LKQ CORP, 10-Q filed on 10/30/2015
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2015
Oct. 23, 2015
Document and Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Sep. 30, 2015 
 
Document Fiscal Year Focus
2015 
 
Document Fiscal Period Focus
Q3 
 
Trading Symbol
LKQ 
 
Entity Registrant Name
LKQ CORP 
 
Entity Central Index Key
0001065696 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
305,487,699 
Unaudited Condensed Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Current Assets:
 
 
Cash and equivalents
$ 137,086 
$ 114,605 
Receivables, net
626,780 
601,422 
Inventory
1,464,627 
1,433,847 
Deferred income taxes
77,401 
81,744 
Prepaid expenses and other current assets
81,249 
85,799 
Total Current Assets
2,387,143 
2,317,417 
Property and Equipment, net
652,780 
629,987 
Intangible Assets:
 
 
Goodwill
2,348,092 
2,288,895 
Other intangibles, net
219,632 
245,525 
Other Assets
96,385 
91,668 
Total Assets
5,704,032 
5,573,492 
Current Liabilities:
 
 
Accounts payable
416,341 
400,202 
Accrued expenses:
 
 
Accrued payroll-related liabilities
95,014 
86,016 
Other accrued expenses
185,072 
164,148 
Other current liabilities
64,097 
36,815 
Current portion of long-term obligations
37,174 
63,515 
Total Current Liabilities
797,698 
750,696 
Long-Term Obligations, Excluding Current Portion
1,570,056 
1,801,047 
Deferred Income Taxes
175,310 
181,662 
Other Noncurrent Liabilities
124,255 
119,430 
Commitments and Contingencies
   
   
Stockholders’ Equity:
 
 
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 305,473,459 and 303,452,655 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively
3,054 
3,035 
Additional paid-in capital
1,084,423 
1,054,686 
Retained earnings
2,031,324 
1,703,161 
Accumulated other comprehensive loss
(82,088)
(40,225)
Total Stockholders’ Equity
3,036,713 
2,720,657 
Total Liabilities and Stockholders’ Equity
$ 5,704,032 
$ 5,573,492 
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Sep. 30, 2015
Dec. 31, 2014
Statement of Financial Position [Abstract]
 
 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
1,000,000,000 
1,000,000,000 
Common stock, shares issued
305,473,459 
303,452,655 
Common stock, shares outstanding
305,473,459 
303,452,655 
Unaudited Condensed Consolidated Statements of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Income Statement [Abstract]
 
 
 
 
Revenue
$ 1,831,732 
$ 1,721,024 
$ 5,443,714 
$ 5,055,933 
Cost of goods sold
1,118,953 
1,056,613 
3,307,512 
3,068,579 
Gross margin
712,779 
664,411 
2,136,202 
1,987,354 
Facility and warehouse expenses
143,918 
133,330 
412,954 
387,995 
Distribution expenses
158,768 
148,572 
450,521 
432,445 
Selling, general and administrative expenses
207,887 
192,229 
616,924 
563,344 
Restructuring and acquisition related expenses
4,578 
3,594 
12,729 
12,816 
Depreciation and amortization
30,883 
30,498 
90,118 
87,136 
Operating income
166,745 
156,188 
552,956 
503,618 
Other expense (income):
 
 
 
 
Interest expense, net
14,722 
16,394 
44,250 
48,140 
Loss on debt extinguishment
0 
0 
0 
324 
Change in fair value of contingent consideration liabilities
(89)
(12)
(365)
2,000 
Other income, net
(3,017)
(18)
(1,277)
(1,021)
Total other expense, net
11,794 
16,388 
43,338 
45,443 
Income before provision for income taxes
154,951 
139,800 
509,618 
458,175 
Provision for income taxes
52,475 
47,564 
177,255 
155,926 
Equity in earnings of unconsolidated subsidiaries
(1,130)
(721)
(4,200)
(1,199)
Net income
$ 101,346 
$ 91,515 
$ 328,163 
$ 301,050 
Earnings per share:
 
 
 
 
Basic
$ 0.33 1
$ 0.30 1
$ 1.08 
$ 1.00 
Diluted
$ 0.33 1
$ 0.30 1
$ 1.07 
$ 0.98 
Unaudited Condensed Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net income
$ 101,346 
$ 91,515 
$ 328,163 
$ 301,050 
Other comprehensive income (loss), net of tax:
 
 
 
 
Foreign currency translation
(33,458)
(39,329)
(43,758)
(24,013)
Net change in unrecognized gains/losses on derivative instruments, net of tax
612 
817 
1,813 
2,067 
Net change in unrealized gains/losses on pension plan, net of tax
(25)
(30)
82 
(97)
Total other comprehensive loss
(32,871)
(38,542)
(41,863)
(22,043)
Total comprehensive income
$ 68,475 
$ 52,973 
$ 286,300 
$ 279,007 
Unaudited Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
Net income
$ 328,163 
$ 301,050 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
94,688 
90,647 
Stock-based compensation expense
16,291 
16,967 
Excess tax benefit from stock-based payments
(13,672)
(14,455)
Other
6,580 
3,440 
Changes in operating assets and liabilities, net of effects from acquisitions:
 
 
Receivables
(6,304)
(69,680)
Inventory
22,345 
(55,266)
Prepaid income taxes/income taxes payable
39,639 
20,858 
Accounts payable
(11,139)
1,433 
Other operating assets and liabilities
14,732 
27,648 
Net cash provided by operating activities
491,323 
322,642 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
Purchases of property and equipment
(99,573)
(100,191)
Acquisitions, net of cash acquired
(157,357)
(650,614)
Other investing activities, net
3,174 
934 
Net cash used in investing activities
(253,756)
(749,871)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
Proceeds from exercise of stock options
7,534 
6,520 
Excess tax benefit from stock-based payments
13,672 
14,455 
Taxes paid related to net share settlements of stock-based compensation awards
(7,423)
0 
Borrowings under revolving credit facilities
282,421 
1,299,821 
Repayments under revolving credit facilities
(433,840)
(808,039)
Borrowings under term loans
0 
11,250 
Repayments under term loans
(16,875)
(11,250)
Borrowings under receivables securitization facility
3,858 
80,000 
Repayments under receivables securitization facility
(8,958)
0 
Repayments of other long-term debt
(50,843)
(20,532)
Payments of other obligations
(2,491)
(41,934)
Other financing activities, net
0 
(6,881)
Net cash (used in) provided by financing activities
(212,945)
523,410 
Effect of exchange rate changes on cash and equivalents
(2,141)
(2,023)
Net increase in cash and equivalents
22,481 
94,158 
Cash and equivalents, beginning of period
114,605 
150,488 
Cash and equivalents, end of period
137,086 
244,646 
Supplemental disclosure of cash paid for:
 
 
Income taxes, net of refunds
138,192 
135,447 
Interest
35,430 
38,399 
Supplemental disclosure of noncash investing and financing activities:
 
 
Notes payable and other obligations, including notes issued and debt assumed in connection with business acquisitions
28,598 
87,731 
Contingent consideration liabilities
0 
5,854 
Noncash property and equipment additions
$ 4,841 
$ 4,852 
Unaudited Condensed Consolidated Statements of Stockholders' Equity (USD $)
In Thousands, except Share data
Total
Common Stock
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Loss
Beginning balance at Dec. 31, 2014
$ 2,720,657 
$ 3,035 
$ 1,054,686 
$ 1,703,161 
$ (40,225)
Beginning balance, shares at Dec. 31, 2014
 
303,453,000 
 
 
 
Net income
328,163 
0 
0 
 
0 
Total other comprehensive loss
(41,863)
0 
0 
0 
(41,863)
RSUs vested, shares
 
840,000 
 
 
 
Restricted stock units vested, value
(4,183)
8 
(4,191)
0 
0 
Stock-based compensation expense
16,291 
 
16,291 
0 
0 
Stock options exercised, shares
 
1,324,000 
 
 
 
Exercise of stock options, value
8,229 
13 
8,216 
0 
0 
Shares withheld for net share settlements of stock option awards, shares
 
(144,000)
 
 
 
Adjustments Related to Tax Withholding for Share-based Compensation
(3,936)
(2)
(3,934)
0 
0 
Excess tax benefit from stock-based payments
13,355 
 
13,355 
0 
0 
Ending balance at Sep. 30, 2015
$ 3,036,713 
$ 3,054 
$ 1,084,423 
$ 2,031,324 
$ (82,088)
Ending balance, shares at Sep. 30, 2015
 
305,473,000 
 
 
 
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 condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to interim financial statements. Accordingly, certain information related to our significant accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted. These unaudited condensed consolidated financial statements reflect, in the opinion of management, all material adjustments (which include only normally recurring adjustments) necessary to fairly state, in all material respects, our financial position, results of operations and cash flows for the periods presented.
Operating results for interim periods are not necessarily indicative of the results that can be expected for any subsequent interim period or for a full year. These interim financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto included in our most recent Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on March 2, 2015.
Financial Statement Information
Summary of Significant Accounting Policies
Revenue Recognition
The majority of our revenue is derived from the sale of vehicle parts. Revenue is recognized when the products are shipped to, delivered to or picked up by customers and title has transferred, subject to an allowance for estimated returns, discounts and allowances that we estimate based upon historical information. We recorded a reserve for estimated returns, discounts and allowances of approximately $31.4 million and $31.3 million at September 30, 2015 and December 31, 2014, respectively. We present taxes assessed by governmental authorities collected from customers on a net basis. Therefore, the taxes are excluded from revenue on our Unaudited Condensed Consolidated Statements of Income and are shown as a current liability on our Unaudited Condensed Consolidated Balance Sheets until remitted. We recognize revenue from the sale of scrap metal, other metals, and cores when title has transferred, which typically occurs upon delivery to the customer.
Allowance for Doubtful Accounts
We recorded a reserve for uncollectible accounts of approximately $24.3 million and $19.4 million at September 30, 2015 and December 31, 2014, respectively.
Inventory
Inventory consists of the following (in thousands):
 
September 30,
 
December 31,
 
2015
 
2014
Aftermarket and refurbished products
$
1,070,673

 
$
1,022,549

Salvage and remanufactured products
393,954

 
411,298

 
$
1,464,627

 
$
1,433,847


Our acquisitions completed during 2015 and adjustments to preliminary valuations of inventory for certain of our 2014 acquisitions contributed $74.8 million of the increase in our aftermarket and refurbished products inventory and $4.4 million of the increase in our salvage and remanufactured products inventory during 2015. See Note 8, "Business Combinations" for further information on our acquisitions.
Intangible Assets
Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer relationships, software and other technology related assets, and covenants not to compete.
The changes in the carrying amount of goodwill by reportable segment during the nine months ended September 30, 2015 are as follows (in thousands):
 
North America
 
Europe
 
Specialty
 
Total
Balance as of January 1, 2015
$
1,392,032

 
$
616,819

 
$
280,044

 
$
2,288,895

Business acquisitions and adjustments to previously recorded goodwill
76,284

 
20,980

 
3,989

 
101,253

Exchange rate effects
(14,730
)
 
(27,376
)
 
50

 
(42,056
)
Balance as of September 30, 2015
$
1,453,586

 
$
610,423

 
$
284,083

 
$
2,348,092


The components of other intangibles are as follows (in thousands):
 
September 30, 2015
 
December 31, 2014
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Trade names and trademarks
$
171,165

 
$
(41,480
)
 
$
129,685

 
$
173,340

 
$
(35,538
)
 
$
137,802

Customer relationships
92,780

 
(37,121
)
 
55,659

 
92,972

 
(26,751
)
 
66,221

Software and other technology related assets
44,465

 
(16,028
)
 
28,437

 
44,640

 
(10,387
)
 
34,253

Covenants not to compete
10,937

 
(5,086
)
 
5,851

 
11,074

 
(3,825
)
 
7,249

 
$
319,347

 
$
(99,715
)
 
$
219,632

 
$
322,026

 
$
(76,501
)
 
$
245,525


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 20 years) on an accelerated basis. Software and other technology related assets are amortized on a straight-line basis over the expected period to be benefited (five to six years). Covenants not to compete are amortized over the lives of the respective agreements, which range from one to five years, on a straight-line basis. Amortization expense for intangibles was $25.0 million and $24.4 million during the nine months ended September 30, 2015 and 2014, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2019 is $33.2 million, $29.9 million, $27.4 million, $22.5 million and $17.8 million, respectively.
Warranty Reserve
Some of our salvage mechanical products are sold with a standard six month warranty against defects. Additionally, some of our remanufactured engines are sold with a standard three year warranty against defects. We also provide a limited lifetime warranty for certain of our aftermarket products that is supported by certain of the suppliers of those products. We record the estimated warranty costs at the time of sale using historical warranty claim information to project future warranty claims activity. The changes in the warranty reserve are as follows (in thousands):
Balance as of January 1, 2015
$
14,881

Warranty expense
26,294

Warranty claims
(23,517
)
Balance as of September 30, 2015
$
17,658


Investments in Unconsolidated Subsidiaries
As of September 30, 2015, the carrying value of our investments in unconsolidated subsidiaries was $11.0 million; of this amount, $10.2 million relates to our investment in ACM Parts Pty Ltd ("ACM Parts"). In August 2013, we entered into an agreement with Suncorp Group, a leading general insurance group in Australia and New Zealand, to develop ACM Parts, an alternative vehicle replacement parts business in those countries. We hold a 49% interest in the entity and are contributing our experience to help establish automotive parts recycling operations and to facilitate the procurement of aftermarket parts; Suncorp Group holds a 51% equity interest and is supplying salvage vehicles to the venture as well as assisting in establishing relationships with repair shops as customers. We are accounting for our interest in this subsidiary using the equity method of accounting, as our investment gives us the ability to exercise significant influence, but not control, over the investee. During the nine months ended September 30, 2015, we increased our total investment in ACM Parts by $7.5 million, which is reflected in Other investing activities, net on the Unaudited Condensed Consolidated Statements of Cash Flows. Our total ownership interest in ACM Parts remains unchanged as a result of this additional investment. The total of our investment in ACM Parts and other unconsolidated subsidiaries is included within Other Assets on our Unaudited Condensed Consolidated Balance Sheets. Our equity in the net earnings of the investees for the three and nine months ended September 30, 2015 was not material.
Depreciation Expense
Included in Cost of Goods Sold on the Unaudited Condensed Consolidated Statements of Income is depreciation expense associated with our refurbishing, remanufacturing, and furnace operations as well as our distribution centers.
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"), which was amended in July 2015. This update outlines a new comprehensive revenue recognition model that supersedes most current revenue recognition guidance, and requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Entities adopting the standard have the option of using either a full retrospective or modified retrospective approach in the application of this guidance. ASU 2014-09 will be effective for the Company during the first quarter of our fiscal year 2018. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. We are still evaluating the impact that ASU 2014-09 will have on our consolidated financial statements and related disclosures.
In April 2015, the FASB issued Accounting Standards Update 2015-03, "Interest-Imputation of Interest" ("ASU 2015-03"). This update simplifies the presentation of debt issuance costs on the financial statements by requiring companies to deduct debt issuance costs from the carrying value of their corresponding liability on the balance sheet, rather than presenting debt issuance costs as deferred charges. ASU 2015-03 will be effective for the Company during the first quarter of our fiscal year 2016. Early adoption is permitted. Entities must retrospectively apply this guidance within the balance sheet for all periods presented in order to reflect the period-specific effects of this new guidance. We do not anticipate the adoption of this guidance will have a material impact on our financial position, results of operations, or cash flows.
In July 2015, the FASB issued Accounting Standards Update 2015-11, "Simplifying the Measurement of Inventory" ("ASU 2015-11"), which requires entities to measure inventory at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. ASU 2015-11 will be effective for the Company during the first quarter of our fiscal year 2017 and must be applied on a prospective basis. Early adoption is permitted. We do not anticipate the adoption of this guidance will have a material impact on our financial position, results of operations, or cash flows.
In September 2015, the FASB issued Accounting Standards Update 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments" ("ASU 2015-16"), which requires an acquirer to recognize adjustments to provisional amounts identified during the measurement period in the reporting period in which the adjustments are identified as opposed to recognition as if the accounting had been completed as of the acquisition date. The ASU also requires disclosure regarding amounts that would have been recorded in previous reporting periods if the adjustment had been recognized as of the acquisition date. ASU 2015-16 will be effective for the Company during the first quarter of our fiscal year 2016 and must be applied on a prospective basis. Early adoption is permitted for financial statements that have not been issued. We do not anticipate that the adoption of this guidance will have a material impact on our financial position, results of operations, or cash flows.
Stock-Based Compensation
Stock-Based Compensation
In order to attract and retain employees, non-employee directors, consultants, and other persons associated with us, we may grant qualified and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares and performance units under the LKQ Corporation 1998 Equity Incentive Plan (the “Equity Incentive Plan”). We have granted RSUs, stock options, and restricted stock under the Equity Incentive Plan. We expect to issue new shares of common stock to cover past and future equity grants.
RSUs
RSUs vest over periods of up to five years, subject to a continued service condition. Currently outstanding RSUs contain either a time-based vesting condition or a combination of a performance-based vesting condition and a time-based vesting condition, in which case, both conditions must be met before any RSUs vest. For the RSUs containing a performance-based vesting condition, the Company must report positive diluted earnings per share, subject to certain adjustments, during any fiscal year period within five years following the grant date. Each RSU converts into one share of LKQ common stock on the applicable vesting date. The grant date fair value of RSUs is based on the market price of LKQ stock on the grant date.
During the nine months ended September 30, 2015, we granted 915,386 RSUs to employees. The fair value of RSUs that vested during the nine months ended September 30, 2015 was $28.2 million.
The following table summarizes activity related to our RSUs under the Equity Incentive Plan for the nine months ended September 30, 2015:
 
Number
Outstanding
 
Weighted
Average
Grant Date
Fair Value
 
Aggregate Intrinsic Value
   (in thousands) (1)
Unvested as of January 1, 2015
2,151,232

 
$
20.97

 
$
60,493

Granted
915,386

 
$
27.04

 
 
Vested
(994,130
)
 
$
19.87

 
 
Forfeited / Canceled
(81,563
)
 
$
24.54

 
 
Unvested as of September 30, 2015
1,990,925

 
$
24.16

 
$
56,463

Expected to vest after September 30, 2015
1,935,514

 
$
24.08

 
$
54,891


(1) The aggregate intrinsic value of unvested and expected to vest RSUs represents the total pretax intrinsic value (the fair value of the Company's stock on the last day of each period multiplied by the number of units) that would have been received by the holders had all RSUs vested. This amount changes based on the market price of the Company’s common stock.
Stock Options
Stock options vest over periods of up to five years, subject to a continued service condition. Stock options expire either six or ten years from the date they are granted. No options were granted during the nine months ended September 30, 2015.
The following table summarizes activity related to our stock options under the Equity Incentive Plan for the nine months ended September 30, 2015:
 
Number
Outstanding
 
Weighted
Average Exercise Price
 
Weighted Average Remaining Contractual Term
(in years)
 
Aggregate Intrinsic Value
   (in thousands) (1)
Balance as of January 1, 2015
5,207,772

 
$
8.04

 
3.6
 
$
105,038

Exercised
(1,324,150
)
 
$
6.21

 

 


Forfeited / Canceled
(13,599
)
 
$
28.13

 

 


Balance as of September 30, 2015
3,870,023

 
$
8.59

 
3.1
 
$
76,891

Exercisable as of September 30, 2015
3,775,341

 
$
7.99

 
3.1
 
$
76,891

Exercisable as of September 30, 2015 and expected to vest thereafter
3,860,555

 
$
8.53

 
3.1
 
$
76,891


(1) The aggregate intrinsic value of outstanding, exercisable and expected to vest options represents the total pretax intrinsic value (the difference between the fair value of the Company's stock on the last day of each period and the exercise price, multiplied by the number of options where the fair value exceeds the exercise price) that would have been received by the option holders had all option holders exercised their options as of January 1, 2015 and September 30, 2015, respectively. This amount changes based on the market price of the Company’s common stock.
The following table summarizes the components of pre-tax stock-based compensation expense (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
RSUs
$
5,119

 
$
4,434

 
$
16,067

 
$
14,625

Stock options
58

 
703

 
224

 
2,203

Restricted stock
—

 
47

 
—

 
139

Total stock-based compensation expense
$
5,177

 
$
5,184

 
$
16,291

 
$
16,967


As of September 30, 2015, unrecognized compensation expense related to unvested RSUs and stock options is $35.6 million and $0.3 million, respectively, and is expected to be recognized over weighted-average periods of 3.1 years and 1.3 years, respectively. Stock-based compensation expense related to these awards will be different to the extent the actual forfeiture rates are different from our estimated forfeiture rates.
Long-Term Obligations
Long-Term Obligations
Long-Term Obligations consist of the following (in thousands):
 
September 30,
 
December 31,
 
2015
 
2014
Senior secured credit agreement:
 
 
 
Term loans payable
$
416,250

 
$
433,125

Revolving credit facilities
475,308

 
663,912

Senior notes
600,000

 
600,000

Receivables securitization facility
89,800

 
94,900

Notes payable through November 2019 at weighted average interest rates of 1.1% and 1.0%, respectively
13,875

 
45,891

Other long-term debt at weighted average interest rates of 4.2% and 3.1%, respectively
11,997

 
26,734

 
1,607,230

 
1,864,562

Less current maturities
(37,174
)
 
(63,515
)
 
$
1,570,056

 
$
1,801,047


Senior Secured Credit Agreement
On March 27, 2014, LKQ Corporation, LKQ Delaware LLP, and certain other subsidiaries (collectively, the "Borrowers") entered into a third amended and restated credit agreement (the "Credit Agreement"). Total availability under the Credit Agreement is $2.3 billion (composed of $1.69 billion in the revolving credit facility's multicurrency component, $165 million in the revolving credit facility's U.S. dollar only component, and $450 million of term loans). 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.
Amounts under the revolving credit facilities are due and payable upon maturity of the Credit Agreement on May 3, 2019. Term loan borrowings are due and payable in quarterly installments equal to 1.25% of the original principal amount beginning on June 30, 2014 with the remaining balance due and payable on the maturity date of the Credit Agreement. We are required to prepay the term loan by amounts equal to proceeds from the sale or disposition of certain assets if the proceeds are not reinvested within twelve months. We also have the option to prepay outstanding amounts under the Credit Agreement without penalty.
The Credit Agreement contains customary representations and warranties, and contains customary covenants that provide limitations and conditions on our ability to enter into certain transactions. The Credit Agreement also contains financial and affirmative covenants, including limitations on our net leverage ratio and a minimum interest coverage ratio.
Borrowings under the Credit Agreement bear interest at variable rates, which depend on the currency and duration of the borrowing elected, plus an applicable margin. The applicable margin is subject to change in increments of 0.25% depending on our net leverage ratio. Interest payments are due on the last day of the selected interest period or quarterly in arrears depending on the type of borrowing. Including the effect of the interest rate swap agreements described in Note 5, "Derivative Instruments and Hedging Activities," the weighted average interest rates on borrowings outstanding under the Credit Agreement at September 30, 2015 and December 31, 2014 were 2.12% and 2.10%, respectively. We also pay a commitment fee based on the average daily unused amount of the revolving credit facilities. 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.
Of the total borrowings outstanding under the Credit Agreement, $22.5 million was classified as current maturities at both September 30, 2015 and December 31, 2014. As of September 30, 2015, there were letters of credit outstanding in the aggregate amount of $71.4 million. The amounts available under the revolving credit facilities are reduced by the amounts outstanding under letters of credit, and thus availability under the revolving credit facilities at September 30, 2015 was $1.3 billion.
Related to the execution of the Credit Agreement in March 2014, we incurred $3.7 million of fees, of which $3.4 million were capitalized within Other Assets on our Unaudited Condensed Consolidated Balance Sheet and are amortized over the term of the agreement. The remaining $0.3 million of fees were expensed during the three months ended March 31, 2014 as a loss on debt extinguishment.
Senior Notes
In April 2014, LKQ Corporation completed an offer to exchange $600 million aggregate principal amount of registered 4.75% Senior Notes due 2023 (the "Notes") for notes previously issued through a private placement. The Notes are governed by the original Indenture dated as of May 9, 2013 among LKQ Corporation, certain of our subsidiaries (the "Guarantors") and U.S. Bank National Association, as trustee. The Notes are substantially identical to those previously issued through the private placement, except the Notes are registered under the Securities Act of 1933.
The Notes bear interest at a rate of 4.75% per year from the most recent payment date on which interest has been paid or provided for. Interest on the Notes is payable in arrears on May 15 and November 15 of each year. The first interest payment was made on November 15, 2013. The Notes are fully and unconditionally guaranteed, jointly and severally, by the Guarantors.
The Notes and the guarantees are, respectively, LKQ Corporation's and each Guarantor's senior unsecured obligations. The Notes are subordinated to all of LKQ Corporation's and the Guarantors' existing and future secured debt to the extent of the assets securing that secured debt. In addition, the Notes are effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the Notes to the extent of the assets of those subsidiaries.
Receivables Securitization Facility
On September 29, 2014, LKQ Corporation amended the terms of the receivables securitization facility with The Bank of Tokyo-Mitsubishi UFJ, LTD. ("BTMU") to: (i) extend the term of the facility to October 2, 2017; (ii) increase the maximum amount available to $97 million; and (iii) make other clarifying and updating changes. 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 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 Condensed Consolidated Balance Sheets, under which the receivables included in the program collateralize the amounts invested by BTMU, the conduit investors and/or financial institutions (the "Purchasers"). The receivables are held by LKQ Receivables Finance Company, LLC ("LRFC"), a wholly owned bankruptcy-remote special purpose subsidiary of LKQ, and therefore, the receivables are available first to satisfy the creditors of LRFC, including the investors. As of September 30, 2015 and December 31, 2014, $128.3 million and $129.5 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"), or (iii) base rates, and are payable monthly in arrears. Commercial paper rates will be the applicable variable rate unless conduit investors are not available to invest in the receivables at commercial paper rates. In such case, financial institutions will invest at the LIBOR rate or at base rates. We also pay a commitment fee on the excess of the investment maximum over the average daily outstanding investment, payable monthly in arrears. As of September 30, 2015, the interest rate under the receivables facility was based on commercial paper rates and was 0.98%. The outstanding balances of $89.8 million and $94.9 million as of September 30, 2015 and December 31, 2014, respectively, were classified as long-term on the Unaudited Condensed Consolidated Balance Sheets because we have the ability and intent to refinance these borrowings on a long-term basis.
Derivative Instruments and Hedging Activities
Derivative Instruments and Hedging Activities
We are exposed to market risks, including the effect of changes in interest rates, foreign currency exchange rates and commodity prices. Under our current policies, we use derivatives to manage our exposure to variable interest rates on our senior secured debt, changing foreign exchange rates for certain foreign currency denominated transactions and changes in metals prices. We do not hold or issue derivatives for trading purposes.
Cash Flow Hedges
At September 30, 2015, we had interest rate swap agreements in place to hedge a portion of the variable interest rate risk on our variable rate borrowings under our Credit Agreement, with the objective of minimizing the impact of interest rate fluctuations and stabilizing cash flows. Under the terms of the interest rate swap agreements, we pay the fixed interest rate and receive payment at a variable rate of interest based on LIBOR or the Canadian Dealer Offered Rate (“CDOR”) for the respective currency of each interest rate swap agreement’s notional amount. The effective portion of changes in the fair value of the interest rate swap agreements is recorded in Accumulated Other Comprehensive Income (Loss) and is reclassified to interest expense when the underlying interest payment has an impact on earnings. The ineffective portion of changes in the fair value of the interest rate swap agreements is reported in interest expense. Our interest rate swap contracts have maturity dates ranging from 2015 through 2016.
From time to time, we may hold foreign currency forward contracts related to certain foreign currency denominated intercompany transactions, with the objective of minimizing the impact of changing exchange rates on these future cash flows, as well as minimizing the impact of fluctuating exchange rates on our results of operations through the respective dates of settlement. Under the terms of the foreign currency forward contracts, we will sell the foreign currency in exchange for U.S. dollars at a fixed rate on the maturity dates of the contracts. The effective portion of the changes in fair value of the foreign currency forward contracts is recorded in Accumulated Other Comprehensive Income (Loss) and reclassified to other income (expense) when the underlying transaction has an impact on earnings.
The following table summarizes the notional amounts and fair values of our designated cash flow hedges as of September 30, 2015 and December 31, 2014 (in thousands):
 
 
Notional Amount
 
Fair Value at September 30, 2015 (USD)
 
Fair Value at December 31, 2014 (USD)
 
 
September 30, 2015
 
December 31, 2014
 
Other Accrued Expenses
 
Other Noncurrent Liabilities
 
Other Accrued Expenses
 
Other Noncurrent Liabilities
Interest rate swap agreements
 
 
 
 
 
 
 
 
USD denominated
 
$
420,000

 
$
420,000

 
$
140

 
$
1,519

 
$
2,691

 
$
1,615

GBP denominated
 
£
50,000

 
£
50,000

 
—

 
653

 
—

 
893

CAD denominated
 
C$
25,000

 
C$
25,000

 
62

 
—

 
—

 
19

Total cash flow hedges
 
$
202

 
$
2,172

 
$
2,691

 
$
2,527

 
While our derivative instruments executed with the same counterparty are subject to master netting arrangements, we present our cash flow hedge derivative instruments on a gross basis in our Unaudited Condensed Consolidated Balance Sheets. The impact of netting the fair values of these contracts would not have a material effect on our Unaudited Condensed Consolidated Balance Sheets at September 30, 2015 or December 31, 2014.
The activity related to our cash flow hedges is included in Note 12, "Accumulated Other Comprehensive Income (Loss)." Ineffectiveness related to our cash flow hedges was immaterial to our results of operations during the three and nine months ended September 30, 2015 and September 30, 2014. We do not expect future ineffectiveness related to our cash flow hedges to have a material effect on our results of operations.
As of September 30, 2015, we estimate that $1.5 million of derivative losses (net of tax) included in Accumulated Other Comprehensive Loss will be reclassified into our consolidated statements of income within the next 12 months.
Other Derivative Instruments
We hold other short-term derivative instruments, including foreign currency forward contracts, to manage our exposure to variability related to inventory purchases and intercompany financing transactions denominated in a non-functional currency, as well as commodity forward contracts to manage our exposure to fluctuations in precious metals prices. We have elected not to apply hedge accounting for these transactions, and therefore the contracts are adjusted to fair value through our results of operations as of each balance sheet date, which could result in volatility in our earnings. The notional amount and fair value of these contracts at September 30, 2015 and December 31, 2014, along with the effect on our results of operations during each of the nine month periods ended September 30, 2015 and September 30, 2014, were immaterial.
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 nine months ended September 30, 2015, there were no significant changes in valuation techniques or inputs related to the financial assets or liabilities that we have historically recorded at fair value. The tiers in the fair value hierarchy include: Level 1, defined as observable inputs such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation inputs we utilized to determine such fair value as of September 30, 2015 and December 31, 2014 (in thousands):
 
Balance as of September 30, 2015
 
Fair Value Measurements as of September 30, 2015
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
Cash surrender value of life insurance
$
28,787

 
$
—

 
$
28,787

 
$
—

Total Assets
$
28,787

 
$
—

 
$
28,787

 
$
—

Liabilities:
 
 
 
 
 
 
 
Contingent consideration liabilities
$
4,548

 
$
—

 
$
—

 
$
4,548

Deferred compensation liabilities
28,388

 
—

 
28,388

 
—

Interest rate swaps
2,374

 
—

 
2,374

 
—

Total Liabilities
$
35,310

 
$
—

 
$
30,762

 
$
4,548

 
Balance as of December 31, 2014
 
Fair Value Measurements as of December 31, 2014
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
Cash surrender value of life insurance
$
28,242

 
$
—

 
$
28,242

 
$
—

Total Assets
$
28,242

 
$
—

 
$
28,242

 
$
—

Liabilities:
 
 
 
 
 
 
 
Contingent consideration liabilities
$
7,295

 
$
—

 
$
—

 
$
7,295

Deferred compensation liabilities
27,580

 
—

 
27,580

 
—

Interest rate swaps
5,218

 
—

 
5,218

 
—

Total Liabilities
$
40,093

 
$
—

 
$
32,798

 
$
7,295


The cash surrender value of life insurance is included in Other Assets on our Unaudited Condensed Consolidated Balance Sheets. The current portion of deferred compensation and contingent consideration liabilities is included in Other Current Liabilities, and the noncurrent portion is included in Other Noncurrent Liabilities on our Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments. The balance sheet classification of the interest rate swaps 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.
Our contingent consideration liabilities are related to our business acquisitions as further described in Note 8, "Business Combinations." Under the terms of the contingent consideration agreements, payments may be made at specified future dates depending on the performance of the acquired business subsequent to the acquisition. The liabilities for these payments are classified as Level 3 liabilities because the related fair value measurement, which is determined using an income approach, includes significant inputs not observable in the market. These unobservable inputs include internally-developed assumptions of the probabilities of achieving specified targets, which are used to determine the resulting cash flows and the applicable discount rate. Our Level 3 fair value measurements are established and updated quarterly by our corporate accounting department using current information about these key assumptions, with the input and oversight of our operational and executive management teams. We evaluate the performance of the business during the period compared to our previous expectations, along with any changes to our future projections, and update the estimated cash flows accordingly. In addition, we consider changes to our cost of capital and changes to the probability of achieving the earnout payment targets when updating our discount rate on a quarterly basis.
The significant unobservable inputs used in the fair value measurements of our Level 3 contingent consideration liabilities were as follows:
 
September 30,
 
December 31,
 
2015
 
2014
Unobservable Input
(Weighted Average)
Probability of achieving payout targets
75.9
%
 
79.1
%
Discount rate
7.5
%
 
7.5
%

A decrease in the assessed probabilities of achieving the targets or an increase in the discount rate, in isolation, would result in a lower fair value measurement. Changes in the values of the liabilities are recorded in Change in Fair Value of Contingent Consideration Liabilities within Other Expense (Income) on our Unaudited Condensed Consolidated Statements of Income.
Changes in the fair value of our contingent consideration obligations are as follows (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Beginning Balance
$
5,191

 
$
8,762

 
$
7,295

 
$
55,653

Contingent consideration liabilities recorded for business acquisitions
—

 
(1,203
)
 
—

 
5,854

Payments
(610
)
 
—

 
(2,815
)
 
(52,305
)
Increase (decrease) in fair value included in earnings
89

 
12

 
365

 
(2,000
)
Exchange rate effects
(122
)
 
(270
)
 
(297
)
 
99

Ending Balance
$
4,548

 
$
7,301

 
$
4,548

 
$
7,301


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. The performance target for 2013 was exceeded, and therefore, we settled the liability related to the 2013 performance period for the maximum amount of £30 million during the three months ended June 30, 2014 through a cash payment of $44.8 million (£26.9 million) and the issuance of notes for $5.1 million (£3.1 million).
Of the amounts included in earnings for the three and nine months ended September 30, 2015, $0.1 million and $0.2 million of losses, respectively, were related to contingent consideration obligations outstanding as of September 30, 2015. Of the amounts included in earnings for the nine months ended September 30, 2014, $0.2 million of losses were related to contingent consideration obligations outstanding as of September 30, 2015; substantially all of the losses included in earnings for the three months ended September 30, 2014 related to contingent consideration obligations outstanding as of September 30, 2015.
The changes in the fair value of contingent consideration obligations included in earnings during the respective periods in 2015 and 2014 reflect the quarterly reassessment of each obligation's fair value, including an analysis of the significant inputs used in the valuation, as well as the accretion of the present value discount.
Financial Assets and Liabilities Not Measured at Fair Value
Our debt is reflected on the Unaudited Condensed Consolidated Balance Sheets at cost. Based on market conditions as of September 30, 2015 and December 31, 2014, the fair value of our credit agreement borrowings reasonably approximated the carrying value of $892 million and $1.1 billion, respectively. In addition, based on market conditions, the fair value of the outstanding borrowings under the receivables facility reasonably approximated the carrying value of $90 million and $95 million at September 30, 2015 and December 31, 2014, respectively. As of September 30, 2015 and December 31, 2014, the fair value of our senior notes was approximately $583 million and $569 million, respectively, 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 September 30, 2015 to assume these obligations. The fair value of our senior notes is classified as Level 1 within the fair value hierarchy since it is determined based upon observable market inputs including quoted market prices in an active market.
Commitments and Contingencies
Commitments and Contingencies
Operating Leases
We are obligated under noncancelable operating leases for corporate office space, warehouse and distribution facilities, trucks and certain equipment.
The future minimum lease commitments under these leases at September 30, 2015 are as follows (in thousands):
Three months ending December 31, 2015
$
40,241

Years ending December 31:
 
2016
146,774

2017
124,121

2018
102,397

2019
82,568

2020
66,396

Thereafter
232,894

Future Minimum Lease Payments
$
795,391


Litigation and Related Contingencies
We have certain contingencies resulting from litigation, claims and other commitments and are subject to a variety of environmental and pollution control laws and regulations incident to the ordinary course of business. We currently expect that the resolution of such contingencies will not materially affect our financial position, results of operations or cash flows.
Business Combinations
Business Combinations
Business Combinations
During the nine months ended September 30, 2015, we completed 17 acquisitions, including 4 wholesale businesses in North America, 11 wholesale businesses in Europe, a self service retail operation, and a specialty vehicle aftermarket business. Our wholesale business acquisitions in North America included PartsChannel, Inc. ("Parts Channel"), an aftermarket collision parts distributor. The specialty aftermarket business acquired was The Coast Distribution System, Inc. ("Coast"), a supplier of replacement parts, supplies and accessories in North America for the recreational vehicle and outdoor recreation markets. Our European acquisitions included 11 aftermarket parts distribution businesses in the Netherlands, 9 of which were former customers of and distributors for our Netherlands subsidiary, Sator Beheer B.V. ("Sator"), and were acquired with the objective of expanding our distribution network in the Netherlands. Our other acquisitions completed during the nine months ended September 30, 2015 enabled us to expand our geographic presence. Total acquisition date fair value of the consideration for these acquisitions was $184.5 million, composed of $157.2 million of cash (net of cash acquired), $4.1 million of notes payable, $22.1 million of other purchase price obligations, and $1.1 million of pre-existing balances between us and the acquired entities considered to be effectively settled as a result of the acquisitions. During the nine months ended September 30, 2015, we recorded $101.3 million of goodwill related to these acquisitions and immaterial adjustments to preliminary purchase price allocations related to certain of our 2014 acquisitions. We expect $69.9 million of the $101.3 million of goodwill recorded to be deductible for income tax purposes. In the period between the acquisition dates and September 30, 2015, these acquisitions generated revenue of $83.4 million and net income of $2.0 million.
On January 3, 2014, we completed our acquisition of Keystone Automotive Holdings, Inc. ("Keystone Specialty"), which is a leading distributor and marketer of specialty vehicle aftermarket equipment and accessories in North America. Total acquisition date fair value of the consideration for our Keystone Specialty acquisition was $471.9 million, composed of $427.1 million of cash (net of cash acquired), $31.5 million of notes payable and $13.4 million of other purchase price obligations (non-interest bearing). We recorded $237.7 million of goodwill related to our acquisition of Keystone Specialty, which we do not expect to be deductible for income tax purposes.
In addition to our acquisition of Keystone Specialty, we made 22 acquisitions during 2014, including 9 wholesale businesses in North America, 9 wholesale businesses in Europe, 2 self service retail operations, and 2 specialty vehicle aftermarket businesses. Our European acquisitions included seven aftermarket parts distribution businesses in the Netherlands, five of which were customers of and distributors for our Netherlands subsidiary, Sator. Our European acquisitions were completed with the objective of aligning our Netherlands and U.K. distribution models; our other acquisitions completed during the year ended December 31, 2014 enabled us to expand in existing markets, introduce new product lines, and enter new markets. Total acquisition date fair value of the consideration for these additional acquisitions was $359.1 million, composed of $334.3 million of cash (net of cash acquired), $13.5 million of notes payable, $0.3 million of other purchase price obligations (non-interest bearing), $5.9 million for the estimated value of contingent payments to former owners (with maximum potential payments totaling $8.3 million), and $5.1 million of pre-existing balances between us and the acquired entities considered to be effectively settled as a result of the acquisitions. During the year ended December 31, 2014, we recorded $178.0 million of goodwill related to these acquisitions and immaterial adjustments to preliminary purchase price allocations related to certain of our 2013 acquisitions. We expect $44.2 million of the $178.0 million of goodwill recorded to be deductible for income tax purposes.
Our acquisitions are accounted for under the purchase method of accounting and are included in our unaudited condensed consolidated financial statements from the dates of acquisition. The purchase prices were allocated to the net assets acquired based upon estimated fair market values at the dates of acquisition. The purchase price allocations for the acquisitions made during the nine months ended September 30, 2015 and the last three months of 2014 are preliminary as we are in the process of determining the following: 1) valuation amounts for certain receivables, inventories and fixed assets acquired; 2) valuation amounts for certain intangible assets acquired; 3) the acquisition date fair value of certain liabilities assumed; and 4) the final estimation of the tax basis of the entities acquired. We have recorded preliminary estimates for certain of the items noted above and will record adjustments, if any, to the preliminary amounts upon finalization of the valuations.
The preliminary purchase price allocations for the acquisitions completed during the nine months ended September 30, 2015 and the year ended December 31, 2014 are as follows (in thousands):
 
Nine Months Ended
 
Year Ended
 
September 30, 2015
 
December 31, 2014
 
All Acquisitions
 
Keystone
Specialty
 
Other Acquisitions
 
Total
Receivables
$
35,870

 
$
48,473

 
$
75,330

 
$
123,803

Receivable reserves
(1,167
)
 
(7,748
)
 
(7,383
)
 
(15,131
)
Inventory
79,234

 
150,696

 
123,815

 
274,511

Income taxes receivable
—

 
14,096

 
—

 
14,096

Prepaid expenses and other current assets
3,352

 
8,085

 
4,050

 
12,135

Property and equipment
8,671

 
38,080

 
27,026

 
65,106

Goodwill
101,253

 
237,729

 
177,974

 
415,703

Other intangibles
3,456

 
78,110

 
51,135

 
129,245

Other assets
3,748

 
6,159

 
2,793

 
8,952

Deferred income taxes
2,243

 
(26,591
)
 
313

 
(26,278
)
Current liabilities assumed
(48,918
)
 
(63,513
)
 
(52,961
)
 
(116,474
)
Debt assumed
(2,373
)
 
—

 
(32,441
)
 
(32,441
)
Other noncurrent liabilities assumed
(832
)
 
(11,675
)
 
(10,573
)
 
(22,248
)
Contingent consideration liabilities
—

 
—

 
(5,854
)
 
(5,854
)
Other purchase price obligations
(22,077
)
 
(13,351
)
 
(333
)
 
(13,684
)
Notes issued
(4,148
)
 
(31,500
)
 
(13,535
)
 
(45,035
)
Settlement of pre-existing balances
(1,073
)
 
—

 
(5,052
)
 
(5,052
)
Cash used in acquisitions, net of cash acquired
$
157,239

 
$
427,050

 
$
334,304

 
$
761,354


The primary reason for our acquisitions made during the nine months ended September 30, 2015 and the year ended December 31, 2014 was to create economic value for our stockholders by enhancing our position as a leading source for alternative collision and mechanical repair products and expanding into other product lines and businesses that may benefit from our operating strengths. Our acquisition of Keystone Specialty allows us to enter into new product lines and increase the size of our addressable market. In addition, we believe that the acquisition creates logistics and administrative cost synergies as well as cross-selling opportunities, which contributed to the goodwill recorded on the Keystone Specialty acquisition. Other acquisitions completed during 2014 and 2015 enabled us to expand our distribution network in the Netherlands and expand our geographic presence.
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 will result in purchase prices that include a significant amount of goodwill.
The following pro forma summary presents the effect of the businesses acquired during the nine months ended September 30, 2015 as though the businesses had been acquired as of January 1, 2014 and the businesses acquired during the year ended December 31, 2014, including the Keystone Specialty acquisition on January 3, 2014, as though they had been acquired as of January 1, 2013. The pro forma adjustments are based upon unaudited financial information of the acquired entities (in thousands, except per share data):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Revenue, as reported
$
1,831,732

 
$
1,721,024

 
$
5,443,714

 
$
5,055,933

Revenue of purchased businesses for the period prior to acquisition:
 
 
 
 
 
 
 
Keystone Specialty
—

 
—

 
—

 
3,443

Other acquisitions
28,065

 
176,693

 
209,834

 
582,344

Pro forma revenue
$
1,859,797

 
$
1,897,717

 
$
5,653,548

 
$
5,641,720

 
 
 
 
 
 
 
 
Net income, as reported
$
101,346

 
$
91,515

 
$
328,163

 
$
301,050

Net income of purchased businesses for the period prior to acquisition, and pro forma purchase accounting adjustments:
 
 
 
 
 
 
 
Keystone Specialty
—

 
144

 
—

 
497

Other acquisitions
(288
)
 
6,841

 
5,501

 
17,872

Pro forma net income
$
101,058

 
$
98,500

 
$
333,664

 
$
319,419

 
 
 
 
 
 
 
 
Earnings per share, basic—as reported
$
0.33

 
$
0.30

 
$
1.08

 
$
1.00

Effect of purchased businesses for the period prior to acquisition:
 
 
 
 
 
 
 
Keystone Specialty
—

 
0.00

 
—

 
0.00

Other acquisitions
(0.00
)
 
0.02

 
0.02

 
0.06

Pro forma earnings per share, basic (1) 
$
0.33

 
$
0.32

 
$
1.10

 
$
1.06

 
 
 
 
 
 
 
 
Earnings per share, diluted—as reported
$
0.33

 
$
0.30

 
$
1.07

 
$
0.98

Effect of purchased businesses for the period prior to acquisition:
 
 
 
 
 
 
 
Keystone Specialty
—

 
0.00

 
—

 
0.00

Other acquisitions
(0.00
)
 
0.02

 
0.02

 
0.06

Pro forma earnings per share, diluted (1) 
$
0.33

 
$
0.32

 
$
1.09

 
$
1.04


(1) 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 acquisitions reflects the elimination of acquisition related expenses totaling $0.5 million and $2.3 million for the three and nine months ended September 30, 2014, primarily related to our May 2014 acquisitions of five aftermarket parts distribution businesses in the Netherlands. Refer to Note 9, "Restructuring and Acquisition Related Expenses," for further information regarding our acquisition related expenses. These pro forma results are not necessarily indicative of what would have occurred if the acquisitions had been in effect for the periods presented or of future results.
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
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Net Income
$
101,346

 
$
91,515

 
$
328,163

 
$
301,050

Denominator for basic earnings per share—Weighted-average shares outstanding
305,059

 
302,724

 
304,453

 
302,058

Effect of dilutive securities:
 
 
 
 
 
 
 
RSUs
603

 
658

 
678

 
804

Stock options
2,066

 
2,817

 
2,195

 
2,988

Restricted stock
—

 
7

 
—

 
7

Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding
307,728

 
306,206

 
307,326

 
305,857

Earnings per share, basic
$
0.33

 
$
0.30

 
$
1.08

 
$
1.00

Earnings per share, diluted
$
0.33

 
$
0.30

 
$
1.07

 
$
0.98

The following table sets forth the number of employee stock-based compensation awards outstanding but not included in the computation of diluted earnings per share because their effect would have been antidilutive for the three and nine months ended September 30, 2015 and 2014 (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Antidilutive securities:
 
 
 
 
 
 
 
RSUs
272

 
389

 
306

 
265

Stock options
95

 
115

 
97

 
120

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 nine months ended September 30, 2015 was 34.8%, which was consistent with our full year 2014 effective tax rate of 34.7% as our estimate of the geographic distribution of pretax income for 2015 is similar to the actual 2014 allocation.  Our effective income tax rate for the nine months ended September 30, 2014 was 34.0%, which reflected our estimate at the time that our international operations would constitute a greater percentage of the consolidated pretax income than was actually realized in the full year results. We adjusted the tax rate in the fourth quarter of 2014 to recognize the actual geographic allocation.
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)
The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):
 
 
Three Months Ended
 
Three Months Ended
 
 
September 30, 2015
 
September 30, 2014
 
 
Foreign
Currency
Translation
 
Unrealized (Loss) Gain
on Cash Flow Hedges
 
Unrealized (Loss) Gain
on Pension Plan
 
Accumulated
Other
Comprehensive
(Loss) Income
 
Foreign
Currency
Translation
 
Unrealized (Loss) Gain
on Cash Flow Hedges
 
Unrealized Gain (Loss) on Pension Plan
 
Accumulated
Other
Comprehensive
Income (Loss)
Beginning balance
 
$
(37,373
)
 
$
(2,200
)
 
$
(9,644
)
 
$
(49,217
)
 
$
40,222

 
$
(4,346
)
 
$
634

 
$
36,510

Pretax (loss)income
 
(33,458
)
 
(575
)
 
—

 
(34,033
)
 
(39,329
)
 
(186
)
 
—

 
(39,515
)
Income tax effect
 
—

 
185

 
—

 
185

 
—

 
(7
)
 
—

 
(7
)
Reclassification of unrealized gain(loss)
 
—

 
1,542

 
(34
)
 
1,508

 
—

 
1,554

 
(39
)
 
1,515

Reclassification of deferred income taxes
 
—

 
(540
)
 
9

 
(531
)
 
—

 
(544
)
 
9

 
(535
)
Ending Balance
 
$
(70,831
)
 
$
(1,588
)
 
$
(9,669
)
 
$
(82,088
)
 
$
893

 
$
(3,529
)
 
$
604

 
$
(2,032
)

 
 
Nine Months Ended
 
Nine Months Ended
 
 
September 30, 2015
 
September 30, 2014
 
 
Foreign
Currency
Translation
 
Unrealized (Loss) Gain
on Cash Flow Hedges
 
Unrealized (Loss) Gain
on Pension Plan
 
Accumulated
Other
Comprehensive
(Loss) Income
 
Foreign
Currency
Translation
 
Unrealized (Loss) Gain
on Cash Flow Hedges
 
Unrealized Gain (Loss) on Pension Plan
 
Accumulated
Other
Comprehensive
Income (Loss)
Beginning balance
 
$
(27,073
)
 
$
(3,401
)
 
$
(9,751
)
 
$
(40,225
)
 
$
24,906

 
$
(5,596
)
 
$
701

 
$
20,011

Pretax (loss) income
 
(43,758
)
 
(1,814
)
 
—

 
(45,572
)
 
(24,013
)
 
(362
)
 
—

 
(24,375
)
Income tax effect
 
—

 
624

 
—

 
624

 
—

 
39

 
—

 
39

Reclassification of unrealized gain(loss)
 
—

 
4,627

 
109

 
4,736

 
—

 
3,647

 
(129
)
 
3,518

Reclassification of deferred income taxes
 
—

 
(1,624
)
 
(27
)
 
(1,651
)
 
—

 
(1,257
)
 
32

 
(1,225
)
Ending Balance
 
$
(70,831
)
 
$
(1,588
)
 
$
(9,669
)
 
$
(82,088
)
 
$
893

 
$
(3,529
)
 
$
604

 
$
(2,032
)


Unrealized losses on our interest rate swap contracts totaling $1.5 million and $4.6 million were reclassified to interest expense in our Unaudited Condensed Consolidated Statements of Income during the three and nine months ended September 30, 2015, respectively. During the three and nine months ended September 30, 2014, unrealized losses of $1.6 million and $4.6 million, respectively, related to our interest rate swaps were reclassified to interest expense. The remaining reclassification of unrealized gains during the three and nine months ended September 30, 2014 related to our foreign currency forward contracts and was recorded to other income in our Unaudited Condensed Consolidated Statements of Income. These gains offset the remeasurement of certain of our intercompany balances. The deferred income taxes related to our cash flow hedges were reclassified from Accumulated Other Comprehensive Income to income tax expense.
Segment and Geographic Information
Segment and Geographic Information
We have four operating segments: Wholesale – North America; Europe; Self Service; and Specialty. Our Wholesale – North America and Self Service operating segments are aggregated into one reportable segment, North America, because they possess similar economic characteristics and have common products and services, customers, and methods of distribution. Our reportable segments are organized based on a combination of geographic areas served and type of product lines offered. The reportable segments are managed separately as each business serves different customers (i.e. geographic in the case of North America and Europe and product type in the case of Specialty) and is affected by different economic conditions. Therefore, we present three reportable segments: North America, Europe and Specialty.
The following tables present our financial performance by reportable segment for the periods indicated (in thousands):
 
North America
 
Europe
 
Specialty
 
Eliminations
 
Consolidated
Three Months Ended September 30, 2015
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
Third Party
$
1,037,130

 
$
511,146

 
$
283,456

 
$
—

 
$
1,831,732

Intersegment
160

 
—

 
850

 
(1,010
)
 
—

Total segment revenue
$
1,037,290

 
$
511,146

 
$
284,306

 
$
(1,010
)
 
$
1,831,732

Segment EBITDA
$
128,506

 
$
52,733

 
$
26,075

 
$
—

 
$
207,314

Depreciation and amortization (1)
17,918

 
9,478

 
5,578

 
—

 
32,974

Three Months Ended September 30, 2014
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
Third Party
$
1,024,835

 
$
495,776

 
$
200,413

 
$
—

 
$
1,721,024

Intersegment
132

 
—

 
594

 
(726
)
 
—

Total segment revenue
$
1,024,967

 
$
495,776

 
$
201,007

 
$
(726
)
 
$
1,721,024

Segment EBITDA
$
131,851

 
$
41,726

 
$
17,977

 
$
—

 
$
191,554

Depreciation and amortization (1)
18,029

 
9,411

 
4,314

 
—

 
31,754

 
North America
 
Europe
 
Specialty
 
Eliminations
 
Consolidated
Nine Months Ended September 30, 2015
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
Third Party
$
3,127,988

 
$
1,508,325

 
$
807,401

 
$
—

 
$
5,443,714

Intersegment
626

 
70

 
2,457

 
(3,153
)
 
—

Total segment revenue
$
3,128,614

 
$
1,508,395

 
$
809,858

 
$
(3,153
)
 
$
5,443,714

Segment EBITDA
$
416,774

 
$
153,199

 
$
91,677

 
$
—

 
$
661,650

Depreciation and amortization (1)
52,432

 
26,533

 
15,723

 
—

 
94,688

Nine Months Ended September 30, 2014
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
Third Party
$
3,080,090

 
$
1,380,663

 
$
595,180

 
$
—

 
$
5,055,933

Intersegment
266

 
—

 
1,250

 
(1,516
)
 
—

Total segment revenue
$
3,080,356

 
$
1,380,663

 
$
596,430

 
$
(1,516
)
 
$
5,055,933

Segment EBITDA
$
415,139

 
$
128,826

 
$
64,137

 
$
—

 
$
608,102

Depreciation and amortization (1)
52,682

 
24,868

 
13,097

 
—

 
90,647


(1) Amounts presented include depreciation and amortization expense recorded within cost of goods sold.
The key measure of segment profit or loss reviewed by our chief operating decision maker, who is our Chief Executive Officer, is Segment EBITDA. Segment EBITDA includes revenue and expenses that are controllable by the segment. Corporate and administrative expenses are allocated to the segments based on usage, with shared expenses apportioned based on the segment's percentage of consolidated revenue. Segment EBITDA is calculated as EBITDA excluding restructuring and acquisition related expenses, change in fair value of contingent consideration liabilities and equity in earnings of unconsolidated subsidiaries. EBITDA, which is the basis for Segment EBITDA, is calculated as net income excluding depreciation, amortization, interest (including loss on debt extinguishment) 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 table below provides a reconciliation from Segment EBITDA to Net Income (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Segment EBITDA
$
207,314

 
$
191,554

 
$
661,650

 
$
608,102

Deduct:
 
 
 
 
 
 
 
Restructuring and acquisition related expenses (1)
4,578

 
3,594

 
12,729

 
12,816

Change in fair value of contingent consideration liabilities (2)
89

 
12

 
365

 
(2,000
)
Add:
 
 
 
 
 
 
 
Equity in earnings of unconsolidated subsidiaries
(1,130
)
 
(721
)
 
(4,200
)
 
(1,199
)
EBITDA
201,517

 
187,227

 
644,356

 
596,087

Depreciation and amortization - cost of goods sold
2,091

 
1,256

 
4,570

 
3,511

Depreciation and amortization
30,883

 
30,498

 
90,118

 
87,136

Interest expense, net
14,722

 
16,394

 
44,250

 
48,140

Loss on debt extinguishment
—

 
—

 
—

 
324

Provision for income taxes
52,475

 
47,564

 
177,255

 
155,926

Net income
$
101,346

 
$
91,515

 
$
328,163

 
$
301,050



(1) See Note 9, "Restructuring and Acquisition Related Expenses," for further information.
(2) See Note 6, "Fair Value Measurements," for further information on our contingent consideration liabilities.

The following table presents capital expenditures by reportable segment (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Capital Expenditures
 
 
 
 
 
 
 
North America
$
11,615

 
$
20,986

 
$
41,762

 
$
61,262

Europe
16,966

 
8,652

 
47,138

 
32,927

Specialty
4,229

 
3,222

 
10,673

 
6,002

 
$
32,810

 
$
32,860

 
$
99,573

 
$
100,191


The following table presents assets by reportable segment (in thousands):
 
September 30,
 
December 31,
 
2015
 
2014
Receivables, net
 
 
 
North America
$
322,954

 
$
322,713

Europe
222,445

 
227,987

Specialty
81,381

 
50,722

Total receivables, net
626,780

 
601,422

Inventory
 
 
 
North America
808,679

 
826,429

Europe
402,830

 
402,488

Specialty
253,118

 
204,930

Total inventory
1,464,627

 
1,433,847

Property and Equipment, net
 
 
 
North America
450,748

 
456,288

Europe
152,881

 
128,309

Specialty
49,151

 
45,390

Total property and equipment, net
652,780

 
629,987

Other unallocated assets
2,959,845

 
2,908,236

Total assets
$
5,704,032

 
$
5,573,492


We report net receivables, inventories, and net property and equipment by segment as that information is used by the chief operating decision maker in assessing segment performance. These assets provide a measure for the operating capital employed in each segment. Unallocated assets include cash, prepaid and other current and noncurrent assets, goodwill, intangibles and deferred income taxes.
The majority of our operations are conducted in the U.S. Our European operations are located in the U.K., the Netherlands, Belgium, France, Sweden, and Norway. Our operations in other countries include recycled and aftermarket operations in Canada, engine remanufacturing and bumper refurbishing operations in Mexico, an aftermarket parts freight consolidation warehouse in Taiwan, other alternative parts operations in Guatemala, and administrative support functions in India. Our net sales are attributed to geographic area based on the location of the selling operation.
The following table sets forth our revenue by geographic area (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Revenue
 
 
 
 
 
 
 
United States
$
1,229,958

 
$
1,126,468

 
$
3,653,326

 
$
3,369,636

United Kingdom
358,925

 
349,012

 
1,049,596

 
1,003,889

Other countries
242,849

 
245,544

 
740,792

 
682,408

 
$
1,831,732

 
$
1,721,024

 
$
5,443,714

 
$
5,055,933



The following table sets forth our tangible long-lived assets by geographic area (in thousands):
 
September 30,
 
December 31,
 
2015
 
2014
Long-lived Assets
 
 
 
United States
$
471,549

 
$
469,450

United Kingdom
118,357

 
92,813

Other countries
62,874

 
67,724

 
$
652,780

 
$
629,987



The following table sets forth our revenue by product category (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Aftermarket, other new and refurbished products
$
1,307,399

 
$
1,171,706

 
$
3,850,038

 
$
3,445,376

Recycled, remanufactured and related products and services
401,292

 
371,632

 
1,207,917

 
1,108,376

Other
123,041

 
177,686

 
385,759

 
502,181

 
$
1,831,732

 
$
1,721,024

 
$
5,443,714

 
$
5,055,933


Our North American reportable segment generates revenue from all of our product categories, while our European and Specialty segments generate revenue primarily from the sale of aftermarket products. Revenue from other sources includes scrap sales, bulk sales to mechanical remanufacturers (including cores) and sales of aluminum ingots and sows from our furnace operations.
Condensed Consolidating Financial Information
Condensed Consolidating Financial Information
LKQ Corporation (the "Parent") issued, and certain of its 100% owned subsidiaries (the "Guarantors") have fully and unconditionally guaranteed, jointly and severally, the Company's Notes due on May 15, 2023. A Guarantor's guarantee will be unconditionally and automatically released and discharged upon the occurrence of any of the following events: (i) a transfer (including as a result of consolidation or merger) by the Guarantor to any person that is not a Guarantor of all or substantially all assets and properties of such Guarantor, provided the Guarantor is also released from its obligations with respect to indebtedness under the Credit Agreement or other indebtedness of ours, which obligation gave rise to the guarantee of the Notes; (ii) a transfer (including as a result of consolidation or merger) to any person that is not a Guarantor of the equity interests of a Guarantor or issuance by a Guarantor of its equity interests such that the Guarantor ceases to be a subsidiary, as defined in the Indenture, provided the Guarantor is also released from its obligations with respect to indebtedness under the Credit Agreement or other indebtedness of ours, which obligation gave rise to the guarantee of the Notes; (iii) the release of the Guarantor from its obligations with respect to indebtedness under the Credit Agreement or other indebtedness of ours, which obligation gave rise to the guarantee of the Notes; and (iv) upon legal defeasance, covenant defeasance or satisfaction and discharge of the Indenture, as defined in the Indenture.
Presented below are the unaudited condensed consolidating financial statements of the Parent, the Guarantors, the non-guarantor subsidiaries (the "Non-Guarantors"), and the elimination entries necessary to present the Company's financial statements on a consolidated basis as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934 resulting from the guarantees of the Notes. Investments in consolidated subsidiaries have been presented under the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries, intercompany balances, and intercompany revenue and expenses. The unaudited condensed consolidating financial statements below have been prepared from the Company's financial information on the same basis of accounting as the unaudited condensed consolidated financial statements, and may not necessarily be indicative of the financial position, results of operations or cash flows had the Parent, Guarantors and Non-Guarantors operated as independent entities.

LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Balance Sheets
(In thousands)
 
September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
 
 
Cash and equivalents
$
17,679

 
$
37,014

 
$
82,393

 
$
—

 
$
137,086

Receivables, net
—

 
246,035

 
380,745

 
—

 
626,780

Intercompany receivables, net
3,470

 
—

 
11,354

 
(14,824
)
 
—

Inventory
—

 
992,340

 
472,287

 
—

 
1,464,627

Deferred income taxes
3,123

 
71,356

 
2,922

 
—

 
77,401

Prepaid expenses and other current assets
548

 
40,005

 
40,696

 
—

 
81,249

Total Current Assets
24,820

 
1,386,750

 
990,397

 
(14,824
)
 
2,387,143

Property and Equipment, net
377

 
472,864

 
179,539

 
—

 
652,780

Intangible Assets:
 
 
 
 
 
 
 
 
 
Goodwill
—

 
1,650,053

 
698,039

 
—

 
2,348,092

Other intangibles, net
—

 
141,644

 
77,988

 
—

 
219,632

Investment in Subsidiaries
3,385,478

 
288,999

 
—

 
(3,674,477
)
 
—

Intercompany Notes Receivable
651,424

 
27,252

 
—

 
(678,676
)
 
—

Other Assets
47,593

 
28,937

 
22,894

 
(3,039
)
 
96,385

Total Assets
$
4,109,692

 
$
3,996,499

 
$
1,968,857

 
$
(4,371,016
)
 
$
5,704,032

Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
1,414

 
$
206,446

 
$
208,481

 
$
—

 
$
416,341

Intercompany payables, net
—

 
11,354

 
3,470

 
(14,824
)
 
—

Accrued expenses:
 
 
 
 
 
 
 
 
 
Accrued payroll-related liabilities
6,448

 
56,682

 
31,884

 
—

 
95,014

Other accrued expenses
13,183

 
85,727

 
86,162

 
—

 
185,072

Other current liabilities
1,396

 
37,358

 
25,343

 
—

 
64,097

Current portion of long-term obligations
22,650

 
1,905

 
12,619

 
—

 
37,174

Total Current Liabilities
45,091

 
399,472

 
367,959

 
(14,824
)
 
797,698

Long-Term Obligations, Excluding Current Portion
995,450

 
4,643

 
569,963

 
—

 
1,570,056

Intercompany Notes Payable
—

 
635,594

 
43,082

 
(678,676
)
 
—

Deferred Income Taxes
—

 
163,107

 
15,242

 
(3,039
)
 
175,310

Other Noncurrent Liabilities
32,438

 
67,430

 
24,387

 
—

 
124,255

Stockholders’ Equity
3,036,713

 
2,726,253

 
948,224

 
(3,674,477
)
 
3,036,713

Total Liabilities and Stockholders' Equity
$
4,109,692

 
$
3,996,499

 
$
1,968,857

 
$
(4,371,016
)
 
$
5,704,032



LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Balance Sheets
(In thousands)
 
December 31, 2014
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
 
 
Cash and equivalents
$
14,930

 
$
32,103

 
$
67,572

 
$
—

 
$
114,605

Receivables, net
145

 
217,542

 
383,735

 
—

 
601,422

Intercompany receivables, net
1,360

 
—

 
8,048

 
(9,408
)
 
—

Inventory
—

 
964,477

 
469,370

 
—

 
1,433,847

Deferred income taxes
4,064

 
62,850

 
10,215

 
4,615

 
81,744

Prepaid expenses and other current assets
20,640

 
36,553

 
28,606

 
—

 
85,799

Total Current Assets
41,139

 
1,313,525

 
967,546

 
(4,793
)
 
2,317,417

Property and Equipment, net
494

 
470,791

 
158,702

 
—

 
629,987

Intangible Assets:
 
 
 
 
 
 
 
 
 
Goodwill
—

 
1,563,796

 
725,099

 
—

 
2,288,895

Other intangibles, net
—

 
155,819

 
89,706

 
—

 
245,525

Investment in Subsidiaries
3,216,039

 
279,967

 
—

 
(3,496,006
)
 
—

Intercompany Notes Receivable
667,949

 
23,449

 
—

 
(691,398
)
 
—

Other Assets
49,601

 
24,457

 
20,481

 
(2,871
)
 
91,668

Total Assets
$
3,975,222

 
$
3,831,804

 
$
1,961,534

 
$
(4,195,068
)
 
$
5,573,492

Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
682

 
$
182,607

 
$
216,913

 
$
—

 
$
400,202

Intercompany payables, net
—

 
8,048

 
1,360

 
(9,408
)
 
—

Accrued expenses:
 
 
 
 
 
 
 
 
 
Accrued payroll-related liabilities
8,075

 
48,850

 
29,091

 
—

 
86,016

Other accrued expenses
8,061

 
83,857

 
72,230

 
—

 
164,148

Other current liabilities
283

 
16,197

 
15,720

 
4,615

 
36,815

Current portion of long-term obligations
55,172

 
4,599

 
3,744

 
—

 
63,515

Total Current Liabilities
72,273

 
344,158

 
339,058

 
(4,793
)
 
750,696

Long-Term Obligations, Excluding Current Portion
1,150,624

 
6,561

 
643,862

 
—

 
1,801,047

Intercompany Notes Payable
—

 
649,824

 
41,574

 
(691,398
)
 
—

Deferred Income Taxes
—

 
156,727

 
27,806

 
(2,871
)
 
181,662

Other Noncurrent Liabilities
31,668

 
60,213

 
27,549

 
—

 
119,430

Stockholders’ Equity
2,720,657

 
2,614,321

 
881,685

 
(3,496,006
)
 
2,720,657

Total Liabilities and Stockholders’ Equity
$
3,975,222

 
$
3,831,804

 
$
1,961,534

 
$
(4,195,068
)
 
$
5,573,492






LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Income
(In thousands)
 
For the Three Months Ended September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Revenue
$
—

 
$
1,263,397

 
$
595,769

 
$
(27,434
)
 
$
1,831,732

Cost of goods sold
—

 
773,957

 
372,430

 
(27,434
)
 
1,118,953

Gross margin
—

 
489,440

 
223,339

 
—

 
712,779

Facility and warehouse expenses
—

 
106,090

 
37,828

 
—

 
143,918

Distribution expenses
—

 
105,519

 
53,249

 
—

 
158,768

Selling, general and administrative expenses
8,484

 
124,678

 
74,725

 
—

 
207,887

Restructuring and acquisition related expenses
—

 
3,754

 
824

 
—

 
4,578

Depreciation and amortization
38

 
21,133

 
9,712

 
—

 
30,883

Operating (loss) income
(8,522
)
 
128,266

 
47,001

 
—

 
166,745

Other expense (income):
 
 
 
 
 
 
 
 
 
Interest expense, net
12,049

 
460

 
2,213

 
—

 
14,722

Intercompany interest (income) expense, net
(10,146
)
 
7,183

 
2,963

 
—

 
—

Change in fair value of contingent consideration liabilities
—

 
56

 
33

 
—

 
89

Other expense (income), net
8

 
(2,497
)
 
(528
)
 
—

 
(3,017
)
Total other expense, net
1,911

 
5,202

 
4,681

 
—

 
11,794

(Loss) income before (benefit) provision for income taxes
(10,433
)
 
123,064

 
42,320

 
—

 
154,951

(Benefit) provision for income taxes
(4,012
)
 
48,089

 
8,398

 
—

 
52,475

Equity in earnings of unconsolidated subsidiaries
—

 
17

 
(1,147
)
 
—

 
(1,130
)
Equity in earnings of subsidiaries
107,767

 
6,328

 
—

 
(114,095
)
 
—

Net income
$
101,346

 
$
81,320

 
$
32,775

 
$
(114,095
)
 
$
101,346






LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Income
(In thousands)
 
For the Three Months Ended September 30, 2014
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Revenue
$
—

 
$
1,165,794

 
$
588,852

 
$
(33,622
)
 
$
1,721,024

Cost of goods sold
—

 
709,985

 
380,250

 
(33,622
)
 
1,056,613

Gross margin
—

 
455,809

 
208,602

 
—

 
664,411

Facility and warehouse expenses
—

 
95,619

 
37,711

 
—

 
133,330

Distribution expenses
—

 
98,457

 
50,115

 
—

 
148,572

Selling, general and administrative expenses
5,178

 
114,926

 
72,125

 
—

 
192,229

Restructuring and acquisition related expenses
—

 
882

 
2,712

 
—

 
3,594

Depreciation and amortization
50

 
19,592

 
10,856

 
—

 
30,498

Operating (loss) income
(5,228
)
 
126,333

 
35,083

 
—

 
156,188

Other expense (income):
 
 
 
 
 
 
 
 
 
Interest expense, net
12,338

 
71

 
3,985

 
—

 
16,394

Intercompany interest (income) expense, net
(12,638
)
 
6,207

 
6,431

 
—

 
—

Change in fair value of contingent consideration liabilities
—

 
54

 
(42
)
 
—

 
12

Other expense (income), net
155

 
(1,164
)
 
991

 
—

 
(18
)
Total other expense, net
(145
)
 
5,168

 
11,365

 
—

 
16,388

(Loss) income before (benefit) provision for income taxes
(5,083
)
 
121,165

 
23,718

 
—

 
139,800

(Benefit) provision for income taxes
(1,363
)
 
43,986

 
4,941

 
—

 
47,564

Equity in earnings of unconsolidated subsidiaries
—

 
20

 
(741
)
 
—

 
(721
)
Equity in earnings of subsidiaries
95,235

 
6,151

 
—

 
(101,386
)
 
—

Net income
$
91,515

 
$
83,350

 
$
18,036

 
$
(101,386
)
 
$
91,515

LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Income
(In thousands)
 
For the Nine Months Ended September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Revenue
$
—

 
$
3,758,846

 
$
1,778,456

 
$
(93,588
)
 
$
5,443,714

Cost of goods sold
—

 
2,284,786

 
1,116,314

 
(93,588
)
 
3,307,512

Gross margin
—

 
1,474,060

 
662,142

 
—

 
2,136,202

Facility and warehouse expenses
—

 
304,140

 
108,814

 
—

 
412,954

Distribution expenses
—

 
304,264

 
146,257

 
—

 
450,521

Selling, general and administrative expenses
24,876

 
366,298

 
225,750

 
—

 
616,924

Restructuring and acquisition related expenses
—

 
10,999

 
1,730

 
—

 
12,729

Depreciation and amortization
117

 
60,897

 
29,104

 
—

 
90,118

Operating (loss) income
(24,993
)
 
427,462

 
150,487

 
—

 
552,956

Other expense (income):
 
 
 
 
 
 
 
 
 
Interest expense, net
36,604

 
331

 
7,315

 
—

 
44,250

Intercompany interest (income) expense, net
(31,347
)
 
21,498

 
9,849

 
—

 
—

Change in fair value of contingent consideration liabilities
—

 
166

 
199

 
—

 
365

Other expense (income), net
35

 
(5,448
)
 
4,136

 
—

 
(1,277
)
Total other expense, net
5,292

 
16,547

 
21,499

 
—

 
43,338

(Loss) income before (benefit) provision for income taxes
(30,285
)
 
410,915

 
128,988

 
—

 
509,618

(Benefit) provision for income taxes
(12,061
)
 
163,361

 
25,955

 
—

 
177,255

Equity in earnings of unconsolidated subsidiaries
—

 
47

 
(4,247
)
 
—

 
(4,200
)
Equity in earnings of subsidiaries
346,387

 
20,923

 
—

 
(367,310
)
 
—

Net income
$
328,163

 
$
268,524

 
$
98,786

 
$
(367,310
)
 
$
328,163

LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Income
(In thousands)
 
For the Nine Months Ended September 30, 2014
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Revenue
$
—

 
$
3,486,098

 
$
1,665,247

 
$
(95,412
)
 
$
5,055,933

Cost of goods sold
—

 
2,107,866

 
1,056,125

 
(95,412
)
 
3,068,579

Gross margin
—

 
1,378,232

 
609,122

 
—

 
1,987,354

Facility and warehouse expenses
—

 
281,805

 
106,190

 
—

 
387,995

Distribution expenses
—

 
291,187

 
141,258

 
—

 
432,445

Selling, general and administrative expenses
20,188

 
342,038

 
201,118

 
—

 
563,344

Restructuring and acquisition related expenses
—

 
7,366

 
5,450

 
—

 
12,816

Depreciation and amortization
168

 
58,556

 
28,412

 
—

 
87,136

Operating (loss) income
(20,356
)
 
397,280

 
126,694

 
—

 
503,618

Other expense (income):
 
 
 
 
 
 
 
 
 
Interest expense, net
38,583

 
186

 
9,371

 
—

 
48,140

Intercompany interest (income) expense, net
(35,828
)
 
16,279

 
19,549

 
—

 
—

Loss on debt extinguishment
324

 
—

 
—

 
—

 
324

Change in fair value of contingent consideration liabilities
—

 
(2,183
)
 
183

 
—

 
(2,000
)
Other expense (income), net
81

 
(4,542
)
 
3,440

 
—

 
(1,021
)
Total other expense, net
3,160

 
9,740

 
32,543

 
—

 
45,443

(Loss) income before (benefit) provision for income taxes
(23,516
)
 
387,540

 
94,151

 
—

 
458,175

(Benefit) provision for income taxes
(8,665
)
 
144,725

 
19,866

 
—

 
155,926

Equity in earnings of unconsolidated subsidiaries
—

 
35

 
(1,234
)
 
—

 
(1,199
)
Equity in earnings of subsidiaries
315,901

 
24,528

 
—

 
(340,429
)
 
—

Net income
$
301,050

 
$
267,378

 
$
73,051

 
$
(340,429
)
 
$
301,050









LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Comprehensive Income
(In thousands)
 
For the Three Months Ended September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net income
$
101,346

 
$
81,320

 
$
32,775

 
$
(114,095
)
 
$
101,346

Other comprehensive (loss) income, net of tax:
 
 
 
 
 
 
 
 
 
Foreign currency translation
(33,458
)
 
(11,459
)
 
(32,073
)
 
43,532

 
(33,458
)
Net change in unrecognized gains/losses on derivative instruments, net of tax
612

 
—

 
14

 
(14
)
 
612

Net change in unrealized gains/losses on pension plan, net of tax
(25
)
 
—

 
(25
)
 
25

 
(25
)
Total other comprehensive loss
(32,871
)
 
(11,459
)
 
(32,084
)
 
43,543

 
(32,871
)
Total comprehensive income
$
68,475

 
$
69,861

 
$
691

 
$
(70,552
)
 
$
68,475




LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Comprehensive Income (Loss)
(In thousands)
 
For the Three Months Ended September 30, 2014
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net income
$
91,515

 
$
83,350

 
$
18,036

 
$
(101,386
)
 
$
91,515

Other comprehensive (loss) income, net of tax:
 
 
 
 
 
 
 
 
 
Foreign currency translation
(39,329
)
 
(14,554
)
 
(37,922
)
 
52,476

 
(39,329
)
Net change in unrecognized gains/losses on derivative instruments, net of tax
817

 
—

 
(229
)
 
229

 
817

Change in unrealized gain on pension plan, net of tax
(30
)
 
—

 
(30
)
 
30

 
(30
)
Total other comprehensive loss
(38,542
)
 
(14,554
)
 
(38,181
)
 
52,735

 
(38,542
)
Total comprehensive income (loss)
$
52,973

 
$
68,796

 
$
(20,145
)
 
$
(48,651
)
 
$
52,973

LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Comprehensive Income
(In thousands)
 
For the Nine Months Ended September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net income
$
328,163

 
$
268,524

 
$
98,786

 
$
(367,310
)
 
$
328,163

Other comprehensive (loss) income, net of tax:
 
 
 
 
 
 
 
 
 
Foreign currency translation
(43,758
)
 
(12,697
)
 
(40,656
)
 
53,353

 
(43,758
)
Net change in unrecognized gains/losses on derivative instruments, net of tax
1,813

 
—

 
143

 
(143
)
 
1,813

Net change in unrealized gains/losses on pension plan, net of tax
82

 
—

 
82

 
(82
)
 
82

Total other comprehensive loss
(41,863
)
 
(12,697
)
 
(40,431
)
 
53,128

 
(41,863
)
Total comprehensive income
$
286,300

 
$
255,827

 
$
58,355

 
$
(314,182
)
 
$
286,300




LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Comprehensive Income
(In thousands)
 
For the Nine Months Ended September 30, 2014
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net income
$
301,050

 
$
267,378

 
$
73,051

 
$
(340,429
)
 
$
301,050

Other comprehensive (loss) income, net of tax:
 
 
 
 
 
 
 
 
 
Foreign currency translation
(24,013
)
 
(7,034
)
 
(22,610
)
 
29,644

 
(24,013
)
Net change in unrecognized gains/losses on derivative instruments, net of tax
2,067

 
—

 
(48
)
 
48

 
2,067

Change in unrealized gain on pension plan, net of tax
(97
)
 
—

 
(97
)
 
97

 
(97
)
Total other comprehensive loss
(22,043
)
 
(7,034
)
 
(22,755
)
 
29,789

 
(22,043
)
Total comprehensive income
$
279,007

 
$
260,344

 
$
50,296

 
$
(310,640
)
 
$
279,007







LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Cash Flows
(In thousands)
 
For the Nine Months Ended September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
243,988

 
$
329,740

 
$
136,686

 
$
(219,091
)
 
$
491,323

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Purchases of property and equipment
(3
)
 
(49,023
)
 
(50,547
)
 
—

 
(99,573
)
Investment and intercompany note activity with subsidiaries
(66,644
)
 
—

 
—

 
66,644

 
—

Acquisitions, net of cash acquired
—

 
(120,766
)
 
(36,591
)
 
—

 
(157,357
)
Other investing activities, net
—

 
8,832

 
(5,658
)
 
—

 
3,174

Net cash used in investing activities
(66,647
)
 
(160,957
)
 
(92,796
)
 
66,644

 
(253,756
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Proceeds from exercise of stock options
7,534

 
—

 
—

 
—

 
7,534

Excess tax benefit from stock-based payments
13,672

 
—

 
—

 
—

 
13,672

Taxes paid related to net share settlements of stock-based compensation awards
(7,423
)
 
—

 
—

 
—

 
(7,423
)
Borrowings under revolving credit facilities
207,000

 
—

 
75,421

 
—

 
282,421

Repayments under revolving credit facilities
(347,000
)
 
—

 
(86,840
)
 
—

 
(433,840
)
Repayments under term loans
(16,875
)
 
—

 
—

 
—

 
(16,875
)
Borrowings under receivables securitization facility
—

 
—

 
3,858

 
—

 
3,858

Repayments under receivables securitization facility
—

 
—

 
(8,958
)
 
—

 
(8,958
)
Repayments of other long-term debt
(31,500
)
 
(5,962
)
 
(13,381
)
 
—

 
(50,843
)
Payments of other obligations
—

 
(1,596
)
 
(895
)
 
—

 
(2,491
)
Investment and intercompany note activity with parent
—

 
62,540

 
4,104

 
(66,644
)
 
—

Dividends
—

 
(219,091
)
 
—

 
219,091

 
—

Net cash used in financing activities
(174,592
)
 
(164,109
)
 
(26,691
)
 
152,447

 
(212,945
)
Effect of exchange rate changes on cash and equivalents
—

 
237

 
(2,378
)
 
—

 
(2,141
)
Net increase in cash and equivalents
2,749

 
4,911

 
14,821

 
—

 
22,481

Cash and equivalents, beginning of period
14,930

 
32,103

 
67,572

 
—

 
114,605

Cash and equivalents, end of period
$
17,679

 
$
37,014

 
$
82,393

 
$
—

 
$
137,086


LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Cash Flows
(In thousands)
 
For the Nine Months Ended September 30, 2014
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
$
264,870

 
$
361,218

 
$
(43,793
)
 
$
(259,653
)
 
$
322,642

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Purchases of property and equipment
(37
)
 
(59,387
)
 
(40,767
)
 
—

 
(100,191
)
Investment and intercompany note activity with subsidiaries
(197,714
)
 
(607
)
 
—

 
198,321

 
—

Acquisitions, net of cash acquired
—

 
(520,721
)
 
(129,893
)
 
—

 
(650,614
)
Other investing activities, net
—

 
618

 
316

 
—

 
934

Net cash used in investing activities
(197,751
)
 
(580,097
)
 
(170,344
)
 
198,321

 
(749,871
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Proceeds from exercise of stock options
6,520

 
—

 
—

 
—

 
6,520

Excess tax benefit from stock-based payments
14,455

 
—

 
—

 
—

 
14,455

Borrowings under revolving credit facilities
693,000

 
—

 
606,821

 
—

 
1,299,821

Repayments under revolving credit facilities
(693,000
)
 
—

 
(115,039
)
 
—

 
(808,039
)
Borrowings under term loans
11,250

 
—

 
—

 
—

 
11,250

Repayments under term loans
(11,250
)
 
—

 
—

 
—

 
(11,250
)
Borrowings under receivables securitization facility
—

 
—

 
80,000

 
—

 
80,000

Repayments of other long-term debt
(1,920
)
 
(2,104
)
 
(16,508
)
 
—

 
(20,532
)
Payments of other obligations
—

 
(407
)
 
(41,527
)
 
—

 
(41,934
)
Other financing activities, net
(18,669
)
 
12,340

 
(552
)
 
—

 
(6,881
)
Investment and intercompany note activity with parent
—

 
481,951

 
(283,630
)
 
(198,321
)
 
—

Dividends
—

 
(259,653
)
 
—

 
259,653

 
—

Net cash provided by financing activities
386

 
232,127

 
229,565

 
61,332

 
523,410

Effect of exchange rate changes on cash and equivalents
—

 
(86
)
 
(1,937
)
 
—

 
(2,023
)
Net increase in cash and equivalents
67,505

 
13,162

 
13,491

 
—

 
94,158

Cash and equivalents, beginning of period
77,926

 
13,693

 
58,869

 
—

 
150,488

Cash and equivalents, end of period
$
145,431

 
$
26,855

 
$
72,360

 
$
—

 
$
244,646

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 to, delivered to or picked up by customers and title has transferred, subject to an allowance for estimated returns, discounts and allowances that we estimate based upon historical information. We recorded a reserve for estimated returns, discounts and allowances of approximately $31.4 million and $31.3 million at September 30, 2015 and December 31, 2014, respectively. We present taxes assessed by governmental authorities collected from customers on a net basis. Therefore, the taxes are excluded from revenue on our Unaudited Condensed Consolidated Statements of Income and are shown as a current liability on our Unaudited Condensed Consolidated Balance Sheets until remitted. We recognize revenue from the sale of scrap metal, other metals, and cores when title has transferred, which typically occurs upon delivery to the customer.
Allowance for Doubtful Accounts 
Allowance for Doubtful Accounts
We recorded a reserve for uncollectible accounts of approximately $24.3 million and $19.4 million at September 30, 2015 and December 31, 2014, respectively.
Inventory 
Inventory
Inventory consists of the following (in thousands):
 
September 30,
 
December 31,
 
2015
 
2014
Aftermarket and refurbished products
$
1,070,673

 
$
1,022,549

Salvage and remanufactured products
393,954

 
411,298

 
$
1,464,627

 
$
1,433,847


Our acquisitions completed during 2015 and adjustments to preliminary valuations of inventory for certain of our 2014 acquisitions contributed $74.8 million of the increase in our aftermarket and refurbished products inventory and $4.4 million of the increase in our salvage and remanufactured products inventory during 2015. See Note 8, "Business Combinations" for further information on our acquisitions.
Intangible Assets 
Intangible Assets
Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer relationships, software and other technology related assets, and covenants not to compete.
The changes in the carrying amount of goodwill by reportable segment during the nine months ended September 30, 2015 are as follows (in thousands):
 
North America
 
Europe
 
Specialty
 
Total
Balance as of January 1, 2015
$
1,392,032

 
$
616,819

 
$
280,044

 
$
2,288,895

Business acquisitions and adjustments to previously recorded goodwill
76,284

 
20,980

 
3,989

 
101,253

Exchange rate effects
(14,730
)
 
(27,376
)
 
50

 
(42,056
)
Balance as of September 30, 2015
$
1,453,586

 
$
610,423

 
$
284,083

 
$
2,348,092


The components of other intangibles are as follows (in thousands):
 
September 30, 2015
 
December 31, 2014
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Trade names and trademarks
$
171,165

 
$
(41,480
)
 
$
129,685

 
$
173,340

 
$
(35,538
)
 
$
137,802

Customer relationships
92,780

 
(37,121
)
 
55,659

 
92,972

 
(26,751
)
 
66,221

Software and other technology related assets
44,465

 
(16,028
)
 
28,437

 
44,640

 
(10,387
)
 
34,253

Covenants not to compete
10,937

 
(5,086
)
 
5,851

 
11,074

 
(3,825
)
 
7,249

 
$
319,347

 
$
(99,715
)
 
$
219,632

 
$
322,026

 
$
(76,501
)
 
$
245,525


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 20 years) on an accelerated basis. Software and other technology related assets are amortized on a straight-line basis over the expected period to be benefited (five to six years). Covenants not to compete are amortized over the lives of the respective agreements, which range from one to five years, on a straight-line basis. Amortization expense for intangibles was $25.0 million and $24.4 million during the nine months ended September 30, 2015 and 2014, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2019 is $33.2 million, $29.9 million, $27.4 million, $22.5 million and $17.8 million, respectively.
Warranty Reserve 
Warranty Reserve
Some of our salvage mechanical products are sold with a standard six month warranty against defects. Additionally, some of our remanufactured engines are sold with a standard three year warranty against defects. We also provide a limited lifetime warranty for certain of our aftermarket products that is supported by certain of the suppliers of those products. We record the estimated warranty costs at the time of sale using historical warranty claim information to project future warranty claims activity. The changes in the warranty reserve are as follows (in thousands):
Balance as of January 1, 2015
$
14,881

Warranty expense
26,294

Warranty claims
(23,517
)
Balance as of September 30, 2015
$
17,658


Investments in Unconsolidated Subsidiaries 
Investments in Unconsolidated Subsidiaries
As of September 30, 2015, the carrying value of our investments in unconsolidated subsidiaries was $11.0 million; of this amount, $10.2 million relates to our investment in ACM Parts Pty Ltd ("ACM Parts"). In August 2013, we entered into an agreement with Suncorp Group, a leading general insurance group in Australia and New Zealand, to develop ACM Parts, an alternative vehicle replacement parts business in those countries. We hold a 49% interest in the entity and are contributing our experience to help establish automotive parts recycling operations and to facilitate the procurement of aftermarket parts; Suncorp Group holds a 51% equity interest and is supplying salvage vehicles to the venture as well as assisting in establishing relationships with repair shops as customers. We are accounting for our interest in this subsidiary using the equity method of accounting, as our investment gives us the ability to exercise significant influence, but not control, over the investee. During the nine months ended September 30, 2015, we increased our total investment in ACM Parts by $7.5 million, which is reflected in Other investing activities, net on the Unaudited Condensed Consolidated Statements of Cash Flows. Our total ownership interest in ACM Parts remains unchanged as a result of this additional investment. The total of our investment in ACM Parts and other unconsolidated subsidiaries is included within Other Assets on our Unaudited Condensed Consolidated Balance Sheets. Our equity in the net earnings of the investees for the three and nine months ended September 30, 2015 was not material.
Depreciation Expense 
Depreciation Expense
Included in Cost of Goods Sold on the Unaudited Condensed Consolidated Statements of Income is depreciation expense associated with our refurbishing, remanufacturing, and furnace operations as well as our distribution centers.
Recent Accounting Pronouncements 
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"), which was amended in July 2015. This update outlines a new comprehensive revenue recognition model that supersedes most current revenue recognition guidance, and requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Entities adopting the standard have the option of using either a full retrospective or modified retrospective approach in the application of this guidance. ASU 2014-09 will be effective for the Company during the first quarter of our fiscal year 2018. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. We are still evaluating the impact that ASU 2014-09 will have on our consolidated financial statements and related disclosures.
In April 2015, the FASB issued Accounting Standards Update 2015-03, "Interest-Imputation of Interest" ("ASU 2015-03"). This update simplifies the presentation of debt issuance costs on the financial statements by requiring companies to deduct debt issuance costs from the carrying value of their corresponding liability on the balance sheet, rather than presenting debt issuance costs as deferred charges. ASU 2015-03 will be effective for the Company during the first quarter of our fiscal year 2016. Early adoption is permitted. Entities must retrospectively apply this guidance within the balance sheet for all periods presented in order to reflect the period-specific effects of this new guidance. We do not anticipate the adoption of this guidance will have a material impact on our financial position, results of operations, or cash flows.
In July 2015, the FASB issued Accounting Standards Update 2015-11, "Simplifying the Measurement of Inventory" ("ASU 2015-11"), which requires entities to measure inventory at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. ASU 2015-11 will be effective for the Company during the first quarter of our fiscal year 2017 and must be applied on a prospective basis. Early adoption is permitted. We do not anticipate the adoption of this guidance will have a material impact on our financial position, results of operations, or cash flows.
In September 2015, the FASB issued Accounting Standards Update 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments" ("ASU 2015-16"), which requires an acquirer to recognize adjustments to provisional amounts identified during the measurement period in the reporting period in which the adjustments are identified as opposed to recognition as if the accounting had been completed as of the acquisition date. The ASU also requires disclosure regarding amounts that would have been recorded in previous reporting periods if the adjustment had been recognized as of the acquisition date. ASU 2015-16 will be effective for the Company during the first quarter of our fiscal year 2016 and must be applied on a prospective basis. Early adoption is permitted for financial statements that have not been issued. We do not anticipate that the adoption of this guidance will have a material impact on our financial position, results of operations, or cash flows.
Financial Statement Information (Tables)
Schedule Of Inventory 
Inventory consists of the following (in thousands):
 
September 30,
 
December 31,
 
2015
 
2014
Aftermarket and refurbished products
$
1,070,673

 
$
1,022,549

Salvage and remanufactured products
393,954

 
411,298

 
$
1,464,627

 
$
1,433,847

Changes In Carrying Amount Of Goodwill 
The changes in the carrying amount of goodwill by reportable segment during the nine months ended September 30, 2015 are as follows (in thousands):
 
North America
 
Europe
 
Specialty
 
Total
Balance as of January 1, 2015
$
1,392,032

 
$
616,819

 
$
280,044

 
$
2,288,895

Business acquisitions and adjustments to previously recorded goodwill
76,284

 
20,980

 
3,989

 
101,253

Exchange rate effects
(14,730
)
 
(27,376
)
 
50

 
(42,056
)
Balance as of September 30, 2015
$
1,453,586

 
$
610,423

 
$
284,083

 
$
2,348,092

Components Of Other Intangibles 
The components of other intangibles are as follows (in thousands):
 
September 30, 2015
 
December 31, 2014
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Trade names and trademarks
$
171,165

 
$
(41,480
)
 
$
129,685

 
$
173,340

 
$
(35,538
)
 
$
137,802

Customer relationships
92,780

 
(37,121
)
 
55,659

 
92,972

 
(26,751
)
 
66,221

Software and other technology related assets
44,465

 
(16,028
)
 
28,437

 
44,640

 
(10,387
)
 
34,253

Covenants not to compete
10,937

 
(5,086
)
 
5,851

 
11,074

 
(3,825
)
 
7,249

 
$
319,347

 
$
(99,715
)
 
$
219,632

 
$
322,026

 
$
(76,501
)
 
$
245,525

Changes In Warranty Reserve 
The changes in the warranty reserve are as follows (in thousands):
Balance as of January 1, 2015
$
14,881

Warranty expense
26,294

Warranty claims
(23,517
)
Balance as of September 30, 2015
$
17,658

Stock-Based Compensation (Tables)
Schedule of Unvested Restricted Stock Units Activity 
The following table summarizes activity related to our RSUs under the Equity Incentive Plan for the nine months ended September 30, 2015:
 
Number
Outstanding
 
Weighted
Average
Grant Date
Fair Value
 
Aggregate Intrinsic Value
   (in thousands) (1)
Unvested as of January 1, 2015
2,151,232

 
$
20.97

 
$
60,493

Granted
915,386

 
$
27.04

 
 
Vested
(994,130
)
 
$
19.87

 
 
Forfeited / Canceled
(81,563
)
 
$
24.54

 
 
Unvested as of September 30, 2015
1,990,925

 
$
24.16

 
$
56,463

Expected to vest after September 30, 2015
1,935,514

 
$
24.08

 
$
54,891

Schedule of Stock Option Activity 
The following table summarizes activity related to our stock options under the Equity Incentive Plan for the nine months ended September 30, 2015:
 
Number
Outstanding
 
Weighted
Average Exercise Price
 
Weighted Average Remaining Contractual Term
(in years)
 
Aggregate Intrinsic Value
   (in thousands) (1)
Balance as of January 1, 2015
5,207,772

 
$
8.04

 
3.6
 
$
105,038

Exercised
(1,324,150
)
 
$
6.21

 

 


Forfeited / Canceled
(13,599
)
 
$
28.13

 

 


Balance as of September 30, 2015
3,870,023

 
$
8.59

 
3.1
 
$
76,891

Exercisable as of September 30, 2015
3,775,341

 
$
7.99

 
3.1
 
$
76,891

Exercisable as of September 30, 2015 and expected to vest thereafter
3,860,555

 
$
8.53

 
3.1
 
$
76,891

Schedule Of Pre-Tax Stock-Based Compensation Expense 
The following table summarizes the components of pre-tax stock-based compensation expense (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
RSUs
$
5,119

 
$
4,434

 
$
16,067

 
$
14,625

Stock options
58

 
703

 
224

 
2,203

Restricted stock
—

 
47

 
—

 
139

Total stock-based compensation expense
$
5,177

 
$
5,184

 
$
16,291

 
$
16,967

Long-Term Obligations (Tables)
Schedule Of Long-Term Obligations
Long-Term Obligations consist of the following (in thousands):
 
September 30,
 
December 31,
 
2015
 
2014
Senior secured credit agreement:
 
 
 
Term loans payable
$
416,250

 
$
433,125

Revolving credit facilities
475,308

 
663,912

Senior notes
600,000

 
600,000

Receivables securitization facility
89,800

 
94,900

Notes payable through November 2019 at weighted average interest rates of 1.1% and 1.0%, respectively
13,875

 
45,891

Other long-term debt at weighted average interest rates of 4.2% and 3.1%, respectively
11,997

 
26,734

 
1,607,230

 
1,864,562

Less current maturities
(37,174
)
 
(63,515
)
 
$
1,570,056

 
$
1,801,047

Derivative Instruments and Hedging Activities (Tables)
Schedule of Cash Flow Hedges
The following table summarizes the notional amounts and fair values of our designated cash flow hedges as of September 30, 2015 and December 31, 2014 (in thousands):
 
 
Notional Amount
 
Fair Value at September 30, 2015 (USD)
 
Fair Value at December 31, 2014 (USD)
 
 
September 30, 2015
 
December 31, 2014
 
Other Accrued Expenses
 
Other Noncurrent Liabilities
 
Other Accrued Expenses
 
Other Noncurrent Liabilities
Interest rate swap agreements
 
 
 
 
 
 
 
 
USD denominated
 
$
420,000

 
$
420,000

 
$
140

 
$
1,519

 
$
2,691

 
$
1,615

GBP denominated
 
£
50,000

 
£
50,000

 
—

 
653

 
—

 
893

CAD denominated
 
C$
25,000

 
C$
25,000

 
62

 
—

 
—

 
19

Total cash flow hedges
 
$
202

 
$
2,172

 
$
2,691

 
$
2,527

 
Fair Value Measurements (Tables)
Financial Assets And Liabilities Measured At Fair Value On A Recurring Basis 
The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation inputs we utilized to determine such fair value as of September 30, 2015 and December 31, 2014 (in thousands):
 
Balance as of September 30, 2015
 
Fair Value Measurements as of September 30, 2015
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
Cash surrender value of life insurance
$
28,787

 
$
—

 
$
28,787

 
$
—

Total Assets
$
28,787

 
$
—

 
$
28,787

 
$
—

Liabilities:
 
 
 
 
 
 
 
Contingent consideration liabilities
$
4,548

 
$
—

 
$
—

 
$
4,548

Deferred compensation liabilities
28,388

 
—

 
28,388

 
—

Interest rate swaps
2,374

 
—

 
2,374

 
—

Total Liabilities
$
35,310

 
$
—

 
$
30,762

 
$
4,548

 
Balance as of December 31, 2014
 
Fair Value Measurements as of December 31, 2014
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
Cash surrender value of life insurance
$
28,242

 
$
—

 
$
28,242

 
$
—

Total Assets
$
28,242

 
$
—

 
$
28,242

 
$
—

Liabilities:
 
 
 
 
 
 
 
Contingent consideration liabilities
$
7,295

 
$
—

 
$
—

 
$
7,295

Deferred compensation liabilities
27,580

 
—

 
27,580

 
—

Interest rate swaps
5,218

 
—

 
5,218

 
—

Total Liabilities
$
40,093

 
$
—

 
$
32,798

 
$
7,295

Significant Unobservable Inputs Used In Fair Value Measurements 
The significant unobservable inputs used in the fair value measurements of our Level 3 contingent consideration liabilities were as follows:
 
September 30,
 
December 31,
 
2015
 
2014
Unobservable Input
(Weighted Average)
Probability of achieving payout targets
75.9
%
 
79.1
%
Discount rate
7.5
%
 
7.5
%
Changes In Fair Value Of Contingent Consideration Obligations 
Changes in the fair value of our contingent consideration obligations are as follows (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Beginning Balance
$
5,191

 
$
8,762

 
$
7,295

 
$
55,653

Contingent consideration liabilities recorded for business acquisitions
—

 
(1,203
)
 
—

 
5,854

Payments
(610
)
 
—

 
(2,815
)
 
(52,305
)
Increase (decrease) in fair value included in earnings
89

 
12

 
365

 
(2,000
)
Exchange rate effects
(122
)
 
(270
)
 
(297
)
 
99

Ending Balance
$
4,548

 
$
7,301

 
$
4,548

 
$
7,301

Commitments and Contingencies (Tables)
Future Minimum Lease Commitments
The future minimum lease commitments under these leases at September 30, 2015 are as follows (in thousands):
Three months ending December 31, 2015
$
40,241

Years ending December 31:
 
2016
146,774

2017
124,121

2018
102,397

2019
82,568

2020
66,396

Thereafter
232,894

Future Minimum Lease Payments
$
795,391

Business Combinations (Tables)
Purchase Price Allocations For Acquisitions 
The preliminary purchase price allocations for the acquisitions completed during the nine months ended September 30, 2015 and the year ended December 31, 2014 are as follows (in thousands):
 
Nine Months Ended
 
Year Ended
 
September 30, 2015
 
December 31, 2014
 
All Acquisitions
 
Keystone
Specialty
 
Other Acquisitions
 
Total
Receivables
$
35,870

 
$
48,473

 
$
75,330

 
$
123,803

Receivable reserves
(1,167
)
 
(7,748
)
 
(7,383
)
 
(15,131
)
Inventory
79,234

 
150,696

 
123,815

 
274,511

Income taxes receivable
—

 
14,096

 
—

 
14,096

Prepaid expenses and other current assets
3,352

 
8,085

 
4,050

 
12,135

Property and equipment
8,671

 
38,080

 
27,026

 
65,106

Goodwill
101,253

 
237,729

 
177,974

 
415,703

Other intangibles
3,456

 
78,110

 
51,135

 
129,245

Other assets
3,748

 
6,159

 
2,793

 
8,952

Deferred income taxes
2,243

 
(26,591
)
 
313

 
(26,278
)
Current liabilities assumed
(48,918
)
 
(63,513
)
 
(52,961
)
 
(116,474
)
Debt assumed
(2,373
)
 
—

 
(32,441
)
 
(32,441
)
Other noncurrent liabilities assumed
(832
)
 
(11,675
)
 
(10,573
)
 
(22,248
)
Contingent consideration liabilities
—

 
—

 
(5,854
)
 
(5,854
)
Other purchase price obligations
(22,077
)
 
(13,351
)
 
(333
)
 
(13,684
)
Notes issued
(4,148
)
 
(31,500
)
 
(13,535
)
 
(45,035
)
Settlement of pre-existing balances
(1,073
)
 
—

 
(5,052
)
 
(5,052
)
Cash used in acquisitions, net of cash acquired
$
157,239

 
$
427,050

 
$
334,304

 
$
761,354

Pro Forma Effect Of Businesses Acquired 
The following pro forma summary presents the effect of the businesses acquired during the nine months ended September 30, 2015 as though the businesses had been acquired as of January 1, 2014 and the businesses acquired during the year ended December 31, 2014, including the Keystone Specialty acquisition on January 3, 2014, as though they had been acquired as of January 1, 2013. The pro forma adjustments are based upon unaudited financial information of the acquired entities (in thousands, except per share data):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Revenue, as reported
$
1,831,732

 
$
1,721,024

 
$
5,443,714

 
$
5,055,933

Revenue of purchased businesses for the period prior to acquisition:
 
 
 
 
 
 
 
Keystone Specialty
—

 
—

 
—

 
3,443

Other acquisitions
28,065

 
176,693

 
209,834

 
582,344

Pro forma revenue
$
1,859,797

 
$
1,897,717

 
$
5,653,548

 
$
5,641,720

 
 
 
 
 
 
 
 
Net income, as reported
$
101,346

 
$
91,515

 
$
328,163

 
$
301,050

Net income of purchased businesses for the period prior to acquisition, and pro forma purchase accounting adjustments:
 
 
 
 
 
 
 
Keystone Specialty
—

 
144

 
—

 
497

Other acquisitions
(288
)
 
6,841

 
5,501

 
17,872

Pro forma net income
$
101,058

 
$
98,500

 
$
333,664

 
$
319,419

 
 
 
 
 
 
 
 
Earnings per share, basic—as reported
$
0.33

 
$
0.30

 
$
1.08

 
$
1.00

Effect of purchased businesses for the period prior to acquisition:
 
 
 
 
 
 
 
Keystone Specialty
—

 
0.00

 
—

 
0.00

Other acquisitions
(0.00
)
 
0.02

 
0.02

 
0.06

Pro forma earnings per share, basic (1) 
$
0.33

 
$
0.32

 
$
1.10

 
$
1.06

 
 
 
 
 
 
 
 
Earnings per share, diluted—as reported
$
0.33

 
$
0.30

 
$
1.07

 
$
0.98

Effect of purchased businesses for the period prior to acquisition:
 
 
 
 
 
 
 
Keystone Specialty
—

 
0.00

 
—

 
0.00

Other acquisitions
(0.00
)
 
0.02

 
0.02

 
0.06

Pro forma earnings per share, diluted (1) 
$
0.33

 
$
0.32

 
$
1.09

 
$
1.04


(1) The sum of the individual earnings per share amounts may not equal the total due to rounding.
Earnings Per Share (Tables)
Computation Of Earnings Per Share 
The following chart sets forth the computation of earnings per share (in thousands, except per share amounts):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Net Income
$
101,346

 
$
91,515

 
$
328,163

 
$
301,050

Denominator for basic earnings per share—Weighted-average shares outstanding
305,059

 
302,724

 
304,453

 
302,058

Effect of dilutive securities:
 
 
 
 
 
 
 
RSUs
603

 
658

 
678

 
804

Stock options
2,066

 
2,817

 
2,195

 
2,988

Restricted stock
—

 
7

 
—

 
7

Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding
307,728

 
306,206

 
307,326

 
305,857

Earnings per share, basic
$
0.33

 
$
0.30

 
$
1.08

 
$
1.00

Earnings per share, diluted
$
0.33

 
$
0.30

 
$
1.07

 
$
0.98

Schedule Of Antidilutive Securities Excluded From Computation Of Diluted Earnings Per Share 
The following table sets forth the number of employee stock-based compensation awards outstanding but not included in the computation of diluted earnings per share because their effect would have been antidilutive for the three and nine months ended September 30, 2015 and 2014 (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Antidilutive securities:
 
 
 
 
 
 
 
RSUs
272

 
389

 
306

 
265

Stock options
95

 
115

 
97

 
120

Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) (Tables)
Schedule Of Accumulated Other Comprehensive Income (Loss)
The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):
 
 
Three Months Ended
 
Three Months Ended
 
 
September 30, 2015
 
September 30, 2014
 
 
Foreign
Currency
Translation
 
Unrealized (Loss) Gain
on Cash Flow Hedges
 
Unrealized (Loss) Gain
on Pension Plan
 
Accumulated
Other
Comprehensive
(Loss) Income
 
Foreign
Currency
Translation
 
Unrealized (Loss) Gain
on Cash Flow Hedges
 
Unrealized Gain (Loss) on Pension Plan
 
Accumulated
Other
Comprehensive
Income (Loss)
Beginning balance
 
$
(37,373
)
 
$
(2,200
)
 
$
(9,644
)
 
$
(49,217
)
 
$
40,222

 
$
(4,346
)
 
$
634

 
$
36,510

Pretax (loss)income
 
(33,458
)
 
(575
)
 
—

 
(34,033
)
 
(39,329
)
 
(186
)
 
—

 
(39,515
)
Income tax effect
 
—

 
185

 
—

 
185

 
—

 
(7
)
 
—

 
(7
)
Reclassification of unrealized gain(loss)
 
—

 
1,542

 
(34
)
 
1,508

 
—

 
1,554

 
(39
)
 
1,515

Reclassification of deferred income taxes
 
—

 
(540
)
 
9

 
(531
)
 
—

 
(544
)
 
9

 
(535
)
Ending Balance
 
$
(70,831
)
 
$
(1,588
)
 
$
(9,669
)
 
$
(82,088
)
 
$
893

 
$
(3,529
)
 
$
604

 
$
(2,032
)

 
 
Nine Months Ended
 
Nine Months Ended
 
 
September 30, 2015
 
September 30, 2014
 
 
Foreign
Currency
Translation
 
Unrealized (Loss) Gain
on Cash Flow Hedges
 
Unrealized (Loss) Gain
on Pension Plan
 
Accumulated
Other
Comprehensive
(Loss) Income
 
Foreign
Currency
Translation
 
Unrealized (Loss) Gain
on Cash Flow Hedges
 
Unrealized Gain (Loss) on Pension Plan
 
Accumulated
Other
Comprehensive
Income (Loss)
Beginning balance
 
$
(27,073
)
 
$
(3,401
)
 
$
(9,751
)
 
$
(40,225
)
 
$
24,906

 
$
(5,596
)
 
$
701

 
$
20,011

Pretax (loss) income
 
(43,758
)
 
(1,814
)
 
—

 
(45,572
)
 
(24,013
)
 
(362
)
 
—

 
(24,375
)
Income tax effect
 
—

 
624

 
—

 
624

 
—

 
39

 
—

 
39

Reclassification of unrealized gain(loss)
 
—

 
4,627

 
109

 
4,736

 
—

 
3,647

 
(129
)
 
3,518

Reclassification of deferred income taxes
 
—

 
(1,624
)
 
(27
)
 
(1,651
)
 
—

 
(1,257
)
 
32

 
(1,225
)
Ending Balance
 
$
(70,831
)
 
$
(1,588
)
 
$
(9,669
)
 
$
(82,088
)
 
$
893

 
$
(3,529
)
 
$
604

 
$
(2,032
)
Segment and Geographic Information (Tables)
Schedule Of Financial Performance By Reportable Segment 
The following tables present our financial performance by reportable segment for the periods indicated (in thousands):
 
North America
 
Europe
 
Specialty
 
Eliminations
 
Consolidated
Three Months Ended September 30, 2015
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
Third Party
$
1,037,130

 
$
511,146

 
$
283,456

 
$
—

 
$
1,831,732

Intersegment
160

 
—

 
850

 
(1,010
)
 
—

Total segment revenue
$
1,037,290

 
$
511,146

 
$
284,306

 
$
(1,010
)
 
$
1,831,732

Segment EBITDA
$
128,506

 
$
52,733

 
$
26,075

 
$
—

 
$
207,314

Depreciation and amortization (1)
17,918

 
9,478

 
5,578

 
—

 
32,974

Three Months Ended September 30, 2014
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
Third Party
$
1,024,835

 
$
495,776

 
$
200,413

 
$
—

 
$
1,721,024

Intersegment
132

 
—

 
594

 
(726
)
 
—

Total segment revenue
$
1,024,967

 
$
495,776

 
$
201,007

 
$
(726
)
 
$
1,721,024

Segment EBITDA
$
131,851

 
$
41,726

 
$
17,977

 
$
—

 
$
191,554

Depreciation and amortization (1)
18,029

 
9,411

 
4,314

 
—

 
31,754

 
North America
 
Europe
 
Specialty
 
Eliminations
 
Consolidated
Nine Months Ended September 30, 2015
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
Third Party
$
3,127,988

 
$
1,508,325

 
$
807,401

 
$
—

 
$
5,443,714

Intersegment
626

 
70

 
2,457

 
(3,153
)
 
—

Total segment revenue
$
3,128,614

 
$
1,508,395

 
$
809,858

 
$
(3,153
)
 
$
5,443,714

Segment EBITDA
$
416,774

 
$
153,199

 
$
91,677

 
$
—

 
$
661,650

Depreciation and amortization (1)
52,432

 
26,533

 
15,723

 
—

 
94,688

Nine Months Ended September 30, 2014
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
Third Party
$
3,080,090

 
$
1,380,663

 
$
595,180

 
$
—

 
$
5,055,933

Intersegment
266

 
—

 
1,250

 
(1,516
)
 
—

Total segment revenue
$
3,080,356

 
$
1,380,663

 
$
596,430

 
$
(1,516
)
 
$
5,055,933

Segment EBITDA
$
415,139

 
$
128,826

 
$
64,137

 
$
—

 
$
608,102

Depreciation and amortization (1)
52,682

 
24,868

 
13,097

 
—

 
90,647

Reconciliation Of Earnings Before Interest Taxes Depreciation And Amortization To Net Income Table [Text Block] 
The table below provides a reconciliation from Segment EBITDA to Net Income (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Segment EBITDA
$
207,314

 
$
191,554

 
$
661,650

 
$
608,102

Deduct:
 
 
 
 
 
 
 
Restructuring and acquisition related expenses (1)
4,578

 
3,594

 
12,729

 
12,816

Change in fair value of contingent consideration liabilities (2)
89

 
12

 
365

 
(2,000
)
Add:
 
 
 
 
 
 
 
Equity in earnings of unconsolidated subsidiaries
(1,130
)
 
(721
)
 
(4,200
)
 
(1,199
)
EBITDA
201,517

 
187,227

 
644,356

 
596,087

Depreciation and amortization - cost of goods sold
2,091

 
1,256

 
4,570

 
3,511

Depreciation and amortization
30,883

 
30,498

 
90,118

 
87,136

Interest expense, net
14,722

 
16,394

 
44,250

 
48,140

Loss on debt extinguishment
—

 
—

 
—

 
324

Provision for income taxes
52,475

 
47,564

 
177,255

 
155,926

Net income
$
101,346

 
$
91,515

 
$
328,163

 
$
301,050



(1) See Note 9, "Restructuring and Acquisition Related Expenses," for further information.
(2) See Note 6, "Fair Value Measurements," for further information on our contingent consideration liabilities.
Schedule Of Capital Expenditures By Reportable Segment 
The following table presents capital expenditures by reportable segment (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Capital Expenditures
 
 
 
 
 
 
 
North America
$
11,615

 
$
20,986

 
$
41,762

 
$
61,262

Europe
16,966

 
8,652

 
47,138

 
32,927

Specialty
4,229

 
3,222

 
10,673

 
6,002

 
$
32,810

 
$
32,860

 
$
99,573

 
$
100,191

Schedule Of Assets By Reportable Segment 
The following table presents assets by reportable segment (in thousands):
 
September 30,
 
December 31,
 
2015
 
2014
Receivables, net
 
 
 
North America
$
322,954

 
$
322,713

Europe
222,445

 
227,987

Specialty
81,381

 
50,722

Total receivables, net
626,780

 
601,422

Inventory
 
 
 
North America
808,679

 
826,429

Europe
402,830

 
402,488

Specialty
253,118

 
204,930

Total inventory
1,464,627

 
1,433,847

Property and Equipment, net
 
 
 
North America
450,748

 
456,288

Europe
152,881

 
128,309

Specialty
49,151

 
45,390

Total property and equipment, net
652,780

 
629,987

Other unallocated assets
2,959,845

 
2,908,236

Total assets
$
5,704,032

 
$
5,573,492

Schedule Of Revenue By Geographic Area 
The following table sets forth our revenue by geographic area (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Revenue
 
 
 
 
 
 
 
United States
$
1,229,958

 
$
1,126,468

 
$
3,653,326

 
$
3,369,636

United Kingdom
358,925

 
349,012

 
1,049,596

 
1,003,889

Other countries
242,849

 
245,544

 
740,792

 
682,408

 
$
1,831,732

 
$
1,721,024

 
$
5,443,714

 
$
5,055,933

Schedule Of Tangible Long-Lived Assets By Geographic Area 
The following table sets forth our tangible long-lived assets by geographic area (in thousands):
 
September 30,
 
December 31,
 
2015
 
2014
Long-lived Assets
 
 
 
United States
$
471,549

 
$
469,450

United Kingdom
118,357

 
92,813

Other countries
62,874

 
67,724

 
$
652,780

 
$
629,987

Schedule Of Revenue By Product Category 
The following table sets forth our revenue by product category (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Aftermarket, other new and refurbished products
$
1,307,399

 
$
1,171,706

 
$
3,850,038

 
$
3,445,376

Recycled, remanufactured and related products and services
401,292

 
371,632

 
1,207,917

 
1,108,376

Other
123,041

 
177,686

 
385,759

 
502,181

 
$
1,831,732

 
$
1,721,024

 
$
5,443,714

 
$
5,055,933

Condensed Consolidating Financial Information (Tables)
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Condensed Consolidating Financial Information [Abstract]
 
 
Consolidated Condensed Balance Sheets
Text Block 
 
Consolidated Condensed Statements of Income
Text Block 
 
Consolidated Condensed Statements of Comprehensive Income (Loss)
Text Block 
 
Consolidated Condensed Statements of Cash Flows
 
Text Block 
Consolidated Condensed Balance Sheets 
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Balance Sheets
(In thousands)
 
September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
 
 
Cash and equivalents
$
17,679

 
$
37,014

 
$
82,393

 
$
—

 
$
137,086

Receivables, net
—

 
246,035

 
380,745

 
—

 
626,780

Intercompany receivables, net
3,470

 
—

 
11,354

 
(14,824
)
 
—

Inventory
—

 
992,340

 
472,287

 
—

 
1,464,627

Deferred income taxes
3,123

 
71,356

 
2,922

 
—

 
77,401

Prepaid expenses and other current assets
548

 
40,005

 
40,696

 
—

 
81,249

Total Current Assets
24,820

 
1,386,750

 
990,397

 
(14,824
)
 
2,387,143

Property and Equipment, net
377

 
472,864

 
179,539

 
—

 
652,780

Intangible Assets:
 
 
 
 
 
 
 
 
 
Goodwill
—

 
1,650,053

 
698,039

 
—

 
2,348,092

Other intangibles, net
—

 
141,644

 
77,988

 
—

 
219,632

Investment in Subsidiaries
3,385,478

 
288,999

 
—

 
(3,674,477
)
 
—

Intercompany Notes Receivable
651,424

 
27,252

 
—

 
(678,676
)
 
—

Other Assets
47,593

 
28,937

 
22,894

 
(3,039
)
 
96,385

Total Assets
$
4,109,692

 
$
3,996,499

 
$
1,968,857

 
$
(4,371,016
)
 
$
5,704,032

Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
1,414

 
$
206,446

 
$
208,481

 
$
—

 
$
416,341

Intercompany payables, net
—

 
11,354

 
3,470

 
(14,824
)
 
—

Accrued expenses:
 
 
 
 
 
 
 
 
 
Accrued payroll-related liabilities
6,448

 
56,682

 
31,884

 
—

 
95,014

Other accrued expenses
13,183

 
85,727

 
86,162

 
—

 
185,072

Other current liabilities
1,396

 
37,358

 
25,343

 
—

 
64,097

Current portion of long-term obligations
22,650

 
1,905

 
12,619

 
—

 
37,174

Total Current Liabilities
45,091

 
399,472

 
367,959

 
(14,824
)
 
797,698

Long-Term Obligations, Excluding Current Portion
995,450

 
4,643

 
569,963

 
—

 
1,570,056

Intercompany Notes Payable
—

 
635,594

 
43,082

 
(678,676
)
 
—

Deferred Income Taxes
—

 
163,107

 
15,242

 
(3,039
)
 
175,310

Other Noncurrent Liabilities
32,438

 
67,430

 
24,387

 
—

 
124,255

Stockholders’ Equity
3,036,713

 
2,726,253

 
948,224

 
(3,674,477
)
 
3,036,713

Total Liabilities and Stockholders' Equity
$
4,109,692

 
$
3,996,499

 
$
1,968,857

 
$
(4,371,016
)
 
$
5,704,032



LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Balance Sheets
(In thousands)
 
December 31, 2014
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
 
 
Cash and equivalents
$
14,930

 
$
32,103

 
$
67,572

 
$
—

 
$
114,605

Receivables, net
145

 
217,542

 
383,735

 
—

 
601,422

Intercompany receivables, net
1,360

 
—

 
8,048

 
(9,408
)
 
—

Inventory
—

 
964,477

 
469,370

 
—

 
1,433,847

Deferred income taxes
4,064

 
62,850

 
10,215

 
4,615

 
81,744

Prepaid expenses and other current assets
20,640

 
36,553

 
28,606

 
—

 
85,799

Total Current Assets
41,139

 
1,313,525

 
967,546

 
(4,793
)
 
2,317,417

Property and Equipment, net
494

 
470,791

 
158,702

 
—

 
629,987

Intangible Assets:
 
 
 
 
 
 
 
 
 
Goodwill
—

 
1,563,796

 
725,099

 
—

 
2,288,895

Other intangibles, net
—

 
155,819

 
89,706

 
—

 
245,525

Investment in Subsidiaries
3,216,039

 
279,967

 
—

 
(3,496,006
)
 
—

Intercompany Notes Receivable
667,949

 
23,449

 
—

 
(691,398
)
 
—

Other Assets
49,601

 
24,457

 
20,481

 
(2,871
)
 
91,668

Total Assets
$
3,975,222

 
$
3,831,804

 
$
1,961,534

 
$
(4,195,068
)
 
$
5,573,492

Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
682

 
$
182,607

 
$
216,913

 
$
—

 
$
400,202

Intercompany payables, net
—

 
8,048

 
1,360

 
(9,408
)
 
—

Accrued expenses:
 
 
 
 
 
 
 
 
 
Accrued payroll-related liabilities
8,075

 
48,850

 
29,091

 
—

 
86,016

Other accrued expenses
8,061

 
83,857

 
72,230

 
—

 
164,148

Other current liabilities
283

 
16,197

 
15,720

 
4,615

 
36,815

Current portion of long-term obligations
55,172

 
4,599

 
3,744

 
—

 
63,515

Total Current Liabilities
72,273

 
344,158

 
339,058

 
(4,793
)
 
750,696

Long-Term Obligations, Excluding Current Portion
1,150,624

 
6,561

 
643,862

 
—

 
1,801,047

Intercompany Notes Payable
—

 
649,824

 
41,574

 
(691,398
)
 
—

Deferred Income Taxes
—

 
156,727

 
27,806

 
(2,871
)
 
181,662

Other Noncurrent Liabilities
31,668

 
60,213

 
27,549

 
—

 
119,430

Stockholders’ Equity
2,720,657

 
2,614,321

 
881,685

 
(3,496,006
)
 
2,720,657

Total Liabilities and Stockholders’ Equity
$
3,975,222

 
$
3,831,804

 
$
1,961,534

 
$
(4,195,068
)
 
$
5,573,492

Consolidated Condensed Statements of Income 
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Income
(In thousands)
 
For the Three Months Ended September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Revenue
$
—

 
$
1,263,397

 
$
595,769

 
$
(27,434
)
 
$
1,831,732

Cost of goods sold
—

 
773,957

 
372,430

 
(27,434
)
 
1,118,953

Gross margin
—

 
489,440

 
223,339

 
—

 
712,779

Facility and warehouse expenses
—

 
106,090

 
37,828

 
—

 
143,918

Distribution expenses
—

 
105,519

 
53,249

 
—

 
158,768

Selling, general and administrative expenses
8,484

 
124,678

 
74,725

 
—

 
207,887

Restructuring and acquisition related expenses
—

 
3,754

 
824

 
—

 
4,578

Depreciation and amortization
38

 
21,133

 
9,712

 
—

 
30,883

Operating (loss) income
(8,522
)
 
128,266

 
47,001

 
—

 
166,745

Other expense (income):
 
 
 
 
 
 
 
 
 
Interest expense, net
12,049

 
460

 
2,213

 
—

 
14,722

Intercompany interest (income) expense, net
(10,146
)
 
7,183

 
2,963

 
—

 
—

Change in fair value of contingent consideration liabilities
—

 
56

 
33

 
—

 
89

Other expense (income), net
8

 
(2,497
)
 
(528
)
 
—

 
(3,017
)
Total other expense, net
1,911

 
5,202

 
4,681

 
—

 
11,794

(Loss) income before (benefit) provision for income taxes
(10,433
)
 
123,064

 
42,320

 
—

 
154,951

(Benefit) provision for income taxes
(4,012
)
 
48,089

 
8,398

 
—

 
52,475

Equity in earnings of unconsolidated subsidiaries
—

 
17

 
(1,147
)
 
—

 
(1,130
)
Equity in earnings of subsidiaries
107,767

 
6,328

 
—

 
(114,095
)
 
—

Net income
$
101,346

 
$
81,320

 
$
32,775

 
$
(114,095
)
 
$
101,346






LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Income
(In thousands)
 
For the Three Months Ended September 30, 2014
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Revenue
$
—

 
$
1,165,794

 
$
588,852

 
$
(33,622
)
 
$
1,721,024

Cost of goods sold
—

 
709,985

 
380,250

 
(33,622
)
 
1,056,613

Gross margin
—

 
455,809

 
208,602

 
—

 
664,411

Facility and warehouse expenses
—

 
95,619

 
37,711

 
—

 
133,330

Distribution expenses
—

 
98,457

 
50,115

 
—

 
148,572

Selling, general and administrative expenses
5,178

 
114,926

 
72,125

 
—

 
192,229

Restructuring and acquisition related expenses
—

 
882

 
2,712

 
—

 
3,594

Depreciation and amortization
50

 
19,592

 
10,856

 
—

 
30,498

Operating (loss) income
(5,228
)
 
126,333

 
35,083

 
—

 
156,188

Other expense (income):
 
 
 
 
 
 
 
 
 
Interest expense, net
12,338

 
71

 
3,985

 
—

 
16,394

Intercompany interest (income) expense, net
(12,638
)
 
6,207

 
6,431

 
—

 
—

Change in fair value of contingent consideration liabilities
—

 
54

 
(42
)
 
—

 
12

Other expense (income), net
155

 
(1,164
)
 
991

 
—

 
(18
)
Total other expense, net
(145
)
 
5,168

 
11,365

 
—

 
16,388

(Loss) income before (benefit) provision for income taxes
(5,083
)
 
121,165

 
23,718

 
—

 
139,800

(Benefit) provision for income taxes
(1,363
)
 
43,986

 
4,941

 
—

 
47,564

Equity in earnings of unconsolidated subsidiaries
—

 
20

 
(741
)
 
—

 
(721
)
Equity in earnings of subsidiaries
95,235

 
6,151

 
—

 
(101,386
)
 
—

Net income
$
91,515

 
$
83,350

 
$
18,036

 
$
(101,386
)
 
$
91,515

LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Income
(In thousands)
 
For the Nine Months Ended September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Revenue
$
—

 
$
3,758,846

 
$
1,778,456

 
$
(93,588
)
 
$
5,443,714

Cost of goods sold
—

 
2,284,786

 
1,116,314

 
(93,588
)
 
3,307,512

Gross margin
—

 
1,474,060

 
662,142

 
—

 
2,136,202

Facility and warehouse expenses
—

 
304,140

 
108,814

 
—

 
412,954

Distribution expenses
—

 
304,264

 
146,257

 
—

 
450,521

Selling, general and administrative expenses
24,876

 
366,298

 
225,750

 
—

 
616,924

Restructuring and acquisition related expenses
—

 
10,999

 
1,730

 
—

 
12,729

Depreciation and amortization
117

 
60,897

 
29,104

 
—

 
90,118

Operating (loss) income
(24,993
)
 
427,462

 
150,487

 
—

 
552,956

Other expense (income):
 
 
 
 
 
 
 
 
 
Interest expense, net
36,604

 
331

 
7,315

 
—

 
44,250

Intercompany interest (income) expense, net
(31,347
)
 
21,498

 
9,849

 
—

 
—

Change in fair value of contingent consideration liabilities
—

 
166

 
199

 
—

 
365

Other expense (income), net
35

 
(5,448
)
 
4,136

 
—

 
(1,277
)
Total other expense, net
5,292

 
16,547

 
21,499

 
—

 
43,338

(Loss) income before (benefit) provision for income taxes
(30,285
)
 
410,915

 
128,988

 
—

 
509,618

(Benefit) provision for income taxes
(12,061
)
 
163,361

 
25,955

 
—

 
177,255

Equity in earnings of unconsolidated subsidiaries
—

 
47

 
(4,247
)
 
—

 
(4,200
)
Equity in earnings of subsidiaries
346,387

 
20,923

 
—

 
(367,310
)
 
—

Net income
$
328,163

 
$
268,524

 
$
98,786

 
$
(367,310
)
 
$
328,163

LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Income
(In thousands)
 
For the Nine Months Ended September 30, 2014
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Revenue
$
—

 
$
3,486,098

 
$
1,665,247

 
$
(95,412
)
 
$
5,055,933

Cost of goods sold
—

 
2,107,866

 
1,056,125

 
(95,412
)
 
3,068,579

Gross margin
—

 
1,378,232

 
609,122

 
—

 
1,987,354

Facility and warehouse expenses
—

 
281,805

 
106,190

 
—

 
387,995

Distribution expenses
—

 
291,187

 
141,258

 
—

 
432,445

Selling, general and administrative expenses
20,188

 
342,038

 
201,118

 
—

 
563,344

Restructuring and acquisition related expenses
—

 
7,366

 
5,450

 
—

 
12,816

Depreciation and amortization
168

 
58,556

 
28,412

 
—

 
87,136

Operating (loss) income
(20,356
)
 
397,280

 
126,694

 
—

 
503,618

Other expense (income):
 
 
 
 
 
 
 
 
 
Interest expense, net
38,583

 
186

 
9,371

 
—

 
48,140

Intercompany interest (income) expense, net
(35,828
)
 
16,279

 
19,549

 
—

 
—

Loss on debt extinguishment
324

 
—

 
—

 
—

 
324

Change in fair value of contingent consideration liabilities
—

 
(2,183
)
 
183

 
—

 
(2,000
)
Other expense (income), net
81

 
(4,542
)
 
3,440

 
—

 
(1,021
)
Total other expense, net
3,160

 
9,740

 
32,543

 
—

 
45,443

(Loss) income before (benefit) provision for income taxes
(23,516
)
 
387,540

 
94,151

 
—

 
458,175

(Benefit) provision for income taxes
(8,665
)
 
144,725

 
19,866

 
—

 
155,926

Equity in earnings of unconsolidated subsidiaries
—

 
35

 
(1,234
)
 
—

 
(1,199
)
Equity in earnings of subsidiaries
315,901

 
24,528

 
—

 
(340,429
)
 
—

Net income
$
301,050

 
$
267,378

 
$
73,051

 
$
(340,429
)
 
$
301,050









Consolidated Condensed Statements of Comprehensive Income (Loss) 
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Comprehensive Income
(In thousands)
 
For the Three Months Ended September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net income
$
101,346

 
$
81,320

 
$
32,775

 
$
(114,095
)
 
$
101,346

Other comprehensive (loss) income, net of tax:
 
 
 
 
 
 
 
 
 
Foreign currency translation
(33,458
)
 
(11,459
)
 
(32,073
)
 
43,532

 
(33,458
)
Net change in unrecognized gains/losses on derivative instruments, net of tax
612

 
—

 
14

 
(14
)
 
612

Net change in unrealized gains/losses on pension plan, net of tax
(25
)
 
—

 
(25
)
 
25

 
(25
)
Total other comprehensive loss
(32,871
)
 
(11,459
)
 
(32,084
)
 
43,543

 
(32,871
)
Total comprehensive income
$
68,475

 
$
69,861

 
$
691

 
$
(70,552
)
 
$
68,475




LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Comprehensive Income (Loss)
(In thousands)
 
For the Three Months Ended September 30, 2014
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net income
$
91,515

 
$
83,350

 
$
18,036

 
$
(101,386
)
 
$
91,515

Other comprehensive (loss) income, net of tax:
 
 
 
 
 
 
 
 
 
Foreign currency translation
(39,329
)
 
(14,554
)
 
(37,922
)
 
52,476

 
(39,329
)
Net change in unrecognized gains/losses on derivative instruments, net of tax
817

 
—

 
(229
)
 
229

 
817

Change in unrealized gain on pension plan, net of tax
(30
)
 
—

 
(30
)
 
30

 
(30
)
Total other comprehensive loss
(38,542
)
 
(14,554
)
 
(38,181
)
 
52,735

 
(38,542
)
Total comprehensive income (loss)
$
52,973

 
$
68,796

 
$
(20,145
)
 
$
(48,651
)
 
$
52,973

LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Comprehensive Income
(In thousands)
 
For the Nine Months Ended September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net income
$
328,163

 
$
268,524

 
$
98,786

 
$
(367,310
)
 
$
328,163

Other comprehensive (loss) income, net of tax:
 
 
 
 
 
 
 
 
 
Foreign currency translation
(43,758
)
 
(12,697
)
 
(40,656
)
 
53,353

 
(43,758
)
Net change in unrecognized gains/losses on derivative instruments, net of tax
1,813

 
—

 
143

 
(143
)
 
1,813

Net change in unrealized gains/losses on pension plan, net of tax
82

 
—

 
82

 
(82
)
 
82

Total other comprehensive loss
(41,863
)
 
(12,697
)
 
(40,431
)
 
53,128

 
(41,863
)
Total comprehensive income
$
286,300

 
$
255,827

 
$
58,355

 
$
(314,182
)
 
$
286,300




LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Comprehensive Income
(In thousands)
 
For the Nine Months Ended September 30, 2014
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net income
$
301,050

 
$
267,378

 
$
73,051

 
$
(340,429
)
 
$
301,050

Other comprehensive (loss) income, net of tax:
 
 
 
 
 
 
 
 
 
Foreign currency translation
(24,013
)
 
(7,034
)
 
(22,610
)
 
29,644

 
(24,013
)
Net change in unrecognized gains/losses on derivative instruments, net of tax
2,067

 
—

 
(48
)
 
48

 
2,067

Change in unrealized gain on pension plan, net of tax
(97
)
 
—

 
(97
)
 
97

 
(97
)
Total other comprehensive loss
(22,043
)
 
(7,034
)
 
(22,755
)
 
29,789

 
(22,043
)
Total comprehensive income
$
279,007

 
$
260,344

 
$
50,296

 
$
(310,640
)
 
$
279,007






Consolidated Condensed Statements of Cash Flows 
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Cash Flows
(In thousands)
 
For the Nine Months Ended September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
243,988

 
$
329,740

 
$
136,686

 
$
(219,091
)
 
$
491,323

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Purchases of property and equipment
(3
)
 
(49,023
)
 
(50,547
)
 
—

 
(99,573
)
Investment and intercompany note activity with subsidiaries
(66,644
)
 
—

 
—

 
66,644

 
—

Acquisitions, net of cash acquired
—

 
(120,766
)
 
(36,591
)
 
—

 
(157,357
)
Other investing activities, net
—

 
8,832

 
(5,658
)
 
—

 
3,174

Net cash used in investing activities
(66,647
)
 
(160,957
)
 
(92,796
)
 
66,644

 
(253,756
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Proceeds from exercise of stock options
7,534

 
—

 
—

 
—

 
7,534

Excess tax benefit from stock-based payments
13,672

 
—

 
—

 
—

 
13,672

Taxes paid related to net share settlements of stock-based compensation awards
(7,423
)
 
—

 
—

 
—

 
(7,423
)
Borrowings under revolving credit facilities
207,000

 
—

 
75,421

 
—

 
282,421

Repayments under revolving credit facilities
(347,000
)
 
—

 
(86,840
)
 
—

 
(433,840
)
Repayments under term loans
(16,875
)
 
—

 
—

 
—

 
(16,875
)
Borrowings under receivables securitization facility
—

 
—

 
3,858

 
—

 
3,858

Repayments under receivables securitization facility
—

 
—

 
(8,958
)
 
—

 
(8,958
)
Repayments of other long-term debt
(31,500
)
 
(5,962
)
 
(13,381
)
 
—

 
(50,843
)
Payments of other obligations
—

 
(1,596
)
 
(895
)
 
—

 
(2,491
)
Investment and intercompany note activity with parent
—

 
62,540

 
4,104

 
(66,644
)
 
—

Dividends
—

 
(219,091
)
 
—

 
219,091

 
—

Net cash used in financing activities
(174,592
)
 
(164,109
)
 
(26,691
)
 
152,447

 
(212,945
)
Effect of exchange rate changes on cash and equivalents
—

 
237

 
(2,378
)
 
—

 
(2,141
)
Net increase in cash and equivalents
2,749

 
4,911

 
14,821

 
—

 
22,481

Cash and equivalents, beginning of period
14,930

 
32,103

 
67,572

 
—

 
114,605

Cash and equivalents, end of period
$
17,679

 
$
37,014

 
$
82,393

 
$
—

 
$
137,086


LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Cash Flows
(In thousands)
 
For the Nine Months Ended September 30, 2014
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
$
264,870

 
$
361,218

 
$
(43,793
)
 
$
(259,653
)
 
$
322,642

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Purchases of property and equipment
(37
)
 
(59,387
)
 
(40,767
)
 
—

 
(100,191
)
Investment and intercompany note activity with subsidiaries
(197,714
)
 
(607
)
 
—

 
198,321

 
—

Acquisitions, net of cash acquired
—

 
(520,721
)
 
(129,893
)
 
—

 
(650,614
)
Other investing activities, net
—

 
618

 
316

 
—

 
934

Net cash used in investing activities
(197,751
)
 
(580,097
)
 
(170,344
)
 
198,321

 
(749,871
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Proceeds from exercise of stock options
6,520

 
—

 
—

 
—

 
6,520

Excess tax benefit from stock-based payments
14,455

 
—

 
—

 
—

 
14,455

Borrowings under revolving credit facilities
693,000

 
—

 
606,821

 
—

 
1,299,821

Repayments under revolving credit facilities
(693,000
)
 
—

 
(115,039
)
 
—

 
(808,039
)
Borrowings under term loans
11,250

 
—

 
—

 
—

 
11,250

Repayments under term loans
(11,250
)
 
—

 
—

 
—

 
(11,250
)
Borrowings under receivables securitization facility
—

 
—

 
80,000

 
—

 
80,000

Repayments of other long-term debt
(1,920
)
 
(2,104
)
 
(16,508
)
 
—

 
(20,532
)
Payments of other obligations
—

 
(407
)
 
(41,527
)
 
—

 
(41,934
)
Other financing activities, net
(18,669
)
 
12,340

 
(552
)
 
—

 
(6,881
)
Investment and intercompany note activity with parent
—

 
481,951

 
(283,630
)
 
(198,321
)
 
—

Dividends
—

 
(259,653
)
 
—

 
259,653

 
—

Net cash provided by financing activities
386

 
232,127

 
229,565

 
61,332

 
523,410

Effect of exchange rate changes on cash and equivalents
—

 
(86
)
 
(1,937
)
 
—

 
(2,023
)
Net increase in cash and equivalents
67,505

 
13,162

 
13,491

 
—

 
94,158

Cash and equivalents, beginning of period
77,926

 
13,693

 
58,869

 
—

 
150,488

Cash and equivalents, end of period
$
145,431

 
$
26,855

 
$
72,360

 
$
—

 
$
244,646




Financial Statement Information - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2014
Finite-Lived Intangible Assets
 
 
 
Reserve for estimated returns, discounts and allowances
$ 31.4 
 
$ 31.3 
Reserve for uncollectible accounts
24.3 
 
19.4 
Amortization expense
25.0 
24.4 
 
Estimated annual amortization expense in year one
33.2 
 
 
Estimated annual amortization expense in year two
29.9 
 
 
Estimated annual amortization expense in year three
27.4 
 
 
Estimated annual amortization expense in year four
22.5 
 
 
Estimated annual amortization expense in year five
17.8 
 
 
Investment in unconsolidated subsidiary
11.0 
 
 
ACM Parts
 
 
 
Finite-Lived Intangible Assets
 
 
 
Investment in unconsolidated subsidiary
10.2 
 
 
Investment in unconsolidated subsidiary, ownership percentage
49.00% 
 
 
Equity method investment, ownership percentage of other investors
51.00% 
 
 
Increase in equity method investment
$ 7.5 
 
 
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
20 years 
 
 
Software and technology related assets |
Minimum
 
 
 
Finite-Lived Intangible Assets
 
 
 
Useful life, years
5 years 
 
 
Software and technology related assets |
Maximum
 
 
 
Finite-Lived Intangible Assets
 
 
 
Useful life, years
6 years 
 
 
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 
 
 
Salvage mechanical products
 
 
 
Finite-Lived Intangible Assets
 
 
 
Standard warranty period
6 months 
 
 
Remanufactured engines
 
 
 
Finite-Lived Intangible Assets
 
 
 
Standard warranty period
3 years 
 
 
Financial Statement Information Schedule of Inventory (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Product Information
 
 
Inventory
$ 1,464,627 
$ 1,433,847 
Inventory
79,234 
 
Aftermarket and refurbished products
 
 
Product Information
 
 
Inventory
1,070,673 
1,022,549 
Inventory
74,800 
 
Salvage and remanufactured products
 
 
Product Information
 
 
Inventory
393,954 
411,298 
Inventory
$ 4,400 
 
Changes in Carrying Amount of Goodwill (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Goodwill [Roll Forward]
 
Goodwill, beginning balance
$ 2,288,895 
Business acquisitions and adjustments to previously recorded goodwill
101,253 
Exchange rate effects
(42,056)
Goodwill, ending balance
2,348,092 
North America
 
Goodwill [Roll Forward]
 
Goodwill, beginning balance
1,392,032 
Business acquisitions and adjustments to previously recorded goodwill
76,284 
Exchange rate effects
(14,730)
Goodwill, ending balance
1,453,586 
Europe
 
Goodwill [Roll Forward]
 
Goodwill, beginning balance
616,819 
Business acquisitions and adjustments to previously recorded goodwill
20,980 
Exchange rate effects
(27,376)
Goodwill, ending balance
610,423 
Specialty
 
Goodwill [Roll Forward]
 
Goodwill, beginning balance
280,044 
Business acquisitions and adjustments to previously recorded goodwill
3,989 
Exchange rate effects
50 
Goodwill, ending balance
$ 284,083 
Components of Other Intangibles (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Finite-Lived Intangible Assets
 
 
Gross carrying amount
$ 319,347 
$ 322,026 
Accumulated amortization
(99,715)
(76,501)
Net
219,632 
245,525 
Trade names and trademarks
 
 
Finite-Lived Intangible Assets
 
 
Gross carrying amount
171,165 
173,340 
Accumulated amortization
(41,480)
(35,538)
Net
129,685 
137,802 
Customer relationships
 
 
Finite-Lived Intangible Assets
 
 
Gross carrying amount
92,780 
92,972 
Accumulated amortization
(37,121)
(26,751)
Net
55,659 
66,221 
Software and technology related assets
 
 
Finite-Lived Intangible Assets
 
 
Gross carrying amount
44,465 
44,640 
Accumulated amortization
(16,028)
(10,387)
Net
28,437 
34,253 
Covenants not to compete
 
 
Finite-Lived Intangible Assets
 
 
Gross carrying amount
10,937 
11,074 
Accumulated amortization
(5,086)
(3,825)
Net
$ 5,851 
$ 7,249 
Changes in Warranty Reserve (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Warranty Reserve [Roll Forward]
 
Warranty reserve, beginning balance
$ 14,881 
Warranty expense
26,294 
Warranty claims
(23,517)
Warranty reserve, ending balance
$ 17,658 
Stock-Based Compensation - Additional Information (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
 
Stock-based compensation expense
$ 5,177,000 
$ 5,184,000 
$ 16,291,000 
$ 16,967,000 
 
RSUs
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
 
Number of shares that RSUs convert into on the applicable vesting date
1 
 
 
 
 
Total shares approved under the Equity Incentive Plan
915,386 
 
915,386 
 
 
Fair value of RSUs or restricted stock vested during the period
 
 
28,200,000 
 
 
RSUs granted, shares
 
 
915,386 
 
 
Unvested RSUs, aggregate intrinsic value
56,463,000 
 
56,463,000 
 
60,493,000 
Stock-based compensation expense
5,119,000 
4,434,000 
16,067,000 
14,625,000 
 
Unrecognized stock-based compensation expense
35,600,000 
 
35,600,000 
 
 
Expected term for unrecognized stock-based compensation expense expected to be recognized
 
 
3 years 1 month 20 days 
 
 
Stock Options
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term
 
 
3 years 1 month 20 days 
 
 
Exercisable stock options, aggregate intrinsic value
76,891,000 
 
76,891,000 
 
 
Stock-based compensation expense
58,000 
703,000 
224,000 
2,203,000 
 
Unrecognized stock-based compensation expense
300,000 
 
300,000 
 
 
Expected term for unrecognized stock-based compensation expense expected to be recognized
 
 
1 year 3 months 19 days 
 
 
Restricted Stock
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
 
Stock-based compensation expense
$ 0 
$ 47,000 
$ 0 
$ 139,000 
 
Minimum |
Stock Options
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
 
Stock options expiration period
6 years 
 
 
 
 
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 
 
 
 
 
Stock options expiration period
10 years 
 
 
 
 
Stock-Based Compensation Schedule of Unvested Restricted Stock Units Activity (Details) (RSUs, USD $)
In Thousands, except Share data, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Dec. 31, 2014
RSUs
 
 
Summary of Expected to Vest RSUs [Line Items]
 
 
Unvested RSUs, shares
1,990,925 
2,151,232 
RSUs granted, shares
915,386 
 
RSUs vested, shares
(994,130)
 
RSUs forfeited/canceled, shares
(81,563)
 
RSUs expected to vest, shares
1,935,514 
 
Unvested RSUs, weighted average grant date fair value
$ 24.16 
$ 20.97 
RSUs granted, weighted average grant date fair value
$ 27.04 
 
RSUs vested, weighted average grant date fair value
$ 19.87 
 
RSUs forfeited/canceled, weighted average grant date fair value
$ 24.54 
 
RSUs expected to vest, weighted average grant date fair value
$ 24.08 
 
Unvested RSUs, aggregate intrinsic value
$ 56,463 
$ 60,493 
RSUs expected to vest, aggregate intrinsic value
$ 54,891 
 
Stock-Based Compensation Schedule of Stock Option Activity (Details) (Stock Options, USD $)
In Thousands, except Share data, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Stock Options
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
 
Stock options outstanding, shares
3,870,023 
5,207,772 
Stock options exercised, shares
(1,324,150)
 
Stock options forfeited/canceled, shares
(13,599)
 
Exercisable stock options, shares
3,775,341 
 
Exercisable and expected to vest stock options, shares
3,860,555 
 
Stock options outstanding, weighted average exercise price
$ 8.59 
$ 8.04 
Stock options exercised, weighted average exercise price
$ 6.21 
 
Stock options forfeited/canceled, weighted average exercise price
$ 28.13 
 
Exercisable stock options, weighted average exercise price
$ 7.99 
 
Exercisable and expected to vest stock options, weighted average exercise price
$ 8.53 
 
Stock options outstanding, weighted average remaining contractual term (years)
3 years 1 month 20 days 
3 years 7 months 6 days 
Exercisable stock options, weighted average remaining contractual term (years)
3 years 1 month 20 days 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term
3 years 1 month 20 days 
 
Stock options outstanding, aggregate intrinsic value
$ 76,891 
$ 105,038 
Exercisable stock options, aggregate intrinsic value
76,891 
 
Exercisable and expected to vest stock options, aggregate intrinsic value
$ 76,891 
 
Schedule of Pre-Tax Stock-Based Compensation Expense (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Stock-based compensation expense
$ 5,177 
$ 5,184 
$ 16,291 
$ 16,967 
RSUs
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Stock-based compensation expense
5,119 
4,434 
16,067 
14,625 
Stock Options
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Stock-based compensation expense
58 
703 
224 
2,203 
Restricted Stock
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
Stock-based compensation expense
$ 0 
$ 47 
$ 0 
$ 139 
Schedule of Long-Term Obligations (Parenthetical) (Details)
Sep. 30, 2015
Dec. 31, 2014
Notes Payable
 
 
Debt Instrument
 
 
Weighted average interest rate
   
1.00% 
Other Long-Term Debt
 
 
Debt Instrument
 
 
Weighted average interest rate
   
3.10% 
Long-Term Obligations - Additional Information (Details) (USD $)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2014
Credit Agreement
Sep. 30, 2015
Credit Agreement
Mar. 31, 2014
Credit Agreement
Mar. 27, 2014
Credit Agreement
Mar. 27, 2014
Credit Agreement
Multicurrency Component
Mar. 27, 2014
Credit Agreement
US Dollar Component
Sep. 30, 2015
Term Loan
Dec. 31, 2014
Term Loan
Mar. 27, 2014
Term Loan
Sep. 30, 2015
Senior Notes
Dec. 31, 2014
Senior Notes
May 9, 2013
Senior Notes
Sep. 30, 2015
Receivables Securitization Facility
Dec. 31, 2014
Receivables Securitization Facility
Sep. 29, 2014
Receivables Securitization Facility
Debt Instrument
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum credit agreement borrowings
 
 
 
 
 
 
 
$ 2,300,000,000 
 
 
 
 
 
 
 
 
 
 
 
Maximum revolving credit facility borrowings
 
 
 
 
 
 
 
 
1,690,000,000 
165,000,000 
 
 
 
 
 
 
 
 
 
Term loans payable
 
 
 
 
 
 
 
 
 
 
416,250,000 
433,125,000 
450,000,000 
 
 
 
 
 
 
Maximum increase of revolving credit facility or term loans
 
 
 
 
 
 
 
400,000,000 
 
 
 
 
 
 
 
 
 
 
 
Maximum leverage ratio for incremental borrowings
 
 
 
 
 
 
 
2.50 
 
 
 
 
 
 
 
 
 
 
 
Term loan quarterly repayment, percentage of initial balance
 
 
 
 
 
 
 
1.25% 
 
 
 
 
 
 
 
 
 
 
 
Increment change in applicable margin
 
 
 
 
 
 
 
0.25% 
 
 
 
 
 
 
 
 
 
 
 
Weighted average interest rate
 
 
 
 
2.10% 
2.12% 
 
 
 
 
 
 
 
 
 
 
0.98% 
 
 
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 
22,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding letters of credit
 
 
 
 
 
71,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Availability on the revolving credit facility
 
 
 
 
 
1,300,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payments of financing costs
 
 
 
 
3,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fees capitalized
 
 
 
 
 
 
3,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
Loss on debt extinguishment
0 
0 
0 
(324,000)
300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior notes
 
 
 
 
 
 
 
 
 
 
 
 
 
600,000,000 
600,000,000 
600,000,000 
 
 
 
Senior notes interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.75% 
 
 
 
Receivables securitization maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
97,000,000 
Receivables used as collateral for receivables securitization facility
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
128,300,000 
129,500,000 
 
Borrowings under receivable securitization facility, carrying value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 89,800,000 
$ 94,900,000 
 
Schedule of Long-Term Obligations (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Sep. 30, 2015
Term Loan
Dec. 31, 2014
Term Loan
Mar. 27, 2014
Term Loan
Sep. 30, 2015
Revolving Credit Facility
Dec. 31, 2014
Revolving Credit Facility
Sep. 30, 2015
Senior Notes
Dec. 31, 2014
Senior Notes
May 9, 2013
Senior Notes
Sep. 30, 2015
Receivables Securitization Facility
Dec. 31, 2014
Receivables Securitization Facility
Sep. 30, 2015
Notes Payable
Dec. 31, 2014
Notes Payable
Sep. 30, 2015
Other Long-Term Debt
Dec. 31, 2014
Other Long-Term Debt
Debt Instrument
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Term loans payable
 
 
$ 416,250 
$ 433,125 
$ 450,000 
 
 
 
 
 
 
 
 
 
 
 
Revolving credit facilities
 
 
 
 
 
475,308 
663,912 
 
 
 
 
 
 
 
 
 
Senior notes
 
 
 
 
 
 
 
600,000 
600,000 
600,000 
 
 
 
 
 
 
Receivables securitization facility
 
 
 
 
 
 
 
 
 
 
89,800 
94,900 
 
 
 
 
Notes payable
 
 
 
 
 
 
 
 
 
 
 
 
13,875 
45,891 
 
 
Other long-term debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
11,997 
26,734 
Long-Term Obligations, Total
1,607,230 
1,864,562 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less current maturities
(37,174)
(63,515)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-Term Obligations, Excluding Current Portion
$ 1,570,056 
$ 1,801,047 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Instruments and Hedging Activities - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
 
Net loss included in accumulated other comprehensive income (loss) to be reclassified into interest expense within the next 12 months
$ (1.5)
Schedule of Cash Flow Hedges (Details)
In Thousands, unless otherwise specified
Sep. 30, 2015
USD ($)
Dec. 31, 2014
USD ($)
Sep. 30, 2015
Interest Rate Swap
US Dollar Notional Amount
USD ($)
Dec. 31, 2014
Interest Rate Swap
US Dollar Notional Amount
USD ($)
Sep. 30, 2015
Interest Rate Swap
Pound Sterling Notional Amount
USD ($)
Sep. 30, 2015
Interest Rate Swap
Pound Sterling Notional Amount
GBP (£)
Dec. 31, 2014
Interest Rate Swap
Pound Sterling Notional Amount
USD ($)
Dec. 31, 2014
Interest Rate Swap
Pound Sterling Notional Amount
GBP (£)
Sep. 30, 2015
Interest Rate Swap
Canadian Dollar Notional Amount
USD ($)
Sep. 30, 2015
Interest Rate Swap
Canadian Dollar Notional Amount
CAD ($)
Dec. 31, 2014
Interest Rate Swap
Canadian Dollar Notional Amount
USD ($)
Dec. 31, 2014
Interest Rate Swap
Canadian Dollar Notional Amount
CAD ($)
Derivative
 
 
 
 
 
 
 
 
 
 
 
 
Derivative, Notional Amount
 
 
$ 420,000 
$ 420,000 
 
£ 50,000 
 
£ 50,000 
 
$ 25,000 
 
$ 25,000 
Derivative Liability, Current
202 
2,691 
140 
2,691 
0 
 
0 
 
62 
 
0 
 
Derivative Liability, Noncurrent
$ 2,172 
$ 2,527 
$ 1,519 
$ 1,615 
$ 653 
 
$ 893 
 
 
 
$ 19 
 
Fair Value Measurements - Additional Information (Details) (USD $)
3 Months Ended 9 Months Ended 3 Months Ended 6 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
lkq_Contingent_consideration_amounts_outstanding
Jun. 30, 2014
lkq_Contingent_consideration_amounts_outstanding
Sep. 30, 2015
lkq_Contingent_consideration_amounts_outstanding
Sep. 30, 2015
Credit Agreement
Dec. 31, 2014
Credit Agreement
Sep. 30, 2015
Receivables Securitization Facility
Dec. 31, 2014
Receivables Securitization Facility
Sep. 30, 2015
Senior Notes
Dec. 31, 2014
Senior Notes
May 9, 2013
Senior Notes
Fair Value Measurements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Portion of change in fair value included in earnings related to contingent consideration obligations outstanding at period end
$ 89,000 
$ 12,000 
$ 365,000 
$ (2,000,000)
$ 100,000 
$ 200,000 
$ 200,000 
 
 
 
 
 
 
 
Borrowings under credit agreement, carrying value
 
 
 
 
 
 
 
892,000,000 
1,100,000,000 
 
 
 
 
 
Borrowings under receivable securitization facility, carrying value
 
 
 
 
 
 
 
 
 
89,800,000 
94,900,000 
 
 
 
Debt instrument, fair value
 
 
 
 
 
 
 
 
 
 
 
583,000,000 
569,000,000 
 
Debt instrument, carrying value
 
 
 
 
 
 
 
 
 
 
 
$ 600,000,000 
$ 600,000,000 
$ 600,000,000 
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) (Fair Value, Measurements, Recurring, USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value assets measured on recurring basis
$ 28,787 
$ 28,242 
Fair value liabilities measured on recurring basis
35,310 
40,093 
Cash surrender value of life insurance
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value assets measured on recurring basis
28,787 
28,242 
Contingent consideration liabilities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on recurring basis
4,548 
7,295 
Deferred compensation liabilities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on recurring basis
28,388 
27,580 
Interest Rate Swap
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on recurring basis
2,374 
5,218 
Fair Value, Inputs, Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value assets measured on recurring basis
28,787 
28,242 
Fair value liabilities measured on recurring basis
30,762 
32,798 
Fair Value, Inputs, Level 2 |
Cash surrender value of life insurance
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value assets measured on recurring basis
28,787 
28,242 
Fair Value, Inputs, Level 2 |
Deferred compensation liabilities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on recurring basis
28,388 
27,580 
Fair Value, Inputs, Level 2 |
Interest Rate Swap
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on recurring basis
2,374 
5,218 
Fair Value, Inputs, Level 3
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on recurring basis
4,548 
7,295 
Fair Value, Inputs, Level 3 |
Contingent consideration liabilities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on recurring basis
$ 4,548 
$ 7,295 
Significant Unobservable Inputs Used in Fair Value Measurements (Details) (Fair Value, Inputs, Level 3, Contingent consideration liabilities)
Sep. 30, 2015
Dec. 31, 2014
Fair Value, Inputs, Level 3 |
Contingent consideration liabilities
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
 
 
Weighted Average, Probability of achieving payout targets
75.90% 
79.10% 
Weighted Average, Discount rate
7.50% 
7.50% 
Changes in Fair Value of Contingent Consideration Obligations (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Contingent Consideration Obligations [Roll Forward]
 
 
 
 
Beginning balance
$ 5,191 
$ 8,762 
$ 7,295 
$ 55,653 
Contingent consideration liabilities recorded for business acquisitions
0 
(1,203)
0 
5,854 
Payments
(610)
0 
(2,815)
(52,305)
Increase (decrease) in fair value included in earnings
89 
12 
365 
(2,000)
Exchange rate effects
(122)
(270)
(297)
99 
Ending balance
$ 4,548 
$ 7,301 
$ 4,548 
$ 7,301 
Future Minimum Lease Commitments (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
 
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year
$ 40,241 
2016
146,774 
2017
124,121 
2018
102,397 
2019
82,568 
2020
66,396 
Thereafter
232,894 
Future Minimum Lease Payments
$ 795,391 
Business Combinations - Additional Information (Details)
3 Months Ended 9 Months Ended 9 Months Ended 3 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2015
USD ($)
Sep. 30, 2014
USD ($)
Sep. 30, 2015
USD ($)
Sep. 30, 2014
USD ($)
Dec. 31, 2014
USD ($)
Sep. 30, 2015
All 2015 Acquisitions
USD ($)
Jun. 30, 2014
ECP 2013 Contingent Payment
USD ($)
Jun. 30, 2014
ECP 2013 Contingent Payment
GBP (£)
Dec. 31, 2013
ECP 2013 Contingent Payment
USD ($)
Dec. 31, 2014
Keystone Specialty
USD ($)
Sep. 30, 2015
Netherlands Distributors Former Customers
Dec. 31, 2014
Netherlands Distributors Former Customers
Dec. 31, 2014
All 2014 Acquisitions Excluding Keystone Specialty
USD ($)
Dec. 31, 2014
All 2014 Acquisitions
USD ($)
Sep. 30, 2015
North America
USD ($)
Dec. 31, 2014
North America
USD ($)
Sep. 30, 2015
Wholesale North America Segment
Dec. 31, 2014
Wholesale North America Segment
All 2014 Acquisitions Excluding Keystone Specialty
Dec. 31, 2014
Self Service Segment
All 2014 Acquisitions Excluding Keystone Specialty
Sep. 30, 2015
Europe
USD ($)
Dec. 31, 2014
Europe
USD ($)
Sep. 30, 2015
Europe
Netherlands Distributors
Dec. 31, 2014
Europe
Netherlands Distributors
Dec. 31, 2014
Europe
All 2014 Acquisitions Excluding Keystone Specialty
Sep. 30, 2015
Specialty
USD ($)
Dec. 31, 2014
Specialty
USD ($)
Dec. 31, 2014
Specialty
All 2014 Acquisitions Excluding Keystone Specialty
Sep. 30, 2015
Acquisition-related expenses
USD ($)
Sep. 30, 2014
Acquisition-related expenses
USD ($)
Sep. 30, 2015
Acquisition-related expenses
USD ($)
Sep. 30, 2014
Acquisition-related expenses
USD ($)
Sep. 30, 2014
Acquisition-related expenses
Netherlands Distributors
USD ($)
Sep. 30, 2015
Acquisition-related expenses
Netherlands Distributors
USD ($)
Sep. 30, 2014
Acquisition-related expenses
Netherlands Distributors
USD ($)
Business Acquisition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of acquisitions
 
 
 
 
 
17 
 
 
 
 
9 
5 
22 
 
 
 
4 
9 
2 
 
 
11 
7 
9 
 
 
2 
 
 
 
 
 
 
 
Business Combination, Consideration Transferred
 
 
 
 
 
$ 184,500,000 
 
 
 
$ 471,900,000 
 
 
$ 359,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash used in acquisitions, net of cash acquired
 
 
157,357,000 
650,614,000 
 
157,200,000 
 
 
 
427,100,000 
 
 
334,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes issued
(4,148,000)
 
(4,148,000)
 
 
(4,100,000)
 
 
 
(31,500,000)
 
 
(13,535,000)
(45,035,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other purchase price obligations
22,077,000 
 
22,077,000 
 
 
22,100,000 
 
 
 
13,351,000 
 
 
333,000 
13,684,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contingent consideration liability
0 
 
0 
 
 
 
 
 
 
0 
 
 
5,854,000 
5,854,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum payment under contingent consideration agreement
 
 
 
 
 
 
 
 
30,000,000 
 
 
 
8,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Settlement of pre-existing balances
1,073,000 
 
1,073,000 
 
 
1,100,000 
 
 
 
0 
 
 
5,052,000 
5,052,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition Contingent Consideration Liabilities Payments Made
610,000 
0 
2,815,000 
52,305,000 
 
 
44,800,000 
26,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition Contingent Consideration Liabilities Other Settlements
 
 
 
 
 
 
5,100,000 
3,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill expected to be deductible for income tax purposes
 
 
 
 
 
69,900,000 
 
 
 
 
 
 
44,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
2,348,092,000 
 
2,348,092,000 
 
2,288,895,000 
101,253,000 
 
 
 
237,729,000 
 
 
177,974,000 
415,703,000 
1,453,586,000 
1,392,032,000 
 
 
 
610,423,000 
616,819,000 
 
 
 
284,083,000 
280,044,000 
 
 
 
 
 
 
 
 
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual
 
 
83,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual
 
 
2,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business acquisitions and adjustments to previously recorded goodwill
 
 
101,253,000 
 
 
 
 
 
 
 
 
 
 
 
76,284,000 
 
 
 
 
20,980,000 
 
 
 
 
3,989,000 
 
 
 
 
 
 
 
 
 
Restructuring and acquisition related expenses
$ 4,578,000 
$ 3,594,000 
$ 12,729,000 
$ 12,816,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1,200,000 
$ 1,300,000 
$ 2,400,000 
$ 3,200,000 
$ 500,000 
$ 1,500,000 
$ 2,300,000 
Purchase Price Allocations for Acquisitions (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Business Acquisition
 
 
Receivables
$ 35,870 
 
Receivable reserves
(1,167)
 
Inventory
79,234 
 
Income taxes receivable
0 
 
Prepaid expenses and other current assets
3,352 
 
Property and equipment
8,671 
 
Goodwill
2,348,092 
2,288,895 
Other intangibles
3,456 
 
Other assets
3,748 
 
Deferred income taxes
2,243 
 
Current liabilities assumed
(48,918)
 
Debt assumed
(2,373)
 
Other noncurrent liabilities assumed
(832)
 
Contingent consideration liabilities
0 
 
Other purchase price obligations
(22,077)
 
Notes issued
(4,148)
 
Settlement of pre-existing balances
(1,073)
 
Cash used in acquisitions, net of cash acquired
157,239 
 
All 2015 Acquisitions
 
 
Business Acquisition
 
 
Goodwill
101,253 
 
Other purchase price obligations
(22,100)
 
Notes issued
(4,100)
 
Settlement of pre-existing balances
(1,100)
 
Keystone Specialty
 
 
Business Acquisition
 
 
Receivables
 
48,473 
Receivable reserves
 
(7,748)
Inventory
 
150,696 
Income taxes receivable
 
14,096 
Prepaid expenses and other current assets
 
8,085 
Property and equipment
 
38,080 
Goodwill
 
237,729 
Other intangibles
 
78,110 
Other assets
 
6,159 
Deferred income taxes
 
(26,591)
Current liabilities assumed
 
(63,513)
Debt assumed
 
0 
Other noncurrent liabilities assumed
 
(11,675)
Contingent consideration liabilities
 
0 
Other purchase price obligations
 
(13,351)
Notes issued
 
(31,500)
Settlement of pre-existing balances
 
0 
Cash used in acquisitions, net of cash acquired
 
427,050 
All 2014 Acquisitions Excluding Keystone Specialty
 
 
Business Acquisition
 
 
Receivables
 
75,330 
Receivable reserves
 
(7,383)
Inventory
 
123,815 
Income taxes receivable
 
0 
Prepaid expenses and other current assets
 
4,050 
Property and equipment
 
27,026 
Goodwill
 
177,974 
Other intangibles
 
51,135 
Other assets
 
2,793 
Deferred income taxes
 
313 
Current liabilities assumed
 
(52,961)
Debt assumed
 
(32,441)
Other noncurrent liabilities assumed
 
(10,573)
Contingent consideration liabilities
 
(5,854)
Other purchase price obligations
 
(333)
Notes issued
 
(13,535)
Settlement of pre-existing balances
 
(5,052)
Cash used in acquisitions, net of cash acquired
 
334,304 
All 2014 Acquisitions
 
 
Business Acquisition
 
 
Receivables
 
123,803 
Receivable reserves
 
(15,131)
Inventory
 
274,511 
Income taxes receivable
 
14,096 
Prepaid expenses and other current assets
 
12,135 
Property and equipment
 
65,106 
Goodwill
 
415,703 
Other intangibles
 
129,245 
Other assets
 
8,952 
Deferred income taxes
 
(26,278)
Current liabilities assumed
 
(116,474)
Debt assumed
 
(32,441)
Other noncurrent liabilities assumed
 
(22,248)
Contingent consideration liabilities
 
(5,854)
Other purchase price obligations
 
(13,684)
Notes issued
 
(45,035)
Settlement of pre-existing balances
 
(5,052)
Cash used in acquisitions, net of cash acquired
 
$ 761,354 
Pro Forma Effect of Businesses Acquired (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Business Acquisition
 
 
 
 
Revenue, as reported
$ 1,831,732 
$ 1,721,024 
$ 5,443,714 
$ 5,055,933 
Pro forma revenue
1,859,797 
1,897,717 
5,653,548 
5,641,720 
Net income
101,346 
91,515 
328,163 
301,050 
Pro forma net income
101,058 
98,500 
333,664 
319,419 
Earnings per share, basic
$ 0.33 1
$ 0.30 1
$ 1.08 
$ 1.00 
Pro forma earnings per share, basic (1)
$ 0.33 2
$ 0.32 2
$ 1.10 2
$ 1.06 2
Earnings per share, diluted
$ 0.33 1
$ 0.30 1
$ 1.07 
$ 0.98 
Pro forma earnings per share, diluted (1)
$ 0.33 2
$ 0.32 2
$ 1.09 2
$ 1.04 2
Restructuring and acquisition related expenses
4,578 
3,594 
12,729 
12,816 
Acquisition-related expenses
 
 
 
 
Business Acquisition
 
 
 
 
Restructuring and acquisition related expenses
1,200 
1,300 
2,400 
3,200 
Keystone Specialty
 
 
 
 
Business Acquisition
 
 
 
 
Revenue of purchased businesses for the period prior to acquisition
0 
0 
0 
3,443 
Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments
0 
144 
0 
497 
Effect of purchased businesses for the period prior to acquisition
$ 0.00 
$ 0.00 
$ 0.00 
$ 0.00 
Effect of purchased businesses for the period prior to acquisition
$ 0.00 
$ 0.00 
$ 0.00 
$ 0.00 
All 2015 Acquisitions
 
 
 
 
Business Acquisition
 
 
 
 
Revenue of purchased businesses for the period prior to acquisition
28,065 
 
209,834 
 
Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments
(288)
 
5,501 
 
Effect of purchased businesses for the period prior to acquisition
$ 0.00 
 
$ 0.02 
 
Effect of purchased businesses for the period prior to acquisition
$ 0.00 
 
$ 0.02 
 
All 2015 and 2014 Acquisitions Excluding Keystone Specialty [Domain]
 
 
 
 
Business Acquisition
 
 
 
 
Revenue of purchased businesses for the period prior to acquisition
 
176,693 
 
582,344 
Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments
 
6,841 
 
17,872 
Effect of purchased businesses for the period prior to acquisition
 
$ 0.02 
 
$ 0.06 
Effect of purchased businesses for the period prior to acquisition
 
$ 0.02 
 
$ 0.06 
Netherlands Distributors |
Acquisition-related expenses
 
 
 
 
Business Acquisition
 
 
 
 
Restructuring and acquisition related expenses
 
$ 500 
$ 1,500 
$ 2,300 
Restructuring and Acquisition Related Expenses - Additional Information (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Restructuring Cost and Reserve
 
 
 
 
Restructuring and acquisition related expenses
$ 4,578,000 
$ 3,594,000 
$ 12,729,000 
$ 12,816,000 
Acquisition-related expenses
 
 
 
 
Restructuring Cost and Reserve
 
 
 
 
Restructuring and acquisition related expenses
1,200,000 
1,300,000 
2,400,000 
3,200,000 
Restructuring expenses
 
 
 
 
Restructuring Cost and Reserve
 
 
 
 
Restructuring and acquisition related expenses
3,400,000 
2,300,000 
10,300,000 
9,600,000 
Restructuring expenses |
Maximum
 
 
 
 
Restructuring Cost and Reserve
 
 
 
 
Expected additional charges
 
 
(9,000,000)
 
Netherlands Distributors |
Acquisition-related expenses
 
 
 
 
Restructuring Cost and Reserve
 
 
 
 
Restructuring and acquisition related expenses
 
500,000 
1,500,000 
2,300,000 
Coast |
Acquisition-related expenses
 
 
 
 
Restructuring Cost and Reserve
 
 
 
 
Restructuring and acquisition related expenses
 
 
300,000 
 
All 2015 Acquisitions Excluding Netherlands Distributors and Coast |
Acquisition-related expenses
 
 
 
 
Restructuring Cost and Reserve
 
 
 
 
Restructuring and acquisition related expenses
 
 
$ 600,000 
 
Computation of Earnings Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Earnings Per Share [Abstract]
 
 
 
 
Net income
$ 101,346 
$ 91,515 
$ 328,163 
$ 301,050 
Denominator for basic earnings per share—Weighted-average shares outstanding
305,059 
302,724 
304,453 
302,058 
Effect of dilutive securities:
 
 
 
 
RSUs
603 
658 
678 
804 
Stock options
2,066 
2,817 
2,195 
2,988 
Restricted stock
0 
7 
0 
7 
Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding
307,728 
306,206 
307,326 
305,857 
Earnings per share, basic
$ 0.33 1
$ 0.30 1
$ 1.08 
$ 1.00 
Earnings per share, diluted
$ 0.33 1
$ 0.30 1
$ 1.07 
$ 0.98 
Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share (Details)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
RSUs
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share
 
 
 
 
Antidilutive securities
272 
389 
306 
265 
Stock Options
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share
 
 
 
 
Antidilutive securities
95 
115 
97 
120 
Income Taxes Income Taxes - Additional Information (Details)
9 Months Ended 12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2014
Effective Income Tax Rate Reconciliation, Amount [Abstract] [Abstract]
 
 
 
Effective income tax rate
34.80% 
34.00% 
34.70% 
Accumulated Other Comprehensive Income (Loss) Additional Information (Details) (Interest Rate Swap, USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Interest Rate Swap
 
 
 
 
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax
$ 1.5 
$ 1.6 
$ 4.6 
$ 4.6 
Accumulated Other Comprehensive Income (Loss) Schedule of Accumulated Other Comprehensive Income (Loss) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Beginning Balance
$ (49,217)
$ 36,510 
$ (40,225)
$ 20,011 
Pretax (loss) income
(34,033)
(39,515)
(45,572)
(24,375)
Income tax effect
185 
(7)
624 
39 
Reclassification of unrealized gain (loss)
1,508 
1,515 
4,736 
3,518 
Reclassification of deferred income taxes
(531)
(535)
(1,651)
(1,225)
Ending Balance
(82,088)
(2,032)
(82,088)
(2,032)
Foreign Currency Translation
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Beginning Balance
(37,373)
40,222 
(27,073)
24,906 
Pretax (loss) income
(33,458)
(39,329)
(43,758)
(24,013)
Ending Balance
(70,831)
893 
(70,831)
893 
Unrealized (Loss) Gain on Cash Flow Hedges
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Beginning Balance
(2,200)
(4,346)
(3,401)
(5,596)
Pretax (loss) income
(575)
(186)
(1,814)
(362)
Income tax effect
185 
(7)
624 
39 
Reclassification of unrealized gain (loss)
1,542 
1,554 
4,627 
3,647 
Reclassification of deferred income taxes
(540)
(544)
(1,624)
(1,257)
Ending Balance
(1,588)
(3,529)
(1,588)
(3,529)
Unrealized (Loss) Gain on Pension Plan
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Beginning Balance
(9,644)
634 
(9,751)
701 
Reclassification of unrealized gain (loss)
(34)
(39)
109 
(129)
Reclassification of deferred income taxes
9 
9 
(27)
32 
Ending Balance
$ (9,669)
$ 604 
$ (9,669)
$ 604 
Segment and Geographic Information - Additional Information (Details)
3 Months Ended
Sep. 30, 2015
Segment Reporting Information
 
Number of operating segments
4 
Number of reportable segments
3 
North America
 
Segment Reporting Information
 
Number of reportable segments
1 
Schedule of Financial Performance by Reportable Segment (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Segment Reporting Information
 
 
 
 
Revenue
$ 1,831,732 
$ 1,721,024 
$ 5,443,714 
$ 5,055,933 
Segment EBITDA
207,314 
191,554 
661,650 
608,102 
Depreciation and amortization
32,974 
31,754 
94,688 
90,647 
North America
 
 
 
 
Segment Reporting Information
 
 
 
 
Revenue
1,037,290 
1,024,967 
3,128,614 
3,080,356 
Segment EBITDA
128,506 
131,851 
416,774 
415,139 
Depreciation and amortization
17,918 
18,029 
52,432 
52,682 
Europe
 
 
 
 
Segment Reporting Information
 
 
 
 
Revenue
511,146 
495,776 
1,508,395 
1,380,663 
Segment EBITDA
52,733 
41,726 
153,199 
128,826 
Depreciation and amortization
9,478 
9,411 
26,533 
24,868 
Specialty
 
 
 
 
Segment Reporting Information
 
 
 
 
Revenue
284,306 
201,007 
809,858 
596,430 
Segment EBITDA
26,075 
17,977 
91,677 
64,137 
Depreciation and amortization
5,578 
4,314 
15,723 
13,097 
Intersegment Eliminations [Member]
 
 
 
 
Segment Reporting Information
 
 
 
 
Revenue
(1,010)
(726)
(3,153)
(1,516)
Third Party |
North America
 
 
 
 
Segment Reporting Information
 
 
 
 
Revenue
1,037,130 
1,024,835 
3,127,988 
3,080,090 
Third Party |
Europe
 
 
 
 
Segment Reporting Information
 
 
 
 
Revenue
511,146 
495,776 
1,508,325 
1,380,663 
Third Party |
Specialty
 
 
 
 
Segment Reporting Information
 
 
 
 
Revenue
283,456 
200,413 
807,401 
595,180 
Intersegment |
North America
 
 
 
 
Segment Reporting Information
 
 
 
 
Revenue
160 
132 
626 
266 
Intersegment |
Europe
 
 
 
 
Segment Reporting Information
 
 
 
 
Revenue
0 
 
70 
 
Intersegment |
Specialty
 
 
 
 
Segment Reporting Information
 
 
 
 
Revenue
850 
594 
2,457 
1,250 
Intersegment |
Intersegment Eliminations [Member]
 
 
 
 
Segment Reporting Information
 
 
 
 
Revenue
$ (1,010)
$ (726)
$ (3,153)
$ (1,516)
Reconciliation Of Segment EBITDA To Net Income (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Segment Reporting [Abstract]
 
 
 
 
Segment EBITDA
$ 207,314 
$ 191,554 
$ 661,650 
$ 608,102 
Restructuring and acquisition related expenses
4,578 
3,594 
12,729 
12,816 
Change in fair value of contingent consideration liabilities
(89)
(12)
(365)
2,000 
Equity in earnings of unconsolidated subsidiaries
(1,130)
(721)
(4,200)
(1,199)
EBITDA
201,517 
187,227 
644,356 
596,087 
Depreciation and amortization - cost of goods sold
2,091 
1,256 
4,570 
3,511 
Depreciation and amortization
30,883 
30,498 
90,118 
87,136 
Interest expense, net
14,722 
16,394 
44,250 
48,140 
Loss on debt extinguishment
0 
0 
0 
(324)
Provision for income taxes
52,475 
47,564 
177,255 
155,926 
Net income
$ 101,346 
$ 91,515 
$ 328,163 
$ 301,050 
Schedule of Capital Expenditures by Reportable Segment (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Segment Reporting Information
 
 
 
 
Capital Expenditures
$ 32,810 
$ 32,860 
$ 99,573 
$ 100,191 
North America
 
 
 
 
Segment Reporting Information
 
 
 
 
Capital Expenditures
11,615 
20,986 
41,762 
61,262 
Europe
 
 
 
 
Segment Reporting Information
 
 
 
 
Capital Expenditures
16,966 
8,652 
47,138 
32,927 
Specialty
 
 
 
 
Segment Reporting Information
 
 
 
 
Capital Expenditures
$ 4,229 
$ 3,222 
$ 10,673 
$ 6,002 
Schedule of Assets by Reportable Segment (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Segment Reporting Information
 
 
Receivables, net
$ 626,780 
$ 601,422 
Inventory
1,464,627 
1,433,847 
Property and Equipment, net
652,780 
629,987 
Other unallocated assets
2,959,845 
2,908,236 
Total Assets
5,704,032 
5,573,492 
North America
 
 
Segment Reporting Information
 
 
Receivables, net
322,954 
322,713 
Inventory
808,679 
826,429 
Property and Equipment, net
450,748 
456,288 
Europe
 
 
Segment Reporting Information
 
 
Receivables, net
222,445 
227,987 
Inventory
402,830 
402,488 
Property and Equipment, net
152,881 
128,309 
Specialty
 
 
Segment Reporting Information
 
 
Receivables, net
81,381 
50,722 
Inventory
253,118 
204,930 
Property and Equipment, net
$ 49,151 
$ 45,390 
Schedule of Revenue by Geographic Area (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Revenues from External Customers and Long-Lived Assets
 
 
 
 
Revenue
$ 1,831,732 
$ 1,721,024 
$ 5,443,714 
$ 5,055,933 
United States
 
 
 
 
Revenues from External Customers and Long-Lived Assets
 
 
 
 
Revenue
1,229,958 
1,126,468 
3,653,326 
3,369,636 
United Kingdom
 
 
 
 
Revenues from External Customers and Long-Lived Assets
 
 
 
 
Revenue
358,925 
349,012 
1,049,596 
1,003,889 
Other countries
 
 
 
 
Revenues from External Customers and Long-Lived Assets
 
 
 
 
Revenue
$ 242,849 
$ 245,544 
$ 740,792 
$ 682,408 
Schedule of Tangible Long-Lived Assets by Geographic Area (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Revenues from External Customers and Long-Lived Assets
 
 
Long-lived Assets
$ 652,780 
$ 629,987 
United States
 
 
Revenues from External Customers and Long-Lived Assets
 
 
Long-lived Assets
471,549 
469,450 
United Kingdom
 
 
Revenues from External Customers and Long-Lived Assets
 
 
Long-lived Assets
118,357 
92,813 
Other countries
 
 
Revenues from External Customers and Long-Lived Assets
 
 
Long-lived Assets
$ 62,874 
$ 67,724 
Schedule of Revenue by Product Category (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Revenue from External Customers
 
 
 
 
Revenue
$ 1,831,732 
$ 1,721,024 
$ 5,443,714 
$ 5,055,933 
Aftermarket, other new and refurbished products
 
 
 
 
Revenue from External Customers
 
 
 
 
Revenue
1,307,399 
1,171,706 
3,850,038 
3,445,376 
Recycled, remanufactured and related products and services
 
 
 
 
Revenue from External Customers
 
 
 
 
Revenue
401,292 
371,632 
1,207,917 
1,108,376 
Other
 
 
 
 
Revenue from External Customers
 
 
 
 
Revenue
$ 123,041 
$ 177,686 
$ 385,759 
$ 502,181 
Condensed Consolidating Balance Sheets (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Sep. 30, 2014
Dec. 31, 2013
Current Assets:
 
 
 
 
Cash and equivalents
$ 137,086 
$ 114,605 
$ 244,646 
$ 150,488 
Receivables, net
626,780 
601,422 
 
 
Intercompany receivables, net
0 
0 
 
 
Inventory
1,464,627 
1,433,847 
 
 
Deferred income taxes
77,401 
81,744 
 
 
Prepaid expenses and other current assets
81,249 
85,799 
 
 
Total Current Assets
2,387,143 
2,317,417 
 
 
Property and Equipment, net
652,780 
629,987 
 
 
Intangible Assets:
 
 
 
 
Goodwill
2,348,092 
2,288,895 
 
 
Other intangibles, net
219,632 
245,525 
 
 
Investment in Subsidiaries
0 
0 
 
 
Intercompany Notes Receivable
0 
0 
 
 
Other Assets
96,385 
91,668 
 
 
Total Assets
5,704,032 
5,573,492 
 
 
Current Liabilities:
 
 
 
 
Accounts payable
416,341 
400,202 
 
 
Intercompany payables, net
0 
0 
 
 
Accrued expenses:
 
 
 
 
Accrued payroll-related liabilities
95,014 
86,016 
 
 
Other accrued expenses
185,072 
164,148 
 
 
Other current liabilities
64,097 
36,815 
 
 
Current portion of long-term obligations
37,174 
63,515 
 
 
Total Current Liabilities
797,698 
750,696 
 
 
Long-Term Obligations, Excluding Current Portion
1,570,056 
1,801,047 
 
 
Intercompany Notes Payable
0 
0 
 
 
Deferred Income Taxes
175,310 
181,662 
 
 
Other Noncurrent Liabilities
124,255 
119,430 
 
 
Stockholders’ Equity
3,036,713 
2,720,657 
 
 
Total Liabilities and Stockholders’ Equity
5,704,032 
5,573,492 
 
 
Parent Company
 
 
 
 
Current Assets:
 
 
 
 
Cash and equivalents
17,679 
14,930 
145,431 
77,926 
Receivables, net
0 
145 
 
 
Intercompany receivables, net
3,470 
1,360 
 
 
Inventory
0 
0 
 
 
Deferred income taxes
3,123 
4,064 
 
 
Prepaid expenses and other current assets
548 
20,640 
 
 
Total Current Assets
24,820 
41,139 
 
 
Property and Equipment, net
377 
494 
 
 
Intangible Assets:
 
 
 
 
Goodwill
0 
0 
 
 
Other intangibles, net
0 
0 
 
 
Investment in Subsidiaries
3,385,478 
3,216,039 
 
 
Intercompany Notes Receivable
651,424 
667,949 
 
 
Other Assets
47,593 
49,601 
 
 
Total Assets
4,109,692 
3,975,222 
 
 
Current Liabilities:
 
 
 
 
Accounts payable
1,414 
682 
 
 
Intercompany payables, net
0 
0 
 
 
Accrued expenses:
 
 
 
 
Accrued payroll-related liabilities
6,448 
8,075 
 
 
Other accrued expenses
13,183 
8,061 
 
 
Other current liabilities
1,396 
283 
 
 
Current portion of long-term obligations
22,650 
55,172 
 
 
Total Current Liabilities
45,091 
72,273 
 
 
Long-Term Obligations, Excluding Current Portion
995,450 
1,150,624 
 
 
Intercompany Notes Payable
0 
0 
 
 
Deferred Income Taxes
0 
0 
 
 
Other Noncurrent Liabilities
32,438 
31,668 
 
 
Stockholders’ Equity
3,036,713 
2,720,657 
 
 
Total Liabilities and Stockholders’ Equity
4,109,692 
3,975,222 
 
 
Guarantor Subsidiaries
 
 
 
 
Current Assets:
 
 
 
 
Cash and equivalents
37,014 
32,103 
26,855 
13,693 
Receivables, net
246,035 
217,542 
 
 
Intercompany receivables, net
0 
0 
 
 
Inventory
992,340 
964,477 
 
 
Deferred income taxes
71,356 
62,850 
 
 
Prepaid expenses and other current assets
40,005 
36,553 
 
 
Total Current Assets
1,386,750 
1,313,525 
 
 
Property and Equipment, net
472,864 
470,791 
 
 
Intangible Assets:
 
 
 
 
Goodwill
1,650,053 
1,563,796 
 
 
Other intangibles, net
141,644 
155,819 
 
 
Investment in Subsidiaries
288,999 
279,967 
 
 
Intercompany Notes Receivable
27,252 
23,449 
 
 
Other Assets
28,937 
24,457 
 
 
Total Assets
3,996,499 
3,831,804 
 
 
Current Liabilities:
 
 
 
 
Accounts payable
206,446 
182,607 
 
 
Intercompany payables, net
11,354 
8,048 
 
 
Accrued expenses:
 
 
 
 
Accrued payroll-related liabilities
56,682 
48,850 
 
 
Other accrued expenses
85,727 
83,857 
 
 
Other current liabilities
37,358 
16,197 
 
 
Current portion of long-term obligations
1,905 
4,599 
 
 
Total Current Liabilities
399,472 
344,158 
 
 
Long-Term Obligations, Excluding Current Portion
4,643 
6,561 
 
 
Intercompany Notes Payable
635,594 
649,824 
 
 
Deferred Income Taxes
163,107 
156,727 
 
 
Other Noncurrent Liabilities
67,430 
60,213 
 
 
Stockholders’ Equity
2,726,253 
2,614,321 
 
 
Total Liabilities and Stockholders’ Equity
3,996,499 
3,831,804 
 
 
Non-Guarantor Subsidiaries
 
 
 
 
Current Assets:
 
 
 
 
Cash and equivalents
82,393 
67,572 
72,360 
58,869 
Receivables, net
380,745 
383,735 
 
 
Intercompany receivables, net
11,354 
8,048 
 
 
Inventory
472,287 
469,370 
 
 
Deferred income taxes
2,922 
10,215 
 
 
Prepaid expenses and other current assets
40,696 
28,606 
 
 
Total Current Assets
990,397 
967,546 
 
 
Property and Equipment, net
179,539 
158,702 
 
 
Intangible Assets:
 
 
 
 
Goodwill
698,039 
725,099 
 
 
Other intangibles, net
77,988 
89,706 
 
 
Investment in Subsidiaries
0 
0 
 
 
Intercompany Notes Receivable
0 
0 
 
 
Other Assets
22,894 
20,481 
 
 
Total Assets
1,968,857 
1,961,534 
 
 
Current Liabilities:
 
 
 
 
Accounts payable
208,481 
216,913 
 
 
Intercompany payables, net
3,470 
1,360 
 
 
Accrued expenses:
 
 
 
 
Accrued payroll-related liabilities
31,884 
29,091 
 
 
Other accrued expenses
86,162 
72,230 
 
 
Other current liabilities
25,343 
15,720 
 
 
Current portion of long-term obligations
12,619 
3,744 
 
 
Total Current Liabilities
367,959 
339,058 
 
 
Long-Term Obligations, Excluding Current Portion
569,963 
643,862 
 
 
Intercompany Notes Payable
43,082 
41,574 
 
 
Deferred Income Taxes
15,242 
27,806 
 
 
Other Noncurrent Liabilities
24,387 
27,549 
 
 
Stockholders’ Equity
948,224 
881,685 
 
 
Total Liabilities and Stockholders’ Equity
1,968,857 
1,961,534 
 
 
Consolidation, Eliminations
 
 
 
 
Current Assets:
 
 
 
 
Cash and equivalents
0 
0 
0 
0 
Receivables, net
0 
0 
 
 
Intercompany receivables, net
(14,824)
(9,408)
 
 
Inventory
0 
0 
 
 
Deferred income taxes
0 
4,615 
 
 
Prepaid expenses and other current assets
0 
0 
 
 
Total Current Assets
(14,824)
(4,793)
 
 
Property and Equipment, net
0 
0 
 
 
Intangible Assets:
 
 
 
 
Goodwill
0 
0 
 
 
Other intangibles, net
0 
0 
 
 
Investment in Subsidiaries
(3,674,477)
(3,496,006)
 
 
Intercompany Notes Receivable
(678,676)
(691,398)
 
 
Other Assets
(3,039)
(2,871)
 
 
Total Assets
(4,371,016)
(4,195,068)
 
 
Current Liabilities:
 
 
 
 
Accounts payable
0 
0 
 
 
Intercompany payables, net
(14,824)
(9,408)
 
 
Accrued expenses:
 
 
 
 
Accrued payroll-related liabilities
0 
0 
 
 
Other accrued expenses
0 
0 
 
 
Other current liabilities
0 
4,615 
 
 
Current portion of long-term obligations
0 
0 
 
 
Total Current Liabilities
(14,824)
(4,793)
 
 
Long-Term Obligations, Excluding Current Portion
0 
0 
 
 
Intercompany Notes Payable
(678,676)
(691,398)
 
 
Deferred Income Taxes
(3,039)
(2,871)
 
 
Other Noncurrent Liabilities
0 
0 
 
 
Stockholders’ Equity
(3,674,477)
(3,496,006)
 
 
Total Liabilities and Stockholders’ Equity
$ (4,371,016)
$ (4,195,068)
 
 
Condensed Consolidating Statements of Income (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Revenue
$ 1,831,732 
$ 1,721,024 
$ 5,443,714 
$ 5,055,933 
Cost of goods sold
1,118,953 
1,056,613 
3,307,512 
3,068,579 
Gross margin
712,779 
664,411 
2,136,202 
1,987,354 
Facility and warehouse expenses
143,918 
133,330 
412,954 
387,995 
Distribution expenses
158,768 
148,572 
450,521 
432,445 
Selling, general and administrative expenses
207,887 
192,229 
616,924 
563,344 
Restructuring and acquisition related expenses
4,578 
3,594 
12,729 
12,816 
Depreciation and amortization
30,883 
30,498 
90,118 
87,136 
Operating income
166,745 
156,188 
552,956 
503,618 
Other expense (income):
 
 
 
 
Interest expense, net
14,722 
16,394 
44,250 
48,140 
Intercompany interest (income) expense, net
0 
0 
0 
0 
Loss on debt extinguishment
0 
0 
0 
324 
Change in fair value of contingent consideration liabilities
(89)
(12)
(365)
2,000 
Other income, net
(3,017)
(18)
(1,277)
(1,021)
Total other expense, net
11,794 
16,388 
43,338 
45,443 
Income before provision for income taxes
154,951 
139,800 
509,618 
458,175 
Provision for income taxes
52,475 
47,564 
177,255 
155,926 
Equity in earnings of unconsolidated subsidiaries
(1,130)
(721)
(4,200)
(1,199)
Income (Loss) from Subsidiaries, Net of Tax
0 
0 
0 
0 
Net income
101,346 
91,515 
328,163 
301,050 
Parent Company
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Revenue
0 
0 
0 
0 
Cost of goods sold
0 
0 
0 
0 
Gross margin
0 
0 
0 
0 
Facility and warehouse expenses
0 
0 
0 
0 
Distribution expenses
0 
0 
0 
0 
Selling, general and administrative expenses
8,484 
5,178 
24,876 
20,188 
Restructuring and acquisition related expenses
0 
0 
0 
0 
Depreciation and amortization
38 
50 
117 
168 
Operating income
(8,522)
(5,228)
(24,993)
(20,356)
Other expense (income):
 
 
 
 
Interest expense, net
12,049 
12,338 
36,604 
38,583 
Intercompany interest (income) expense, net
(10,146)
(12,638)
(31,347)
(35,828)
Loss on debt extinguishment
 
 
 
324 
Change in fair value of contingent consideration liabilities
0 
0 
0 
0 
Other income, net
8 
155 
35 
81 
Total other expense, net
1,911 
(145)
5,292 
3,160 
Income before provision for income taxes
(10,433)
(5,083)
(30,285)
(23,516)
Provision for income taxes
(4,012)
(1,363)
(12,061)
(8,665)
Equity in earnings of unconsolidated subsidiaries
0 
0 
0 
0 
Income (Loss) from Subsidiaries, Net of Tax
107,767 
95,235 
346,387 
315,901 
Net income
101,346 
91,515 
328,163 
301,050 
Guarantor Subsidiaries
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Revenue
1,263,397 
1,165,794 
3,758,846 
3,486,098 
Cost of goods sold
773,957 
709,985 
2,284,786 
2,107,866 
Gross margin
489,440 
455,809 
1,474,060 
1,378,232 
Facility and warehouse expenses
106,090 
95,619 
304,140 
281,805 
Distribution expenses
105,519 
98,457 
304,264 
291,187 
Selling, general and administrative expenses
124,678 
114,926 
366,298 
342,038 
Restructuring and acquisition related expenses
3,754 
882 
10,999 
7,366 
Depreciation and amortization
21,133 
19,592 
60,897 
58,556 
Operating income
128,266 
126,333 
427,462 
397,280 
Other expense (income):
 
 
 
 
Interest expense, net
460 
71 
331 
186 
Intercompany interest (income) expense, net
7,183 
6,207 
21,498 
16,279 
Loss on debt extinguishment
 
 
 
0 
Change in fair value of contingent consideration liabilities
(56)
(54)
(166)
2,183 
Other income, net
(2,497)
(1,164)
(5,448)
(4,542)
Total other expense, net
5,202 
5,168 
16,547 
9,740 
Income before provision for income taxes
123,064 
121,165 
410,915 
387,540 
Provision for income taxes
48,089 
43,986 
163,361 
144,725 
Equity in earnings of unconsolidated subsidiaries
17 
20 
47 
35 
Income (Loss) from Subsidiaries, Net of Tax
6,328 
6,151 
20,923 
24,528 
Net income
81,320 
83,350 
268,524 
267,378 
Non-Guarantor Subsidiaries
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Revenue
595,769 
588,852 
1,778,456 
1,665,247 
Cost of goods sold
372,430 
380,250 
1,116,314 
1,056,125 
Gross margin
223,339 
208,602 
662,142 
609,122 
Facility and warehouse expenses
37,828 
37,711 
108,814 
106,190 
Distribution expenses
53,249 
50,115 
146,257 
141,258 
Selling, general and administrative expenses
74,725 
72,125 
225,750 
201,118 
Restructuring and acquisition related expenses
824 
2,712 
1,730 
5,450 
Depreciation and amortization
9,712 
10,856 
29,104 
28,412 
Operating income
47,001 
35,083 
150,487 
126,694 
Other expense (income):
 
 
 
 
Interest expense, net
2,213 
3,985 
7,315 
9,371 
Intercompany interest (income) expense, net
2,963 
6,431 
9,849 
19,549 
Loss on debt extinguishment
 
 
 
0 
Change in fair value of contingent consideration liabilities
(33)
42 
(199)
(183)
Other income, net
(528)
991 
4,136 
3,440 
Total other expense, net
4,681 
11,365 
21,499 
32,543 
Income before provision for income taxes
42,320 
23,718 
128,988 
94,151 
Provision for income taxes
8,398 
4,941 
25,955 
19,866 
Equity in earnings of unconsolidated subsidiaries
(1,147)
(741)
(4,247)
(1,234)
Income (Loss) from Subsidiaries, Net of Tax
0 
0 
0 
0 
Net income
32,775 
18,036 
98,786 
73,051 
Consolidation, Eliminations
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Revenue
(27,434)
(33,622)
(93,588)
(95,412)
Cost of goods sold
(27,434)
(33,622)
(93,588)
(95,412)
Gross margin
0 
0 
0 
0 
Facility and warehouse expenses
0 
0 
0 
0 
Distribution expenses
0 
0 
0 
0 
Selling, general and administrative expenses
0 
0 
0 
0 
Restructuring and acquisition related expenses
0 
0 
0 
0 
Depreciation and amortization
0 
0 
0 
0 
Operating income
0 
0 
0 
0 
Other expense (income):
 
 
 
 
Interest expense, net
0 
0 
0 
0 
Intercompany interest (income) expense, net
0 
0 
0 
0 
Loss on debt extinguishment
 
 
 
0 
Change in fair value of contingent consideration liabilities
0 
0 
0 
0 
Other income, net
0 
0 
0 
0 
Total other expense, net
0 
0 
0 
0 
Income before provision for income taxes
0 
0 
0 
0 
Provision for income taxes
0 
0 
0 
0 
Equity in earnings of unconsolidated subsidiaries
0 
0 
0 
0 
Income (Loss) from Subsidiaries, Net of Tax
(114,095)
(101,386)
(367,310)
(340,429)
Net income
$ (114,095)
$ (101,386)
$ (367,310)
$ (340,429)
Condensed Consolidating Statements of Comprehensive Income (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Net income
$ 101,346 
$ 91,515 
$ 328,163 
$ 301,050 
Other comprehensive income (loss), net of tax:
 
 
 
 
Foreign currency translation
(33,458)
(39,329)
(43,758)
(24,013)
Net change in unrecognized gains/losses on derivative instruments, net of tax
612 
817 
1,813 
2,067 
Net change in unrealized gains/losses on pension plan, net of tax
(25)
(30)
82 
(97)
Total other comprehensive loss
(32,871)
(38,542)
(41,863)
(22,043)
Total comprehensive income
68,475 
52,973 
286,300 
279,007 
Parent Company
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Net income
101,346 
91,515 
328,163 
301,050 
Other comprehensive income (loss), net of tax:
 
 
 
 
Foreign currency translation
(33,458)
(39,329)
(43,758)
(24,013)
Net change in unrecognized gains/losses on derivative instruments, net of tax
612 
817 
1,813 
2,067 
Net change in unrealized gains/losses on pension plan, net of tax
(25)
(30)
82 
(97)
Total other comprehensive loss
(32,871)
(38,542)
(41,863)
(22,043)
Total comprehensive income
68,475 
52,973 
286,300 
279,007 
Guarantor Subsidiaries
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Net income
81,320 
83,350 
268,524 
267,378 
Other comprehensive income (loss), net of tax:
 
 
 
 
Foreign currency translation
(11,459)
(14,554)
(12,697)
(7,034)
Net change in unrecognized gains/losses on derivative instruments, net of tax
0 
0 
0 
0 
Net change in unrealized gains/losses on pension plan, net of tax
0 
0 
0 
0 
Total other comprehensive loss
(11,459)
(14,554)
(12,697)
(7,034)
Total comprehensive income
69,861 
68,796 
255,827 
260,344 
Non-Guarantor Subsidiaries
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Net income
32,775 
18,036 
98,786 
73,051 
Other comprehensive income (loss), net of tax:
 
 
 
 
Foreign currency translation
(32,073)
(37,922)
(40,656)
(22,610)
Net change in unrecognized gains/losses on derivative instruments, net of tax
14 
(229)
143 
(48)
Net change in unrealized gains/losses on pension plan, net of tax
(25)
(30)
82 
(97)
Total other comprehensive loss
(32,084)
(38,181)
(40,431)
(22,755)
Total comprehensive income
691 
(20,145)
58,355 
50,296 
Consolidation, Eliminations
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Net income
(114,095)
(101,386)
(367,310)
(340,429)
Other comprehensive income (loss), net of tax:
 
 
 
 
Foreign currency translation
43,532 
52,476 
53,353 
29,644 
Net change in unrecognized gains/losses on derivative instruments, net of tax
(14)
229 
(143)
48 
Net change in unrealized gains/losses on pension plan, net of tax
25 
30 
(82)
97 
Total other comprehensive loss
43,543 
52,735 
53,128 
29,789 
Total comprehensive income
$ (70,552)
$ (48,651)
$ (314,182)
$ (310,640)
Condensed Consolidating Statements of Cash Flows (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
Net cash provided by operating activities
$ 491,323 
$ 322,642 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
Purchases of property and equipment
(99,573)
(100,191)
Investment and intercompany note activity with subsidiaries
0 
0 
Acquisitions, net of cash acquired
(157,357)
(650,614)
Other investing activities, net
3,174 
934 
Net cash used in investing activities
(253,756)
(749,871)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
Proceeds from exercise of stock options
7,534 
6,520 
Excess tax benefit from stock-based payments
13,672 
14,455 
Taxes paid related to net share settlements of stock-based compensation awards
7,423 
0 
Borrowings under revolving credit facilities
282,421 
1,299,821 
Repayments under revolving credit facilities
(433,840)
(808,039)
Borrowings under term loans
0 
11,250 
Repayments under term loans
(16,875)
(11,250)
Borrowings under receivables securitization facility
3,858 
80,000 
Repayments under receivables securitization facility
(8,958)
0 
Repayments of other long-term debt
(50,843)
(20,532)
Payments of other obligations
(2,491)
(41,934)
Other financing activities, net
0 
(6,881)
Investment and intercompany note activity with parent
0 
0 
Dividends
0 
0 
Net cash (used in) provided by financing activities
(212,945)
523,410 
Effect of exchange rate changes on cash and equivalents
(2,141)
(2,023)
Net (decrease) increase in cash and equivalents
22,481 
94,158 
Cash and equivalents, beginning of period
114,605 
150,488 
Cash and equivalents, end of period
137,086 
244,646 
Parent Company
 
 
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
Net cash provided by operating activities
243,988 
264,870 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
Purchases of property and equipment
(3)
(37)
Investment and intercompany note activity with subsidiaries
(66,644)
(197,714)
Acquisitions, net of cash acquired
0 
0 
Other investing activities, net
0 
0 
Net cash used in investing activities
(66,647)
(197,751)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
Proceeds from exercise of stock options
7,534 
6,520 
Excess tax benefit from stock-based payments
13,672 
14,455 
Taxes paid related to net share settlements of stock-based compensation awards
7,423 
 
Borrowings under revolving credit facilities
207,000 
693,000 
Repayments under revolving credit facilities
(347,000)
(693,000)
Borrowings under term loans
 
11,250 
Repayments under term loans
(16,875)
(11,250)
Borrowings under receivables securitization facility
0 
0 
Repayments under receivables securitization facility
0 
 
Repayments of other long-term debt
(31,500)
(1,920)
Payments of other obligations
0 
0 
Other financing activities, net
 
(18,669)
Investment and intercompany note activity with parent
0 
0 
Dividends
0 
0 
Net cash (used in) provided by financing activities
(174,592)
386 
Effect of exchange rate changes on cash and equivalents
0 
0 
Net (decrease) increase in cash and equivalents
2,749 
67,505 
Cash and equivalents, beginning of period
14,930 
77,926 
Cash and equivalents, end of period
17,679 
145,431 
Guarantor Subsidiaries
 
 
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
Net cash provided by operating activities
329,740 
361,218 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
Purchases of property and equipment
(49,023)
(59,387)
Investment and intercompany note activity with subsidiaries
0 
(607)
Acquisitions, net of cash acquired
(120,766)
(520,721)
Other investing activities, net
8,832 
618 
Net cash used in investing activities
(160,957)
(580,097)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
Proceeds from exercise of stock options
0 
0 
Excess tax benefit from stock-based payments
0 
0 
Taxes paid related to net share settlements of stock-based compensation awards
0 
 
Borrowings under revolving credit facilities
0 
0 
Repayments under revolving credit facilities
0 
0 
Borrowings under term loans
 
0 
Repayments under term loans
0 
0 
Borrowings under receivables securitization facility
0 
0 
Repayments under receivables securitization facility
0 
 
Repayments of other long-term debt
(5,962)
(2,104)
Payments of other obligations
(1,596)
(407)
Other financing activities, net
 
12,340 
Investment and intercompany note activity with parent
(62,540)
(481,951)
Dividends
(219,091)
(259,653)
Net cash (used in) provided by financing activities
(164,109)
232,127 
Effect of exchange rate changes on cash and equivalents
237 
(86)
Net (decrease) increase in cash and equivalents
4,911 
13,162 
Cash and equivalents, beginning of period
32,103 
13,693 
Cash and equivalents, end of period
37,014 
26,855 
Non-Guarantor Subsidiaries
 
 
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
Net cash provided by operating activities
136,686 
(43,793)
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
Purchases of property and equipment
(50,547)
(40,767)
Investment and intercompany note activity with subsidiaries
0 
0 
Acquisitions, net of cash acquired
(36,591)
(129,893)
Other investing activities, net
(5,658)
316 
Net cash used in investing activities
(92,796)
(170,344)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
Proceeds from exercise of stock options
0 
0 
Excess tax benefit from stock-based payments
0 
0 
Taxes paid related to net share settlements of stock-based compensation awards
0 
 
Borrowings under revolving credit facilities
75,421 
606,821 
Repayments under revolving credit facilities
(86,840)
(115,039)
Borrowings under term loans
 
0 
Repayments under term loans
0 
0 
Borrowings under receivables securitization facility
3,858 
80,000 
Repayments under receivables securitization facility
(8,958)
 
Repayments of other long-term debt
(13,381)
(16,508)
Payments of other obligations
(895)
(41,527)
Other financing activities, net
 
(552)
Investment and intercompany note activity with parent
(4,104)
283,630 
Dividends
0 
0 
Net cash (used in) provided by financing activities
(26,691)
229,565 
Effect of exchange rate changes on cash and equivalents
(2,378)
(1,937)
Net (decrease) increase in cash and equivalents
14,821 
13,491 
Cash and equivalents, beginning of period
67,572 
58,869 
Cash and equivalents, end of period
82,393 
72,360 
Consolidation, Eliminations
 
 
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
Net cash provided by operating activities
(219,091)
(259,653)
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
Purchases of property and equipment
0 
0 
Investment and intercompany note activity with subsidiaries
66,644 
198,321 
Acquisitions, net of cash acquired
0 
0 
Other investing activities, net
0 
0 
Net cash used in investing activities
66,644 
198,321 
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
Proceeds from exercise of stock options
0 
0 
Excess tax benefit from stock-based payments
0 
0 
Taxes paid related to net share settlements of stock-based compensation awards
0 
 
Borrowings under revolving credit facilities
0 
0 
Repayments under revolving credit facilities
0 
0 
Borrowings under term loans
 
0 
Repayments under term loans
0 
0 
Borrowings under receivables securitization facility
0 
0 
Repayments under receivables securitization facility
0 
 
Repayments of other long-term debt
0 
0 
Payments of other obligations
0 
0 
Other financing activities, net
 
0 
Investment and intercompany note activity with parent
66,644 
198,321 
Dividends
219,091 
259,653 
Net cash (used in) provided by financing activities
152,447 
61,332 
Effect of exchange rate changes on cash and equivalents
0 
0 
Net (decrease) increase in cash and equivalents
0 
0 
Cash and equivalents, beginning of period
0 
0 
Cash and equivalents, end of period
$ 0 
$ 0