LKQ CORP, 10-Q filed on 8/2/2013
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 30, 2013
Jul. 26, 2013
Document Documentand Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Jun. 30, 2013 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q2 
 
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
 
300,119,760 
Consolidated Condensed Balance Sheets (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Current Assets:
 
 
Cash and equivalents
$ 161,590 
$ 59,770 
Receivables, net
413,215 
311,808 
Inventory
972,926 
900,803 
Deferred income taxes
53,328 
53,485 
Prepaid income taxes
11,885 
29,537 
Prepaid expenses and other current assets
45,546 
28,948 
Total Current Assets
1,658,490 
1,384,351 
Property and Equipment, net
515,353 
494,379 
Intangible Assets:
 
 
Goodwill
1,826,128 
1,690,284 
Other intangibles, net
148,771 
106,715 
Other Assets
69,573 
47,727 
Total Assets
4,218,315 
3,723,456 
Current Liabilities:
 
 
Accounts payable
263,565 
219,335 
Accrued expenses:
 
 
Accrued payroll-related liabilities
46,083 
44,400 
Other accrued expenses
117,772 
90,422 
Income taxes payable
9,756 
2,748 
Contingent consideration liabilities
44,584 
42,255 
Other current liabilities
12,388 
17,068 
Current portion of long-term obligations
64,962 
71,716 
Total Current Liabilities
559,110 
487,944 
Long-Term Obligations, Excluding Current Portion
1,311,519 
1,046,762 
Deferred Income Taxes
118,044 
102,275 
Contingent Consideration Liabilities
4,889 
47,754 
Other Noncurrent Liabilities
87,100 
74,627 
Commitments and Contingencies
   
   
Stockholders’ Equity:
 
 
Common stock, $0.01 par value, 1,000,000,000 and 500,000,000 shares authorized, 299,798,228 and 297,810,896 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively
2,998 
2,978 
Additional paid-in capital
982,386 
950,338 
Retained earnings
1,170,333 
1,010,019 
Accumulated other comprehensive (loss) income
(18,064)
759 
Total Stockholders’ Equity
2,137,653 
1,964,094 
Total Liabilities and Stockholders’ Equity
$ 4,218,315 
$ 3,723,456 
Consolidated Condensed Balance Sheets (Parenthetical) (USD $)
Jun. 30, 2013
Dec. 31, 2012
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
1,000,000,000 
500,000,000 
Common stock, shares issued
299,798,228 
297,810,896 
Common stock, shares outstanding
299,798,228 
297,810,896 
Consolidated Condensed Statements of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Income Statement [Abstract]
 
 
 
 
Revenue
$ 1,251,748 
$ 1,006,531 
$ 2,447,745 
$ 2,038,308 
Cost of goods sold
741,875 
584,600 
1,435,923 
1,168,994 
Gross margin
509,873 
421,931 
1,011,822 
869,314 
Facility and warehouse expenses
102,885 
82,192 
203,131 
167,300 
Distribution expenses
106,583 
91,926 
210,440 
183,739 
Selling, general and administrative expenses
146,012 
121,698 
283,068 
243,412 
Restructuring and acquisition related expenses
3,680 
2,195 
5,185 
2,442 
Depreciation and amortization
19,335 
15,353 
37,032 
30,246 
Operating income
131,378 
108,567 
272,966 
242,175 
Other expense (income):
 
 
 
 
Interest expense, net
12,492 
7,356 
21,087 
14,723 
Loss on debt extinguishment
2,795 
0 
2,795 
0 
Change in fair value of contingent consideration liabilities
230 
1,240 
1,053 
(105)
Other income, net
(577)
(1,228)
(175)
(1,739)
Total other expense, net
14,940 
7,368 
24,760 
12,879 
Income before provision for income taxes
116,438 
101,199 
248,206 
229,296 
Provision for income taxes
40,716 
37,201 
87,892 
84,307 
Net income
$ 75,722 
$ 63,998 
$ 160,314 
$ 144,989 
Earnings per share:
 
 
 
 
Basic
$ 0.25 
$ 0.22 
$ 0.54 
$ 0.49 
Diluted
$ 0.25 
$ 0.21 
$ 0.53 
$ 0.48 
Consolidated Condensed Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Statement of Other Comprehensive Income [Abstract]
 
 
 
 
Net income
$ 75,722 
$ 63,998 
$ 160,314 
$ 144,989 
Other comprehensive (loss) income, net of tax:
 
 
 
 
Foreign currency translation
(3,204)
(6,171)
(22,184)
2,336 
Net change in unrecognized gains (losses) on derivative instruments, net of tax
2,629 
(3,341)
3,361 
(2,991)
Total other comprehensive loss
(575)
(9,512)
(18,823)
(655)
Total comprehensive income
$ 75,147 
$ 54,486 
$ 141,491 
$ 144,334 
Consolidated Condensed Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
Net income
$ 160,314 
$ 144,989 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
39,711 
33,446 
Stock-based compensation expense
10,562 
7,978 
Excess tax benefit from stock-based payments
(10,902)
(7,219)
Other
6,126 
1,369 
Changes in operating assets and liabilities, net of effects from acquisitions:
 
 
Receivables
(50,320)
(22,662)
Inventory
(6,227)
(30,763)
Prepaid income taxes/income taxes payable
34,521 
13,728 
Accounts payable
14,361 
3,802 
Other operating assets and liabilities
11,344 
(23,656)
Net cash provided by operating activities
209,490 
121,012 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
Purchases of property and equipment
(40,151)
(41,615)
Proceeds from sales of property and equipment
1,251 
472 
Cash used in acquisitions, net of cash acquired
(308,579)
(120,315)
Net cash used in investing activities
(347,479)
(161,458)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
Proceeds from exercise of stock options
10,604 
10,112 
Excess tax benefit from stock-based payments
10,902 
7,219 
Debt issuance costs
(16,521)
0 
Proceeds from issuance of senior notes
600,000 
0 
Borrowings under revolving credit facility
353,408 
331,342 
Repayments under revolving credit facility
(708,060)
(484,851)
Borrowings under term loans
35,000 
200,000 
Repayments under term loans
(5,625)
(8,750)
Borrowings under receivables securitization facility
1,500 
0 
Repayments under receivables securitization facility
(1,500)
0 
Payments of other obligations
(38,556)
(3,611)
Net cash provided by financing activities
241,152 
51,461 
Effect of exchange rate changes on cash and equivalents
(1,343)
91 
Net increase in cash and equivalents
101,820 
11,106 
Cash and equivalents, beginning of period
59,770 
48,247 
Cash and equivalents, end of period
161,590 
59,353 
Supplemental disclosure of cash paid for:
 
 
Income taxes, net of refunds
53,459 
70,698 
Interest
15,286 
13,484 
Supplemental disclosure of noncash investing and financing activities:
 
 
Notes payable and long-term obligations, including notes issued in connection with business acquisitions
7,260 
7,936 
Contingent consideration liabilities
2,650 
5,540 
Non-cash property and equipment additions
$ 3,407 
$ 6,162 
Consolidated Condensed Statements of Stockholders' Equity (USD $)
In Thousands, except Share data
Total
Common Stock
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Beginning Balance at Dec. 31, 2012
$ 1,964,094 
$ 2,978 
$ 950,338 
$ 1,010,019 
$ 759 
Beginning Balance, shares at Dec. 31, 2012
 
297,811,000 
 
 
 
Net income
160,314 
 
 
160,314 
 
Other comprehensive loss
(18,823)
 
 
 
(18,823)
Restricted stock units vested, shares
 
345,000 
 
 
 
Restricted stock units vested, value
 
4 
(4)
 
 
Stock-based compensation expense
10,562 
 
10,562 
 
 
Exercise of stock options, shares
 
1,642,000 
 
 
 
Exercise of stock options, value
10,604 
16 
10,588 
 
 
Excess tax benefit from stock-based payments
10,902 
 
10,902 
 
 
Ending Balance at Jun. 30, 2013
$ 2,137,653 
$ 2,998 
$ 982,386 
$ 1,170,333 
$ (18,064)
Ending Balance, shares at Jun. 30, 2013
 
299,798,000 
 
 
 
Interim Financial Statements
Interim Financial Statements
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 consolidated condensed 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 have been condensed or omitted. These unaudited consolidated condensed financial statements reflect, in the opinion of management, all material adjustments (which include only normal recurring adjustments) necessary to fairly state, in all material respects, our financial position, results of operations and cash flows for the periods presented.
During the third quarter of 2012, our Board of Directors approved a two-for-one split of our common stock. The stock split was completed in the form of a stock dividend that was issued on September 18, 2012 to stockholders of record at the close of business on August 28, 2012. The stock began trading on a split adjusted basis on September 19, 2012. The Company’s historical share and per share information within this Quarterly Report on Form 10-Q has been retroactively adjusted to give effect to this stock split.
During the 2013 Annual Meeting of Stockholders in May 2013, our stockholders approved an amendment to our Certificate of Incorporation to increase the number of authorized shares of common stock from 500 million to 1 billion. The increased number of authorized shares is reflected on our Unaudited Consolidated Condensed Balance Sheet as of June 30, 2013.
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, 2012 filed with the SEC on March 1, 2013.
Financial Statement Information
Financial Statement Information
Financial Statement Information
Revenue Recognition
The majority of our revenue is derived from the sale of vehicle parts. Revenue is recognized when the products are shipped or 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 $28.9 million and $24.7 million at June 30, 2013 and December 31, 2012, 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 Consolidated Condensed Statements of Income and are shown as a current liability on our Unaudited Consolidated Condensed 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
We recorded a reserve for uncollectible accounts of $11.9 million and $9.5 million at June 30, 2013 and December 31, 2012, respectively.
Inventory
Inventory consists of the following (in thousands):
 
June 30,
2013
 
December 31,
2012
Aftermarket and refurbished products
$
598,939

 
$
523,677

Salvage and remanufactured products
373,987

 
377,126

 
$
972,926

 
$
900,803


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 and covenants not to compete.
The change in the carrying amount of goodwill by reportable segment during the six months ended June 30, 2013 is as follows (in thousands):
 
North America
 
Europe
 
Total
Balance as of January 1, 2013
$
1,339,831

 
$
350,453

 
$
1,690,284

Business acquisitions and adjustments to previously recorded goodwill
15,708

 
149,524

 
165,232

Exchange rate effects
(6,774
)
 
(22,614
)
 
(29,388
)
Balance as of June 30, 2013
$
1,348,765

 
$
477,363

 
$
1,826,128


The components of other intangibles are as follows (in thousands):
 
June 30, 2013
 
December 31, 2012
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Trade names and trademarks
$
140,527

 
$
(24,332
)
 
$
116,195

 
$
118,422

 
$
(21,599
)
 
$
96,823

Customer relationships
39,378

 
(8,583
)
 
30,795

 
14,426

 
(6,642
)
 
7,784

Covenants not to compete
3,687

 
(1,906
)
 
1,781

 
3,654

 
(1,546
)
 
2,108

 
$
183,592

 
$
(34,821
)
 
$
148,771

 
$
136,502

 
$
(29,787
)
 
$
106,715


During the six months ended June 30, 2013, we recorded $24.7 million of trade names and $25.3 million of customer relationships for our acquisition of Sator Beheer B.V. ("Sator") as discussed in Note 9, "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 either a straight-line or accelerated basis. 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 $5.3 million and $4.2 million during the six month periods ended June 30, 2013 and 2012, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2017 is $12.1 million, $12.9 million, $11.7 million, $10.4 million and $9.6 million, respectively.
Depreciation Expense
Included in Cost of Goods Sold on the Unaudited Consolidated Condensed Statements of Income is depreciation expense associated with our refurbishing, remanufacturing, and furnace operations and our distribution centers.
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. 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 six month period ended June 30, 2013 were as follows (in thousands):
 
Balance as of January 1, 2013
$
10,574

Warranty expense
15,028

Warranty claims
(14,180
)
Balance as of June 30, 2013
$
11,422


For an additional fee, we also sell extended warranty contracts for certain mechanical products. The expense related to extended warranty claims is recognized when the claim is made.
Recent Accounting Pronouncements
Effective January 1, 2013, we adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2013-02, "Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." This update requires disclosure of amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. The update does not change the items reported in other comprehensive income or when an item of other comprehensive income is reclassified to net income. As this guidance only revises the presentation and disclosures related to the reclassification of items out of accumulated other comprehensive income, the adoption of this guidance did not affect our financial position, results of operations or cash flows. See Note 12, "Accumulated Other Comprehensive Income (Loss)" for the additional required disclosures.
Equity Incentive Plans
Equity Incentive Plans
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").
Our RSUs, stock options, and restricted stock vest over periods ranging from one to five years. Vesting of the awards is subject to a continued service condition. Each RSU converts into one share of LKQ common stock on the applicable vesting date. Shares of restricted stock may not be sold, pledged or otherwise transferred until they vest. Stock options expire ten years from the date they are granted. We expect to issue new shares of common stock to cover past and future equity grants.
In March 2013, the Compensation Committee approved the cancellation of 671,400 unvested RSUs held by our executive officers and approved the issuance of 946,800 RSUs containing both a performance-based vesting condition and a time-based vesting condition.  Of the 946,800 RSUs, 671,400 were granted as a replacement of the canceled RSUs and include a performance-based condition that the Company reports positive diluted earnings per share, subject to certain adjustments, during the year ended December 31, 2013.  In addition, these RSUs retain the same remaining time-based vesting conditions as the canceled RSUs (vesting in equal tranches each six months beginning July 2013 through either January 2016 or January 2017).  The remaining 275,400 RSUs granted in March 2013 include a performance-based condition that the Company reports positive diluted earnings per share, subject to certain adjustments, during any fiscal year period within five years following the grant date.  In addition, these RSUs include a time-based vesting condition, vesting in equal tranches each six months beginning July 2013 through January 2016.
In all cases, both conditions must be met before any RSUs vest. If the applicable performance-based condition of an RSU is not met, the RSU is forfeited.  If and when the performance-based condition is met, all applicable RSUs that had previously met the time-based vesting condition will vest immediately and the remaining RSUs will vest according to the remaining schedule of the time-based condition. 
A summary of transactions in our stock-based compensation plans for the six months ended June 30, 2013 is as follows:
 
Shares
Available For
Grant
 
RSUs
 
Stock Options
 
Restricted Stock
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, 2013
14,643,932

 
2,351,362

 
$
14.02

 
9,355,070

 
$
6.90

 
116,000

 
$
9.47

Granted
(923,312
)
 
923,312

 
22.17

 
—

 
—

 
—

 
—

Exercised
—

 
—

 
—

 
(1,641,974
)
 
6.46

 
—

 
—

Vested
—

 
(345,358
)
 
14.38

 
—

 
—

 
(86,000
)
 
9.54

Canceled
138,022

 
(70,242
)
 
15.80

 
(67,780
)
 
8.69

 
—

 
—

Balance, June 30, 2013
13,858,642

 
2,859,074

 
$
16.57

 
7,645,316

 
$
6.98

 
30,000

 
$
9.30


The RSUs containing a performance-based vesting condition that were granted in replacement of canceled RSUs were accounted for as a modification of the original awards, and therefore are not reflected as grants or cancellations in the table above.
The fair value of RSUs is based on the market price of LKQ stock on the grant date. When estimating forfeitures, we consider voluntary and involuntary termination behavior as well as analysis of historical forfeitures. For valuing RSUs granted during the six month period ended June 30, 2013, we used forfeiture rates of 10% for grants to employees and 0% for grants to non-employee directors and executive officers. The fair value of RSUs that vested during the six months ended June 30, 2013 was approximately $7.9 million.
For the 2013 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, where expense is recognized over the requisite service period for each separate vesting tranche of the award. For the RSUs that were canceled and replaced, the fair values of the RSUs immediately before and after the modification were the same. As a result, there was no charge recorded in the six months ended June 30, 2013 and the expense for these RSUs was continued at the grant date fair value. During the three and six months ended June 30, 2013, we recognized $2.3 million and $3.7 million, respectively, of stock-based compensation expense 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.
The components of pre-tax stock-based compensation expense are as follows (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
RSUs
$
4,443

 
$
2,019

 
$
8,115

 
$
4,083

Stock options
1,124

 
1,721

 
2,333

 
3,442

Restricted stock
46

 
228

 
114

 
453

Total stock-based compensation expense
$
5,613

 
$
3,968

 
$
10,562

 
$
7,978


The following table sets forth the classification of total stock-based compensation expense included in our Unaudited Consolidated Condensed Statements of Income (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Cost of goods sold
$
98

 
$
96

 
$
196

 
$
199

Facility and warehouse expenses
687

 
609

 
1,371

 
1,303

Selling, general and administrative expenses
4,828

 
3,263

 
8,995

 
6,476

 
5,613

 
3,968

 
10,562

 
7,978

Income tax benefit
(2,189
)
 
(1,548
)
 
(4,119
)
 
(3,112
)
Total stock-based compensation expense, net of tax
$
3,424

 
$
2,420

 
$
6,443

 
$
4,866


We have not capitalized any stock-based compensation costs during either of the six month periods ended June 30, 2013 or 2012.
As of June 30, 2013, unrecognized compensation expense related to unvested RSUs, stock options and restricted stock is expected to be recognized as follows (in thousands):
 
RSUs
 
Stock
Options
 
Restricted
Stock
 
Total
Remainder of 2013
$
8,976

 
$
2,247

 
$
94

 
$
11,317

2014
12,867

 
3,007

 
139

 
16,013

2015
9,417

 
75

 
—

 
9,492

2016
5,669

 
—

 
—

 
5,669

2017
2,571

 
—

 
—

 
2,571

2018
96

 
—

 
—

 
96

Total unrecognized compensation expense
$
39,596

 
$
5,329

 
$
233

 
$
45,158



Our stock-based compensation expense for the remainder of 2013 related to the RSUs containing a performance-based vesting condition is expected to be $4.6 million.
Long-Term Obligations
Long-Term Obligations
Long-Term Obligations
Long-Term Obligations consist of the following (in thousands):
 
June 30,
2013
 
December 31,
2012
Senior secured credit agreement:
 
 
 
Term loans payable
$
450,000

 
$
420,625

Revolving credit facility
183,245

 
553,964

Senior notes
600,000

 
—

Receivables securitization facility
80,000

 
80,000

Notes payable through October 2018 at weighted average interest rates of 1.7%
43,577

 
42,398

Other long-term debt at weighted average interest rates of 3.4% and 3.3%, respectively
19,659

 
21,491

 
1,376,481

 
1,118,478

Less current maturities
(64,962
)
 
(71,716
)
 
$
1,311,519

 
$
1,046,762


Senior Secured Credit Agreement
On May 3, 2013, we entered into an 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 and RBS Citizens, N.A., as co-documentation agents, and Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, The Bank of Tokyo-Mitsubishi UFJ, LTD and RBS Citizens, N.A., as joint lead arrangers and joint bookrunners. The Credit Agreement retains many of the terms of the Company's amended and restated credit agreement dated September 30, 2011 (the "Original Credit Agreement") while also modifying certain terms to (1) extend the maturity date by approximately two years to May 3, 2018; (2) increase the total availability under the Credit Agreement from $1.4 billion to $1.8 billion (composed of $1.2 billion in the revolving credit facility's multicurrency component, $150 million in the revolving credit facility's US dollar component, and $450 million of term loans; (3) increase the amount of letters of credit that may be issued under the revolving credit facility to $150 million from $125 million; (4) raise the amount of swing line loans available under the revolving credit facility to $50 million from $25 million; (5) increase the maximum net leverage ratio covenant; (6) add certain subsidiaries as additional borrowers under the revolving credit facility; and (7) make other immaterial or clarifying modifications and amendments to the terms of the Original 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 amounts outstanding under the Original Credit Agreement, to pay fees related to the amendment and restatement and for general corporate purposes.    
Amounts under the revolving credit facility are due and payable upon maturity of the Credit Agreement on May 3, 2018. Amounts under the initial and additional term borrowings are due and payable in quarterly installments equal to 1.25% of the original principal amount beginning on September 30, 2013, 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 (an increase from 3.00 to 1.00 under the Original Credit Agreement), 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 (an increase from 3.50 to 1.00 under the Original Credit Agreement) and (ii) are required to maintain a minimum interest coverage ratio of 3.00 to 1.00. We were in compliance with all restrictive covenants under the Credit Agreement and the Original Credit Agreement as of June 30, 2013 and December 31, 2012, respectively.
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 against the Credit Agreement at June 30, 2013 and December 31, 2012 were 3.07% and 2.85%, 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 $633.2 million and $974.6 million at June 30, 2013 and December 31, 2012, respectively, of which $22.5 million and $31.9 million were classified as current maturities, respectively. As of June 30, 2013, there were letters of credit outstanding in the aggregate amount of $54.4 million. The amounts available under the revolving credit facility are reduced by the amounts outstanding under letters of credit, and thus availability on the revolving credit facility at June 30, 2013 was $1.1 billion.
Related to the execution of the Credit Agreement, we incurred $7.1 million of fees, of which $6.0 million were capitalized within Other Assets on our Unaudited Consolidated Condensed Balance Sheet and are amortized over the term of the agreement. The remaining $1.1 million of fees were expensed, together with $1.7 million of capitalized debt issuance costs related to the Original Credit Agreement, as a loss on debt extinguishment in our Unaudited Consolidated Condensed Statements of Income for the three and six months ended June 30, 2013.
Senior Notes
On May 9, 2013, we completed an offering of $600 million aggregate principal amount of senior notes due May 15, 2023 (the "Notes") in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933. The proceeds from the offering were used to repay revolver borrowings under our senior secured credit agreement, including amounts borrowed to finance our acquisition of Sator in May 2013 as discussed further in Note 9, "Business Combinations," to pay related fees and expenses, and for general corporate purposes. 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 bear interest at a rate of 4.75% per year from the date of 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, beginning on November 15, 2013. The Notes are fully and unconditionally guaranteed by the Guarantors.
The Notes and the guarantees will be our and each Guarantor's senior unsecured obligations and will be 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 will be 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.
The Notes will be redeemable, in whole or in part, at any time on or after May 15, 2018 on the redemption dates and at the respective redemption prices specified in the Indenture. In addition, we may redeem up to 35% of the notes before May 15, 2016 with the net cash proceeds from certain equity offerings. We may also redeem some or all of the notes before May 15, 2018 at a redemption price of 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the redemption date, plus a "make whole" premium. We may be required to make an offer to purchase the notes upon the sale of certain assets, subject to certain exceptions, and upon a change of control.
In connection with the sale of the Notes, the Company entered into a Registration Rights Agreement dated as of May 9, 2013 (the "Registration Rights Agreement") with the Guarantors and the representative of the initial purchasers of the Notes identified therein. Under the Registration Rights Agreement, the Company and the Guarantors have agreed to (i) file an exchange offer registration statement to exchange the Notes for a new issue of debt securities registered under the Securities Act of 1933, with terms substantially identical to those of the Notes (except that the exchange notes will not contain terms with respect to additional interest, registration rights, or certain transfer restrictions); (ii) use their commercially reasonable efforts to consummate the exchange offer within 365 days after the issue date of the Notes; and (iii) in certain circumstances, file a shelf registration statement for the resale of the Notes. If the Company and the Guarantors fail to consummate the exchange offer within 365 days of the issue date of the Notes or otherwise fail to satisfy their registration obligations under the Registration Rights Agreement, then the annual interest rate on the Notes will increase by 0.25% per annum and by an additional 0.25% per annum for each subsequent 90-day period during which the registration default continues, up to a maximum additional interest rate of 1.0% per annum.
Fees incurred related to the offering of the Notes totaling $9.4 million were capitalized within Other Assets on our Unaudited Consolidated Condensed Balance Sheet and are amortized over the term of the Notes.
Receivables Securitization Facility
On September 28, 2012, we entered into a three year receivables securitization facility with The Bank of Tokyo-Mitsubishi UFJ, Ltd. ("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.     
The sale of the ownership interest in the receivables is accounted for as a secured borrowing in our Unaudited Consolidated Condensed Balance Sheets, under which the receivables included in the program collateralize the amounts invested by BTMU and the conduit investors and/or financial institutions. 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 June 30, 2013 and December 31, 2012, $117.9 million and $116.9 million, respectively, of net receivables were collateral for the investment under the receivables facility.
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") plus 1.25%, 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 plus 1.25% 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 June 30, 2013 and December 31, 2012, the interest rate under the receivables facility was based on commercial paper rates and was 1.01% and 1.05%, respectively. The outstanding balance of $80.0 million as of both June 30, 2013 and December 31, 2012 was classified as long-term on the Unaudited Consolidated Condensed Balance Sheets because we have the ability and intent to refinance these borrowings on a long-term basis.
Derivative Instruments and Hedging Activities
Derivative Instruments and Hedging Activities
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 June 30, 2013, 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 have received and will 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 2013 through 2016.
Beginning in the second quarter of 2013, we 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 the 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 euros and pounds sterling 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. These foreign currency forward contracts expire in 2014.
    
The following table summarizes the notional amounts and fair values of our designated cash flow hedges as of June 30, 2013 and December 31, 2012 (in thousands):

 
Notional Amount
 
Fair Value at June 30, 2013
 
Fair Value at December 31, 2012
 
 
June 30, 2013
 
December 31, 2012
 
Other Assets
 
Other Accrued Expenses
 
Other Noncurrent Liabilities
 
Other Accrued Expenses
 
Other Noncurrent Liabilities
Interest rate swap agreements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
USD denominated
 
$
420,000

 
$
520,000

 
$
—

 
$
—

 
$
8,678

 
$
705

 
$
12,791

GBP denominated
 
£
50,000

 
£
50,000

 
—

 
—

 
1,115

 
—

 
2,135

CAD denominated
 
C$
25,000

 
C$
25,000

 
148

 
—

 
—

 
—

 
12

Foreign currency forward contracts
 
 
 
 
 
 
 
 
 
 
EUR denominated
 
€
149,976

 
—

 
—

 
629

 
—

 
—

 
—

GBP denominated
 
£
70,000

 
—

 
—

 
544

 
—

 
—

 
—

Total cash flow hedges
 
 
$
148

 
$
1,173

 
$
9,793

 
$
705

 
$
14,938

 
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 on our Unaudited Consolidated Condensed Balance Sheets. The impact of netting the fair values of these contracts would not have a material effect on our Unaudited Consolidated Condensed Balance Sheets at June 30, 2013 or December 31, 2012.
The activity related to our cash flow hedges is included in Note 12, "Accumulated Other Comprehensive Income (Loss)." In May 2013, we repaid a portion of our variable rate U.S. dollar denominated credit agreement borrowings with the proceeds of our fixed rate senior notes, which resulted in one of our interest rate swap contracts, which expires in October 2013, no longer being designated as an effective cash flow hedge. As a result, we experienced an immaterial amount of hedge ineffectiveness during the three and six month periods ended June 30, 2013. Hedge ineffectiveness related to our foreign currency forward contracts was immaterial to our results of operations during the three and six months ended June 30, 2013. We expect future ineffectiveness related to our cash flow hedges will not have a material effect on our results of operations.
As of June 30, 2013, we estimate that $4.1 million of derivative losses (net of tax) included in Accumulated Other Comprehensive Income (Loss) will be reclassified into our Unaudited Consolidated Condensed Statements of Income within the next 12 months.
Other Derivative Instruments
We hold other short-term derivative instruments, including foreign currency forward contracts and commodity forward contracts, to manage our exposure to variability in exchange rates related to purchases of inventory invoiced in a non-functional currency and to metals prices in certain of our operations. 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 at each balance sheet date, which could result in volatility in our earnings. The notional amount and fair value of these contracts at June 30, 2013 and December 31, 2012, along with the effect on our results of operations during each of the three and six month periods ended June 30, 2013 and June 30, 2012, were immaterial.
Fair Value Measurements
Fair Value Measurements
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 six months ended June 30, 2013, 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. As described in Note 5, "Derivative Instruments and Hedging Activities," in the second quarter of 2013, we entered into several foreign currency forward contracts, which are recorded at fair market 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 June 30, 2013 and December 31, 2012 (in thousands):
 
Balance as of June 30, 2013
 
Fair Value Measurements as of June 30, 2013
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
Cash surrender value of life insurance
$
22,453

 
$
—

 
$
22,453

 
$
—

Interest rate swaps
148

 
 
 
148

 
 
Total Assets
$
22,601

 
$
—

 
$
22,601

 
$
—

Liabilities:
 
 
 
 
 
 
 
Contingent consideration liabilities
$
49,473

 
$
—

 
$
—

 
$
49,473

Deferred compensation liabilities
22,280

 
—

 
22,280

 
—

Interest rate swaps
10,066

 
—

 
10,066

 
—

Foreign currency forward contracts
1,173

 
—

 
1,173

 
—

Total Liabilities
$
82,992

 
$
—

 
$
33,519

 
$
49,473

 
Balance as of December 31, 2012
 
Fair Value Measurements as of December 31, 2012
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
Cash surrender value of life insurance
$
19,492

 
$
—

 
$
19,492

 
$
—

Total Assets
$
19,492

 
$
—

 
$
19,492

 
$
—

Liabilities:
 
 
 
 
 
 
 
Contingent consideration liabilities
$
90,009

 
$
—

 
$
—

 
$
90,009

Deferred compensation liabilities
19,843

 
—

 
19,843

 
—

Interest rate swaps
15,643

 
—

 
15,643

 
—

Total Liabilities
$
125,495

 
$
—

 
$
35,486

 
$
90,009



The cash surrender value of life insurance and deferred compensation liabilities are included in Other Assets and Other Noncurrent Liabilities, respectively, on our Unaudited Consolidated Condensed Balance Sheets. The contingent consideration liabilities are classified as separate line items in both current and noncurrent liabilities on our Unaudited Consolidated Condensed 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 certain of our business acquisitions as further described in Note 9, "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:
Unobservable Input
June 30, 2013 Weighted Average
 
December 31, 2012 Weighted Average
Probability of achieving payout targets
70.4
%
 
79.7
%
Discount rate
6.5
%
 
6.6
%

A significant decrease in the assessed probabilities of achieving the targets or a significant increase in the discount rate, in isolation, would result in a significantly 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 Consolidated Condensed Statements of Income.
Changes in the fair value of our contingent consideration liabilities for the three and six months ended June 30, 2013 and 2012 were as follows (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Beginning balance
$
49,565

 
$
82,909

 
$
90,009

 
$
82,382

Contingent consideration liabilities recorded for business acquisitions
261

 
5,433

 
2,650

 
5,540

Payments
(581
)
 
—

 
(38,349
)
 
(600
)
Loss (gain) included in earnings
230

 
1,240

 
1,053

 
(105
)
Exchange rate effects
(2
)
 
(1,545
)
 
(5,890
)
 
820

Ending balance
$
49,473

 
$
88,037

 
$
49,473

 
$
88,037


The purchase price for our 2011 acquisition of Euro Car Parts Holdings Limited ("ECP") included contingent payments depending on the achievement of certain annual performance targets in 2012 and 2013. The performance target for 2012 was exceeded, and during the three months ended March 31, 2013, we paid £25.0 million, the maximum contingent payment, through a cash payment of $33.9 million (£22.4 million) and the issuance of notes for $3.9 million (£2.6 million). In April 2013, we amended the ECP contingent payment agreement, and as a result, we are obligated to pay Draco Limited, one of the sellers of ECP, approximately £27 million in the first quarter of 2014, which is equal to the maximum payment for Draco Limited's share of the contingent payment agreement for the 2013 performance period. The effect of the amendment did not have a material effect on our financial position or our results of operations, and we believe the amendment will not have a material effect on our future cash flows, as the fair value of the contingent payment liability prior to the amendment was calculated assuming a high probability of achieving the performance targets for the maximum payment. See Note 9, "Business Combinations" for further information on the amendment.
Of the amounts included in earnings for the three and six months ended June 30, 2013, $1.3 million and $2.1 million of losses, respectively, relate to contingent consideration liabilities outstanding as of June 30, 2013. The amounts included in earnings for the three and six months ended June 30, 2012 included $0.3 million of losses and $1.0 million of gains, respectively, related to contingent consideration liabilities outstanding as of June 30, 2013. The changes in the fair value of contingent consideration liabilities during the respective periods in 2013 and 2012 are a result of the quarterly assessment of the fair value inputs. The net gain during the six month period ended June 30, 2012 also includes the impact related to the adoption of FASB ASU No. 2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs" (which adoption did not have a material impact).
Financial Assets and Liabilities Not Measured at Fair Value
Our debt is reflected on the Unaudited Consolidated Condensed Balance Sheets at cost. Based on market conditions as of June 30, 2013 and December 31, 2012, the fair value of our credit agreement borrowings reasonably approximated the carrying value of $633 million and $975 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 both June 30, 2013 and December 31, 2012. As of June 30, 2013, the fair value of our senior notes was approximately $576 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 value by calculating the upfront cash payment a market participant would require at June 30, 2013 to assume these obligations. The fair value of our senior notes, which is determined using quoted market prices in the secondary market, is also classified as Level 2 within the fair value hierarchy because the market for these financial instruments is not considered an active market.
Commitments and Contingencies
Commitments and Contingencies
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 June 30, 2013 are as follows (in thousands):
Six months ending December 31, 2013
$
61,194

Years ending December 31:
 
2014
100,859

2015
89,359

2016
71,307

2017
56,731

2018
44,952

Thereafter
132,250

Future Minimum Lease Payments
$
556,652


Litigation and Related Contingencies
We are a plaintiff in a class action lawsuit against several aftermarket product suppliers. During the three and six month periods ended June 30, 2012, we recognized gains of $8.4 million and $16.7 million, respectively, resulting from settlements with certain of the defendants. These gains were recorded as a reduction of Cost of Goods Sold on our Unaudited Consolidated Condensed Statements of Income. The class action is still pending against two defendants, the results of which are not expected to be material to our financial position, results of operations or cash flows. If there is a class settlement with (or a favorable judgment entered against) either of the remaining defendants, we will recognize the gain from such settlement or judgment when substantially all uncertainties regarding its timing and amount are resolved and realization is assured.
We also 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.
Earnings Per Share
Earnings Per Share
Earnings Per Share
The following chart sets forth the computation of earnings per share (in thousands, except per share amounts):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Net income
$
75,722

 
$
63,998

 
$
160,314

 
$
144,989

Denominator for basic earnings per share—weighted average shares outstanding
299,159

 
295,290

 
298,690

 
294,784

Effect of dilutive securities:
 
 
 
 
 
 
 
RSUs
758

 
440

 
721

 
438

Stock options
3,728

 
4,372

 
3,865

 
4,476

Restricted stock
12

 
50

 
19

 
48

Denominator for diluted earnings per share—Adjusted weighted average shares outstanding
303,657

 
300,152

 
303,295

 
299,746

Earnings per share, basic
$
0.25

 
$
0.22

 
$
0.54

 
$
0.49

Earnings per share, diluted
$
0.25

 
$
0.21

 
$
0.53

 
$
0.48

There were no employee stock-based compensation awards that would have had an antidilutive effect on the computation of diluted earnings per share for the three and six months ended June 30, 2013 or June 30, 2012.
Business Combinations
Business Combinations
Business Combinations
On May 1, 2013, LKQ Netherlands B.V., a subsidiary of LKQ Corporation, entered into a sale and purchase agreement with H2 Sator B.V., Cooperatieve H2 Sator U.A. and H2 Sator U.A. (collectively the "Sellers") to acquire the shares of Sator, an automotive aftermarket parts distribution company based in the Netherlands, with operations in the Netherlands, Belgium, Luxembourg and Northern France.  With the acquisition of Sator, we expanded our geographic presence in the European automotive 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 $139.2 million of goodwill related to our acquisition of Sator, which we do not expect will be deductible for income tax purposes. In the period between May 1, 2013 and June 30, 2013, Sator generated approximately $68.8 million of revenue and $5.4 million of operating income.
In addition to our acquisition of Sator, we made nine acquisitions during the six months ended June 30, 2013, including seven wholesale businesses and a self service operation in North America, and a wholesale business in Europe. Our acquisitions enabled us to expand into new product lines and enter new markets. Total acquisition date fair value of the consideration for these acquisitions was $41.1 million, composed of $35.1 million of cash (net of cash acquired), $2.4 million of notes payable, $1.0 million of other purchase price obligations (non-interest bearing) and $2.7 million for the estimated value of contingent payments to former owners. The maximum amount of the contingent payment is $3.0 million. During the six months ended June 30, 2013, we recorded $26.1 million of goodwill related to the acquisitions excluding Sator and immaterial adjustments to preliminary purchase price allocations related to certain of our 2012 acquisitions. We expect $8.4 million of the $26.1 million of goodwill recorded to be deductible for income tax purposes. In the period between the acquisition dates and June 30, 2013, these acquisitions generated $12.4 million of revenue and $0.5 million of operating income.
The consideration for our 2011 acquisition of ECP included a contingent payment agreement with a potential payment of up to £30 million based on ECP's 2013 results. In April 2013, we entered into an agreement waiving for Draco Limited, one of the sellers of ECP, the condition of ECP achieving the 2013 performance target, subject to the closing of the Sator acquisition.  As a result of the waiver and the closing of the Sator acquisition in May 2013, we are obligated to pay Draco Limited approximately £27 million in the first quarter of 2014, which is equal to the maximum payment for Draco Limited's share of the contingent payment agreement. The waiver of the 2013 performance targets did not have a material impact on our financial position or results of operations, and it is not expected to have a material impact on our cash flows, as the fair value of the contingent payment liability prior to the waiver was calculated assuming a high probability of achieving the performance targets for the maximum payment. We also believe the waiver will improve our flexibility to execute our European strategy.
During the year ended December 31, 2012, we made 30 acquisitions in North America, including 22 wholesale businesses and 8 self service retail operations. These acquisitions enabled us to expand our geographic presence and to enter new markets. Additionally, two of our acquisitions were completed with a goal of improving the recovery from scrap and other metals harvested from the vehicles we purchase: a precious metals refining and reclamation business, which we acquired with the goal of improving the profitability of the precious metals we extract from our recycled vehicle parts; and a scrap metal shredder, which we expect will improve the profitability of the scrap metals recovered from the vehicle hulks in certain of our recycled product operations.
Total acquisition date fair value of the consideration for the 2012 acquisitions was $284.6 million, composed of $261.5 million of cash (net of cash acquired), $16.0 million of notes payable, $1.6 million of other purchase price obligations (non-interest bearing) and $5.5 million of contingent payments to former owners. The contingent consideration arrangements made in connection with our 2012 acquisitions have a maximum potential payout of $6.5 million.
During the year ended December 31, 2012, we recorded $197.6 million of goodwill related to these 30 acquisitions and immaterial adjustments to preliminary purchase price allocations related to certain of our 2011 acquisitions. Of this amount, approximately $157.8 million is expected to be deductible for income tax purposes.
Our acquisitions are accounted for under the purchase method of accounting and are included in our unaudited consolidated condensed 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 six months ended June 30, 2013 and the last six months of 2012 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 purchase price allocations for the acquisitions completed during the six months ended June 30, 2013 and the year ended December 31, 2012 are as follows (in thousands):
 
 
Six Months Ended June 30, 2013
 
Year Ended
 
Sator (Preliminary)
 
Other Acquisitions (Preliminary)
 
Total (Preliminary)
 
December 31, 2012 (Preliminary)
Receivables
$
61,639

 
$
4,726

 
$
66,365

 
$
15,473

Receivable reserves
(8,563
)
 
(224
)
 
(8,787
)
 
(1,459
)
Inventory
71,784

 
7,095

 
78,879

 
62,305

Prepaid expenses and other current assets
7,184

 
365

 
7,549

 
201

Property and equipment
19,484

 
4,831

 
24,315

 
31,930

Goodwill
139,158

 
26,074

 
165,232

 
201,742

Other intangibles
49,978

 
175

 
50,153

 
655

Other assets
2,049

 
—

 
2,049

 
187

Deferred income taxes
(15,222
)
 
(32
)
 
(15,254
)
 
428

Current liabilities assumed
(49,593
)
 
(1,775
)
 
(51,368
)
 
(22,910
)
Debt assumed
—

 
(124
)
 
(124
)
 
(3,989
)
Other noncurrent liabilities assumed
(5,074
)
 
—

 
(5,074
)
 
—

Contingent consideration liabilities
—

 
(2,650
)
 
(2,650
)
 
(5,456
)
Other purchase price obligations
—

 
(992
)
 
(992
)
 
(1,647
)
Notes issued
—

 
(2,408
)
 
(2,408
)
 
(15,990
)
Cash used in acquisitions, net of cash acquired
$
272,824

 
$
35,061

 
$
307,885

 
$
261,470


Included in other noncurrent liabilities recorded for our Sator acquisition is a preliminary estimate for certain pension and other post-retirement obligations we assumed with the acquisition. Due to the immateriality of these plans, we have not provided the detailed disclosures otherwise prescribed by the accounting guidance on pensions and other post-retirement obligations.
The primary reason for our acquisitions made during the six months ended June 30, 2013 and the year ended December 31, 2012 was to leverage our strategy of becoming a one-stop provider for alternative vehicle replacement products. These acquisitions enabled us to expand our market presence, to widen our product offerings and to enter new markets, including continental Europe through the Sator acquisition. When we identify potential acquisitions, we attempt to target companies with a leading market share, an experienced management team and 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 six months ended June 30, 2013 as though they had been acquired as of January 1, 2012 and the effect of the businesses acquired during the year ended December 31, 2012 as though they had been acquired as of January 1, 2011. The pro forma adjustments are based upon unaudited financial information of the acquired entities (in thousands, except per share data):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Revenue, as reported
$
1,251,748

 
$
1,006,531

 
$
2,447,745

 
$
2,038,308

Revenue of purchased businesses for the period prior to acquisition:
 
 
 
 
 
 
 
Sator
31,306

 
92,401

 
126,309

 
186,664

Other acquisitions
4,799

 
77,515

 
14,119

 
170,474

Pro forma revenue
$
1,287,853

 
$
1,176,447

 
$
2,588,173

 
$
2,395,446

 
 
 
 
 
 
 
 
Net income, as reported
$
75,722

 
$
63,998

 
$
160,314

 
$
144,989

Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments:
 
 
 
 
 
 
 
Sator
2,764

 
1,598

 
5,345

 
3,277

Other acquisitions
127

 
3,162

 
526

 
9,407

Pro forma net income
$
78,613

 
$
68,758

 
$
166,185

 
$
157,673

 
 
 
 
 
 
 
 
Earnings per share-basic, as reported
$
0.25

 
$
0.22

 
$
0.54

 
$
0.49

Effect of purchased businesses for the period prior to acquisition:
 
 
 
 
 
 
 
Sator
0.01

 
0.01

 
0.02

 
0.01

Other acquisitions
0.00

 
0.01

 
0.00

 
0.03

Pro forma earnings per share-basic (a) 
$
0.26

 
$
0.23

 
$
0.56

 
$
0.53

 
 
 
 
 
 
 
 
Earnings per share-diluted, as reported
$
0.25

 
$
0.21

 
$
0.53

 
$
0.48

Effect of purchased businesses for the period prior to acquisition:
 
 
 
 
 
 
 
Sator
0.01

 
0.01

 
0.02

 
0.01

Other acquisitions
0.00

 
0.01

 
0.00

 
0.03

Pro forma earnings per share-diluted (a) 
$
0.26

 
$
0.23

 
$
0.55

 
$
0.53


(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. Additionally, the pro forma impact of our Sator acquisition reflects the elimination of acquisition related expenses totaling $2.8 million and $3.6 million for the three and six months ended June 30, 2013, which do not have a continuing impact on the our operating results. Refer to Note 10, "Restructuring and Acquisition Related Expenses," for further information on our restructuring and acquisition related expenses. These pro forma results are not necessarily indicative either of what would have occurred if the acquisitions had been in effect for the period presented or of future results.
Income Taxes
Income Taxes
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 six months ended June 30, 2013 was 35.4% compared with 36.8% for the comparable prior year period. We continued to expand our international operations during the last six months of 2012 and the first half of 2013 with both acquisition related and organic growth in our European segment as well as acquisitions in Canada, which contributed to a lower effective tax rate as a larger proportion of our pretax income was generated in lower rate jurisdictions.
Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)
Changes in Accumulated Other Comprehensive Income (Loss) were as follows (in thousands):
 
 
Three Months Ended
 
Three Months Ended
 
 
June 30, 2013
 
June 30, 2012
 
 
Foreign
Currency Translation
 
Unrealized  (Loss)
Gain
on Cash Flow Hedges
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Foreign
Currency
Translation
 
Unrealized  (Loss)
Gain
on Cash Flow Hedges
 
Accumulated
Other
Comprehensive
Income (Loss)
Beginning balance
 
$
(8,130
)
 
$
(9,359
)
 
$
(17,489
)
 
$
6,436

 
$
(6,540
)
 
$
(104
)
Pretax income (loss)
 
(3,204
)
 
1,648

 
(1,556
)
 
(6,171
)
 
(6,718
)
 
(12,889
)
Income tax effect
 
—

 
(481
)
 
(481
)
 
—

 
2,333

 
2,333

Reclassification of unrealized loss
 
—

 
2,117

 
2,117

 
—

 
1,636

 
1,636

Reclassification of deferred income taxes
 
—

 
(760
)
 
(760
)
 
—

 
(592
)
 
(592
)
Hedge ineffectiveness
 
—

 
167

 
167

 
—

 
—

 
—

Income tax benefit
 
—

 
(62
)
 
(62
)
 
—

 
—

 
—

Ending balance
 
$
(11,334
)
 
$
(6,730
)
 
$
(18,064
)
 
$
265

 
$
(9,881
)
 
$
(9,616
)

 
 
Six Months Ended
 
Six Months Ended
 
 
June 30, 2013
 
June 30, 2012
 
 
Foreign
Currency
Translation
 
Unrealized  (Loss)
Gain
on Cash Flow Hedges
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Foreign
Currency
Translation
 
Unrealized  (Loss)
Gain
on Cash Flow Hedges
 
Accumulated
Other
Comprehensive
Income (Loss)
Beginning balance
 
$
10,850

 
$
(10,091
)
 
$
759

 
$
(2,071
)
 
$
(6,890
)
 
$
(8,961
)
Pretax income (loss)
 
(22,184
)
 
1,145

 
(21,039
)
 
2,336

 
(7,709
)
 
(5,373
)
Income tax effect
 
—

 
(342
)
 
(342
)
 
—

 
2,722

 
2,722

Reclassification of unrealized loss
 
—

 
3,815

 
3,815

 
—

 
3,112

 
3,112

Reclassification of deferred income taxes
 
—

 
(1,362
)
 
(1,362
)
 
—

 
(1,116
)
 
(1,116
)
Hedge ineffectiveness
 
—

 
167

 
167

 
—

 
—

 
—

Income tax benefit
 
—

 
(62
)
 
(62
)
 
—

 
—

 
—

Ending balance
 
$
(11,334
)
 
$
(6,730
)
 
$
(18,064
)
 
$
265

 
$
(9,881
)
 
$
(9,616
)

Unrealized losses on our foreign currency forward contracts totaling $0.7 million were reclassified to other expense in our Unaudited Consolidated Condensed Statements of Income during the three months ended June 30, 2013. The remaining reclassification of unrealized losses related to our interest rate swap contracts and was recorded to interest expense in our Unaudited Consolidated Condensed Statements of Income during the three and six months ended June 30, 2013 and 2012. The deferred income taxes related to our cash flow hedges were reclassified from Accumulated Other Comprehensive Income to income tax expense during the three and six months ended June 30, 2013 and 2012.
Segment and Geographic Information
Segment and Geographic Information
Segment and Geographic Information
We have three operating segments: Wholesale – North America; Wholesale – Europe; and Self Service. Our operations in North America, which include our Wholesale – North America and Self Service operating segments, are aggregated into one reportable segment because they possess similar economic characteristics and have common products and services, customers, and methods of distribution. Our Wholesale – Europe operating segment, which includes Sator, is presented as a separate reportable segment as we believe this data would be beneficial to readers in understanding our results. Therefore, we present our reportable segments on a geographic basis.
The following table presents our financial performance, including revenue, earnings before interest, taxes, depreciation and amortization ("EBITDA"), and depreciation and amortization by reportable segment for the periods indicated (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Revenue
 
 
 
 
 
 
 
North America
$
953,918

 
$
841,335

 
$
1,937,306

 
$
1,712,419

Europe
297,830

 
165,196

 
510,439

 
325,889

Total revenue
$
1,251,748

 
$
1,006,531

 
$
2,447,745

 
$
2,038,308

EBITDA
 
 
 
 
 
 
 
North America
$
118,632

 
$
109,687

 
$
253,967

 
$
241,875

Europe
33,764

 
16,057

 
57,832

 
35,590

Total EBITDA
$
152,396

 
$
125,744

 
$
311,799

 
$
277,465

Depreciation and Amortization
 
 
 
 
 
 
 
North America
$
16,251

 
$
14,771

 
$
32,138

 
$
28,773

Europe
4,420

 
2,418

 
7,573

 
4,673

Total depreciation and amortization
$
20,671

 
$
17,189

 
$
39,711

 
$
33,446


EBITDA for our North American segment included gains of $8.4 million and $16.7 million during the three and six months ended June 30, 2012 resulting from lawsuit settlements with certain of our aftermarket product suppliers as discussed in Note 7, "Commitments and Contingencies." Included within EBITDA of our European segment are losses of $1.2 million during each of the three month periods ended June 30, 2013 and 2012 for the change in fair value of contingent consideration liabilities, primarily related to our 2011 ECP acquisition. During the six month periods ended June 30, 2013 and 2012, our European segment recognized a loss of $1.9 million and a gain of $0.2 million, respectively, related to the remeasurement of these contingent consideration liabilities. See Note 6, "Fair Value Measurements" for further information on our contingent consideration liabilities. For the three and six months ended June 30, 2013, Europe EBITDA also included restructuring and acquisition related expenses of $2.8 million and $3.7 million, respectively, related primarily to the acquisition of Sator.
The table below provides a reconciliation from EBITDA to Net Income (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
EBITDA
$
152,396

 
$
125,744

 
$
311,799

 
$
277,465

Depreciation and amortization
20,671

 
17,189

 
39,711

 
33,446

Interest expense, net
12,492

 
7,356

 
21,087

 
14,723

Loss on debt extinguishment
2,795

 
—

 
2,795

 
—

Provision for income taxes
40,716

 
37,201

 
87,892

 
84,307

Net income
$
75,722

 
$
63,998

 
$
160,314

 
$
144,989


The key measure of segment profit or loss reviewed by our chief operating decision maker, who is our Chief Executive Officer, is 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 depreciation, amortization, interest and taxes. Loss on debt extinguishment is considered a component of interest in calculating EBITDA, as the write-off of debt issuance costs is similar to the treatment of debt issuance cost amortization.
The following table presents capital expenditures, which includes additions to property and equipment, by reportable segment (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Capital Expenditures
 
 
 
 
 
 
 
North America
$
16,138

 
$
16,372

 
$
33,702

 
$
34,506

Europe
2,553

 
3,914

 
6,449

 
7,109

 
$
18,691

 
$
20,286

 
$
40,151

 
$
41,615


The following table presents assets by reportable segment (in thousands):
 
June 30,
2013
 
December 31,
2012
Receivables, net
 
 
 
North America
$
269,533

 
$
241,627

Europe
143,682

 
70,181

Total receivables, net
413,215

 
311,808

Inventory
 
 
 
North America
729,799

 
750,565

Europe
243,127

 
150,238

Total inventory
972,926

 
900,803

Property and Equipment, net
 
 
 
North America
436,364

 
434,010

Europe
78,989

 
60,369

Total property and equipment, net
515,353

 
494,379

Other unallocated assets
2,316,821

 
2,016,466

Total assets
$
4,218,315

 
$
3,723,456


We report net trade 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.
Our operations are primarily conducted in the U.S. Our European operations are located in the U.K., the Netherlands, Belgium, Luxembourg 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 distribution facility in Taiwan, and other alternative parts operations in Guatemala and Costa Rica. 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
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Revenue
 
 
 
 
 
 
 
United States
$
915,152

 
$
789,346

 
$
1,804,493

 
$
1,610,311

United Kingdom
229,096

 
165,196

 
441,705

 
325,889

Other countries
107,500

 
51,989

 
201,547

 
102,108

 
$
1,251,748

 
$
1,006,531

 
$
2,447,745

 
$
2,038,308


The following table sets forth our tangible long-lived assets by geographic area (in thousands):
 
June 30,
2013
 
December 31,
2012
Long-lived Assets
 
 
 
United States
$
408,007

 
$
408,244

United Kingdom
59,569

 
60,369

Other countries
47,777

 
25,766

 
$
515,353

 
$
494,379


The following table sets forth our revenue by product category (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Aftermarket, other new and refurbished products
$
737,128

 
$
547,912

 
$
1,405,084

 
$
1,113,256

Recycled, remanufactured and related products and services
356,834

 
323,669

 
711,270

 
649,373

Other
157,786

 
134,950

 
331,391

 
275,679

 
$
1,251,748

 
$
1,006,531

 
$
2,447,745

 
$
2,038,308


All of the product categories include revenue from our North American reportable segment, while our European segment generates 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.
Financial Statement Information (Policies)
Revenue Recognition 
Revenue Recognition
The majority of our revenue is derived from the sale of vehicle parts. Revenue is recognized when the products are shipped or 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 $28.9 million and $24.7 million at June 30, 2013 and December 31, 2012, 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 Consolidated Condensed Statements of Income and are shown as a current liability on our Unaudited Consolidated Condensed 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.
Intangibles 
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 and covenants not to compete.
The change in the carrying amount of goodwill by reportable segment during the six months ended June 30, 2013 is as follows (in thousands):
 
North America
 
Europe
 
Total
Balance as of January 1, 2013
$
1,339,831

 
$
350,453

 
$
1,690,284

Business acquisitions and adjustments to previously recorded goodwill
15,708

 
149,524

 
165,232

Exchange rate effects
(6,774
)
 
(22,614
)
 
(29,388
)
Balance as of June 30, 2013
$
1,348,765

 
$
477,363

 
$
1,826,128


The components of other intangibles are as follows (in thousands):
 
June 30, 2013
 
December 31, 2012
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Trade names and trademarks
$
140,527

 
$
(24,332
)
 
$
116,195

 
$
118,422

 
$
(21,599
)
 
$
96,823

Customer relationships
39,378

 
(8,583
)
 
30,795

 
14,426

 
(6,642
)
 
7,784

Covenants not to compete
3,687

 
(1,906
)
 
1,781

 
3,654

 
(1,546
)
 
2,108

 
$
183,592

 
$
(34,821
)
 
$
148,771

 
$
136,502

 
$
(29,787
)
 
$
106,715


During the six months ended June 30, 2013, we recorded $24.7 million of trade names and $25.3 million of customer relationships for our acquisition of Sator Beheer B.V. ("Sator") as discussed in Note 9, "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 either a straight-line or accelerated basis. 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 $5.3 million and $4.2 million during the six month periods ended June 30, 2013 and 2012, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2017 is $12.1 million, $12.9 million, $11.7 million, $10.4 million and $9.6 million, respectively.
Depreciation Expense 
Depreciation Expense
Included in Cost of Goods Sold on the Unaudited Consolidated Condensed Statements of Income is depreciation expense associated with our refurbishing, remanufacturing, and furnace operations and our distribution centers.
Product Warranties 
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. 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 six month period ended June 30, 2013 were as follows (in thousands):
 
Balance as of January 1, 2013
$
10,574

Warranty expense
15,028

Warranty claims
(14,180
)
Balance as of June 30, 2013
$
11,422


For an additional fee, we also sell extended warranty contracts for certain mechanical products. The expense related to extended warranty claims is recognized when the claim is made.
Recent Accounting Pronouncements 
Recent Accounting Pronouncements
Effective January 1, 2013, we adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2013-02, "Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." This update requires disclosure of amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. The update does not change the items reported in other comprehensive income or when an item of other comprehensive income is reclassified to net income. As this guidance only revises the presentation and disclosures related to the reclassification of items out of accumulated other comprehensive income, the adoption of this guidance did not affect our financial position, results of operations or cash flows. See Note 12, "Accumulated Other Comprehensive Income (Loss)" for the additional required disclosures.
Financial Statement Information (Tables)
Schedule Of Inventory 
Inventory consists of the following (in thousands):
 
June 30,
2013
 
December 31,
2012
Aftermarket and refurbished products
$
598,939

 
$
523,677

Salvage and remanufactured products
373,987

 
377,126

 
$
972,926

 
$
900,803

Changes In Carrying Amount Of Goodwill 
The change in the carrying amount of goodwill by reportable segment during the six months ended June 30, 2013 is as follows (in thousands):
 
North America
 
Europe
 
Total
Balance as of January 1, 2013
$
1,339,831

 
$
350,453

 
$
1,690,284

Business acquisitions and adjustments to previously recorded goodwill
15,708

 
149,524

 
165,232

Exchange rate effects
(6,774
)
 
(22,614
)
 
(29,388
)
Balance as of June 30, 2013
$
1,348,765

 
$
477,363

 
$
1,826,128

Components Of Other Intangibles 
The components of other intangibles are as follows (in thousands):
 
June 30, 2013
 
December 31, 2012
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Trade names and trademarks
$
140,527

 
$
(24,332
)
 
$
116,195

 
$
118,422

 
$
(21,599
)
 
$
96,823

Customer relationships
39,378

 
(8,583
)
 
30,795

 
14,426

 
(6,642
)
 
7,784

Covenants not to compete
3,687

 
(1,906
)
 
1,781

 
3,654

 
(1,546
)
 
2,108

 
$
183,592

 
$
(34,821
)
 
$
148,771

 
$
136,502

 
$
(29,787
)
 
$
106,715

Changes In Warranty Reserve 
The changes in the warranty reserve during the six month period ended June 30, 2013 were as follows (in thousands):
 
Balance as of January 1, 2013
$
10,574

Warranty expense
15,028

Warranty claims
(14,180
)
Balance as of June 30, 2013
$
11,422

Equity Incentive Plans (Tables)
Summary Of Transactions In Stock-Based Compensation Plans 
A summary of transactions in our stock-based compensation plans for the six months ended June 30, 2013 is as follows:
 
Shares
Available For
Grant
 
RSUs
 
Stock Options
 
Restricted Stock
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, 2013
14,643,932

 
2,351,362

 
$
14.02

 
9,355,070

 
$
6.90

 
116,000

 
$
9.47

Granted
(923,312
)
 
923,312

 
22.17

 
—

 
—

 
—

 
—

Exercised
—

 
—

 
—

 
(1,641,974
)
 
6.46

 
—

 
—

Vested
—

 
(345,358
)
 
14.38

 
—

 
—

 
(86,000
)
 
9.54

Canceled
138,022

 
(70,242
)
 
15.80

 
(67,780
)
 
8.69

 
—

 
—

Balance, June 30, 2013
13,858,642

 
2,859,074

 
$
16.57

 
7,645,316

 
$
6.98

 
30,000

 
$
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
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
RSUs
$
4,443

 
$
2,019

 
$
8,115

 
$
4,083

Stock options
1,124

 
1,721

 
2,333

 
3,442

Restricted stock
46

 
228

 
114

 
453

Total stock-based compensation expense
$
5,613

 
$
3,968

 
$
10,562

 
$
7,978

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 Consolidated Condensed Statements of Income (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Cost of goods sold
$
98

 
$
96

 
$
196

 
$
199

Facility and warehouse expenses
687

 
609

 
1,371

 
1,303

Selling, general and administrative expenses
4,828

 
3,263

 
8,995

 
6,476

 
5,613

 
3,968

 
10,562

 
7,978

Income tax benefit
(2,189
)
 
(1,548
)
 
(4,119
)
 
(3,112
)
Total stock-based compensation expense, net of tax
$
3,424

 
$
2,420

 
$
6,443

 
$
4,866

Schedule Of Stock-Based Compensation Expense Expected To Be Recognized 
As of June 30, 2013, unrecognized compensation expense related to unvested RSUs, stock options and restricted stock is expected to be recognized as follows (in thousands):
 
RSUs
 
Stock
Options
 
Restricted
Stock
 
Total
Remainder of 2013
$
8,976

 
$
2,247

 
$
94

 
$
11,317

2014
12,867

 
3,007

 
139

 
16,013

2015
9,417

 
75

 
—

 
9,492

2016
5,669

 
—

 
—

 
5,669

2017
2,571

 
—

 
—

 
2,571

2018
96

 
—

 
—

 
96

Total unrecognized compensation expense
$
39,596

 
$
5,329

 
$
233

 
$
45,158

Long-Term Obligations (Tables)
Schedule Of Long-Term Obligations
Long-Term Obligations consist of the following (in thousands):
 
June 30,
2013
 
December 31,
2012
Senior secured credit agreement:
 
 
 
Term loans payable
$
450,000

 
$
420,625

Revolving credit facility
183,245

 
553,964

Senior notes
600,000

 
—

Receivables securitization facility
80,000

 
80,000

Notes payable through October 2018 at weighted average interest rates of 1.7%
43,577

 
42,398

Other long-term debt at weighted average interest rates of 3.4% and 3.3%, respectively
19,659

 
21,491

 
1,376,481

 
1,118,478

Less current maturities
(64,962
)
 
(71,716
)
 
$
1,311,519

 
$
1,046,762

Derivative Instruments and Hedging Activities (Tables)
Schedule of Derivative Instruments
The following table summarizes the notional amounts and fair values of our designated cash flow hedges as of June 30, 2013 and December 31, 2012 (in thousands):

 
Notional Amount
 
Fair Value at June 30, 2013
 
Fair Value at December 31, 2012
 
 
June 30, 2013
 
December 31, 2012
 
Other Assets
 
Other Accrued Expenses
 
Other Noncurrent Liabilities
 
Other Accrued Expenses
 
Other Noncurrent Liabilities
Interest rate swap agreements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
USD denominated
 
$
420,000

 
$
520,000

 
$
—

 
$
—

 
$
8,678

 
$
705

 
$
12,791

GBP denominated
 
£
50,000

 
£
50,000

 
—

 
—

 
1,115

 
—

 
2,135

CAD denominated
 
C$
25,000

 
C$
25,000

 
148

 
—

 
—

 
—

 
12

Foreign currency forward contracts
 
 
 
 
 
 
 
 
 
 
EUR denominated
 
€
149,976

 
—

 
—

 
629

 
—

 
—

 
—

GBP denominated
 
£
70,000

 
—

 
—

 
544

 
—

 
—

 
—

Total cash flow hedges
 
 
$
148

 
$
1,173

 
$
9,793

 
$
705

 
$
14,938

 
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 June 30, 2013 and December 31, 2012 (in thousands):
 
Balance as of June 30, 2013
 
Fair Value Measurements as of June 30, 2013
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
Cash surrender value of life insurance
$
22,453

 
$
—

 
$
22,453

 
$
—

Interest rate swaps
148

 
 
 
148

 
 
Total Assets
$
22,601

 
$
—

 
$
22,601

 
$
—

Liabilities:
 
 
 
 
 
 
 
Contingent consideration liabilities
$
49,473

 
$
—

 
$
—

 
$
49,473

Deferred compensation liabilities
22,280

 
—

 
22,280

 
—

Interest rate swaps
10,066

 
—

 
10,066

 
—

Foreign currency forward contracts
1,173

 
—

 
1,173

 
—

Total Liabilities
$
82,992

 
$
—

 
$
33,519

 
$
49,473

 
Balance as of December 31, 2012
 
Fair Value Measurements as of December 31, 2012
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
Cash surrender value of life insurance
$
19,492

 
$
—

 
$
19,492

 
$
—

Total Assets
$
19,492

 
$
—

 
$
19,492

 
$
—

Liabilities:
 
 
 
 
 
 
 
Contingent consideration liabilities
$
90,009

 
$
—

 
$
—

 
$
90,009

Deferred compensation liabilities
19,843

 
—

 
19,843

 
—

Interest rate swaps
15,643

 
—

 
15,643

 
—

Total Liabilities
$
125,495

 
$
—

 
$
35,486

 
$
90,009

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:
Unobservable Input
June 30, 2013 Weighted Average
 
December 31, 2012 Weighted Average
Probability of achieving payout targets
70.4
%
 
79.7
%
Discount rate
6.5
%
 
6.6
%
Changes In Fair Value Of Contingent Consideration Obligations 
Changes in the fair value of our contingent consideration liabilities for the three and six months ended June 30, 2013 and 2012 were as follows (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Beginning balance
$
49,565

 
$
82,909

 
$
90,009

 
$
82,382

Contingent consideration liabilities recorded for business acquisitions
261

 
5,433

 
2,650

 
5,540

Payments
(581
)
 
—

 
(38,349
)
 
(600
)
Loss (gain) included in earnings
230

 
1,240

 
1,053

 
(105
)
Exchange rate effects
(2
)
 
(1,545
)
 
(5,890
)
 
820

Ending balance
$
49,473

 
$
88,037

 
$
49,473

 
$
88,037

Commitments and Contingencies (Tables)
Future Minimum Lease Commitments
The future minimum lease commitments under these leases at June 30, 2013 are as follows (in thousands):
Six months ending December 31, 2013
$
61,194

Years ending December 31:
 
2014
100,859

2015
89,359

2016
71,307

2017
56,731

2018
44,952

Thereafter
132,250

Future Minimum Lease Payments
$
556,652

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
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Net income
$
75,722

 
$
63,998

 
$
160,314

 
$
144,989

Denominator for basic earnings per share—weighted average shares outstanding
299,159

 
295,290

 
298,690

 
294,784

Effect of dilutive securities:
 
 
 
 
 
 
 
RSUs
758

 
440

 
721

 
438

Stock options
3,728

 
4,372

 
3,865

 
4,476

Restricted stock
12

 
50

 
19

 
48

Denominator for diluted earnings per share—Adjusted weighted average shares outstanding
303,657

 
300,152

 
303,295

 
299,746

Earnings per share, basic
$
0.25

 
$
0.22

 
$
0.54

 
$
0.49

Earnings per share, diluted
$
0.25

 
$
0.21

 
$
0.53

 
$
0.48

Business Combinations (Tables)
Purchase Price Allocations For Acquisitions 
The purchase price allocations for the acquisitions completed during the six months ended June 30, 2013 and the year ended December 31, 2012 are as follows (in thousands):
 
 
Six Months Ended June 30, 2013
 
Year Ended
 
Sator (Preliminary)
 
Other Acquisitions (Preliminary)
 
Total (Preliminary)
 
December 31, 2012 (Preliminary)
Receivables
$
61,639

 
$
4,726

 
$
66,365

 
$
15,473

Receivable reserves
(8,563
)
 
(224
)
 
(8,787
)
 
(1,459
)
Inventory
71,784

 
7,095

 
78,879

 
62,305

Prepaid expenses and other current assets
7,184

 
365

 
7,549

 
201

Property and equipment
19,484

 
4,831

 
24,315

 
31,930

Goodwill
139,158

 
26,074

 
165,232

 
201,742

Other intangibles
49,978

 
175

 
50,153

 
655

Other assets
2,049

 
—

 
2,049

 
187

Deferred income taxes
(15,222
)
 
(32
)
 
(15,254
)
 
428

Current liabilities assumed
(49,593
)
 
(1,775
)
 
(51,368
)
 
(22,910
)
Debt assumed
—

 
(124
)
 
(124
)
 
(3,989
)
Other noncurrent liabilities assumed
(5,074
)
 
—

 
(5,074
)
 
—

Contingent consideration liabilities
—

 
(2,650
)
 
(2,650
)
 
(5,456
)
Other purchase price obligations
—

 
(992
)
 
(992
)
 
(1,647
)
Notes issued
—

 
(2,408
)
 
(2,408
)
 
(15,990
)
Cash used in acquisitions, net of cash acquired
$
272,824

 
$
35,061

 
$
307,885

 
$
261,470

Pro Forma Effect Of Businesses Acquired 
The following pro forma summary presents the effect of the businesses acquired during the six months ended June 30, 2013 as though they had been acquired as of January 1, 2012 and the effect of the businesses acquired during the year ended December 31, 2012 as though they had been acquired as of January 1, 2011. The pro forma adjustments are based upon unaudited financial information of the acquired entities (in thousands, except per share data):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Revenue, as reported
$
1,251,748

 
$
1,006,531

 
$
2,447,745

 
$
2,038,308

Revenue of purchased businesses for the period prior to acquisition:
 
 
 
 
 
 
 
Sator
31,306

 
92,401

 
126,309

 
186,664

Other acquisitions
4,799

 
77,515

 
14,119

 
170,474

Pro forma revenue
$
1,287,853

 
$
1,176,447

 
$
2,588,173

 
$
2,395,446

 
 
 
 
 
 
 
 
Net income, as reported
$
75,722

 
$
63,998

 
$
160,314

 
$
144,989

Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments:
 
 
 
 
 
 
 
Sator
2,764

 
1,598

 
5,345

 
3,277

Other acquisitions
127

 
3,162

 
526

 
9,407

Pro forma net income
$
78,613

 
$
68,758

 
$
166,185

 
$
157,673

 
 
 
 
 
 
 
 
Earnings per share-basic, as reported
$
0.25

 
$
0.22

 
$
0.54

 
$
0.49

Effect of purchased businesses for the period prior to acquisition:
 
 
 
 
 
 
 
Sator
0.01

 
0.01

 
0.02

 
0.01

Other acquisitions
0.00

 
0.01

 
0.00

 
0.03

Pro forma earnings per share-basic (a) 
$
0.26

 
$
0.23

 
$
0.56

 
$
0.53

 
 
 
 
 
 
 
 
Earnings per share-diluted, as reported
$
0.25

 
$
0.21

 
$
0.53

 
$
0.48

Effect of purchased businesses for the period prior to acquisition:
 
 
 
 
 
 
 
Sator
0.01

 
0.01

 
0.02

 
0.01

Other acquisitions
0.00

 
0.01

 
0.00

 
0.03

Pro forma earnings per share-diluted (a) 
$
0.26

 
$
0.23

 
$
0.55

 
$
0.53


(a) The sum of the individual earnings per share amounts may not equal the total due to rounding.
Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) (Tables)
Schedule of Accumulated Other Comprehensive Income (Loss)
Changes in Accumulated Other Comprehensive Income (Loss) were as follows (in thousands):
 
 
Three Months Ended
 
Three Months Ended
 
 
June 30, 2013
 
June 30, 2012
 
 
Foreign
Currency Translation
 
Unrealized  (Loss)
Gain
on Cash Flow Hedges
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Foreign
Currency
Translation
 
Unrealized  (Loss)
Gain
on Cash Flow Hedges
 
Accumulated
Other
Comprehensive
Income (Loss)
Beginning balance
 
$
(8,130
)
 
$
(9,359
)
 
$
(17,489
)
 
$
6,436

 
$
(6,540
)
 
$
(104
)
Pretax income (loss)
 
(3,204
)
 
1,648

 
(1,556
)
 
(6,171
)
 
(6,718
)
 
(12,889
)
Income tax effect
 
—

 
(481
)
 
(481
)
 
—

 
2,333

 
2,333

Reclassification of unrealized loss
 
—

 
2,117

 
2,117

 
—

 
1,636

 
1,636

Reclassification of deferred income taxes
 
—

 
(760
)
 
(760
)
 
—

 
(592
)
 
(592
)
Hedge ineffectiveness
 
—

 
167

 
167

 
—

 
—

 
—

Income tax benefit
 
—

 
(62
)
 
(62
)
 
—

 
—

 
—

Ending balance
 
$
(11,334
)
 
$
(6,730
)
 
$
(18,064
)
 
$
265

 
$
(9,881
)
 
$
(9,616
)

 
 
Six Months Ended
 
Six Months Ended
 
 
June 30, 2013
 
June 30, 2012
 
 
Foreign
Currency
Translation
 
Unrealized  (Loss)
Gain
on Cash Flow Hedges
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Foreign
Currency
Translation
 
Unrealized  (Loss)
Gain
on Cash Flow Hedges
 
Accumulated
Other
Comprehensive
Income (Loss)
Beginning balance
 
$
10,850

 
$
(10,091
)
 
$
759

 
$
(2,071
)
 
$
(6,890
)
 
$
(8,961
)
Pretax income (loss)
 
(22,184
)
 
1,145

 
(21,039
)
 
2,336

 
(7,709
)
 
(5,373
)
Income tax effect
 
—

 
(342
)
 
(342
)
 
—

 
2,722

 
2,722

Reclassification of unrealized loss
 
—

 
3,815

 
3,815

 
—

 
3,112

 
3,112

Reclassification of deferred income taxes
 
—

 
(1,362
)
 
(1,362
)
 
—

 
(1,116
)
 
(1,116
)
Hedge ineffectiveness
 
—

 
167

 
167

 
—

 
—

 
—

Income tax benefit
 
—

 
(62
)
 
(62
)
 
—

 
—

 
—

Ending balance
 
$
(11,334
)
 
$
(6,730
)
 
$
(18,064
)
 
$
265

 
$
(9,881
)
 
$
(9,616
)
Segment and Geographic Information (Tables)
Schedule Of Financial Performance By Reportable Segment 
The following table presents our financial performance, including revenue, earnings before interest, taxes, depreciation and amortization ("EBITDA"), and depreciation and amortization by reportable segment for the periods indicated (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Revenue
 
 
 
 
 
 
 
North America
$
953,918

 
$
841,335

 
$
1,937,306

 
$
1,712,419

Europe
297,830

 
165,196

 
510,439

 
325,889

Total revenue
$
1,251,748

 
$
1,006,531

 
$
2,447,745

 
$
2,038,308

EBITDA
 
 
 
 
 
 
 
North America
$
118,632

 
$
109,687

 
$
253,967

 
$
241,875

Europe
33,764

 
16,057

 
57,832

 
35,590

Total EBITDA
$
152,396

 
$
125,744

 
$
311,799

 
$
277,465

Depreciation and Amortization
 
 
 
 
 
 
 
North America
$
16,251

 
$
14,771

 
$
32,138

 
$
28,773

Europe
4,420

 
2,418

 
7,573

 
4,673

Total depreciation and amortization
$
20,671

 
$
17,189

 
$
39,711

 
$
33,446

Reconciliation Of EBITDA To Net Income 
The table below provides a reconciliation from EBITDA to Net Income (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
EBITDA
$
152,396

 
$
125,744

 
$
311,799

 
$
277,465

Depreciation and amortization
20,671

 
17,189

 
39,711

 
33,446

Interest expense, net
12,492

 
7,356

 
21,087

 
14,723

Loss on debt extinguishment
2,795

 
—

 
2,795

 
—

Provision for income taxes
40,716

 
37,201

 
87,892

 
84,307

Net income
$
75,722

 
$
63,998

 
$
160,314

 
$
144,989

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
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Capital Expenditures
 
 
 
 
 
 
 
North America
$
16,138

 
$
16,372

 
$
33,702

 
$
34,506

Europe
2,553

 
3,914

 
6,449

 
7,109

 
$
18,691

 
$
20,286

 
$
40,151

 
$
41,615

Schedule Of Assets By Reportable Segment 
The following table presents assets by reportable segment (in thousands):
 
June 30,
2013
 
December 31,
2012
Receivables, net
 
 
 
North America
$
269,533

 
$
241,627

Europe
143,682

 
70,181

Total receivables, net
413,215

 
311,808

Inventory
 
 
 
North America
729,799

 
750,565

Europe
243,127

 
150,238

Total inventory
972,926

 
900,803

Property and Equipment, net
 
 
 
North America
436,364

 
434,010

Europe
78,989

 
60,369

Total property and equipment, net
515,353

 
494,379

Other unallocated assets
2,316,821

 
2,016,466

Total assets
$
4,218,315

 
$
3,723,456

Schedule Of Revenue By Geographic Area 
The following table sets forth our revenue by geographic area (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Revenue
 
 
 
 
 
 
 
United States
$
915,152

 
$
789,346

 
$
1,804,493

 
$
1,610,311

United Kingdom
229,096

 
165,196

 
441,705

 
325,889

Other countries
107,500

 
51,989

 
201,547

 
102,108

 
$
1,251,748

 
$
1,006,531

 
$
2,447,745

 
$
2,038,308

Schedule Of Tangible Long-Lived Assets By Geographic Area 
The following table sets forth our tangible long-lived assets by geographic area (in thousands):
 
June 30,
2013
 
December 31,
2012
Long-lived Assets
 
 
 
United States
$
408,007

 
$
408,244

United Kingdom
59,569

 
60,369

Other countries
47,777

 
25,766

 
$
515,353

 
$
494,379

Schedule Of Revenue By Product Category 
The following table sets forth our revenue by product category (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
Aftermarket, other new and refurbished products
$
737,128

 
$
547,912

 
$
1,405,084

 
$
1,113,256

Recycled, remanufactured and related products and services
356,834

 
323,669

 
711,270

 
649,373

Other
157,786

 
134,950

 
331,391

 
275,679

 
$
1,251,748

 
$
1,006,531

 
$
2,447,745

 
$
2,038,308

Interim Financial Statements Interim Financial Statements - Additional Information (Details)
3 Months Ended
Sep. 30, 2012
Jun. 30, 2013
Dec. 31, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
 
Stock split conversion ratio
2 
 
 
Common stock, shares authorized
 
1,000,000,000 
500,000,000 
Financial Statement Information - Additional Information (Details) (USD $)
6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Dec. 31, 2012
Finite-Lived Intangible Assets
 
 
 
Reserve for estimated returns, discounts and allowances
$ 28,900,000 
 
$ 24,700,000 
Reserve for uncollectible accounts
11,900,000 
 
9,500,000 
Amortization expense
5,300,000 
4,200,000 
 
Estimated annual amortization expense, current fiscal year
12,100,000 
 
 
Estimated annual amortization expense, 2014
12,900,000 
 
 
Estimated annual amortization expense, 2015
11,700,000 
 
 
Estimated annual amortization expense, 2016
10,400,000 
 
 
Estimated annual amortization expense, 2017
9,600,000 
 
 
Salvage Mechanical Products
 
 
 
Finite-Lived Intangible Assets
 
 
 
Standard warranty period
6 months 
 
 
Remanufactured Engines
 
 
 
Finite-Lived Intangible Assets
 
 
 
Standard warranty period
3 years 
 
 
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 
 
 
Customer relationships |
Minimum
 
 
 
Finite-Lived Intangible Assets
 
 
 
Useful life, years
5 years 
 
 
Customer relationships |
Maximum
 
 
 
Finite-Lived Intangible Assets
 
 
 
Useful life, years
15 years 
 
 
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 
 
 
Sator
 
 
 
Finite-Lived Intangible Assets
 
 
 
Intangibles recognized for acquisitons
49,978,000 
 
 
Sator |
Trade names and trademarks
 
 
 
Finite-Lived Intangible Assets
 
 
 
Intangibles recognized for acquisitons
24,700,000 
 
 
Sator |
Customer relationships
 
 
 
Finite-Lived Intangible Assets
 
 
 
Intangibles recognized for acquisitons
$ 25,300,000 
 
 
Schedule of Inventory (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Product Information
 
 
Inventory
$ 972,926 
$ 900,803 
Aftermarket and refurbished products
 
 
Product Information
 
 
Inventory
598,939 
523,677 
Salvage and remanufactured products
 
 
Product Information
 
 
Inventory
$ 373,987 
$ 377,126 
Changes in Carrying Amount of Goodwill (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended 12 Months Ended
Jun. 30, 2013
Dec. 31, 2012
Goodwill [Roll Forward]
 
 
Beginning balance
$ 1,690,284 
 
Business acquisitions and adjustments to previously recorded goodwill
165,232 
197,600 
Exchange rate effects
(29,388)
 
Ending balance
1,826,128 
1,690,284 
North America
 
 
Goodwill [Roll Forward]
 
 
Beginning balance
1,339,831 
 
Business acquisitions and adjustments to previously recorded goodwill
15,708 
 
Exchange rate effects
(6,774)
 
Ending balance
1,348,765 
 
Europe
 
 
Goodwill [Roll Forward]
 
 
Beginning balance
350,453 
 
Business acquisitions and adjustments to previously recorded goodwill
149,524 
 
Exchange rate effects
(22,614)
 
Ending balance
$ 477,363 
 
Components of Other Intangibles (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Finite-Lived Intangible Assets
 
 
Gross Carrying Amount
$ 183,592 
$ 136,502 
Accumulated Amortization
(34,821)
(29,787)
Net
148,771 
106,715 
Trade names and trademarks
 
 
Finite-Lived Intangible Assets
 
 
Gross Carrying Amount
140,527 
118,422 
Accumulated Amortization
(24,332)
(21,599)
Net
116,195 
96,823 
Customer relationships
 
 
Finite-Lived Intangible Assets
 
 
Gross Carrying Amount
39,378 
14,426 
Accumulated Amortization
(8,583)
(6,642)
Net
30,795 
7,784 
Covenants not to compete
 
 
Finite-Lived Intangible Assets
 
 
Gross Carrying Amount
3,687 
3,654 
Accumulated Amortization
(1,906)
(1,546)
Net
$ 1,781 
$ 2,108 
Changes in Warranty Reserve (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2013
Warranty Reserve [Roll Forward]
 
Beginning balance
$ 10,574 
Warranty expense
15,028 
Warranty claims
(14,180)
Ending balance
$ 11,422 
Equity Incentive Plans - Additional Information (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Stock-based compensation expense
$ 5,613,000 
$ 3,968,000 
$ 10,562,000 
$ 7,978,000 
Stock compensation expense, remainder of 2013
11,317,000 
 
11,317,000 
 
RSUs
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Number of shares that RSUs convert into on the applicable vesting date
 
 
1 
 
Fair value of RSUs vested during the period
 
 
7,900,000 
 
Forfeiture rates used for grants to employees
 
 
10.00% 
 
Forfeiture rates used for grants to non-employee directors and executive officers
 
 
0.00% 
 
RSUs canceled
 
 
70,242 
 
RSUs granted
 
 
923,312 
 
Stock-based compensation expense
4,443,000 
2,019,000 
8,115,000 
4,083,000 
Stock compensation expense, remainder of 2013
8,976,000 
 
8,976,000 
 
Performance Shares
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Performance period
 
 
5 years 
 
RSUs granted
 
 
946,800 
 
Stock-based compensation expense
2,300,000 
 
3,700,000 
 
Stock compensation expense, remainder of 2013
4,600,000 
 
4,600,000 
 
New Performance Shares
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Vesting period
 
 
6 months 
 
RSUs granted
 
 
275,400 
 
Replacement Performance Shares
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Vesting period
 
 
6 months 
 
RSUs canceled
 
 
671,400 
 
RSUs granted
 
 
671,400 
 
Stock Options
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Stock options expiration period
 
 
10 years 
 
Stock-based compensation expense
1,124,000 
1,721,000 
2,333,000 
3,442,000 
Stock compensation expense, remainder of 2013
2,247,000 
 
2,247,000 
 
Restricted Stock
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Stock-based compensation expense
46,000 
228,000 
114,000 
453,000 
Stock compensation expense, remainder of 2013
$ 94,000 
 
$ 94,000 
 
Minimum |
RSUs
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Vesting period
 
 
1 year 
 
Minimum |
Stock Options
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Vesting period
 
 
1 year 
 
Minimum |
Restricted Stock
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Vesting period
 
 
1 year 
 
Maximum |
RSUs
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Vesting period
 
 
5 years 
 
Maximum |
Stock Options
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Vesting period
 
 
5 years 
 
Maximum |
Restricted Stock
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Vesting period
 
 
5 years 
 
Summary of Transactions in Stock-Based Compensation Plans (Details) (USD $)
6 Months Ended
Jun. 30, 2013
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
14,643,932 
Granted
(923,312)
Cancelled
138,022 
Balance, end of period
13,858,642 
RSUs
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
Balance, beginning of period
2,351,362 
Granted
923,312 
Vested
(345,358)
Canceled
(70,242)
Balance, end of period
2,859,074 
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
$ 14.02 
Granted, weighted average grant date fair value
$ 22.17 
Vested, weighted average grant date fair value
$ 14.38 
Cancelled, weighted average grant date fair value
$ 15.80 
Balance, weighted average grant date fair value, end of period
$ 16.57 
Performance Shares
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
Granted
946,800 
New Performance Shares
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
Granted
275,400 
Replacement Performance Shares
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
Granted
671,400 
Canceled
(671,400)
Stock Options
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
Balance, beginning of period
9,355,070 
Exercised
(1,641,974)
Cancelled
(67,780)
Balance, end of period
7,645,316 
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
$ 6.90 
Exercised, weighted average exercise price
$ 6.46 
Cancelled, weighted average exercise price
$ 8.69 
Balance, weighted average exercise price, end of period
$ 6.98 
Restricted Stock
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
Balance, beginning of period
116,000 
Vested
(86,000)
Balance, end of period
30,000 
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
$ 9.47 
Vested, weighted average grant date fair value
$ 9.54 
Balance, weighted average grant date fair value, end of period
$ 9.30 
Schedule of Pre-Tax Stock-Based Compensation Expense (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Stock-based compensation expense
$ 5,613 
$ 3,968 
$ 10,562 
$ 7,978 
RSUs
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Stock-based compensation expense
4,443 
2,019 
8,115 
4,083 
Stock Options
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Stock-based compensation expense
1,124 
1,721 
2,333 
3,442 
Restricted Stock
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Stock-based compensation expense
$ 46 
$ 228 
$ 114 
$ 453 
Schedule of Stock-Based Compensation Expense Included in Statements of Income (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
 
 
 
 
Stock-based compensation expense, before tax
$ 5,613 
$ 3,968 
$ 10,562 
$ 7,978 
Income tax benefit
(2,189)
(1,548)
(4,119)
(3,112)
Total stock-based compensation expense, net of tax
3,424 
2,420 
6,443 
4,866 
Cost of goods sold
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
 
 
 
 
Stock-based compensation expense, before tax
98 
96 
196 
199 
Facility and warehouse expenses
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
 
 
 
 
Stock-based compensation expense, before tax
687 
609 
1,371 
1,303 
Selling, general and administrative expenses
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
 
 
 
 
Stock-based compensation expense, before tax
$ 4,828 
$ 3,263 
$ 8,995 
$ 6,476 
Schedule of Stock-Based Compensation Expense Expected to be Recognized (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award
 
Remainder of 2013
$ 11,317 
2014
16,013 
2015
9,492 
2016
5,669 
2017
2,571 
2018
96 
Total unrecognized compensation expense
45,158 
RSUs
 
Share-based Compensation Arrangement by Share-based Payment Award
 
Remainder of 2013
8,976 
2014
12,867 
2015
9,417 
2016
5,669 
2017
2,571 
2018
96 
Total unrecognized compensation expense
39,596 
Stock Options
 
Share-based Compensation Arrangement by Share-based Payment Award
 
Remainder of 2013
2,247 
2014
3,007 
2015
75 
Total unrecognized compensation expense
5,329 
Restricted Stock
 
Share-based Compensation Arrangement by Share-based Payment Award
 
Remainder of 2013
94 
2014
139 
Total unrecognized compensation expense
$ 233 
Long-Term Obligations - Additional Information (Details) (USD $)
0 Months Ended 0 Months Ended 0 Months Ended
Jun. 30, 2013
Dec. 31, 2012
Jun. 30, 2013
Notes payable
Dec. 31, 2012
Notes payable
May 3, 2013
Credit agreement
Jun. 30, 2013
Credit agreement
Dec. 31, 2012
Credit agreement
Sep. 30, 2011
Credit agreement
Sep. 28, 2012
Receivables securitization facility
Jun. 30, 2013
Receivables securitization facility
Dec. 31, 2012
Receivables securitization facility
Jun. 30, 2013
Other long-term debt
Dec. 31, 2012
Other long-term debt
May 3, 2013
Multicurrency Component
Credit agreement
May 3, 2013
US Dollar Component
Credit agreement
May 3, 2013
Amended Credit Agreement
Credit agreement
May 3, 2013
Original Credit Agreement
Credit agreement
May 9, 2013
4.75% Senior Notes Due May 2023
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average interest rate
 
 
1.70% 
1.70% 
 
3.07% 
2.85% 
 
 
1.01% 
1.05% 
3.40% 
3.30% 
 
 
 
 
 
Senior Secured Credit Agreement [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payments of Financing Costs
 
 
 
 
$ 7,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred Finance Costs, Noncurrent, Net
 
 
 
 
6,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
9,400,000 
Extension period of maturity date for credit agreement
 
 
 
 
2 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum credit agreement borrowings
 
 
 
 
1,800,000,000 
 
 
1,400,000,000 
 
 
 
 
 
 
 
 
 
 
Maximum revolving credit facility borrowings
 
 
 
 
 
 
 
 
 
 
 
 
 
1,200,000,000 
150,000,000 
 
 
 
Term loan
 
 
 
 
450,000,000 
633,200,000 
974,600,000 
 
 
 
 
 
 
 
 
 
 
 
Maximum amount of letters of credit
 
 
 
 
150,000,000 
 
 
125,000,000 
 
 
 
 
 
 
 
 
 
 
Bridge loan maximum capacity
 
 
 
 
50,000,000 
 
 
25,000,000 
 
 
 
 
 
 
 
 
 
 
Maximum increase of revolving credit facility or term loans
 
 
 
 
400,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum senior secured leverage ratio
 
 
 
 
2.50 
 
 
 
 
 
 
 
 
 
 
 
 
 
Original principal payment percentage in first and second years
 
 
 
 
1.25% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prepayment requirement, duration to reinvest proceeds from sale or disposition of certain assets
 
 
 
 
12 months 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum net leverage ratio
 
 
 
 
3.50 
 
 
3.00 
 
 
 
 
 
 
 
 
 
 
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 
 
 
3.50 
 
 
 
 
 
 
 
 
 
 
Minimum interest coverage ratio
 
 
 
 
3.00 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increment change in applicable margin
 
 
 
 
0.25% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increment change in commitment fees
 
 
 
 
0.05% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fronting fee on letters of credit in addition to participation commission
 
 
 
 
0.125% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current maturities of credit agreement
 
 
 
 
 
22,500,000 
31,900,000 
 
 
 
 
 
 
 
 
 
 
 
Outstanding letters of credit
 
 
 
 
 
54,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
Availability on the revolving credit facility
 
 
 
 
 
1,100,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
Loss on debt extinguishment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,100,000 
1,700,000 
 
Senior Notes [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior notes aggregate principal amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
600,000,000 
Senior notes interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.75% 
Percent of notes redeemable before May 15, 2016 with net cash proceeds from certain equity offerings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
35.00% 
Notes redemption price, percent of principal amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
Period to consummate exchange offer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
365 days 
Failure to consummate exchange offer, annual interest rate increase
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.25% 
Failure to consummate exchange offer, for each subsequent default period, additional increase in annual interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.25% 
Failure to consummate exchange offer, subsequent default period for additional incremental increase in annual interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
90 days 
Failure to consummate exchange offer, maximum additional increase in annual interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.00% 
Receivables Securitization Facility [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt and capital lease obligations
1,376,481,000 
1,118,478,000 
43,577,000 
42,398,000 
 
 
 
 
 
80,000,000 
80,000,000 
19,659,000 
21,491,000 
 
 
 
 
 
Receivables securitization facility term period
 
 
 
 
 
 
 
 
3 years 
 
 
 
 
 
 
 
 
 
Receivables securitization maximum borrowing capacity
 
 
 
 
 
 
 
 
80,000,000 
 
 
 
 
 
 
 
 
 
Receivables used as collateral for receivables securitization facility
 
 
 
 
 
 
 
 
 
$ 117,900,000 
$ 116,900,000 
 
 
 
 
 
 
 
Margin above LIBOR for receivables secuirtization facility
 
 
 
 
 
 
 
 
1.25% 
 
 
 
 
 
 
 
 
 
Long-Term Obligations Schedule of Long-Term Obligations (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Debt Instrument [Line Items]
 
 
Long-term obligations
$ 1,376,481 
$ 1,118,478 
Less current maturities
(64,962)
(71,716)
Long-Term Obligations, Excluding Current Portion
1,311,519 
1,046,762 
Term loans payable
 
 
Debt Instrument [Line Items]
 
 
Long-term obligations
450,000 
420,625 
Revolving credit facility
 
 
Debt Instrument [Line Items]
 
 
Long-term obligations
183,245 
553,964 
Senior notes
 
 
Debt Instrument [Line Items]
 
 
Long-term obligations
600,000 
0 
Receivables securitization facility
 
 
Debt Instrument [Line Items]
 
 
Long-term obligations
80,000 
80,000 
Notes payable
 
 
Debt Instrument [Line Items]
 
 
Long-term obligations
43,577 
42,398 
Other long-term debt
 
 
Debt Instrument [Line Items]
 
 
Long-term obligations
$ 19,659 
$ 21,491 
Derivative Instruments and Hedging Activities - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]
 
Net loss included in accumulated other comprehensive income (loss) to be reclassified to earnings within 12 months
$ 4.1 
Schedule of Derivative Instruments (Details)
In Thousands, unless otherwise specified
Jun. 30, 2013
USD ($)
Dec. 31, 2012
USD ($)
Jun. 30, 2013
Pound Sterling Notional Amount [Member]
GBP (£)
Jun. 30, 2013
Interest rate swap
US Dollar Notional Amount [Member]
USD ($)
Dec. 31, 2012
Interest rate swap
US Dollar Notional Amount [Member]
USD ($)
Jun. 30, 2013
Interest rate swap
Pound Sterling Notional Amount [Member]
USD ($)
Dec. 31, 2012
Interest rate swap
Pound Sterling Notional Amount [Member]
USD ($)
Dec. 31, 2012
Interest rate swap
Pound Sterling Notional Amount [Member]
GBP (£)
Jun. 30, 2013
Interest rate swap
Canadian Dollar Notional Amount [Member]
USD ($)
Jun. 30, 2013
Interest rate swap
Canadian Dollar Notional Amount [Member]
CAD ($)
Dec. 31, 2012
Interest rate swap
Canadian Dollar Notional Amount [Member]
USD ($)
Dec. 31, 2012
Interest rate swap
Canadian Dollar Notional Amount [Member]
CAD ($)
Jun. 30, 2013
Foreign exchange forward
Pound Sterling Notional Amount [Member]
USD ($)
Jun. 30, 2013
Foreign exchange forward
Pound Sterling Notional Amount [Member]
GBP (£)
Jun. 30, 2013
Foreign exchange forward
Euro Notional Amount [Member]
USD ($)
Jun. 30, 2013
Foreign exchange forward
Euro Notional Amount [Member]
EUR (€)
Derivative
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative, notional amount
 
 
£ 50,000 
$ 420,000 
$ 520,000 
 
 
£ 50,000 
 
$ 25,000 
 
$ 25,000 
 
£ 70,000 
 
€ 149,976 
Derivative assets, noncurrent
148 
 
 
 
 
 
 
 
148 
 
 
 
 
 
 
 
Derivative liabilities, current
1,173 
705 
 
 
705 
 
 
 
 
 
 
 
544 
 
629 
 
Derivative liabilities, noncurrent
$ 9,793 
$ 14,938 
 
$ 8,678 
$ 12,791 
$ 1,115 
$ 2,135 
 
 
 
$ 12 
 
 
 
 
 
Fair Value Measurements - Additional Information (Details)
3 Months Ended 6 Months Ended 6 Months Ended
Jun. 30, 2013
USD ($)
Jun. 30, 2012
USD ($)
Jun. 30, 2013
USD ($)
Jun. 30, 2012
USD ($)
Dec. 31, 2012
USD ($)
Jun. 30, 2013
ECP 2012 Contingent Payment
USD ($)
Jun. 30, 2013
ECP 2012 Contingent Payment
GBP (£)
Dec. 31, 2011
ECP 2012 Contingent Payment
GBP (£)
Dec. 31, 2011
ECP 2013 Contingent Payment Draco Portion
GBP (£)
Jun. 30, 2013
Receivables securitization facility
USD ($)
Dec. 31, 2012
Receivables securitization facility
USD ($)
Jun. 30, 2013
Senior notes
USD ($)
Dec. 31, 2012
Senior notes
USD ($)
Fair Value Measurements
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum payment under contingent consideration agreement
 
 
 
 
 
 
 
£ 25,000,000 
£ 27,000,000 
 
 
 
 
Contingent consideration payments
581,000 
 
38,349,000 
600,000 
 
33,900,000 
22,400,000 
 
 
 
 
 
 
Contingent consideration other settlements
 
 
 
 
 
3,900,000 
2,600,000 
 
 
 
 
 
 
Gains (losses) related to contingent consideration outstanding at period-end
1,300,000 
300,000 
2,100,000 
(1,000,000)
 
 
 
 
 
 
 
 
 
Debt and capital lease obligations
1,376,481,000 
 
1,376,481,000 
 
1,118,478,000 
 
 
 
 
80,000,000 
80,000,000 
600,000,000 
0 
Debt and capital lease obligations, fair value
 
 
 
 
 
 
 
 
 
 
 
$ 576,000,000 
 
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) (Fair Value, Measurements, Recurring, USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value assets measured on a recurring basis
$ 22,601 
$ 19,492 
Fair value liabilities measured on a recurring basis
82,992 
125,495 
Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value assets measured on a recurring basis
22,601 
19,492 
Fair value liabilities measured on a recurring basis
33,519 
35,486 
Level 3
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on a recurring basis
49,473 
90,009 
Cash surrender value of life insurance
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value assets measured on a recurring basis
22,453 
19,492 
Cash surrender value of life insurance |
Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value assets measured on a recurring basis
22,453 
19,492 
Interest rate swap
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value assets measured on a recurring basis
148 
 
Fair value liabilities measured on a recurring basis
10,066 
15,643 
Interest rate swap |
Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value assets measured on a recurring basis
148 
 
Fair value liabilities measured on a recurring basis
10,066 
15,643 
Contingent consideration liabilities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on a recurring basis
49,473 
90,009 
Contingent consideration liabilities |
Level 3
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on a recurring basis
49,473 
90,009 
Deferred compensation liabilities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on a recurring basis
22,280 
19,843 
Deferred compensation liabilities |
Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on a recurring basis
22,280 
19,843 
Foreign exchange forward
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on a recurring basis
1,173 
 
Foreign exchange forward |
Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on a recurring basis
$ 1,173 
 
Significant Unobservable Inputs Used in Fair Value Measurements (Details) (Contingent consideration liabilities, Level 3)
Jun. 30, 2013
Dec. 31, 2012
Contingent consideration liabilities |
Level 3
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
 
 
Weighted Average, Probability of achieving payout targets
70.40% 
79.70% 
Weighted Average, Discount rate
6.50% 
6.60% 
Changes in Fair Value of Contingent Consideration Obligations (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Contingent Consideration Obligations [Roll Forward]
 
 
 
 
Beginning balance
$ 49,565 
$ 82,909 
$ 90,009 
$ 82,382 
Contingent consideration liabilities recorded for business acquisitions
261 
5,433 
2,650 
5,540 
Payments
(581)
 
(38,349)
(600)
Loss (gain) included in earnings
230 
1,240 
1,053 
(105)
Exchange rate effects
(2)
(1,545)
(5,890)
820 
Ending balance
$ 49,473 
$ 88,037 
$ 49,473 
$ 88,037 
Commitments and Contingencies - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2012
Jun. 30, 2013
Commitments and Contingencies Disclosure [Abstract]
 
 
 
Gain on lawsuit settlement
$ 8.4 
$ 16.7 
 
Number of defendants class action is pending against
 
 
2 
Future Minimum Lease Commitments (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Commitments and Contingencies Disclosure [Abstract]
 
Six months ending December 31, 2013
$ 61,194 
2014
100,859 
2015
89,359 
2016
71,307 
2017
56,731 
2018
44,952 
Thereafter
132,250 
Future Minimum Lease Payments
$ 556,652 
Computation of Earnings Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Earnings Per Share [Abstract]
 
 
 
 
Net income
$ 75,722 
$ 63,998 
$ 160,314 
$ 144,989 
Denominator for basic earnings per share—weighted average shares outstanding
299,159 
295,290 
298,690 
294,784 
Effect of dilutive securities:
 
 
 
 
RSUs
758 
440 
721 
438 
Stock options
3,728 
4,372 
3,865 
4,476 
Restricted stock
12 
50 
19 
48 
Denominator for diluted earnings per share—Adjusted weighted average shares outstanding
303,657 
300,152 
303,295 
299,746 
Earnings per share, basic
$ 0.25 
$ 0.22 
$ 0.54 
$ 0.49 
Earnings per share, diluted
$ 0.25 
$ 0.21 
$ 0.53 
$ 0.48 
Business Combinations - Additional Information (Details)
3 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended 12 Months Ended 3 Months Ended 6 Months Ended 6 Months Ended
Jun. 30, 2013
USD ($)
Jun. 30, 2012
USD ($)
Jun. 30, 2013
USD ($)
Jun. 30, 2012
USD ($)
Dec. 31, 2012
USD ($)
Jun. 30, 2013
North America
USD ($)
Dec. 31, 2012
North America
USD ($)
Jun. 30, 2013
All 2013 Acquisitions
USD ($)
Dec. 31, 2012
All 2012 Acquisitions
USD ($)
Dec. 31, 2012
All 2012 Acquisitions
North America
Dec. 31, 2012
All 2012 Acquisitions
Wholesale North America Segment
Dec. 31, 2012
All 2012 Acquisitions
Scrap and Other Metals Processors
Dec. 31, 2012
All 2012 Acquisitions
Self Service Segment
Jun. 30, 2013
Sator
USD ($)
Jun. 30, 2013
Sator
USD ($)
Jun. 30, 2013
Sator
EUR (€)
Jun. 30, 2013
All 2013 Acquisitions Excluding Sator
USD ($)
Jun. 30, 2013
All 2013 Acquisitions Excluding Sator
Wholesale North America Segment
Dec. 31, 2011
ECP 2013 Contingent Payment
GBP (£)
Dec. 31, 2011
ECP 2013 Contingent Payment Draco Portion
GBP (£)
Business Acquisition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of acquisitions
 
 
 
 
 
 
 
 
 
30 
22 
2 
8 
 
 
 
9 
7 
 
 
Total acquisition date fair value of the consideration for acquisitions
 
 
 
 
 
 
 
 
$ 284,600,000 
 
 
 
 
 
 
 
$ 41,100,000 
 
 
 
Cash used in acquisitions, net of cash acquired
 
 
 
 
 
 
 
307,885,000 
261,470,000 
 
 
 
 
272,824,000 
272,824,000 
209,800,000 
35,061,000 
 
 
 
Notes issued
 
 
 
 
 
 
 
2,408,000 
15,990,000 
 
 
 
 
 
 
 
2,408,000 
 
 
 
Other purchase price obligations
 
 
 
 
 
 
 
992,000 
1,647,000 
 
 
 
 
 
 
 
992,000 
 
 
 
Acquisition fair value of contingent consideration
 
 
 
 
 
 
 
2,650,000 
5,456,000 
 
 
 
 
 
 
 
2,650,000 
 
 
 
Maximum payment under contingent consideration agreement
 
 
 
 
 
 
 
 
6,500,000 
 
 
 
 
 
 
 
3,000,000 
 
30,000,000 
27,000,000 
Goodwill
1,826,128,000 
 
1,826,128,000 
 
1,690,284,000 
1,348,765,000 
1,339,831,000 
165,232,000 
201,742,000 
 
 
 
 
139,158,000 
139,158,000 
 
26,074,000 
 
 
 
Goodwill recorded for acquisitions
 
 
165,232,000 
 
197,600,000 
15,708,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue generated by acquisitions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
68,800,000 
 
12,400,000 
 
 
 
Operating income generated by acquisitions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,400,000 
 
500,000 
 
 
 
Goodwill expected to be deductible for income tax purposes
 
 
 
 
 
 
 
 
157,800,000 
 
 
 
 
 
 
 
8,400,000 
 
 
 
Restructuring and acquisition related expenses
$ 3,680,000 
$ 2,195,000 
$ 5,185,000 
$ 2,442,000 
 
 
 
 
 
 
 
 
 
$ 2,800,000 
$ 3,600,000 
 
 
 
 
 
Purchase Price Allocations for Acquisitions (Details)
In Thousands, unless otherwise specified
Jun. 30, 2013
USD ($)
Dec. 31, 2012
USD ($)
Jun. 30, 2013
Sator
USD ($)
Jun. 30, 2013
Sator
EUR (€)
Jun. 30, 2013
All 2013 Acquisitions Excluding Sator
USD ($)
Jun. 30, 2013
All 2013 Acquisitions
USD ($)
Dec. 31, 2012
All 2012 Acquisitions
USD ($)
Business Acquisition
 
 
 
 
 
 
 
Receivables
 
 
$ 61,639 
 
$ 4,726 
$ 66,365 
$ 15,473 
Receivable reserves
 
 
(8,563)
 
(224)
(8,787)
(1,459)
Inventory
 
 
71,784 
 
7,095 
78,879 
62,305 
Prepaid expenses and other current assets
 
 
7,184 
 
365 
7,549 
201 
Property and equipment
 
 
19,484 
 
4,831 
24,315 
31,930 
Goodwill
1,826,128 
1,690,284 
139,158 
 
26,074 
165,232 
201,742 
Other intangibles
 
 
49,978 
 
175 
50,153 
655 
Other assets
 
 
2,049 
 
0 
2,049 
187 
Deferred income taxes
 
 
(15,222)
 
(32)
(15,254)
428 
Current liabilities assumed
 
 
(49,593)
 
(1,775)
(51,368)
(22,910)
Debt assumed
 
 
 
 
(124)
(124)
(3,989)
Other noncurrent liabilities assumed
 
 
(5,074)
 
 
(5,074)
 
Contingent consideration liabilities
 
 
 
 
(2,650)
(2,650)
(5,456)
Other purchase price obligations
 
 
 
 
(992)
(992)
(1,647)
Notes issued
 
 
 
 
(2,408)
(2,408)
(15,990)
Cash used in acquisitions, net of cash acquired
 
 
$ 272,824 
€ 209,800 
$ 35,061 
$ 307,885 
$ 261,470 
Pro Forma Effect of Businesses Acquired (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Business Acquisition
 
 
 
 
Revenue, as reported
$ 1,251,748 
$ 1,006,531 
$ 2,447,745 
$ 2,038,308 
Pro forma revenue
1,287,853 
1,176,447 
2,588,173 
2,395,446 
Net income, as reported
75,722 
63,998 
160,314 
144,989 
Pro forma net income
78,613 
68,758 
166,185 
157,673 
Earnings per share, basic
$ 0.25 
$ 0.22 
$ 0.54 
$ 0.49 
Pro forma earnings per share-basic
$ 0.26 1
$ 0.23 1
$ 0.56 1
$ 0.53 1
Earnings per share, diluted
$ 0.25 
$ 0.21 
$ 0.53 
$ 0.48 
Pro forma earnings per share-diluted
$ 0.26 1
$ 0.23 1
$ 0.55 1
$ 0.53 1
Sator
 
 
 
 
Business Acquisition
 
 
 
 
Revenue of purchased businesses prior to acquisition
31,306 
92,401 
126,309 
186,664 
Net income of purchased business prior to acquisition
2,764 
1,598 
5,345 
3,277 
Earnings per share, basic of purchased business prior to acquisition
$ 0.01 
$ 0.01 
$ 0.02 
$ 0.01 
Earnings per share, diluted, of purchased business prior to acquisition
$ 0.01 
$ 0.01 
$ 0.02 
$ 0.01 
All 2012 and 2013 Acquisitions Excluding Sator [Member]
 
 
 
 
Business Acquisition
 
 
 
 
Revenue of purchased businesses prior to acquisition
4,799 
77,515 
14,119 
170,474 
Net income of purchased business prior to acquisition
$ 127 
$ 3,162 
$ 526 
$ 9,407 
Earnings per share, basic of purchased business prior to acquisition
$ 0.00 
$ 0.01 
$ 0.00 
$ 0.03 
Earnings per share, diluted, of purchased business prior to acquisition
$ 0.00 
$ 0.01 
$ 0.00 
$ 0.03 
Restructuring and Acquisition Related Expenses - Additional Information (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Restructuring Cost and Reserve
 
 
 
 
Restructuring and acquisition related expenses
$ 3,680,000 
$ 2,195,000 
$ 5,185,000 
$ 2,442,000 
Acquisition related expenses
 
 
 
 
Restructuring Cost and Reserve
 
 
 
 
Restructuring and acquisition related expenses
2,900,000 
 
4,000,000 
 
All 2012 and 2013 Acquisitions Excluding Sator [Member]
 
 
 
 
Restructuring Cost and Reserve
 
 
 
 
Restructuring and acquisition related expenses
800,000 
 
1,200,000 
 
All 2011 and 2012 Acquisitions [Member]
 
 
 
 
Restructuring Cost and Reserve
 
 
 
 
Restructuring and acquisition related expenses
 
1,100,000 
 
1,300,000 
Refurbished Bumper And Wheel Restructuring [Member]
 
 
 
 
Restructuring Cost and Reserve
 
 
 
 
Restructuring and acquisition related expenses
 
 
 
$ 1,100,000 
Income Taxes - Additional Information (Details)
6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Income Tax Disclosure [Abstract]
 
 
Effective income tax rate
35.40% 
36.80% 
Accumulated Other Comprehensive Income (Loss) Schedule of Accumulated Other Comprehensive Income (Loss) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment [Roll Forward]
 
 
 
 
Balance, beginning
$ (8,130)
$ 6,436 
$ 10,850 
$ (2,071)
Foreign currency translation
(3,204)
(6,171)
(22,184)
2,336 
Balance, ending
(11,334)
265 
(11,334)
265 
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges [Roll Forward]
 
 
 
 
Balance, beginning
(9,359)
(6,540)
(10,091)
(6,890)
Pretax income (loss)
1,648 
(6,718)
1,145 
(7,709)
Income tax benefit
(481)
2,333 
(342)
2,722 
Reclassification of unrealized loss
2,117 
1,636 
3,815 
3,112 
Reversal of deferred income taxes
(760)
(592)
(1,362)
(1,116)
Hedge ineffectiveness
167 
 
167 
 
Income tax benefit
(62)
 
(62)
 
Balance, ending
(6,730)
(9,881)
(6,730)
(9,881)
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
 
 
 
 
Balance, beginning
(17,489)
(104)
759 
(8,961)
Pretax income (loss)
(1,556)
(12,889)
(21,039)
(5,373)
Income tax effect
(481)
2,333 
(342)
2,722 
Reversal of unrealized loss
2,117 
1,636 
3,815 
3,112 
Reversal of deferred income taxes
(760)
(592)
(1,362)
(1,116)
Hedge ineffectiveness
167 
 
167 
 
Income tax benefit
(62)
 
(62)
 
Balance, ending
$ (18,064)
$ (9,616)
$ (18,064)
$ (9,616)
Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) - Additional Information (Details) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Reclassification of unrealized loss
$ 2,117 
$ 1,636 
$ 3,815 
$ 3,112 
Foreign exchange forward
 
 
 
 
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Reclassification of unrealized loss
$ 700 
 
 
 
Segment and Geographic Information - Additional Information (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Segment Reporting Information
 
 
 
 
Number of operating segments
 
 
3 
 
Gain on lawsuit settlement
 
$ 8,400,000 
 
$ 16,700,000 
Change in fair value of contingent consideration liabilities
(230,000)
(1,240,000)
(1,053,000)
105,000 
Restructuring and acquisition related expenses
3,680,000 
2,195,000 
5,185,000 
2,442,000 
North America
 
 
 
 
Segment Reporting Information
 
 
 
 
Number of reportable segments
 
 
1 
 
Gain on lawsuit settlement
 
8,400,000 
 
16,700,000 
Europe
 
 
 
 
Segment Reporting Information
 
 
 
 
Change in fair value of contingent consideration liabilities
1,200,000 
1,174,668 
(1,900,000)
200,000 
Restructuring and acquisition related expenses
$ 2,800,000 
 
$ 3,700,000 
 
Schedule of Financial Performance by Reportable Segment (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Segment Reporting Information
 
 
 
 
Revenue
$ 1,251,748 
$ 1,006,531 
$ 2,447,745 
$ 2,038,308 
EBITDA
152,396 
125,744 
311,799 
277,465 
Depreciation and amortization
20,671 
17,189 
39,711 
33,446 
North America
 
 
 
 
Segment Reporting Information
 
 
 
 
Revenue
953,918 
841,335 
1,937,306 
1,712,419 
EBITDA
118,632 
109,687 
253,967 
241,875 
Depreciation and amortization
16,251 
14,771 
32,138 
28,773 
Europe
 
 
 
 
Segment Reporting Information
 
 
 
 
Revenue
297,830 
165,196 
510,439 
325,889 
EBITDA
33,764 
16,057 
57,832 
35,590 
Depreciation and amortization
$ 4,420 
$ 2,418 
$ 7,573 
$ 4,673 
Reconciliation of EBITDA to Net Income (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Segment Reporting [Abstract]
 
 
 
 
EBITDA
$ 152,396 
$ 125,744 
$ 311,799 
$ 277,465 
Depreciation and amortization
20,671 
17,189 
39,711 
33,446 
Interest expense, net
12,492 
7,356 
21,087 
14,723 
Loss on debt extinguishment
2,795 
0 
2,795 
0 
Provision for income taxes
40,716 
37,201 
87,892 
84,307 
Net income
$ 75,722 
$ 63,998 
$ 160,314 
$ 144,989 
Schedule of Capital Expenditures by Reportable Segment (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Segment Reporting Information
 
 
 
 
Capital Expenditures
$ 18,691 
$ 20,286 
$ 40,151 
$ 41,615 
North America
 
 
 
 
Segment Reporting Information
 
 
 
 
Capital Expenditures
16,138 
16,372 
33,702 
34,506 
Europe
 
 
 
 
Segment Reporting Information
 
 
 
 
Capital Expenditures
$ 2,553 
$ 3,914 
$ 6,449 
$ 7,109 
Schedule of Assets by Reportable Segment (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Segment Reporting Information
 
 
Receivables, net
$ 413,215 
$ 311,808 
Inventory
972,926 
900,803 
Property and Equipment, net
515,353 
494,379 
Other unallocated assets
2,316,821 
2,016,466 
Total Assets
4,218,315 
3,723,456 
North America
 
 
Segment Reporting Information
 
 
Receivables, net
269,533 
241,627 
Inventory
729,799 
750,565 
Property and Equipment, net
436,364 
434,010 
Europe
 
 
Segment Reporting Information
 
 
Receivables, net
143,682 
70,181 
Inventory
243,127 
150,238 
Property and Equipment, net
$ 78,989 
$ 60,369 
Schedule of Revenue by Geographic Area (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Revenues from External Customers and Long-Lived Assets
 
 
 
 
Revenue
$ 1,251,748 
$ 1,006,531 
$ 2,447,745 
$ 2,038,308 
United States
 
 
 
 
Revenues from External Customers and Long-Lived Assets
 
 
 
 
Revenue
915,152 
789,346 
1,804,493 
1,610,311 
United Kingdom
 
 
 
 
Revenues from External Customers and Long-Lived Assets
 
 
 
 
Revenue
229,096 
165,196 
441,705 
325,889 
Other countries
 
 
 
 
Revenues from External Customers and Long-Lived Assets
 
 
 
 
Revenue
$ 107,500 
$ 51,989 
$ 201,547 
$ 102,108 
Schedule of Tangible Long-Lived Assets by Geographic Area (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Revenues from External Customers and Long-Lived Assets
 
 
Long-lived Assets
$ 515,353 
$ 494,379 
United States
 
 
Revenues from External Customers and Long-Lived Assets
 
 
Long-lived Assets
408,007 
408,244 
United Kingdom
 
 
Revenues from External Customers and Long-Lived Assets
 
 
Long-lived Assets
59,569 
60,369 
Other countries
 
 
Revenues from External Customers and Long-Lived Assets
 
 
Long-lived Assets
$ 47,777 
$ 25,766 
Schedule of Revenue by Product Category (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Revenue from External Customers
 
 
 
 
Revenue
$ 1,251,748 
$ 1,006,531 
$ 2,447,745 
$ 2,038,308 
Aftermarket, other new and refurbished products
 
 
 
 
Revenue from External Customers
 
 
 
 
Revenue
737,128 
547,912 
1,405,084 
1,113,256 
Recycled, remanufactured and related products and services
 
 
 
 
Revenue from External Customers
 
 
 
 
Revenue
356,834 
323,669 
711,270 
649,373 
Other
 
 
 
 
Revenue from External Customers
 
 
 
 
Revenue
$ 157,786 
$ 134,950 
$ 331,391 
$ 275,679