LKQ CORP, 10-K filed on 3/1/2013
Annual Report
Document and Entity Information (USD $)
In Billions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Feb. 22, 2013
Jun. 30, 2012
Document and Entity Information [Abstract]
 
 
 
Document Type
10-K 
 
 
Amendment Flag
false 
 
 
Document Period End Date
Dec. 31, 2012 
 
 
Document Fiscal Year Focus
2012 
 
 
Document Fiscal Period Focus
FY 
 
 
Trading Symbol
LKQ 
 
 
Entity Registrant Name
LKQ CORP 
 
 
Entity Central Index Key
0001065696 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Common Stock, Shares Outstanding
 
298,370,916 
 
Entity Public Float
 
 
$ 4.9 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Current Assets:
 
 
Cash and equivalents
$ 59,770 
$ 48,247 
Receivables, net
311,808 
281,764 
Inventory
900,803 
736,846 
Deferred income taxes
53,485 
45,690 
Prepaid income taxes
29,537 
17,597 
Prepaid expenses and other current assets
28,948 
19,591 
Total Current Assets
1,384,351 
1,149,735 
Property and Equipment, net
494,379 
424,098 
Intangible Assets:
 
 
Goodwill
1,690,284 
1,476,063 
Other intangibles, net
106,715 
108,910 
Other Assets
47,727 
40,898 
Total Assets
3,723,456 
3,199,704 
Current Liabilities:
 
 
Accounts payable
219,335 
210,875 
Accrued expenses:
 
 
Accrued payroll-related liabilities
44,400 
53,256 
Other accrued expenses
90,422 
77,769 
Income taxes payable
2,748 
7,262 
Contingent consideration liabilities
42,255 
600 
Other current liabilities
17,068 
18,407 
Current portion of long-term obligations
71,716 
29,524 
Total Current Liabilities
487,944 
397,693 
Long-Term Obligations, Excluding Current Portion
1,046,762 
926,552 
Deferred Income Taxes
102,275 
88,796 
Contingent Consideration Liabilities
47,754 
81,782 
Other Noncurrent Liabilities
74,627 
60,796 
Commitments and Contingencies
   
   
Stockholders’ Equity:
 
 
Common stock, $0.01 par value, 500,000,000 shares authorized, 297,810,896 and 293,897,216 shares issued and outstanding at December 31, 2012 and 2011, respectively
2,978 
2,939 
Additional paid-in capital
950,338 
901,313 
Retained earnings
1,010,019 
748,794 
Accumulated other comprehensive income (loss)
759 
(8,961)
Total Stockholders’ Equity
1,964,094 
1,644,085 
Total Liabilities and Stockholders’ Equity
$ 3,723,456 
$ 3,199,704 
Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 31, 2012
Dec. 31, 2011
Statement of Financial Position [Abstract]
 
 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
500,000,000 
500,000,000 
Common stock, shares issued
297,810,896 
293,897,216 
Common stock, shares outstanding
297,810,896 
293,897,216 
Consolidated Statements of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Income Statement [Abstract]
 
 
 
Revenue
$ 4,122,930 
$ 3,269,862 
$ 2,469,881 
Cost of goods sold
2,398,790 
1,877,869 
1,376,401 
Gross margin
1,724,140 
1,391,993 
1,093,480 
Facility and warehouse expenses
347,917 
293,423 
233,993 
Distribution expenses
375,835 
287,626 
212,718 
Selling, general and administrative expenses
495,591 
391,942 
310,228 
Restructuring and acquisition related expenses
2,751 
7,590 
668 
Depreciation and amortization
64,093 
49,929 
37,996 
Operating income
437,953 
361,483 
297,877 
Other expense (income):
 
 
 
Interest expense
31,429 
24,307 
29,765 
Loss on debt extinguishment
0 
5,345 
0 
Change in fair value of contingent consideration liabilities
1,643 
(1,408)
0 
Interest and other income, net
(4,286)
(2,532)
(2,013)
Total other expense, net
28,786 
25,712 
27,752 
Income from continuing operations before provision for income taxes
409,167 
335,771 
270,125 
Provision for income taxes
147,942 
125,507 
103,007 
Income from continuing operations
261,225 
210,264 
167,118 
Discontinued operations:
 
 
 
Income from discontinued operations, net of taxes
0 
0 
224 
Gain on sale of discontinued operations, net of taxes
0 
0 
1,729 
Income from discontinued operations
0 
0 
1,953 
Net income
$ 261,225 
$ 210,264 
$ 169,071 
Basic earnings per share(a):
 
 
 
Income from continuing operations
$ 0.88 1
$ 0.72 1
$ 0.58 1
Income from discontinued operations
$ 0.00 1
$ 0.00 1
$ 0.01 1
Total
$ 0.88 1
$ 0.72 1
$ 0.59 1
Diluted earnings per share(a):
 
 
 
Income from continuing operations
$ 0.87 1
$ 0.71 1
$ 0.57 1
Income from discontinued operations
$ 0.00 1
$ 0.00 1
$ 0.01 1
Total
$ 0.87 1
$ 0.71 1
$ 0.58 1
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Statement of Other Comprehensive Income [Abstract]
 
 
 
Net income
$ 261,225 
$ 210,264 
$ 169,071 
Other comprehensive income (loss), net of tax:
 
 
 
Foreign currency translation
12,921 
(4,273)
3,078 
Net change in unrecognized gains/losses on interest rate swaps, net of tax
(3,201)
(9,066)
8,712 
Reversal of unrealized gain on pension plan, net of tax
0 
0 
(15)
Total other comprehensive income (loss)
9,720 
(13,339)
11,775 
Total comprehensive income
$ 270,945 
$ 196,925 
$ 180,846 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net income
$ 261,225 
$ 210,264 
$ 169,071 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
70,165 
54,505 
41,428 
Stock-based compensation expense
15,634 
13,107 
9,974 
Deferred income taxes
4,222 
9,302 
8,963 
Excess tax benefit from stock-based payments
(15,737)
(7,973)
(15,000)
Other
4,515 
6,556 
(47)
Changes in operating assets and liabilities, net of effects from acquisitions and divestitures:
 
 
 
Receivables
(12,813)
(18,074)
(12,309)
Inventory
(95,042)
(90,091)
(67,795)
Prepaid expenses and other assets
(18,952)
(5,094)
(5,240)
Prepaid income taxes/income taxes payable
(774)
2,251 
7,492 
Accounts payable
(15,097)
28,589 
10,156 
Accrued expenses and other current liabilities
2,208 
(3,303)
8,056 
Other noncurrent liabilities
6,636 
11,733 
4,434 
Net cash provided by operating activities
206,190 
211,772 
159,183 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
Purchases of property and equipment
(88,255)
(86,416)
(61,438)
Proceeds from sales of property and equipment
1,057 
1,743 
1,441 
Proceeds from sale of businesses, net of cash sold
0 
0 
11,992 
Cash used in acquisitions, net of cash acquired
(265,336)
(486,934)
(143,578)
Net cash used in investing activities
(352,534)
(571,607)
(191,583)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Proceeds from exercise of stock options
17,693 
11,919 
13,962 
Excess tax benefit from stock-based payments
15,737 
7,973 
15,000 
Debt issuance costs
(253)
(11,048)
(419)
Borrowings under revolving credit facility
742,381 
1,111,369 
0 
Repayments under revolving credit facility
(855,402)
(453,867)
0 
Borrowings under term loans
200,000 
250,000 
0 
Repayments under term loans
(20,000)
(600,464)
(7,476)
Borrowings under receivables securitization facility
82,700 
0 
0 
Repayments under receivables securitization facility
(2,700)
0 
0 
Payments of other obligations
(23,084)
(4,471)
(2,105)
Net cash provided by financing activities
157,072 
311,411 
18,962 
Effect of exchange rate changes on cash and equivalents
795 
982 
221 
Net increase (decrease) in cash and equivalents
11,523 
(47,442)
(13,217)
Cash and equivalents, beginning of period
48,247 
95,689 
108,906 
Cash and equivalents, end of period
59,770 
48,247 
95,689 
Supplemental disclosure of cash paid for:
 
 
 
Income taxes, net of refunds
146,478 
113,433 
88,294 
Interest
29,026 
21,354 
27,421 
Supplemental disclosure of noncash investing and financing activities:
 
 
 
Purchase price payable, including notes issued in connection with business acquisitions
17,637 
42,865 
11,889 
Contingent consideration liabilities
5,456 
81,239 
2,000 
Stock issued in connection with business acquisitions
0 
0 
14,945 
Debt assumed with business acquisitions
3,989 
13,564 
0 
Property and equipment acquired under capital leases
14,467 
414 
0 
Property and equipment purchases not yet paid
$ 6,564 
$ 3,567 
$ 1,425 
Consolidated Statements of Stockholders' Equity (USD $)
In Thousands, except Share data
Total
Common Stock
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive (Loss) Income
Beginning Balance at Dec. 31, 2009
$ 1,179,434 
$ 2,840 
$ 814,532 
$ 369,459 
$ (7,397)
Beginning Balance, shares at Dec. 31, 2009
 
284,010,000 
 
 
 
Net income
169,071 
 
 
169,071 
 
Other comprehensive income (loss)
11,775 
 
 
 
11,775 
Stock issued in business acquisitions, shares
 
1,379,000 
 
 
 
Stock issued in business acquisitions, value
14,945 
14 
14,931 
 
 
Stock issued as director compensation, shares
 
28,000 
 
 
 
Stock issued as director compensation, value
290 
 
290 
 
 
Stock-based compensation expense
9,684 
 
9,684 
 
 
Exercise of stock options, shares
 
5,516,000 
 
 
 
Exercise of stock options, value
13,962 
55 
13,907 
 
 
Excess tax benefit from stock-based payments
15,000 
 
15,000 
 
 
Ending Balance at Dec. 31, 2010
1,414,161 
2,909 
868,344 
538,530 
4,378 
Ending Balance, shares at Dec. 31, 2010
 
290,933,000 
 
 
 
Net income
210,264 
 
 
210,264 
 
Other comprehensive income (loss)
(13,339)
 
 
 
(13,339)
Stock issued in business acquisitions, value
0 
 
 
 
 
Restricted stock units vested, shares
 
164,000 
 
 
 
Restricted stock units vested, value
 
2 
(2)
 
 
Stock issued as director compensation, shares
 
32,000 
 
 
 
Stock issued as director compensation, value
399 
 
399 
 
 
Stock-based compensation expense
12,708 
 
12,708 
 
 
Exercise of stock options, shares
 
2,768,000 
 
 
 
Exercise of stock options, value
11,919 
28 
11,891 
 
 
Excess tax benefit from stock-based payments
7,973 
 
7,973 
 
 
Ending Balance at Dec. 31, 2011
1,644,085 
2,939 
901,313 
748,794 
(8,961)
Ending Balance, shares at Dec. 31, 2011
 
293,897,000 
 
 
 
Net income
261,225 
 
 
261,225 
 
Other comprehensive income (loss)
9,720 
 
 
 
9,720 
Stock issued in business acquisitions, value
0 
 
 
 
 
Restricted stock units vested, shares
 
467,000 
 
 
 
Restricted stock units vested, value
 
5 
(5)
 
 
Stock-based compensation expense
15,634 
 
15,634 
 
 
Exercise of stock options, shares
 
3,447,000 
 
 
 
Exercise of stock options, value
17,693 
34 
17,659 
 
 
Excess tax benefit from stock-based payments
15,737 
 
15,737 
 
 
Ending Balance at Dec. 31, 2012
$ 1,964,094 
$ 2,978 
$ 950,338 
$ 1,010,019 
$ 759 
Ending Balance, shares at Dec. 31, 2012
 
297,811,000 
 
 
 
Business
Business
Business
The 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 "the Company," "we," "us," or "our" are used in this document, those terms refer to LKQ Corporation and its consolidated subsidiaries.
We provide replacement parts, components and systems needed to repair cars and trucks. We are the nation's largest provider of alternative vehicle collision replacement products, and a leading provider of alternative vehicle mechanical replacement products. We also have operations in the United Kingdom, Canada, Mexico and Central America. In total, we operate more than 500 facilities.
As described in Note 3, "Discontinued Operations," during 2010, we sold certain of our self service facilities. These facilities qualified for treatment as discontinued operations. The financial results of these facilities are segregated from our continuing operations and presented as discontinued operations in the Consolidated Statements of Income for all periods presented. The remaining liabilities of discontinued operations are not material to our financial position for the periods presented.
In 2012, our Board of Directors approved a two-for-one split of our common stock. The stock split was completed in the form of a stock dividend that was issued on September 18, 2012 to stockholders of record at the close of business on August 28, 2012. The stock began trading on a split adjusted basis on September 19, 2012. The Company’s historical share and per share information within this Annual Report on Form 10-K has been retroactively adjusted to give effect to this stock split.
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of LKQ Corporation and its subsidiaries. All intercompany transactions and accounts have been eliminated.
Use of Estimates
In preparing our financial statements in conformity with accounting principles generally accepted in the United States we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition
The majority of our revenue is derived from the sale of vehicle parts. Revenue is recognized when the products are shipped 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 $24.7 million and $22.8 million at December 31, 2012 and 2011, respectively. We present taxes assessed by governmental authorities collected from customers on a net basis. Therefore, the taxes are excluded from revenue on our Consolidated Statements of Income and are shown as a current liability on our Consolidated Balance Sheets until remitted. Revenue from the sale of separately-priced extended warranty contracts is reported as deferred revenue and recognized ratably over the term of the contracts or three years in the case of lifetime warranties. We recognize revenue from the sale of scrap, cores and other metals when title has transferred, which typically occurs upon delivery to the customer.
Shipping & Handling
Revenue also includes amounts billed to customers related to shipping and handling of approximately $25.6 million, $23.9 million and $17.3 million during the years ended December 31, 2012, 2011 and 2010, respectively. Distribution expenses in the accompanying Consolidated Statements of Income are the costs incurred to prepare and deliver products to customers.
Receivables and Allowance for Doubtful Accounts
In the normal course of business, we extend credit to customers after a review of each customer's credit history. We recorded a reserve for uncollectible accounts of approximately $9.5 million and $8.3 million at December 31, 2012 and 2011, respectively. The reserve is based upon the aging of the accounts receivable, our assessment of the collectability of specific customer accounts and historical experience. Receivables are written off once collection efforts have been exhausted. Recoveries of receivables previously written off are recorded when received.
Concentrations of Credit Risk
Financial instruments that potentially subject us to significant concentration of credit risk consist primarily of cash and equivalents and accounts receivable. We control our exposure to credit risk associated with these instruments by (i) placing our cash and equivalents with several major financial institutions; (ii) holding high-quality financial instruments; and (iii) maintaining strict policies over credit extension that include credit evaluations, credit limits and monitoring procedures. In addition, our overall credit risk with respect to accounts receivable is limited to some extent because our customer base is composed of a large number of geographically diverse customers.
Inventory
We classify our inventory into the following categories: aftermarket and refurbished vehicle replacement products; and salvage and remanufactured vehicle replacement products. This classification reflects the historically distinct distribution channels used in the sale of alternative repair products in North America, although we continue to work toward integrating these distribution channels.
An aftermarket product is a new vehicle product manufactured by a company other than the original equipment manufacturer. Cost is established based on the average price we pay for parts, and includes expenses incurred for freight and overhead costs. For items purchased from foreign companies, import fees and duties and transportation insurance are also included. Refurbished inventory cost is based on the average price we pay for cores, which are recycled automotive parts that are not suitable for sale as a replacement part without further processing. The cost of our refurbished inventory also includes expenses incurred for freight, labor and other overhead.
A salvage product is a recycled vehicle part suitable for sale as a replacement part. Cost is established based upon the price we pay for a vehicle, including auction, storage and towing fees, as well as expenditures for buying and dismantling. Inventory carrying value is determined using the average cost to sales percentage at each of our facilities and applying that percentage to the facility's inventory at expected selling prices. The average cost to sales percentage is derived from each facility's historical vehicle profitability for salvage vehicles purchased at auction or from contracted rates for salvage vehicles acquired under certain direct procurement arrangements. Remanufactured inventory cost is based upon the price paid for cores, and also includes expenses incurred for freight, direct manufacturing costs and overhead.
For all inventory, carrying value is recorded at the lower of cost or market and is reduced to reflect the age of the inventory and current anticipated demand. If actual demand differs from our estimates, additional reductions to inventory carrying value would be necessary in the period such determination is made.
Inventory consists of the following (in thousands):
 
December 31,
 
2012
 
2011
Aftermarket and refurbished products
$
523,677

 
$
445,787

Salvage and remanufactured products
377,126

 
291,059

 
$
900,803

 
$
736,846


Property and Equipment
Property and equipment are recorded at cost. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized. Construction in progress consists primarily of building and land improvements at our existing facilities. Depreciation is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term of the related lease and reasonably assured renewal periods, if shorter.
The internal and external costs incurred to develop internal use computer software during the application development stage of the implementation, including the design of the chosen path, are capitalized. Other costs, including expenses incurred during the preliminary project stage, training expenses, data conversion costs and expenses incurred in the post implementation stage are expensed in the period incurred. Capitalized costs are amortized ratably over the useful life of the software when the software becomes operational. Upgrades and enhancements to internal use software are capitalized only if the costs result in additional functionality. We do not plan to sell or market our internal use computer software to third parties.
Our estimated useful lives are as follows:
Land improvements
10-20 years
Buildings and improvements
20-40 years
Furniture, fixtures and equipment
3-20 years
Computer equipment and software
3-10 years
Vehicles and trailers
3-10 years

Property and equipment consists of the following (in thousands):
 
December 31,
 
2012
 
2011
Land and improvements
$
87,720

 
$
81,170

Buildings and improvements
133,368

 
119,414

Furniture, fixtures and equipment
243,565

 
192,514

Computer equipment and software
91,588

 
79,195

Vehicles and trailers
51,187

 
40,825

Leasehold improvements
91,280

 
69,079

 
698,708

 
582,197

Less—Accumulated depreciation
(231,130
)
 
(179,950
)
Construction in progress
26,801

 
21,851

 
$
494,379

 
$
424,098


Intangibles
Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer relationships and covenants not to compete.
Goodwill is tested for impairment at least annually, and we performed annual impairment tests during the fourth quarters of 2012, 2011 and 2010. The results of all of these tests indicated that goodwill was not impaired.
The changes in the carrying amount of goodwill by reportable segment are as follows (in thousands):
 
North America
 
Europe
 
Total
Balance as of January 1, 2010
$
938,783

 
$
—

 
$
938,783

Business acquisitions and adjustments to previously recorded goodwill
91,757

 
—

 
91,757

Exchange rate effects
2,433

 
—

 
2,433

Balance as of December 31, 2010
$
1,032,973

 
$
—

 
$
1,032,973

Business acquisitions and adjustments to previously recorded goodwill
105,177

 
337,031

 
442,208

Exchange rate effects
(1,520
)
 
2,402

 
882

Balance as of December 31, 2011
$
1,136,630

 
$
339,433

 
$
1,476,063

Business acquisitions and adjustments to previously recorded goodwill
201,742

 
(4,140
)
 
197,602

Exchange rate effects
1,459

 
15,160

 
16,619

Balance as of December 31, 2012
$
1,339,831

 
$
350,453

 
$
1,690,284


In 2011 and 2012, we finalized the valuation of certain intangible assets acquired related to our 2010 and 2011 acquisitions, respectively. As these adjustments did not have a material impact on our financial position or results of operations, we recorded these adjustments to goodwill and amortization expense in 2011 and 2012, respectively.
The components of other intangibles are as follows (in thousands):
 
December 31, 2012
 
December 31, 2011
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Trade names and trademarks
$
118,422

 
$
(21,599
)
 
$
96,823

 
$
115,954

 
$
(16,305
)
 
$
99,649

Customer relationships
14,426

 
(6,642
)
 
7,784

 
10,050

 
(3,065
)
 
6,985

Covenants not to compete
3,654

 
(1,546
)
 
2,108

 
3,194

 
(918
)
 
2,276

 
$
136,502

 
$
(29,787
)
 
$
106,715

 
$
129,198

 
$
(20,288
)
 
$
108,910


In 2012, we recorded $0.6 million of trade names, $4.1 million of customer relationships and $0.6 million of covenants not to compete resulting from our 2012 acquisitions and adjustments to certain preliminary intangible asset valuations from our 2011 acquisitions. In 2011, we recorded $40.1 million of trade names, $5.7 million of customer relationships and $1.5 million of covenants not to compete resulting from our 2011 acquisitions and adjustments to certain preliminary intangible asset valuations from our 2010 acquisitions. The trade names recorded in 2011 included $39.3 million for the Euro Car Parts trade name related to our acquisition of Euro Car Parts Holdings Limited (“ECP”) effective October 1, 2011. 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 10 years) on either a straight-line or accelerated basis. Covenants not to compete are amortized over the lives of the respective agreements, which range from one to five years, on a straight-line basis. Amortization expense for intangibles was $9.5 million, $7.9 million and $4.2 million during the years ended December 31, 2012, 2011 and 2010, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2017 is $8.8 million, $7.9 million, $7.1 million, $6.3 million and $6.0 million, respectively.
Impairment of Long-Lived Assets
Long-lived assets are reviewed for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. If such review indicates that the carrying amount of long-lived assets is not recoverable, the carrying amount of such assets is reduced to fair value. There were no material adjustments to the carrying value of long-lived assets of continuing operations during the years ended December 31, 2012, 2011 or 2010.
Product Warranties
Some of our salvage mechanical products are sold with a standard six month warranty against defects. Additionally, some of our remanufactured engines are sold with a standard three year warranty against defects. We also provide a limited lifetime warranty for certain of our aftermarket products. We record the estimated warranty costs at the time of sale using historical warranty claim information to project future warranty claims activity. The changes in the warranty reserve are as follows (in thousands):
Balance as of January 1, 2011
$
2,063

Warranty expense
22,364

Warranty claims
(20,802
)
Business acquisitions
3,722

Balance as of December 31, 2011
$
7,347

Warranty expense
29,628

Warranty claims
(27,514
)
Business acquisitions
1,113

Balance as of December 31, 2012
$
10,574


For an additional fee, we also sell extended warranty contracts for certain mechanical products. The expense related to extended warranty claims is recognized when the claim is made.
Self-Insurance Reserves
We self-insure a portion of employee medical benefits under the terms of our employee health insurance program. We purchase certain stop-loss insurance to limit our liability exposure. We also self-insure a portion of our property and casualty risk, which includes automobile liability, general liability, directors and officers liability, workers' compensation and property coverage, under deductible insurance programs. The insurance premium costs are expensed over the contract periods. A reserve for liabilities associated with these losses is established for claims filed and claims incurred but not yet reported based upon our estimate of ultimate cost, which is calculated using analyses of historical data. We monitor new claims and claim development as well as trends related to the claims incurred but not reported in order to assess the adequacy of our insurance reserves. Total self-insurance reserves were $44.1 million and $37.4 million, including $21.5 million and $18.2 million classified as Other Accrued Expenses, as of December 31, 2012 and 2011, respectively. The remaining balances of self-insurance reserves are classified as Other Noncurrent Liabilities, which reflects management's estimates of when claims will be paid. The reserves presented on the Consolidated Balance Sheets are net of claims deposits of $0.5 million at both December 31, 2012 and 2011. In addition to these claims deposits, we had outstanding letters of credit of $37.1 million and $31.8 million at December 31, 2012 and 2011, respectively, to guarantee self-insurance claims payments. While we do not expect the amounts ultimately paid to differ significantly from our estimates, our insurance reserves and corresponding expenses could be affected if future claims experience differs significantly from historical trends and assumptions.
Income Taxes
Current income taxes are provided on income reported for financial reporting purposes, adjusted for transactions that do not enter into the computation of income taxes payable in the same year. Deferred income taxes have been provided to show the effect of temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before we are able to realize their benefit or that future deductibility is uncertain.
We recognize the benefits of uncertain tax positions taken or expected to be taken in tax returns in the provision for income taxes only for those positions that are more likely than not to be realized. We follow a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. Our policy is to include interest and penalties associated with income tax obligations in income tax expense.
U.S. federal income taxes are not provided on our interest in undistributed earnings of foreign subsidiaries when it is management's intent that such earnings will remain invested in those subsidiaries or other foreign subsidiaries. Taxes will be provided on these earnings in the period in which a decision is made to repatriate the earnings.
Depreciation Expense
Included in Cost of Goods Sold on the Consolidated Statements of Income is depreciation expense associated with our refurbishing, remanufacturing, and furnace operations and our distribution centers.
Rental Expense
We recognize rental expense on a straight-line basis over the respective lease terms, including reasonably-assured renewal periods, for all of our operating leases.
Foreign Currency Translation
For most of our foreign operations, the local currency is the functional currency. Assets and liabilities are translated into U.S. dollars at the period-ending exchange rate. Statements of Income amounts are translated to U.S. dollars using average exchange rates during the period. Translation gains and losses are reported as a component of Accumulated Other Comprehensive Income (Loss) in stockholders' equity.
Recent Accounting Pronouncements
Effective January 1, 2012, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2011-05, “Presentation of Comprehensive Income” and ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.” These ASUs eliminate the option to present the components of other comprehensive income in the statement of changes in stockholders’ equity. Instead, entities have the option to present the components of net income, the components of other comprehensive income and total comprehensive income in a single continuous statement or in two separate but consecutive statements. The amendments did not change the items reported in other comprehensive income or when an item of other comprehensive income is reclassified to net income. As a result, the adoption of this guidance did not affect our financial position, results of operations or cash flows. We have presented the components of net income, the components of other comprehensive income and total comprehensive income in two separate but consecutive statements.
Additionally, in February 2013, the FASB issued ASU 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” This update requires disclosure of amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2012. The update does not change the items reported in other comprehensive income or when an item of other comprehensive income is reclassified to net income. As this guidance only revises the presentation and disclosures related to the reclassification of items out of accumulated other comprehensive income, the adoption of this guidance will not affect our financial position, results of operations or cash flows.
Effective January 1, 2012, we adopted FASB ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” This update clarifies existing fair value measurement requirements, amends existing guidance primarily related to fair value measurements for financial instruments, and requires enhanced disclosures on fair value measurements. The additional disclosures are specific to Level 3 fair value measurements, transfers between Level 1 and Level 2 of the fair value hierarchy, financial instruments not measured at fair value and use of an asset measured or disclosed at fair value differing from its highest and best use. We applied the provisions of this ASU to our fair value measurements during the current year, however, the adoption did not have a material effect on our financial statements. See Note 7, "Fair Value Measurements," for the required disclosures.
Discontinued Operations
Discontinued Operations
Discontinued Operations
In connection with our 2009 agreement with Schnitzer Steel Industries, Inc., we agreed to sell two self service retail facilities in Dallas, Texas on January 15, 2010 for $12.0 million. We recognized a gain on the sale of approximately $1.7 million, net of tax, in our first quarter 2010 results. Goodwill totaling $6.7 million was included in the cost basis of net assets disposed when determining the gain on sale.
The self service facilities that we sold qualified for treatment as discontinued operations. The financial results of these facilities are segregated from our continuing operations and presented as discontinued operations in the Consolidated Statements of Income for all periods presented. The remaining liabilities of discontinued operations are not material to our financial position for the periods presented.
Results of operations for the discontinued operations are as follows (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Revenue
$
—

 
$
—

 
$
686

Income before income tax provision
$
—

 
$
—

 
$
355

Income tax provision
—

 
—

 
131

Income from discontinued operations, net of taxes, before gain on sale of discontinued operations
—

 
—

 
224

Gain on sale of discontinued operations, net of taxes of $1,015
—

 
—

 
1,729

Income from discontinued operations, net of taxes
$
—

 
$
—

 
$
1,953

Equity Incentive Plans
Equity Incentive Plans
Equity Incentive Plans
In order to attract and retain employees, non-employee directors, consultants, and other persons associated with us, we may grant qualified and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares and performance units under the LKQ Corporation 1998 Equity Incentive Plan (the “Equity Incentive Plan”). In the first quarter of 2012, our Board of Directors approved an amendment to the Equity Incentive Plan, which was subsequently approved by our stockholders at our 2012 Annual Meeting in May 2012, to explicitly allow participation of our non-employee directors, to allow issuance of shares of our common stock to non-employee directors in lieu of cash compensation, to increase the number of shares available for issuance under the Equity Incentive Plan by 1,088,834, and to make certain updating amendments.
In connection with the amendment to the Equity Incentive Plan, our Board of Directors approved the termination of the Stock Option and Compensation Plan for Non-Employee Directors (the “Director Plan”), other than with respect to any options currently outstanding under the Director Plan. We had not issued options under the Director Plan since 2007. The increase in the number of shares available for issuance under the Equity Incentive Plan as approved by our Board of Directors in the first quarter of 2012 represented the remaining number of shares available for issuance under the Director Plan as of December 31, 2011.
The total number of shares approved by our stockholders for issuance under the Equity Incentive Plan is 69.9 million shares, subject to antidilution and other adjustment provisions, which includes the 1.1 million shares authorized in 2012 and 12.8 million shares authorized in 2011. Of the shares approved by our stockholders for issuance under the Equity Incentive Plan, 14.6 million shares remained available for issuance as of December 31, 2012.
Most of our RSUs, stock options, and restricted stock vest over a period of five years. Vesting of the awards is subject to a continued service condition. Each RSU converts into one share of LKQ common stock on the applicable vesting date. Shares of restricted stock may not be sold, pledged or otherwise transferred until they vest. Stock options expire ten years from the date they are granted. We expect to issue new shares of common stock to cover past and future equity grants.
As a result of the stock split in September 2012 as discussed in Note 1, "Business," the following adjustments were made in accordance with the nondiscretionary antidilution provisions of our 1998 Equity Incentive Plan:  the number of shares available for issuance doubled; the number of outstanding RSUs, shares subject to stock options and shares of restricted stock all also doubled; and the exercise prices of outstanding stock options were reduced to 50% of the exercise prices prior to the stock split. 
A summary of transactions in our stock-based compensation plans is as follows:
 
Shares
Available For
Grant
 
RSUs
 
Stock Options
 
Restricted Stock
Number
Outstanding
 
Weighted
Average
Grant Date
Fair Value
 
Number
Outstanding
 
Weighted
Average
Exercise
Price
 
Number
Outstanding
 
Weighted
Average
Grant Date
Fair Value
Balance, January 1, 2010
7,285,606

 
—

 
$
—

 
18,658,814

 
$
4.41

 
404,000

 
$
9.50

Granted
(3,423,066
)
 
—

 
—

 
3,423,066

 
9.98

 
—

 
—

Exercised
—

 
—

 
—

 
(5,516,310
)
 
2.53

 
—

 
—

Vested
—

 
—

 
—

 
—

 
—

 
(96,000
)
 
9.51

Cancelled
417,640

 
—

 
—

 
(417,640
)
 
8.06

 
—

 
—

Balance, December 31, 2010
4,280,180

 
—

 
$
—

 
16,147,930

 
$
6.14

 
308,000

 
$
9.50

Granted
(1,643,348
)
 
1,643,348

 
11.80

 
—

 
—

 
—

 
—

Shares Issued for Director Compensation
(31,166
)
 
—

 
—

 
—

 
—

 
—

 
—

Exercised
—

 
—

 
—

 
(2,768,038
)
 
4.31

 
—

 
—

Vested
—

 
(164,862
)
 
11.84

 
—

 
—

 
(96,000
)
 
9.51

Cancelled
346,704

 
(44,904
)
 
11.77

 
(301,800
)
 
8.44

 
—

 
—

Additional Shares Authorized
12,800,000

 
—

 
—

 
—

 
—

 
—

 
—

Balance, December 31, 2011
15,752,370

 
1,433,582

 
$
11.80

 
13,078,092

 
$
6.47

 
212,000

 
$
9.49

Granted
(1,504,410
)
 
1,504,410

 
15.86

 
—

 
—

 
—

 
—

Exercised
—

 
—

 
—

 
(3,446,472
)
 
5.13

 
—

 
—

Vested
—

 
(467,208
)
 
13.09

 
—

 
—

 
(96,000
)
 
9.51

Cancelled
395,972

 
(119,422
)
 
14.03

 
(276,550
)
 
8.30

 
—

 
—

Balance, December 31, 2012
14,643,932

 
2,351,362

 
$
14.02

 
9,355,070

 
$
6.90

—

116,000

 
$
9.47


In January 2013, our Board of Directors granted 594,700 RSUs to employees. The annual award to executive officers has not been granted as of March 1, 2013.
The following table summarizes information about expected to vest RSUs and restricted stock, and vested and expected to vest options at December 31, 2012:
 
Shares
 
Weighted
Average
Remaining
Contractual
Life (Yrs)
 
Intrinsic
Value
(in thousands)
 
Weighted
Average
Exercise
Price
RSUs
2,319,877

 
3.5
 
$
48,949

 
$
—

Stock options
9,079,684

 
5.0
 
129,421

 
6.85

Restricted stock
116,000

 
0.6
 
2,448

 
—


The aggregate intrinsic value represents the total pre-tax intrinsic value based on our closing stock price of $21.10 on December 31, 2012. This amount changes based upon the fair market value of our common stock. The aggregate intrinsic value of total outstanding RSUs and restricted stock was $49.6 million and $2.4 million at December 31, 2012, respectively.
The following table summarizes information about outstanding and exercisable stock options at December 31, 2012:
 
 
Outstanding
 
Exercisable
Range of Exercise Prices
 
Shares
 
Weighted
Average
Remaining
Contractual
Life (Yrs)
 
Weighted
Average
Exercise
Price
 
Shares
 
Weighted
Average
Remaining
Contractual
Life (Yrs)
 
Weighted
Average
Exercise
Price
$1.50 - $3.50
 
1,357,538

 
1.6
 
$
2.11

 
1,357,538

 
1.6
 
$
2.11

$3.51 - $5.50
 
1,676,760

 
3.5
 
4.85

 
1,676,760

 
3.5
 
4.85

$5.51 - $7.50
 
2,193,800

 
6.0
 
5.98

 
1,448,330

 
6.0
 
5.98

$7.51 - $9.50
 
215,666

 
6.1
 
9.21

 
160,733

 
5.8
 
9.25

$9.51 +
 
3,911,306

 
6.3
 
9.84

 
2,253,124

 
6.0
 
9.78

 
 
9,355,070

 
5.0
 
$
6.90

 
6,896,485

 
4.5
 
$
6.26


The aggregate intrinsic value of outstanding and exercisable stock options at December 31, 2012 was $132.8 million and $102.3 million, respectively.
The fair value of RSUs and restricted stock is based on the market price of LKQ stock on the date of issuance. When estimating forfeitures, we consider voluntary and involuntary termination behavior as well as analysis of historical forfeitures. For valuing RSUs, we used forfeiture rates of 10% for grants to employees and 0% for grants to non-employee directors and executive officers.
The fair value of RSUs that vested during the years ended December 31, 2012 and 2011 was $7.8 million and $2.2 million, respectively. There were no RSU vestings during the year ended December 31, 2010 as we did not issue RSUs prior to 2011. The fair value of restricted stock that vested during the years ended December 31, 2012, 2011 and 2010 was approximately $1.6 million, $1.1 million and $1.0 million, respectively.
We did not grant any stock options during the years ended December 31, 2012 and 2011. For the stock options granted during 2010, the fair value was estimated using the Black-Scholes option-pricing model. The following table summarizes the weighted average assumptions used to compute the fair value of stock option grants:
 
Year Ended
December 31,
 
2010
Expected life (in years)
6.4

Risk-free interest rate
3.17
%
Volatility
43.9
%
Dividend yield
0
%
Weighted average fair value of options granted
$
4.77


Expected life—The expected life represents the period that our stock-based awards are expected to be outstanding. At the last grant date (in 2010), we used the simplified method in developing an estimate of expected life of stock options because we lacked sufficient data to calculate an expected life based on historical experience. Our first annual option grant with a full five year vesting period since we became a public company was on January 13, 2006, and these awards became fully vested in January 2011. Additionally, our options have a ten year life while our existence as a public company was just over six years when the 2010 grant was made. Therefore, we used the simplified expected term method as permitted by the Securities and Exchange Commission Staff Accounting Bulletin No. 107, as amended by Staff Accounting Bulletin No. 110.
Risk-free interest rate—We base the risk-free interest rate used in the Black-Scholes option-pricing model on the implied yield available on U.S. Treasury zero-coupon issues with the same or substantially equivalent remaining term.
Expected volatility—We use the trading history and historical volatility of our common stock in determining an estimated volatility factor for the Black-Scholes option-pricing model.
Expected dividend yield—We have not declared and have no plans to declare dividends and have therefore used a zero value for the expected dividend yield in the Black-Scholes option-pricing model.
Estimated forfeitures—When estimating forfeitures, we consider voluntary and involuntary termination behavior as well as analysis of historical forfeitures. A forfeiture rate of 9% was used for valuing employee option grants, while a forfeiture rate of 0% was used for valuing non-employee director and executive officer option grants.
The total grant-date fair value of options that vested during the years ended December 31, 2012, 2011 and 2010 was $7.2 million, $8.6 million and $7.7 million respectively. The total intrinsic value (market value of stock less option exercise price) of stock options exercised was $45.3 million, $24.8 million and $43.2 million during the years ended December 31, 2012, 2011 and 2010, respectively.
We recognize compensation expense on a straight-line basis over the requisite service period of the award. The components of pre-tax stock-based compensation expense are as follows (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
RSUs
$
8,411

 
$
3,666

 
$
—

Stock options
6,310

 
8,129

 
8,771

Restricted stock
913

 
913

 
913

Stock issued to non-employee directors
—

 
399

 
290

Total stock-based compensation expense
$
15,634

 
$
13,107

 
$
9,974


The following table sets forth the classification of total stock-based compensation expense included in our Consolidated Statements of Income (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Cost of goods sold
$
376

 
$
327

 
$
278

Facility and warehouse expenses
2,465

 
2,391

 
2,069

Selling, general and administrative expenses
12,793

 
10,389

 
7,627

 
15,634

 
13,107

 
9,974

Income tax benefit
(6,097
)
 
(5,059
)
 
(3,920
)
Total stock-based compensation expense, net of tax
$
9,537

 
$
8,048

 
$
6,054


We have not capitalized any stock-based compensation costs during the years ended December 31, 2012, 2011 or 2010.
As of December 31, 2012, unrecognized compensation expense related to unvested RSUs, stock options and restricted stock is expected to be recognized as follows (in thousands):
 
RSUs
 
Stock
Options
 
Restricted
Stock
 
Total
2013
$
8,254

 
$
4,580

 
$
208

 
$
13,042

2014
7,897

 
3,007

 
139

 
11,043

2015
7,861

 
75

 
—

 
7,936

2016
4,394

 
—

 
—

 
4,394

2017
141

 
—

 
—

 
141

Total unrecognized compensation expense
$
28,547

 
$
7,662

 
$
347

 
$
36,556

Long-Term Obligations
Long-Term Obligations
Long-Term Obligations
Long-Term Obligations consist of the following (in thousands):
 
December 31,
 
2012
 
2011
Senior secured credit agreement:
 
 
 
Term loans payable
$
420,625

 
$
240,625

Revolving credit facility
553,964

 
660,730

Receivables securitization facility
80,000

 
—

Notes payable through October 2018 at weighted average interest rates of 1.7% and 2.0%, respectively
42,398

 
38,338

Other long-term debt at weighted average interest rates of 3.3% and 3.2%, respectively
21,491

 
16,383

 
1,118,478

 
956,076

Less current maturities
(71,716
)
 
(29,524
)
 
$
1,046,762

 
$
926,552



The scheduled maturities of long-term obligations outstanding at December 31, 2012 are as follows (in thousands):
2013
$
71,716

2014
54,611

2015
138,323

2016
847,759

2017
848

Thereafter
5,221

 
$
1,118,478


Senior Secured Credit Agreement
On March 25, 2011, we entered into a credit agreement with the several lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America N.A., as syndication agent, RBS Citizens, N.A. and Wells Fargo Bank, National Association, as co-documentation agents, and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBS Citizens, N.A. and Wells Fargo Securities, LLC, as joint lead arrangers and joint bookrunners, which was amended on September 30, 2011 (as amended, the “Credit Agreement”). The Credit Agreement provides for borrowings up to $1.4 billion, consisting of (1) a $950 million revolving credit facility (the “Revolving Credit Facility”), (2) a $250 million term loan facility (the “Term Loan Facility”) and (3) an additional term loan facility of up to $200 million (“New Term Loan Facility”). Under the Revolving Credit Facility, we are permitted to draw up to the U.S. dollar equivalent of $500 million in Canadian dollars, pounds sterling, euros, and other agreed-upon currencies. The Credit Agreement also provides for (a) the issuance of up to $125 million of letters of credit under the Revolving Credit Facility in agreed-upon currencies, (b) the issuance of up to $25 million of swing line loans under the Revolving Credit Facility, and (c) the opportunity to increase the amount of the Revolving Credit Facility or obtain incremental term loans up to $400 million. Outstanding letters of credit and swing line loans are taken into account when determining availability under the Revolving Credit Facility. In January 2012, we borrowed the full $200 million available under the New Term Loan Facility, which we used to pay down a portion of our Revolving Credit Facility borrowings.
The obligations under the Credit Agreement are unconditionally guaranteed by our direct and indirect domestic subsidiaries and certain foreign subsidiaries. Obligations under the Credit Agreement, including the related guarantees, are collateralized by a security interest and lien on a majority of the existing and future personal property of, and a security interest in 100% of our equity interest in, each of our existing and future direct and indirect domestic and foreign subsidiaries, provided that if a pledge of 100% of a foreign subsidiary’s voting equity interests gives rise to an adverse tax consequence, such pledge shall be limited to 65% of the voting equity interest of the first tier foreign subsidiary. In the event that we obtain and maintain certain ratings from S&P (BBB- or better, with stable or better outlook) or Moody’s (Baa3 or better, with stable or better outlook), and upon our request, the security interests in and liens on the collateral described above shall be released. As of December 31, 2012, our our credit ratings from Moody’s and S&P were Ba2 and BB+, respectively, with a stable outlook.
Amounts under the Revolving Credit Facility are due and payable upon maturity of the Credit Agreement in March 2016. Amounts under the Term Loan Facility are due and payable in quarterly installments, with the annual payments equal to 5% of the original principal amount in the first and second years, 10% of the original principal amount in the third and fourth years, and 15% of the original principal amount in the fifth year. The remaining balance under the Term Loan Facility is due and payable on the maturity date of the Credit Agreement. Amounts under the New Term Loan Facility are due and payable in quarterly installments beginning after March 31, 2012, with the annual payments equal to 5% of the original principal amount in the first and second years and 10% of the original principal amount in the third and fourth years. The remaining balance under the New Term Loan Facility is due and payable on the maturity date of the Credit Agreement. We are required to prepay the Term Loan Facility and the New Term Loan Facility 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, among other things (i) incur indebtedness, except for certain exclusions such as borrowings on a permitted receivables facility up to $100 million, (ii) incur liens, (iii) enter into any merger, consolidation, amalgamation, or otherwise liquidate or dissolve the Company, (iv) dispose of certain property, (v) make dividend payments, repurchase our stock, or enter into derivative contracts indexed to the value of our common stock, (vi) make certain investments, including the acquisition of assets constituting a business or the stock of a business designated as a non-guarantor, (vii) make optional prepayments of subordinated debt, (viii) enter into sale-leaseback transactions, (ix) issue preferred stock, redeemable stock, convertible stock or other similar equity instruments, and (x) enter into hedge agreements for speculative purposes or otherwise not in the ordinary course of business. The Credit Agreement also contains financial and affirmative covenants under which we (i) may not exceed a maximum net leverage ratio of 3.00 to 1.00, except in connection with permitted acquisitions with aggregate consideration in excess of $200 million during any period of four consecutive fiscal quarters in which case the maximum net leverage ratio may increase to 3.50 to 1.00 for the subsequent four fiscal quarters and (ii) are required to maintain a minimum interest coverage ratio of 3.00 to 1.00. We were in compliance with all restrictive covenants under the Credit Agreement as of December 31, 2012 and 2011.
The Credit Agreement contains events of default that include (i) our failure to pay principal when due or interest, fees, or other amounts after grace periods, (ii) our material breach of any representation or warranty, (iii) covenant defaults, (iv) cross defaults to certain other indebtedness, (v) bankruptcy, (vi) certain ERISA events, (vii) material judgments, (viii) change of control, and (ix) failure of subordinated indebtedness to be validly and sufficiently subordinated.
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 total 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 6, "Derivative Instruments and Hedging Activities," the weighted average interest rates on borrowings outstanding against the Credit Agreement at December 31, 2012 and 2011 were 2.85% and 2.59%, respectively. We also pay a commitment fee based on the average daily unused amount of the Revolving Credit Facility. The commitment fee is subject to change in increments of 0.05% depending on our total leverage ratio. In addition, we pay a participation commission on outstanding letters of credit at an applicable rate based on our total leverage ratio, as well as a fronting fee of 0.125% to the issuing bank, which are due quarterly in arrears. Borrowings under the Credit Agreement totaled $974.6 million and $901.4 million at December 31, 2012 and 2011, respectively, of which $31.9 million and $12.5 million were classified as current maturities, respectively. As of December 31, 2012, there were $39.9 million of outstanding letters of credit. The amounts available under the Revolving Credit Facility are reduced by the amounts outstanding under letters of credit, and thus availability on the Revolving Credit Facility at December 31, 2012 was $356.1 million.
In 2011, we incurred a loss on debt extinguishment of $5.3 million related to the write off of the unamortized balance of capitalized debt issuance costs under our previous debt agreement. The amount of the write off excludes debt issuance cost amortization, which is recorded as a component of interest expense. We incurred $11.0 million in fees related to the execution of the Credit Agreement during 2011. These fees were capitalized within Other Assets on our Consolidated Balance Sheets and are amortized over the term of the agreement.
Receivables Securitization Facility
On September 28, 2012, we entered into a three year receivables securitization facility (the "Receivables Facility") pursuant to (i) a Receivables Sale Agreement (the "RSA"), among certain subsidiaries of LKQ, as "Originators," and LKQ Receivables Finance Company, LLC ("LRFC"), a wholly owned, bankruptcy-remote special purpose subsidiary of LKQ, as Buyer and (ii) a Receivables Purchase Agreement (the "RPA") among LRFC, as Seller, LKQ, as Servicer, certain conduit investors and The Bank of Tokyo-Mitsubishi UFJ, Ltd. ("BTMU"), as Administrative Agent, Managing Agent and Financial Institution.
Under the terms of the RSA, the Originators sell at a discount or contribute certain of their trade accounts receivable, related collections and security interests (the "Receivables") to LRFC on a revolving basis. Under the terms of the RPA, LRFC sells to BTMU for the benefit of the conduit investors and/or financial institutions (together with BTMU, the "Purchasers") an undivided ownership interest in the Receivables for up to $80 million in cash proceeds, subject to additional Incremental Purchases, as defined in the RPA, which may increase the maximum amount of aggregate investments made by the Purchasers. The proceeds from the Purchasers' initial investment of $77.3 million were used to finance LRFC's initial purchase from the Originators, and the proceeds from LRFC's initial purchase from the Originators were used to repay outstanding borrowings under the Revolving Credit Facility. Upon payment of the Receivables by customers, rather than remitting to BTMU the amounts collected, LRFC has reinvested and will reinvest such Receivables payments to purchase additional Receivables from the Originators, subject to the Originators generating sufficient eligible Receivables to sell to LRFC in replacement of collected balances. LRFC may also use the proceeds from a subordinated loan made by the Originators to LRFC to finance purchases of the Receivables from the Originators. Because the Receivables are held by LRFC, a separate bankruptcy-remote corporate entity, the Receivables will be available first to satisfy the creditors of LRFC, including the Purchasers. At the end of the initial three year term, the financial institutions may elect to renew their commitments under the RPA.
The sale of the ownership interest in the Receivables is accounted for as a secured borrowing on our Consolidated Balance Sheets, under which the Receivables collateralize the amounts invested by the Purchasers. As of December 31, 2012, $116.9 million of net Receivables were collateral for the investment under the Receivables Facility. Under the RPA, 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) LIBOR rates plus 1.25%, or (iii) base rates, and are payable monthly in arrears. 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 December 31, 2012, the interest rate under the Receivables Facility was 1.05%. During 2012, we also incurred $0.3 million of arrangement fees and other related transaction costs which were capitalized within Other Assets on the Consolidated Balance Sheets and are amortized over the term of the facility. As of December 31, 2012, the outstanding balance of $80.0 million was classified as long-term on the Consolidated Balance Sheets because we have the ability and intent to refinance these borrowings on a long-term basis.
The RPA contains customary representations and warranties and customary covenants, including covenants to preserve the bankruptcy remote status of LRFC. The RPA also contains customary default and termination provisions that provide for acceleration of amounts owed under the RPA upon the occurrence of certain specified events with respect to LRFC, the Originators or LKQ, including, but not limited to, (i) LRFC's failure to pay interest and other amounts due, (ii) failure by LRFC, the Originators, or LKQ to pay certain indebtedness, (iii) certain insolvency events with respect to LRFC, the Originators or LKQ, (iv) certain judgments entered against LRFC, the Originators or LKQ, (v) certain liens filed with respect to the assets of LRFC or the Originators, and (vi) breach of certain financial ratios designed to capture events negatively affecting the overall credit quality of the Receivables securing amounts invested by the Purchasers.
Other Long-Term Obligations
As part of the consideration for business acquisitions completed during 2012, 2011 and 2010, we issued promissory notes totaling approximately $16.0 million, $34.2 million and $5.5 million, respectively. The weighted average interest rates on the notes outstanding at December 31, 2012 and 2011 were 1.7% and 2.0%, respectively.
Derivative Instruments and Hedging Activities
Derivative Instruments and Hedging Activities
Derivative Instruments and Hedging Activities
We are exposed to market risks, including the effect of changes in interest rates, foreign currency exchange rates and commodity prices. Under our current policies, we use derivatives to manage our exposure to variable interest rates on our senior secured debt. For certain of our operations, we also use short-term foreign currency and commodity forward contracts to manage our exposure to variability in foreign currency denominated transactions and changing metals prices, respectively. We do not hold or issue derivatives for trading purposes.
Interest Rate Swaps
At December 31, 2012, we had interest rate swap agreements in place to hedge a portion of the variable interest rate risk on our variable rate borrowings under our credit agreement, with the objective of minimizing the impact of interest rate fluctuations and stabilizing cash flows. Under the terms of the interest rate swap agreements, we pay the fixed interest rate and have received and will receive payment at a variable rate of interest based on the London InterBank Offered Rate (“LIBOR”) or the Canadian Dealer Offered Rate (“CDOR”) for the respective currency of each interest rate swap agreement’s notional amount. The interest rate swap agreements qualify as cash flow hedges, and we have elected to apply hedge accounting for these swap agreements. As a result, 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.
The following table summarizes the terms of our interest rate swap agreements as of December 31, 2012:
Notional Amount
 
Effective Date
 
Maturity Date
 
Fixed Interest Rate*
USD $250,000,000
 
October 14, 2010
 
October 14, 2015
 
3.31%
USD $100,000,000
 
April 14, 2011
 
October 14, 2013
 
2.86%
USD $60,000,000
 
November 30, 2011
 
October 31, 2016
 
2.95%
USD $60,000,000
 
November 30, 2011
 
October 31, 2016
 
2.94%
USD $50,000,000
 
December 30, 2011
 
December 30, 2016
 
2.94%
GBP £50,000,000
 
November 30, 2011
 
October 30, 2016
 
3.11%
CAD $25,000,000
 
December 30, 2011
 
March 24, 2016
 
3.17%
 

* Includes applicable margin of 1.75% per annum on LIBOR or CDOR-based debt in effect as of December 31, 2012 under the Credit Agreement.
As of December 31, 2012, the fair market value of the $100 million notional amount swap was a liability of $0.7 million included in Other Accrued Expenses on our Consolidated Balance Sheets. The fair market value of the other swap contracts was a liability of $14.9 million included in Other Noncurrent Liabilities. As of December 31, 2011, the fair market value of the interest rate swap contracts was a liability of $10.6 million included in Other Noncurrent Liabilities on our Consolidated Balance Sheets. While our interest rate swaps executed with the same counterparty are subject to master netting arrangements, we present our interest rate swaps on a gross basis in our Consolidated Balance Sheets.
The activity related to our interest swap agreements is included in Note 14, "Accumulated Other Comprehensive Income (Loss)." In connection with the execution of our credit agreement on March 25, 2011 as discussed in Note 5, "Long-Term Obligations," we temporarily experienced differences in critical terms between the interest rate swaps and the underlying debt. As a result, we incurred a loss of $0.2 million related to hedge ineffectiveness in 2011. Beginning on April 14, 2011, we have held, and expect to continue to hold through the maturity of the respective interest rate swap agreements, at least the notional amount of each agreement in the respective variable-rate debt, such that we expect any future ineffectiveness will be immaterial and the swaps will continue to be highly effective in hedging our variable rate debt.
As of December 31, 2012, we estimate that $4.1 million of derivative losses (net of tax) included in Accumulated Other Comprehensive Income (Loss) will be reclassified into interest expense within the next 12 months.
Other Derivative Instruments
We hold other short-term derivative instruments, including foreign currency forward contracts and commodity forward contracts, to manage our exposure to variability in exchange rates and metals prices in certain of our operations. We have elected not to apply hedge accounting for these transactions, and therefore the contracts are adjusted to fair value through our results of operations as of each balance sheet date, which could result in volatility in our earnings. The notional amount and fair value of these contracts at December 31, 2012 and 2011, along with the effect on our results of operations in 2012 and 2011, were immaterial. We did not hold any foreign currency forward contracts or commodity forward contracts during the year ended December 31, 2010.
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
Financial Assets and Liabilities Measured at Fair Value
We use the market and income approaches to value our financial assets and liabilities, and there were no significant changes in valuation techniques or inputs during the year ended December 31, 2012. 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 December 31, 2012 and 2011 (in thousands):
 
Balance as of December 31, 2012
 
Fair Value Measurements as of December 31, 2012
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
Cash surrender value of life insurance
$
19,492

 
$
—

 
$
19,492

 
$
—

Total Assets
$
19,492

 
$
—

 
$
19,492

 
$
—

Liabilities:
 
 
 
 
 
 
 
Contingent consideration liabilities
$
90,009

 
$
—

 
$
—

 
$
90,009

Deferred compensation liabilities
19,843

 
—

 
19,843

 
—

Interest rate swaps
15,643

 
—

 
15,643

 
—

Total Liabilities
$
125,495

 
$
—

 
$
35,486

 
$
90,009

 
Balance as of December 31, 2011
 
Fair Value Measurements as of December 31, 2011
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
Cash surrender value of life insurance
$
13,413

 
$
—

 
$
13,413

 
$
—

Total Assets
$
13,413

 
$
—

 
$
13,413

 
$
—

Liabilities:
 
 
 
 
 
 
 
Contingent consideration liabilities
$
82,382

 
$
—

 
$
—

 
$
82,382

Deferred compensation liabilities
14,071

 
—

 
14,071

 
—

Interest rate swaps
10,576

 
—

 
10,576

 
—

Total Liabilities
$
107,029

 
$
—

 
$
24,647

 
$
82,382



The cash surrender value of life insurance and deferred compensation liabilities are included in Other Assets and Other Noncurrent Liabilities, respectively, on our Consolidated Balance Sheets. The contingent consideration liabilities are classified as separate line items in both current and noncurrent liabilities on our Consolidated Balance Sheets based on the expected timing of the related payments.
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 the interest rate swaps 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 9, "Business Combinations." Under the terms of the contingent consideration agreements, payments may be made at specified future dates depending on the performance of the acquired business subsequent to the acquisition. The liabilities for these payments are classified as Level 3 liabilities because the related fair value measurement, which is determined using an income approach, includes significant inputs not observable in the market. These unobservable inputs include internally-developed assumptions of the probabilities of achieving specified targets, which are used to determine the resulting cash flows and the applicable discount rate. Our Level 3 fair value measurements are established and updated quarterly by our corporate accounting department using current information about these key assumptions, with the input and oversight of our operational and executive management teams. We evaluate the performance of the business during the period compared to our previous expectations, along with any changes to our future projections, and update the estimated cash flows accordingly. In addition, we consider changes to our cost of capital and changes to the probability of achieving the earnout payment targets when updating our discount rate on a quarterly basis.
The significant unobservable inputs used in the fair value measurements of our Level 3 contingent consideration liabilities were as follows:
 
December 31,
 
2012
 
2011
Unobservable Input
(Weighted Average)
Probability of achieving payout targets
79.7
%
 
78.1
%
Discount rate
6.6
%
 
3.0
%

A significant decrease in the assessed probabilities of achieving the targets or a significant increase in the discount rate, in isolation, would result in a significantly lower fair value measurement. Changes in the values of the liabilities are recorded in Change in Fair Value of Contingent Consideration Liabilities within Other Expense (Income) on our Consolidated Statements of Income.
Changes in the fair value of our contingent consideration obligations are as follows (in thousands):
Balance as of January 1, 2011
$
2,000

Contingent consideration liabilities recorded for business acquisitions
81,239

Decrease in fair value included in earnings
(1,408
)
Exchange rate effects
551

Balance as of December 31, 2011
$
82,382

Contingent consideration liabilities recorded for business acquisitions
5,456

Payments
(3,100
)
Increase in fair value included in earnings
1,643

Exchange rate effects
3,628

Balance as of December 31, 2012
$
90,009


The net loss included in earnings for the year ended December 31, 2012 included $1.5 million of losses related to contingent consideration obligations outstanding as of December 31, 2012. The gain included in earnings for the year ended December 31, 2011 is related to a contingent consideration obligation that was settled prior to December 31, 2012. The changes in the fair value of contingent consideration obligations during 2012 and 2011 are a result of the quarterly assessment of the fair value inputs. The loss during the year ended December 31, 2012 also includes the impact related to the adoption of FASB ASU No. 2011-04 as described in Note 2, "Summary of Significant Accounting Policies" (which adoption did not have a material impact).
Financial Assets and Liabilities Not Measured at Fair Value
Our debt is reflected on the Consolidated Balance Sheets at cost. Based on market conditions as of December 31, 2012 and 2011, the fair value of our Credit Agreement borrowings reasonably approximated the carrying value of $975 million and $901 million, respectively. As discussed in Note 5, "Long-Term Obligations," we entered into a Receivables Facility on September 28, 2012. Based on market conditions as of December 31, 2012, the fair value of the outstanding borrowings under the Receivables Facility reasonably approximated the carrying value of $80 million.
The fair value measurements of our debt instruments 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 December 31, 2012 to assume these obligations.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
Operating Leases
We are obligated under noncancelable operating leases for corporate office space, warehouse and distribution facilities, trucks and certain equipment.
The future minimum lease commitments under these leases at December 31, 2012 are as follows (in thousands):
Years ending December 31:
 
2013
$
99,345

2014
88,494

2015
78,536

2016
62,795

2017
51,159

Thereafter
156,506

Future Minimum Lease Payments
$
536,835


Rental expense for operating leases was approximately $101.1 million, $83.7 million and $66.9 million during the years ended December 31, 2012, 2011 and 2010, respectively.
We guarantee the residual values of the majority of our truck and equipment operating leases. The residual values decline over the lease terms to a defined percentage of original cost. In the event the lessor does not realize the residual value when a piece of equipment is sold, we would be responsible for a portion of the shortfall. Similarly, if the lessor realizes more than the residual value when a piece of equipment is sold, we would be paid the amount realized over the residual value. Had we terminated all of our operating leases subject to these guarantees at December 31, 2012, the guaranteed residual value would have totaled approximately $28.7 million. We have not recorded a liability for the guaranteed residual value of equipment under operating leases as the recovery on disposition of the equipment under the leases is expected to approximate the guaranteed residual value.
Litigation and Related Contingencies
We are a plaintiff in a class action lawsuit against several aftermarket product suppliers. During 2012, we recognized gains totaling $17.9 million resulting from settlements with certain of the defendants. These gains were recorded as a reduction of Cost of Goods Sold on our Consolidated Statements of Income. The class action is still pending against two defendants, the results of which are not expected to be material to our results of operations or cash flows. If there is a class settlement with (or a favorable judgment entered against) each of the remaining defendants, we will recognize the gain from such settlement or judgment when substantially all uncertainties regarding its timing and amount are resolved and realization is assured.
We also have certain contingencies resulting from litigation, claims and other commitments and are subject to a variety of environmental and pollution control laws and regulations incident to the ordinary course of business. We currently expect that the resolution of such contingencies will not materially affect our financial position, results of operations or cash flows.
Business Combinations
Business Combinations
Business Combinations
During the year ended December 31, 2012, we made 30 acquisitions in North America, including 22 wholesale businesses and eight self service retail operations. These acquisitions enabled us to expand our geographic presence and enter new markets. Additionally, two of our acquisitions were completed with a goal of improving the recovery from scrap and other metals harvested from the vehicles we purchase: a precious metals refining and reclamation business, which we acquired with the goal of improving the profitability of the precious metals we extract from our recycled vehicle parts; and a scrap metal shredder, which we expect will improve the profitability of the scrap metals recovered from the vehicle hulks in certain of our recycled product operations.
Total acquisition date fair value of the consideration for the 2012 acquisitions was $284.6 million, composed of $261.5 million of cash (net of cash acquired), $16.0 million of notes payable, $1.6 million of other purchase price obligations (non-interest bearing) and $5.5 million of contingent payments to former owners. The contingent consideration arrangements made in connection with our 2012 acquisitions have a maximum potential payout of $6.5 million.
During the year ended December 31, 2012, we recorded $197.6 million of goodwill related to these acquisitions and immaterial adjustments to preliminary purchase price allocations related to certain of our 2011 acquisitions. We expect $157.8 million of the $197.6 million of goodwill recorded to be deductible for income tax purposes. In the period between the acquisition dates and December 31, 2012, our 2012 acquisitions generated $116.3 million of revenue and $11.0 million of operating income. Of our 30 acquisitions completed in 2012, eight were completed in December 2012, and therefore, contributed less than one month of revenue and operating income for the year ended December 31, 2012.
Subsequent to December 31, 2012, we completed the acquisition of an aftermarket product distributor in the U.K. and a paint distribution business in Canada. We are in the process of completing the purchase accounting for these acquisitions, and as a result, we are unable to disclose the amounts recognized for each major class of assets acquired and liabilities assumed, or the pro forma effect of the acquisition on our results of operations.
On October 3, 2011, LKQ Corporation, LKQ Euro Limited (“LKQ Euro”), a subsidiary of LKQ Corporation, and Draco Limited (“Draco”) entered into an Agreement for the Sale and Purchase of Shares of Euro Car Parts Holdings Limited (the “Sale and Purchase Agreement”). Under the terms of the Sale and Purchase Agreement, effective October 1, 2011, LKQ Euro acquired all of the shares in the capital of ECP, an automotive aftermarket products distributor in the U.K., from Draco and the other shareholders of ECP. With the acquisition of ECP, we expanded our geographic presence beyond North America into the European market. Our acquisition of ECP established our Wholesale – Europe operating segment. Total acquisition date fair value of the consideration for the ECP acquisition was £261.6 million ($403.7 million), composed of £190.3 million ($293.7 million) of cash (net of cash acquired), £18.4 million ($28.3 million) of notes payable, £2.7 million ($4.1 million) of other purchase price obligations (non-interest bearing) and a contingent payment to the former owners of ECP. Pursuant to the contingent payment terms, if certain annual performance targets are met by ECP, we will be obligated to pay between £22 million and £25 million and between £23 million and £30 million for the years ending December 31, 2012 and 2013, respectively. We determined the acquisition date fair value of these contingent payments to be £50.2 million ($77.5 million at the exchange rate on October 3, 2011). For the 2012 annual performance period, ECP exceeded the stated performance targets, and therefore, we accrued the maximum payout for the 2012 earnout period as of December 31, 2012. See Note 7, "Fair Value Measurements" for additional information on changes to the fair value of our contingent consideration liabilities during the years ended December 31, 2012 and 2011.
We recorded goodwill of $332.9 million for the ECP acquisition, which will not be deductible for income tax purposes.
In addition to our acquisition of ECP, we made 20 acquisitions in North America in 2011 (17 wholesale businesses and three self service retail operations). Our acquisitions included the purchase of two engine remanufacturers, which expanded our presence in the remanufacturing industry that we entered in 2010. Additionally, our acquisition of an automotive heating and cooling component distributor supplements our expansion into the automotive heating and cooling aftermarket products market. Our North American wholesale business acquisitions also included the purchase of the U.S. vehicle refinish paint distribution business of Akzo Nobel Automotive and Aerospace Coatings (the “Akzo Nobel paint business”), which allowed us to increase our paint and related product offerings and expand our geographic presence in the automotive paint market. Our other 2011 acquisitions enabled us to expand our geographic presence and enter new markets.
Total acquisition date fair value of the consideration for these 20 acquisitions was $207.3 million, composed of $193.2 million of cash (net of cash acquired), $5.9 million of notes payable, $4.5 million of other purchase price obligations (non-interest bearing) and $3.7 million of contingent payments to former owners. In conjunction with the acquisition of the Akzo Nobel paint business on May 26, 2011, we entered into a wholesaler agreement under which we became an authorized distributor of Akzo Nobel products in the acquired markets. Included in this agreement is a requirement to make an additional payment to Akzo Nobel in the event that our purchases of Akzo Nobel products do not meet specified thresholds from June 1, 2011 to May 31, 2014. This contingent payment will be calculated as the difference between our actual purchases and the targeted purchase levels outlined in the agreement for the specified period with a maximum payment of $21 million. The contingent consideration liability recorded in 2011 also includes two additional arrangements that have a maximum potential payout of $4.6 million. The acquisition date fair value of these contingent consideration agreements is immaterial.
During the year ended December 31, 2011, we recorded $105.2 million of goodwill related to these 20 acquisitions and immaterial adjustments to preliminary purchase price allocations related to certain of our 2010 acquisitions. Of this amount, approximately $88.3 million is expected to be deductible for income tax purposes.
In 2010, we made 20 acquisitions in North America (18 wholesale businesses and two self service retail operations). Our acquisitions included the purchase of an engine remanufacturer, which allowed us to further vertically integrate our supply chain. We expanded our product offerings through the acquisition of an automotive heating and cooling component business, as well as a tire recycling business. Our 2010 acquisitions have also enabled us to expand our geographic presence, most notably in Canada through our purchase of Cross Canada, an aftermarket product supplier.
Total acquisition date fair value of the consideration for the 2010 acquisitions was $170.4 million, composed of $143.6 million of cash (net of cash acquired), $5.5 million of notes payable, $4.4 million of other purchase price obligations (non-interest bearing), $2.0 million of contingent payments to former owners and $14.9 million in stock issued (1,379,310 shares). The $14.9 million of common stock was issued in connection with our acquisition of Cross Canada on November 1, 2010. The fair value of common stock issued was based on the market price of LKQ stock on the date of issuance. We recorded goodwill of $91.8 million for the 2010 acquisitions, of which $74.9 million is expected to be deductible for income tax purposes.
Our acquisitions are accounted for under the purchase method of accounting and are included in our 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. In connection with the 2012 acquisitions, the purchase price allocations are preliminary as we are in the process of determining the following: 1) valuation amounts for certain of the inventories and equipment 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.
The purchase price allocations for the acquisitions completed during 2012 and 2011 are as follows (in thousands):
 
 
Year Ended December 31,
 
2012
 
2011
 
(Preliminary)
 
ECP
 
Other Acquisitions
 
Total
Receivables
$
15,473

 
$
54,225

 
$
23,538

 
$
77,763

Receivable reserves
(1,459
)
 
(3,832
)
 
(1,121
)
 
(4,953
)
Inventory
62,305

 
93,835

 
59,846

 
153,681

Prepaid expenses and other current assets
201

 
3,189

 
2,820

 
6,009

Property and equipment
31,930

 
41,830

 
10,614

 
52,444

Goodwill
201,742

 
332,891

 
105,177

 
438,068

Other intangibles
655

 
43,723

 
7,683

 
51,406

Other assets
187

 
13

 
9,420

 
9,433

Deferred income taxes
428

 
(13,218
)
 
7,235

 
(5,983
)
Current liabilities assumed
(22,910
)
 
(135,390
)
 
(17,257
)
 
(152,647
)
Debt assumed
(3,989
)
 
(13,564
)
 
—

 
(13,564
)
Other noncurrent liabilities assumed
—

 
—

 
(619
)
 
(619
)
Contingent consideration liabilities
(5,456
)
 
(77,539
)
 
(3,700
)
 
(81,239
)
Other purchase price obligations
(1,647
)
 
(4,136
)
 
(4,510
)
 
(8,646
)
Notes issued
(15,990
)
 
(28,302
)
 
(5,917
)
 
(34,219
)
Cash used in acquisitions, net of cash acquired
$
261,470

 
$
293,725

 
$
193,209

 
$
486,934


The primary reason for our acquisitions made in 2012, 2011 and 2010 was to leverage our strategy of becoming a one-stop provider for alternative vehicle replacement products. These acquisitions enabled us to expand our market presence, widen our product offerings and enter new markets. 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. In many cases, acquiring companies with these characteristics can result in purchase prices that include a significant amount of goodwill.
Our acquisition of ECP in 2011 marked our entry into the European automotive aftermarket business and provides an opportunity to us as that market has historically had a low penetration of alternative collision parts. We targeted the U.K. as a desirable market for international expansion. We believe growth opportunities exist for this business, both through the geographic expansion into new primary and secondary markets, as well as through increased product offerings including alternative collision parts. By acquiring ECP, a leading distributor of alternative automotive products, we were able to gain access to this market in a manner that we viewed as quicker and more cost effective than would have been achievable through a start-up organization and organic growth. The potential growth opportunities, combined with the developed distribution network, experienced management team, and established workforce, contributed to the $332.9 million of goodwill recognized related to this acquisition.
The following pro forma summary presents the effect of the businesses acquired during the year ended December 31, 2012 as though the businesses had been acquired as of January 1, 2011, the businesses acquired during the year ended December 31, 2011 as though they had been acquired as of January 1, 2010 and the businesses acquired during the year ended December 31, 2010 as though they had been acquired as of January 1, 2009. The pro forma adjustments are based upon unaudited financial information of the acquired entities (in thousands, except per share data):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Revenue, as reported
$
4,122,930

 
$
3,269,862

 
$
2,469,881

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

 
407,042

 
420,769

Other acquisitions
202,144

 
466,002

 
504,044

Pro forma revenue
$
4,325,074

 
$
4,142,906

 
$
3,394,694

Income from continuing operations, as reported
$
261,225

 
$
210,264

 
$
167,118

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

 
21,858

 
9,669

Other acquisitions
12,674

 
27,396

 
12,996

Pro forma income from continuing operations
$
273,899

 
$
259,518

 
$
189,783

Basic earnings per share from continuing operations, as reported
$
0.88

 
$
0.72

 
$
0.58

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

 
0.07

 
0.03

Other acquisitions
0.04

 
0.09

 
0.05

Pro forma basic earnings per share from continuing operations (a) 
$
0.93

 
$
0.89

 
$
0.66

Diluted earnings per share from continuing operations, as reported
$
0.87

 
$
0.71

 
0.57

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

 
0.07

 
0.03

Other acquisitions
0.04

 
0.09

 
0.04

Pro forma diluted earnings per share from continuing operations (a) 
$
0.91

 
$
0.87

 
$
0.65


(a) The sum of the individual earnings per share amounts may not equal the total due to rounding.
Unaudited pro forma supplemental information is based upon accounting estimates and judgments that we believe are reasonable. The unaudited pro forma supplemental information includes the effect of purchase accounting adjustments, such as the adjustment of inventory acquired to net realizable value, adjustments to depreciation on acquired property and equipment, adjustments to amortization on acquired intangible assets, adjustments to interest expense, and the related tax effects. These pro forma results are not necessarily indicative either of what would have occurred if the acquisitions had been in effect for the period presented or of future results.
Retirement Plans
Retirement Plans
Retirement Plans
401(k) Plan
We sponsor a 401(k) defined contribution plan that covers substantially all of our eligible, full time U.S. employees. Contributions to the plan are made by both the employee and us. Our contributions are based on the level of employee contributions and are subject to certain vesting provisions based upon years of service. Expenses related to this plan totaled approximately $5.4 million, $5.3 million and $4.8 million during 2012, 2011 and 2010, respectively.
Nonqualified Deferred Compensation Plan
We also offer a nonqualified deferred compensation plan to eligible employees who, due to Internal Revenue Service ("IRS") guidelines, may not take full advantage of our 401(k) defined contribution plan. The plan allows participants to defer eligible compensation, subject to certain limitations. We will match 50% of the portion of the employee's contributions that does not exceed 6% of the employee's eligible deferrals. The deferred compensation, together with our matching contributions and accumulated earnings, is accrued and is payable after retirement or termination of employment, subject to vesting provisions. Participants may also elect to receive amounts deferred in a given year on any plan anniversary five or more years subsequent to the year of deferral. Our matching contributions vest over a four year period and totaled $0.9 million, $0.8 million and $0.7 million in 2012, 2011 and 2010, respectively, net of allowable transfers into our 401(k) defined contribution plan. Total deferred compensation liabilities were approximately $19.8 million and $14.1 million at December 31, 2012 and 2011, respectively.
The nonqualified deferred compensation plan is funded under a trust agreement whereby we pay to the trust amounts deferred by employees, together with our match, with such amounts invested in life insurance policies carried to meet the obligations under the deferred compensation plan. We held 184 contracts as of both December 31, 2012 and 2011with a face value of $81.8 million and $80.6 million, respectively. The cash surrender value of these policies was $19.5 million and $13.4 million at December 31, 2012 and 2011, respectively.
Earnings Per Share
Earnings Per Share
Earnings Per Share
Basic earnings per share are computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share incorporate the incremental shares issuable upon the assumed exercise of stock options and the assumed vesting of RSUs and restricted stock. Certain of our stock options and restricted stock were excluded from the calculation of diluted earnings per share because they were antidilutive, but these equity instruments could be dilutive in the future.
The following chart sets forth the computation of earnings per share (in thousands, except per share amounts):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Income from continuing operations
$
261,225

 
$
210,264

 
$
167,118

Denominator for basic earnings per share—Weighted-average shares outstanding
295,810

 
292,252

 
286,542

Effect of dilutive securities:
 
 
 
 
 
RSUs
479

 
182

 
—

Stock options
4,346

 
4,250

 
5,118

Restricted stock
58

 
66

 
54

Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding
300,693

 
296,750

 
291,714

Basic earnings per share from continuing operations
$
0.88

 
$
0.72

 
$
0.58

Diluted earnings per share from continuing operations
$
0.87

 
$
0.71

 
$
0.57

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 (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Antidilutive securities:
 
 
 
 
 
Stock options
—

 
2,340

 
5,714

Restricted stock
—

 
—

 
80

Income Taxes
Income Taxes
Income Taxes
The provision for income taxes consists of the following components (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Current:
 
 
 
 
 
Federal
$
110,825

 
$
97,887

 
$
75,009

State
19,693

 
14,435

 
16,552

Foreign
13,202

 
3,883

 
2,483

 
$
143,720

 
$
116,205

 
$
94,044

Deferred:
 
 
 
 
 
Federal
$
5,824

 
$
8,376

 
$
8,928

State
(647
)
 
919

 
598

Foreign
(955
)
 
7

 
(563
)
 
$
4,222

 
$
9,302

 
$
8,963

Provision for income taxes
$
147,942

 
$
125,507

 
$
103,007

Income taxes have been based on the following components of income from continuing operations before provision for income taxes (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Domestic
$
348,150

 
$
319,305

 
$
264,438

Foreign
61,017

 
16,466

 
5,687

 
$
409,167

 
$
335,771

 
$
270,125

The U.S. federal statutory rate is reconciled to the effective tax rate as follows:
 
Year Ended December 31,
 
2012
 
2011
 
2010
U.S. federal statutory rate
35.0
 %
 
35.0
 %
 
35.0
 %
State income taxes, net of state credits and federal tax impact
3.1
 %
 
3.1
 %
 
3.4
 %
Impact of international operations
(2.3
)%
 
(0.8
)%
 
(0.3
)%
Non-deductible expenses
0.8
 %
 
0.7
 %
 
0.3
 %
Federal production incentives and credits
(0.3
)%
 
(0.4
)%
 
(0.2
)%
Revaluation of deferred taxes
(0.3
)%
 
—
 %
 
(0.5
)%
Other, net
0.2
 %
 
(0.2
)%
 
0.4
 %
Effective tax rate
36.2
 %
 
37.4
 %
 
38.1
 %

Undistributed earnings of the Company's foreign subsidiaries amounted to approximately $74 million at December 31, 2012. Those earnings are considered to be indefinitely reinvested, and accordingly no provision for U.S. income taxes has been
provided thereon. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes (subject to adjustment for foreign tax credits) and potential withholding taxes payable to the various foreign countries. Determination of the amount of unrecognized deferred US income tax liability is not practicable due to the complexities associated with its hypothetical calculation; however, unrecognized foreign tax credits would be available to reduce materially any U.S. liability.
The greater impact of international operations in 2012 compared to 2011 is primarily a result of our expanding international operations as a larger proportion of our pretax income was generated in lower rate jurisdictions.
The significant components of our deferred tax assets and liabilities are as follows (in thousands):
 
December 31,
 
2012
 
2011
Deferred Tax Assets:
 
 
 
Inventory
$
29,523

 
$
22,267

Accrued expenses and reserves
27,361

 
18,357

Accounts receivable
10,037

 
10,860

Stock-based compensation
9,442

 
8,945

Qualified and nonqualified retirement plans
7,476

 
5,157

Net operating loss carryforwards
4,451

 
4,722

Interest rate swaps
5,461

 
3,679

Other
4,711

 
8,621

 
98,462

 
82,608

Less valuation allowance
(1,631
)
 
(1,911
)
Total deferred tax assets
$
96,831

 
$
80,697

Deferred Tax Liabilities:
 
 
 
Goodwill and other intangible assets
$
64,704

 
$
46,373

Property and equipment
48,994

 
44,535

Trade name
30,336

 
32,592

Other
1,428

 
1,864

Total deferred tax liabilities
$
145,462

 
$
125,364

Net deferred tax liability
$
(48,631
)
 
$
(44,667
)
Deferred tax assets and liabilities are reflected on our Consolidated Balance Sheets as follows (in thousands):
 
December 31,
 
2012
 
2011
Current deferred tax assets
$
53,485

 
$
45,690

Noncurrent deferred tax assets
164

 
—

Current deferred tax liabilities
5

 
1,561

Noncurrent deferred tax liabilities
102,275

 
88,796


Our noncurrent deferred tax assets and current deferred tax liabilities are included in Other Assets and Other Current Liabilities, respectively, on our Consolidated Balance Sheets.
We had net operating loss carryforwards for federal and certain of our state tax jurisdictions, the tax benefits of which total approximately $4.5 million and $4.7 million at December 31, 2012 and 2011, respectively. At both December 31, 2012 and 2011, we had tax credit carryforwards of $1.0 million related to certain of our state tax jurisdictions. As of December 31, 2012 and 2011, a valuation allowance of $1.6 million and $1.9 million, respectively, was recognized for a portion of the deferred tax assets related to net operating loss and tax credit carryforwards. The valuation allowance for net operating loss and tax credit carryforwards decreased by $0.3 million during the year ended December 31, 2012 due to current utilization of some of the underlying tax benefits as well as a change in judgment regarding the realization of the remaining carryforwards. The net operating loss carryforwards expire over the period from 2013 through 2030, while nearly all of the tax credit carryforwards have no expiration. Realization of these deferred tax assets is dependent on the generation of sufficient taxable income prior to the expiration dates. Based on historical and projected operating results, we believe that it is more likely than not that earnings will be sufficient to realize the deferred tax assets for which valuation allowances have not been provided. While we expect to realize the deferred tax assets, net of valuation allowances, changes in estimates of future taxable income or in tax laws may alter this expectation.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands):
 
2012
 
2011
 
2010
Balance at January 1
$
5,497

 
$
5,441

 
$
8,526

Additions based on tax positions related to the current year
973

 
952

 
713

Additions for tax positions of prior years
167

 
192

 
281

Reductions for tax positions of prior years
(2,379
)
 
—

 
(86
)
Reductions for tax positions of prior years—timing differences
—

 
—

 
(2,041
)
Lapse of statutes of limitations
(998
)
 
(892
)
 
(1,952
)
Settlements with taxing authorities
(957
)
 
(196
)
 
—

Balance at December 31
$
2,303

 
$
5,497

 
$
5,441


At December 31, 2012 and 2011, we had accumulated interest and penalties included in gross unrecognized tax benefits of $0.6 million and $1.2 million, respectively. During each of the years ended December 31, 2012, 2011, and 2010, $0.2 million of interest and penalties were recorded through the income tax provision, prior to any reversals for lapses in the statutes of limitations. We had deferred tax assets of $0.1 million and $0.2 million related to the accumulated interest balance as of December 31, 2012 and 2011, respectively. The amount of the unrecognized tax benefits, which if resolved favorably (in whole or in part) would reduce our effective tax rate, is approximately $1.6 million and $3.8 million at December 31, 2012 and 2011, respectively. The balance of unrecognized tax benefits at December 31, 2012 and 2011 also includes $0.7 million and $1.7 million, respectively, of tax benefits that, if recognized, would result in adjustments to deferred taxes.
During the twelve months beginning January 1, 2013, it is reasonably possible that we will reduce gross unrecognized tax benefits by up to approximately $0.4 million, of which approximately $0.3 million would impact our effective tax rate, primarily as a result of the expiration of certain statutes of limitations.
Tax years after 2009 remain subject to examination by the IRS. In the U.K., tax years through 2009 are no longer open to inquiry. For certain of our Canadian subsidiaries, certain tax years from 2008 to 2011 are currently under examination. Tax years from 2009 are subject to income tax examinations by various U.S. state and local jurisdictions. Adjustments from such examinations, if any, are not expected to have a material effect on our consolidated financial statements.
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)
The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):
 
 
Foreign
Currency
Translation
 
Unrealized (Loss)
Gain
on Interest Rate
Swaps
 
Unrealized Gain
(Loss)
on Pension Plan
 
Accumulated
Other
Comprehensive
(Loss) Income
Balance at January 1, 2010
 
$
(876
)
 
$
(6,536
)
 
$
15

 
$
(7,397
)
Pretax income
 
3,078

 
3,230

 
—

 
6,308

Income tax expense
 
—

 
(1,054
)
 
—

 
(1,054
)
Reversal of unrealized (gain) loss
 
—

 
10,377

 
(15
)
 
10,362

Reversal of deferred income taxes
 
—

 
(3,841
)
 
—

 
(3,841
)
Balance at December 31, 2010
 
$
2,202

 
$
2,176

 
$
—

 
$
4,378

Pretax loss
 
(4,273
)
 
(19,391
)
 
—

 
(23,664
)
Income tax benefit
 
—

 
6,847

 
—

 
6,847

Reversal of unrealized loss
 
—

 
5,641

 
—

 
5,641

Reversal of deferred income taxes
 
—

 
(2,019
)
 
—

 
(2,019
)
Hedge ineffectiveness
 
—

 
(225
)
 
—

 
(225
)
Income tax benefit
 
—

 
81

 
—

 
81

Balance at December 31, 2011
 
$
(2,071
)
 
$
(6,890
)
 
$
—

 
$
(8,961
)
Pretax income (loss)
 
12,921

 
(11,313
)
 
—

 
1,608

Income tax benefit
 
—

 
3,962

 
—

 
3,962

Reversal of unrealized loss
 
—

 
6,439

 
—

 
6,439

Reversal of deferred income taxes
 
—

 
(2,289
)
 
—

 
(2,289
)
Balance at December 31, 2012
 
$
10,850

 
$
(10,091
)
 
$
—

 
$
759

Segment and Geographic Information
Segment and Geographic Information
Segment and Geographic Information
We have three operating segments: Wholesale – North America; Wholesale – Europe; and Self Service. Our operations in North America, which include our Wholesale – North America and Self Service operating segments, are aggregated into one reportable segment because they possess similar economic characteristics and have common products and services, customers, and methods of distribution. Our Wholesale – Europe operating segment, formed with our acquisition of ECP effective October 1, 2011, marks our entry into the European automotive aftermarket business, and is presented as a separate reportable segment. Although the Wholesale – Europe operating segment shares many of the characteristics of our North American operations, including types of products offered, distribution methods, and procurement, we have provided separate financial information as we believe this data would be beneficial to users in understanding our results. Therefore, we present our reportable segments on a geographic basis.
The following table presents our financial performance, including revenue, earnings before interest, taxes, depreciation and amortization (“EBITDA”), and depreciation and amortization by reportable segment for the periods indicated (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Revenue
 
 
 
 
 
North America
$
3,426,858

 
$
3,131,376

 
$
2,469,881

Europe
696,072

 
138,486

 
—

Total revenue
$
4,122,930

 
$
3,269,862

 
$
2,469,881

EBITDA
 
 
 
 
 
North America
$
440,448

 
$
405,924

 
$
339,869

Europe
70,099

 
12,144

 
—

Total EBITDA
$
510,547

 
$
418,068

 
$
339,869

Depreciation and Amortization
 
 
 
 
 
North America
$
59,132

 
$
52,481

 
$
41,428

Europe
11,033

 
2,024

 
—

Total depreciation and amortization
$
70,165

 
$
54,505

 
$
41,428


EBITDA during 2012 for our North American segment is inclusive of gains of $17.9 million resulting from lawsuit settlements with certain of our aftermarket product suppliers as discussed in Note 8, "Commitments and Contingencies." EBITDA for our North America segment also includes net gains of $2.0 million in each of the years ended December 31, 2012 and 2011 from the change in fair value of contingent consideration liabilities related to certain of our acquisitions. Included within EBITDA of our European segment are losses of $3.6 million and $0.6 million for the years ended December 31, 2012 and 2011, respectively, for the change in fair value of contingent consideration liabilities related to our ECP acquisition. See Note 7, "Fair Value Measurements," for further information on these changes in fair value of the contingent consideration obligations recorded in earnings during the periods.
The table below provides a reconciliation from EBITDA to Income from Continuing Operations (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
EBITDA
$
510,547

 
$
418,068

 
$
339,869

Depreciation and amortization
70,165

 
54,505

 
41,428

Interest expense, net
31,215

 
22,447

 
28,316

Loss on debt extinguishment
—

 
5,345

 
—

Provision for income taxes
147,942

 
125,507

 
103,007

Income from continuing operations
$
261,225

 
$
210,264

 
$
167,118


The key measure of segment profit or loss reviewed by our chief operating decision maker, who is our Chief Executive Officer, is EBITDA. Segment EBITDA includes revenue and expenses that are controllable by the segment. Corporate and administrative expenses are allocated to the segments based on usage, with shared expenses apportioned based on the segment’s percentage of consolidated revenue. Segment EBITDA excludes depreciation, amortization, interest (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 following table presents capital expenditures, which includes additions to property and equipment, by reportable segment (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Capital Expenditures
 
 
 
 
 
North America
$
73,331

 
$
84,856

 
$
61,438

Europe
14,924

 
1,560

 
—

 
$
88,255

 
$
86,416

 
$
61,438


The following table presents assets by reportable segment (in thousands):
 
December 31,
 
2012
 
2011
 
2010
Receivables, net
 
 
 
 
 
North America
$
241,627

 
$
230,871

 
$
191,085

Europe
70,181

 
50,893

 
—

Total receivables, net
311,808

 
281,764

 
191,085

Inventory
 
 
 
 
 
North America
750,565

 
636,145

 
492,688

Europe
150,238

 
100,701

 
—

Total inventory
900,803

 
736,846

 
492,688

Property and Equipment, net
 
 
 
 
 
North America
434,010

 
380,282

 
331,312

Europe
60,369

 
43,816

 
—

Total property and equipment, net
494,379

 
424,098

 
331,312

Other unallocated assets
2,016,466

 
1,756,996

 
1,284,424

Total assets
$
3,723,456

 
$
3,199,704

 
$
2,299,509


We report net trade receivables, inventories, and net property and equipment by segment as that information is used by the chief operating decision maker in assessing segment performance. These assets provide a measure for the operating capital employed in each segment. Unallocated assets include cash, prepaid and other current and noncurrent assets, goodwill, intangibles and income taxes.
Our operations are primarily conducted in the U.S. Our European operations, which we started with the acquisition of ECP in the fourth quarter of 2011, are located in the U.K. Our operations in other countries include recycled and aftermarket operations in Canada, engine remanufacturing and bumper refurbishing operations in Mexico, an aftermarket parts distribution facility in Taiwan, and other alternative parts operations in Guatemala and Costa Rica.
The following table sets forth our revenue by geographic area (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Revenue
 
 
 
 
 
United States
$
3,209,024

 
$
2,952,620

 
$
2,366,224

United Kingdom
696,072

 
138,486

 
—

Other countries
217,834

 
178,756

 
103,657

 
$
4,122,930

 
$
3,269,862

 
$
2,469,881


The following table sets forth our tangible long-lived assets by geographic area (in thousands):
 
December 31,
 
2012
 
2011
Long-lived Assets
 
 
 
United States
$
408,244

 
$
360,961

United Kingdom
60,369

 
43,816

Other countries
25,766

 
19,321

 
$
494,379

 
$
424,098


The following table sets forth our revenue by product category (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Aftermarket, other new and refurbished products
$
2,286,853

 
$
1,634,003

 
$
1,236,806

Recycled, remanufactured and related products and services
1,277,023

 
1,115,088

 
888,320

Other
559,054

 
520,771

 
344,755

 
$
4,122,930

 
$
3,269,862

 
$
2,469,881


All of the product categories include revenue from our North American reportable segment, while our European segment, which is composed of ECP, an automotive aftermarket products distributor, currently generates revenue only 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. With our acquisition of a precious metals refining and reclamation business in the second quarter of 2012, revenue from other sources also includes the sales of precious metals harvested from various components, including certain of our salvage vehicle parts.
Selected Quarterly Data
Selected Quarterly Data
Selected Quarterly Data (unaudited)
The following table represents unaudited selected quarterly financial data for the two years ended December 31, 2012. Beginning with quarter ended December 31, 2011, the selected quarterly financial data includes the results of ECP, which was acquired effective October 1, 2011. The operating results for any quarter are not necessarily indicative of the results for any future period.
 
Quarter Ended
(In thousands, except per share data)
Mar. 31
 
Jun. 30
 
Sep. 30
 
Dec. 31
2011
 
 
 
 
 
 
 
Revenue
$
786,648

 
$
759,684

 
$
783,898

 
$
939,632

Gross margin(1)
343,646

 
322,236

 
334,322

 
391,789

Operating income(1)
107,371

 
78,486

 
85,488

 
90,138

Net income(2)
58,182

 
46,706

 
49,231

 
56,145

Basic earnings per share(3)
$
0.20

 
$
0.16

 
$
0.17

 
$
0.19

Diluted earnings per share(3)
$
0.20

 
$
0.16

 
$
0.17

 
$
0.19

 
Quarter Ended
(In thousands, except per share data)
Mar. 31
 
Jun. 30
 
Sep. 30
 
Dec. 31
2012
 
 
 
 
 
 
 
Revenue
$
1,031,777

 
$
1,006,531

 
$
1,016,707

 
$
1,067,915

Gross margin(1)
447,383

 
421,931

 
409,705

 
445,121

Operating income(1)
133,608

 
108,567

 
91,434

 
104,344

Net income(2)
80,991

 
63,998

 
54,048

 
62,188

Basic earnings per share(3)
$
0.28

 
$
0.22

 
$
0.18

 
$
0.21

Diluted earnings per share(3)
$
0.27

 
$
0.21

 
$
0.18

 
$
0.21

(1)
Gross margin and operating income during the quarters ended March 31, 2012, June 30, 2012, September 30, 2012 and December 31, 2012 include gains of $8.3 million, $8.4 million, $0.5 million and $0.7 million, respectively, resulting from lawsuit settlements with certain of our aftermarket product suppliers as discussed in Note 8, "Commitments and Contingencies."
(2)
Net income during the quarters ended June 30, 2011 and December 31, 2011 includes a gain of $1.6 million and a loss of $0.2 million, respectively, for changes in fair value of our contingent consideration liabilities. The quarters ended March 31, 2012 and December 31, 2012 include gains for changes in fair value of our contingent consideration liabilities of $1.3 million and $0.2 million, respectively, while the quarters ended June 30, 2012 and September 30, 2012 include losses of $1.2 million and $1.9 million, respectively. See Note 7, "Fair Value Measurements," for further information on these changes in fair value of the contingent consideration obligations recorded in earnings during the periods.
(3)
The sum of the quarters may not equal the total of the respective year's earnings per share on either a basic or diluted basis due to changes in weighted average shares outstanding throughout the year.
Schedule II-Valuation and Qualifying Accounts and Reserves
Schedule II-Valuation and Qualifying Accounts and Reserves
Schedule II—Valuation and Qualifying Accounts and Reserves
Descriptions
 
Balance at
Beginning of
Period
 
Additions
Charged to
Costs and
Expenses
 
Acquisitions and
Other
 
Deductions
 
Balance at End
of Period
 
 
(in thousands)
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2010
 
$
6,507

 
$
4,326

 
$
1,125

 
$
(5,063
)
 
$
6,895

Year ended December 31, 2011
 
6,895

 
5,084

 
2,199

 
(5,831
)
 
8,347

Year ended December 31, 2012
 
8,347

 
5,928

 
308

 
(5,113
)
 
9,470

ALLOWANCE FOR ESTIMATED RETURNS, DISCOUNTS & ALLOWANCES:
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2010
 
$
15,802

 
$
541,314

 
$
1,061

 
$
(539,992
)
 
$
18,185

Year ended December 31, 2011
 
18,185

 
668,936

 
2,754

 
(667,071
)
 
22,804

Year ended December 31, 2012
 
22,804

 
714,880

 
1,151

 
(714,143
)
 
24,692

Summary of Significant Accounting Policies (Policies)
Principles of Consolidation 
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of LKQ Corporation and its subsidiaries. All intercompany transactions and accounts have been eliminated.
Use of Estimates 
Use of Estimates
In preparing our financial statements in conformity with accounting principles generally accepted in the United States we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition 
Revenue Recognition
The majority of our revenue is derived from the sale of vehicle parts. Revenue is recognized when the products are shipped or 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 $24.7 million and $22.8 million at December 31, 2012 and 2011, respectively. We present taxes assessed by governmental authorities collected from customers on a net basis. Therefore, the taxes are excluded from revenue on our Consolidated Statements of Income and are shown as a current liability on our Consolidated Balance Sheets until remitted. Revenue from the sale of separately-priced extended warranty contracts is reported as deferred revenue and recognized ratably over the term of the contracts or three years in the case of lifetime warranties. We recognize revenue from the sale of scrap, cores and other metals when title has transferred, which typically occurs upon delivery to the customer.
Shipping & Handling 
Shipping & Handling
Revenue also includes amounts billed to customers related to shipping and handling of approximately $25.6 million, $23.9 million and $17.3 million during the years ended December 31, 2012, 2011 and 2010, respectively. Distribution expenses in the accompanying Consolidated Statements of Income are the costs incurred to prepare and deliver products to customers.
Receivables and Allowance for Doubtful Accounts 
Receivables and Allowance for Doubtful Accounts
In the normal course of business, we extend credit to customers after a review of each customer's credit history. We recorded a reserve for uncollectible accounts of approximately $9.5 million and $8.3 million at December 31, 2012 and 2011, respectively. The reserve is based upon the aging of the accounts receivable, our assessment of the collectability of specific customer accounts and historical experience. Receivables are written off once collection efforts have been exhausted. Recoveries of receivables previously written off are recorded when received.
Concentrations of Credit Risk 
Concentrations of Credit Risk
Financial instruments that potentially subject us to significant concentration of credit risk consist primarily of cash and equivalents and accounts receivable. We control our exposure to credit risk associated with these instruments by (i) placing our cash and equivalents with several major financial institutions; (ii) holding high-quality financial instruments; and (iii) maintaining strict policies over credit extension that include credit evaluations, credit limits and monitoring procedures. In addition, our overall credit risk with respect to accounts receivable is limited to some extent because our customer base is composed of a large number of geographically diverse customers.
Inventory 
Inventory
We classify our inventory into the following categories: aftermarket and refurbished vehicle replacement products; and salvage and remanufactured vehicle replacement products. This classification reflects the historically distinct distribution channels used in the sale of alternative repair products in North America, although we continue to work toward integrating these distribution channels.
An aftermarket product is a new vehicle product manufactured by a company other than the original equipment manufacturer. Cost is established based on the average price we pay for parts, and includes expenses incurred for freight and overhead costs. For items purchased from foreign companies, import fees and duties and transportation insurance are also included. Refurbished inventory cost is based on the average price we pay for cores, which are recycled automotive parts that are not suitable for sale as a replacement part without further processing. The cost of our refurbished inventory also includes expenses incurred for freight, labor and other overhead.
A salvage product is a recycled vehicle part suitable for sale as a replacement part. Cost is established based upon the price we pay for a vehicle, including auction, storage and towing fees, as well as expenditures for buying and dismantling. Inventory carrying value is determined using the average cost to sales percentage at each of our facilities and applying that percentage to the facility's inventory at expected selling prices. The average cost to sales percentage is derived from each facility's historical vehicle profitability for salvage vehicles purchased at auction or from contracted rates for salvage vehicles acquired under certain direct procurement arrangements. Remanufactured inventory cost is based upon the price paid for cores, and also includes expenses incurred for freight, direct manufacturing costs and overhead.
For all inventory, carrying value is recorded at the lower of cost or market and is reduced to reflect the age of the inventory and current anticipated demand. If actual demand differs from our estimates, additional reductions to inventory carrying value would be necessary in the period such determination is made.
Inventory consists of the following (in thousands):
 
December 31,
 
2012
 
2011
Aftermarket and refurbished products
$
523,677

 
$
445,787

Salvage and remanufactured products
377,126

 
291,059

 
$
900,803

 
$
736,846

Property and Equipment 
Property and Equipment
Property and equipment are recorded at cost. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized. Construction in progress consists primarily of building and land improvements at our existing facilities. Depreciation is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term of the related lease and reasonably assured renewal periods, if shorter.
The internal and external costs incurred to develop internal use computer software during the application development stage of the implementation, including the design of the chosen path, are capitalized. Other costs, including expenses incurred during the preliminary project stage, training expenses, data conversion costs and expenses incurred in the post implementation stage are expensed in the period incurred. Capitalized costs are amortized ratably over the useful life of the software when the software becomes operational. Upgrades and enhancements to internal use software are capitalized only if the costs result in additional functionality. We do not plan to sell or market our internal use computer software to third parties.
Our estimated useful lives are as follows:
Land improvements
10-20 years
Buildings and improvements
20-40 years
Furniture, fixtures and equipment
3-20 years
Computer equipment and software
3-10 years
Vehicles and trailers
3-10 years

Property and equipment consists of the following (in thousands):
 
December 31,
 
2012
 
2011
Land and improvements
$
87,720

 
$
81,170

Buildings and improvements
133,368

 
119,414

Furniture, fixtures and equipment
243,565

 
192,514

Computer equipment and software
91,588

 
79,195

Vehicles and trailers
51,187

 
40,825

Leasehold improvements
91,280

 
69,079

 
698,708

 
582,197

Less—Accumulated depreciation
(231,130
)
 
(179,950
)
Construction in progress
26,801

 
21,851

 
$
494,379

 
$
424,098

Intangibles 
Intangibles
Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer relationships and covenants not to compete.
Goodwill is tested for impairment at least annually, and we performed annual impairment tests during the fourth quarters of 2012, 2011 and 2010. The results of all of these tests indicated that goodwill was not impaired.
The changes in the carrying amount of goodwill by reportable segment are as follows (in thousands):
 
North America
 
Europe
 
Total
Balance as of January 1, 2010
$
938,783

 
$
—

 
$
938,783

Business acquisitions and adjustments to previously recorded goodwill
91,757

 
—

 
91,757

Exchange rate effects
2,433

 
—

 
2,433

Balance as of December 31, 2010
$
1,032,973

 
$
—

 
$
1,032,973

Business acquisitions and adjustments to previously recorded goodwill
105,177

 
337,031

 
442,208

Exchange rate effects
(1,520
)
 
2,402

 
882

Balance as of December 31, 2011
$
1,136,630

 
$
339,433

 
$
1,476,063

Business acquisitions and adjustments to previously recorded goodwill
201,742

 
(4,140
)
 
197,602

Exchange rate effects
1,459

 
15,160

 
16,619

Balance as of December 31, 2012
$
1,339,831

 
$
350,453

 
$
1,690,284


In 2011 and 2012, we finalized the valuation of certain intangible assets acquired related to our 2010 and 2011 acquisitions, respectively. As these adjustments did not have a material impact on our financial position or results of operations, we recorded these adjustments to goodwill and amortization expense in 2011 and 2012, respectively.
The components of other intangibles are as follows (in thousands):
 
December 31, 2012
 
December 31, 2011
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Trade names and trademarks
$
118,422

 
$
(21,599
)
 
$
96,823

 
$
115,954

 
$
(16,305
)
 
$
99,649

Customer relationships
14,426

 
(6,642
)
 
7,784

 
10,050

 
(3,065
)
 
6,985

Covenants not to compete
3,654

 
(1,546
)
 
2,108

 
3,194

 
(918
)
 
2,276

 
$
136,502

 
$
(29,787
)
 
$
106,715

 
$
129,198

 
$
(20,288
)
 
$
108,910


In 2012, we recorded $0.6 million of trade names, $4.1 million of customer relationships and $0.6 million of covenants not to compete resulting from our 2012 acquisitions and adjustments to certain preliminary intangible asset valuations from our 2011 acquisitions. In 2011, we recorded $40.1 million of trade names, $5.7 million of customer relationships and $1.5 million of covenants not to compete resulting from our 2011 acquisitions and adjustments to certain preliminary intangible asset valuations from our 2010 acquisitions. The trade names recorded in 2011 included $39.3 million for the Euro Car Parts trade name related to our acquisition of Euro Car Parts Holdings Limited (“ECP”) effective October 1, 2011. 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 10 years) on either a straight-line or accelerated basis. Covenants not to compete are amortized over the lives of the respective agreements, which range from one to five years, on a straight-line basis. Amortization expense for intangibles was $9.5 million, $7.9 million and $4.2 million during the years ended December 31, 2012, 2011 and 2010, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2017 is $8.8 million, $7.9 million, $7.1 million, $6.3 million and $6.0 million, respectively.
Intangibles
Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer relationships and covenants not to compete.
Goodwill is tested for impairment at least annually, and we performed annual impairment tests during the fourth quarters of 2012, 2011 and 2010. The results of all of these tests indicated that goodwill was not impaired.
The changes in the carrying amount of goodwill by reportable segment are as follows (in thousands):
 
North America
 
Europe
 
Total
Balance as of January 1, 2010
$
938,783

 
$
—

 
$
938,783

Business acquisitions and adjustments to previously recorded goodwill
91,757

 
—

 
91,757

Exchange rate effects
2,433

 
—

 
2,433

Balance as of December 31, 2010
$
1,032,973

 
$
—

 
$
1,032,973

Business acquisitions and adjustments to previously recorded goodwill
105,177

 
337,031

 
442,208

Exchange rate effects
(1,520
)
 
2,402

 
882

Balance as of December 31, 2011
$
1,136,630

 
$
339,433

 
$
1,476,063

Business acquisitions and adjustments to previously recorded goodwill
201,742

 
(4,140
)
 
197,602

Exchange rate effects
1,459

 
15,160

 
16,619

Balance as of December 31, 2012
$
1,339,831

 
$
350,453

 
$
1,690,284


In 2011 and 2012, we finalized the valuation of certain intangible assets acquired related to our 2010 and 2011 acquisitions, respectively. As these adjustments did not have a material impact on our financial position or results of operations, we recorded these adjustments to goodwill and amortization expense in 2011 and 2012, respectively.
The components of other intangibles are as follows (in thousands):
 
December 31, 2012
 
December 31, 2011
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Trade names and trademarks
$
118,422

 
$
(21,599
)
 
$
96,823

 
$
115,954

 
$
(16,305
)
 
$
99,649

Customer relationships
14,426

 
(6,642
)
 
7,784

 
10,050

 
(3,065
)
 
6,985

Covenants not to compete
3,654

 
(1,546
)
 
2,108

 
3,194

 
(918
)
 
2,276

 
$
136,502

 
$
(29,787
)
 
$
106,715

 
$
129,198

 
$
(20,288
)
 
$
108,910


In 2012, we recorded $0.6 million of trade names, $4.1 million of customer relationships and $0.6 million of covenants not to compete resulting from our 2012 acquisitions and adjustments to certain preliminary intangible asset valuations from our 2011 acquisitions. In 2011, we recorded $40.1 million of trade names, $5.7 million of customer relationships and $1.5 million of covenants not to compete resulting from our 2011 acquisitions and adjustments to certain preliminary intangible asset valuations from our 2010 acquisitions. The trade names recorded in 2011 included $39.3 million for the Euro Car Parts trade name related to our acquisition of Euro Car Parts Holdings Limited (“ECP”) effective October 1, 2011. 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 10 years) on either a straight-line or accelerated basis. Covenants not to compete are amortized over the lives of the respective agreements, which range from one to five years, on a straight-line basis. Amortization expense for intangibles was $9.5 million, $7.9 million and $4.2 million during the years ended December 31, 2012, 2011 and 2010, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2017 is $8.8 million, $7.9 million, $7.1 million, $6.3 million and $6.0 million, respectively.
Impairment of Long-Lived Assets 
Impairment of Long-Lived Assets
Long-lived assets are reviewed for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. If such review indicates that the carrying amount of long-lived assets is not recoverable, the carrying amount of such assets is reduced to fair value. There were no material adjustments to the carrying value of long-lived assets of continuing operations during the years ended December 31, 2012, 2011 or 2010.
Product Warranties 
Product Warranties
Some of our salvage mechanical products are sold with a standard six month warranty against defects. Additionally, some of our remanufactured engines are sold with a standard three year warranty against defects. We also provide a limited lifetime warranty for certain of our aftermarket products. We record the estimated warranty costs at the time of sale using historical warranty claim information to project future warranty claims activity. The changes in the warranty reserve are as follows (in thousands):
Balance as of January 1, 2011
$
2,063

Warranty expense
22,364

Warranty claims
(20,802
)
Business acquisitions
3,722

Balance as of December 31, 2011
$
7,347

Warranty expense
29,628

Warranty claims
(27,514
)
Business acquisitions
1,113

Balance as of December 31, 2012
$
10,574


For an additional fee, we also sell extended warranty contracts for certain mechanical products. The expense related to extended warranty claims is recognized when the claim is made.
Self-Insurance Reserves 
Self-Insurance Reserves
We self-insure a portion of employee medical benefits under the terms of our employee health insurance program. We purchase certain stop-loss insurance to limit our liability exposure. We also self-insure a portion of our property and casualty risk, which includes automobile liability, general liability, directors and officers liability, workers' compensation and property coverage, under deductible insurance programs. The insurance premium costs are expensed over the contract periods. A reserve for liabilities associated with these losses is established for claims filed and claims incurred but not yet reported based upon our estimate of ultimate cost, which is calculated using analyses of historical data. We monitor new claims and claim development as well as trends related to the claims incurred but not reported in order to assess the adequacy of our insurance reserves. Total self-insurance reserves were $44.1 million and $37.4 million, including $21.5 million and $18.2 million classified as Other Accrued Expenses, as of December 31, 2012 and 2011, respectively. The remaining balances of self-insurance reserves are classified as Other Noncurrent Liabilities, which reflects management's estimates of when claims will be paid. The reserves presented on the Consolidated Balance Sheets are net of claims deposits of $0.5 million at both December 31, 2012 and 2011. In addition to these claims deposits, we had outstanding letters of credit of $37.1 million and $31.8 million at December 31, 2012 and 2011, respectively, to guarantee self-insurance claims payments. While we do not expect the amounts ultimately paid to differ significantly from our estimates, our insurance reserves and corresponding expenses could be affected if future claims experience differs significantly from historical trends and assumptions.
Income Taxes 
Income Taxes
Current income taxes are provided on income reported for financial reporting purposes, adjusted for transactions that do not enter into the computation of income taxes payable in the same year. Deferred income taxes have been provided to show the effect of temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before we are able to realize their benefit or that future deductibility is uncertain.
We recognize the benefits of uncertain tax positions taken or expected to be taken in tax returns in the provision for income taxes only for those positions that are more likely than not to be realized. We follow a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. Our policy is to include interest and penalties associated with income tax obligations in income tax expense.
U.S. federal income taxes are not provided on our interest in undistributed earnings of foreign subsidiaries when it is management's intent that such earnings will remain invested in those subsidiaries or other foreign subsidiaries. Taxes will be provided on these earnings in the period in which a decision is made to repatriate the earnings.
Depreciation Expense 
Depreciation Expense
Included in Cost of Goods Sold on the Consolidated Statements of Income is depreciation expense associated with our refurbishing, remanufacturing, and furnace operations and our distribution centers.
Rental Expense 
Rental Expense
We recognize rental expense on a straight-line basis over the respective lease terms, including reasonably-assured renewal periods, for all of our operating leases.
Foreign Currency Translation 
Foreign Currency Translation
For most of our foreign operations, the local currency is the functional currency. Assets and liabilities are translated into U.S. dollars at the period-ending exchange rate. Statements of Income amounts are translated to U.S. dollars using average exchange rates during the period. Translation gains and losses are reported as a component of Accumulated Other Comprehensive Income (Loss) in stockholders' equity.
Recent Accounting Pronouncements 
Recent Accounting Pronouncements
Effective January 1, 2012, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2011-05, “Presentation of Comprehensive Income” and ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.” These ASUs eliminate the option to present the components of other comprehensive income in the statement of changes in stockholders’ equity. Instead, entities have the option to present the components of net income, the components of other comprehensive income and total comprehensive income in a single continuous statement or in two separate but consecutive statements. The amendments did not change the items reported in other comprehensive income or when an item of other comprehensive income is reclassified to net income. As a result, the adoption of this guidance did not affect our financial position, results of operations or cash flows. We have presented the components of net income, the components of other comprehensive income and total comprehensive income in two separate but consecutive statements.
Additionally, in February 2013, the FASB issued ASU 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” This update requires disclosure of amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2012. The update does not change the items reported in other comprehensive income or when an item of other comprehensive income is reclassified to net income. As this guidance only revises the presentation and disclosures related to the reclassification of items out of accumulated other comprehensive income, the adoption of this guidance will not affect our financial position, results of operations or cash flows.
Effective January 1, 2012, we adopted FASB ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” This update clarifies existing fair value measurement requirements, amends existing guidance primarily related to fair value measurements for financial instruments, and requires enhanced disclosures on fair value measurements. The additional disclosures are specific to Level 3 fair value measurements, transfers between Level 1 and Level 2 of the fair value hierarchy, financial instruments not measured at fair value and use of an asset measured or disclosed at fair value differing from its highest and best use. We applied the provisions of this ASU to our fair value measurements during the current year, however, the adoption did not have a material effect on our financial statements. See Note 7, "Fair Value Measurements," for the required disclosures.
Summary of Significant Accounting Policies (Tables)
Schedule Of Inventory 
Inventory consists of the following (in thousands):
 
December 31,
 
2012
 
2011
Aftermarket and refurbished products
$
523,677

 
$
445,787

Salvage and remanufactured products
377,126

 
291,059

 
$
900,803

 
$
736,846

Schedule Of Estimated Useful Lives 
Our estimated useful lives are as follows:
Land improvements
10-20 years
Buildings and improvements
20-40 years
Furniture, fixtures and equipment
3-20 years
Computer equipment and software
3-10 years
Vehicles and trailers
3-10 years
Schedule Of Property And Equipment 
Property and equipment consists of the following (in thousands):
 
December 31,
 
2012
 
2011
Land and improvements
$
87,720

 
$
81,170

Buildings and improvements
133,368

 
119,414

Furniture, fixtures and equipment
243,565

 
192,514

Computer equipment and software
91,588

 
79,195

Vehicles and trailers
51,187

 
40,825

Leasehold improvements
91,280

 
69,079

 
698,708

 
582,197

Less—Accumulated depreciation
(231,130
)
 
(179,950
)
Construction in progress
26,801

 
21,851

 
$
494,379

 
$
424,098

Changes In Carrying Amount Of Goodwill 
The changes in the carrying amount of goodwill by reportable segment are as follows (in thousands):
 
North America
 
Europe
 
Total
Balance as of January 1, 2010
$
938,783

 
$
—

 
$
938,783

Business acquisitions and adjustments to previously recorded goodwill
91,757

 
—

 
91,757

Exchange rate effects
2,433

 
—

 
2,433

Balance as of December 31, 2010
$
1,032,973

 
$
—

 
$
1,032,973

Business acquisitions and adjustments to previously recorded goodwill
105,177

 
337,031

 
442,208

Exchange rate effects
(1,520
)
 
2,402

 
882

Balance as of December 31, 2011
$
1,136,630

 
$
339,433

 
$
1,476,063

Business acquisitions and adjustments to previously recorded goodwill
201,742

 
(4,140
)
 
197,602

Exchange rate effects
1,459

 
15,160

 
16,619

Balance as of December 31, 2012
$
1,339,831

 
$
350,453

 
$
1,690,284

Components Of Other Intangibles 
The components of other intangibles are as follows (in thousands):
 
December 31, 2012
 
December 31, 2011
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Trade names and trademarks
$
118,422

 
$
(21,599
)
 
$
96,823

 
$
115,954

 
$
(16,305
)
 
$
99,649

Customer relationships
14,426

 
(6,642
)
 
7,784

 
10,050

 
(3,065
)
 
6,985

Covenants not to compete
3,654

 
(1,546
)
 
2,108

 
3,194

 
(918
)
 
2,276

 
$
136,502

 
$
(29,787
)
 
$
106,715

 
$
129,198

 
$
(20,288
)
 
$
108,910

Changes In Warranty Reserve 
The changes in the warranty reserve are as follows (in thousands):
Balance as of January 1, 2011
$
2,063

Warranty expense
22,364

Warranty claims
(20,802
)
Business acquisitions
3,722

Balance as of December 31, 2011
$
7,347

Warranty expense
29,628

Warranty claims
(27,514
)
Business acquisitions
1,113

Balance as of December 31, 2012
$
10,574

Discontinued Operations Discontinued Operations (Tables)
Results Of Operations For Discontinued Operations
Results of operations for the discontinued operations are as follows (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Revenue
$
—

 
$
—

 
$
686

Income before income tax provision
$
—

 
$
—

 
$
355

Income tax provision
—

 
—

 
131

Income from discontinued operations, net of taxes, before gain on sale of discontinued operations
—

 
—

 
224

Gain on sale of discontinued operations, net of taxes of $1,015
—

 
—

 
1,729

Income from discontinued operations, net of taxes
$
—

 
$
—

 
$
1,953

Equity Incentive Plans (Tables)
Summary Of Transactions In Stock-Based Compensation Plans 
A summary of transactions in our stock-based compensation plans is as follows:
 
Shares
Available For
Grant
 
RSUs
 
Stock Options
 
Restricted Stock
Number
Outstanding
 
Weighted
Average
Grant Date
Fair Value
 
Number
Outstanding
 
Weighted
Average
Exercise
Price
 
Number
Outstanding
 
Weighted
Average
Grant Date
Fair Value
Balance, January 1, 2010
7,285,606

 
—

 
$
—

 
18,658,814

 
$
4.41

 
404,000

 
$
9.50

Granted
(3,423,066
)
 
—

 
—

 
3,423,066

 
9.98

 
—

 
—

Exercised
—

 
—

 
—

 
(5,516,310
)
 
2.53

 
—

 
—

Vested
—

 
—

 
—

 
—

 
—

 
(96,000
)
 
9.51

Cancelled
417,640

 
—

 
—

 
(417,640
)
 
8.06

 
—

 
—

Balance, December 31, 2010
4,280,180

 
—

 
$
—

 
16,147,930

 
$
6.14

 
308,000

 
$
9.50

Granted
(1,643,348
)
 
1,643,348

 
11.80

 
—

 
—

 
—

 
—

Shares Issued for Director Compensation
(31,166
)
 
—

 
—

 
—

 
—

 
—

 
—

Exercised
—

 
—

 
—

 
(2,768,038
)
 
4.31

 
—

 
—

Vested
—

 
(164,862
)
 
11.84

 
—

 
—

 
(96,000
)
 
9.51

Cancelled
346,704

 
(44,904
)
 
11.77

 
(301,800
)
 
8.44

 
—

 
—

Additional Shares Authorized
12,800,000

 
—

 
—

 
—

 
—

 
—

 
—

Balance, December 31, 2011
15,752,370

 
1,433,582

 
$
11.80

 
13,078,092

 
$
6.47

 
212,000

 
$
9.49

Granted
(1,504,410
)
 
1,504,410

 
15.86

 
—

 
—

 
—

 
—

Exercised
—

 
—

 
—

 
(3,446,472
)
 
5.13

 
—

 
—

Vested
—

 
(467,208
)
 
13.09

 
—

 
—

 
(96,000
)
 
9.51

Cancelled
395,972

 
(119,422
)
 
14.03

 
(276,550
)
 
8.30

 
—

 
—

Balance, December 31, 2012
14,643,932

 
2,351,362

 
$
14.02

 
9,355,070

 
$
6.90

—

116,000

 
$
9.47

Summary Of Expected to Vest RSUs, Options, and Restricted Shares 
The following table summarizes information about expected to vest RSUs and restricted stock, and vested and expected to vest options at December 31, 2012:
 
Shares
 
Weighted
Average
Remaining
Contractual
Life (Yrs)
 
Intrinsic
Value
(in thousands)
 
Weighted
Average
Exercise
Price
RSUs
2,319,877

 
3.5
 
$
48,949

 
$
—

Stock options
9,079,684

 
5.0
 
129,421

 
6.85

Restricted stock
116,000

 
0.6
 
2,448

 
—

Summary Of Oustanding And Exercisable Stock Options 
The following table summarizes information about outstanding and exercisable stock options at December 31, 2012:
 
 
Outstanding
 
Exercisable
Range of Exercise Prices
 
Shares
 
Weighted
Average
Remaining
Contractual
Life (Yrs)
 
Weighted
Average
Exercise
Price
 
Shares
 
Weighted
Average
Remaining
Contractual
Life (Yrs)
 
Weighted
Average
Exercise
Price
$1.50 - $3.50
 
1,357,538

 
1.6
 
$
2.11

 
1,357,538

 
1.6
 
$
2.11

$3.51 - $5.50
 
1,676,760

 
3.5
 
4.85

 
1,676,760

 
3.5
 
4.85

$5.51 - $7.50
 
2,193,800

 
6.0
 
5.98

 
1,448,330

 
6.0
 
5.98

$7.51 - $9.50
 
215,666

 
6.1
 
9.21

 
160,733

 
5.8
 
9.25

$9.51 +
 
3,911,306

 
6.3
 
9.84

 
2,253,124

 
6.0
 
9.78

 
 
9,355,070

 
5.0
 
$
6.90

 
6,896,485

 
4.5
 
$
6.26

Summary Of Weighted Average Assumptions Used To Compute The Fair Value Of Stock Options 
The following table summarizes the weighted average assumptions used to compute the fair value of stock option grants:
 
Year Ended
December 31,
 
2010
Expected life (in years)
6.4

Risk-free interest rate
3.17
%
Volatility
43.9
%
Dividend yield
0
%
Weighted average fair value of options granted
$
4.77

Schedule Of Pre-Tax Stock-Based Compensation Expense 
The components of pre-tax stock-based compensation expense are as follows (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
RSUs
$
8,411

 
$
3,666

 
$
—

Stock options
6,310

 
8,129

 
8,771

Restricted stock
913

 
913

 
913

Stock issued to non-employee directors
—

 
399

 
290

Total stock-based compensation expense
$
15,634

 
$
13,107

 
$
9,974

Schedule Of Stock-Based Compensation Expense Included In Statements Of Income 
The following table sets forth the classification of total stock-based compensation expense included in our Consolidated Statements of Income (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Cost of goods sold
$
376

 
$
327

 
$
278

Facility and warehouse expenses
2,465

 
2,391

 
2,069

Selling, general and administrative expenses
12,793

 
10,389

 
7,627

 
15,634

 
13,107

 
9,974

Income tax benefit
(6,097
)
 
(5,059
)
 
(3,920
)
Total stock-based compensation expense, net of tax
$
9,537

 
$
8,048

 
$
6,054

Schedule Of Stock-Based Compensation Expense Expected To Be Recognized 
As of December 31, 2012, unrecognized compensation expense related to unvested RSUs, stock options and restricted stock is expected to be recognized as follows (in thousands):
 
RSUs
 
Stock
Options
 
Restricted
Stock
 
Total
2013
$
8,254

 
$
4,580

 
$
208

 
$
13,042

2014
7,897

 
3,007

 
139

 
11,043

2015
7,861

 
75

 
—

 
7,936

2016
4,394

 
—

 
—

 
4,394

2017
141

 
—

 
—

 
141

Total unrecognized compensation expense
$
28,547

 
$
7,662

 
$
347

 
$
36,556

Long-Term Obligations (Tables)
Schedule Of Long-Term Obligations 
Long-Term Obligations consist of the following (in thousands):
 
December 31,
 
2012
 
2011
Senior secured credit agreement:
 
 
 
Term loans payable
$
420,625

 
$
240,625

Revolving credit facility
553,964

 
660,730

Receivables securitization facility
80,000

 
—

Notes payable through October 2018 at weighted average interest rates of 1.7% and 2.0%, respectively
42,398

 
38,338

Other long-term debt at weighted average interest rates of 3.3% and 3.2%, respectively
21,491

 
16,383

 
1,118,478

 
956,076

Less current maturities
(71,716
)
 
(29,524
)
 
$
1,046,762

 
$
926,552

Schedule Of Maturities Of Long-Term Obligations 
The scheduled maturities of long-term obligations outstanding at December 31, 2012 are as follows (in thousands):
2013
$
71,716

2014
54,611

2015
138,323

2016
847,759

2017
848

Thereafter
5,221

 
$
1,118,478

Derivative Instruments and Hedging Activities (Tables)
Terms Of Interest Rate Swap Agreements
The following table summarizes the terms of our interest rate swap agreements as of December 31, 2012:
Notional Amount
 
Effective Date
 
Maturity Date
 
Fixed Interest Rate*
USD $250,000,000
 
October 14, 2010
 
October 14, 2015
 
3.31%
USD $100,000,000
 
April 14, 2011
 
October 14, 2013
 
2.86%
USD $60,000,000
 
November 30, 2011
 
October 31, 2016
 
2.95%
USD $60,000,000
 
November 30, 2011
 
October 31, 2016
 
2.94%
USD $50,000,000
 
December 30, 2011
 
December 30, 2016
 
2.94%
GBP £50,000,000
 
November 30, 2011
 
October 30, 2016
 
3.11%
CAD $25,000,000
 
December 30, 2011
 
March 24, 2016
 
3.17%
 

* Includes applicable margin of 1.75% per annum on LIBOR or CDOR-based debt in effect as of December 31, 2012 under the Credit Agreement.
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 December 31, 2012 and 2011 (in thousands):
 
Balance as of December 31, 2012
 
Fair Value Measurements as of December 31, 2012
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
Cash surrender value of life insurance
$
19,492

 
$
—

 
$
19,492

 
$
—

Total Assets
$
19,492

 
$
—

 
$
19,492

 
$
—

Liabilities:
 
 
 
 
 
 
 
Contingent consideration liabilities
$
90,009

 
$
—

 
$
—

 
$
90,009

Deferred compensation liabilities
19,843

 
—

 
19,843

 
—

Interest rate swaps
15,643

 
—

 
15,643

 
—

Total Liabilities
$
125,495

 
$
—

 
$
35,486

 
$
90,009

 
Balance as of December 31, 2011
 
Fair Value Measurements as of December 31, 2011
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
Cash surrender value of life insurance
$
13,413

 
$
—

 
$
13,413

 
$
—

Total Assets
$
13,413

 
$
—

 
$
13,413

 
$
—

Liabilities:
 
 
 
 
 
 
 
Contingent consideration liabilities
$
82,382

 
$
—

 
$
—

 
$
82,382

Deferred compensation liabilities
14,071

 
—

 
14,071

 
—

Interest rate swaps
10,576

 
—

 
10,576

 
—

Total Liabilities
$
107,029

 
$
—

 
$
24,647

 
$
82,382

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:
 
December 31,
 
2012
 
2011
Unobservable Input
(Weighted Average)
Probability of achieving payout targets
79.7
%
 
78.1
%
Discount rate
6.6
%
 
3.0
%
Changes In Fair Value Of Contingent Consideration Obligations 
Changes in the fair value of our contingent consideration obligations are as follows (in thousands):
Balance as of January 1, 2011
$
2,000

Contingent consideration liabilities recorded for business acquisitions
81,239

Decrease in fair value included in earnings
(1,408
)
Exchange rate effects
551

Balance as of December 31, 2011
$
82,382

Contingent consideration liabilities recorded for business acquisitions
5,456

Payments
(3,100
)
Increase in fair value included in earnings
1,643

Exchange rate effects
3,628

Balance as of December 31, 2012
$
90,009

Commitments and Contingencies (Tables)
Future Minimum Lease Commitments
The future minimum lease commitments under these leases at December 31, 2012 are as follows (in thousands):
Years ending December 31:
 
2013
$
99,345

2014
88,494

2015
78,536

2016
62,795

2017
51,159

Thereafter
156,506

Future Minimum Lease Payments
$
536,835

Business Combinations (Tables)
Purchase Price Allocations For Acquisitions 
The purchase price allocations for the acquisitions completed during 2012 and 2011 are as follows (in thousands):
 
 
Year Ended December 31,
 
2012
 
2011
 
(Preliminary)
 
ECP
 
Other Acquisitions
 
Total
Receivables
$
15,473

 
$
54,225

 
$
23,538

 
$
77,763

Receivable reserves
(1,459
)
 
(3,832
)
 
(1,121
)
 
(4,953
)
Inventory
62,305

 
93,835

 
59,846

 
153,681

Prepaid expenses and other current assets
201

 
3,189

 
2,820

 
6,009

Property and equipment
31,930

 
41,830

 
10,614

 
52,444

Goodwill
201,742

 
332,891

 
105,177

 
438,068

Other intangibles
655

 
43,723

 
7,683

 
51,406

Other assets
187

 
13

 
9,420

 
9,433

Deferred income taxes
428

 
(13,218
)
 
7,235

 
(5,983
)
Current liabilities assumed
(22,910
)
 
(135,390
)
 
(17,257
)
 
(152,647
)
Debt assumed
(3,989
)
 
(13,564
)
 
—

 
(13,564
)
Other noncurrent liabilities assumed
—

 
—

 
(619
)
 
(619
)
Contingent consideration liabilities
(5,456
)
 
(77,539
)
 
(3,700
)
 
(81,239
)
Other purchase price obligations
(1,647
)
 
(4,136
)
 
(4,510
)
 
(8,646
)
Notes issued
(15,990
)
 
(28,302
)
 
(5,917
)
 
(34,219
)
Cash used in acquisitions, net of cash acquired
$
261,470

 
$
293,725

 
$
193,209

 
$
486,934

Pro Forma Effect Of Businesses Acquired 
The following pro forma summary presents the effect of the businesses acquired during the year ended December 31, 2012 as though the businesses had been acquired as of January 1, 2011, the businesses acquired during the year ended December 31, 2011 as though they had been acquired as of January 1, 2010 and the businesses acquired during the year ended December 31, 2010 as though they had been acquired as of January 1, 2009. The pro forma adjustments are based upon unaudited financial information of the acquired entities (in thousands, except per share data):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Revenue, as reported
$
4,122,930

 
$
3,269,862

 
$
2,469,881

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

 
407,042

 
420,769

Other acquisitions
202,144

 
466,002

 
504,044

Pro forma revenue
$
4,325,074

 
$
4,142,906

 
$
3,394,694

Income from continuing operations, as reported
$
261,225

 
$
210,264

 
$
167,118

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

 
21,858

 
9,669

Other acquisitions
12,674

 
27,396

 
12,996

Pro forma income from continuing operations
$
273,899

 
$
259,518

 
$
189,783

Basic earnings per share from continuing operations, as reported
$
0.88

 
$
0.72

 
$
0.58

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

 
0.07

 
0.03

Other acquisitions
0.04

 
0.09

 
0.05

Pro forma basic earnings per share from continuing operations (a) 
$
0.93

 
$
0.89

 
$
0.66

Diluted earnings per share from continuing operations, as reported
$
0.87

 
$
0.71

 
0.57

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

 
0.07

 
0.03

Other acquisitions
0.04

 
0.09

 
0.04

Pro forma diluted earnings per share from continuing operations (a) 
$
0.91

 
$
0.87

 
$
0.65


(a) The sum of the individual earnings per share amounts may not equal the total due to rounding.
Earnings Per Share (Tables)
Computation Of Earnings Per Share 
The following chart sets forth the computation of earnings per share (in thousands, except per share amounts):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Income from continuing operations
$
261,225

 
$
210,264

 
$
167,118

Denominator for basic earnings per share—Weighted-average shares outstanding
295,810

 
292,252

 
286,542

Effect of dilutive securities:
 
 
 
 
 
RSUs
479

 
182

 
—

Stock options
4,346

 
4,250

 
5,118

Restricted stock
58

 
66

 
54

Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding
300,693

 
296,750

 
291,714

Basic earnings per share from continuing operations
$
0.88

 
$
0.72

 
$
0.58

Diluted earnings per share from continuing operations
$
0.87

 
$
0.71

 
$
0.57

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 (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Antidilutive securities:
 
 
 
 
 
Stock options
—

 
2,340

 
5,714

Restricted stock
—

 
—

 
80

Income Taxes Income Taxes (Tables)
Schedule Of Components Of Income Tax Expense (Benefit) 
The provision for income taxes consists of the following components (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Current:
 
 
 
 
 
Federal
$
110,825

 
$
97,887

 
$
75,009

State
19,693

 
14,435

 
16,552

Foreign
13,202

 
3,883

 
2,483

 
$
143,720

 
$
116,205

 
$
94,044

Deferred:
 
 
 
 
 
Federal
$
5,824

 
$
8,376

 
$
8,928

State
(647
)
 
919

 
598

Foreign
(955
)
 
7

 
(563
)
 
$
4,222

 
$
9,302

 
$
8,963

Provision for income taxes
$
147,942

 
$
125,507

 
$
103,007

Schedule Of Income Before Income Tax, Domestic and Foreign 
Income taxes have been based on the following components of income from continuing operations before provision for income taxes (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Domestic
$
348,150

 
$
319,305

 
$
264,438

Foreign
61,017

 
16,466

 
5,687

 
$
409,167

 
$
335,771

 
$
270,125

Schedule Of Effective Income Tax Rate Reconciliation 
The U.S. federal statutory rate is reconciled to the effective tax rate as follows:
 
Year Ended December 31,
 
2012
 
2011
 
2010
U.S. federal statutory rate
35.0
 %
 
35.0
 %
 
35.0
 %
State income taxes, net of state credits and federal tax impact
3.1
 %
 
3.1
 %
 
3.4
 %
Impact of international operations
(2.3
)%
 
(0.8
)%
 
(0.3
)%
Non-deductible expenses
0.8
 %
 
0.7
 %
 
0.3
 %
Federal production incentives and credits
(0.3
)%
 
(0.4
)%
 
(0.2
)%
Revaluation of deferred taxes
(0.3
)%
 
—
 %
 
(0.5
)%
Other, net
0.2
 %
 
(0.2
)%
 
0.4
 %
Effective tax rate
36.2
 %
 
37.4
 %
 
38.1
 %

Schedule Of Deferred Tax Assets and Liabilities 
The significant components of our deferred tax assets and liabilities are as follows (in thousands):
 
December 31,
 
2012
 
2011
Deferred Tax Assets:
 
 
 
Inventory
$
29,523

 
$
22,267

Accrued expenses and reserves
27,361

 
18,357

Accounts receivable
10,037

 
10,860

Stock-based compensation
9,442

 
8,945

Qualified and nonqualified retirement plans
7,476

 
5,157

Net operating loss carryforwards
4,451

 
4,722

Interest rate swaps
5,461

 
3,679

Other
4,711

 
8,621

 
98,462

 
82,608

Less valuation allowance
(1,631
)
 
(1,911
)
Total deferred tax assets
$
96,831

 
$
80,697

Deferred Tax Liabilities:
 
 
 
Goodwill and other intangible assets
$
64,704

 
$
46,373

Property and equipment
48,994

 
44,535

Trade name
30,336

 
32,592

Other
1,428

 
1,864

Total deferred tax liabilities
$
145,462

 
$
125,364

Net deferred tax liability
$
(48,631
)
 
$
(44,667
)
Schedule Of Deferred Tax Assets And Liabilities Classification 
Deferred tax assets and liabilities are reflected on our Consolidated Balance Sheets as follows (in thousands):
 
December 31,
 
2012
 
2011
Current deferred tax assets
$
53,485

 
$
45,690

Noncurrent deferred tax assets
164

 
—

Current deferred tax liabilities
5

 
1,561

Noncurrent deferred tax liabilities
102,275

 
88,796

Schedule Of Unrecognized Tax Benefits Rollforward 
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands):
 
2012
 
2011
 
2010
Balance at January 1
$
5,497

 
$
5,441

 
$
8,526

Additions based on tax positions related to the current year
973

 
952

 
713

Additions for tax positions of prior years
167

 
192

 
281

Reductions for tax positions of prior years
(2,379
)
 
—

 
(86
)
Reductions for tax positions of prior years—timing differences
—

 
—

 
(2,041
)
Lapse of statutes of limitations
(998
)
 
(892
)
 
(1,952
)
Settlements with taxing authorities
(957
)
 
(196
)
 
—

Balance at December 31
$
2,303

 
$
5,497

 
$
5,441

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):
 
 
Foreign
Currency
Translation
 
Unrealized (Loss)
Gain
on Interest Rate
Swaps
 
Unrealized Gain
(Loss)
on Pension Plan
 
Accumulated
Other
Comprehensive
(Loss) Income
Balance at January 1, 2010
 
$
(876
)
 
$
(6,536
)
 
$
15

 
$
(7,397
)
Pretax income
 
3,078

 
3,230

 
—

 
6,308

Income tax expense
 
—

 
(1,054
)
 
—

 
(1,054
)
Reversal of unrealized (gain) loss
 
—

 
10,377

 
(15
)
 
10,362

Reversal of deferred income taxes
 
—

 
(3,841
)
 
—

 
(3,841
)
Balance at December 31, 2010
 
$
2,202

 
$
2,176

 
$
—

 
$
4,378

Pretax loss
 
(4,273
)
 
(19,391
)
 
—

 
(23,664
)
Income tax benefit
 
—

 
6,847

 
—

 
6,847

Reversal of unrealized loss
 
—

 
5,641

 
—

 
5,641

Reversal of deferred income taxes
 
—

 
(2,019
)
 
—

 
(2,019
)
Hedge ineffectiveness
 
—

 
(225
)
 
—

 
(225
)
Income tax benefit
 
—

 
81

 
—

 
81

Balance at December 31, 2011
 
$
(2,071
)
 
$
(6,890
)
 
$
—

 
$
(8,961
)
Pretax income (loss)
 
12,921

 
(11,313
)
 
—

 
1,608

Income tax benefit
 
—

 
3,962

 
—

 
3,962

Reversal of unrealized loss
 
—

 
6,439

 
—

 
6,439

Reversal of deferred income taxes
 
—

 
(2,289
)
 
—

 
(2,289
)
Balance at December 31, 2012
 
$
10,850

 
$
(10,091
)
 
$
—

 
$
759

Segment and Geographic Information (Tables)
Schedule Of Financial Performance By Reportable Segment 
The following table presents our financial performance, including revenue, earnings before interest, taxes, depreciation and amortization (“EBITDA”), and depreciation and amortization by reportable segment for the periods indicated (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Revenue
 
 
 
 
 
North America
$
3,426,858

 
$
3,131,376

 
$
2,469,881

Europe
696,072

 
138,486

 
—

Total revenue
$
4,122,930

 
$
3,269,862

 
$
2,469,881

EBITDA
 
 
 
 
 
North America
$
440,448

 
$
405,924

 
$
339,869

Europe
70,099

 
12,144

 
—

Total EBITDA
$
510,547

 
$
418,068

 
$
339,869

Depreciation and Amortization
 
 
 
 
 
North America
$
59,132

 
$
52,481

 
$
41,428

Europe
11,033

 
2,024

 
—

Total depreciation and amortization
$
70,165

 
$
54,505

 
$
41,428

Reconciliation Of Earnings Before Interest Taxes Depreciation And Amortization To Net Income Table [Text Block] 
The table below provides a reconciliation from EBITDA to Income from Continuing Operations (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
EBITDA
$
510,547

 
$
418,068

 
$
339,869

Depreciation and amortization
70,165

 
54,505

 
41,428

Interest expense, net
31,215

 
22,447

 
28,316

Loss on debt extinguishment
—

 
5,345

 
—

Provision for income taxes
147,942

 
125,507

 
103,007

Income from continuing operations
$
261,225

 
$
210,264

 
$
167,118

Schedule Of Capital Expenditures By Reportable Segment 
The following table presents capital expenditures, which includes additions to property and equipment, by reportable segment (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Capital Expenditures
 
 
 
 
 
North America
$
73,331

 
$
84,856

 
$
61,438

Europe
14,924

 
1,560

 
—

 
$
88,255

 
$
86,416

 
$
61,438

Schedule Of Assets By Reportable Segment 
The following table presents assets by reportable segment (in thousands):
 
December 31,
 
2012
 
2011
 
2010
Receivables, net
 
 
 
 
 
North America
$
241,627

 
$
230,871

 
$
191,085

Europe
70,181

 
50,893

 
—

Total receivables, net
311,808

 
281,764

 
191,085

Inventory
 
 
 
 
 
North America
750,565

 
636,145

 
492,688

Europe
150,238

 
100,701

 
—

Total inventory
900,803

 
736,846

 
492,688

Property and Equipment, net
 
 
 
 
 
North America
434,010

 
380,282

 
331,312

Europe
60,369

 
43,816

 
—

Total property and equipment, net
494,379

 
424,098

 
331,312

Other unallocated assets
2,016,466

 
1,756,996

 
1,284,424

Total assets
$
3,723,456

 
$
3,199,704

 
$
2,299,509

Schedule Of Revenue By Geographic Area 
The following table sets forth our revenue by geographic area (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Revenue
 
 
 
 
 
United States
$
3,209,024

 
$
2,952,620

 
$
2,366,224

United Kingdom
696,072

 
138,486

 
—

Other countries
217,834

 
178,756

 
103,657

 
$
4,122,930

 
$
3,269,862

 
$
2,469,881

Schedule Of Tangible Long-Lived Assets By Geographic Area 
The following table sets forth our tangible long-lived assets by geographic area (in thousands):
 
December 31,
 
2012
 
2011
Long-lived Assets
 
 
 
United States
$
408,244

 
$
360,961

United Kingdom
60,369

 
43,816

Other countries
25,766

 
19,321

 
$
494,379

 
$
424,098

Schedule Of Revenue By Product Category 
The following table sets forth our revenue by product category (in thousands):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Aftermarket, other new and refurbished products
$
2,286,853

 
$
1,634,003

 
$
1,236,806

Recycled, remanufactured and related products and services
1,277,023

 
1,115,088

 
888,320

Other
559,054

 
520,771

 
344,755

 
$
4,122,930

 
$
3,269,862

 
$
2,469,881

Selected Quarterly Data Selected Quarterly Data (Tables)
Summary Of Selected Quarterly Data
The following table represents unaudited selected quarterly financial data for the two years ended December 31, 2012. Beginning with quarter ended December 31, 2011, the selected quarterly financial data includes the results of ECP, which was acquired effective October 1, 2011. The operating results for any quarter are not necessarily indicative of the results for any future period.
 
Quarter Ended
(In thousands, except per share data)
Mar. 31
 
Jun. 30
 
Sep. 30
 
Dec. 31
2011
 
 
 
 
 
 
 
Revenue
$
786,648

 
$
759,684

 
$
783,898

 
$
939,632

Gross margin(1)
343,646

 
322,236

 
334,322

 
391,789

Operating income(1)
107,371

 
78,486

 
85,488

 
90,138

Net income(2)
58,182

 
46,706

 
49,231

 
56,145

Basic earnings per share(3)
$
0.20

 
$
0.16

 
$
0.17

 
$
0.19

Diluted earnings per share(3)
$
0.20

 
$
0.16

 
$
0.17

 
$
0.19

 
Quarter Ended
(In thousands, except per share data)
Mar. 31
 
Jun. 30
 
Sep. 30
 
Dec. 31
2012
 
 
 
 
 
 
 
Revenue
$
1,031,777

 
$
1,006,531

 
$
1,016,707

 
$
1,067,915

Gross margin(1)
447,383

 
421,931

 
409,705

 
445,121

Operating income(1)
133,608

 
108,567

 
91,434

 
104,344

Net income(2)
80,991

 
63,998

 
54,048

 
62,188

Basic earnings per share(3)
$
0.28

 
$
0.22

 
$
0.18

 
$
0.21

Diluted earnings per share(3)
$
0.27

 
$
0.21

 
$
0.18

 
$
0.21

(1)
Gross margin and operating income during the quarters ended March 31, 2012, June 30, 2012, September 30, 2012 and December 31, 2012 include gains of $8.3 million, $8.4 million, $0.5 million and $0.7 million, respectively, resulting from lawsuit settlements with certain of our aftermarket product suppliers as discussed in Note 8, "Commitments and Contingencies."
(2)
Net income during the quarters ended June 30, 2011 and December 31, 2011 includes a gain of $1.6 million and a loss of $0.2 million, respectively, for changes in fair value of our contingent consideration liabilities. The quarters ended March 31, 2012 and December 31, 2012 include gains for changes in fair value of our contingent consideration liabilities of $1.3 million and $0.2 million, respectively, while the quarters ended June 30, 2012 and September 30, 2012 include losses of $1.2 million and $1.9 million, respectively. See Note 7, "Fair Value Measurements," for further information on these changes in fair value of the contingent consideration obligations recorded in earnings during the periods.
(3)
The sum of the quarters may not equal the total of the respective year's earnings per share on either a basic or diluted basis due to changes in weighted average shares outstanding throughout the year.
Schedule II-Valuation and Qualifying Accounts and Reserves Schedule II-Valuation and Qualifying Accounts and Reserves (Tables)
Schedule II-Valuation And Qualifying Accounts
Schedule II—Valuation and Qualifying Accounts and Reserves
Descriptions
 
Balance at
Beginning of
Period
 
Additions
Charged to
Costs and
Expenses
 
Acquisitions and
Other
 
Deductions
 
Balance at End
of Period
 
 
(in thousands)
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2010
 
$
6,507

 
$
4,326

 
$
1,125

 
$
(5,063
)
 
$
6,895

Year ended December 31, 2011
 
6,895

 
5,084

 
2,199

 
(5,831
)
 
8,347

Year ended December 31, 2012
 
8,347

 
5,928

 
308

 
(5,113
)
 
9,470

ALLOWANCE FOR ESTIMATED RETURNS, DISCOUNTS & ALLOWANCES:
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2010
 
$
15,802

 
$
541,314

 
$
1,061

 
$
(539,992
)
 
$
18,185

Year ended December 31, 2011
 
18,185

 
668,936

 
2,754

 
(667,071
)
 
22,804

Year ended December 31, 2012
 
22,804

 
714,880

 
1,151

 
(714,143
)
 
24,692

Business Business - Additional Information (Details)
12 Months Ended
Dec. 31, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
Number of facilities (rounded)
500 
Stock split conversion ratio
2 
Summary of Significant Accounting Policies - Additional Information (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Finite-Lived Intangible Assets
 
 
 
Reserve for estimated returns, discounts and allowances
$ 24,700,000 
$ 22,800,000 
 
Revenue recognition period for lifetime extended warranties
3 years 
 
 
Shipping and handling revenue
25,600,000 
23,900,000 
17,300,000 
Reserve for uncollectible accounts
9,500,000 
8,300,000 
 
Amortization expense
9,500,000 
7,900,000 
4,200,000 
Estimated annual amortization expense, 2013
8,800,000 
 
 
Estimated annual amortization expense, 2014
7,900,000 
 
 
Estimated annual amortization expense, 2015
7,100,000 
 
 
Estimated annual amortization expense, 2016
6,300,000 
 
 
Estimated annual amortization expense, 2017
6,000,000 
 
 
Self-insurance reserve, total
44,100,000 
37,400,000 
 
Self-insurance reserve, current
21,500,000 
18,200,000 
 
Claims deposits
500,000 
500,000 
 
Percentage threshold to measure tax benefit
50.00% 
 
 
Self-insurance
 
 
 
Finite-Lived Intangible Assets
 
 
 
Outstanding letters of credit
37,100,000 
31,800,000 
 
Salvage Mechanical Products
 
 
 
Finite-Lived Intangible Assets
 
 
 
Standard warranty period
6 months 
 
 
Remanufactured Engines
 
 
 
Finite-Lived Intangible Assets
 
 
 
Standard warranty period
3 years 
 
 
Euro Car Parts Holdings Limited
 
 
 
Finite-Lived Intangible Assets
 
 
 
Intangible assets recognized
 
43,723,000 
 
Trade names and trademarks
 
 
 
Finite-Lived Intangible Assets
 
 
 
Intangible assets recognized
600,000 
40,100,000 
 
Trade names and trademarks |
Minimum
 
 
 
Finite-Lived Intangible Assets
 
 
 
Useful life, years
10 years 
 
 
Trade names and trademarks |
Maximum
 
 
 
Finite-Lived Intangible Assets
 
 
 
Useful life, years
30 years 
 
 
Trade names and trademarks |
Euro Car Parts Holdings Limited
 
 
 
Finite-Lived Intangible Assets
 
 
 
Intangible assets recognized
 
39,300,000 
 
Customer relationships
 
 
 
Finite-Lived Intangible Assets
 
 
 
Intangible assets recognized
4,100,000 
5,700,000 
 
Customer relationships |
Minimum
 
 
 
Finite-Lived Intangible Assets
 
 
 
Useful life, years
5 years 
 
 
Customer relationships |
Maximum
 
 
 
Finite-Lived Intangible Assets
 
 
 
Useful life, years
10 years 
 
 
Covenants not to compete
 
 
 
Finite-Lived Intangible Assets
 
 
 
Intangible assets recognized
$ 600,000 
$ 1,500,000 
 
Covenants not to compete |
Minimum
 
 
 
Finite-Lived Intangible Assets
 
 
 
Useful life, years
1 year 
 
 
Covenants not to compete |
Maximum
 
 
 
Finite-Lived Intangible Assets
 
 
 
Useful life, years
5 years 
 
 
Summary of Significant Accounting Policies Schedule of Inventory (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Product Information
 
 
 
Inventory
$ 900,803 
$ 736,846 
$ 492,688 
Aftermarket and refurbished products
 
 
 
Product Information
 
 
 
Inventory
523,677 
445,787 
 
Salvage and remanufactured products
 
 
 
Product Information
 
 
 
Inventory
$ 377,126 
$ 291,059 
 
Summary of Significant Accounting Policies Schedule of Estimated Useful Lives (Details)
12 Months Ended
Dec. 31, 2012
Land improvements |
Minimum
 
Property, Plant and Equipment
 
Estimated useful life
10 years 
Land improvements |
Maximum
 
Property, Plant and Equipment
 
Estimated useful life
20 years 
Buildings and improvements |
Minimum
 
Property, Plant and Equipment
 
Estimated useful life
20 years 
Buildings and improvements |
Maximum
 
Property, Plant and Equipment
 
Estimated useful life
40 years 
Furniture, fixtures and equipment |
Minimum
 
Property, Plant and Equipment
 
Estimated useful life
3 years 
Furniture, fixtures and equipment |
Maximum
 
Property, Plant and Equipment
 
Estimated useful life
20 years 
Computer equipment and software |
Minimum
 
Property, Plant and Equipment
 
Estimated useful life
3 years 
Computer equipment and software |
Maximum
 
Property, Plant and Equipment
 
Estimated useful life
10 years 
Vehicles and trailers |
Minimum
 
Property, Plant and Equipment
 
Estimated useful life
3 years 
Vehicles and trailers |
Maximum
 
Property, Plant and Equipment
 
Estimated useful life
10 years 
Summary of Significant Accounting Policies Schedule of Property and Equipment (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Property, Plant and Equipment
 
 
 
Property and equipment excluding construction in progress, gross
$ 698,708 
$ 582,197 
 
Less—Accumulated depreciation
(231,130)
(179,950)
 
Construction in progress
26,801 
21,851 
 
Property, Plant and Equipment, Net
494,379 
424,098 
331,312 
Land and improvements
 
 
 
Property, Plant and Equipment
 
 
 
Property and equipment excluding construction in progress, gross
87,720 
81,170 
 
Buildings and improvements
 
 
 
Property, Plant and Equipment
 
 
 
Property and equipment excluding construction in progress, gross
133,368 
119,414 
 
Furniture, fixtures and equipment
 
 
 
Property, Plant and Equipment
 
 
 
Property and equipment excluding construction in progress, gross
243,565 
192,514 
 
Computer equipment and software
 
 
 
Property, Plant and Equipment
 
 
 
Property and equipment excluding construction in progress, gross
91,588 
79,195 
 
Vehicles and trailers
 
 
 
Property, Plant and Equipment
 
 
 
Property and equipment excluding construction in progress, gross
51,187 
40,825 
 
Leasehold improvements
 
 
 
Property, Plant and Equipment
 
 
 
Property and equipment excluding construction in progress, gross
$ 91,280 
$ 69,079 
 
Changes in Carrying Amount of Goodwill (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Goodwill [Roll Forward]
 
 
 
Beginning balance
$ 1,476,063 
$ 1,032,973 
$ 938,783 
Business acquisitions and adjustments to previously recorded goodwill
197,602 
442,208 
91,757 
Exchange rate effects
16,619 
882 
2,433 
Ending balance
1,690,284 
1,476,063 
1,032,973 
North America
 
 
 
Goodwill [Roll Forward]
 
 
 
Beginning balance
1,136,630 
1,032,973 
938,783 
Business acquisitions and adjustments to previously recorded goodwill
201,742 
105,177 
91,757 
Exchange rate effects
1,459 
(1,520)
2,433 
Ending balance
1,339,831 
1,136,630 
1,032,973 
Europe
 
 
 
Goodwill [Roll Forward]
 
 
 
Beginning balance
339,433 
0 
 
Business acquisitions and adjustments to previously recorded goodwill
(4,140)
337,031 
 
Exchange rate effects
15,160 
2,402 
 
Ending balance
$ 350,453 
$ 339,433 
 
Components of Other Intangibles (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Finite-Lived Intangible Assets
 
 
Gross carrying amount
$ 136,502 
$ 129,198 
Accumulated amortization
(29,787)
(20,288)
Net
106,715 
108,910 
Trade names and trademarks
 
 
Finite-Lived Intangible Assets
 
 
Gross carrying amount
118,422 
115,954 
Accumulated amortization
(21,599)
(16,305)
Net
96,823 
99,649 
Customer relationships
 
 
Finite-Lived Intangible Assets
 
 
Gross carrying amount
14,426 
10,050 
Accumulated amortization
(6,642)
(3,065)
Net
7,784 
6,985 
Covenants not to compete
 
 
Finite-Lived Intangible Assets
 
 
Gross carrying amount
3,654 
3,194 
Accumulated amortization
(1,546)
(918)
Net
$ 2,108 
$ 2,276 
Changes in Warranty Reserve (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Warranty Reserve [Roll Forward]
 
 
Beginning balance
$ 7,347 
$ 2,063 
Warranty expense
29,628 
22,364 
Warranty claims
(27,514)
(20,802)
Business acquisitions
3,722 
1,113 
Ending balance
$ 10,574 
$ 7,347 
Discontinued Operations Discontinued Operations - Additional Information (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Jan. 15, 2010
Discontinued Operations and Disposal Groups [Abstract]
 
 
 
 
Number of self service retail facilities sold
 
 
 
2 
Proceeds from sale of businesses, net of cash sold
$ 0 
$ 0 
$ 11,992,000 
 
Gain on sale of discontinued operations, net of taxes
0 
0 
1,729,000 
 
Goodwill included in the cost basis of net assets disposed
 
 
 
$ 6,700,000 
Discontinued Operations Results of Operations for Discontinued Operations (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Discontinued Operations and Disposal Groups [Abstract]
 
 
 
Revenue
 
 
$ 686 
Income before income tax provision
 
 
355 
Income tax provision
 
 
131 
Income from discontinued operations, net of taxes, before gain on sale of discontinued operations
0 
0 
224 
Gain on sale of discontinued operations, net of taxes
0 
0 
1,729 
Income from discontinued operations, net of taxes
$ 0 
$ 0 
$ 1,953 
Discontinued Operations Results of Operations for Discontinued Operations (Parenthetical) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2010
Discontinued Operations and Disposal Groups [Abstract]
 
Tax portion of gain on sale of discontinued operations
$ 1,015 
Equity Incentive Plans - Additional Information (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended 2 Months Ended 12 Months Ended
Dec. 31, 2010
Mar. 1, 2013
RSUs
Dec. 31, 2012
RSUs
Dec. 31, 2011
RSUs
Dec. 31, 2012
Stock Options
Dec. 31, 2011
Stock Options
Dec. 31, 2010
Stock Options
Dec. 31, 2012
Restricted Stock
Dec. 31, 2011
Restricted Stock
Dec. 31, 2010
Restricted Stock
Dec. 31, 2012
1998 Equity Incentive Plan
Dec. 31, 2011
1998 Equity Incentive Plan
Dec. 31, 2012
Common Stock
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase in shares available for issuance under the Equity Incentive Plan
 
 
 
 
 
 
 
 
 
 
1,088,834 
12,800,000 
 
Total shares approved under the Equity Incentive Plan
 
 
 
 
 
 
 
 
 
 
69,900,000 
 
 
Shares available for issuance under the Equity Incentive Plan
 
 
 
 
 
 
 
 
 
 
14,643,932 
 
 
Vesting period
 
 
5 years 
 
5 years 
 
 
5 years 
 
 
 
 
 
Number of shares that RSUs convert into on the applicable vesting date
 
 
1 
 
 
 
 
 
 
 
 
 
 
Stock options expiration period
 
 
 
 
10 years 
 
 
 
 
 
 
 
 
Exercise price adjustment resulting from stock split
 
 
 
 
50.00% 
 
 
 
 
 
 
 
 
RSUs granted (shares)
 
594,700 
1,504,410 
1,643,348 
 
 
 
 
 
 
 
 
 
Closing stock price
 
 
 
 
 
 
 
 
 
 
 
 
$ 21.1 
Outstanding RSUs or restricted stock, intrinsic value
 
 
$ 49.6 
 
 
 
 
$ 2.4 
 
 
 
 
 
Outstanding stock options, intrinsic value
 
 
 
 
132.8 
 
 
 
 
 
 
 
 
Exercisable stock options, intrinsic value
 
 
 
 
102.3 
 
 
 
 
 
 
 
 
Forfeiture rates used for grants to employees
 
 
10.00% 
 
 
 
9.00% 
 
 
 
 
 
 
Forfeiture rates used for grants to non-employee directors and executive officers
 
 
0.00% 
 
 
 
0.00% 
 
 
 
 
 
 
Fair value of RSUs or restricted stock vested during the period
 
 
7.8 
2.2 
 
 
 
1.6 
1.1 
1.0 
 
 
 
Period of time as a public company
6 years 
 
 
 
 
 
 
 
 
 
 
 
 
Number of coupon issues related to the risk-free rate
 
 
 
 
 
 
0 
 
 
 
 
 
 
Dividend Yield
0.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of stock options vested
 
 
 
 
7.2 
8.6 
7.7 
 
 
 
 
 
 
Intrinsic value of stock options exercised
 
 
 
 
$ 45.3 
$ 24.8 
$ 43.2 
 
 
 
 
 
 
Summary of Transactions in Stock-Based Compensation Plans (Details) (USD $)
12 Months Ended 2 Months Ended 12 Months Ended
Dec. 31, 2012
Dec. 31, 2012
Shares Available For Grant
Dec. 31, 2011
Shares Available For Grant
Dec. 31, 2010
Shares Available For Grant
Mar. 1, 2013
RSUs
Dec. 31, 2012
RSUs
Dec. 31, 2011
RSUs
Dec. 31, 2012
Stock Options
Dec. 31, 2011
Stock Options
Dec. 31, 2010
Stock Options
Dec. 31, 2012
Restricted Stock
Dec. 31, 2011
Restricted Stock
Dec. 31, 2010
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Including Options, Shares Available for Grant [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
 
15,752,370 
4,280,180 
7,285,606 
 
 
 
 
 
 
 
 
 
Granted
 
(1,504,410)
(1,643,348)
(3,423,066)
 
 
 
 
 
 
 
 
 
Shares issued for director compensation
 
 
(31,166)
 
 
 
 
 
 
 
 
 
 
Cancelled
 
395,972 
346,704 
417,640 
 
 
 
 
 
 
 
 
 
Additional shares authorized
 
 
12,800,000 
 
 
 
 
 
 
 
 
 
 
Balance, end of period
 
14,643,932 
15,752,370 
4,280,180 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
9,355,070 
 
 
 
 
 
 
13,078,092 
16,147,930 
18,658,814 
 
 
 
Granted
 
 
 
 
 
 
 
 
 
3,423,066 
 
 
 
Exercised
 
 
 
 
 
 
 
(3,446,472)
(2,768,038)
(5,516,310)
 
 
 
Cancelled
 
 
 
 
 
 
 
(276,550)
(301,800)
(417,640)
 
 
 
Balance, end of period
9,355,070 
 
 
 
 
 
 
9,355,070 
13,078,092 
16,147,930 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, weighted average exercise price, beginning of period
$ 6.90 
 
 
 
 
 
 
$ 6.47 
$ 6.14 
$ 4.41 
 
 
 
Granted, weighted average exercise price
 
 
 
 
 
 
 
 
 
$ 9.98 
 
 
 
Exercised, weighted average exercise price
 
 
 
 
 
 
 
$ 5.13 
$ 4.31 
$ 2.53 
 
 
 
Cancelled, weighted average exercise price
 
 
 
 
 
 
 
$ 8.30 
$ 8.44 
$ 8.06 
 
 
 
Balance, weighted average exercise price, end of period
$ 6.90 
 
 
 
 
 
 
$ 6.90 
$ 6.47 
$ 6.14 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, weighted average grant date fair value, beginning of period
 
 
 
 
$ 14.02 
$ 11.80 
 
 
 
 
$ 9.49 
$ 9.50 
$ 9.50 
Granted, weighted average grant date fair value
 
 
 
 
 
$ 15.86 
$ 11.80 
 
 
 
 
 
 
Vested, weighted average grant date fair value
 
 
 
 
 
$ 13.09 
$ 11.84 
 
 
 
$ 9.51 
$ 9.51 
$ 9.51 
Cancelled, weighted average grant date fair value
 
 
 
 
 
$ 14.03 
$ 11.77 
 
 
 
 
 
 
Balance, weighted average grant date fair value, end of period
 
 
 
 
 
$ 14.02 
$ 11.80 
 
 
 
$ 9.47 
$ 9.49 
$ 9.50 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
 
 
 
 
2,351,362 
1,433,582 
 
 
 
 
212,000 
308,000 
404,000 
Granted
 
 
 
 
594,700 
1,504,410 
1,643,348 
 
 
 
 
 
 
Vested
 
 
 
 
 
(467,208)
(164,862)
 
 
 
(96,000)
(96,000)
(96,000)
Cancelled
 
 
 
 
 
(119,422)
(44,904)
 
 
 
 
 
 
Balance, end of period
 
 
 
 
 
2,351,362 
1,433,582 
 
 
 
116,000 
212,000 
308,000 
Equity Incentive Plans Summary of Expected to Vest RSUs, Stock Options, and Restricted Stock (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2012
RSUs
 
Summary of Expected to Vest RSUs, Stock Options, and Restricted Stock [Line Items]
 
Shares
2,319,877 
Weighted average remaining contractual life
3 years 6 months 
Intrinsic value
$ 48,949 
Stock Options
 
Summary of Expected to Vest RSUs, Stock Options, and Restricted Stock [Line Items]
 
Shares
9,079,684 
Weighted average remaining contractual life
5 years 
Intrinsic value
129,421 
Weighted average exercise price
$ 6.85 
Restricted Stock
 
Summary of Expected to Vest RSUs, Stock Options, and Restricted Stock [Line Items]
 
Shares
116,000 
Weighted average remaining contractual life
7 months 
Intrinsic value
$ 2,448 
Equity Incentive Plans Summary of Outstanding And Exercisable Stock Options (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Outstanding shares
9,355,070 
Weighted average remaining contractual life, outstanding options
5 years 
Weighted average exercise price, outstanding options
$ 6.90 
Exercisable shares
6,896,485 
Weighted average remaining contractual life, exercisable options
4 years 6 months 
Weighted average exercise price, exercisable options
$ 6.26 
$1.50 - $3.50
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Lower range limit
$ 1.50 
Upper range limit
$ 3.50 
Outstanding shares
1,357,538 
Weighted average remaining contractual life, outstanding options
1 year 7 months 
Weighted average exercise price, outstanding options
$ 2.11 
Exercisable shares
1,357,538 
Weighted average remaining contractual life, exercisable options
1 year 7 months 
Weighted average exercise price, exercisable options
$ 2.11 
$3.51 - $5.50
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Lower range limit
$ 3.51 
Upper range limit
$ 5.50 
Outstanding shares
1,676,760 
Weighted average remaining contractual life, outstanding options
3 years 6 months 
Weighted average exercise price, outstanding options
$ 4.85 
Exercisable shares
1,676,760 
Weighted average remaining contractual life, exercisable options
3 years 6 months 
Weighted average exercise price, exercisable options
$ 4.85 
$5.51 - $7.50
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Lower range limit
$ 5.51 
Upper range limit
$ 7.50 
Outstanding shares
2,193,800 
Weighted average remaining contractual life, outstanding options
6 years 
Weighted average exercise price, outstanding options
$ 5.98 
Exercisable shares
1,448,330 
Weighted average remaining contractual life, exercisable options
6 years 
Weighted average exercise price, exercisable options
$ 5.98 
$7.51 - $9.50
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Lower range limit
$ 7.51 
Upper range limit
$ 9.50 
Outstanding shares
215,666 
Weighted average remaining contractual life, outstanding options
6 years 1 month 
Weighted average exercise price, outstanding options
$ 9.21 
Exercisable shares
160,733 
Weighted average remaining contractual life, exercisable options
5 years 9 months 
Weighted average exercise price, exercisable options
$ 9.25 
$9.51 and above
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Lower range limit
$ 9.51 
Outstanding shares
3,911,306 
Weighted average remaining contractual life, outstanding options
6 years 3 months 
Weighted average exercise price, outstanding options
$ 9.84 
Exercisable shares
2,253,124 
Weighted average remaining contractual life, exercisable options
6 years 
Weighted average exercise price, exercisable options
$ 9.78 
Equity Incentive Plans Summary of Weighted Average Assumptions Used to Compute Fair Value of Stock Option Grants (Details)
12 Months Ended
Dec. 31, 2010
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
Expected life
6 years 5 months 
Risk-free interest rate
3.17% 
Volatility
43.90% 
Dividend Yield
0.00% 
Weighted average fair value of options granted
$ 4.77 
Schedule of Pre-Tax Stock-Based Compensation Expense (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
Stock-based compensation expense
$ 15,634 
$ 13,107 
$ 9,974 
RSUs
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
Stock-based compensation expense
8,411 
3,666 
 
Stock Options
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
Stock-based compensation expense
6,310 
8,129 
8,771 
Restricted Stock
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
Stock-based compensation expense
913 
913 
913 
Stock Issued To Non-Employee Directors
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
Stock-based compensation expense
 
$ 399 
$ 290 
Schedule of Stock-Based Compensation Expense Included in Statements of Income (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
 
 
 
Stock-based compensation expense, before tax
$ 15,634 
$ 13,107 
$ 9,974 
Income tax benefit
(6,097)
(5,059)
(3,920)
Total stock-based compensation expense, net of tax
9,537 
8,048 
6,054 
Cost of goods sold
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
 
 
 
Stock-based compensation expense, before tax
376 
327 
278 
Facility and warehouse expenses
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
 
 
 
Stock-based compensation expense, before tax
2,465 
2,391 
2,069 
Selling, general and administrative expenses
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
 
 
 
Stock-based compensation expense, before tax
$ 12,793 
$ 10,389 
$ 7,627 
Schedule of Stock-Based Compensation Expense Expected to be Recognized (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award
 
2013
$ 13,042 
2014
11,043 
2015
7,936 
2016
4,394 
2017
141 
Total unrecognized compensation expense
36,556 
RSUs
 
Share-based Compensation Arrangement by Share-based Payment Award
 
2013
8,254 
2014
7,897 
2015
7,861 
2016
4,394 
2017
141 
Total unrecognized compensation expense
28,547 
Stock Options
 
Share-based Compensation Arrangement by Share-based Payment Award
 
2013
4,580 
2014
3,007 
2015
75 
Total unrecognized compensation expense
7,662 
Restricted Stock
 
Share-based Compensation Arrangement by Share-based Payment Award
 
2013
208 
2014
139 
Total unrecognized compensation expense
$ 347 
Long-Term Obligations - Additional Information (Details) (USD $)
12 Months Ended 12 Months Ended 0 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Sep. 28, 2012
Dec. 31, 2012
Credit Agreement
Dec. 31, 2011
Credit Agreement
Sep. 30, 2011
Credit Agreement
Mar. 25, 2011
Credit Agreement
Sep. 28, 2012
Receivables Securitization
Dec. 31, 2012
Receivables Securitization
Dec. 31, 2012
Notes Payable
Dec. 31, 2011
Notes Payable
Debt Instrument
 
 
 
 
 
 
 
 
 
 
 
 
Maximum credit agreement borrowings
 
 
 
 
 
 
$ 1,400,000,000 
 
 
 
 
 
Maximum revolving credit facility borrowings
 
 
 
 
 
 
950,000,000 
 
 
 
 
 
Term loan
420,625,000 
240,625,000 
 
 
 
 
 
250,000,000 
 
 
 
 
Maximum incremental term loan borrowings
 
 
 
 
 
 
200,000,000 
 
 
 
 
 
Maximum U.S. dollar value of foreign currency borrowings
 
 
 
 
 
 
500,000,000 
 
 
 
 
 
Maximum amount of letters of credit
 
 
 
 
 
 
125,000,000 
 
 
 
 
 
Swing line loan maximum capacity
 
 
 
 
 
 
25,000,000 
 
 
 
 
 
Maximum increase of revolving credit facility or term loans
 
 
 
 
 
 
400,000,000 
 
 
 
 
 
Proceeds from the new term loan
 
 
 
 
200,000,000 
 
 
 
 
 
 
 
Security interest in subsidiaries pledged as collateral
 
 
 
 
 
 
100.00% 
 
 
 
 
 
Pleadge of a foreign subsidiary's voting equity interest evaluated for adverse tax consequences
 
 
 
 
 
 
100.00% 
 
 
 
 
 
Minimum security interest percentage in foreign subidiaries
 
 
 
 
 
 
65.00% 
 
 
 
 
 
Original principal payment percentage in first and second years
 
 
 
 
 
 
5.00% 
 
 
 
 
 
Original principal payment percentage in third and fourth years
 
 
 
 
 
 
10.00% 
 
 
 
 
 
Original principal payment percentage in fifth year
 
 
 
 
 
 
15.00% 
 
 
 
 
 
Restrictive covenants, maximum permitted receivables facility
 
 
 
 
 
 
100,000,000 
 
 
 
 
 
Maximum net leverage ratio
 
 
 
 
 
 
3 
 
 
 
 
 
Minimum consideration for acquisitions during 12 month period to change the maximum net leverage ratio
 
 
 
 
 
 
200,000,000 
 
 
 
 
 
Maximum net leverage ratio subsequent to acquisition
 
 
 
 
 
 
3.50 
 
 
 
 
 
Minimum interest coverage ratio
 
 
 
 
 
 
3 
 
 
 
 
 
Increment change in applicable margin
 
 
 
 
 
 
0.25% 
 
 
 
 
 
Weighted average interest rates
 
 
 
 
2.85% 
2.59% 
 
 
 
1.05% 
1.70% 
2.00% 
Increment change in commitment fees
 
 
 
 
 
 
0.05% 
 
 
 
 
 
Fronting fee on letters of credit in addition to participation commission
 
 
 
 
 
 
0.125% 
 
 
 
 
 
Borrowings under credit agreement, carrying value
 
 
 
 
974,600,000 
901,400,000 
 
 
 
 
 
 
Current maturities of credit agreement
 
 
 
 
31,900,000 
12,500,000 
 
 
 
 
 
 
Outstanding letters of credit
 
 
 
 
39,900,000 
 
 
 
 
 
 
 
Availability on the revolving credit facility
 
 
 
 
356,100,000 
 
 
 
 
 
 
 
Write-off of the unamortized balance of capitalized debt issuance costs
0 
5,345,000 
0 
 
 
 
 
 
 
 
 
 
Fees incurred related to the execution of the agreement
 
 
 
 
 
11,000,000 
 
 
 
300,000 
 
 
Receivables securitization facility term period
 
 
 
 
 
 
 
 
3 years 
 
 
 
Receivables securitization maximum borrowing capacity
 
 
 
 
 
 
 
 
80,000,000 
 
 
 
Borrowings under receivable securitization facility, carrying value
80,000,000 
 
 
77,300,000 
 
 
 
 
 
80,000,000 
 
 
Receivables used as collateral for receivables securitization facility
 
 
 
 
 
 
 
 
 
116,900,000 
 
 
Margin above LIBOR for receivables secuirtization facility
 
 
 
 
 
 
 
 
1.25% 
 
 
 
Promissory notes issued for business acquisitions
$ 16,000,000 
$ 34,200,000 
$ 5,500,000 
 
 
 
 
 
 
 
 
 
Schedule of Long-Term Obligations (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Sep. 28, 2012
Dec. 31, 2011
Senior secured credit agreement:
 
 
 
Term loans payable
$ 420,625 
 
$ 240,625 
Revolving credit facility
553,964 
 
660,730 
Borrowings under receivable securitization facility, carrying value
80,000 
77,300 
 
Notes payable
42,398 
 
38,338 
Other long-term debt
21,491 
 
16,383 
Long-term obligations, total
1,118,478 
 
956,076 
Less current maturities
(71,716)
 
(29,524)
Long-Term Obligations, Excluding Current Portion
$ 1,046,762 
 
$ 926,552 
Schedule of Long-Term Obligations (Parenthetical) (Details)
Dec. 31, 2012
Dec. 31, 2011
Notes Payable
 
 
Debt Instrument
 
 
Weighted average interest rates
1.70% 
2.00% 
Other Long-Term Debt
 
 
Debt Instrument
 
 
Weighted average interest rates
3.30% 
3.20% 
Long-Term Obligations Schedule of Maturities of Long-Term Obligations (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Debt Disclosure [Abstract]
 
 
2013
$ 71,716 
 
2014
54,611 
 
2015
138,323 
 
2016
847,759 
 
2017
848 
 
Thereafter
5,221 
 
Long-term obligations, total
$ 1,118,478 
$ 956,076 
Derivative Instruments and Hedging Activities - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2012
Derivative Instruments and Hedging Activities Disclosure [Abstract]
 
 
Fair market value of interest rate swaps, current liability
 
$ 0.7 
Fair market value of interest rate swaps, noncurrent liability
10.6 
14.9 
Loss from hedge ineffectiveness
0.2 
 
Net loss included in accumulated other comprehensive income (loss) to be reclassified into interest expense within the next 12 months
 
$ 4.1 
Terms of Interest Rate Swap Agreements (Details)
Dec. 31, 2012
3.31%
USD ($)
Dec. 31, 2012
2.86%
USD ($)
Dec. 31, 2012
2.95%
USD ($)
Dec. 31, 2012
2.94% Maturity On October 31, 2016
USD ($)
Dec. 31, 2012
2.94% Maturity On December 30, 2016
USD ($)
Dec. 31, 2012
3.11%
GBP (£)
Dec. 31, 2012
3.17%
CAD ($)
Derivative
 
 
 
 
 
 
 
Notional Amount
$ 250,000,000 
$ 100,000,000 
$ 60,000,000 
$ 60,000,000 
$ 50,000,000 
£ 50,000,000 
$ 25,000,000 
Fixed Interest Rate
3.31% 1
2.86% 1
2.95% 1
2.94% 1
2.94% 1
3.11% 1
3.17% 1
Terms of Interest Rate Swap Agreements (Parenthetical) (Details)
Dec. 31, 2012
Derivative Instruments and Hedging Activities Disclosure [Abstract]
 
Applicable margin per annum as of the balance sheet date, under the Credit Agreement
1.75% 
Fair Value Measurements - Additional Information (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Sep. 28, 2012
Dec. 31, 2012
Credit Agreement
Dec. 31, 2011
Credit Agreement
Dec. 31, 2012
Receivables Securitization
Fair Value Measurements
 
 
 
 
 
Losses related to contingent consideration obligations outstanding at period-end
$ 1,500,000 
 
 
 
 
Borrowings under credit agreement, carrying value
 
 
974,600,000 
901,400,000 
 
Borrowings under receivable securitization facility, carrying value
$ 80,000,000 
$ 77,300,000 
 
 
$ 80,000,000 
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) (Fair Value, Measurements, Recurring, USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value assets measured on recurring basis
$ 19,492 
$ 13,413 
Fair value liabilities measured on recurring basis
125,495 
107,029 
Fair Value, Inputs, Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value assets measured on recurring basis
19,492 
13,413 
Fair value liabilities measured on recurring basis
35,486 
24,647 
Fair Value, Inputs, Level 3
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on recurring basis
90,009 
82,382 
Cash surrender value of life insurance
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value assets measured on recurring basis
19,492 
13,413 
Cash surrender value of life insurance |
Fair Value, Inputs, Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value assets measured on recurring basis
19,492 
13,413 
Contingent Consideration Liabilities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on recurring basis
90,009 
82,382 
Contingent Consideration Liabilities |
Fair Value, Inputs, Level 3
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on recurring basis
90,009 
82,382 
Deferred Compensation Liabilities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on recurring basis
19,843 
14,071 
Deferred Compensation Liabilities |
Fair Value, Inputs, Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on recurring basis
19,843 
14,071 
Interest Rate Swap
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on recurring basis
15,643 
10,576 
Interest Rate Swap |
Fair Value, Inputs, Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Fair value liabilities measured on recurring basis
$ 15,643 
$ 10,576 
Significant Unobservable Inputs Used in Fair Value Measurements (Details) (Contingent Consideration Liabilities, Fair Value, Inputs, Level 3)
Dec. 31, 2012
Dec. 31, 2011
Contingent Consideration Liabilities |
Fair Value, Inputs, Level 3
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
 
 
Weighted Average, Probability of achieving payout targets
79.70% 
78.10% 
Weighted Average, Discount rate
6.60% 
3.00% 
Changes in Fair Value of Contingent Consideration Obligations (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Contingent Consideration Obligations [Roll Forward]
 
 
 
Beginning balance
$ 82,382 
$ 2,000 
 
Contingent consideration liabilities recorded for business acquisitions
5,456 
81,239 
2,000 
Payments
(3,100)
 
 
Loss (gain) included in earnings
1,643 
(1,408)
 
Exchange rate effects
3,628 
551 
 
Ending balance
$ 90,009 
$ 82,382 
$ 2,000 
Commitments and Contingencies - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Commitments and Contingencies Disclosure [Abstract]
 
 
 
 
 
 
 
Rent expense
 
 
 
 
$ 101.1 
$ 83.7 
$ 66.9 
Guaranteed residual value of operating leases
28.7 
 
 
 
28.7 
 
 
Gain on lawsuit settlements
$ 0.7 
$ 0.5 
$ 8.4 
$ 8.3 
$ 17.9 
 
 
Number of defendants class action is pending against
2 
 
 
 
2 
 
 
Future Minimum Lease Commitments (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Commitments and Contingencies Disclosure [Abstract]
 
2013
$ 99,345 
2014
88,494 
2015
78,536 
2016
62,795 
2017
51,159 
Thereafter
156,506 
Future Minimum Lease Payments
$ 536,835 
Business Combinations - Additional Information (Details)
12 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2012
USD ($)
Dec. 31, 2011
USD ($)
Dec. 31, 2010
USD ($)
Dec. 31, 2009
USD ($)
Dec. 31, 2012
North America
USD ($)
Dec. 31, 2011
North America
USD ($)
Dec. 31, 2010
North America
USD ($)
Dec. 31, 2009
North America
USD ($)
Dec. 31, 2012
All 2012 Acquisitions
USD ($)
Dec. 31, 2012
All 2012 Acquisitions
USD ($)
Dec. 31, 2012
All 2012 Acquisitions
Wholesale North America Segment
Dec. 31, 2012
All 2012 Acquisitions
Self Service Segment
Dec. 31, 2012
Scrap and Other Metals Processors
Dec. 31, 2011
All 2011 Acquisitions
USD ($)
Dec. 31, 2011
Euro Car Parts Holdings Limited
USD ($)
Dec. 31, 2011
Euro Car Parts Holdings Limited
GBP (£)
Dec. 31, 2011
2012 Contingent Payment
GBP (£)
Dec. 31, 2011
2013 Contingent Payment
GBP (£)
Dec. 31, 2011
All 2011 Acquisitions Excluding ECP
USD ($)
Dec. 31, 2011
All 2011 Acquisitions Excluding ECP
Wholesale North America Segment
Dec. 31, 2011
All 2011 Acquisitions Excluding ECP
Self Service Segment
Dec. 31, 2011
All 2011 Acquisitions Excluding ECP and Akzo
USD ($)
Dec. 31, 2011
Engine Remanufacturers
Wholesale North America Segment
Dec. 31, 2011
Akzo Nobel
Wholesale North America Segment
USD ($)
Dec. 31, 2010
All 2010 Acquisitions
USD ($)
Dec. 31, 2010
All 2010 Acquisitions
Wholesale North America Segment
Dec. 31, 2010
All 2010 Acquisitions
Self Service Segment
Business Acquisition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of acquisitions
 
 
 
 
 
 
 
 
8 
30 
22 
8 
2 
 
 
 
 
 
20 
17 
3 
 
2 
 
20 
18 
2 
Total acquisition date fair value of the consideration for acquisitions
 
 
 
 
 
 
 
 
$ 284,600,000 
$ 284,600,000 
 
 
 
 
$ 403,700,000 
£ 261,600,000 
 
 
$ 207,300,000 
 
 
 
 
 
$ 170,400,000 
 
 
Cash used in acquisitions, net of cash acquired
 
 
 
 
 
 
 
 
261,470,000 
261,470,000 
 
 
 
486,934,000 
293,725,000 
190,300,000 
 
 
193,209,000 
 
 
 
 
 
143,600,000 
 
 
Notes issued
16,000,000 
34,200,000 
5,500,000 
 
 
 
 
 
15,990,000 
15,990,000 
 
 
 
34,219,000 
28,302,000 
18,400,000 
 
 
5,917,000 
 
 
 
 
 
5,500,000 
 
 
Other purchase price obligations
 
 
 
 
 
 
 
 
1,647,000 
1,647,000 
 
 
 
8,646,000 
4,136,000 
2,700,000 
 
 
4,510,000 
 
 
 
 
 
4,400,000 
 
 
Acquisition date fair value of contingent consideration
 
 
 
 
 
 
 
 
5,456,000 
5,456,000 
 
 
 
81,239,000 
77,539,000 
50,200,000 
 
 
3,700,000 
 
 
 
 
 
2,000,000 
 
 
Minimum payment under contingent consideration agreement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22,000,000 
23,000,000 
 
 
 
 
 
 
 
 
 
Maximum payment under contingent consideration agreement
 
 
 
 
 
 
 
 
6,500,000 
6,500,000 
 
 
 
 
 
 
25,000,000 
30,000,000 
 
 
 
4,600,000 
 
21,000,000 
 
 
 
Goodwill
1,690,284,000 
1,476,063,000 
1,032,973,000 
938,783,000 
1,339,831,000 
1,136,630,000 
1,032,973,000 
938,783,000 
201,742,000 
201,742,000 
 
 
 
438,068,000 
332,891,000 
 
 
 
105,177,000 
 
 
 
 
 
91,800,000 
 
 
Goodwill recorded for acquisitions
197,602,000 
442,208,000 
91,757,000 
 
201,742,000 
105,177,000 
91,757,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of contingent consideration arrangements resulting from acquisitions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 
 
 
 
 
 
Goodwill expected to be deductible for income tax purposes
 
 
 
 
 
 
 
 
157,800,000 
157,800,000 
 
 
 
 
 
 
 
 
88,300,000 
 
 
 
 
 
74,900,000 
 
 
Revenue generated by acquisitions
 
 
 
 
 
 
 
 
 
116,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income generated by acquisitions
 
 
 
 
 
 
 
 
 
11,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock issued in acquisitions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 14,900,000 
 
 
Stock issued in acquisitions, shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,379,310 
 
 
Purchase Price Allocations for Acquisitions (Details)
In Thousands, unless otherwise specified
Dec. 31, 2012
USD ($)
Dec. 31, 2011
USD ($)
Dec. 31, 2010
USD ($)
Dec. 31, 2009
USD ($)
Dec. 31, 2012
All 2012 Acquisitions
USD ($)
Dec. 31, 2011
Euro Car Parts Holdings Limited
USD ($)
Dec. 31, 2011
Euro Car Parts Holdings Limited
GBP (£)
Dec. 31, 2011
All 2011 Acquisitions Excluding ECP
USD ($)
Dec. 31, 2011
All 2011 Acquisitions
USD ($)
Business Acquisition
 
 
 
 
 
 
 
 
 
Receivables
 
 
 
 
$ 15,473 
$ 54,225 
 
$ 23,538 
$ 77,763 
Receivable reserves
 
 
 
 
(1,459)
(3,832)
 
(1,121)
(4,953)
Inventory
 
 
 
 
62,305 
93,835 
 
59,846 
153,681 
Prepaid expenses and other current assets
 
 
 
 
201 
3,189 
 
2,820 
6,009 
Property and equipment
 
 
 
 
31,930 
41,830 
 
10,614 
52,444 
Goodwill
1,690,284 
1,476,063 
1,032,973 
938,783 
201,742 
332,891 
 
105,177 
438,068 
Other intangibles
 
 
 
 
655 
43,723 
 
7,683 
51,406 
Other assets
 
 
 
 
187 
13 
 
9,420 
9,433 
Deferred income taxes
 
 
 
 
428 
(13,218)
 
7,235 
(5,983)
Current liabilities assumed
 
 
 
 
(22,910)
(135,390)
 
(17,257)
(152,647)
Debt assumed
(3,989)
(13,564)
0 
 
(3,989)
(13,564)
 
 
(13,564)
Other noncurrent liabilities assumed
 
 
 
 
 
 
 
(619)
(619)
Contingent consideration liabilities
 
 
 
 
(5,456)
(77,539)
(50,200)
(3,700)
(81,239)
Other purchase price obligations
 
 
 
 
(1,647)
(4,136)
(2,700)
(4,510)
(8,646)
Notes issued
(16,000)
(34,200)
(5,500)
 
(15,990)
(28,302)
(18,400)
(5,917)
(34,219)
Cash used in acquisitions, net of cash acquired
 
 
 
 
$ 261,470 
$ 293,725 
£ 190,300 
$ 193,209 
$ 486,934 
Pro Forma Effect of Businesses Acquired (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Business Acquisition
 
 
 
 
 
 
 
 
 
 
 
Revenue, as reported
$ 1,067,915 
$ 1,016,707 
$ 1,006,531 
$ 1,031,777 
$ 939,632 
$ 783,898 
$ 759,684 
$ 786,648 
$ 4,122,930 
$ 3,269,862 
$ 2,469,881 
Pro forma revenue
 
 
 
 
 
 
 
 
4,325,074 
4,142,906 
3,394,694 
Income from continuing operations, as reported
 
 
 
 
 
 
 
 
261,225 
210,264 
167,118 
Pro forma income from continuing operations
 
 
 
 
 
 
 
 
273,899 
259,518 
189,783 
Basic earnings per share from continuing operations
 
 
 
 
 
 
 
 
$ 0.88 1
$ 0.72 1
$ 0.58 1
Pro forma basic earnings per share from continuing operations (a)
 
 
 
 
 
 
 
 
$ 0.93 1
$ 0.89 1
$ 0.66 
Diluted earnings per share from continuing operations
 
 
 
 
 
 
 
 
$ 0.87 1
$ 0.71 1
$ 0.57 1
Pro forma diluted earnings per share from continuing operations (a)
 
 
 
 
 
 
 
 
$ 0.91 1
$ 0.87 1
$ 0.65 
Euro Car Parts Holdings Limited
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition
 
 
 
 
 
 
 
 
 
 
 
Revenue of purchased businesses for the period prior to acquisition
 
 
 
 
 
 
 
 
 
407,042 
420,769 
Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments
 
 
 
 
 
 
 
 
 
21,858 
9,669 
Effect of purchased businesses for the period prior to acquisition
 
 
 
 
 
 
 
 
 
$ 0.07 
$ 0.03 
Effect of purchased businesses for the period prior to acquisition
 
 
 
 
 
 
 
 
 
$ 0.07 
$ 0.03 
All 2012 & 2011 Acquisitions Excluding ECP [Member]
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition
 
 
 
 
 
 
 
 
 
 
 
Revenue of purchased businesses for the period prior to acquisition
 
 
 
 
 
 
 
 
202,144 
466,002 
 
Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments
 
 
 
 
 
 
 
 
12,674 
27,396 
 
Effect of purchased businesses for the period prior to acquisition
 
 
 
 
 
 
 
 
$ 0.04 
$ 0.09 
 
Effect of purchased businesses for the period prior to acquisition
 
 
 
 
 
 
 
 
$ 0.04 
$ 0.09 
 
All 2011 & 2010 Acquisitions Excluding ECP [Member]
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition
 
 
 
 
 
 
 
 
 
 
 
Revenue of purchased businesses for the period prior to acquisition
 
 
 
 
 
 
 
 
 
 
504,044 
Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments
 
 
 
 
 
 
 
 
 
 
$ 12,996 
Effect of purchased businesses for the period prior to acquisition
 
 
 
 
 
 
 
 
 
 
$ 0.05 
Effect of purchased businesses for the period prior to acquisition
 
 
 
 
 
 
 
 
 
 
$ 0.04 
Restructuring and Acquisition Related Expenses - Additional Information (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Restructuring Cost and Reserve
 
 
 
Restructuring and acquisition related expenses
$ 2,751,000 
$ 7,590,000 
$ 668,000 
Refurbished Bumper and Wheel Restructuring
 
 
 
Restructuring Cost and Reserve
 
 
 
Restructuring and acquisition related expenses
1,100,000 
 
 
Akzo Nobel Paint Business Integration
 
 
 
Restructuring Cost and Reserve
 
 
 
Restructuring and acquisition related expenses
 
2,600,000 
 
Greenleaf Integration
 
 
 
Restructuring Cost and Reserve
 
 
 
Restructuring and acquisition related expenses
 
 
700,000 
Restructuring expenses |
Other 2011 and 2012 Acquisitions
 
 
 
Restructuring Cost and Reserve
 
 
 
Restructuring and acquisition related expenses
1,200,000 
 
 
Expected additional charges
1,000,000 
 
 
Restructuring expenses |
Excluding Akzo Nobel Paint Business Integration
 
 
 
Restructuring Cost and Reserve
 
 
 
Restructuring and acquisition related expenses
 
1,800,000 
 
Restructuring expenses |
Cross Canada Integration
 
 
 
Restructuring Cost and Reserve
 
 
 
Restructuring and acquisition related expenses
 
1,400,000 
 
Restructuring expenses |
Other 2010 and 2011 Acquisitions
 
 
 
Restructuring Cost and Reserve
 
 
 
Restructuring and acquisition related expenses
 
400,000 
 
Acquisition-related expenses
 
 
 
Restructuring Cost and Reserve
 
 
 
Restructuring and acquisition related expenses
 
3,200,000 
 
Acquisition-related expenses |
Other 2011 and 2012 Acquisitions
 
 
 
Restructuring Cost and Reserve
 
 
 
Restructuring and acquisition related expenses
$ 500,000 
 
 
Retirement Plans Retirement Plans - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
401(k) Plan
 
 
 
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
 
 
 
Defined contribution plan expense
$ 5.4 
$ 5.3 
$ 4.8 
Nonqualified Deferred Compensation Plan
 
 
 
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
 
 
 
Defined contribution plan expense
0.9 
0.8 
0.7 
Percentage of eligible employee contribution matched by employer
50.00% 
 
 
Maximum percentage of employee deferrals subject to match by employer
6.00% 
 
 
Period after which a participant may receive amounts deferred
5 years 
 
 
Vesting period of matching contributions
4 years 
 
 
Deferred compensation liabilities
19.8 
14.1 
 
Number of life settlement contracts
184 
184 
 
Face value of life settlement contracts
81.8 
80.6 
 
Cash surrender value of life insurance policies
$ 19.5 
$ 13.4 
 
Computation of Earnings Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Earnings Per Share [Abstract]
 
 
 
Income from continuing operations
$ 261,225 
$ 210,264 
$ 167,118 
Denominator for basic earnings per share—Weighted-average shares outstanding
295,810 
292,252 
286,542 
Effect of dilutive securities:
 
 
 
RSUs
479 
182 
0 
Stock options
4,346 
4,250 
5,118 
Restricted stock
58 
66 
54 
Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding
300,693 
296,750 
291,714 
Basic earnings per share from continuing operations
$ 0.88 1
$ 0.72 1
$ 0.58 1
Diluted earnings per share from continuing operations
$ 0.87 1
$ 0.71 1
$ 0.57 1
Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share (Details)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Stock Options
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share
 
 
Antidilutive securities
2,340 
5,714 
Restricted Stock
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share
 
 
Antidilutive securities
 
80 
Income Taxes - Additional Information (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Income Tax Disclosure [Abstract]
 
 
 
Undistributed earnings of foreign subsidiaries
$ 74,000,000 
 
 
Net operating loss carryforwards
4,451,000 
4,722,000 
 
Tax credit carryforwards
1,000,000 
1,000,000 
 
Valuation allowance
1,631,000 
1,911,000 
 
Change in valuation allowance
300,000 
 
 
Accumulated interest and penalties
600,000 
1,200,000 
 
Accumulated interest and penalties recorded through the income tax provision
200,000 
200,000 
200,000 
Deferred tax asset, accumulated interest balance
100,000 
200,000 
 
Unrecognized tax benefits that would impact effective tax rate
1,600,000 
3,800,000 
 
Unrecognized tax benefits that would impact deferred taxes
700,000 
1,700,000 
 
Estimated upper bound of reasonably possible changes in unrecognized tax benefits within the next 12 months
400,000 
 
 
Estimated upper bound of reasonably possible changes in unrecognized tax benefits that will impact the effective tax rate within the next 12 months
$ 300,000 
 
 
Income Taxes Schedule of Components of Income Tax Expense (Benefit) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Current:
 
 
 
Federal
$ 110,825 
$ 97,887 
$ 75,009 
State
19,693 
14,435 
16,552 
Foreign
13,202 
3,883 
2,483 
Current income tax expense, total
143,720 
116,205 
94,044 
Deferred:
 
 
 
Federal
5,824 
8,376 
8,928 
State
(647)
919 
598 
Foreign
(955)
7 
(563)
Deferred income tax expense, total
4,222 
9,302 
8,963 
Provision for income taxes
$ 147,942 
$ 125,507 
$ 103,007 
Income Taxes Schedule of Income before Income Tax, Domestic and Foreign (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Income Tax Disclosure [Abstract]
 
 
 
Domestic income from continuing operations before provision for income taxes
$ 348,150 
$ 319,305 
$ 264,438 
Foreign income from continuing operations before provision for income taxes
61,017 
16,466 
5,687 
Income from continuing operations before provision for income taxes
$ 409,167 
$ 335,771 
$ 270,125 
Income Taxes Schedule of Effective Income Tax Rate Reconciliation (Details)
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Income Tax Disclosure [Abstract]
 
 
 
U.S. federal statutory rate
35.00% 
35.00% 
35.00% 
State income taxes, net of state credits and federal tax impact
3.10% 
3.10% 
3.40% 
Impact of international operations
(2.30%)
(0.80%)
(0.30%)
Non-deductible expenses
0.80% 
0.70% 
0.30% 
Federal production incentives and credits
(0.30%)
(0.40%)
(0.20%)
Revaluation of deferred taxes
(0.30%)
0.00% 
(0.50%)
Other, net
0.20% 
(0.20%)
0.40% 
Effective tax rate
36.20% 
37.40% 
38.10% 
Income Taxes Schedule of Deferred Tax Assets and Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Deferred Tax Assets:
 
 
Inventory
$ 29,523 
$ 22,267 
Accrued expenses and reserves
27,361 
18,357 
Accounts receivable
10,037 
10,860 
Stock-based compensation
9,442 
8,945 
Qualified and nonqualified retirement plans
7,476 
5,157 
Net operating loss carryforwards
4,451 
4,722 
Interest rate swaps
5,461 
3,679 
Other
4,711 
8,621 
Total deferred tax assets, gross
98,462 
82,608 
Less valuation allowance
(1,631)
(1,911)
Total deferred tax assets
96,831 
80,697 
Deferred Tax Liabilities:
 
 
Goodwill and other intangible assets
64,704 
46,373 
Property and equipment
48,994 
44,535 
Trade name
30,336 
32,592 
Other
1,428 
1,864 
Total deferred tax liabilities
145,462 
125,364 
Net deferred tax liability
$ (48,631)
$ (44,667)
Income Taxes Schedule of Deferred Tax Assets and Liabilities Classification (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Income Tax Disclosure [Abstract]
 
 
Current deferred tax assets
$ 53,485 
$ 45,690 
Noncurrent deferred tax assets
164 
 
Current deferred tax liabilities
5 
1,561 
Noncurrent deferred tax liabilities
$ 102,275 
$ 88,796 
Income Taxes Schedule of Unrecognized Tax Benefits Rollforward (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
 
Balance at January 1
$ 5,497 
$ 5,441 
$ 8,526 
Additions based on tax positions related to the current year
973 
952 
713 
Additions for tax positions of prior years
167 
192 
281 
Reductions for tax positions of prior years
(2,379)
 
(86)
Reductions for tax positions of prior years—timing differences
 
 
(2,041)
Lapse of statutes of limitations
(998)
(892)
(1,952)
Settlements with taxing authorities
(957)
(196)
 
Balance at December 31
$ 2,303 
$ 5,497 
$ 5,441 
Accumulated Other Comprehensive Income (Loss) Schedule of Accumulated Other Comprehensive Income (Loss) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment [Roll Forward]
 
 
 
Balance, beginning
$ (2,071)
$ 2,202 
$ (876)
Foreign currency translation
12,921 
(4,273)
3,078 
Balance, ending
10,850 
(2,071)
2,202 
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges [Roll Forward]
 
 
 
Balance, beginning
(6,890)
2,176 
(6,536)
Pretax (loss) income
(11,313)
(19,391)
3,230 
Income tax expense (benefit)
3,962 
6,847 
(1,054)
Reversal of unrealized loss (gain)
6,439 
5,641 
10,377 
Reversal of deferred income taxes
(2,289)
(2,019)
(3,841)
Hedge ineffectiveness
 
(225)
 
Income tax benefit
 
81 
 
Balance, ending
(10,091)
(6,890)
2,176 
Accumulated Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans [Roll Forward]
 
 
 
Balance, beginning
 
0 
15 
Reversal of unrealized gain
 
 
(15)
Balance, ending
 
 
0 
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
 
 
 
Balance, beginning
(8,961)
4,378 
(7,397)
Pretax income (loss)
1,608 
(23,664)
6,308 
Income tax expense (benefit)
(3,962)
(6,847)
1,054 
Reversal of unrealized loss (gain)
6,439 
5,641 
10,362 
Reversal of deferred income taxes
2,289 
2,019 
3,841 
Hedge ineffectiveness
 
(225)
 
Income tax benefit
 
81 
 
Balance, ending
$ 759 
$ (8,961)
$ 4,378 
Segment and Geographic Information - Additional Information (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Jun. 30, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Segment Reporting Information
 
 
 
 
 
 
 
 
 
Number of operating segments
 
 
 
 
 
 
3 
 
 
Gain on lawsuit settlements
$ 700,000 
$ 500,000 
$ 8,400,000 
$ 8,300,000 
 
 
$ 17,900,000 
 
 
Change in fair value of contingent consideration liabilities
200,000 
(1,900,000)
(1,200,000)
1,300,000 
(200,000)
1,600,000 
(1,643,000)
1,408,000 
0 
North America
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
Number of reportable segments
 
 
 
 
 
 
1 
 
 
Gain on lawsuit settlements
 
 
 
 
 
 
17,900,000 
 
 
Change in fair value of contingent consideration liabilities
 
 
 
 
 
 
2,000,000 
2,000,000 
 
Europe
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
Change in fair value of contingent consideration liabilities
 
 
 
 
 
 
$ (3,600,000)
 
$ (600,000)
Schedule of Financial Performance by Reportable Segment (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 1,067,915 
$ 1,016,707 
$ 1,006,531 
$ 1,031,777 
$ 939,632 
$ 783,898 
$ 759,684 
$ 786,648 
$ 4,122,930 
$ 3,269,862 
$ 2,469,881 
EBITDA
 
 
 
 
 
 
 
 
510,547 
418,068 
339,869 
Depreciation and amortization
 
 
 
 
 
 
 
 
70,165 
54,505 
41,428 
North America
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
3,426,858 
3,131,376 
2,469,881 
EBITDA
 
 
 
 
 
 
 
 
440,448 
405,924 
339,869 
Depreciation and amortization
 
 
 
 
 
 
 
 
59,132 
52,481 
41,428 
Europe
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
696,072 
138,486 
 
EBITDA
 
 
 
 
 
 
 
 
70,099 
12,144 
 
Depreciation and amortization
 
 
 
 
 
 
 
 
$ 11,033 
$ 2,024 
 
Reconciliation Of EBITDA To Income From Continuing Operations (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Segment Reporting [Abstract]
 
 
 
EBITDA
$ 510,547 
$ 418,068 
$ 339,869 
Depreciation and amortization
70,165 
54,505 
41,428 
Interest expense, net
31,215 
22,447 
28,316 
Loss on debt extinguishment
0 
5,345 
0 
Provision for income taxes
147,942 
125,507 
103,007 
Income from continuing operations
$ 261,225 
$ 210,264 
$ 167,118 
Schedule of Capital Expenditures by Reportable Segment (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Segment Reporting Information
 
 
 
Capital Expenditures
$ 88,255 
$ 86,416 
$ 61,438 
North America
 
 
 
Segment Reporting Information
 
 
 
Capital Expenditures
73,331 
84,856 
61,438 
Europe
 
 
 
Segment Reporting Information
 
 
 
Capital Expenditures
$ 14,924 
$ 1,560 
$ 0 
Schedule of Assets by Reportable Segment (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Segment Reporting Information
 
 
 
Receivables, net
$ 311,808 
$ 281,764 
$ 191,085 
Inventory
900,803 
736,846 
492,688 
Property and Equipment, net
494,379 
424,098 
331,312 
Other unallocated assets
2,016,466 
1,756,996 
1,284,424 
Total Assets
3,723,456 
3,199,704 
2,299,509 
North America
 
 
 
Segment Reporting Information
 
 
 
Receivables, net
241,627 
230,871 
191,085 
Inventory
750,565 
636,145 
492,688 
Property and Equipment, net
434,010 
380,282 
331,312 
Europe
 
 
 
Segment Reporting Information
 
 
 
Receivables, net
70,181 
50,893 
 
Inventory
150,238 
100,701 
 
Property and Equipment, net
$ 60,369 
$ 43,816 
 
Schedule of Revenue by Geographic Area (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Revenues from External Customers and Long-Lived Assets
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 1,067,915 
$ 1,016,707 
$ 1,006,531 
$ 1,031,777 
$ 939,632 
$ 783,898 
$ 759,684 
$ 786,648 
$ 4,122,930 
$ 3,269,862 
$ 2,469,881 
United States
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
3,209,024 
2,952,620 
2,366,224 
United Kingdom
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
696,072 
138,486 
 
Other countries
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
$ 217,834 
$ 178,756 
$ 103,657 
Schedule of Tangible Long-Lived Assets by Geographic Area (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Revenues from External Customers and Long-Lived Assets
 
 
 
Long-lived Assets
$ 494,379 
$ 424,098 
$ 331,312 
United States
 
 
 
Revenues from External Customers and Long-Lived Assets
 
 
 
Long-lived Assets
408,244 
360,961 
 
United Kingdom
 
 
 
Revenues from External Customers and Long-Lived Assets
 
 
 
Long-lived Assets
60,369 
43,816 
 
Other countries
 
 
 
Revenues from External Customers and Long-Lived Assets
 
 
 
Long-lived Assets
$ 25,766 
$ 19,321 
 
Schedule of Revenue by Product Category (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Revenue from External Customers
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 1,067,915 
$ 1,016,707 
$ 1,006,531 
$ 1,031,777 
$ 939,632 
$ 783,898 
$ 759,684 
$ 786,648 
$ 4,122,930 
$ 3,269,862 
$ 2,469,881 
Aftermarket, other new and refurbished products
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customers
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
2,286,853 
1,634,003 
1,236,806 
Recycled, remanufactured and related products and services
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customers
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
1,277,023 
1,115,088 
888,320 
Other
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customers
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
$ 559,054 
$ 520,771 
$ 344,755 
Selected Quarterly Data Selected Quarterly Data - Additional Information (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Jun. 30, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
Gain on lawsuit settlements
$ 700,000 
$ 500,000 
$ 8,400,000 
$ 8,300,000 
 
 
$ 17,900,000 
 
 
Change in fair value of contingent consideration liabilities
$ 200,000 
$ (1,900,000)
$ (1,200,000)
$ 1,300,000 
$ (200,000)
$ 1,600,000 
$ (1,643,000)
$ 1,408,000 
$ 0 
Selected Quarterly Data Summary of Selected Quarterly Data (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 1,067,915 
$ 1,016,707 
$ 1,006,531 
$ 1,031,777 
$ 939,632 
$ 783,898 
$ 759,684 
$ 786,648 
$ 4,122,930 
$ 3,269,862 
$ 2,469,881 
Gross margin
445,121 1
409,705 1
421,931 1
447,383 1
391,789 
334,322 
322,236 
343,646 
1,724,140 
1,391,993 
1,093,480 
Operating income
104,344 1
91,434 1
108,567 1
133,608 1
90,138 
85,488 
78,486 
107,371 
437,953 
361,483 
297,877 
Net income
$ 62,188 2
$ 54,048 2
$ 63,998 2
$ 80,991 2
$ 56,145 2
$ 49,231 
$ 46,706 2
$ 58,182 
$ 261,225 
$ 210,264 
$ 169,071 
Total
$ 0.21 3
$ 0.18 3
$ 0.22 3
$ 0.28 3
$ 0.19 3
$ 0.17 3
$ 0.16 3
$ 0.20 3
$ 0.88 4
$ 0.72 4
$ 0.59 4
Total
$ 0.21 3
$ 0.18 3
$ 0.21 3
$ 0.27 3
$ 0.19 3
$ 0.17 3
$ 0.16 3
$ 0.20 3
$ 0.87 4
$ 0.71 4
$ 0.58 4
Schedule II-Valuation and Qualifying Accounts and Reserves Schedule II-Valuation and Qualifying Accounts and Reserves (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Allowance for Doubtful Accounts
 
 
 
Valuation and Qualifying Accounts Disclosure [Line Items]
 
 
 
Balance at Beginning of Period
$ 8,347 
$ 6,895 
$ 6,507 
Additions Charged to Costs and Expenses
5,928 
5,084 
4,326 
Acquisitions and Other
308 
2,199 
1,125 
Deductions
(5,113)
(5,831)
(5,063)
Balance at End of Period
9,470 
8,347 
6,895 
Allowance for Estimated Returns, Discounts & Allowances
 
 
 
Valuation and Qualifying Accounts Disclosure [Line Items]
 
 
 
Balance at Beginning of Period
22,804 
18,185 
15,802 
Additions Charged to Costs and Expenses
714,880 
668,936 
541,314 
Acquisitions and Other
1,151 
2,754 
1,061 
Deductions
(714,143)
(667,071)
(539,992)
Balance at End of Period
$ 24,692 
$ 22,804 
$ 18,185