. Our operations in other countries include recycled and aftermarket operations in Canada, engine remanufacturing and bumper refurbishing operations in Mexico, an aftermarket parts freight consolidation warehouse in Taiwan, and other alternative parts operations in Guatemala. Our net sales are attributed to geographic area based on the location of the selling operation.

The following table sets forth our revenue by geographic area (in thousands):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Revenue
United States	$	1,126,468	$	868,052	$	3,369,636	$	2,672,545
United Kingdom	349,012		266,384		1,003,889		708,089
Other countries	245,544		163,658		682,408		365,205
	$	1,721,024	$	1,298,094	$	5,055,933	$	3,745,839

The following table sets forth our tangible long-lived assets by geographic area (in thousands):



	September 30, 2014		December 31, 2013
Long-lived Assets
United States	$	456,556	$	418,869
United Kingdom	92,365		77,827
Other countries	63,371		49,955
	$	612,292	$	546,651

The following table sets forth our revenue by product category (in thousands):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Aftermarket, other new and refurbished products	$	1,171,706	$	793,925	$	3,445,376	$	2,199,009
Recycled, remanufactured and related products and services	371,632		349,411		1,108,376		1,060,681
Other	177,686		154,758		502,181		486,149
	$	1,721,024	$	1,298,094	$	5,055,933	$	3,745,839

Our North American reportable segment generates revenue from all of our product categories, while our European and Specialty segments generate revenue primarily from the sale of aftermarket products. Revenue from other sources includes scrap sales, bulk sales to mechanical remanufacturers (including cores) and sales of aluminum ingots and sows from our furnace operations.

Condensed Consolidating Financial Information

LKQ Corporation (the "Parent") issued, and certain of its 100% owned subsidiaries (the "Guarantors") have fully and unconditionally guaranteed, jointly and severally, the Parent's Notes due on May 15, 2023. A Guarantor's guarantee will be unconditionally and automatically released and discharged upon the occurrence of any of the following events: (i) a transfer (including as a result of consolidation or merger) by the Guarantor to any person that is not a Guarantor of all or substantially all assets and properties of such Guarantor, provided the Guarantor is also released from its obligations with respect to indebtedness under the Credit Agreement or other indebtedness of ours, which obligation gave rise to the guarantee of the Notes; (ii) a transfer (including as a result of consolidation or merger) to any person that is not a Guarantor of the equity interests of a Guarantor or issuance by a Guarantor of its equity interests such that the Guarantor ceases to be a subsidiary, as defined in the Indenture, provided the Guarantor is also released from its obligations with respect to indebtedness under the Credit Agreement or other indebtedness of ours, which obligation gave rise to the guarantee of the Notes; (iii) the release of the Guarantor from its obligations with respect to indebtedness under the Credit Agreement or other indebtedness of ours, which obligation gave rise to the guarantee of the Notes; and (iv) upon legal defeasance, covenant defeasance or satisfaction and discharge of the Indenture, as defined in the Indenture.

Presented below are the unaudited condensed consolidating financial statements of the Parent, the Guarantors, the non-guarantor subsidiaries (the "Non-Guarantors"), and the elimination entries necessary to present the Company's financial statements on a consolidated basis as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934 resulting from the guarantees of the Notes. Investments in consolidated subsidiaries have been presented under the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries, intercompany balances, and intercompany revenues and expenses. The unaudited condensed consolidating financial statements below have been prepared from the Company's financial information on the same basis of accounting as the unaudited condensed consolidated financial statements, and may not necessarily be indicative of the financial position, results of operations or cash flows had the Parent, Guarantors and Non-Guarantors operated as independent entities.

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Balance Sheets (In thousands)

	September 30, 2014
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current Assets:
Cash and equivalents	$	145,431	$	26,855	$	72,360	$	—		$	244,646
Receivables, net	77		223,767		385,590		—			609,434
Intercompany receivables, net	6,331		—		13,829		(20,160		)	—
Inventory	—		885,665		455,660		—			1,341,325
Deferred income taxes	3,071		67,560		3,366		—			73,997
Prepaid expenses and other current assets	10,284		33,661		32,191		—			76,136
Total Current Assets	165,194		1,237,508		962,996		(20,160		)	2,345,538
Property and Equipment, net	534		457,975		153,783		—			612,292
Intangible Assets:
Goodwill	—		1,518,384		738,769		—			2,257,153
Other intangibles, net	—		126,522		94,527		—			221,049
Investment in Subsidiaries	2,958,048		285,996		—		(3,244,044		)	—
Intercompany Notes Receivable	619,070		32,207		—		(651,277		)	—
Other Assets	50,433		27,235		25,963		(5,085		)	98,546
Total Assets	$	3,793,279	$	3,685,827	$	1,976,038	$	(3,920,566	)	$	5,534,578
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	501	$	180,877	$	222,209	$	—		$	403,587
Intercompany payables, net	—		13,829		6,331		(20,160		)	—
Accrued expenses:
Accrued payroll-related liabilities	7,054		54,794		26,234		—			88,082
Sales taxes payable	—		6,545		38,553		—			45,098
Other accrued expenses	11,434		76,371		40,033		—			127,838
Contingent consideration liabilities	—		1,727		561		—			2,288
Other current liabilities	1,127		12,816		17,644		—			31,587
Current portion of long-term obligations	55,000		4,452		13,456		—			72,908
Total Current Liabilities	75,116		351,411		365,021		(20,160		)	771,388
Long-Term Obligations, Excluding Current Portion	1,016,429		6,423		802,281		—			1,825,133
Intercompany Notes Payable	—		558,691		92,586		(651,277		)	—
Deferred Income Taxes	—		137,785		26,570		(5,085		)	159,270
Other Noncurrent Liabilities	34,040		63,314		13,739		—			111,093
Stockholders’ Equity	2,667,694		2,568,203		675,841		(3,244,044		)	2,667,694
Total Liabilities and Stockholders’ Equity	$	3,793,279	$	3,685,827	$	1,976,038	$	(3,920,566	)	$	5,534,578

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Balance Sheets (In thousands)

	December 31, 2013
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current Assets:
Cash and equivalents	$	77,926	$	13,693	$	58,869	$	—		$	150,488
Receivables, net	—		126,926		331,168		—			458,094
Intercompany receivables, net	2,275		6,923		—		(9,198		)	—
Inventory	—		687,164		389,788		—			1,076,952
Deferred income taxes	3,189		57,422		3,327		—			63,938
Prepaid expenses and other current assets	7,924		24,190		18,231		—			50,345
Total Current Assets	91,314		916,318		801,383		(9,198		)	1,799,817
Property and Equipment, net	668		419,617		126,366		—			546,651
Intangible Assets:
Goodwill	—		1,248,746		688,698		—			1,937,444
Other intangibles, net	—		56,069		97,670		—			153,739
Investment in Subsidiaries	2,364,586		264,815		—		(2,629,401		)	—
Intercompany Notes Receivable	959,185		118,740		—		(1,077,925		)	—
Other Assets	49,218		20,133		17,241		(5,469		)	81,123
Total Assets	$	3,464,971	$	3,044,438	$	1,731,358	$	(3,721,993	)	$	4,518,774
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	314	$	147,708	$	201,047	$	—		$	349,069
Intercompany payables, net	—		—		9,198		(9,198		)	—
Accrued expenses:
Accrued payroll-related liabilities	5,236		32,850		20,609		—			58,695
Sales taxes payable	—		5,694		25,007		—			30,701
Other accrued expenses	26,714		51,183		31,476		—			109,373
Contingent consideration liabilities	—		1,923		50,542		—			52,465
Other current liabilities	2,803		13,039		20,273		—			36,115
Current portion of long-term obligations	24,421		3,030		14,084		—			41,535
Total Current Liabilities	59,488		255,427		372,236		(9,198		)	677,953
Long-Term Obligations, Excluding Current Portion	1,016,249		6,554		241,443		—			1,264,246
Intercompany Notes Payable	—		611,274		466,651		(1,077,925		)	—
Deferred Income Taxes	—		110,110		29,181		(5,469		)	133,822
Other Noncurrent Liabilities	38,489		46,417		7,102		—			92,008
Stockholders’ Equity	2,350,745		2,014,656		614,745		(2,629,401		)	2,350,745
Total Liabilities and Stockholders’ Equity	$	3,464,971	$	3,044,438	$	1,731,358	$	(3,721,993	)	$	4,518,774

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)

	For the Three Months Ended September 30, 2014
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	1,165,794		$	588,852		$	(33,622	)	$	1,721,024
Cost of goods sold	—			709,985			380,250			(33,622		)	1,056,613
Gross margin	—			455,809			208,602			—			664,411
Facility and warehouse expenses	—			95,619			37,711			—			133,330
Distribution expenses	—			98,457			50,115			—			148,572
Selling, general and administrative expenses	5,178			114,926			72,125			—			192,229
Restructuring and acquisition related expenses	—			882			2,712			—			3,594
Depreciation and amortization	50			19,592			10,856			—			30,498
Operating (loss) income	(5,228		)	126,333			35,083			—			156,188
Other expense (income):
Interest expense, net	12,338			71			3,985			—			16,394
Intercompany interest (income) expense, net	(12,638		)	6,207			6,431			—			—
Change in fair value of contingent consideration liabilities	—			54			(42		)	—			12
Other expense (income), net	155			(1,164		)	991			—			(18		)
Total other (income) expense, net	(145		)	5,168			11,365			—			16,388
(Loss) income before (benefit) provision for income taxes	(5,083		)	121,165			23,718			—			139,800
(Benefit) provision for income taxes	(1,363		)	43,986			4,941			—			47,564
Equity in earnings of unconsolidated subsidiaries	—			20			(741		)	—			(721		)
Equity in earnings of subsidiaries	95,235			6,151			—			(101,386		)	—
Net income	$	91,515		$	83,350		$	18,036		$	(101,386	)	$	91,515

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)

	For the Three Months Ended September 30, 2013
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	876,862		$	450,505		$	(29,273	)	$	1,298,094
Cost of goods sold	—			522,176			287,284			(29,273		)	780,187
Gross margin	—			354,686			163,221			—			517,907
Facility and warehouse expenses	—			79,565			28,784			—			108,349
Distribution expenses	—			73,752			35,841			—			109,593
Selling, general and administrative expenses	6,813			93,549			53,184			—			153,546
Restructuring and acquisition related expenses	—			411			1,795			—			2,206
Depreciation and amortization	65			14,014			6,739			—			20,818
Operating (loss) income	(6,878		)	93,395			36,878			—			123,395
Other expense (income):
Interest expense, net	13,335			81			1,784			—			15,200
Intercompany interest (income) expense, net	(13,028		)	5,593			7,435			—			—
Change in fair value of contingent consideration liabilities	—			(72		)	784			—			712
Other expense (income), net	45			(912		)	(695		)	—			(1,562		)
Total other expense, net	352			4,690			9,308			—			14,350
(Loss) income before (benefit) provision for income taxes	(7,230		)	88,705			27,570			—			109,045
(Benefit) provision for income taxes	(2,867		)	33,973			4,494			—			35,600
Equity in earnings of subsidiaries	77,808			5,656			—			(83,464		)	—
Net income	$	73,445		$	60,388		$	23,076		$	(83,464	)	$	73,445

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)

	For the Nine Months Ended September 30, 2014
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	3,486,098		$	1,665,247		$	(95,412	)	$	5,055,933
Cost of goods sold	—			2,107,866			1,056,125			(95,412		)	3,068,579
Gross margin	—			1,378,232			609,122			—			1,987,354
Facility and warehouse expenses	—			281,805			106,190			—			387,995
Distribution expenses	—			291,187			141,258			—			432,445
Selling, general and administrative expenses	20,188			342,038			201,118			—			563,344
Restructuring and acquisition related expenses	—			7,366			5,450			—			12,816
Depreciation and amortization	168			58,556			28,412			—			87,136
Operating (loss) income	(20,356		)	397,280			126,694			—			503,618
Other expense (income):
Interest expense, net	38,583			186			9,371			—			48,140
Intercompany interest (income) expense, net	(35,828		)	16,279			19,549			—			—
Loss on debt extinguishment	324			—			—			—			324
Change in fair value of contingent consideration liabilities	—			(2,183		)	183			—			(2,000		)
Other expense (income), net	81			(4,542		)	3,440			—			(1,021		)
Total other expense, net	3,160			9,740			32,543			—			45,443
(Loss) income before (benefit) provision for income taxes	(23,516		)	387,540			94,151			—			458,175
(Benefit) provision for income taxes	(8,665		)	144,725			19,866			—			155,926
Equity in earnings of unconsolidated subsidiaries	—			35			(1,234		)	—			(1,199		)
Equity in earnings of subsidiaries	315,901			24,528			—			(340,429		)	—
Net income	$	301,050		$	267,378		$	73,051		$	(340,429	)	$	301,050

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)

	For the Nine Months Ended September 30, 2013
	Parent			Guarantors			Non-Guarantors		Eliminations			Consolidated
Revenue	$	—		$	2,698,008		$	1,133,369	$	(85,538	)	$	3,745,839
Cost of goods sold	—			1,593,764			707,884		(85,538		)	2,216,110
Gross margin	—			1,104,244			425,485		—			1,529,729
Facility and warehouse expenses	—			240,389			71,091		—			311,480
Distribution expenses	—			224,266			95,767		—			320,033
Selling, general and administrative expenses	20,130			282,364			134,120		—			436,614
Restructuring and acquisition related expenses	—			750			6,641		—			7,391
Depreciation and amortization	187			41,568			16,095		—			57,850
Operating (loss) income	(20,317		)	314,907			101,771		—			396,361
Other expense (income):
Interest expense, net	29,589			621			6,077		—			36,287
Intercompany interest (income) expense, net	(34,318		)	16,901			17,417		—			—
Loss on debt extinguishment	2,795			—			—		—			2,795
Change in fair value of contingent consideration liabilities	—			(936		)	2,701		—			1,765
Other expense (income), net	172			(2,380		)	471		—			(1,737		)
Total other (income) expense, net	(1,762		)	14,206			26,666		—			39,110
(Loss) income before (benefit) provision for income taxes	(18,555		)	300,701			75,105		—			357,251
(Benefit) provision for income taxes	(7,199		)	115,625			15,066		—			123,492
Equity in earnings of subsidiaries	245,115			15,496			—		(260,611		)	—
Net income	$	233,759		$	200,572		$	60,039	$	(260,611	)	$	233,759

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (Loss) (In thousands)

	For the Three Months Ended September 30, 2014
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net income	$	91,515		$	83,350		$	18,036		$	(101,386	)	$	91,515
Other comprehensive (loss) income, net of tax:
Foreign currency translation	(39,329		)	(14,554		)	(37,922		)	52,476			(39,329		)
Net change in unrecognized gains/losses on derivative instruments, net of tax	817			—			(229		)	229			817
Change in unrealized gain on pension plan, net of tax	(30		)	—			(30		)	30			(30		)
Total other comprehensive loss	(38,542		)	(14,554		)	(38,181		)	52,735			(38,542		)
Total comprehensive income (loss)	$	52,973		$	68,796		$	(20,145	)	$	(48,651	)	$	52,973

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands)

	For the Three Months Ended September 30, 2013
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
Net income	$	73,445	$	60,388	$	23,076	$	(83,464	)	$	73,445
Other comprehensive income, net of tax:
Foreign currency translation	28,514		13,130		28,104		(41,234		)	28,514
Net change in unrecognized gains/losses on derivative instruments, net of tax	625		—		127		(127		)	625
Total other comprehensive income	29,139		13,130		28,231		(41,361		)	29,139
Total comprehensive income	$	102,584	$	73,518	$	51,307	$	(124,825	)	$	102,584

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands)

	For the Nine Months Ended September 30, 2014
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net income	$	301,050		$	267,378		$	73,051		$	(340,429	)	$	301,050
Other comprehensive (loss) income, net of tax:
Foreign currency translation	(24,013		)	(7,034		)	(22,610		)	29,644			(24,013		)
Net change in unrecognized gains/losses on derivative instruments, net of tax	2,067			—			(48		)	48			2,067
Change in unrealized gain on pension plan, net of tax	(97		)	—			(97		)	97			(97		)
Total other comprehensive loss	(22,043		)	(7,034		)	(22,755		)	29,789			(22,043		)
Total comprehensive income	$	279,007		$	260,344		$	50,296		$	(310,640	)	$	279,007

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands)

	For the Nine Months Ended September 30, 2013
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
Net income	$	233,759	$	200,572	$	60,039	$	(260,611	)	$	233,759
Other comprehensive income, net of tax:
Foreign currency translation	6,330		3,386		7,107		(10,493		)	6,330
Net change in unrecognized gains/losses on derivative instruments, net of tax	3,986		—		903		(903		)	3,986
Total other comprehensive income	10,316		3,386		8,010		(11,396		)	10,316
Total comprehensive income	$	244,075	$	203,958	$	68,049	$	(272,007	)	$	244,075

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Cash Flows (In thousands)

	For the Nine Months Ended September 30, 2014
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	264,870		$	361,218		$	(43,793	)	$	(259,653	)	$	322,642
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(37		)	(59,387		)	(40,767		)	—			(100,191		)
Proceeds from sales of property and equipment	—			1,218			1,956			—			3,174
Investments in unconsolidated subsidiaries	—			(600		)	(1,640		)	—			(2,240		)
Investment and intercompany note activity with subsidiaries	(197,714		)	(607		)	—			198,321			—
Acquisitions, net of cash acquired	—			(520,721		)	(129,893		)	—			(650,614		)
Net cash used in investing activities	(197,751		)	(580,097		)	(170,344		)	198,321			(749,871		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	6,520			—			—			—			6,520
Excess tax benefit from stock-based payments	14,455			—			—			—			14,455
Borrowings under revolving credit facility	693,000			—			606,821			—			1,299,821
Repayments under revolving credit facility	(693,000		)	—			(115,039		)	—			(808,039		)
Borrowings under term loans	11,250			—			—			—			11,250
Repayments under term loans	(11,250		)	—			—			—			(11,250		)
Borrowings under receivables securitization facility	—			—			80,000			—			80,000
Repayments of other long-term debt	(1,920		)	(2,104		)	(16,508		)	—			(20,532		)
Payments of other obligations	—			(407		)	(41,527		)	—			(41,934		)
Other financing activities, net	(18,669		)	12,340			(552		)	—			(6,881		)
Investment and intercompany note activity with parent	—			481,951			(283,630		)	(198,321		)	—
Dividends	—			(259,653		)	—			259,653			—
Net cash provided by financing activities	386			232,127			229,565			61,332			523,410
Effect of exchange rate changes on cash and equivalents	—			(86		)	(1,937		)	—			(2,023		)
Net increase in cash and equivalents	67,505			13,162			13,491			—			94,158
Cash and equivalents, beginning of period	77,926			13,693			58,869			—			150,488
Cash and equivalents, end of period	$	145,431		$	26,855		$	72,360		$	—		$	244,646

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Cash Flows (In thousands)

	For the Nine Months Ended September 30, 2013
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities	$	101,136		$	195,524		$	116,212		$	(71,943	)	$	340,929
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(1		)	(40,824		)	(20,301		)	—			(61,126		)
Proceeds from sales of property and equipment	—			1,032			427			—			1,459
Investment in unconsolidated subsidiary	—			—			(9,136		)	—			(9,136		)
Investment and intercompany note activity with subsidiaries	(418,205		)	(84,893		)	—			503,098			—
Acquisitions, net of cash acquired	—			(21,570		)	(374,404		)	—			(395,974		)
Net cash used in investing activities	(418,206		)	(146,255		)	(403,414		)	503,098			(464,777		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	13,647			—			—			—			13,647
Excess tax benefit from stock-based payments	15,998			—			—			—			15,998
Proceeds from issuance of senior notes	600,000			—			—			—			600,000
Borrowings under revolving credit facility	315,000			—			84,758			—			399,758
Repayments under revolving credit facility	(616,000		)	—			(129,313		)	—			(745,313		)
Borrowings under term loans	35,000			—			—			—			35,000
Repayments under term loans	(11,250		)	—			—			—			(11,250		)
Borrowings under receivables securitization facility	—			—			41,500			—			41,500
Repayments under receivables securitization facility	—			—			(111,500		)	—			(111,500		)
Repayments of other long-term debt	(925		)	(7,983		)	(10,610		)	—			(19,518		)
Payments of other obligations	—			(473		)	(31,618		)	—			(32,091		)
Other financing activities, net	(16,830		)	—			(82		)	—			(16,912		)
Investment and intercompany note activity with parent	—			25,095			478,003			(503,098		)	—
Dividends	—			(71,943		)	—			71,943			—
Net cash provided by (used in) financing activities	334,640			(55,304		)	321,138			(431,155		)	169,319
Effect of exchange rate changes on cash and equivalents	—			—			2,096			—			2,096
Net increase (decrease) in cash and equivalents	17,570			(6,035		)	36,032			—			47,567
Cash and equivalents, beginning of period	18,396			18,253			23,121			—			59,770
Cash and equivalents, end of period	$	35,966		$	12,218		$	59,153		$	—		$	107,337

Financial Statement Information (Policies)

Revenue Recognition

The majority of our revenue is derived from the sale of vehicle parts. Revenue is recognized when the products are shipped to, delivered to or picked up by customers and title has transferred, subject to an allowance for estimated returns, discounts and allowances that we estimate based upon historical information. We recorded a reserve for estimated returns, discounts and allowances of approximately $30.0 million and $26.6 million at September 30, 2014 and December 31, 2013, respectively. We present taxes assessed by governmental authorities collected from customers on a net basis. Therefore, the taxes are excluded from revenue on our Unaudited Condensed Consolidated Statements of Income and are shown as a current liability on our Unaudited Condensed Consolidated Balance Sheets until remitted. We recognize revenue from the sale of scrap, cores and other metals when title has transferred, which typically occurs upon delivery to the customer.

Receivables and Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

We recorded a reserve for uncollectible accounts of approximately $19.1 million and $14.4 million at September 30, 2014 and December 31, 2013, respectively.

Inventory

Inventory consists of the following (in thousands):



	September 30,		December 31,
	2014		2013
Aftermarket and refurbished products	$	944,451	$	706,600
Salvage and remanufactured products	396,874		370,352
	$	1,341,325	$	1,076,952

Our acquisitions completed during the first nine months of 2014 and adjustments to preliminary valuations of inventory for certain of our 2013 acquisitions contributed $217.3 million of the increase in our aftermarket and refurbished products inventory and $13.0 million of the increase in our salvage and remanufactured products inventory during the nine months ended September 30, 2014. See Note 8, "Business Combinations," for further information on our acquisitions.

Intangible Assets

Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer relationships, software and other technology related assets and covenants not to compete.

The changes in the carrying amount of goodwill by reportable segment during the nine months ended September 30, 2014 are as follows (in thousands):



	North America			Europe			Specialty		Total
Balance as of January 1, 2014	$	1,358,937		$	578,507		$	—	$	1,937,444
Business acquisitions and adjustments to previously recorded goodwill	44,981			73,959			233,998		352,938
Exchange rate effects	(6,332		)	(26,898		)	1		(33,229		)
Balance as of September 30, 2014	$	1,397,586		$	625,568		$	233,999	$	2,257,153

The components of other intangibles are as follows (in thousands):



	September 30, 2014							December 31, 2013
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Trade names and trademarks	$	165,262	$	(33,643	)	$	131,619	$	143,577	$	(27,950	)	$	115,627
Customer relationships	71,345		(21,906		)	49,439		29,583		(10,770		)	18,813
Software and other technology related assets	45,513		(8,657		)	36,856		20,384		(2,718		)	17,666
Covenants not to compete	6,199		(3,064		)	3,135		3,979		(2,346		)	1,633
	$	288,319	$	(67,270	)	$	221,049	$	197,523	$	(43,784	)	$	153,739

During the nine months ended September 30, 2014, we recorded preliminary intangible asset valuations resulting from our 2014 acquisitions and adjustments to certain preliminary intangible asset valuations from our 2013 acquisitions, which included $24.7 million of trade names, $42.8 million of customer relationships, $26.8 million of software and other technology related assets and $2.4 million of covenants not to compete. The trade names, customer relationships, and software and technology related assets recorded in the nine months ended September 30, 2014 included $20.9 million, $23.1 million and $26.8 million, respectively, related to our acquisition of Keystone Specialty, as discussed in Note 8, "Business Combinations."

Trade names and trademarks are amortized over a useful life ranging from 10 to 30 years on a straight-line basis. Customer relationships are amortized over the expected period to be benefited (5 to 15 years) on an accelerated basis. Software and other technology related assets are amortized on a straight-line basis over the expected period to be benefited (five to six years). Covenants not to compete are amortized over the lives of the respective agreements, which range from one to five years, on a straight-line basis. Amortization expense for intangibles was $24.4 million and $9.0 million during the nine month periods ended September 30, 2014 and 2013, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2018 is $32.4 million, $29.4 million, $26.1 million, $23.7 million and $18.7 million, respectively.

Warranty Reserve

Some of our salvage mechanical products are sold with a standard six month warranty against defects. Additionally, some of our remanufactured engines are sold with a standard three year warranty against defects. We also provide a limited lifetime warranty for certain of our aftermarket products that is supported by certain of the suppliers of those products. We record the estimated warranty costs at the time of sale using historical warranty claim information to project future warranty claims activity. The changes in the warranty reserve during the nine month period ended September 30, 2014 were as follows (in thousands):



Balance as of January 1, 2014	$	12,447
Warranty expense	22,890
Warranty claims	(20,514		)
Balance as of September 30, 2014	$	14,823

Investment in Unconsolidated Subsidiary

Investments in Unconsolidated Subsidiaries

As of September 30, 2014, the carrying value of our investments in unconsolidated subsidiaries was $9.5 million; of this amount, $7.6 million relates to our investment in ACM Parts Pty Ltd ("ACM Parts"). In August 2013, we entered into an agreement with Suncorp Group, a leading general insurance group in Australia and New Zealand, to develop ACM Parts, an alternative vehicle replacement parts business in those countries. We hold a 49% equity interest in the entity and will contribute our experience to help establish automotive parts recycling operations and to facilitate the procurement of aftermarket parts; Suncorp Group holds a 51% equity interest and will supply salvage vehicles to the venture as well as assist in establishing relationships with repair shops as customers. We are accounting for our interest in this subsidiary using the equity method of accounting, as our investment gives us the ability to exercise significant influence, but not control, over the investee. The total of our investment in ACM Parts and other unconsolidated subsidiaries is included within Other Assets on our Unaudited Condensed Consolidated Balance Sheets. Our equity in the net earnings of the investees for the three and nine months ended September 30, 2014 was not material.

Depreciation Expense

Included in Cost of Goods Sold on the Unaudited Condensed Consolidated Statements of Income is depreciation expense associated with our refurbishing, remanufacturing, and furnace operations as well as our distribution centers.

New Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). This update outlines a new comprehensive revenue recognition model which supersedes most current revenue recognition guidance, and requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Entities adopting the standard have the option of using either a full retrospective or modified retrospective approach in the application of this guidance. ASU 2014-09 will be effective for the Company during the first quarter of our fiscal year 2017. Early adoption is not permitted. We are still evaluating the impact that ASU 2014-09 will have on our consolidated financial statements and related disclosures.

In June 2014, the FASB issued Accounting Standards Update 2014-12, "Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period" ("ASU 2014-12"). This update requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition, and requires the recognition of compensation cost in the period in which it becomes probable that the performance target will be achieved. ASU 2014-12 will be effective for the Company during the first quarter of our fiscal year 2016. Early adoption is permitted. The new standard can be applied either prospectively to all awards granted or modified after the effective date or retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements as an adjustment to opening retained earnings. We do not anticipate the adoption of this guidance will have a material impact on our financial position, results of operations, cash flows, or disclosures.

Financial Statement Information (Tables)

Schedule Of Inventory

Inventory

Inventory consists of the following (in thousands):



	September 30,		December 31,
	2014		2013
Aftermarket and refurbished products	$	944,451	$	706,600
Salvage and remanufactured products	396,874		370,352
	$	1,341,325	$	1,076,952

Changes In Carrying Amount Of Goodwill

The changes in the carrying amount of goodwill by reportable segment during the nine months ended September 30, 2014 are as follows (in thousands):



	North America			Europe			Specialty		Total
Balance as of January 1, 2014	$	1,358,937		$	578,507		$	—	$	1,937,444
Business acquisitions and adjustments to previously recorded goodwill	44,981			73,959			233,998		352,938
Exchange rate effects	(6,332		)	(26,898		)	1		(33,229		)
Balance as of September 30, 2014	$	1,397,586		$	625,568		$	233,999	$	2,257,153

Components Of Other Intangibles

The components of other intangibles are as follows (in thousands):



	September 30, 2014							December 31, 2013
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Trade names and trademarks	$	165,262	$	(33,643	)	$	131,619	$	143,577	$	(27,950	)	$	115,627
Customer relationships	71,345		(21,906		)	49,439		29,583		(10,770		)	18,813
Software and other technology related assets	45,513		(8,657		)	36,856		20,384		(2,718		)	17,666
Covenants not to compete	6,199		(3,064		)	3,135		3,979		(2,346		)	1,633
	$	288,319	$	(67,270	)	$	221,049	$	197,523	$	(43,784	)	$	153,739

Changes In Warranty Reserve

The changes in the warranty reserve during the nine month period ended September 30, 2014 were as follows (in thousands):



Balance as of January 1, 2014	$	12,447
Warranty expense	22,890
Warranty claims	(20,514		)
Balance as of September 30, 2014	$	14,823

Equity Incentive Plans (Tables)

Summary Of Transactions In Stock-Based Compensation Plans

A summary of transactions in our stock-based compensation plans is as follows:



	Shares Available For Grant		RSUs				Stock Options				Restricted Stock
	Shares Available For Grant		Number Outstanding		Weighted Average Grant Date Fair Value		Number Outstanding		Weighted Average Exercise Price		Number Outstanding		Weighted Average Grant Date Fair Value
Balance, January 1, 2014	13,965,440		2,558,213		$	16.63	6,832,331		$	7.04	20,000		$	9.30
Granted	(791,652	)	664,897		31.82		126,755		32.31		—		—
Exercised	—		—		—		(1,250,620	)	5.21		—		—
Vested	—		(975,462	)	17.01		—		—		(10,000	)	9.30
Canceled	142,887		(89,138	)	20.49		(53,749	)	13.42		—		—
Balance, September 30, 2014	13,316,675		2,158,510		$	20.98	5,654,717		$	7.95	10,000		$	9.30

Schedule Of Pre-Tax Stock-Based Compensation Expense

The components of pre-tax stock-based compensation expense are as follows (in thousands):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
RSUs	$	4,434	$	4,559	$	14,625	$	12,674
Stock options	703		1,124		2,203		3,457
Restricted stock	47		47		139		161
Total stock-based compensation expense	$	5,184	$	5,730	$	16,967	$	16,292

Schedule Of Stock-Based Compensation Expense Included In Statements Of Income

The following table sets forth the classification of total stock-based compensation expense included in our Unaudited Condensed Consolidated Statements of Income (in thousands):



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Cost of goods sold	$	105		$	98		$	308		$	294
Facility and warehouse expenses	527			687			1,672			2,058
Selling, general and administrative expenses	4,552			4,945			14,987			13,940
	5,184			5,730			16,967			16,292
Income tax benefit	(1,996		)	(2,235		)	(6,532		)	(6,354		)
Total stock-based compensation expense, net of tax	$	3,188		$	3,495		$	10,435		$	9,938

Schedule Of Stock-Based Compensation Expense Expected To Be Recognized

As of September 30, 2014, unrecognized compensation expense related to unvested RSUs and stock options is expected to be recognized as follows (in thousands):



	RSUs		Stock Options		Total
Remainder of 2014	$	4,292	$	724	$	5,016
2015	13,459		396		13,855
2016	8,433		331		8,764
2017	5,049		9		5,058
2018	2,553		—		2,553
2019	110		—		110
Total unrecognized compensation expense	$	33,896	$	1,460	$	35,356

Long-Term Obligations (Tables)

Schedule Of Long-Term Obligations

Long-Term Obligations consist of the following (in thousands):



	September 30,			December 31,
	2014			2013
Senior secured credit agreement:
Term loans payable	$	438,750		$	438,750
Revolving credit facility	693,299			233,804
Senior notes	600,000			600,000
Receivables securitization facility	80,000			—
Notes payable through October 2018 at weighted average interest rates of 1.1%	53,994			15,730
Other long-term debt at weighted average interest rates of 2.9% and 3.5%, respectively	31,998			17,497
	1,898,041			1,305,781
Less current maturities	(72,908		)	(41,535		)
	$	1,825,133		$	1,264,246

Derivative Instruments and Hedging Activities (Tables)

Terms Of Interest Rate Swap Agreements

The following table summarizes the notional amounts and fair values of our designated cash flow hedges as of September 30, 2014 and December 31, 2013 (in thousands):



	Notional Amount				Fair Value at September 30, 2014 (USD)		Fair Value at December 31, 2013 (USD)
	September 30, 2014		December 31, 2013		Other Noncurrent Liabilities		Other Accrued Expenses		Other Noncurrent Liabilities
Interest rate swap agreements
USD denominated	$	420,000	$	420,000	$	5,128	$	—	$	8,099
GBP denominated	£	50,000	£	50,000	396		—		345
CAD denominated	C$	25,000	C$	25,000	32		—		26
Foreign currency forward contracts
EUR denominated	€	—	€	149,976	—		11,632		—
GBP denominated	£	—	£	70,000	—		10,186		—
Total cash flow hedges					$	5,556	$	21,818	$	8,470

Fair Value Measurements (Tables)

Financial Assets And Liabilities Measured At Fair Value On A Recurring Basis

The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation inputs we utilized to determine such fair value as of September 30, 2014 and December 31, 2013 (in thousands):



	Balance as of September 30, 2014		Fair Value Measurements as of September 30, 2014
	Balance as of September 30, 2014		Level 1		Level 2		Level 3
Assets:
Cash surrender value of life insurance policies	$	26,438	$	—	$	26,438	$	—
Total Assets	$	26,438	$	—	$	26,438	$	—
Liabilities:
Contingent consideration liabilities	$	7,301	$	—	$	—	$	7,301
Deferred compensation liabilities	25,834		—		25,834		—
Interest rate swaps	5,556		—		5,556		—
Total Liabilities	$	38,691	$	—	$	31,390	$	7,301



	Balance as of December 31, 2013		Fair Value Measurements as of December 31, 2013
	Balance as of December 31, 2013		Level 1		Level 2		Level 3
Assets:
Cash surrender value of life insurance policies	$	25,745	$	—	$	25,745	$	—
Total Assets	$	25,745	$	—	$	25,745	$	—
Liabilities:
Contingent consideration liabilities	$	55,653	$	—	$	—	$	55,653
Deferred compensation liabilities	25,232		—		25,232		—
Foreign currency forward contracts	21,818		—		21,818		—
Interest rate swaps	8,470		—		8,470		—
Total Liabilities	$	111,173	$	—	$	55,520	$	55,653

Significant Unobservable Inputs Used In Fair Value Measurements

The significant unobservable inputs used in the fair value measurements of our Level 3 contingent consideration liabilities were as follows:



	September 30,		December 31,
	2014		2013
Unobservable Input	(Weighted Average)
Probability of achieving payout targets	78.7	%	70.6	%
Discount rate	7.5	%	6.5	%

Changes In Fair Value Of Contingent Consideration Obligations

Changes in the fair value of our contingent consideration obligations are as follows (in thousands):



	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2014			2013		2014			2013
Beginning Balance	$	8,762		$	49,473	$	55,653		$	90,009
Contingent consideration liabilities recorded for business acquisitions	(1,203		)	1,204		5,854			3,854
Payments	—			—		(52,305		)	(38,349		)
Increase (decrease) in fair value included in earnings	12			712		(2,000		)	1,765
Exchange rate effects	(270		)	3,096		99			(2,794		)
Ending Balance	$	7,301		$	54,485	$	7,301		$	54,485

Commitments and Contingencies (Tables)

Future Minimum Lease Commitments

The future minimum lease commitments under these leases at September 30, 2014 are as follows (in thousands):



Three months ending December 31, 2014	$	35,353
Years ending December 31:
2015	134,572
2016	114,205
2017	95,568
2018	78,838
2019	63,638
Thereafter	251,142
Future Minimum Lease Payments	$	773,316

Business Combinations (Tables)

Purchase Price Allocations For Acquisitions

The preliminary purchase price allocations for the acquisitions completed during the nine months ended September 30, 2014 and the year ended December 31, 2013 are as follows (in thousands):



	Nine Months Ended									Year Ended
	September 30, 2014									December 31, 2013
	Keystone Specialty			Other Acquisitions			Total			Sator			Other Acquisitions			Total
Receivables	$	48,473		$	57,191		$	105,664		$	61,639		$	38,685		$	100,324
Receivable reserves	(4,403		)	(2,817		)	(7,220		)	(8,563		)	(3,246		)	(11,809		)
Inventory	151,013			79,260			230,273			71,784			26,455			98,239
Income taxes receivable	13,972			—			13,972			—			—			—
Prepaid expenses and other current assets	8,339			3,266			11,605			7,184			1,933			9,117
Property and equipment	38,080			16,389			54,469			19,484			14,015			33,499
Goodwill	233,998			118,940			352,938			142,721			92,726			235,447
Other intangibles	70,830			25,897			96,727			45,293			12,353			57,646
Other assets	7,805			5,623			13,428			2,049			1,251			3,300
Deferred income taxes	(17,418		)	429			(16,989		)	(14,100		)	(564		)	(14,664		)
Current liabilities assumed	(65,439		)	(34,880		)	(100,319		)	(49,593		)	(36,799		)	(86,392		)
Debt assumed	—			(26,425		)	(26,425		)	—			(664		)	(664		)
Other noncurrent liabilities assumed	(14,147		)	(9,282		)	(23,429		)	(5,074		)	—			(5,074		)
Contingent consideration liabilities	—			(5,854		)	(5,854		)	—			(3,854		)	(3,854		)
Other purchase price obligations	(12,553		)	(313		)	(12,866		)	—			(214		)	(214		)
Notes issued	(31,500		)	(11,842		)	(43,342		)	—			(7,482		)	(7,482		)
Settlement of pre-existing balances	—			(4,922		)	(4,922		)	—			—			—
Cash used in acquisitions, net of cash acquired	$	427,050		$	210,660		$	637,710		$	272,824		$	134,595		$	407,419

Pro Forma Effect Of Businesses Acquired

The following pro forma summary presents the effect of the businesses acquired during the nine months ended September 30, 2014 as though they had been acquired as of January 1, 2013 and the businesses acquired during the year ended December 31, 2013 as though they had been acquired as of January 1, 2012. The pro forma adjustments are based upon unaudited financial information of the acquired entities (in thousands, except per share data):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Revenue, as reported	$	1,721,024	$	1,298,094	$	5,055,933	$	3,745,839
Revenue of purchased businesses for the period prior to acquisition:
Keystone Specialty	—		177,324		3,443		540,826
Sator	—		—		—		126,309
Other acquisitions	4,815		101,971		116,326		371,312
Pro forma revenue	$	1,725,839	$	1,577,389	$	5,175,702	$	4,784,286

Net income, as reported	$	91,515	$	73,445	$	301,050	$	233,759
Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments:
Keystone Specialty	180		7,142		514		24,769
Sator	—		—		—		5,712
Other acquisitions	3,623		5,059		8,053		11,505
Pro forma net income	$	95,318	$	85,646	$	309,617	$	275,745

Earnings per share-basic, as reported	$	0.30	$	0.24	$	1.00	$	0.78
Effect of purchased businesses for the period prior to acquisition:
Keystone Specialty	0.00		0.02		0.00		0.08
Sator	—		—		—		0.02
Other acquisitions	0.01		0.02		0.03		0.04
Pro forma earnings per share-basic ^(a)	$	0.31	$	0.29	$	1.03	$	0.92

Earnings per share-diluted, as reported	$	0.30	$	0.24	$	0.98	$	0.77
Effect of purchased businesses for the period prior to acquisition:
Keystone Specialty	0.00		0.02		0.00		0.08
Sator	—		—		—		0.02
Other acquisitions	0.01		0.02		0.03		0.04
Pro forma earnings per share-diluted ^(a)	$	0.31	$	0.28	$	1.01	$	0.91

(a) The sum of the individual earnings per share amounts may not equal the total due to rounding.

Earnings Per Share (Tables)

Computation Of Earnings Per Share

The following chart sets forth the computation of earnings per share (in thousands, except per share amounts):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Net Income	$	91,515	$	73,445	$	301,050	$	233,759
Denominator for basic earnings per share—Weighted-average shares outstanding	302,724		300,223		302,058		299,213
Effect of dilutive securities:
RSUs	658		883		804		775
Stock options	2,817		3,564		2,988		3,765
Restricted stock	7		15		7		18
Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding	306,206		304,685		305,857		303,771
Earnings per share, basic	$	0.30	$	0.24	$	1.00	$	0.78
Earnings per share, diluted	$	0.30	$	0.24	$	0.98	$	0.77

Schedule Of Antidilutive Securities Excluded From Computation Of Diluted Earnings Per Share



	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2014	2013	2014	2013
Antidilutive securities:
RSUs	389	—	265	—
Stock Options	115	—	120	—

Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) (Tables)

Schedule Of Accumulated Other Comprehensive Income (Loss)

The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):



	Three Months Ended												Three Months Ended
	September 30, 2014												September 30, 2013
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Change in Unrealized Gain on Pension Plan			Accumulated Other Comprehensive Income (Loss)			Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Accumulated Other Comprehensive Income (Loss)
Beginning balance	$	40,222		$	(4,346	)	$	634		$	36,510		$	(11,334	)	$	(6,730	)	$	(18,064	)
Pretax income (loss)	(39,329		)	(186		)	—			(39,515		)	28,514			(15,315		)	13,199
Income tax effect	—			(7		)	—			(7		)	—			5,647			5,647
Reclassification of unrealized loss (gain)	—			1,554			(39		)	1,515			—			15,956			15,956
Reclassification of deferred income taxes	—			(544		)	9			(535		)	—			(5,849		)	(5,849		)
Hedge ineffectiveness	—			—			—			—			—			293			293
Income tax effect	—			—			—			—			—			(107		)	(107		)
Ending balance	$	893		$	(3,529	)	$	604		$	(2,032	)	$	17,180		$	(6,105	)	$	11,075



	Nine Months Ended												Nine Months Ended
	September 30, 2014												September 30, 2013
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Change in Unrealized Gain on Pension Plan			Accumulated Other Comprehensive Income (Loss)			Foreign Currency Translation		Unrealized Gain (Loss) on Cash Flow Hedges			Accumulated Other Comprehensive Income (Loss)
Beginning balance	$	24,906		$	(5,596	)	$	701		$	20,011		$	10,850	$	(10,091	)	$	759
Pretax income (loss)	(24,013		)	(362		)	—			(24,375		)	6,330		(14,170		)	(7,840		)
Income tax effect	—			39			—			39			—		5,305			5,305
Reclassification of unrealized loss (gain)	—			3,647			(129		)	3,518			—		19,771			19,771
Reclassification of deferred income taxes	—			(1,257		)	32			(1,225		)	—		(7,211		)	(7,211		)
Hedge ineffectiveness	—			—			—			—			—		460			460
Income tax effect	—			—			—			—			—		(169		)	(169		)
Ending balance	$	893		$	(3,529	)	$	604		$	(2,032	)	$	17,180	$	(6,105	)	$	11,075

Segment and Geographic Information (Tables)

Schedule Of Financial Performance By Reportable Segment

The following tables present our financial performance by reportable segment for the periods indicated (in thousands):



	North America		Europe		Specialty		Eliminations			Consolidated
Three Months Ended September 30, 2014
Revenue:
Third Party	$	1,024,835	$	495,776	$	200,413	$	—		$	1,721,024
Intersegment	132		—		594		(726		)	—
Total segment revenue	$	1,024,967	$	495,776	$	201,007	$	(726	)	$	1,721,024
Segment EBITDA	$	131,851	$	41,726	$	17,977	$	—		$	191,554
Depreciation and amortization	18,029		9,411		4,314		—			31,754
Three Months Ended September 30, 2013
Revenue:
Third Party	$	928,307	$	369,787	$	—	$	—		$	1,298,094
Intersegment	—		—		—		—			—
Total segment revenue	$	928,307	$	369,787	$	—	$	—		$	1,298,094
Segment EBITDA	$	108,863	$	40,457	$	—	$	—		$	149,320
Depreciation and amortization	16,417		5,740		—		—			22,157



	North America		Europe		Specialty		Eliminations			Consolidated
Nine Months Ended September 30, 2014
Revenue:
Third Party	$	3,080,090	$	1,380,663	$	595,180	$	—		$	5,055,933
Intersegment	266		—		1,250		(1,516		)	—
Total segment revenue	$	3,080,356	$	1,380,663	$	596,430	$	(1,516	)	$	5,055,933
Segment EBITDA	$	415,139	$	128,826	$	64,137				$	608,102
Depreciation and amortization	52,682		24,868		13,097		—			90,647
Nine Months Ended September 30, 2013
Revenue:
Third Party	$	2,865,613	$	880,226	$	—	$	—		$	3,745,839
Intersegment	—		—		—		—			—
Total segment revenue	$	2,865,613	$	880,226	$	—	$	—		$	3,745,839
Segment EBITDA	$	363,411	$	103,946	$	—	$	—		$	467,357
Depreciation and amortization	48,555		13,313		—		—			61,868

Reconciliation Of Earnings Before Interest Taxes Depreciation And Amortization To Net Income Table [Text Block]



	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2014			2013		2014			2013
Segment EBITDA	$	191,554		$	149,320	$	608,102		$	467,357
Deduct:
Restructuring and acquisition related expenses⁽¹⁾	3,594			2,206		12,816			7,391
Change in fair value of contingent consideration liabilities ⁽²⁾	12			712		(2,000		)	1,765
Add:
Equity in earnings of unconsolidated subsidiaries	(721		)	—		(1,199		)	—
EBITDA	187,227			146,402		596,087			458,201
Depreciation and amortization	31,754			22,157		90,647			61,868
Interest expense, net	16,394			15,200		48,140			36,287
Loss on debt extinguishment	—			—		324			2,795
Provision for income taxes	47,564			35,600		155,926			123,492
Net income	$	91,515		$	73,445	$	301,050		$	233,759

Schedule Of Capital Expenditures By Reportable Segment

The following table presents capital expenditures, which includes additions to property and equipment, by reportable segment (in thousands):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Capital Expenditures
North America	$	20,986	$	14,960	$	61,262	$	48,662
Europe	8,652		6,015		32,927		12,464
Specialty	3,222		—		6,002		—
	$	32,860	$	20,975	$	100,191	$	61,126

Schedule Of Assets By Reportable Segment

The following table presents assets by reportable segment (in thousands):



	September 30, 2014		December 31, 2013
Receivables, net
North America	$	318,575	$	277,395
Europe	235,791		180,699
Specialty	55,068		—
Total receivables, net	609,434		458,094
Inventory
North America	787,884		748,167
Europe	389,941		328,785
Specialty	163,500		—
Total inventory	1,341,325		1,076,952
Property and Equipment, net
North America	449,824		447,528
Europe	123,211		99,123
Specialty	39,257		—
Total property and equipment, net	612,292		546,651
Other unallocated assets	2,971,527		2,437,077
Total assets	$	5,534,578	$	4,518,774

Schedule Of Revenue By Geographic Area

The following table sets forth our revenue by geographic area (in thousands):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Revenue
United States	$	1,126,468	$	868,052	$	3,369,636	$	2,672,545
United Kingdom	349,012		266,384		1,003,889		708,089
Other countries	245,544		163,658		682,408		365,205
	$	1,721,024	$	1,298,094	$	5,055,933	$	3,745,839

Schedule Of Tangible Long-Lived Assets By Geographic Area

The following table sets forth our tangible long-lived assets by geographic area (in thousands):



	September 30, 2014		December 31, 2013
Long-lived Assets
United States	$	456,556	$	418,869
United Kingdom	92,365		77,827
Other countries	63,371		49,955
	$	612,292	$	546,651

Schedule Of Revenue By Product Category

The following table sets forth our revenue by product category (in thousands):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Aftermarket, other new and refurbished products	$	1,171,706	$	793,925	$	3,445,376	$	2,199,009
Recycled, remanufactured and related products and services	371,632		349,411		1,108,376		1,060,681
Other	177,686		154,758		502,181		486,149
	$	1,721,024	$	1,298,094	$	5,055,933	$	3,745,839

Condensed Consolidating Financial Information (Tables)

Condensed Consolidating Balance Sheets

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Balance Sheets (In thousands)

	September 30, 2014
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current Assets:
Cash and equivalents	$	145,431	$	26,855	$	72,360	$	—		$	244,646
Receivables, net	77		223,767		385,590		—			609,434
Intercompany receivables, net	6,331		—		13,829		(20,160		)	—
Inventory	—		885,665		455,660		—			1,341,325
Deferred income taxes	3,071		67,560		3,366		—			73,997
Prepaid expenses and other current assets	10,284		33,661		32,191		—			76,136
Total Current Assets	165,194		1,237,508		962,996		(20,160		)	2,345,538
Property and Equipment, net	534		457,975		153,783		—			612,292
Intangible Assets:
Goodwill	—		1,518,384		738,769		—			2,257,153
Other intangibles, net	—		126,522		94,527		—			221,049
Investment in Subsidiaries	2,958,048		285,996		—		(3,244,044		)	—
Intercompany Notes Receivable	619,070		32,207		—		(651,277		)	—
Other Assets	50,433		27,235		25,963		(5,085		)	98,546
Total Assets	$	3,793,279	$	3,685,827	$	1,976,038	$	(3,920,566	)	$	5,534,578
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	501	$	180,877	$	222,209	$	—		$	403,587
Intercompany payables, net	—		13,829		6,331		(20,160		)	—
Accrued expenses:
Accrued payroll-related liabilities	7,054		54,794		26,234		—			88,082
Sales taxes payable	—		6,545		38,553		—			45,098
Other accrued expenses	11,434		76,371		40,033		—			127,838
Contingent consideration liabilities	—		1,727		561		—			2,288
Other current liabilities	1,127		12,816		17,644		—			31,587
Current portion of long-term obligations	55,000		4,452		13,456		—			72,908
Total Current Liabilities	75,116		351,411		365,021		(20,160		)	771,388
Long-Term Obligations, Excluding Current Portion	1,016,429		6,423		802,281		—			1,825,133
Intercompany Notes Payable	—		558,691		92,586		(651,277		)	—
Deferred Income Taxes	—		137,785		26,570		(5,085		)	159,270
Other Noncurrent Liabilities	34,040		63,314		13,739		—			111,093
Stockholders’ Equity	2,667,694		2,568,203		675,841		(3,244,044		)	2,667,694
Total Liabilities and Stockholders’ Equity	$	3,793,279	$	3,685,827	$	1,976,038	$	(3,920,566	)	$	5,534,578

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Balance Sheets (In thousands)

	December 31, 2013
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current Assets:
Cash and equivalents	$	77,926	$	13,693	$	58,869	$	—		$	150,488
Receivables, net	—		126,926		331,168		—			458,094
Intercompany receivables, net	2,275		6,923		—		(9,198		)	—
Inventory	—		687,164		389,788		—			1,076,952
Deferred income taxes	3,189		57,422		3,327		—			63,938
Prepaid expenses and other current assets	7,924		24,190		18,231		—			50,345
Total Current Assets	91,314		916,318		801,383		(9,198		)	1,799,817
Property and Equipment, net	668		419,617		126,366		—			546,651
Intangible Assets:
Goodwill	—		1,248,746		688,698		—			1,937,444
Other intangibles, net	—		56,069		97,670		—			153,739
Investment in Subsidiaries	2,364,586		264,815		—		(2,629,401		)	—
Intercompany Notes Receivable	959,185		118,740		—		(1,077,925		)	—
Other Assets	49,218		20,133		17,241		(5,469		)	81,123
Total Assets	$	3,464,971	$	3,044,438	$	1,731,358	$	(3,721,993	)	$	4,518,774
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	314	$	147,708	$	201,047	$	—		$	349,069
Intercompany payables, net	—		—		9,198		(9,198		)	—
Accrued expenses:
Accrued payroll-related liabilities	5,236		32,850		20,609		—			58,695
Sales taxes payable	—		5,694		25,007		—			30,701
Other accrued expenses	26,714		51,183		31,476		—			109,373
Contingent consideration liabilities	—		1,923		50,542		—			52,465
Other current liabilities	2,803		13,039		20,273		—			36,115
Current portion of long-term obligations	24,421		3,030		14,084		—			41,535
Total Current Liabilities	59,488		255,427		372,236		(9,198		)	677,953
Long-Term Obligations, Excluding Current Portion	1,016,249		6,554		241,443		—			1,264,246
Intercompany Notes Payable	—		611,274		466,651		(1,077,925		)	—
Deferred Income Taxes	—		110,110		29,181		(5,469		)	133,822
Other Noncurrent Liabilities	38,489		46,417		7,102		—			92,008
Stockholders’ Equity	2,350,745		2,014,656		614,745		(2,629,401		)	2,350,745
Total Liabilities and Stockholders’ Equity	$	3,464,971	$	3,044,438	$	1,731,358	$	(3,721,993	)	$	4,518,774

Condensed Consolidating Statements of Income

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)

	For the Three Months Ended September 30, 2014
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	1,165,794		$	588,852		$	(33,622	)	$	1,721,024
Cost of goods sold	—			709,985			380,250			(33,622		)	1,056,613
Gross margin	—			455,809			208,602			—			664,411
Facility and warehouse expenses	—			95,619			37,711			—			133,330
Distribution expenses	—			98,457			50,115			—			148,572
Selling, general and administrative expenses	5,178			114,926			72,125			—			192,229
Restructuring and acquisition related expenses	—			882			2,712			—			3,594
Depreciation and amortization	50			19,592			10,856			—			30,498
Operating (loss) income	(5,228		)	126,333			35,083			—			156,188
Other expense (income):
Interest expense, net	12,338			71			3,985			—			16,394
Intercompany interest (income) expense, net	(12,638		)	6,207			6,431			—			—
Change in fair value of contingent consideration liabilities	—			54			(42		)	—			12
Other expense (income), net	155			(1,164		)	991			—			(18		)
Total other (income) expense, net	(145		)	5,168			11,365			—			16,388
(Loss) income before (benefit) provision for income taxes	(5,083		)	121,165			23,718			—			139,800
(Benefit) provision for income taxes	(1,363		)	43,986			4,941			—			47,564
Equity in earnings of unconsolidated subsidiaries	—			20			(741		)	—			(721		)
Equity in earnings of subsidiaries	95,235			6,151			—			(101,386		)	—
Net income	$	91,515		$	83,350		$	18,036		$	(101,386	)	$	91,515

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)

	For the Three Months Ended September 30, 2013
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	876,862		$	450,505		$	(29,273	)	$	1,298,094
Cost of goods sold	—			522,176			287,284			(29,273		)	780,187
Gross margin	—			354,686			163,221			—			517,907
Facility and warehouse expenses	—			79,565			28,784			—			108,349
Distribution expenses	—			73,752			35,841			—			109,593
Selling, general and administrative expenses	6,813			93,549			53,184			—			153,546
Restructuring and acquisition related expenses	—			411			1,795			—			2,206
Depreciation and amortization	65			14,014			6,739			—			20,818
Operating (loss) income	(6,878		)	93,395			36,878			—			123,395
Other expense (income):
Interest expense, net	13,335			81			1,784			—			15,200
Intercompany interest (income) expense, net	(13,028		)	5,593			7,435			—			—
Change in fair value of contingent consideration liabilities	—			(72		)	784			—			712
Other expense (income), net	45			(912		)	(695		)	—			(1,562		)
Total other expense, net	352			4,690			9,308			—			14,350
(Loss) income before (benefit) provision for income taxes	(7,230		)	88,705			27,570			—			109,045
(Benefit) provision for income taxes	(2,867		)	33,973			4,494			—			35,600
Equity in earnings of subsidiaries	77,808			5,656			—			(83,464		)	—
Net income	$	73,445		$	60,388		$	23,076		$	(83,464	)	$	73,445

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)

	For the Nine Months Ended September 30, 2014
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	3,486,098		$	1,665,247		$	(95,412	)	$	5,055,933
Cost of goods sold	—			2,107,866			1,056,125			(95,412		)	3,068,579
Gross margin	—			1,378,232			609,122			—			1,987,354
Facility and warehouse expenses	—			281,805			106,190			—			387,995
Distribution expenses	—			291,187			141,258			—			432,445
Selling, general and administrative expenses	20,188			342,038			201,118			—			563,344
Restructuring and acquisition related expenses	—			7,366			5,450			—			12,816
Depreciation and amortization	168			58,556			28,412			—			87,136
Operating (loss) income	(20,356		)	397,280			126,694			—			503,618
Other expense (income):
Interest expense, net	38,583			186			9,371			—			48,140
Intercompany interest (income) expense, net	(35,828		)	16,279			19,549			—			—
Loss on debt extinguishment	324			—			—			—			324
Change in fair value of contingent consideration liabilities	—			(2,183		)	183			—			(2,000		)
Other expense (income), net	81			(4,542		)	3,440			—			(1,021		)
Total other expense, net	3,160			9,740			32,543			—			45,443
(Loss) income before (benefit) provision for income taxes	(23,516		)	387,540			94,151			—			458,175
(Benefit) provision for income taxes	(8,665		)	144,725			19,866			—			155,926
Equity in earnings of unconsolidated subsidiaries	—			35			(1,234		)	—			(1,199		)
Equity in earnings of subsidiaries	315,901			24,528			—			(340,429		)	—
Net income	$	301,050		$	267,378		$	73,051		$	(340,429	)	$	301,050

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)

	For the Nine Months Ended September 30, 2013
	Parent			Guarantors			Non-Guarantors		Eliminations			Consolidated
Revenue	$	—		$	2,698,008		$	1,133,369	$	(85,538	)	$	3,745,839
Cost of goods sold	—			1,593,764			707,884		(85,538		)	2,216,110
Gross margin	—			1,104,244			425,485		—			1,529,729
Facility and warehouse expenses	—			240,389			71,091		—			311,480
Distribution expenses	—			224,266			95,767		—			320,033
Selling, general and administrative expenses	20,130			282,364			134,120		—			436,614
Restructuring and acquisition related expenses	—			750			6,641		—			7,391
Depreciation and amortization	187			41,568			16,095		—			57,850
Operating (loss) income	(20,317		)	314,907			101,771		—			396,361
Other expense (income):
Interest expense, net	29,589			621			6,077		—			36,287
Intercompany interest (income) expense, net	(34,318		)	16,901			17,417		—			—
Loss on debt extinguishment	2,795			—			—		—			2,795
Change in fair value of contingent consideration liabilities	—			(936		)	2,701		—			1,765
Other expense (income), net	172			(2,380		)	471		—			(1,737		)
Total other (income) expense, net	(1,762		)	14,206			26,666		—			39,110
(Loss) income before (benefit) provision for income taxes	(18,555		)	300,701			75,105		—			357,251
(Benefit) provision for income taxes	(7,199		)	115,625			15,066		—			123,492
Equity in earnings of subsidiaries	245,115			15,496			—		(260,611		)	—
Net income	$	233,759		$	200,572		$	60,039	$	(260,611	)	$	233,759

Condensed Consolidating Statements of Comprehensive Income (Loss)

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (Loss) (In thousands)

	For the Three Months Ended September 30, 2014
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net income	$	91,515		$	83,350		$	18,036		$	(101,386	)	$	91,515
Other comprehensive (loss) income, net of tax:
Foreign currency translation	(39,329		)	(14,554		)	(37,922		)	52,476			(39,329		)
Net change in unrecognized gains/losses on derivative instruments, net of tax	817			—			(229		)	229			817
Change in unrealized gain on pension plan, net of tax	(30		)	—			(30		)	30			(30		)
Total other comprehensive loss	(38,542		)	(14,554		)	(38,181		)	52,735			(38,542		)
Total comprehensive income (loss)	$	52,973		$	68,796		$	(20,145	)	$	(48,651	)	$	52,973

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands)

	For the Three Months Ended September 30, 2013
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
Net income	$	73,445	$	60,388	$	23,076	$	(83,464	)	$	73,445
Other comprehensive income, net of tax:
Foreign currency translation	28,514		13,130		28,104		(41,234		)	28,514
Net change in unrecognized gains/losses on derivative instruments, net of tax	625		—		127		(127		)	625
Total other comprehensive income	29,139		13,130		28,231		(41,361		)	29,139
Total comprehensive income	$	102,584	$	73,518	$	51,307	$	(124,825	)	$	102,584

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands)

	For the Nine Months Ended September 30, 2014
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net income	$	301,050		$	267,378		$	73,051		$	(340,429	)	$	301,050
Other comprehensive (loss) income, net of tax:
Foreign currency translation	(24,013		)	(7,034		)	(22,610		)	29,644			(24,013		)
Net change in unrecognized gains/losses on derivative instruments, net of tax	2,067			—			(48		)	48			2,067
Change in unrealized gain on pension plan, net of tax	(97		)	—			(97		)	97			(97		)
Total other comprehensive loss	(22,043		)	(7,034		)	(22,755		)	29,789			(22,043		)
Total comprehensive income	$	279,007		$	260,344		$	50,296		$	(310,640	)	$	279,007

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands)

	For the Nine Months Ended September 30, 2013
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
Net income	$	233,759	$	200,572	$	60,039	$	(260,611	)	$	233,759
Other comprehensive income, net of tax:
Foreign currency translation	6,330		3,386		7,107		(10,493		)	6,330
Net change in unrecognized gains/losses on derivative instruments, net of tax	3,986		—		903		(903		)	3,986
Total other comprehensive income	10,316		3,386		8,010		(11,396		)	10,316
Total comprehensive income	$	244,075	$	203,958	$	68,049	$	(272,007	)	$	244,075

Condensed Consolidating Statements of Cash Flows

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Cash Flows (In thousands)

	For the Nine Months Ended September 30, 2014
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	264,870		$	361,218		$	(43,793	)	$	(259,653	)	$	322,642
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(37		)	(59,387		)	(40,767		)	—			(100,191		)
Proceeds from sales of property and equipment	—			1,218			1,956			—			3,174
Investments in unconsolidated subsidiaries	—			(600		)	(1,640		)	—			(2,240		)
Investment and intercompany note activity with subsidiaries	(197,714		)	(607		)	—			198,321			—
Acquisitions, net of cash acquired	—			(520,721		)	(129,893		)	—			(650,614		)
Net cash used in investing activities	(197,751		)	(580,097		)	(170,344		)	198,321			(749,871		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	6,520			—			—			—			6,520
Excess tax benefit from stock-based payments	14,455			—			—			—			14,455
Borrowings under revolving credit facility	693,000			—			606,821			—			1,299,821
Repayments under revolving credit facility	(693,000		)	—			(115,039		)	—			(808,039		)
Borrowings under term loans	11,250			—			—			—			11,250
Repayments under term loans	(11,250		)	—			—			—			(11,250		)
Borrowings under receivables securitization facility	—			—			80,000			—			80,000
Repayments of other long-term debt	(1,920		)	(2,104		)	(16,508		)	—			(20,532		)
Payments of other obligations	—			(407		)	(41,527		)	—			(41,934		)
Other financing activities, net	(18,669		)	12,340			(552		)	—			(6,881		)
Investment and intercompany note activity with parent	—			481,951			(283,630		)	(198,321		)	—
Dividends	—			(259,653		)	—			259,653			—
Net cash provided by financing activities	386			232,127			229,565			61,332			523,410
Effect of exchange rate changes on cash and equivalents	—			(86		)	(1,937		)	—			(2,023		)
Net increase in cash and equivalents	67,505			13,162			13,491			—			94,158
Cash and equivalents, beginning of period	77,926			13,693			58,869			—			150,488
Cash and equivalents, end of period	$	145,431		$	26,855		$	72,360		$	—		$	244,646

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Cash Flows (In thousands)

	For the Nine Months Ended September 30, 2013
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities	$	101,136		$	195,524		$	116,212		$	(71,943	)	$	340,929
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(1		)	(40,824		)	(20,301		)	—			(61,126		)
Proceeds from sales of property and equipment	—			1,032			427			—			1,459
Investment in unconsolidated subsidiary	—			—			(9,136		)	—			(9,136		)
Investment and intercompany note activity with subsidiaries	(418,205		)	(84,893		)	—			503,098			—
Acquisitions, net of cash acquired	—			(21,570		)	(374,404		)	—			(395,974		)
Net cash used in investing activities	(418,206		)	(146,255		)	(403,414		)	503,098			(464,777		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	13,647			—			—			—			13,647
Excess tax benefit from stock-based payments	15,998			—			—			—			15,998
Proceeds from issuance of senior notes	600,000			—			—			—			600,000
Borrowings under revolving credit facility	315,000			—			84,758			—			399,758
Repayments under revolving credit facility	(616,000		)	—			(129,313		)	—			(745,313		)
Borrowings under term loans	35,000			—			—			—			35,000
Repayments under term loans	(11,250		)	—			—			—			(11,250		)
Borrowings under receivables securitization facility	—			—			41,500			—			41,500
Repayments under receivables securitization facility	—			—			(111,500		)	—			(111,500		)
Repayments of other long-term debt	(925		)	(7,983		)	(10,610		)	—			(19,518		)
Payments of other obligations	—			(473		)	(31,618		)	—			(32,091		)
Other financing activities, net	(16,830		)	—			(82		)	—			(16,912		)
Investment and intercompany note activity with parent	—			25,095			478,003			(503,098		)	—
Dividends	—			(71,943		)	—			71,943			—
Net cash provided by (used in) financing activities	334,640			(55,304		)	321,138			(431,155		)	169,319
Effect of exchange rate changes on cash and equivalents	—			—			2,096			—			2,096
Net increase (decrease) in cash and equivalents	17,570			(6,035		)	36,032			—			47,567
Cash and equivalents, beginning of period	18,396			18,253			23,121			—			59,770
Cash and equivalents, end of period	$	35,966		$	12,218		$	59,153		$	—		$	107,337

Financial Statement Information - Additional Information (Details) (USD $)

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Dec. 31, 2013

Finite-Lived Intangible Assets

Reserve for estimated returns, discounts and allowances

$ 30,000,000

$ 26,600,000

Reserve for uncollectible accounts

19,100,000

14,400,000

Amortization expense

24,400,000

9,000,000

Estimated annual amortization expense in year one

32,400,000

Estimated annual amortization expense in year two

29,400,000

Estimated annual amortization expense in year three

26,100,000

Estimated annual amortization expense in year four

23,700,000

Estimated annual amortization expense in year five

18,700,000

Investment in unconsolidated subsidiaries

9,500,000

Aftermarket and refurbished products

Finite-Lived Intangible Assets

Inventory recognized for business combinations

217,300,000

Salvage and remanufactured products

Finite-Lived Intangible Assets

Inventory recognized for business combinations

13,000,000

Salvage Mechanical Products

Finite-Lived Intangible Assets

Standard warranty period

6 months

Remanufactured Engines

Finite-Lived Intangible Assets

Standard warranty period

3 years

All 2014 Acquisitions

Finite-Lived Intangible Assets

Inventory recognized for business combinations

230,273,000

Intangible assets recognized

96,727,000

Keystone Specialty

Finite-Lived Intangible Assets

Inventory recognized for business combinations

151,013,000

Intangible assets recognized

70,830,000

Trade names and trademarks

Finite-Lived Intangible Assets

Intangible assets recognized

24,700,000

Trade names and trademarks |
Minimum

Finite-Lived Intangible Assets

Useful life, years

10 years

Trade names and trademarks |
Maximum

Finite-Lived Intangible Assets

Useful life, years

30 years

Trade names and trademarks |
Keystone Specialty

Finite-Lived Intangible Assets

Intangible assets recognized

20,900,000

Software and technology related assets

Finite-Lived Intangible Assets

Intangible assets recognized

26,800,000

Software and technology related assets |
Minimum

Finite-Lived Intangible Assets

Useful life, years

5 years

Software and technology related assets |
Maximum

Finite-Lived Intangible Assets

Useful life, years

6 years

Software and technology related assets |
Keystone Specialty

Finite-Lived Intangible Assets

Intangible assets recognized

26,800,000

Customer relationships

Finite-Lived Intangible Assets

Intangible assets recognized

42,800,000

Customer relationships |
Minimum

Finite-Lived Intangible Assets

Useful life, years

5 years

Customer relationships |
Maximum

Finite-Lived Intangible Assets

Useful life, years

15 years

Customer relationships |
Keystone Specialty

Finite-Lived Intangible Assets

Intangible assets recognized

23,100,000

Covenants not to compete

Finite-Lived Intangible Assets

Intangible assets recognized

2,400,000

Covenants not to compete |
Minimum

Finite-Lived Intangible Assets

Useful life, years

1 year

Covenants not to compete |
Maximum

Finite-Lived Intangible Assets

Useful life, years

5 years

ACM Parts

Finite-Lived Intangible Assets

Investment in unconsolidated subsidiaries

$ 7,600,000

Investment in unconsolidated subsidiary, ownership percentage

49.00%

Equity method investment, ownership percentage of other investors

51.00%

Financial Statement Information Schedule of Inventory (Details) (USD $)

In Thousands, unless otherwise specified

Sep. 30, 2014

Dec. 31, 2013

Product Information

Inventory

$ 1,341,325

$ 1,076,952

Aftermarket and refurbished products

Product Information

Inventory

944,451

706,600

Salvage and remanufactured products

Product Information

Inventory

$ 396,874

$ 370,352

Changes in Carrying Amount of Goodwill (Details) (USD $)

In Thousands, unless otherwise specified

9 Months Ended

Sep. 30, 2014

Goodwill [Roll Forward]

Beginning balance

$ 1,937,444

Business acquisitions and adjustments to previously recorded goodwill

352,938

Exchange rate effects

(33,229)

Ending balance

2,257,153

North America

Goodwill [Roll Forward]

Beginning balance

1,358,937

Business acquisitions and adjustments to previously recorded goodwill

44,981

Exchange rate effects

(6,332)

Ending balance

1,397,586

Europe

Goodwill [Roll Forward]

Beginning balance

578,507

Business acquisitions and adjustments to previously recorded goodwill

73,959

Exchange rate effects

(26,898)

Ending balance

625,568

Specialty

Goodwill [Roll Forward]

Beginning balance

0

Business acquisitions and adjustments to previously recorded goodwill

233,998

Exchange rate effects

1

Ending balance

$ 233,999

Components of Other Intangibles (Details) (USD $)

In Thousands, unless otherwise specified

Sep. 30, 2014

Dec. 31, 2013

Finite-Lived Intangible Assets

Gross carrying amount

$ 288,319

$ 197,523

Accumulated amortization

(67,270)

(43,784)

Net

221,049

153,739

Trade names and trademarks

Finite-Lived Intangible Assets

Gross carrying amount

165,262

143,577

Accumulated amortization

(33,643)

(27,950)

Net

131,619

115,627

Customer relationships

Finite-Lived Intangible Assets

Gross carrying amount

71,345

29,583

Accumulated amortization

(21,906)

(10,770)

Net

49,439

18,813

Software and technology related assets

Finite-Lived Intangible Assets

Gross carrying amount

45,513

20,384

Accumulated amortization

(8,657)

(2,718)

Net

36,856

17,666

Covenants not to compete

Finite-Lived Intangible Assets

Gross carrying amount

6,199

3,979

Accumulated amortization

(3,064)

(2,346)

Net

$ 3,135

$ 1,633

Changes in Warranty Reserve (Details) (USD $)

In Thousands, unless otherwise specified

9 Months Ended

Sep. 30, 2014

Warranty Reserve [Roll Forward]

Beginning balance

$ 12,447

Warranty expense

22,890

Warranty claims

(20,514)

Ending balance

$ 14,823

Equity Incentive Plans - Additional Information (Details) (USD $)

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Share-based Compensation Arrangement by Share-based Payment Award

Stock options granted (shares)

126,755

Stock-based compensation expense

$ 5,184,000

$ 5,730,000

$ 16,967,000

$ 16,292,000

RSUs

Share-based Compensation Arrangement by Share-based Payment Award

Vesting period

5 years

Number of shares that RSUs convert into on the applicable vesting date

1

RSUs granted (shares)

664,897

Fair value of RSUs or restricted stock vested during the period

27,700,000

Stock-based compensation expense

4,434,000

4,559,000

14,625,000

12,674,000

Performance Shares

Share-based Compensation Arrangement by Share-based Payment Award

Vesting period

5 years

Stock-based compensation expense

1,800,000

2,300,000

6,500,000

6,000,000

Stock Options

Share-based Compensation Arrangement by Share-based Payment Award

Vesting period

5 years

Stock-based compensation expense

703,000

1,124,000

2,203,000

3,457,000

Restricted Stock

Share-based Compensation Arrangement by Share-based Payment Award

Vesting period

5 years

Stock-based compensation expense

$ 47,000

$ 139,000

$ 161,000

Minimum |
Stock Options

Share-based Compensation Arrangement by Share-based Payment Award

Stock option expiration period

6 years

Maximum |
Stock Options

Share-based Compensation Arrangement by Share-based Payment Award

Stock option expiration period

10 years

Summary of Transactions in Stock-Based Compensation Plans (Details) (USD $)

9 Months Ended

Sep. 30, 2014

Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]

Balance, beginning of period

6,832,331

Granted

126,755

Exercised

(1,250,620)

Cancelled

(53,749)

Balance, end of period

5,654,717

Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]

Balance, weighted average exercise price, beginning of period

$ 7.04

Granted, weighted average exercise price

$ 32.31

Exercised, weighted average exercise price

$ 5.21

Cancelled, weighted average exercise price

$ 13.42

Balance, weighted average exercise price, end of period

$ 7.95

Shares Available For Grant

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Including Options, Shares Available for Grant [Roll Forward]

Balance, beginning of period

13,965,440

Granted

(791,652)

Cancelled

142,887

Balance, end of period

13,316,675

RSUs

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]

Balance, weighted average grant date fair value, beginning of period

$ 16.63

Granted, weighted average grant date fair value

$ 31.82

Vested, weighted average grant date fair value

$ 17.01

Cancelled, weighted average grant date fair value

$ 20.49

Balance, weighted average grant date fair value, end of period

$ 20.98

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]

Balance, beginning of period

2,558,213

Granted

664,897

Vested

(975,462)

Cancelled

(89,138)

Balance, end of period

2,158,510

Restricted Stock

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]

Balance, weighted average grant date fair value, beginning of period

$ 9.30

Vested, weighted average grant date fair value

$ 9.30

Balance, weighted average grant date fair value, end of period

$ 9.30

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]

Balance, beginning of period

20,000

Vested

(10,000)

Balance, end of period

10,000

Schedule of Pre-Tax Stock-Based Compensation Expense (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Share-based Compensation Arrangement by Share-based Payment Award

Stock-based compensation expense

$ 5,184

$ 5,730

$ 16,967

$ 16,292

RSUs

Share-based Compensation Arrangement by Share-based Payment Award

Stock-based compensation expense

4,434

4,559

14,625

12,674

Stock Options

Share-based Compensation Arrangement by Share-based Payment Award

Stock-based compensation expense

703

1,124

2,203

3,457

Restricted Stock

Share-based Compensation Arrangement by Share-based Payment Award

Stock-based compensation expense

$ 47

$ 139

$ 161

Schedule of Stock-Based Compensation Expense Included in Statements of Income (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Employee Service Share-based Compensation, Allocation of Recognized Period Costs

Stock-based compensation expense, before tax

$ 5,184

$ 5,730

$ 16,967

$ 16,292

Income tax benefit

(1,996)

(2,235)

(6,532)

(6,354)

Total stock-based compensation expense, net of tax

3,188

3,495

10,435

9,938

Cost of goods sold

Employee Service Share-based Compensation, Allocation of Recognized Period Costs

Stock-based compensation expense, before tax

105

98

308

294

Facility and warehouse expenses

Employee Service Share-based Compensation, Allocation of Recognized Period Costs

Stock-based compensation expense, before tax

527

687

1,672

2,058

Selling, general and administrative expenses

Employee Service Share-based Compensation, Allocation of Recognized Period Costs

Stock-based compensation expense, before tax

$ 4,552

$ 4,945

$ 14,987

$ 13,940

Schedule of Stock-Based Compensation Expense Expected to be Recognized (Details) (USD $)

In Thousands, unless otherwise specified

Sep. 30, 2014

Share-based Compensation Arrangement by Share-based Payment Award

Remainder of 2014

$ 5,016

2015

13,855

2016

8,764

2017

5,058

2018

2,553

2019

110

Total unrecognized compensation expense

35,356

RSUs

Share-based Compensation Arrangement by Share-based Payment Award

Remainder of 2014

4,292

2015

13,459

2016

8,433

2017

5,049

2018

2,553

2019

110

Total unrecognized compensation expense

33,896

Stock Options

Share-based Compensation Arrangement by Share-based Payment Award

Remainder of 2014

724

2015

396

2016

331

2017

9

Total unrecognized compensation expense

$ 1,460

Long-Term Obligations - Additional Information (Details) (USD $)

3 Months Ended

9 Months Ended

0 Months Ended

9 Months Ended

0 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Dec. 31, 2013

Mar. 27, 2014

Credit Agreement

Sep. 30, 2014

Credit Agreement

Sep. 30, 2013

Credit Agreement

Dec. 31, 2013

Credit Agreement

Sep. 30, 2014

Senior notes

Dec. 31, 2013

Senior notes

Sep. 28, 2012

Receivables securitization facility

Sep. 30, 2014

Receivables securitization facility

Sep. 28, 2014

Receivables securitization facility

Dec. 31, 2013

Receivables securitization facility

Sep. 30, 2013

Amended Credit Agreement

Credit Agreement

Mar. 27, 2014

Amended Credit Agreement

Credit Agreement

Mar. 27, 2014

Amended Credit Agreement

Multicurrency Component [Member]

Credit Agreement

Mar. 27, 2014

Amended Credit Agreement

US Dollar Component [Member]

Credit Agreement

Sep. 30, 2013

Original Credit Agreement

Credit Agreement

May 3, 2013

Original Credit Agreement

Credit Agreement

May 9, 2013

Four Point Seven Five Percent Senior Notes Due May 2023

Debt Instrument

Extension period of maturity date for credit agreement

1 year

Maximum credit agreement borrowings

$ 2,300,000,000

$ 1,800,000,000

Maximum revolving credit facility borrowings

1,690,000,000

165,000,000

Debt and capital lease obligations

1,898,041,000

1,305,781,000

450,000,000

Maximum increase of revolving credit facility or term loans

400,000,000

Maximum leverage ratio for incremental borrowings

2.50

Term loan quarterly repayment, percentage of initial balance

1.25%

Prepayment requirement, duration to reinvest proceeds from sale or disposition of certain assets

12 months

Maximum net leverage ratio

3.50

Minimum consideration for acquisitions during 12 month period to change the maximum net leverage ratio

200,000,000

Maximum net leverage ratio subsequent to acquisitions

4.00

Minimum interest coverage ratio

3.00

Increment change in applicable margin

0.25%

Weighted average interest rates

2.35%

3.05%

0.92%

Increment change in commitment fees

0.05%

Fronting fee on letters of credit in addition to participation commission

0.125%

Borrowings under credit agreement, carrying value

1,100,000,000

672,600,000

Current maturities of credit agreement

22,500,000

Outstanding letters of credit

60,400,000

Availability on the revolving credit facility

1,100,000,000

Payments of debt issuance costs

3,700,000

7,200,000

Fees capitalized

3,400,000

6,100,000

Loss on debt extinguishment

0

(324,000)

(2,795,000)

300,000

1,100,000

1,700,000

Debt instrument, carrying amount

600,000,000

Senior notes interest rate

4.75%

Receivables securitization facility term period

3 years

Receivables securitization maximum borrowing capacity

80,000,000

97,000,000

Receivables used as collateral for receivables securitization facility

123,400,000

Borrowings under receivable securitization facility, carrying value

$ 80,000,000

$ 0

Schedule of Long-Term Obligations (Details) (USD $)

In Thousands, unless otherwise specified

Sep. 30, 2014

Dec. 31, 2013

Debt Instrument

Less current maturities

$ (72,908)

$ (41,535)

Long-Term Obligations, Excluding Current Portion

1,825,133

1,264,246

Long-term obligations, total

1,898,041

1,305,781

Term loan

Debt Instrument

Term loan

438,750

Revolving credit facility

Debt Instrument

Revolving credit facility

693,299

233,804

Senior notes

Debt Instrument

Senior notes

600,000

Receivables securitization facility

Debt Instrument

Receivables securitization facility

80,000

0

Notes payable

Debt Instrument

Notes payable

53,994

15,730

Other long-term debt

Debt Instrument

Other long-term debt

$ 31,998

$ 17,497

Schedule of Long-Term Obligations (Parenthetical) (Details) (USD $)

In Millions, unless otherwise specified

Sep. 30, 2014

Dec. 31, 2013

Notes payable

Debt Instrument

Weighted average interest rates

1.10%

Other long-term debt

Debt Instrument

Weighted average interest rates

2.90%

3.50%

Credit Agreement

Debt Instrument

Weighted average interest rates

2.35%

3.05%

Secured Debt, Current

$ 22.5

Derivative Instruments and Hedging Activities - Additional Information (Details)

9 Months Ended

Sep. 30, 2014

USD ($)

Dec. 31, 2013

Foreign currency forward contracts

Pound Sterling Notional Amount

GBP (£)

Dec. 31, 2013

Foreign currency forward contracts

Euro Notional Amount

GBP (£)

Derivative

Derivative, Notional Amount

£ 70,000,000

£ 149,976,000

Payments for (Proceeds from) Derivative Instrument, Financing Activities

20,000,000

Net loss included in accumulated other comprehensive income (loss) to be reclassified into interest expense within the next 12 months

$ (3,600,000)

Terms of Interest Rate Swap Agreements (Details)

In Thousands, unless otherwise specified

Sep. 30, 2014

USD ($)

Dec. 31, 2013

USD ($)

Sep. 30, 2014

Interest rate swaps

US Dollar Notional Amount

USD ($)

Dec. 31, 2013

Interest rate swaps

US Dollar Notional Amount

USD ($)

Sep. 30, 2014

Interest rate swaps

Pound Sterling Notional Amount

USD ($)

Sep. 30, 2014

Interest rate swaps

Pound Sterling Notional Amount

GBP (£)

Dec. 31, 2013

Interest rate swaps

Pound Sterling Notional Amount

USD ($)

Dec. 31, 2013

Interest rate swaps

Pound Sterling Notional Amount

GBP (£)

Sep. 30, 2014

Interest rate swaps

Canadian Dollar Notional Amount

USD ($)

Sep. 30, 2014

Interest rate swaps

Canadian Dollar Notional Amount

CAD ($)

Dec. 31, 2013

Interest rate swaps

Canadian Dollar Notional Amount

USD ($)

Dec. 31, 2013

Interest rate swaps

Canadian Dollar Notional Amount

CAD ($)

Dec. 31, 2013

Foreign currency forward contracts

Pound Sterling Notional Amount

USD ($)

Dec. 31, 2013

Foreign currency forward contracts

Pound Sterling Notional Amount

GBP (£)

Dec. 31, 2013

Foreign currency forward contracts

Euro Notional Amount

USD ($)

Dec. 31, 2013

Foreign currency forward contracts

Euro Notional Amount

GBP (£)

Derivative

Derivative, Notional Amount

$ 420,000

£ 50,000

$ 25,000

£ 70,000

£ 149,976

Derivative Liabilities, Current

21,818

10,186

11,632

Derivative Liabilities, Noncurrent

$ 5,556

$ 8,470

$ 5,128

$ 8,099

$ 396

$ 345

$ 32

$ 26

Fair Value Measurements - Additional Information (Details)

3 Months Ended

9 Months Ended

3 Months Ended

Sep. 30, 2014

USD ($)

Sep. 30, 2013

USD ($)

Sep. 30, 2014

USD ($)

Sep. 30, 2013

USD ($)

Sep. 30, 2014

Credit Agreement

USD ($)

Dec. 31, 2013

Credit Agreement

USD ($)

Sep. 30, 2014

Receivables securitization facility

USD ($)

Dec. 31, 2013

Receivables securitization facility

USD ($)

Sep. 30, 2014

Senior notes

USD ($)

Dec. 31, 2013

Senior notes

USD ($)

Mar. 31, 2013

ECP 2012 Contingent Payment

USD ($)

Mar. 31, 2013

ECP 2012 Contingent Payment

GBP (£)

Dec. 31, 2011

ECP 2012 Contingent Payment

GBP (£)

Sep. 30, 2014

ECP 2013 Contingent Payment

USD ($)

Sep. 30, 2014

ECP 2013 Contingent Payment

GBP (£)

Dec. 31, 2011

ECP 2013 Contingent Payment

GBP (£)

Fair Value Measurements

Maximum payment under contingent consideration agreement

£ 25,000,000

£ 30,000,000

Contingent consideration payments

0

52,305,000

38,349,000

33,900,000

22,400,000

44,800,000

26,900,000

Contingent consideration other settlements

3,900,000

2,600,000

5,100,000

3,100,000

(Gains) Losses related to contingent consideration obligations outstanding at period-end

200,000

Borrowings under credit agreement, carrying value

1,100,000,000

672,600,000

Borrowings under receivable securitization facility, carrying value

80,000,000

0

Debt instrument, fair value

581,000,000

Debt instrument, carrying amount

$ 600,000,000

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) (Fair Value, Measurements, Recurring, USD $)

In Thousands, unless otherwise specified

Sep. 30, 2014

Dec. 31, 2013

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Fair value assets measured on recurring basis

$ 26,438

$ 25,745

Fair value liabilities measured on recurring basis

38,691

111,173

Fair Value, Inputs, Level 2

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Fair value assets measured on recurring basis

26,438

25,745

Fair value liabilities measured on recurring basis

31,390

55,520

Fair Value, Inputs, Level 3

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Fair value liabilities measured on recurring basis

7,301

55,653

Cash surrender value of life insurance

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Fair value assets measured on recurring basis

26,438

25,745

Cash surrender value of life insurance |
Fair Value, Inputs, Level 2

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Fair value assets measured on recurring basis

26,438

25,745

Contingent consideration liabilities

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Fair value liabilities measured on recurring basis

7,301

55,653

Contingent consideration liabilities |
Fair Value, Inputs, Level 3

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Fair value liabilities measured on recurring basis

7,301

55,653

Deferred compensation liabilities

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Fair value liabilities measured on recurring basis

25,834

25,232

Deferred compensation liabilities |
Fair Value, Inputs, Level 2

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Fair value liabilities measured on recurring basis

25,834

25,232

Foreign currency forward contracts

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Fair value liabilities measured on recurring basis

21,818

Foreign currency forward contracts |
Fair Value, Inputs, Level 2

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Fair value liabilities measured on recurring basis

21,818

Interest rate swaps

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Fair value liabilities measured on recurring basis

5,556

8,470

Interest rate swaps |
Fair Value, Inputs, Level 2

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Fair value liabilities measured on recurring basis

$ 5,556

$ 8,470

Significant Unobservable Inputs Used in Fair Value Measurements (Details) (Contingent consideration liabilities, Fair Value, Inputs, Level 3)

Sep. 30, 2014

Dec. 31, 2013

Contingent consideration liabilities |
Fair Value, Inputs, Level 3

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

Weighted Average, Probability of achieving payout targets

78.70%

70.60%

Weighted Average, Discount rate

7.50%

6.50%

Changes in Fair Value of Contingent Consideration Obligations (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Contingent Consideration Obligations [Roll Forward]

Beginning balance

$ 8,762

$ 49,473

$ 55,653

$ 90,009

Contingent consideration liabilities recorded for business acquisitions

(1,203)

1,204

5,854

3,854

Payments

0

(52,305)

(38,349)

Loss (gain) included in earnings

12

712

(2,000)

1,765

Exchange rate effects

(270)

3,096

99

(2,794)

Ending balance

$ 7,301

$ 54,485

$ 7,301

$ 54,485

Future Minimum Lease Commitments (Details) (USD $)

In Thousands, unless otherwise specified

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Operating Leases, Future Minimum Payments, Remainder of Fiscal Year

$ 35,353

2015

134,572

2016

114,205

2017

95,568

2018

78,838

2019

63,638

Thereafter

251,142

Future Minimum Lease Payments

$ 773,316

Business Combinations - Additional Information (Details)

3 Months Ended

9 Months Ended

12 Months Ended

3 Months Ended

9 Months Ended

3 Months Ended

9 Months Ended

3 Months Ended

9 Months Ended

1 Months Ended

Sep. 30, 2014

USD ($)

Sep. 30, 2013

USD ($)

Sep. 30, 2014

USD ($)

Sep. 30, 2013

USD ($)

Dec. 31, 2013

USD ($)

Sep. 30, 2014

Europe

USD ($)

Dec. 31, 2013

Europe

USD ($)

Sep. 30, 2014

North America

USD ($)

Dec. 31, 2013

North America

USD ($)

Sep. 30, 2014

Keystone Specialty

USD ($)

Sep. 30, 2014

All 2014 Acquisitions Excluding Keystone Specialty

USD ($)

Sep. 30, 2014

All 2014 Acquisitions Excluding Keystone Specialty

Europe

Sep. 30, 2014

All 2014 Acquisitions Excluding Keystone Specialty

Wholesale North America Segment

Sep. 30, 2014

All 2014 Acquisitions Excluding Keystone Specialty

Self Service Segment

Sep. 30, 2014

Netherlands Distributors

Sep. 30, 2014

Netherlands Distributors Former Customers [Member]

Sep. 30, 2014

All 2014 Acquisitions

USD ($)

Dec. 31, 2013

All 2013 Acquisitions

USD ($)

Dec. 31, 2013

Sator

USD ($)

Dec. 31, 2013

Sator

EUR (€)

Dec. 31, 2013

All 2013 Acquisitions Excluding Sator

USD ($)

Dec. 31, 2013

All 2013 Acquisitions Excluding Sator

Europe

Dec. 31, 2013

All 2013 Acquisitions Excluding Sator

Wholesale North America Segment

Dec. 31, 2013

All 2013 Acquisitions Excluding Sator

Self Service Segment

Dec. 31, 2013

UK Paint

Europe

Sep. 30, 2014

Acquisition-related expenses

USD ($)

Sep. 30, 2013

Acquisition-related expenses

USD ($)

Sep. 30, 2014

Acquisition-related expenses

USD ($)

Sep. 30, 2013

Acquisition-related expenses

USD ($)

Sep. 30, 2014

Acquisition-related expenses

All 2014 Acquisitions

USD ($)

Sep. 30, 2014

Acquisition-related expenses

All 2014 Acquisitions

USD ($)

Sep. 30, 2013

Acquisition-related expenses

Sator

USD ($)

Sep. 30, 2014

Acquisition-related expenses

UK Paint

USD ($)

Sep. 30, 2013

Acquisition-related expenses

UK Paint

USD ($)

Oct. 31, 2014

Subsequent Event

USD ($)

Business Acquisition

Total acquisition date fair value of the consideration for acquisitions

$ 471,100,000

$ 233,600,000

$ 146,100,000

$ 112,000,000

Cash used in acquisitions, net of cash acquired

650,614,000

395,974,000

427,100,000

210,700,000

272,800,000

209,800,000

134,600,000

Notes issued

31,500,000

11,842,000

43,342,000

7,482,000

0

7,482,000

Other purchase price obligations

12,553,000

313,000

12,866,000

214,000

0

214,000

Contingent consideration liability

0

5,854,000

3,854,000

0

3,854,000

Settlement of pre-existing balances

4,922,000

Number of acquisitions

19

8

9

2

7

5

19

7

10

2

5

2

Maximum payment under contingent consideration agreement

8,300,000

5,000,000

Goodwill

2,257,153,000

1,937,444,000

625,568,000

578,507,000

1,397,586,000

1,358,937,000

233,998,000

118,940,000

352,938,000

235,447,000

142,721,000

92,726,000

Goodwill expected to be deductible for income tax purposes

32,200,000

18,300,000

Revenue generated by acquisitions

595,200,000

142,700,000

Operating income generated by acquisitions

24,400,000

(1,500,000)

Restructuring and acquisition related expenses

$ 3,594,000

$ 2,206,000

$ 12,816,000

$ 7,391,000

$ 1,300,000

$ 2,000,000

$ 3,200,000

$ 6,000,000

$ 500,000

$ 2,300,000

$ 3,600,000

$ 1,400,000

Purchase Price Allocations for Acquisitions (Details) (USD $)

In Thousands, unless otherwise specified

Sep. 30, 2014

Dec. 31, 2013

Business Acquisition

Goodwill

$ 2,257,153

$ 1,937,444

Keystone Specialty

Business Acquisition

Receivables

48,473

Receivable reserves

(4,403)

Inventory

151,013

Income taxes receivable

13,972

Prepaid expenses and other current assets

8,339

Property and equipment

38,080

Goodwill

233,998

Other intangibles

70,830

Other assets

7,805

Deferred income taxes

(17,418)

Current liabilities assumed

(65,439)

Debt assumed

0

Other noncurrent liabilities assumed

(14,147)

Contingent consideration liabilities

0

Other purchase price obligations

(12,553)

Notes issued

(31,500)

Cash used in acquisitions, net of cash acquired

427,050

All 2014 Acquisitions Excluding Keystone Specialty

Business Acquisition

Receivables

57,191

Receivable reserves

(2,817)

Inventory

79,260

Income taxes receivable

0

Prepaid expenses and other current assets

3,266

Property and equipment

16,389

Goodwill

118,940

Other intangibles

25,897

Other assets

5,623

Deferred income taxes

429

Current liabilities assumed

(34,880)

Debt assumed

(26,425)

Other noncurrent liabilities assumed

(9,282)

Contingent consideration liabilities

(5,854)

Other purchase price obligations

(313)

Notes issued

(11,842)

Settlement of pre-existing balances

(4,922)

Cash used in acquisitions, net of cash acquired

210,660

All 2014 Acquisitions

Business Acquisition

Receivables

105,664

Receivable reserves

(7,220)

Inventory

230,273

Income taxes receivable

13,972

Prepaid expenses and other current assets

11,605

Property and equipment

54,469

Goodwill

352,938

Other intangibles

96,727

Other assets

13,428

Deferred income taxes

(16,989)

Current liabilities assumed

(100,319)

Debt assumed

(26,425)

Other noncurrent liabilities assumed

(23,429)

Contingent consideration liabilities

(5,854)

Other purchase price obligations

(12,866)

Notes issued

(43,342)

Settlement of pre-existing balances

(4,922)

Cash used in acquisitions, net of cash acquired

637,710

Sator

Business Acquisition

Receivables

61,639

Receivable reserves

(8,563)

Inventory

71,784

Income taxes receivable

0

Prepaid expenses and other current assets

7,184

Property and equipment

19,484

Goodwill

142,721

Other intangibles

45,293

Other assets

2,049

Deferred income taxes

(14,100)

Current liabilities assumed

(49,593)

Debt assumed

0

Other noncurrent liabilities assumed

(5,074)

Contingent consideration liabilities

0

Other purchase price obligations

0

Notes issued

0

Cash used in acquisitions, net of cash acquired

272,824

All 2013 Acquisitions Excluding Sator

Business Acquisition

Receivables

38,685

Receivable reserves

(3,246)

Inventory

26,455

Income taxes receivable

0

Prepaid expenses and other current assets

1,933

Property and equipment

14,015

Goodwill

92,726

Other intangibles

12,353

Other assets

1,251

Deferred income taxes

(564)

Current liabilities assumed

(36,799)

Debt assumed

(664)

Other noncurrent liabilities assumed

0

Contingent consideration liabilities

(3,854)

Other purchase price obligations

(214)

Notes issued

(7,482)

Cash used in acquisitions, net of cash acquired

134,595

All 2013 Acquisitions

Business Acquisition

Receivables

100,324

Receivable reserves

(11,809)

Inventory

98,239

Income taxes receivable

0

Prepaid expenses and other current assets

9,117

Property and equipment

33,499

Goodwill

235,447

Other intangibles

57,646

Other assets

3,300

Deferred income taxes

(14,664)

Current liabilities assumed

(86,392)

Debt assumed

(664)

Other noncurrent liabilities assumed

(5,074)

Contingent consideration liabilities

(3,854)

Other purchase price obligations

(214)

Notes issued

(7,482)

Cash used in acquisitions, net of cash acquired

$ 407,419

Pro Forma Effect of Businesses Acquired (Details) (USD $)

In Thousands, except Per Share data, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Business Acquisition

Revenue, as reported

$ 1,721,024

$ 1,298,094

$ 5,055,933

$ 3,745,839

Pro forma revenue

1,725,839

1,577,389

5,175,702

4,784,286

Net income, as reported

91,515

73,445

301,050

233,759

Pro forma net income

95,318

85,646

309,617

275,745

Earnings per share, basic

$ 0.30

$ 0.24

$ 1.00

$ 0.78

Pro forma earnings per share-basic (a)

$ 0.31 ¹

$ 0.29 ¹

$ 1.03 ¹

$ 0.92 ¹

Earnings per share, diluted

$ 0.30

$ 0.24

$ 0.98

$ 0.77

Pro forma earnings per share-diluted (a)

$ 0.31 ¹

$ 0.28 ¹

$ 1.01 ¹

$ 0.91 ¹

Keystone Specialty

Business Acquisition

Revenue of purchased businesses for the period prior to acquisition

0

177,324

3,443

540,826

Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments

180

7,142

514

24,769

Effect of purchased businesses for the period prior to acquisition

$ 0.00

$ 0.02

$ 0.00

$ 0.08

Effect of purchased businesses for the period prior to acquisition

$ 0.00

$ 0.02

$ 0.00

$ 0.08

Sator

Business Acquisition

Revenue of purchased businesses for the period prior to acquisition

0

126,309

Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments

0

5,712

Effect of purchased businesses for the period prior to acquisition

$ 0.00

$ 0.02

Effect of purchased businesses for the period prior to acquisition

$ 0.00

$ 0.02

All 2014 and 2013 Acquisitions Excluding Keystone Specialty and Sator

Business Acquisition

Revenue of purchased businesses for the period prior to acquisition

4,815

101,971

116,326

371,312

Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments

$ 3,623

$ 5,059

$ 8,053

$ 11,505

Effect of purchased businesses for the period prior to acquisition

$ 0.01

$ 0.02

$ 0.03

$ 0.04

Effect of purchased businesses for the period prior to acquisition

$ 0.01

$ 0.02

$ 0.03

$ 0.04

[1] The sum of the individual earnings per share amounts may not equal the total due to rounding.

Restructuring and Acquisition Related Expenses - Additional Information (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

9 Months Ended

3 Months Ended

9 Months Ended

3 Months Ended

9 Months Ended

3 Months Ended

9 Months Ended

3 Months Ended

9 Months Ended

3 Months Ended

9 Months Ended

3 Months Ended

12 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Restructuring expenses

Sep. 30, 2013

Restructuring expenses

Sep. 30, 2014

Acquisition-related expenses

Sep. 30, 2013

Acquisition-related expenses

Sep. 30, 2014

Acquisition-related expenses

Sep. 30, 2013

Acquisition-related expenses

Sep. 30, 2014

Netherlands Distributors

Sep. 30, 2014

UK Paint

Acquisition-related expenses

Sep. 30, 2013

UK Paint

Acquisition-related expenses

Sep. 30, 2013

Sator

Acquisition-related expenses

Sep. 30, 2014

Keystone Specialty

Restructuring expenses

Sep. 30, 2014

Keystone Specialty

Restructuring expenses

Sep. 30, 2014

All 2014 & 2013 Acquisitions Excluding Keystone Specialty

Restructuring expenses

Sep. 30, 2014

All 2014 & 2013 Acquisitions Excluding Keystone Specialty

Restructuring expenses

Sep. 30, 2014

Europe

Restructuring expenses

Dec. 31, 2013

Europe

UK Paint

Restructuring Cost and Reserve

Restructuring and acquisition related expenses

$ 3,594

$ 2,206

$ 12,816

$ 7,391

$ 200

$ 1,400

$ 1,300

$ 2,000

$ 3,200

$ 6,000

$ 1,400

$ 3,600

$ 400

$ 5,800

$ 300

$ 2,200

$ 1,600

Number of acquisitions

7

5

Computation of Earnings Per Share (Details) (USD $)

In Thousands, except Per Share data, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Earnings Per Share [Abstract]

Net income

$ 91,515

$ 73,445

$ 301,050

$ 233,759

Denominator for basic earnings per share—Weighted-average shares outstanding

302,724

300,223

302,058

299,213

Effect of dilutive securities:

RSUs

658

883

804

775

Stock options

2,817

3,564

2,988

3,765

Restricted stock

7

15

7

18

Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding

306,206

304,685

305,857

303,771

Earnings per share, basic

$ 0.30

$ 0.24

$ 1.00

$ 0.78

Earnings per share, diluted

$ 0.30

$ 0.24

$ 0.98

$ 0.77

Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share (Details)

In Thousands, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

RSUs

Antidilutive Securities Excluded from Computation of Earnings Per Share

Antidilutive securities

389

265

Stock Options

Antidilutive Securities Excluded from Computation of Earnings Per Share

Antidilutive securities

115

120

Income Taxes - Additional Information (Details) (USD $)

In Millions, unless otherwise specified

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Income Taxes [Line Items]

Effective income tax rate

34.00%

34.60%

Income Tax Expense (Benefit), Adjustment of Deferred Tax (Asset) Liability

$ 2.6

Foreign Tax Authority

Income Taxes [Line Items]

Income Tax Expense (Benefit), Adjustment of Deferred Tax (Asset) Liability

1.6

State and Local Jurisdiction

Income Taxes [Line Items]

Income Tax Expense (Benefit), Adjustment of Deferred Tax (Asset) Liability

$ 0.9

Accumulated Other Comprehensive Income (Loss) Schedule of Accumulated Other Comprehensive Income (Loss) (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment [Roll Forward]

Balance, beginning

$ 40,222

$ (11,334)

$ 24,906

$ 10,850

Pretax (loss) income

(39,329)

28,514

(24,013)

6,330

Balance, ending

893

17,180

893

17,180

Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges [Roll Forward]

Balance, beginning

(4,346)

(6,730)

(5,596)

(10,091)

Pretax (loss) income

(186)

(15,315)

(362)

(14,170)

Income tax effect

(7)

5,647

39

5,305

Reclassification of unrealized (gain) loss

(1,554)

(15,956)

(3,647)

(19,771)

Reclassification of deferred income taxes

(544)

(5,849)

(1,257)

(7,211)

Balance, ending

(3,529)

(6,105)

(3,529)

(6,105)

Accumulated Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans [Roll Forward]

Balance, beginning

634

701

Reclassification of unrealized (gain) loss

(39)

(129)

Income tax effect

9

32

Balance, ending

604

Accumulated Other Comprehensive Income (Loss) [Roll Forward]

Balance, beginning

36,510

(18,064)

20,011

759

Pretax (loss) income

(39,515)

13,199

(24,375)

(7,840)

Income tax effect

(7)

5,647

39

5,305

Reclassification of unrealized (gain) loss

1,515

15,956

3,518

19,771

Reclassification of deferred income taxes

(535)

(5,849)

(1,225)

(7,211)

Balance, ending

(2,032)

11,075

(2,032)

11,075

Other Comprehensive Income Hedge Ineffectiveness Tax

293

460

Other Comprehensive Income Hedge Ineffectiveness Tax

$ (107)

$ (169)

Accumulated Other Comprehensive Income (Loss) Additional Information (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]

Reclassification of unrealized loss

$ (1,554)

$ (15,956)

$ (3,647)

$ (19,771)

Interest rate swaps

Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]

Reclassification of unrealized loss

$ 1,600

$ (1,500)

$ 4,600

$ (4,700)

Segment and Geographic Information - Additional Information (Details)

9 Months Ended

Sep. 30, 2014

Segment Reporting Information

Number of operating segments

4

Number of reportable segments

3

North America

Segment Reporting Information

Number of reportable segments

1

Schedule of Financial Performance by Reportable Segment (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Segment Reporting Information

Revenue

$ 1,721,024

$ 1,298,094

$ 5,055,933

$ 3,745,839

Segment EBITDA

191,554

149,320

608,102

467,357

Depreciation and amortization

31,754

22,157

90,647

61,868

North America

Segment Reporting Information

Revenue

1,024,967

928,307

3,080,356

2,865,613

Segment EBITDA

131,851

108,863

415,139

363,411

Depreciation and amortization

18,029

16,417

52,682

48,555

Europe

Segment Reporting Information

Revenue

495,776

369,787

1,380,663

880,226

Segment EBITDA

41,726

40,457

128,826

103,946

Depreciation and amortization

9,411

5,740

24,868

13,313

Specialty

Segment Reporting Information

Revenue

201,007

596,430

Segment EBITDA

17,977

64,137

Depreciation and amortization

4,314

13,097

Eliminations

Segment Reporting Information

Revenue

(726)

(1,516)

Third Party

Segment Reporting Information

Revenue

1,721,024

1,298,094

Third Party |
North America

Segment Reporting Information

Revenue

1,024,835

928,307

3,080,090

2,865,613

Third Party |
Europe

Segment Reporting Information

Revenue

495,776

369,787

1,380,663

880,226

Third Party |
Specialty

Segment Reporting Information

Revenue

200,413

595,180

Third Party |
Eliminations

Segment Reporting Information

Revenue

0

Intersegment |
North America

Segment Reporting Information

Revenue

132

266

Intersegment |
Specialty

Segment Reporting Information

Revenue

594

1,250

Intersegment |
Eliminations

Segment Reporting Information

Revenue

$ (726)

$ (1,516)

Reconciliation of Segment EBITDA to Net Income (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Segment Reporting [Abstract]

Segment EBITDA

$ 191,554

$ 149,320

$ 608,102

$ 467,357

Restructuring and acquisition related expenses

3,594

2,206

12,816

7,391

Change in fair value of contingent consideration liabilities

12

712

(2,000)

1,765

Equity in earnings of unconsolidated subsidiaries

(721)

0

(1,199)

0

EBITDA

187,227

146,402

596,087

458,201

Depreciation and amortization

31,754

22,157

90,647

61,868

Interest expense, net

16,394

15,200

48,140

36,287

Loss on debt extinguishment

0

(324)

(2,795)

Provision for income taxes

47,564

35,600

155,926

123,492

Net income

$ 91,515

$ 73,445

$ 301,050

$ 233,759

Schedule of Capital Expenditures by Reportable Segment (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Segment Reporting Information

Capital Expenditures

$ 32,860

$ 20,975

$ 100,191

$ 61,126

North America

Segment Reporting Information

Capital Expenditures

20,986

14,960

61,262

48,662

Europe

Segment Reporting Information

Capital Expenditures

8,652

6,015

32,927

12,464

Specialty

Segment Reporting Information

Capital Expenditures

$ 3,222

$ 0

$ 6,002

$ 0

Schedule of Assets by Reportable Segment (Details) (USD $)

In Thousands, unless otherwise specified

Sep. 30, 2014

Dec. 31, 2013

Segment Reporting Information

Receivables, net

$ 609,434

$ 458,094

Inventory

1,341,325

1,076,952

Property and Equipment, net

612,292

546,651

Other unallocated assets

2,971,527

2,437,077

Total Assets

5,534,578

4,518,774

North America

Segment Reporting Information

Receivables, net

318,575

277,395

Inventory

787,884

748,167

Property and Equipment, net

449,824

447,528

Europe

Segment Reporting Information

Receivables, net

235,791

180,699

Inventory

389,941

328,785

Property and Equipment, net

123,211

99,123

Specialty

Segment Reporting Information

Receivables, net

55,068

Inventory

163,500

Property and Equipment, net

$ 39,257

Schedule of Revenue by Geographic Area (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Revenues from External Customers and Long-Lived Assets

Revenue

$ 1,721,024

$ 1,298,094

$ 5,055,933

$ 3,745,839

United States

Revenues from External Customers and Long-Lived Assets

Revenue

1,126,468

868,052

3,369,636

2,672,545

United Kingdom

Revenues from External Customers and Long-Lived Assets

Revenue

349,012

266,384

1,003,889

708,089

Other countries

Revenues from External Customers and Long-Lived Assets

Revenue

$ 245,544

$ 163,658

$ 682,408

$ 365,205

Schedule of Tangible Long-Lived Assets by Geographic Area (Details) (USD $)

In Thousands, unless otherwise specified

Sep. 30, 2014

Dec. 31, 2013

Revenues from External Customers and Long-Lived Assets

Long-lived Assets

$ 612,292

$ 546,651

United States

Revenues from External Customers and Long-Lived Assets

Long-lived Assets

456,556

418,869

United Kingdom

Revenues from External Customers and Long-Lived Assets

Long-lived Assets

92,365

77,827

Other countries

Revenues from External Customers and Long-Lived Assets

Long-lived Assets

$ 63,371

$ 49,955

Schedule of Revenue by Product Category (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Revenue from External Customers

Revenue

$ 1,721,024

$ 1,298,094

$ 5,055,933

$ 3,745,839

Aftermarket, other new and refurbished products

Revenue from External Customers

Revenue

1,171,706

793,925

3,445,376

2,199,009

Recycled, remanufactured and related products and services

Revenue from External Customers

Revenue

371,632

349,411

1,108,376

1,060,681

Other

Revenue from External Customers

Revenue

$ 177,686

$ 154,758

$ 502,181

$ 486,149

Condensed Consolidating Balance Sheets (Details) (USD $)

In Thousands, unless otherwise specified

Sep. 30, 2014

Dec. 31, 2013

Sep. 30, 2013

Dec. 31, 2012

Current Assets:

Cash and equivalents

$ 244,646

$ 150,488

$ 107,337

$ 59,770

Receivables, net

609,434

458,094

Intercompany receivables, net

0

Inventory

1,341,325

1,076,952

Deferred income taxes

73,997

63,938

Prepaid expenses and other current assets

76,136

50,345

Total Current Assets

2,345,538

1,799,817

Property and Equipment, net

612,292

546,651

Intangible Assets:

Goodwill

2,257,153

1,937,444

Other intangibles, net

221,049

153,739

Investment in Subsidiaries

0

Intercompany Notes Receivable

0

Other Assets

98,546

81,123

Total Assets

5,534,578

4,518,774

Current Liabilities:

Accounts payable

403,587

349,069

Intercompany payables, net

0

Accrued expenses:

Accrued payroll-related liabilities

88,082

58,695

Sales taxes payable

45,098

30,701

Other accrued expenses

127,838

109,373

Contingent consideration liabilities

2,288

52,465

Other current liabilities

31,587

36,115

Current portion of long-term obligations

72,908

41,535

Total Current Liabilities

771,388

677,953

Long-Term Obligations, Excluding Current Portion

1,825,133

1,264,246

Intercompany Notes Payable

0

Deferred Income Taxes

159,270

133,822

Other Noncurrent Liabilities

111,093

92,008

Stockholders’ Equity

2,667,694

2,350,745

Total Liabilities and Stockholders’ Equity

5,534,578

4,518,774

Parent Company

Current Assets:

Cash and equivalents

145,431

77,926

35,966

18,396

Receivables, net

77

0

Intercompany receivables, net

6,331

2,275

Inventory

0

Deferred income taxes

3,071

3,189

Prepaid expenses and other current assets

10,284

7,924

Total Current Assets

165,194

91,314

Property and Equipment, net

534

668

Intangible Assets:

Goodwill

0

Other intangibles, net

0

Investment in Subsidiaries

2,958,048

2,364,586

Intercompany Notes Receivable

619,070

959,185

Other Assets

50,433

49,218

Total Assets

3,793,279

3,464,971

Current Liabilities:

Accounts payable

501

314

Intercompany payables, net

0

Accrued expenses:

Accrued payroll-related liabilities

7,054

5,236

Sales taxes payable

0

Other accrued expenses

11,434

26,714

Contingent consideration liabilities

0

Other current liabilities

1,127

2,803

Current portion of long-term obligations

55,000

24,421

Total Current Liabilities

75,116

59,488

Long-Term Obligations, Excluding Current Portion

1,016,429

1,016,249

Intercompany Notes Payable

0

Deferred Income Taxes

0

Other Noncurrent Liabilities

34,040

38,489

Stockholders’ Equity

2,667,694

2,350,745

Total Liabilities and Stockholders’ Equity

3,793,279

3,464,971

Guarantor Subsidiaries

Current Assets:

Cash and equivalents

26,855

13,693

12,218

18,253

Receivables, net

223,767

126,926

Intercompany receivables, net

0

6,923

Inventory

885,665

687,164

Deferred income taxes

67,560

57,422

Prepaid expenses and other current assets

33,661

24,190

Total Current Assets

1,237,508

916,318

Property and Equipment, net

457,975

419,617

Intangible Assets:

Goodwill

1,518,384

1,248,746

Other intangibles, net

126,522

56,069

Investment in Subsidiaries

285,996

264,815

Intercompany Notes Receivable

32,207

118,740

Other Assets

27,235

20,133

Total Assets

3,685,827

3,044,438

Current Liabilities:

Accounts payable

180,877

147,708

Intercompany payables, net

13,829

0

Accrued expenses:

Accrued payroll-related liabilities

54,794

32,850

Sales taxes payable

6,545

5,694

Other accrued expenses

76,371

51,183

Contingent consideration liabilities

1,727

1,923

Other current liabilities

12,816

13,039

Current portion of long-term obligations

4,452

3,030

Total Current Liabilities

351,411

255,427

Long-Term Obligations, Excluding Current Portion

6,423

6,554

Intercompany Notes Payable

558,691

611,274

Deferred Income Taxes

137,785

110,110

Other Noncurrent Liabilities

63,314

46,417

Stockholders’ Equity

2,568,203

2,014,656

Total Liabilities and Stockholders’ Equity

3,685,827

3,044,438

Non-Guarantor Subsidiaries

Current Assets:

Cash and equivalents

72,360

58,869

59,153

23,121

Receivables, net

385,590

331,168

Intercompany receivables, net

13,829

0

Inventory

455,660

389,788

Deferred income taxes

3,366

3,327

Prepaid expenses and other current assets

32,191

18,231

Total Current Assets

962,996

801,383

Property and Equipment, net

153,783

126,366

Intangible Assets:

Goodwill

738,769

688,698

Other intangibles, net

94,527

97,670

Investment in Subsidiaries

0

Intercompany Notes Receivable

0

Other Assets

25,963

17,241

Total Assets

1,976,038

1,731,358

Current Liabilities:

Accounts payable

222,209

201,047

Intercompany payables, net

6,331

9,198

Accrued expenses:

Accrued payroll-related liabilities

26,234

20,609

Sales taxes payable

38,553

25,007

Other accrued expenses

40,033

31,476

Contingent consideration liabilities

561

50,542

Other current liabilities

17,644

20,273

Current portion of long-term obligations

13,456

14,084

Total Current Liabilities

365,021

372,236

Long-Term Obligations, Excluding Current Portion

802,281

241,443

Intercompany Notes Payable

92,586

466,651

Deferred Income Taxes

26,570

29,181

Other Noncurrent Liabilities

13,739

7,102

Stockholders’ Equity

675,841

614,745

Total Liabilities and Stockholders’ Equity

1,976,038

1,731,358

Consolidation, Eliminations

Current Assets:

Cash and equivalents

0

Receivables, net

0

Intercompany receivables, net

(20,160)

(9,198)

Inventory

0

Deferred income taxes

0

Prepaid expenses and other current assets

0

Total Current Assets

(20,160)

(9,198)

Property and Equipment, net

0

Intangible Assets:

Goodwill

0

Other intangibles, net

0

Investment in Subsidiaries

(3,244,044)

(2,629,401)

Intercompany Notes Receivable

(651,277)

(1,077,925)

Other Assets

(5,085)

(5,469)

Total Assets

(3,920,566)

(3,721,993)

Current Liabilities:

Accounts payable

0

Intercompany payables, net

(20,160)

(9,198)

Accrued expenses:

Accrued payroll-related liabilities

0

Sales taxes payable

0

Other accrued expenses

0

Contingent consideration liabilities

0

Other current liabilities

0

Current portion of long-term obligations

0

Total Current Liabilities

(20,160)

(9,198)

Long-Term Obligations, Excluding Current Portion

0

Intercompany Notes Payable

(651,277)

(1,077,925)

Deferred Income Taxes

(5,085)

(5,469)

Other Noncurrent Liabilities

0

Stockholders’ Equity

(3,244,044)

(2,629,401)

Total Liabilities and Stockholders’ Equity

$ (3,920,566)

$ (3,721,993)

Condensed Consolidating Statements of Income (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Condensed Financial Statements, Captions [Line Items]

Revenue

$ 1,721,024

$ 1,298,094

$ 5,055,933

$ 3,745,839

Cost of goods sold

1,056,613

780,187

3,068,579

2,216,110

Gross margin

664,411

517,907

1,987,354

1,529,729

Facility and warehouse expenses

133,330

108,349

387,995

311,480

Distribution expenses

148,572

109,593

432,445

320,033

Selling, general and administrative expenses

192,229

153,546

563,344

436,614

Restructuring and acquisition related expenses

3,594

2,206

12,816

7,391

Depreciation and amortization

30,498

20,818

87,136

57,850

Operating income

156,188

123,395

503,618

396,361

Other expense (income):

Interest expense, net

16,394

15,200

48,140

36,287

Intercompany interest (income) expense, net

0

Loss on debt extinguishment

0

324

2,795

Change in fair value of contingent consideration liabilities

(12)

(712)

2,000

(1,765)

Other (income) expense, net

(18)

(1,562)

(1,021)

(1,737)

Total other expense, net

16,388

14,350

45,443

39,110

Income before provision for income taxes

139,800

109,045

458,175

357,251

Provision for income taxes

47,564

35,600

155,926

123,492

Equity in earnings of unconsolidated subsidiaries

(721)

0

(1,199)

0

Equity in earnings of subsidiaries

0

Net income

91,515

73,445

301,050

233,759

Parent Company

Condensed Financial Statements, Captions [Line Items]

Revenue

0

Cost of goods sold

0

Gross margin

0

Facility and warehouse expenses

0

Distribution expenses

0

Selling, general and administrative expenses

5,178

6,813

20,188

20,130

Restructuring and acquisition related expenses

0

Depreciation and amortization

50

65

168

187

Operating income

(5,228)

(6,878)

(20,356)

(20,317)

Other expense (income):

Interest expense, net

12,338

13,335

38,583

29,589

Intercompany interest (income) expense, net

(12,638)

(13,028)

(35,828)

(34,318)

Loss on debt extinguishment

324

2,795

Change in fair value of contingent consideration liabilities

0

Other (income) expense, net

155

45

81

172

Total other expense, net

(145)

352

3,160

(1,762)

Income before provision for income taxes

(5,083)

(7,230)

(23,516)

(18,555)

Provision for income taxes

(1,363)

(2,867)

(8,665)

(7,199)

Equity in earnings of unconsolidated subsidiaries

0

Equity in earnings of subsidiaries

95,235

77,808

315,901

245,115

Net income

91,515

73,445

301,050

233,759

Guarantor Subsidiaries

Condensed Financial Statements, Captions [Line Items]

Revenue

1,165,794

876,862

3,486,098

2,698,008

Cost of goods sold

709,985

522,176

2,107,866

1,593,764

Gross margin

455,809

354,686

1,378,232

1,104,244

Facility and warehouse expenses

95,619

79,565

281,805

240,389

Distribution expenses

98,457

73,752

291,187

224,266

Selling, general and administrative expenses

114,926

93,549

342,038

282,364

Restructuring and acquisition related expenses

882

411

7,366

750

Depreciation and amortization

19,592

14,014

58,556

41,568

Operating income

126,333

93,395

397,280

314,907

Other expense (income):

Interest expense, net

71

81

186

621

Intercompany interest (income) expense, net

6,207

5,593

16,279

16,901

Loss on debt extinguishment

0

Change in fair value of contingent consideration liabilities

(54)

72

2,183

936

Other (income) expense, net

(1,164)

(912)

(4,542)

(2,380)

Total other expense, net

5,168

4,690

9,740

14,206

Income before provision for income taxes

121,165

88,705

387,540

300,701

Provision for income taxes

43,986

33,973

144,725

115,625

Equity in earnings of unconsolidated subsidiaries

20

35

Equity in earnings of subsidiaries

6,151

5,656

24,528

15,496

Net income

83,350

60,388

267,378

200,572

Non-Guarantor Subsidiaries

Condensed Financial Statements, Captions [Line Items]

Revenue

588,852

450,505

1,665,247

1,133,369

Cost of goods sold

380,250

287,284

1,056,125

707,884

Gross margin

208,602

163,221

609,122

425,485

Facility and warehouse expenses

37,711

28,784

106,190

71,091

Distribution expenses

50,115

35,841

141,258

95,767

Selling, general and administrative expenses

72,125

53,184

201,118

134,120

Restructuring and acquisition related expenses

2,712

1,795

5,450

6,641

Depreciation and amortization

10,856

6,739

28,412

16,095

Operating income

35,083

36,878

126,694

101,771

Other expense (income):

Interest expense, net

3,985

1,784

9,371

6,077

Intercompany interest (income) expense, net

6,431

7,435

19,549

17,417

Loss on debt extinguishment

0

Change in fair value of contingent consideration liabilities

42

(784)

(183)

(2,701)

Other (income) expense, net

991

(695)

3,440

471

Total other expense, net

11,365

9,308

32,543

26,666

Income before provision for income taxes

23,718

27,570

94,151

75,105

Provision for income taxes

4,941

4,494

19,866

15,066

Equity in earnings of unconsolidated subsidiaries

(741)

(1,234)

Equity in earnings of subsidiaries

0

Net income

18,036

23,076

73,051

60,039

Consolidation, Eliminations

Condensed Financial Statements, Captions [Line Items]

Revenue

(33,622)

(29,273)

(95,412)

(85,538)

Cost of goods sold

(33,622)

(29,273)

(95,412)

(85,538)

Gross margin

0

Facility and warehouse expenses

0

Distribution expenses

0

Selling, general and administrative expenses

0

Restructuring and acquisition related expenses

0

Depreciation and amortization

0

Operating income

0

Other expense (income):

Interest expense, net

0

Intercompany interest (income) expense, net

0

Loss on debt extinguishment

0

Change in fair value of contingent consideration liabilities

0

Other (income) expense, net

0

Total other expense, net

0

Income before provision for income taxes

0

Provision for income taxes

0

Equity in earnings of unconsolidated subsidiaries

0

Equity in earnings of subsidiaries

(101,386)

(83,464)

(340,429)

(260,611)

Net income

$ (101,386)

$ (83,464)

$ (340,429)

$ (260,611)

Condensed Consolidating Statements of Comprehensive Income (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

Sep. 30, 2014

Sep. 30, 2013

Condensed Financial Statements, Captions [Line Items]

Net income

$ 91,515

$ 73,445

$ 301,050

$ 233,759

Other comprehensive income, net of tax:

Foreign currency translation

(39,329)

28,514

(24,013)

6,330

Net change in unrecognized gains/losses on derivative instruments, net of tax

817

625

2,067

3,986

Change in unrealized gain on pension plan, net of tax

30

0

97

0

Total other comprehensive (loss) income

(38,542)

29,139

(22,043)

10,316

Total comprehensive income

52,973

102,584

279,007

244,075

Parent Company

Condensed Financial Statements, Captions [Line Items]

Net income

91,515

73,445

301,050

233,759

Other comprehensive income, net of tax:

Foreign currency translation

(39,329)

28,514

(24,013)

6,330

Net change in unrecognized gains/losses on derivative instruments, net of tax

817

625

2,067

3,986

Change in unrealized gain on pension plan, net of tax

30

97

Total other comprehensive (loss) income

(38,542)

29,139

(22,043)

10,316

Total comprehensive income

52,973

102,584

279,007

244,075

Guarantor Subsidiaries

Condensed Financial Statements, Captions [Line Items]

Net income

83,350

60,388

267,378

200,572

Other comprehensive income, net of tax:

Foreign currency translation

(14,554)

13,130

(7,034)

3,386

Net change in unrecognized gains/losses on derivative instruments, net of tax

0

Change in unrealized gain on pension plan, net of tax

0

Total other comprehensive (loss) income

(14,554)

13,130

(7,034)

3,386

Total comprehensive income

68,796

73,518

260,344

203,958

Non-Guarantor Subsidiaries

Condensed Financial Statements, Captions [Line Items]

Net income

18,036

23,076

73,051

60,039

Other comprehensive income, net of tax:

Foreign currency translation

(37,922)

28,104

(22,610)

7,107

Net change in unrecognized gains/losses on derivative instruments, net of tax

(229)

127

(48)

903

Change in unrealized gain on pension plan, net of tax

30

97

Total other comprehensive (loss) income

(38,181)

28,231

(22,755)

8,010

Total comprehensive income

(20,145)

51,307

50,296

68,049

Consolidation, Eliminations

Condensed Financial Statements, Captions [Line Items]

Net income

(101,386)

(83,464)

(340,429)

(260,611)

Other comprehensive income, net of tax:

Foreign currency translation

52,476

(41,234)

29,644

(10,493)

Net change in unrecognized gains/losses on derivative instruments, net of tax

229

(127)

48

(903)

Change in unrealized gain on pension plan, net of tax

(30)

(97)

Total other comprehensive (loss) income

52,735

(41,361)

29,789

(11,396)

Total comprehensive income

$ (48,651)

$ (124,825)

$ (310,640)

$ (272,007)

Condensed Consolidating Statements of Cash Flows (Details) (USD $)

In Thousands, unless otherwise specified

9 Months Ended

Sep. 30, 2014

Sep. 30, 2013

CASH FLOWS FROM OPERATING ACTIVITIES:

Net cash provided by operating activities

$ 322,642

$ 340,929

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

(100,191)

(61,126)

Proceeds from sales of property and equipment

3,174

1,459

Investments in unconsolidated subsidiary

(2,240)

(9,136)

Investment and intercompany note activity with subsidiaries

0

Acquisitions, net of cash acquired

(650,614)

(395,974)

Net cash used in investing activities

(749,871)

(464,777)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of stock options

6,520

13,647

Excess tax benefit from stock-based payments

14,455

15,998

Proceeds from issuance of senior notes

0

600,000

Borrowings under revolving credit facility

1,299,821

399,758

Repayments under revolving credit facility

(808,039)

(745,313)

Borrowings under term loans

11,250

35,000

Repayments under term loans

(11,250)

Borrowings under receivables securitization facility

80,000

41,500

Repayments under receivables securitization facility

0

(111,500)

Repayments of other long-term debt

(20,532)

(19,518)

Payments of other obligations

(41,934)

(32,091)

Other financing activities, net

(6,881)

(16,912)

Investment and intercompany note activity with parent

0

Dividends

0

Net cash provided by financing activities

523,410

169,319

Effect of exchange rate changes on cash and equivalents

(2,023)

2,096

Net increase in cash and equivalents

94,158

47,567

Cash and equivalents, beginning of period

150,488

59,770

Cash and equivalents, end of period

244,646

107,337

Parent Company

CASH FLOWS FROM OPERATING ACTIVITIES:

Net cash provided by operating activities

264,870

101,136

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

(37)

(1)

Proceeds from sales of property and equipment

0

Investments in unconsolidated subsidiary

0

Investment and intercompany note activity with subsidiaries

(197,714)

(418,205)

Acquisitions, net of cash acquired

0

Net cash used in investing activities

(197,751)

(418,206)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of stock options

6,520

13,647

Excess tax benefit from stock-based payments

14,455

15,998

Proceeds from issuance of senior notes

600,000

Borrowings under revolving credit facility

693,000

315,000

Repayments under revolving credit facility

(693,000)

(616,000)

Borrowings under term loans

11,250

35,000

Repayments under term loans

(11,250)

Borrowings under receivables securitization facility

0

Repayments under receivables securitization facility

0

Repayments of other long-term debt

(1,920)

(925)

Payments of other obligations

0

Other financing activities, net

(18,669)

(16,830)

Investment and intercompany note activity with parent

0

Dividends

0

Net cash provided by financing activities

386

334,640

Effect of exchange rate changes on cash and equivalents

0

Net increase in cash and equivalents

67,505

17,570

Cash and equivalents, beginning of period

77,926

18,396

Cash and equivalents, end of period

145,431

35,966

Guarantor Subsidiaries

CASH FLOWS FROM OPERATING ACTIVITIES:

Net cash provided by operating activities

361,218

195,524

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

(59,387)

(40,824)

Proceeds from sales of property and equipment

1,218

1,032

Investments in unconsolidated subsidiary

(600)

0

Investment and intercompany note activity with subsidiaries

(607)

(84,893)

Acquisitions, net of cash acquired

(520,721)

(21,570)

Net cash used in investing activities

(580,097)

(146,255)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of stock options

0

Excess tax benefit from stock-based payments

0

Proceeds from issuance of senior notes

0

Borrowings under revolving credit facility

0

Repayments under revolving credit facility

0

Borrowings under term loans

0

Repayments under term loans

0

Borrowings under receivables securitization facility

0

Repayments under receivables securitization facility

0

Repayments of other long-term debt

(2,104)

(7,983)

Payments of other obligations

(407)

(473)

Other financing activities, net

12,340

0

Investment and intercompany note activity with parent

(481,951)

(25,095)

Dividends

(259,653)

(71,943)

Net cash provided by financing activities

232,127

(55,304)

Effect of exchange rate changes on cash and equivalents

(86)

0

Net increase in cash and equivalents

13,162

(6,035)

Cash and equivalents, beginning of period

13,693

18,253

Cash and equivalents, end of period

26,855

12,218

Non-Guarantor Subsidiaries

CASH FLOWS FROM OPERATING ACTIVITIES:

Net cash provided by operating activities

(43,793)

116,212

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

(40,767)

(20,301)

Proceeds from sales of property and equipment

1,956

427

Investments in unconsolidated subsidiary

(1,640)

(9,136)

Investment and intercompany note activity with subsidiaries

0

Acquisitions, net of cash acquired

(129,893)

(374,404)

Net cash used in investing activities

(170,344)

(403,414)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of stock options

0

Excess tax benefit from stock-based payments

0

Proceeds from issuance of senior notes

0

Borrowings under revolving credit facility

606,821

84,758

Repayments under revolving credit facility

(115,039)

(129,313)

Borrowings under term loans

0

Repayments under term loans

0

Borrowings under receivables securitization facility

80,000

41,500

Repayments under receivables securitization facility

(111,500)

Repayments of other long-term debt

(16,508)

(10,610)

Payments of other obligations

(41,527)

(31,618)

Other financing activities, net

(552)

(82)

Investment and intercompany note activity with parent

283,630

(478,003)

Dividends

0

Net cash provided by financing activities

229,565

321,138

Effect of exchange rate changes on cash and equivalents

(1,937)

2,096

Net increase in cash and equivalents

13,491

36,032

Cash and equivalents, beginning of period

58,869

23,121

Cash and equivalents, end of period

72,360

59,153

Consolidation, Eliminations

CASH FLOWS FROM OPERATING ACTIVITIES:

Net cash provided by operating activities

(259,653)

(71,943)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

0

Proceeds from sales of property and equipment

0

Investments in unconsolidated subsidiary

0

Investment and intercompany note activity with subsidiaries

198,321

503,098

Acquisitions, net of cash acquired

0

Net cash used in investing activities

198,321

503,098

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of stock options

0

Excess tax benefit from stock-based payments

0

Proceeds from issuance of senior notes

0

Borrowings under revolving credit facility

0

Repayments under revolving credit facility

0

Borrowings under term loans

0

Repayments under term loans

0

Borrowings under receivables securitization facility

0

Repayments under receivables securitization facility

0

Repayments of other long-term debt

0

Payments of other obligations

0

Other financing activities, net

0

Investment and intercompany note activity with parent

198,321

503,098

Dividends

259,653

71,943

Net cash provided by financing activities

61,332

(431,155)

Effect of exchange rate changes on cash and equivalents

0

Net increase in cash and equivalents

0

Cash and equivalents, beginning of period

0

Cash and equivalents, end of period

$ 0