LKQ CORP, 10-K filed on 2/27/2012
Annual Report
Document And Entity Information (USD $)
In Billions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Feb. 17, 2012
Jun. 30, 2011
Document And Entity Information [Abstract]
 
 
 
Document Type
10-K 
 
 
Amendment Flag
false 
 
 
Document Period End Date
Dec. 31, 2011 
 
 
Document Fiscal Year Focus
2011 
 
 
Document Fiscal Period Focus
FY 
 
 
Entity Registrant Name
LKQ CORP 
 
 
Entity Central Index Key
0001065696 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Common Stock, Shares Outstanding
 
147,265,959 
 
Entity Current Reporting Status
Yes 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Public Float
 
 
$ 3.7 
Entity Voluntary Filers
No 
 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Assets
 
 
Cash and equivalents
$ 48,247 
$ 95,689 
Receivables, net
281,764 
191,085 
Inventory
736,846 
492,688 
Deferred income taxes
45,690 
32,506 
Prepaid income taxes
17,597 
10,923 
Prepaid expenses and other current assets
19,591 
13,985 
Total Current Assets
1,149,735 
836,876 
Property and Equipment, net
424,098 
331,312 
Intangible Assets
 
 
Goodwill
1,476,063 
1,032,973 
Other intangible assets, net
108,910 
69,302 
Other Assets
40,898 
29,046 
Total Assets
3,199,704 
2,299,509 
Liabilities and Stockholders' Equity
 
 
Accounts payable
210,875 
76,437 
Accrued expenses
 
 
Accrued payroll-related liabilities
53,256 
41,376 
Self-insurance reserves
18,226 
16,820 
Other accrued expenses
59,543 
25,832 
Other current liabilities
24,481 
9,224 
Current portion of long-term obligations
29,524 
52,888 
Liabilities of discontinued operations
1,788 
2,744 
Total Current Liabilities
397,693 
225,321 
Long-Term Obligations, Excluding Current Portion
926,552 
548,066 
Deferred Income Taxes
88,796 
66,059 
Contingent Consideration Liabilities
81,782 
1,500 
Other Noncurrent Liabilities
60,796 
44,402 
Commitments and Contingencies
   
   
Stockholders' Equity:
 
 
Common stock, $0.01 par value, 500,000,000 shares authorized, 146,948,608 and 145,466,575 shares issued and outstanding at December 31, 2011 and 2010, respectively
1,470 
1,455 
Additional paid-in capital
902,782 
869,798 
Retained earnings
748,794 
538,530 
Accumulated other comprehensive (loss) income
(8,961)
4,378 
Total Stockholders' Equity
1,644,085 
1,414,161 
Total Liabilities and Stockholders' Equity
$ 3,199,704 
$ 2,299,509 
Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 31, 2011
Dec. 31, 2010
Consolidated Balance Sheets [Abstract]
 
 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
500,000,000 
500,000,000 
Common stock, shares issued
146,948,608 
145,466,575 
Common stock, shares outstanding
146,948,608 
145,466,575 
Consolidated Statements Of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Consolidated Statements Of Income [Abstract]
 
 
 
Revenue
$ 3,269,862 
$ 2,469,881 
$ 2,047,942 
Cost of goods sold
1,877,869 
1,376,401 
1,120,129 
Gross margin
1,391,993 
1,093,480 
927,813 
Facility and warehouse expenses
293,423 
233,993 
201,056 
Distribution expenses
287,626 
212,718 
181,919 
Selling, general and administrative expenses
391,942 
310,228 
276,723 
Restructuring and acquisition related expenses
7,590 
668 
2,554 
Depreciation and amortization
49,929 
37,996 
34,113 
Operating income
361,483 
297,877 
231,448 
Other expense (income):
 
 
 
Interest expense
24,307 
29,765 
32,252 
Interest income
(1,860)
(1,449)
(1,353)
Gain on bargain purchase
 
 
(4,339)
Loss on debt extinguishment
5,345 
 
 
Change in fair value of contingent consideration liabilities
(1,408)
 
 
Other income, net
(672)
(564)
(429)
Total other expense, net
25,712 
27,752 
26,131 
Income from continuing operations before provision for income taxes
335,771 
270,125 
205,317 
Provision for income taxes
125,507 
103,007 
78,180 
Income from continuing operations
210,264 
167,118 
127,137 
Discontinued operations:
 
 
 
Income (loss) from discontinued operations, net of taxes
   
224 
(2,088)
Gain on sale of discontinued operations, net of taxes
   
1,729 
2,472 
Income from discontinued operations
   
1,953 
384 
Net income
$ 210,264 
$ 169,071 
$ 127,521 
Basic earnings per share:
 
 
 
Income from continuing operations
$ 1.44 1
$ 1.17 1
$ 0.90 1
Income from discontinued operations
 
$ 0.01 1
$ 0.00 1
Total
$ 1.44 1
$ 1.18 1
$ 0.91 1
Diluted earnings per share:
 
 
 
Income from continuing operations
$ 1.42 1
$ 1.15 1
$ 0.88 1
Income from discontinued operations
 
$ 0.01 1
$ 0.00 1
Total
$ 1.42 1
$ 1.16 1
$ 0.89 1
Consolidated Statements Of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net income
$ 210,264 
$ 169,071 
$ 127,521 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
54,505 
41,428 
38,062 
Stock-based compensation expense
13,107 
9,974 
7,283 
Deferred income taxes
9,302 
8,963 
5,882 
Excess tax benefit from stock-based payments
(7,973)
(15,000)
(9,628)
Amortization of debt issuance costs
2,013 
2,322 
2,457 
Loss on debt extinguishment
5,345 
 
 
Gain on sale of discontinued operations
 
(2,744)
(3,924)
Gain on bargain purchase
 
 
(4,339)
Loss on asset impairment
 
1,265 
3,539 
Other
(802)
(890)
678 
Changes in operating assets and liabilities, net of effects from acquisitions and divestitures:
 
 
 
Receivables
(18,074)
(12,309)
(384)
Inventory
(90,091)
(67,795)
(20,428)
Prepaid expenses and other assets
(5,094)
(5,240)
(5,358)
Accounts payable
28,589 
10,156 
(18,067)
Accrued expenses
(3,338)
8,257 
9,107 
Prepaid income taxes/income taxes payable
2,251 
7,492 
24,111 
Deferred revenue
35 
(201)
1,386 
Other noncurrent liabilities
11,733 
4,434 
6,104 
Net cash provided by operating activities
211,772 
159,183 
164,002 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
Purchases of property and equipment
(86,416)
(61,438)
(55,870)
Proceeds from sales of property and equipment
1,743 
1,441 
1,070 
Proceeds from sale of businesses, net of cash sold
 
11,992 
17,477 
Cash used in acquisitions, net of cash acquired
(486,934)
(143,578)
(65,171)
Net cash used in investing activities
(571,607)
(191,583)
(102,494)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Proceeds from exercise of stock options
11,919 
13,962 
8,247 
Excess tax benefit from stock-based payments
7,973 
15,000 
9,628 
Debt issuance costs
(11,048)
(419)
(310)
Borrowings under revolving credit facility
1,111,369 
 
2,309 
Repayments under revolving credit facility
(453,867)
 
(9,045)
Borrowings under term loan
250,000 
 
 
Repayments under term loans
(600,464)
(7,476)
(42,291)
Repayments of other long-term debt
(4,471)
(2,105)
(1,703)
Net cash provided by (used in) financing activities
311,411 
18,962 
(33,165)
Effect of exchange rate changes on cash and equivalents
982 
221 
1,496 
Net (decrease) increase in cash and equivalents
(47,442)
(13,217)
29,839 
Cash and equivalents, beginning of period
95,689 
108,906 
79,067 
Cash and equivalents, end of period
48,247 
95,689 
108,906 
Supplemental disclosure of cash flow information:
 
 
 
Purchase price payable, including notes issued in connection with business acquisitions
42,865 
11,889 
2,324 
Contingent consideration liabilities
81,239 
2,000 
 
Stock issued in connection with business acquisitions
 
14,945 
 
Debt assumed with business acquisitions
13,564 
 
 
Cash paid for income taxes, net of refunds
113,433 
88,294 
49,287 
Cash paid for interest
21,354 
27,421 
29,530 
Property and equipment acquired under capital leases
414 
   
3,404 
Property and equipment purchases not yet paid
$ 3,567 
$ 1,425 
$ 87 
Consolidated Statements Of Stockholders' Equity And Other Comprehensive Income (USD $)
In Thousands, except Share data
Common Stock [Member]
Additional Paid-In Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Total
BALANCE, value at Dec. 31, 2008
$ 1,399 
$ 790,933 
$ 241,938 
$ (13,764)
$ 1,020,506 
BALANCE, shares at Dec. 31, 2008
139,921,000 
 
 
 
 
Net income
 
 
127,521 
 
127,521 
Pension plan activity, net of tax
 
 
 
(129)
(129)
Activity of interest rate swap agreements, net of tax
 
 
 
2,305 
2,305 
Foreign currency translation
 
 
 
4,191 
4,191 
Total comprehensive income
 
 
 
 
133,888 
Restricted stock granted, value
(1)
 
 
 
Restricted stock granted, shares
50,000 
 
 
 
 
Stock issued as director compensation, value
 
290 
 
 
290 
Stock issued as director compensation, shares
18,000 
 
 
 
 
Stock-based compensation expense
 
6,993 
 
 
6,993 
Exercise of stock options, value
20 
8,227 
 
 
8,247 
Exercise of stock options, shares
2,016,000 
 
 
 
 
Excess tax benefit from stock-based payments
 
9,510 
 
 
9,510 
BALANCE, value at Dec. 31, 2009
1,420 
815,952 
369,459 
(7,397)
1,179,434 
BALANCE, shares at Dec. 31, 2009
142,005,000 
 
 
 
 
Net income
 
 
169,071 
 
169,071 
Pension plan activity, net of tax
 
 
 
(15)
(15)
Activity of interest rate swap agreements, net of tax
 
 
 
8,712 
8,712 
Foreign currency translation
 
 
 
3,078 
3,078 
Total comprehensive income
 
 
 
 
180,846 
Stock issued in business acquisitions, value
14,938 
 
 
14,945 
Stock issued in business acquisitions, shares
690,000 
 
 
 
 
Stock issued as director compensation, value
 
290 
 
 
290 
Stock issued as director compensation, shares
14,000 
 
 
 
 
Stock-based compensation expense
 
9,684 
 
 
9,684 
Exercise of stock options, value
28 
13,934 
 
 
13,962 
Exercise of stock options, shares
2,758,000 
 
 
 
 
Excess tax benefit from stock-based payments
 
15,000 
 
 
15,000 
BALANCE, value at Dec. 31, 2010
1,455 
869,798 
538,530 
4,378 
1,414,161 
BALANCE, shares at Dec. 31, 2010
145,467,000 
 
 
 
 
Net income
 
 
210,264 
 
210,264 
Activity of interest rate swap agreements, net of tax
 
 
 
(9,066)
(9,066)
Foreign currency translation
 
 
 
(4,273)
(4,273)
Total comprehensive income
 
 
 
 
196,925 
Restricted stock units vested, value
(1)
 
 
 
Restricted stock units vested, shares
82,000 
 
 
 
 
Stock issued as director compensation, value
 
399 
 
 
399 
Stock issued as director compensation, shares
16,000 
 
 
 
 
Stock-based compensation expense
 
12,708 
 
 
12,708 
Exercise of stock options, value
14 
11,905 
 
 
11,919 
Exercise of stock options, shares
1,384,000 
 
 
 
 
Excess tax benefit from stock-based payments
 
7,973 
 
 
7,973 
BALANCE, value at Dec. 31, 2011
$ 1,470 
$ 902,782 
$ 748,794 
$ (8,961)
$ 1,644,085 
BALANCE, shares at Dec. 31, 2011
146,949,000 
 
 
 
 
Business
Business

Note 1. 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 vehicles (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 440 facilities.

As described in Note 3, "Discontinued Operations," during 2009, we sold, agreed to sell or closed certain of our self service facilities. These facilities qualified for treatment as discontinued operations. The financial results and assets and liabilities of these facilities are segregated from our continuing operations and presented as discontinued operations in the Consolidated Balance Sheets and Consolidated Statements of Income for all periods presented.

Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies

Note 2. 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 aftermarket and recycled products. Revenue is recognized when the products are shipped or picked up 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 $22.8 million and $18.2 million at December 31, 2011 and 2010, respectively. We present taxes assessed by governmental authorities collected from customers on a net basis. Therefore, the taxes are excluded from revenue and are shown as a liability on our Consolidated Balance Sheet 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.

Shipping & Handling

Revenue also includes amounts billed to customers related to shipping and handling of approximately $23.9 million, $17.3 million and $15.5 million during the years ended December 31, 2011, 2010 and 2009, respectively. Distribution expenses in the accompanying Consolidated Statements of Income are the costs incurred to prepare and deliver products to customers.

Cash and Equivalents

We consider all highly liquid investments with original maturities of 90 days or less to be cash equivalents. Cash equivalents are carried at cost, which approximates market value. Our cash equivalents primarily include holdings in money market funds and overnight securities. We did not hold any cash equivalents at December 31, 2011, while cash equivalents at December 31, 2010 were $57.2 million.

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 $8.3 million and $6.9 million at December 31, 2011 and 2010, 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

Our inventory includes aftermarket and refurbished vehicle replacement products, salvage and remanufactured vehicle replacement products and core facilities inventory. A core is a recycled automotive part that is not suitable for sale as a replacement part without further refurbishing or remanufacturing work.

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, and includes expenses incurred for freight, refurbishing costs and overhead. 

A salvage product is a recycled vehicle part suitable for sale as a replacement part. Salvage inventory is recorded at the lower of cost or market. 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 reduced regularly to the lower of cost or market 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,  
     2011      2010  

Aftermarket and refurbished products

   $ 445,787       $ 274,728   

Salvage and remanufactured products

     282,106         209,514   

Core facilities inventory

     8,953         8,446   
  

 

 

    

 

 

 
   $ 736,846       $ 492,688   
  

 

 

    

 

 

 

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,  
     2011     2010  

Land and improvements

   $ 81,170      $ 71,931   

Buildings and improvements

     119,414        103,198   

Furniture, fixtures and equipment

     192,514        145,196   

Computer equipment and software

     79,195        63,341   

Vehicles and trailers

     40,825        27,218   

Leasehold improvements

     69,079        41,939   
  

 

 

   

 

 

 
     582,197        452,823   

Less—Accumulated depreciation

     (179,950     (142,401

Construction in progress

     21,851        20,890   
  

 

 

   

 

 

 
   $ 424,098      $ 331,312   
  

 

 

   

 

 

 

Intangible Assets

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

Goodwill is tested for impairment at least annually, and we performed annual impairment tests during the fourth quarters of 2011, 2010 and 2009. With the decision to sell a portion of our self service operations (as described in Note 3, "Discontinued Operations"), we also conducted a goodwill impairment test as of September 30, 2009 for both the allocated goodwill associated with the facilities to be disposed of and our ongoing self service reporting unit. The results of all of these tests indicated that goodwill was not impaired.

The changes in the carrying amount of goodwill are as follows (in thousands):

 

Balance as of January 1, 2009

   $ 907,218   

Business acquisitions and adjustments to previously recorded goodwill

     26,137   

Exchange rate effects

     5,428   
  

 

 

 

Balance as of December 31, 2009

   $ 938,783   

Business acquisitions and adjustments to previously recorded goodwill

     91,757   

Exchange rate effects

     2,433   
  

 

 

 

Balance as of December 31, 2010

   $ 1,032,973   

Business acquisitions and adjustments to previously recorded goodwill

     442,208   

Exchange rate effects

     882   
  

 

 

 

Balance as of December 31, 2011

   $ 1,476,063   
  

 

 

 

In 2009, we adjusted previously recorded goodwill related to the Pick-Your-Part Auto Wrecking ("PYP") acquisition by $3.2 million, primarily related to various pre-acquisition liabilities.

In 2011, we finalized the valuation of certain intangible assets acquired related to our 2010 acquisitions. 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.

 

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

 

     December 31, 2011      December 31, 2010  
     Gross
Carrying
Amount
     Accumulated
Amortization
    Net      Gross
Carrying
Amount
     Accumulated
Amortization
    Net  

Trade names and trademarks

   $ 115,954       $ (16,305   $ 99,649       $ 75,661       $ (12,020   $ 63,641   

Covenants not to compete

     3,194         (918     2,276         2,688         (1,382     1,306   

Customer relationships

     10,050         (3,065     6,985         4,355         —          4,355   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 
   $ 129,198       $ (20,288   $ 108,910       $ 82,704       $ (13,402   $ 69,302   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

In 2011, we recorded $40.1 million of trade names, $1.5 million of covenants not to compete and $5.7 million of customer relationships 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. In 2010, we recognized $0.9 million of trade names, $1.0 million of covenants not to compete, and $4.4 million of customer relationships resulting from our acquisitions during the year. Trade names are amortized over a useful life ranging from 10 to 30 years on a straight-line 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. Customer relationships are amortized over the expected period to be benefitted (5 to 10 years) on either a straight-line or accelerated basis. Amortization expense for intangibles was approximately $7.9 million, $4.2 million and $4.1 million during the years ended December 31, 2011, 2010 and 2009, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2016 is $8.4 million, $7.7 million, $7.0 million, $6.3 million and $5.6 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. During the year ended December 31, 2010, we recognized impairment charges on certain long-lived assets during the normal course of business of $1.3 million. There were no adjustments to the carrying value of long-lived assets of continuing operations during the years ended December 31, 2011 or 2009.

Fair Value of Financial Instruments

Our debt is reflected on the balance sheet at cost. As discussed in Note 5, "Long-Term Obligations," we entered into a new senior secured credit agreement on March 25, 2011, which was subsequently amended and restated effective September 30, 2011. Based on current market conditions, our interest rate margins are below the rate available in the market, which causes the fair value of our debt to fall below the carrying value. The fair value of our credit facility borrowings is approximately $893 million at December 31, 2011, as compared to the carrying value of $901.4 million. At December 31, 2010, the fair value of our borrowings under the previous credit agreement reasonably approximated the carrying value of $590.1 million. We estimated the fair value of our credit facility borrowings by calculating the upfront cash payment a market participant would require to assume our obligations. The upfront cash payment, excluding any issuance costs, is the amount that a market participant would be able to lend at December 31, 2011 and 2010 to an entity with a credit rating similar to ours and achieve sufficient cash inflows to cover the scheduled cash outflows under our credit facility.

The carrying amounts of our cash and equivalents, net trade receivables and accounts payable approximate fair value.

We apply the market and income approaches to value our financial assets and liabilities, which include the cash surrender value of life insurance, deferred compensation liabilities, interest rate swaps and contingent consideration liabilities. Required fair value disclosures are included in Note 7, "Fair Value Measurements."

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 record the estimated warranty costs at the time of sale using historical warranty claim information to project future warranty claims activity and related expenses. The changes in the warranty reserve are as follows (in thousands):

 

Balance as of January 1, 2010

   $ 604   

Warranty expense

     9,351   

Warranty claims

     (8,882

Business acquisitions

     990   
  

 

 

 

Balance as of December 31, 2010

   $ 2,063   

Warranty expense

     22,364   

Warranty claims

     (20,802

Business acquisitions

     3,722   
  

 

 

 

Balance as of December 31, 2011

   $ 7,347   
  

 

 

 

Our 2011 and 2010 warranty expense reflects $8.5 million and $0.2 million of expense related to our engine remanufacturing operations, which we began in 2010 through an acquisition in the fourth quarter, and subsequently expanded through two additional acquisitions in 2011.

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 $37.4 million and $32.9 million, including $18.2 million and $16.8 million classified in current liabilities, as of December 31, 2011 and 2010, 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 and $0.6 million, at December 31, 2011 and 2010, respectively. In addition to these claims deposits, we had outstanding letters of credit of $31.8 million and $24.2 million at December 31, 2011 and 2010, 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 is depreciation expense associated with refurbishing, remanufacturing, our furnace operations and our distribution centers.

Rental Expense

We recognize rental expense on a straight-line basis over the respective lease terms 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.

Discontinued Operations
Discontinued Operations

Note 3. Discontinued Operations

On October 1, 2009, we sold to Schnitzer Steel Industries, Inc. ("SSI") four self service retail facilities in Oregon and Washington and certain business assets related to two self service facilities in Northern California and a self service facility in Portland, Oregon for $17.5 million, net of cash sold. We recognized a gain on the sale of approximately $2.5 million, net of tax, in our fourth quarter 2009 results. Goodwill totaling $9.9 million was included in the cost basis of net assets disposed when determining the gain on sale. In the fourth quarter of 2009, we closed the two self service facilities in Northern California and converted the self service operation in Portland to a wholesale recycling business.

On January 15, 2010, we also sold to SSI two self service retail facilities in Dallas, Texas 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 or closed are reported as discontinued operations for all periods presented. As of December 31, 2011 and 2010, we had accrued liabilities applicable to discontinued operations of $1.8 million and $2.7 million, respectively, included in the Consolidated Condensed Balance Sheets. These liabilities were primarily composed of accrued restructuring expenses for the excess lease payments (net of estimated sublease income) and facility closure costs related to two of the closed self service facilities.

 

Results of operations for the discontinued operations are as follows (in thousands):

 

     Year Ended December 31,  
     2011      2010      2009  

Revenue

   $ —         $ 686       $ 23,957   
  

 

 

    

 

 

    

 

 

 

Income (loss) before income tax provision (benefit)

   $ —         $ 355       $ (3,314

Income tax provision (benefit)

     —           131         (1,226
  

 

 

    

 

 

    

 

 

 

Income (loss) from discontinued operations, net of taxes, before gain on sale of discontinued operations

     —           224         (2,088

Gain on sale of discontinued operations, net of taxes of $1,015 and $1,452 in 2010 and 2009, respectively

     —           1,729         2,472   
  

 

 

    

 

 

    

 

 

 

Income from discontinued operations, net of taxes

   $ —         $ 1,953       $ 384   
  

 

 

    

 

 

    

 

 

 

Our decision to close the two self service facilities in Northern California represented a triggering event that required us to evaluate the long-lived assets at these facilities for impairment. The pretax loss from discontinued operations in the year ended December 31, 2009 includes a fixed asset impairment charge of $3.5 million primarily related to leasehold improvements that are not recoverable.

Equity Incentive Plans
Equity Incentive Plans

Note 4. Equity Incentive Plans

We have two stock-based compensation plans, the Stock Option and Compensation Plan for Non-Employee Directors (the "Director Plan") and the LKQ Corporation 1998 Equity Incentive Plan (the "Equity Incentive Plan"). Under the Director Plan, which was adopted by our Board of Directors in June 2003 and approved by our stockholders in September 2003, shares of LKQ common stock may be issued to directors in lieu of cash compensation. In February 1998, we adopted the Equity Incentive Plan to attract and retain employees and consultants. Under the Equity Incentive Plan, both qualified and nonqualified stock options, stock appreciation rights, restricted stock, performance shares and performance units may be granted. On January 13, 2011, the Compensation Committee amended the Equity Incentive Plan to allow the grant of restricted stock units ("RSUs").

The total number of shares approved by our stockholders for issuance under the Equity Incentive Plan is 34.4 million shares, subject to antidilution and other adjustment provisions, which includes 6.4 million shares authorized in May 2011.

Stock options issued under the Equity Incentive Plan expire ten years from the date they are granted. Most of the options, RSUs and restricted stock granted under the Equity Incentive Plan 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. We expect to issue new shares of common stock to cover future equity grants under these plans.

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

 

     Shares
Available For
Grant
    Stock Options      RSUs      Restricted Stock  
     Number
Outstanding
    Weighted
Average
Exercise
Price
     Number
Outstanding
    Weighted
Average
Grant Date
Fair Value
     Number
Outstanding
    Weighted
Average
Grant Date
Fair Value
 

Balance, January 1, 2009

     5,374,928        9,663,588      $ 7.27         —        $ —           190,000      $ 19.14   

Granted

     (1,886,400     1,836,400        12.15         —          —           50,000        18.60   

Exercised

     —          (2,016,306     4.09         —          —           —          —     

Vested

     —          —          —           —          —           (38,000     19.14   

Cancelled

     154,275        (154,275     13.82         —          —           —          —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance, December 31, 2009

     3,642,803        9,329,407      $ 8.81         —        $ —           202,000      $ 19.00   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Granted

     (1,711,533     1,711,533        19.95         —          —           —          —     

Exercised

     —          (2,758,155     5.06         —          —           —          —     

Vested

     —          —          —           —          —           (48,000     19.02   

Cancelled

     208,820        (208,820     16.11         —          —           —          —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance, December 31, 2010

     2,140,090        8,073,965      $ 12.27         —        $ —           154,000      $ 19.00   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Granted

     (821,674     —          —           821,674        23.60         —          —     

Shares Issued for Director Compensation

     (15,583     —          —           —          —           —          —     

Exercised

     —          (1,384,019     8.61         —          —           —          —     

Vested

     —          —          —           (82,431     23.68         (48,000     19.02   

Cancelled

     173,352        (150,900     16.87         (22,452     23.54         —          —     

Additional Shares Authorized

     6,400,000        —          —           —          —           —          —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance, December 31, 2011

     7,876,185        6,539,046      $ 12.93         716,791      $ 23.59         106,000      $ 18.98   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

In 2012, our Board of Directors granted 721,100 RSUs to employees and directors.

 

The following table summarizes information about expected to vest options, RSUs and restricted stock at December 31, 2011:

 

     Shares      Weighted
Average
Remaining
Contractual
Life (Yrs)
     Intrinsic
Value

(in  thousands)
     Weighted
Average
Exercise
Price
 

Stock options

     6,526,736         5.6       $ 111,978       $ 12.92   

RSUs

     697,667         4.0         20,986         —     

Restricted stock

     106,000         1.5         3,188         —     

The aggregate intrinsic value represents the total pre-tax intrinsic value based on our closing stock price of $30.08 on December 31, 2011. 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 $21.6 million and $3.2 million at December 31, 2011, respectively.

The following table summarizes information about outstanding and exercisable stock options at December 31, 2011:

 

     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
 

$0.75 - $5.00

     1,369,911         2.2       $ 3.85         1,369,911         2.2       $ 3.85   

$5.01 - $10.00

     536,180         4.0         9.24         536,180         4.0         9.24   

$10.01 - $15.00

     1,999,260         6.4         11.39         1,190,810         6.1         11.14   

$15.01 - $20.00

     2,611,695         7.2         19.57         1,136,909         6.8         19.39   

$20.01 +

     22,000         6.4         21.28         14,850         6.4         21.31   
  

 

 

          

 

 

       
     6,539,046         5.6       $ 12.93         4,248,660         4.8       $ 10.79   
  

 

 

          

 

 

       

The aggregate intrinsic value of outstanding and exercisable stock options at December 31, 2011 was $112.1 million and $81.9 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 and restricted stock, we used a forfeiture rate of 8% for grants to employees and a forfeiture rate of 0% for grants to directors and executive officers.

We did not grant any stock options during the year ended December 31, 2011. For the stock options granted during 2010 and 2009, 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     2009  

Expected life (in years)

     6.4        6.3   

Risk-free interest rate

     3.17     1.87

Volatility

     43.9     44.6

Dividend yield

     0     0

Weighted average fair value of options granted

   $ 9.54      $ 5.57   

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 had been just over six years when the 2010 grant was made. Therefore, we use 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 9.0% has been used for valuing employee option grants, while a forfeiture rate of 0% has been used for valuing director and executive officer option grants.

The total grant-date fair value of options that vested during the years ended December 31, 2011, 2010 and 2009 was approximately $8.6 million, $7.7 million and $5.3 million, respectively. The total intrinsic value (market value of stock less option exercise price) of stock options exercised was $24.8 million, $43.2 million and $27.2 million during the years ended December 31, 2011, 2010 and 2009, respectively.

The fair value of RSUs that vested during the year ended December 31, 2011 was $2.2 million, while there were no RSU vestings during the years ended December 31, 2010 and 2009 as we did not issue RSUs prior to 2011. The fair value of restricted stock that vested during the years ended December 31, 2011, 2010 and 2009 was approximately $1.1 million, $1.0 million and $0.4 million, respectively.

We recognize compensation expense on a straight-line basis over the requisite service period of the award. The components of pretax stock-based compensation expense are as follows (in thousands):

 

     Year Ended December 31,  
     2011      2010      2009  

Stock options

   $ 8,129       $ 8,771       $ 6,219   

RSUs

     3,666         —           —     

Restricted stock

     913         913         774   

Stock issued to non-employee directors

     399         290         290   
  

 

 

    

 

 

    

 

 

 

Total stock-based compensation expense

   $ 13,107       $ 9,974       $ 7,283   
  

 

 

    

 

 

    

 

 

 

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,  
     2011     2010     2009  

Cost of goods sold

   $ 327      $ 278      $ 47   

Facility and warehouse expenses

     2,391        2,069        2,620   

Selling, general and administrative expenses

     10,389        7,627        4,616   
  

 

 

   

 

 

   

 

 

 
     13,107        9,974        7,283   

Income tax benefit

     (5,059     (3,920     (2,862
  

 

 

   

 

 

   

 

 

 

Total stock based compensation, net of tax

   $ 8,048      $ 6,054      $ 4,421   
  

 

 

   

 

 

   

 

 

 

 

We have not capitalized any stock-based compensation cost during the years ended December 31, 2011, 2010 or 2009.

As of December 31, 2011, unrecognized compensation expense related to unvested stock options, RSUs and restricted stock is expected to be recognized as follows (in thousands):

 

     Stock
Options
     RSUs      Restricted
Stock
     Total  

2012

   $ 6,883       $ 3,791       $ 913       $ 11,587   

2013

     4,722         3,702         208         8,632   

2014

     3,116         3,639         139         6,894   

2015

     78         3,602         —           3,680   

2016

     —           162         —           162   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total unrecognized compensation expense

   $ 14,799       $ 14,896       $ 1,260       $ 30,955   
  

 

 

    

 

 

    

 

 

    

 

 

 
Long-Term Obligations
Long-Term Obligations

Note 5. Long-Term Obligations

Long-term obligations consist of the following (in thousands):

 

     December 31,  
     2011     2010  

Senior secured debt financing facility:

    

Term loans payable

   $ 240,625      $ 590,099   

Revolving credit facility

     660,730        —     

Notes payable through October 2018 at a weighted average interest rate of 2.0% and 2.4% at December 31, 2011 and 2010, respectively

     38,338        6,869   

Other long-term debt at a weighted average interest rate of 3.2% and 6.6% at December 31, 2011 and 2010, respectively

     16,383        3,986   
  

 

 

   

 

 

 
     956,076        600,954   

Less current maturities

     (29,524     (52,888
  

 

 

   

 

 

 
   $ 926,552      $ 548,066   
  

 

 

   

 

 

 

The scheduled maturities of long-term obligations outstanding at December 31, 2011 are as follows (in thousands):

 

2012

   $ 29,524   

2013

     51,013   

2014

     27,105   

2015

     35,514   

2016

     811,841   

Thereafter

     1,079   
  

 

 

 
   $ 956,076   
  

 

 

 

We obtained a senior secured debt financing facility from Lehman Brothers Inc. and Deutsche Bank Securities, Inc. on October 12, 2007 (as amended, the "2007 Credit Agreement"). The 2007 Credit Agreement was scheduled to mature on October 12, 2013 and included a $610 million term loan, a $40 million Canadian currency term loan, an $85 million U.S. dollar revolving credit facility, and a $15 million dual currency revolving facility for drawings of either U.S. dollars or Canadian dollars. The 2007 Credit Agreement also provided for (i) the issuance of letters of credit of up to $35 million in U.S. dollars and up to $10 million in either U.S. or Canadian dollars, and (ii) the opportunity for us to add additional term loan facilities and/or increase the $100 million revolving credit facility's commitments, subject to certain requirements.

On March 25, 2011, we entered into a credit agreement (the "Original 2011 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 "Amended and Restated 2011 Credit Agreement"). The Original 2011 Credit Agreement provided for borrowings up to $1 billion, consisting of (1) a five-year $750 million revolving credit facility (the "Revolving Credit Facility"), and (2) a five-year $250 million term loan facility (the "Term Loan Facility"). Under the Revolving Credit Facility, we were permitted to draw up to the U.S. dollar equivalent of $300 million in Canadian dollars, pounds sterling, euros, and other agreed-upon currencies. The Original 2011 Credit Agreement also provided for (a) the issuance of up to $75 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. We used the initial proceeds from the Original 2011 Credit Agreement to pay off outstanding amounts of $591.1 million under the 2007 Credit Agreement. 

The Amended and Restated 2011 Credit Agreement retains most of the terms of the Original 2011 Credit Agreement while also modifying certain terms to (1) provide an additional term loan facility of up to $200 million ("New Term Loan Facility"); (2) increase the total availability under the Revolving Credit Facility by $200 million to $950 million (the increase was applied to the multicurrency component of the Revolving Credit Facility, thus increasing the foreign currency availability to $500 million from $300 million); (3) increase the amount of letters of credit that may be issued under the Revolving Credit Facility to $125 million from $75 million; (4) add certain subsidiaries as additional borrowers under the Revolving Credit Facility; and (5) make other immaterial or clarifying modifications and amendments to the terms of the Original 2011 Credit Agreement. The Amended and Restated 2011 Credit Agreement maintains our opportunity to increase the amount of the Revolving Credit Facility or obtain incremental term loans up to $400 million. We used the initial proceeds from a draw under the increased Revolving Credit Facility for the acquisition of ECP in October 2011, as discussed in more detail in Note 9, "Business Combinations." As of December 31, 2011, we had not drawn any amounts under the New Term Loan Facility, but 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 Amended and Restated 2011 Credit Agreement are unconditionally guaranteed by our direct and indirect domestic subsidiaries and certain foreign subsidiaries. Obligations under the Amended and Restated 2011 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. In October 2011, Moody's and S&P affirmed our credit ratings at Ba2 and BB+, respectively, with a stable outlook.

Amounts under the Revolving Credit Facility will be due and payable upon maturity of the Amended and Restated 2011 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 will be due and payable on the maturity date of the Amended and Restated 2011 Credit Agreement. Amounts under the New Term Loan Facility will be due and payable in quarterly installments equal to 1.25% of the original principal amount at the end of each of the eight quarters subsequent to the first quarter of 2012, 2.5% at the end of each of the following eight quarters, and 3.75% each quarter thereafter. The remaining balance under the New Term Loan Facility will be due and payable on the maturity date of the Amended and Restated 2011 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 Amended and Restated 2011 Credit Agreement.

The Amended and Restated 2011 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, (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 Amended and Restated 2011 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 Amended and Restated 2011 Credit Agreement and the 2007 Credit Agreement as of December 31, 2011 and 2010, respectively.

 

The Amended and Restated 2011 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.

Concurrently with the payment of amounts outstanding under the 2007 Credit Agreement, we incurred a loss on debt extinguishment related to the write off of the unamortized balance of capitalized debt issuance costs of $5.3 million. The amount of the write off excludes debt issuance cost amortization, which is recorded as a component of interest expense. We incurred $8.2 million in fees related to the execution of the Original 2011 Credit Agreement and an additional $2.8 million related to the execution of the Amended and Restated 2011 Credit Agreement. These fees were capitalized within Other Assets on our Consolidated Balance Sheet and are amortized over the term of the agreement.

Borrowings under the Amended and Restated 2011 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 quarterly in arrears for the term loans and on the last day of the selected interest period on revolver borrowings. Including the effect of the interest rate swap agreements described in Note 6, "Derivative Instruments and Hedging Activities," the weighted average interest rate on borrowings outstanding against the Amended and Restated 2011 Credit Agreement at December 31, 2011 was 2.59%. 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. Beginning on December 1, 2011 through January 31, 2012, the date we drew the New Term Loan Facility, we incurred a ticking fee on the unfunded balance of the New Term Loan Facility. The ticking fee is calculated based on variable rates ranging from 0.25% to 0.50%, which are determined based on our total leverage ratio. The ticking fees are payable in arrears on December 31, 2011 and March 31, 2012. Borrowings under the Amended and Restated 2011 Credit Agreement at December 31, 2011 totaled $901.4 million, of which $12.5 million was classified as current maturities. As of December 31, 2011, there were $35.4 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, 2011 was $253.9 million. After giving effect to the additional $200 million of availability under the New Term Loan Facility, total availability under the 2011 Amended and Restated Credit Facility was $453.9 million at December 31, 2011.  

Borrowings under the 2007 Credit Agreement accrued interest at variable rates, which depended on the currency and the duration of the borrowing elected, plus an applicable margin. Including the effect of the interest rate swap agreements, the weighted average interest rate on borrowings outstanding under the 2007 Credit Agreement at December 31, 2010 was 3.97%. We also paid commitment fees on the unused portion of our revolving credit facilities, which ranged from 0.38% to 0.50% based on our total leverage ratio. Borrowings under the 2007 Credit Agreement at December 31, 2010 totaled $590.1 million, of which $50.0 million was classified as current maturities.

As part of the consideration for business acquisitions completed during 2011, 2010 and 2009, we issued promissory notes totaling approximately $34.2 million, $5.5 million and $1.2 million, respectively. The notes bear interest at annual rates of 2.0% to 4.0%, and interest is payable at maturity or in monthly installments.

Derivative Instruments And Hedging Activities
Derivative Instruments And Hedging Activities

Note 6. 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. With our acquisition of ECP in October 2011, we also use certain short-term foreign currency forward contracts to manage our exposure to variability in foreign currency denominated transactions. We do not attempt to hedge our commodity price risks. We do not hold or issue derivatives for trading purposes.

Interest Rate Swaps

At December 31, 2011, 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, 2011:

 

On March 25, 2011, Deutsche Bank AG, the former counterparty on our $100 million notional amount interest rate swap, assigned its obligation under the swap contract to Bank of America N.A because Deutsche Bank AG was not a secured lender under the Amended and Restated 2011 Credit Agreement. We believe Bank of America N.A. is creditworthy to perform its obligation as the counterparty to the swap.

As of December 31, 2011, the fair market values of these swap contracts was a liability of $10.6 million included in Other Noncurrent Liabilities on our Consolidated Balance Sheet. As of December 31, 2010, we held the $250 million notional amount swap and the $100 million notional amount swap. The fair market value of these contracts was an asset of $4.8 million included in Other Assets. At December 31, 2010, we also held a $200 million notional amount swap that was a liability of $1.4 million included in Other Accrued Expenses.

The activity related to our interest rate swap agreements is as follows (in thousands):

 

     Year Ended December 31,  
     2011     2010     2009  

Gain (loss) in Other Comprehensive Income (Loss)

   $ (19,391   $ 3,230      $ (7,994

Loss reclassified to interest expense

     (5,641     (10,377     (11,595

Loss from hedge ineffectiveness

     (225     —          —     

In connection with the execution of the Original 2011 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 future ineffectiveness will be immaterial and the swaps will continue to be highly effective in hedging our variable rate debt.

As of December 31, 2011, we estimate that $3.4 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.

Foreign Currency Forward Contracts

In order to manage the risk of changes in exchange rates associated with certain foreign currency transactions in our European operations, such as our purchases of inventory denominated in a currency other than the pound sterling, we have entered into short-term foreign currency forward contracts. As of December 31, 2011, we had nine contracts outstanding to purchase up to €10.4 million for £8.8 million and two contracts to purchase $1.5 million for £0.9 million, all of which expire during the first half of 2012. These contracts are adjusted to fair value each balance sheet date. As we have elected not to apply hedge accounting for these transactions, the changes in fair value are recorded in Other Income, net. The fair value of these contracts at December 31, 2011 and the effect on our results of operations for the year ended December 31, 2011 were immaterial.

Fair Value Measurements
Fair Value Measurements

Note 7. Fair Value Measurements

We use the market and income approaches to value our financial assets and liabilities, and there were no changes in valuation techniques during the year ended December 31, 2011. The tables below present information about our financial assets and liabilities that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques we utilized to determine such fair value. The tiers in the fair value hierarchy include: Level 1, defined as observable inputs such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. 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 LIBOR and forward interest rates. We determined the fair value of the contingent consideration obligations using the income approach. The key assumptions used in determining the fair value are the projected results of the acquired business and our assessment of the probabilities surrounding the achievement of targets detailed in the respective agreements, which are used to determine the estimated undiscounted cash payments, and a discount rate that approximates our debt credit rating. The fair value measurement is based upon significant inputs not observable in the market. Changes in the value of the obligation are recorded in Change in Fair Value of Contingent Consideration Liabilities within Other Expense (Income) on our Consolidated Statements of Income.

The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2011 and 2010 (in thousands):

 

     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   
  

 

 

    

 

 

    

 

 

    

 

 

 
     Balance as
of December 31,
2010
     Fair Value Measurements as of December 31, 2010  
        Level 1      Level 2      Level 3  

Assets:

           

Cash surrender value of life insurance

   $ 10,517       $ —         $ 10,517       $ —     

Interest rate swaps

     4,815         —           4,815         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Assets

   $ 15,332       $ —         $ 15,332       $ —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities:

           

Deferred compensation liabilities

   $ 11,245       $ —         $ 11,245       $ —     

Contingent consideration liabilities

     2,000         —           —           2,000   

Interest rate swaps

     1,416         —           1,416         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Liabilities

   $ 14,661       $ —         $ 12,661       $ 2,000   
  

 

 

    

 

 

    

 

 

    

 

 

 

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 a separate line item in noncurrent liabilities except for $0.6 million and $0.5 million as of December 31, 2011 and 2010, respectively, which are included in Other Accrued Expenses on our Consolidated Balance Sheets as they are expected to be paid in the next 12 month period.

Changes in the fair value of our Level 3 contingent consideration obligations are as follows:

 

Balance as of January 1, 2010

   $  

Contingent consideration liabilities recorded for business acquisitions

     2,000   
  

 

 

 

Balance as of December 31, 2010

   $ 2,000   

Contingent consideration liabilities recorded for business acquisitions

     81,239   

(Gain) loss included in earnings, net

     (1,408

Exchange rate effects

     551   
  

 

 

 

Balance as of December 31, 2011

   $ 82,382   
  

 

 

 
Commitments And Contingencies
Commitments And Contingencies

Note 8. 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, 2011 are as follows (in thousands):

 

Years ending December 31:

  

2012

   $ 84,977   

2013

     77,306   

2014

     66,013   

2015

     56,116   

2016

     43,179   

Thereafter

     123,137   
  

 

 

 

Future Minimum Lease Payments

   $ 450,728   
  

 

 

 

Rental expense for operating leases was approximately $83.7 million, $66.9 million and $57.2 million during the years ended December 31, 2011, 2010 and 2009, 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, 2011, the guaranteed residual value would have totaled approximately $35.7 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

In December 2005 and May 2008, Ford Global Technologies, LLC filed complaints with the International Trade Commission against us and others alleging that certain aftermarket parts imported into the U.S. infringed on Ford design patents. The parties settled these matters in April 2009 pursuant to a settlement arrangement that was scheduled to expire in September 2011. In July 2011, we entered into a new agreement with Ford (which became effective October 1, 2011) to continue our arrangement through March 2015 with substantially the same terms as the 2009 agreement. Pursuant to the settlement, we (and our designees) became the sole distributor in the U.S. of aftermarket automotive parts that correspond to Ford collision parts that are covered by a U.S. design patent. We paid Ford an upfront fee at the commencement of both the 2009 and 2011 agreements for these rights and pay a royalty for each such part we sell. The amortization of the upfront fee and the royalty expenses are reflected in Cost of Goods Sold on the accompanying Consolidated Statements of Income.

We are a plaintiff in a class action lawsuit against several aftermarket product suppliers. In January 2012, we reached a settlement with one of the defendants, and a settlement with the other vendors is subject to court approval. Our recovery is expected to be approximately $15 million in the aggregate, net of legal fees. We will recognize the gains from these settlements when substantially all uncertainties regarding the timing and the amount of the settlements are resolved.

We also have certain other 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

Note 9. Business Combinations

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 have 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. Under the contingent consideration agreement, if certain annual EBITDA targets are met, we may 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 have assessed 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 all subsequent reporting periods until the contingency is resolved, we will reassess the fair value of this contingent payment and any changes in fair value will be recognized in our Consolidated Statements of Income. There was not a material change in the assessed fair value of the contingent payment between October 3, 2011 and December 31, 2011.

We recorded goodwill of $337.0 million for the ECP acquisition, which will not be deductible for income tax purposes. In the period between October 1, 2011 and December 31, 2011, ECP generated approximately $138.5 million of revenue and $10.1 million of operating income.

In addition to our acquisition of ECP, we made 20 acquisitions in North America in 2011 (12 wholesale businesses, five recycled heavy-duty truck products 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 product 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 $21.0 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 the period between the acquisition dates and December 31, 2011, these 20 acquisitions generated approximately $189.8 million of revenue and $9.1 million of operating income.

In 2010, we made 20 acquisitions in North America (16 wholesale businesses, one recycled heavy-duty truck products business, two self service retail operations and one tire recycling business). 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 (689,655 shares). The fair value of the contingent payment was adjusted downward by $2.0 million in 2011 as a result of changes in the likelihood of meeting the specified performance targets. This adjustment was included in Change in Fair Value of Contingent Consideration Liabilities on our Consolidated Statements of Income for the year ended December 31, 2011. 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.

On October 1, 2009, we acquired Greenleaf Auto Recyclers, LLC ("Greenleaf") from SSI for $38.8 million, net of cash acquired. Greenleaf is the entity through which SSI operated its wholesale recycling business. We recorded a gain on bargain purchase for the Greenleaf acquisition totaling $4.3 million in our results of operations for 2009. We believe that we were able to acquire Greenleaf for less than the fair value of its assets because of (i) our unique position as market leader in the wholesale recycled auto products market and (ii) SSI's intent to exit its Greenleaf operations. Greenleaf generally was an unprofitable venture throughout its history, which included several different ownership groups, and SSI approached us in an effort to sell Greenleaf and exit the wholesale recycled auto products business that no longer fit its strategy. With SSI's intent to exit the wholesale recycled auto products business and our position as the market leader, we were able to agree on a favorable purchase price. We finalized the valuation of acquired inventory, accrued liabilities and deferred taxes in 2010. As a result, we identified certain immaterial adjustments to the opening balance sheet, which were recorded through the results of operations in 2010.

Also in 2009, we acquired four North American wholesale businesses and three recycled heavy-duty truck products businesses. The aggregate acquisition date fair value of the consideration for these seven businesses totaled approximately $29.5 million in cash, net of cash acquired, and $1.2 million of debt issued.

The acquisitions are being 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 2011 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 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 2011 and 2010 are as follows (in thousands):

 

     December 31,  
     2011     2010
(Final)
 
     ECP
(Preliminary)
    Other Acquisitions
(Preliminary)
    Total
(Preliminary)
   

Receivables

   $ 54,225      $ 23,538      $ 77,763      $ 27,774   

Receivable reserves

     (3,832     (1,121     (4,953     (2,186

Inventory

     93,835        59,846        153,681        38,121   

Prepaid expenses and other current assets

     3,189        2,820        6,009        1,480   

Property and equipment

     41,830        10,614        52,444        18,517   

Goodwill

     337,031        105,177        442,208        91,757   

Other intangibles

     39,583        7,683        47,266        6,163   

Other assets

     13        9,420        9,433        1,529   

Deferred income taxes

     (13,218     7,235        (5,983     2,922   

Current liabilities assumed

     (135,390     (17,257     (152,647     (15,665

Debt assumed

     (13,564     —          (13,564     —     

Other noncurrent liabilities assumed

     —          (619     (619     —     

Contingent consideration liabilities

     (77,539     (3,700     (81,239     (2,000

Other purchase price obligations

     (4,136     (4,510     (8,646     (4,359

Notes issued

     (28,302     (5,917     (34,219     (5,530

Stock issued

     —          —          —          (14,945
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash used in acquisitions, net of cash acquired

   $ 293,725      $ 193,209      $ 486,934      $ 143,578   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

The primary reason for our acquisitions made in 2011, 2010 and 2009 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, expand our product offerings and enter new markets. These factors contributed to purchase prices that included, in many cases, a significant amount of goodwill.

Most notably, our acquisition of ECP in 2011 marks our entry into the European automotive aftermarket business, which provides an opportunity to us as that market has historically had a low penetration of alternative collision parts. Additionally, ECP is a leading distributor of alternative automotive products reaching most major markets in the U.K., with a developed distribution network, experienced management team, and established workforce. These factors contributed to the $337 million of goodwill recognized related to this acquisition.

 

The following pro forma summary presents the effect of the businesses acquired during the years ended December 31, 2011 and 2010 as though the businesses had been acquired as of January 1, 2010, and is based upon unaudited financial information of the acquired entities (in thousands, except per share data):

 

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

Note 11. 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 $5.3 million, $4.8 million and $3.7 million during 2011, 2010 and 2009, 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 $0.8 million, $0.7 million and $0.5 million in 2011, 2010 and 2009, respectively, net of allowable transfers into our 401(k) defined contribution plan. Total deferred compensation liabilities were approximately $14.1 million and $11.2 million at December 31, 2011 and 2010, 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. As of December 31, 2011 and 2010, we held 184 and 166 contracts with a face value of $80.6 million and $72.7 million, respectively. The cash surrender value of these policies was approximately $13.4 million and $10.5 million at December 31, 2011 and 2010, respectively.

Earnings Per Share
Earnings Per Share

Note 12. 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 table sets forth the computation of earnings per share (in thousands, except per share amounts):

 

     Year Ended December 31,  
     2011      2010      2009  

Income from continuing operations

   $ 210,264       $ 167,118       $ 127,137   
  

 

 

    

 

 

    

 

 

 

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

     146,126         143,271         140,541   

Effect of dilutive securities:

        

Stock options

     2,125         2,559         3,438   

RSUs

     91         —           —     

Restricted stock

     33         27         11   
  

 

 

    

 

 

    

 

 

 

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

     148,375         145,857         143,990   
  

 

 

    

 

 

    

 

 

 

Basic earnings per share from continuing operations

   $ 1.44       $ 1.17       $ 0.90   
  

 

 

    

 

 

    

 

 

 

Diluted earnings per share from continuing operations

   $ 1.42       $ 1.15       $ 0.88   
  

 

 

    

 

 

    

 

 

 

The following chart 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,  
     2011      2010      2009  

Antidilutive securities:

        

Stock options

     1,170         2,857         1,398   

Restricted stock

     —           40         —     
Income Taxes
Income Taxes

Note 13. Income Taxes

The provision for income taxes consists of the following components (in thousands):

 

     Year Ended December 31,  
     2011      2010      2009  

Current:

        

Federal

   $ 97,887       $ 75,009       $ 58,854   

State

     14,435         16,552         12,619   

Foreign

     3,883         2,483         825   
  

 

 

    

 

 

    

 

 

 
     116,205         94,044         72,298   

Deferred

     9,302         8,963         5,882   
  

 

 

    

 

 

    

 

 

 

Provision for income taxes

   $ 125,507       $ 103,007       $ 78,180   
  

 

 

    

 

 

    

 

 

 

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,  
     2011      2010      2009  

Domestic

   $ 319,305       $ 264,438       $ 202,558   

Foreign

     16,466         5,687         2,759   
  

 

 

    

 

 

    

 

 

 
   $ 335,771       $ 270,125       $ 205,317   
  

 

 

    

 

 

    

 

 

 

 

The U.S. federal statutory rate is reconciled to the effective tax rate as follows:

 

     Year Ended December 31,  
     2011     2010     2009  

U.S. federal statutory rate

     35.0     35.0     35.0

State income taxes, net of state credits and federal tax impact

     3.1        3.4        4.1   

Non-deductible expenses

     0.7        0.3        0.5   

Impact of international operations

     (0.8 )     (0.3     (0.2

Federal production incentives and credits

     (0.4     (0.2     (0.4

Revaluation of deferred taxes

     —          (0.5     —     

Non-taxable gain on bargain purchase

     —          —          (0.8

Other, net

     (0.2     0.4        (0.1
  

 

 

   

 

 

   

 

 

 

Effective tax rate

     37.4     38.1     38.1
  

 

 

   

 

 

   

 

 

 

We do not provide for U.S. federal income taxes on the undistributed earnings of our foreign subsidiaries because such earnings are reinvested and it is our intention that the earnings will be reinvested indefinitely.

We had no individually significant discrete items included in our 2011 effective tax rate. The 2010 effective tax rate included a $1.5 million adjustment related to the revaluation of deferred taxes in connection with a legal entity reorganization in the first quarter. The 2009 effective tax rate included a benefit related to the recognition of a $4.3 million non-taxable gain on a bargain purchase for our acquisition of Greenleaf in October 2009.

The significant components of our deferred tax assets and liabilities are as follows (in thousands):

 

     December 31,  
     2011     2010  

Deferred Tax Assets:

    

Inventory

   $ 22,267      $ 16,409   

Accrued expenses and reserves

     18,357        17,379   

Accounts receivable

     10,860        9,330   

Stock based compensation

     8,945        6,609   

Qualified and nonqualified retirement plans

     5,157        4,422   

Net operating loss carryforwards

     4,722        4,681   

Interest rate swaps

     3,679        —     

Long term incentive plan

     3,260        1,889   

Unrecognized tax benefits

     1,669        1,657   

Other

     3,692        2,015   
  

 

 

   

 

 

 
     82,608        64,391   

Less valuation allowance

     (1,911     (2,607
  

 

 

   

 

 

 

Total deferred tax assets

   $ 80,697      $ 61,784   
  

 

 

   

 

 

 

Deferred Tax Liabilities:

    

Goodwill and other intangible assets

   $ 46,373      $ 38,648   

Property and equipment

     44,535        29,049   

Trade name

     32,592        23,695   

Other

     1,864        3,945   
  

 

 

   

 

 

 

Total deferred tax liabilities

   $ 125,364      $ 95,337   
  

 

 

   

 

 

 

Net deferred tax liability

   $ (44,667   $ (33,553
  

 

 

   

 

 

 

 

Deferred tax assets and liabilities are reflected on our Consolidated Balance Sheets as follows (in thousands):

 

     December 31,  
     2011      2010  

Current deferred tax assets

   $  45,690       $  32,506   

Current deferred tax liabilities

     1,561         —    

Noncurrent deferred tax liabilities

     88,796         66,059   

Our current deferred tax liabilities of $1.6 million were included in Other Current Liabilities on our Consolidated Balance Sheet as of December 31, 2011.

We had net operating loss carryforwards for federal and certain of our state tax jurisdictions, the tax benefits of which total approximately $4.7 million at December 31, 2011 and 2010, respectively. At December 31, 2011 and 2010, we also had tax credit carryforwards of $1.0 million and $1.4 million, respectively, related to certain of our state tax jurisdictions. As of December 31, 2011 and 2010, a valuation allowance of $1.9 million and $2.6 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 $0.7 million 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 2012 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):

 

     2011     2010     2009  

Balance at January 1

   $ 5,441      $ 8,526      $ 7,949   

Additions based on tax positions related to the current year

     952        713        1,811   

Additions for tax positions of prior years

     192        281        483   

Reductions for tax positions of prior years

     —          (86     (90

Reductions for tax positions of prior years—timing differences

     —          (2,041     —     

Lapse of statutes of limitations

     (892     (1,952     (1,489

Settlements with taxing authorities

     (196 )     —          (138
  

 

 

   

 

 

   

 

 

 

Balance at December 31

   $ 5,497      $ 5,441      $ 8,526   
  

 

 

   

 

 

   

 

 

 

At December 31, 2011 and 2010, we have accumulated interest and penalties included in gross unrecognized tax benefits of $1.2 million and $1.1 million, respectively. Of these amounts, $0.2 million was recorded through the income tax provision during each of the years ended December 31, 2011 and 2010, prior to any reversals for lapses in the statutes of limitations. We had a deferred tax asset of $0.2 million and $0.3 million related to the accumulated interest balance as of December 31, 2011 and 2010, 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 $3.8 million at both December 31, 2011 and 2010. The balance of unrecognized tax benefits at December 31, 2011 and 2010 also includes $1.7 million and $1.6 million, respectively, of tax benefits that, if recognized, would result in adjustments to deferred taxes.

 

During the twelve months beginning January 1, 2012, it is reasonably possible that we will reduce gross unrecognized tax benefits by up to approximately $0.6 million, of which approximately $0.4 million would impact our effective tax rate, primarily as a result of the expiration of certain statutes of limitations.

Tax years after 2007 remain subject to examination by the IRS. In the U.K., tax years through 2009 are no longer open to inquiry. We are currently the subject of income tax audits by various states for prior tax years, as well as an audit of the 2009 tax year by the IRS. Adjustments from such audits, 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)

Note 14. Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) are as follows (in thousands):

 

     Foreign
Currency
Translation
    Unrealized Gain
(Loss)
on Pension Plan
    Unrealized (Loss)
Gain
on Interest Rate
Swaps
    Accumulated
Other
Comprehensive
Income (Loss)
 

Balance at January 1, 2009

   $ (5,067   $ 144      $ (8,841   $ (13,764

Pretax income (loss)

     4,191        (211     (7,994     (4,014

Income tax benefit

     —          82        2,878        2,960   

Reversal of unrealized loss

     —          —          11,595        11,595   

Reversal of deferred income taxes

     —          —          (4,174     (4,174
  

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2009

     (876     15        (6,536     (7,397

Pretax income

     3,078        —          3,230        6,308   

Income tax expense

     —          —          (1,054     (1,054

Reversal of unrealized (gain) loss

     —          (15     10,377        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
  

 

 

   

 

 

    

 

 

   

 

 

 
Long Term Incentive Plan
Long Term Incentive Plan

On January 26, 2006, our Board of Directors approved, and our stockholders approved at the annual meeting on May 8, 2006, the LKQ Corporation Long Term Incentive Plan. At our annual meeting on May 2, 2011, the stockholders reapproved this plan. The purpose of the Long Term Incentive Plan is to offer certain key employees the opportunity to receive long-term performance rewards. Performance periods begin on January 1 and end on December 31 of the third calendar year thereafter. Performance awards are equal to the participant's base salary (at the end of the applicable performance period) multiplied by an "Award Percentage." A participant's Award Percentage is determined by three components: the growth over the performance period of each of the Company's earnings per share; total revenue; and return on equity. The Compensation Committee of our Board of Directors determines for each participant the range of Award Percentages based on different growth scenarios of the components. One half of any performance award achieved is payable promptly after the end of the performance period. A participant must be an employee of the Company at the end of the performance period to be eligible for this first payment. The other half of the performance award is deferred and vests in three equal installments on each one year anniversary of the end of the performance period. A participant must be an employee (or in some cases a consultant for us) on each such anniversary date to be eligible for the respective deferred payment, unless the participant is not an employee as a result of death, total disability or normal retirement at age 65, in which case the participant (or his or her estate) will be entitled to all of the deferred payments upon such death, disability or retirement. Interest on the deferred portion of the performance award accrues at the prime rate and is payable to the participant at the same time as the deferred installments are paid. We have recorded expense related to this plan totaling approximately $3.7 million, $3.5 million and $3.4 million during the years ended December 31, 2011, 2010 and 2009, respectively.

Segment And Geographic Information
Segment And Geographic Information

Note 16. Segment and Geographic Information

We have four operating segments: Wholesale—North America; Wholesale—Europe; Self Service; and Heavy-Duty Truck. Our operations in North America, which include our Wholesale—North America, Self Service and Heavy-Duty Truck 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") from continuing operations, and depreciation and amortization from continuing operations by reportable segment for the periods indicated (in thousands):

 

     Year Ended December 31,  
     2011      2010      2009  

Revenue

                    

North America

   $ 3,131,376       $ 2,469,881       $ 2,047,942   

Europe

     138,486         —           —     
  

 

 

    

 

 

    

 

 

 

Total revenue

   $ 3,269,862       $ 2,469,881       $ 2,047,942   
  

 

 

    

 

 

    

 

 

 

EBITDA

                    

North America

   $ 405,924       $ 339,869       $ 273,666   

Europe

     12,144         —           —     
  

 

 

    

 

 

    

 

 

 

Total EBITDA

   $ 418,068       $ 339,869       $ 273,666   
  

 

 

    

 

 

    

 

 

 

Depreciation and Amortization

                    

North America

   $ 52,481       $ 41,428       $ 37,450   

Europe

     2,024         —           —     
  

 

 

    

 

 

    

 

 

 

Total depreciation and amortization

   $ 54,505       $ 41,428       $ 37,450   
  

 

 

    

 

 

    

 

 

 

The table below provides a reconciliation from EBITDA to Income from Continuing Operations (in thousands):

 

     Year Ended December 31,  
     2011      2010      2009  

EBITDA

   $ 418,068       $ 339,869       $ 273,666   

Depreciation and amortization

     54,505         41,428         37,450   

Interest expense, net

     22,447         28,316         30,899   

Loss on debt extinguishment

     5,345         —           —     

Provision for income taxes

     125,507         103,007         78,180   
  

 

 

    

 

 

    

 

 

 

Income from continuing operations

   $ 210,264       $ 167,118       $ 127,137   
  

 

 

    

 

 

    

 

 

 

 

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. Since the European segment was initiated in the fourth quarter of 2011, its usage of the shared corporate and administrative costs has been minimal. 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 represents additions to property and equipment, by reportable segment (in thousands):

 

     Year Ended December 31,  

Capital Expenditures

   2011      2010      2009  

North America

   $ 84,856       $ 61,438       $ 55,870   

Europe

     1,560         —           —     
  

 

 

    

 

 

    

 

 

 
   $ 86,416       $ 61,438       $ 55,870   
  

 

 

    

 

 

    

 

 

 

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

 

     December 31,  
     2011      2010      2009  

Receivables, net

                    

North America

   $ 230,871       $ 191,085       $ 152,443   

Europe

     50,893         —           —     
  

 

 

    

 

 

    

 

 

 

Total receivables, net

     281,764         191,085         152,443   
  

 

 

    

 

 

    

 

 

 

Inventory

                    

North America

     636,145         492,688         385,686   

Europe

     100,701         —           —     
  

 

 

    

 

 

    

 

 

 

Total inventory

     736,846         492,688         385,686   
  

 

 

    

 

 

    

 

 

 

Property and Equipment, net

                    

North America

     380,282         331,312         289,902   

Europe

     43,816         —           —     
  

 

 

    

 

 

    

 

 

 

Total property and equipment, net

     424,098         331,312         289,902   
  

 

 

    

 

 

    

 

 

 

Other unallocated assets

     1,756,996         1,284,424         1,192,090   
  

 

 

    

 

 

    

 

 

 

Total assets

   $ 3,199,704       $ 2,299,509       $ 2,020,121   
  

 

 

    

 

 

    

 

 

 

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. We have recycled and aftermarket product operations in Canada, which were expanded in 2010 through the acquisition of Cross Canada, an aftermarket product supplier. We also have operations in Mexico, Guatemala and Costa Rica. Our locations in Mexico include an engine remanufacturer and a bumper refurbishing operation.

 

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

 

     Year Ended December 31,  

Revenue

   2011      2010      2009  

United States.

   $ 2,952,620       $ 2,366,224       $ 1,971,654   

United Kingdom

     138,486         —           —     

Other countries

     178,756         103,657         76,288   
  

 

 

    

 

 

    

 

 

 
   $ 3,269,862       $ 2,469,881       $ 2,047,942   
  

 

 

    

 

 

    

 

 

 

The following table sets forth our tangible long-lived assets, including primarily property and equipment, by geographic area (in thousands):

 

     December 31,  

Long-lived Assets

   2011      2010  

United States.

   $ 360,961       $ 316,002   

United Kingdom

     43,816         —     

Other countries

     19,321         15,310   
  

 

 

    

 

 

 
   $ 424,098       $ 331,312   
  

 

 

    

 

 

 

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

 

     Year Ended December 31,  
     2011      2010      2009  

Aftermarket, other new and refurbished products

   $ 1,634,003       $ 1,236,806       $ 1,093,157   

Recycled, remanufactured and related products and services

     1,115,088         888,320         749,012   

Other

     520,771         344,755         205,773   
  

 

 

    

 

 

    

 

 

 
   $ 3,269,862       $ 2,469,881       $ 2,047,942   
  

 

 

    

 

 

    

 

 

 

All of the product categories reflect revenue from our North American reportable segment, while our European segment, which is composed of ECP, an automotive aftermarket products distributor, only generates revenue 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.

Selected Quarterly Data
Selected Quarterly Data

Note 17. Selected Quarterly Data (unaudited)

The following table represents unaudited selected quarterly financial data for the two years ended December 31, 2011. The operating results for any quarter are not necessarily indicative of the results for any future period.

 

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, 2009

   $ 5,757       $ 5,102       $ 831       $ (5,183   $ 6,507   

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   

ALLOWANCE FOR ESTIMATED RETURNS, DISCOUNTS & ALLOWANCES:

             

Year ended December 31, 2009

   $ 11,169       $ 469,178       $ 1,915       $ (466,460   $ 15,802   

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
Summary Of Significant Accounting Policies (Policy)

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 aftermarket and recycled products. Revenue is recognized when the products are shipped or picked up 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 $22.8 million and $18.2 million at December 31, 2011 and 2010, respectively. We present taxes assessed by governmental authorities collected from customers on a net basis. Therefore, the taxes are excluded from revenue and are shown as a liability on our Consolidated Balance Sheet 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.

Shipping & Handling

Revenue also includes amounts billed to customers related to shipping and handling of approximately $23.9 million, $17.3 million and $15.5 million during the years ended December 31, 2011, 2010 and 2009, respectively. Distribution expenses in the accompanying Consolidated Statements of Income are the costs incurred to prepare and deliver products to customers.

Cash and Equivalents

We consider all highly liquid investments with original maturities of 90 days or less to be cash equivalents. Cash equivalents are carried at cost, which approximates market value. Our cash equivalents primarily include holdings in money market funds and overnight securities. We did not hold any cash equivalents at December 31, 2011, while cash equivalents at December 31, 2010 were $57.2 million.

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 $8.3 million and $6.9 million at December 31, 2011 and 2010, 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

Our inventory includes aftermarket and refurbished vehicle replacement products, salvage and remanufactured vehicle replacement products and core facilities inventory. A core is a recycled automotive part that is not suitable for sale as a replacement part without further refurbishing or remanufacturing work.

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, and includes expenses incurred for freight, refurbishing costs and overhead. 

A salvage product is a recycled vehicle part suitable for sale as a replacement part. Salvage inventory is recorded at the lower of cost or market. 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 reduced regularly to the lower of cost or market 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,  
     2011      2010  

Aftermarket and refurbished products

   $ 445,787       $ 274,728   

Salvage and remanufactured products

     282,106         209,514   

Core facilities inventory

     8,953         8,446   
  

 

 

    

 

 

 
   $ 736,846       $ 492,688   
  

 

 

    

 

 

 

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,  
     2011     2010  

Land and improvements

   $ 81,170      $ 71,931   

Buildings and improvements

     119,414        103,198   

Furniture, fixtures and equipment

     192,514        145,196   

Computer equipment and software

     79,195        63,341   

Vehicles and trailers

     40,825        27,218   

Leasehold improvements

     69,079        41,939   
  

 

 

   

 

 

 
     582,197        452,823   

Less—Accumulated depreciation

     (179,950     (142,401

Construction in progress

     21,851        20,890   
  

 

 

   

 

 

 
   $ 424,098      $ 331,312   
  

 

 

   

 

 

 

Intangible Assets

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

Goodwill is tested for impairment at least annually, and we performed annual impairment tests during the fourth quarters of 2011, 2010 and 2009. With the decision to sell a portion of our self service operations (as described in Note 3, "Discontinued Operations"), we also conducted a goodwill impairment test as of September 30, 2009 for both the allocated goodwill associated with the facilities to be disposed of and our ongoing self service reporting unit. The results of all of these tests indicated that goodwill was not impaired.

The changes in the carrying amount of goodwill are as follows (in thousands):

 

Balance as of January 1, 2009

   $ 907,218   

Business acquisitions and adjustments to previously recorded goodwill

     26,137   

Exchange rate effects

     5,428   
  

 

 

 

Balance as of December 31, 2009

   $ 938,783   

Business acquisitions and adjustments to previously recorded goodwill

     91,757   

Exchange rate effects

     2,433   
  

 

 

 

Balance as of December 31, 2010

   $ 1,032,973   

Business acquisitions and adjustments to previously recorded goodwill

     442,208   

Exchange rate effects

     882   
  

 

 

 

Balance as of December 31, 2011

   $ 1,476,063   
  

 

 

 

In 2009, we adjusted previously recorded goodwill related to the Pick-Your-Part Auto Wrecking ("PYP") acquisition by $3.2 million, primarily related to various pre-acquisition liabilities.

In 2011, we finalized the valuation of certain intangible assets acquired related to our 2010 acquisitions. 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.

 

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

 

     December 31, 2011      December 31, 2010  
     Gross
Carrying
Amount
     Accumulated
Amortization
    Net      Gross
Carrying
Amount
     Accumulated
Amortization
    Net  

Trade names and trademarks

   $ 115,954       $ (16,305   $ 99,649       $ 75,661       $ (12,020   $ 63,641   

Covenants not to compete

     3,194         (918     2,276         2,688         (1,382     1,306   

Customer relationships

     10,050         (3,065     6,985         4,355         —          4,355   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 
   $ 129,198       $ (20,288   $ 108,910       $ 82,704       $ (13,402   $ 69,302   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

In 2011, we recorded $40.1 million of trade names, $1.5 million of covenants not to compete and $5.7 million of customer relationships 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. In 2010, we recognized $0.9 million of trade names, $1.0 million of covenants not to compete, and $4.4 million of customer relationships resulting from our acquisitions during the year. Trade names are amortized over a useful life ranging from 10 to 30 years on a straight-line 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. Customer relationships are amortized over the expected period to be benefitted (5 to 10 years) on either a straight-line or accelerated basis. Amortization expense for intangibles was approximately $7.9 million, $4.2 million and $4.1 million during the years ended December 31, 2011, 2010 and 2009, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2016 is $8.4 million, $7.7 million, $7.0 million, $6.3 million and $5.6 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. During the year ended December 31, 2010, we recognized impairment charges on certain long-lived assets during the normal course of business of $1.3 million. There were no adjustments to the carrying value of long-lived assets of continuing operations during the years ended December 31, 2011 or 2009.

Fair Value of Financial Instruments

Our debt is reflected on the balance sheet at cost. As discussed in Note 5, "Long-Term Obligations," we entered into a new senior secured credit agreement on March 25, 2011, which was subsequently amended and restated effective September 30, 2011. Based on current market conditions, our interest rate margins are below the rate available in the market, which causes the fair value of our debt to fall below the carrying value. The fair value of our credit facility borrowings is approximately $893 million at December 31, 2011, as compared to the carrying value of $901.4 million. At December 31, 2010, the fair value of our borrowings under the previous credit agreement reasonably approximated the carrying value of $590.1 million. We estimated the fair value of our credit facility borrowings by calculating the upfront cash payment a market participant would require to assume our obligations. The upfront cash payment, excluding any issuance costs, is the amount that a market participant would be able to lend at December 31, 2011 and 2010 to an entity with a credit rating similar to ours and achieve sufficient cash inflows to cover the scheduled cash outflows under our credit facility.

The carrying amounts of our cash and equivalents, net trade receivables and accounts payable approximate fair value.

We apply the market and income approaches to value our financial assets and liabilities, which include the cash surrender value of life insurance, deferred compensation liabilities, interest rate swaps and contingent consideration liabilities. Required fair value disclosures are included in Note 7, "Fair Value Measurements."

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 record the estimated warranty costs at the time of sale using historical warranty claim information to project future warranty claims activity and related expenses. The changes in the warranty reserve are as follows (in thousands):

 

Balance as of January 1, 2010

   $ 604   

Warranty expense

     9,351   

Warranty claims

     (8,882

Business acquisitions

     990   
  

 

 

 

Balance as of December 31, 2010

   $ 2,063   

Warranty expense

     22,364   

Warranty claims

     (20,802

Business acquisitions

     3,722   
  

 

 

 

Balance as of December 31, 2011

   $ 7,347   
  

 

 

 

Our 2011 and 2010 warranty expense reflects $8.5 million and $0.2 million of expense related to our engine remanufacturing operations, which we began in 2010 through an acquisition in the fourth quarter, and subsequently expanded through two additional acquisitions in 2011.

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 $37.4 million and $32.9 million, including $18.2 million and $16.8 million classified in current liabilities, as of December 31, 2011 and 2010, 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 and $0.6 million, at December 31, 2011 and 2010, respectively. In addition to these claims deposits, we had outstanding letters of credit of $31.8 million and $24.2 million at December 31, 2011 and 2010, 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 is depreciation expense associated with refurbishing, remanufacturing, our furnace operations and our distribution centers.

Rental Expense

We recognize rental expense on a straight-line basis over the respective lease terms 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.

Summary Of Significant Accounting Policies (Tables)
     December 31,  
     2011      2010  

Aftermarket and refurbished products

   $ 445,787       $ 274,728   

Salvage and remanufactured products

     282,106         209,514   

Core facilities inventory

     8,953         8,446   
  

 

 

    

 

 

 
   $ 736,846       $ 492,688   
  

 

 

    

 

 

 

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   
     December 31,  
     2011     2010  

Land and improvements

   $ 81,170      $ 71,931   

Buildings and improvements

     119,414        103,198   

Furniture, fixtures and equipment

     192,514        145,196   

Computer equipment and software

     79,195        63,341   

Vehicles and trailers

     40,825        27,218   

Leasehold improvements

     69,079        41,939   
  

 

 

   

 

 

 
     582,197        452,823   

Less—Accumulated depreciation

     (179,950     (142,401

Construction in progress

     21,851        20,890   
  

 

 

   

 

 

 
   $ 424,098      $ 331,312   
  

 

 

   

 

 

 

Balance as of January 1, 2009

   $ 907,218   

Business acquisitions and adjustments to previously recorded goodwill

     26,137   

Exchange rate effects

     5,428   
  

 

 

 

Balance as of December 31, 2009

   $ 938,783   

Business acquisitions and adjustments to previously recorded goodwill

     91,757   

Exchange rate effects

     2,433   
  

 

 

 

Balance as of December 31, 2010

   $ 1,032,973   

Business acquisitions and adjustments to previously recorded goodwill

     442,208   

Exchange rate effects

     882   
  

 

 

 

Balance as of December 31, 2011

   $ 1,476,063   
  

 

 

 
     December 31, 2011      December 31, 2010  
     Gross
Carrying
Amount
     Accumulated
Amortization
    Net      Gross
Carrying
Amount
     Accumulated
Amortization
    Net  

Trade names and trademarks

   $ 115,954       $ (16,305   $ 99,649       $ 75,661       $ (12,020   $ 63,641   

Covenants not to compete

     3,194         (918     2,276         2,688         (1,382     1,306   

Customer relationships

     10,050         (3,065     6,985         4,355         —          4,355   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 
   $ 129,198       $ (20,288   $ 108,910       $ 82,704       $ (13,402   $ 69,302   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Balance as of January 1, 2010

   $ 604   

Warranty expense

     9,351   

Warranty claims

     (8,882

Business acquisitions

     990   
  

 

 

 

Balance as of December 31, 2010

   $ 2,063   

Warranty expense

     22,364   

Warranty claims

     (20,802

Business acquisitions

     3,722   
  

 

 

 

Balance as of December 31, 2011

   $ 7,347   
  

 

 

 
Discontinued Operations (Tables)
Results Of Operations For Discontinued Operations
     Year Ended December 31,  
     2011      2010      2009  

Revenue

   $ —         $ 686       $ 23,957   
  

 

 

    

 

 

    

 

 

 

Income (loss) before income tax provision (benefit)

   $ —         $ 355       $ (3,314

Income tax provision (benefit)

     —           131         (1,226
  

 

 

    

 

 

    

 

 

 

Income (loss) from discontinued operations, net of taxes, before gain on sale of discontinued operations

     —           224         (2,088

Gain on sale of discontinued operations, net of taxes of $1,015 and $1,452 in 2010 and 2009, respectively

     —           1,729         2,472   
  

 

 

    

 

 

    

 

 

 

Income from discontinued operations, net of taxes

   $ —         $ 1,953       $ 384   
  

 

 

    

 

 

    

 

 

 
Equity Incentive Plans (Tables)
     Shares
Available For
Grant
    Stock Options      RSUs      Restricted Stock  
     Number
Outstanding
    Weighted
Average
Exercise
Price
     Number
Outstanding
    Weighted
Average
Grant Date
Fair Value
     Number
Outstanding
    Weighted
Average
Grant Date
Fair Value
 

Balance, January 1, 2009

     5,374,928        9,663,588      $ 7.27         —        $ —           190,000      $ 19.14   

Granted

     (1,886,400     1,836,400        12.15         —          —           50,000        18.60   

Exercised

     —          (2,016,306     4.09         —          —           —          —     

Vested

     —          —          —           —          —           (38,000     19.14   

Cancelled

     154,275        (154,275     13.82         —          —           —          —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance, December 31, 2009

     3,642,803        9,329,407      $ 8.81         —        $ —           202,000      $ 19.00   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Granted

     (1,711,533     1,711,533        19.95         —          —           —          —     

Exercised

     —          (2,758,155     5.06         —          —           —          —     

Vested

     —          —          —           —          —           (48,000     19.02   

Cancelled

     208,820        (208,820     16.11         —          —           —          —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance, December 31, 2010

     2,140,090        8,073,965      $ 12.27         —        $ —           154,000      $ 19.00   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Granted

     (821,674     —          —           821,674        23.60         —          —     

Shares Issued for Director Compensation

     (15,583     —          —           —          —           —          —     

Exercised

     —          (1,384,019     8.61         —          —           —          —     

Vested

     —          —          —           (82,431     23.68         (48,000     19.02   

Cancelled

     173,352        (150,900     16.87         (22,452     23.54         —          —     

Additional Shares Authorized

     6,400,000        —          —           —          —           —          —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance, December 31, 2011

     7,876,185        6,539,046      $ 12.93         716,791      $ 23.59         106,000      $ 18.98   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 
     Shares      Weighted
Average
Remaining
Contractual
Life (Yrs)
     Intrinsic
Value

(in  thousands)
     Weighted
Average
Exercise
Price
 

Stock options

     6,526,736         5.6       $ 111,978       $ 12.92   

RSUs

     697,667         4.0         20,986         —     

Restricted stock

     106,000         1.5         3,188         —     
     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
 

$0.75 - $5.00

     1,369,911         2.2       $ 3.85         1,369,911         2.2       $ 3.85   

$5.01 - $10.00

     536,180         4.0         9.24         536,180         4.0         9.24   

$10.01 - $15.00

     1,999,260         6.4         11.39         1,190,810         6.1         11.14   

$15.01 - $20.00

     2,611,695         7.2         19.57         1,136,909         6.8         19.39   

$20.01 +

     22,000         6.4         21.28         14,850         6.4         21.31   
  

 

 

          

 

 

       
     6,539,046         5.6       $ 12.93         4,248,660         4.8       $ 10.79   
  

 

 

          

 

 

       
     Year Ended
December 31,
 
     2010     2009  

Expected life (in years)

     6.4        6.3   

Risk-free interest rate

     3.17     1.87

Volatility

     43.9     44.6

Dividend yield

     0     0

Weighted average fair value of options granted

   $ 9.54      $ 5.57   
     Year Ended December 31,  
     2011      2010      2009  

Stock options

   $ 8,129       $ 8,771       $ 6,219   

RSUs

     3,666         —           —     

Restricted stock

     913         913         774   

Stock issued to non-employee directors

     399         290         290   
  

 

 

    

 

 

    

 

 

 

Total stock-based compensation expense

   $ 13,107       $ 9,974       $ 7,283   
  

 

 

    

 

 

    

 

 

 
     Year Ended December 31,  
     2011     2010     2009  

Cost of goods sold

   $ 327      $ 278      $ 47   

Facility and warehouse expenses

     2,391        2,069        2,620   

Selling, general and administrative expenses

     10,389        7,627        4,616   
  

 

 

   

 

 

   

 

 

 
     13,107        9,974        7,283   

Income tax benefit

     (5,059     (3,920     (2,862
  

 

 

   

 

 

   

 

 

 

Total stock based compensation, net of tax

   $ 8,048      $ 6,054      $ 4,421   
  

 

 

   

 

 

   

 

 

 
     Stock
Options
     RSUs      Restricted
Stock
     Total  

2012

   $ 6,883       $ 3,791       $ 913       $ 11,587   

2013

     4,722         3,702         208         8,632   

2014

     3,116         3,639         139         6,894   

2015

     78         3,602         —           3,680   

2016

     —           162         —           162   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total unrecognized compensation expense

   $ 14,799       $ 14,896       $ 1,260       $ 30,955   
  

 

 

    

 

 

    

 

 

    

 

 

 
Long-Term Obligations (Tables)
     December 31,  
     2011     2010  

Senior secured debt financing facility:

    

Term loans payable

   $ 240,625      $ 590,099   

Revolving credit facility

     660,730        —     

Notes payable through October 2018 at a weighted average interest rate of 2.0% and 2.4% at December 31, 2011 and 2010, respectively

     38,338        6,869   

Other long-term debt at a weighted average interest rate of 3.2% and 6.6% at December 31, 2011 and 2010, respectively

     16,383        3,986   
  

 

 

   

 

 

 
     956,076        600,954   

Less current maturities

     (29,524     (52,888
  

 

 

   

 

 

 
   $ 926,552      $ 548,066   
  

 

 

   

 

 

 

2012

   $ 29,524   

2013

     51,013   

2014

     27,105   

2015

     35,514   

2016

     811,841   

Thereafter

     1,079   
  

 

 

 
   $ 956,076   
  

 

 

 
Derivative Instruments And Hedging Activities (Tables)
     Year Ended December 31,  
     2011     2010     2009  

Gain (loss) in Other Comprehensive Income (Loss)

   $ (19,391   $ 3,230      $ (7,994

Loss reclassified to interest expense

     (5,641     (10,377     (11,595

Loss from hedge ineffectiveness

     (225     —          —     
Fair Value Measurements (Tables)
     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   
  

 

 

    

 

 

    

 

 

    

 

 

 
     Balance as
of December 31,
2010
     Fair Value Measurements as of December 31, 2010  
        Level 1      Level 2      Level 3  

Assets:

           

Cash surrender value of life insurance

   $ 10,517       $ —         $ 10,517       $ —     

Interest rate swaps

     4,815         —           4,815         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Assets

   $ 15,332       $ —         $ 15,332       $ —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities:

           

Deferred compensation liabilities

   $ 11,245       $ —         $ 11,245       $ —     

Contingent consideration liabilities

     2,000         —           —           2,000   

Interest rate swaps

     1,416         —           1,416         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Liabilities

   $ 14,661       $ —         $ 12,661       $ 2,000   
  

 

 

    

 

 

    

 

 

    

 

 

 

Balance as of January 1, 2010

   $  

Contingent consideration liabilities recorded for business acquisitions

     2,000   
  

 

 

 

Balance as of December 31, 2010

   $ 2,000   

Contingent consideration liabilities recorded for business acquisitions

     81,239   

(Gain) loss included in earnings, net

     (1,408

Exchange rate effects

     551   
  

 

 

 

Balance as of December 31, 2011

   $ 82,382   
  

 

 

 
Commitments And Contingencies (Tables)
Future Minimum Lease Commitments

Years ending December 31:

  

2012

   $ 84,977   

2013

     77,306   

2014

     66,013   

2015

     56,116   

2016

     43,179   

Thereafter

     123,137   
  

 

 

 

Future Minimum Lease Payments

   $ 450,728   
  

 

 

 
Business Combinations (Tables)
     December 31,  
     2011     2010
(Final)
 
     ECP
(Preliminary)
    Other Acquisitions
(Preliminary)
    Total
(Preliminary)
   

Receivables

   $ 54,225      $ 23,538      $ 77,763      $ 27,774   

Receivable reserves

     (3,832     (1,121     (4,953     (2,186

Inventory

     93,835        59,846        153,681        38,121   

Prepaid expenses and other current assets

     3,189        2,820        6,009        1,480   

Property and equipment

     41,830        10,614        52,444        18,517   

Goodwill

     337,031        105,177        442,208        91,757   

Other intangibles

     39,583        7,683        47,266        6,163   

Other assets

     13        9,420        9,433        1,529   

Deferred income taxes

     (13,218     7,235        (5,983     2,922   

Current liabilities assumed

     (135,390     (17,257     (152,647     (15,665

Debt assumed

     (13,564     —          (13,564     —     

Other noncurrent liabilities assumed

     —          (619     (619     —     

Contingent consideration liabilities

     (77,539     (3,700     (81,239     (2,000

Other purchase price obligations

     (4,136     (4,510     (8,646     (4,359

Notes issued

     (28,302     (5,917     (34,219     (5,530

Stock issued

     —          —          —          (14,945
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash used in acquisitions, net of cash acquired

   $ 293,725      $ 193,209      $ 486,934      $ 143,578   
  

 

 

   

 

 

   

 

 

   

 

 

 
Earnings Per Share (Tables)
     Year Ended December 31,  
     2011      2010      2009  

Income from continuing operations

   $ 210,264       $ 167,118       $ 127,137   
  

 

 

    

 

 

    

 

 

 

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

     146,126         143,271         140,541   

Effect of dilutive securities:

        

Stock options

     2,125         2,559         3,438   

RSUs

     91         —           —     

Restricted stock

     33         27         11   
  

 

 

    

 

 

    

 

 

 

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

     148,375         145,857         143,990   
  

 

 

    

 

 

    

 

 

 

Basic earnings per share from continuing operations

   $ 1.44       $ 1.17       $ 0.90   
  

 

 

    

 

 

    

 

 

 

Diluted earnings per share from continuing operations

   $ 1.42       $ 1.15       $ 0.88   
  

 

 

    

 

 

    

 

 

 
     Year Ended December 31,  
     2011      2010      2009  

Antidilutive securities:

        

Stock options

     1,170         2,857         1,398   

Restricted stock

     —           40         —     
Income Taxes (Tables)
     Year Ended December 31,  
     2011      2010      2009  

Current:

        

Federal

   $ 97,887       $ 75,009       $ 58,854   

State

     14,435         16,552         12,619   

Foreign

     3,883         2,483         825   
  

 

 

    

 

 

    

 

 

 
     116,205         94,044         72,298   

Deferred

     9,302         8,963         5,882   
  

 

 

    

 

 

    

 

 

 

Provision for income taxes

   $ 125,507       $ 103,007       $ 78,180   
  

 

 

    

 

 

    

 

 

 
     Year Ended December 31,  
     2011      2010      2009  

Domestic

   $ 319,305       $ 264,438       $ 202,558   

Foreign

     16,466         5,687         2,759   
  

 

 

    

 

 

    

 

 

 
   $ 335,771       $ 270,125       $ 205,317   
  

 

 

    

 

 

    

 

 

 
     Year Ended December 31,  
     2011     2010     2009  

U.S. federal statutory rate

     35.0     35.0     35.0

State income taxes, net of state credits and federal tax impact

     3.1        3.4        4.1   

Non-deductible expenses

     0.7        0.3        0.5   

Impact of international operations

     (0.8 )     (0.3     (0.2

Federal production incentives and credits

     (0.4     (0.2     (0.4

Revaluation of deferred taxes

     —          (0.5     —     

Non-taxable gain on bargain purchase

     —          —          (0.8

Other, net

     (0.2     0.4        (0.1
  

 

 

   

 

 

   

 

 

 

Effective tax rate

     37.4     38.1     38.1
  

 

 

   

 

 

   

 

 

 
     December 31,  
     2011     2010  

Deferred Tax Assets:

    

Inventory

   $ 22,267      $ 16,409   

Accrued expenses and reserves

     18,357        17,379   

Accounts receivable

     10,860        9,330   

Stock based compensation

     8,945        6,609   

Qualified and nonqualified retirement plans

     5,157        4,422   

Net operating loss carryforwards

     4,722        4,681   

Interest rate swaps

     3,679        —     

Long term incentive plan

     3,260        1,889   

Unrecognized tax benefits

     1,669        1,657   

Other

     3,692        2,015   
  

 

 

   

 

 

 
     82,608        64,391   

Less valuation allowance

     (1,911     (2,607
  

 

 

   

 

 

 

Total deferred tax assets

   $ 80,697      $ 61,784   
  

 

 

   

 

 

 

Deferred Tax Liabilities:

    

Goodwill and other intangible assets

   $ 46,373      $ 38,648   

Property and equipment

     44,535        29,049   

Trade name

     32,592        23,695   

Other

     1,864        3,945   
  

 

 

   

 

 

 

Total deferred tax liabilities

   $ 125,364      $ 95,337   
  

 

 

   

 

 

 

Net deferred tax liability

   $ (44,667   $ (33,553
  

 

 

   

 

 

 
     December 31,  
     2011      2010  

Current deferred tax assets

   $  45,690       $  32,506   

Current deferred tax liabilities

     1,561         —    

Noncurrent deferred tax liabilities

     88,796         66,059   
     2011     2010     2009  

Balance at January 1

   $ 5,441      $ 8,526      $ 7,949   

Additions based on tax positions related to the current year

     952        713        1,811   

Additions for tax positions of prior years

     192        281        483   

Reductions for tax positions of prior years

     —          (86     (90

Reductions for tax positions of prior years—timing differences

     —          (2,041     —     

Lapse of statutes of limitations

     (892     (1,952     (1,489

Settlements with taxing authorities

     (196 )     —          (138
  

 

 

   

 

 

   

 

 

 

Balance at December 31

   $ 5,497      $ 5,441      $ 8,526   
  

 

 

   

 

 

   

 

 

 
Accumulated Other Comprehensive Income (Loss) (Tables)
Schedule Of Accumulated Other Comprehensive Income (Loss)
     Foreign
Currency
Translation
    Unrealized Gain
(Loss)
on Pension Plan
    Unrealized (Loss)
Gain
on Interest Rate
Swaps
    Accumulated
Other
Comprehensive
Income (Loss)
 

Balance at January 1, 2009

   $ (5,067   $ 144      $ (8,841   $ (13,764

Pretax income (loss)

     4,191        (211     (7,994     (4,014

Income tax benefit

     —          82        2,878        2,960   

Reversal of unrealized loss

     —          —          11,595        11,595   

Reversal of deferred income taxes

     —          —          (4,174     (4,174
  

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2009

     (876     15        (6,536     (7,397

Pretax income

     3,078        —          3,230        6,308   

Income tax expense

     —          —          (1,054     (1,054

Reversal of unrealized (gain) loss

     —          (15     10,377        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
  

 

 

   

 

 

    

 

 

   

 

 

 
Segment And Geographic Information (Tables)
     Year Ended December 31,  
     2011      2010      2009  

Revenue

                    

North America

   $ 3,131,376       $ 2,469,881       $ 2,047,942   

Europe

     138,486         —           —     
  

 

 

    

 

 

    

 

 

 

Total revenue

   $ 3,269,862       $ 2,469,881       $ 2,047,942   
  

 

 

    

 

 

    

 

 

 

EBITDA

                    

North America

   $ 405,924       $ 339,869       $ 273,666   

Europe

     12,144         —           —     
  

 

 

    

 

 

    

 

 

 

Total EBITDA

   $ 418,068       $ 339,869       $ 273,666   
  

 

 

    

 

 

    

 

 

 

Depreciation and Amortization

                    

North America

   $ 52,481       $ 41,428       $ 37,450   

Europe

     2,024         —           —     
  

 

 

    

 

 

    

 

 

 

Total depreciation and amortization

   $ 54,505       $ 41,428       $ 37,450   
  

 

 

    

 

 

    

 

 

 
     Year Ended December 31,  
     2011      2010      2009  

EBITDA

   $ 418,068       $ 339,869       $ 273,666   

Depreciation and amortization

     54,505         41,428         37,450   

Interest expense, net

     22,447         28,316         30,899   

Loss on debt extinguishment

     5,345         —           —     

Provision for income taxes

     125,507         103,007         78,180   
  

 

 

    

 

 

    

 

 

 

Income from continuing operations

   $ 210,264       $ 167,118       $ 127,137   
  

 

 

    

 

 

    

 

 

 
     Year Ended December 31,  

Capital Expenditures

   2011      2010      2009  

North America

   $ 84,856       $ 61,438       $ 55,870   

Europe

     1,560         —           —     
  

 

 

    

 

 

    

 

 

 
   $ 86,416       $ 61,438       $ 55,870   
  

 

 

    

 

 

    

 

 

 
     December 31,  
     2011      2010      2009  

Receivables, net

                    

North America

   $ 230,871       $ 191,085       $ 152,443   

Europe

     50,893         —           —     
  

 

 

    

 

 

    

 

 

 

Total receivables, net

     281,764         191,085         152,443   
  

 

 

    

 

 

    

 

 

 

Inventory

                    

North America

     636,145         492,688         385,686   

Europe

     100,701         —           —     
  

 

 

    

 

 

    

 

 

 

Total inventory

     736,846         492,688         385,686   
  

 

 

    

 

 

    

 

 

 

Property and Equipment, net

                    

North America

     380,282         331,312         289,902   

Europe

     43,816         —           —     
  

 

 

    

 

 

    

 

 

 

Total property and equipment, net

     424,098         331,312         289,902   
  

 

 

    

 

 

    

 

 

 

Other unallocated assets

     1,756,996         1,284,424         1,192,090   
  

 

 

    

 

 

    

 

 

 

Total assets

   $ 3,199,704       $ 2,299,509       $ 2,020,121   
  

 

 

    

 

 

    

 

 

 
     Year Ended December 31,  

Revenue

   2011      2010      2009  

United States.

   $ 2,952,620       $ 2,366,224       $ 1,971,654   

United Kingdom

     138,486         —           —     

Other countries

     178,756         103,657         76,288   
  

 

 

    

 

 

    

 

 

 
   $ 3,269,862       $ 2,469,881       $ 2,047,942   
  

 

 

    

 

 

    

 

 

 
     December 31,  

Long-lived Assets

   2011      2010  

United States.

   $ 360,961       $ 316,002   

United Kingdom

     43,816         —     

Other countries

     19,321         15,310   
  

 

 

    

 

 

 
   $ 424,098       $ 331,312   
  

 

 

    

 

 

 
     Year Ended December 31,  
     2011      2010      2009  

Aftermarket, other new and refurbished products

   $ 1,634,003       $ 1,236,806       $ 1,093,157   

Recycled, remanufactured and related products and services

     1,115,088         888,320         749,012   

Other

     520,771         344,755         205,773   
  

 

 

    

 

 

    

 

 

 
   $ 3,269,862       $ 2,469,881       $ 2,047,942   
  

 

 

    

 

 

    

 

 

 
Selected Quarterly Data (Tables)
Summary Of Selected Quarterly Financial Data
Business (Details)
Dec. 31, 2011
Business [Abstract]
 
Number of facilities
440 
Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Finite-Lived Intangible Assets [Line Items]
 
 
 
Reserve for estimated returns, discounts and allowances
$ 22,800,000 
$ 18,200,000 
 
Shipping and handling revenue
23,900,000 
17,300,000 
15,500,000 
Cash equivalents
 
57,200,000 
 
Reserve for uncollectible accounts
8,300,000 
6,900,000 
 
Goodwill recorded for acquisitions
442,208,000 
91,757,000 
26,137,000 
Steps for uncertain tax positions
two 
 
 
Amortization expense
7,900,000 
4,200,000 
4,100,000 
Estimated amortization expense, 2012
8,400,000 
 
 
Estimated amortization expense, 2013
7,700,000 
 
 
Estimated amortization expense, 2014
7,000,000 
 
 
Estimated amortization expense, 2015
6,300,000 
 
 
Estimated amortization expense, 2016
5,600,000 
 
 
Loss on asset impairment
 
1,265,000 
3,539,000 
Borrowings under credit agreement, fair value
893,000,000 
 
 
Borrowings under credit agreement, carrying value
901,400,000 
 
 
Borrowings under credit agreement, fair value and carrying value
 
590,100,000 
 
Warranty expense
22,364,000 
9,351,000 
 
Total self-insurance reserves
37,400,000 
32,900,000 
 
Self-insurance reserves, current liabilities
18,226,000 
16,820,000 
 
Claims deposits
500,000 
600,000 
 
Outstanding letters of credit
35,400,000 
 
 
Percentage threshold to measure tax benefit
50.00% 
 
 
Trade Names And Trademarks [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Intangible assets recognized
40,100,000 
900,000 
 
Useful life, minimum, years
10 
 
 
Useful life, maximum, years
30 
 
 
Covenants Not To Compete [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Intangible assets recognized
1,500,000 
1,000,000 
 
Useful life, minimum, years
 
 
Useful life, maximum, years
 
 
Customer Relationships [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Intangible assets recognized
5,700,000 
4,400,000 
 
Useful life, minimum, years
 
 
Useful life, maximum, years
10 
 
 
Pick-Your-Part Auto Wrecking [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Goodwill recorded for acquisitions
 
 
3,200,000 
Euro Car Parts Holding Limited [Member] |
Trade Names And Trademarks [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Intangible assets recognized
39,300,000 
 
 
Self-Insurance [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Outstanding letters of credit
31,800,000 
24,200,000 
 
Engine Remanufacturers [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Warranty expense
$ 8,500,000 
$ 200,000 
 
Summary Of Significant Accounting Policies (Schedule Of Inventory) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Summary Of Significant Accounting Policies [Abstract]
 
 
 
Aftermarket and refurbished products
$ 445,787 
$ 274,728 
 
Salvage and remanufactured products
282,106 
209,514 
 
Core facilities inventory
8,953 
8,446 
 
Inventory total
$ 736,846 
$ 492,688 
$ 385,686 
Summary Of Significant Accounting Policies (Schedule Of Estimated Useful Lives) (Details)
12 Months Ended
Dec. 31, 2011
Land Improvements [Member]
 
Property, Plant and Equipment [Line Items]
 
Estimated useful life, minimum, years
10 
Estimated useful life, maximum, years
20 
Buildings And Improvements [Member]
 
Property, Plant and Equipment [Line Items]
 
Estimated useful life, minimum, years
20 
Estimated useful life, maximum, years
40 
Furniture, Fixtures And Equipment [Member]
 
Property, Plant and Equipment [Line Items]
 
Estimated useful life, minimum, years
Estimated useful life, maximum, years
20 
Computer Equipment And Software [Member]
 
Property, Plant and Equipment [Line Items]
 
Estimated useful life, minimum, years
Estimated useful life, maximum, years
10 
Vehicles And Trailers [Member]
 
Property, Plant and Equipment [Line Items]
 
Estimated useful life, minimum, years
Estimated useful life, maximum, years
10 
Summary Of Significant Accounting Policies (Schedule Of Property And Equipment) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Summary Of Significant Accounting Policies [Abstract]
 
 
 
Land and improvements
$ 81,170 
$ 71,931 
 
Buildings and improvements
119,414 
103,198 
 
Furniture, fixtures and equipment
192,514 
145,196 
 
Computer equipment and software
79,195 
63,341 
 
Vehicles and trailers
40,825 
27,218 
 
Leasehold improvements
69,079 
41,939 
 
Property and equipment excluding construction in progress, gross
582,197 
452,823 
 
Less-Accumulated depreciation
(179,950)
(142,401)
 
Construction in progress
21,851 
20,890 
 
Property and equipment, net
$ 424,098 
$ 331,312 
$ 289,902 
Summary Of Significant Accounting Policies (Changes In Carrying Amount Of Goodwill) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Summary Of Significant Accounting Policies [Abstract]
 
 
 
Beginning balance
$ 1,032,973 
$ 938,783 
$ 907,218 
Business acquisitions and adjustments to previously recorded goodwill
442,208 
91,757 
26,137 
Exchange rate effects
882 
2,433 
5,428 
Ending balance
$ 1,476,063 
$ 1,032,973 
$ 938,783 
Summary Of Significant Accounting Policies (Schedule Of Other Intangibles) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
$ 129,198 
$ 82,704 
Accumulated Amortization
(20,288)
(13,402)
Net
108,910 
69,302 
Trade Names And Trademarks [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
115,954 
75,661 
Accumulated Amortization
(16,305)
(12,020)
Net
99,649 
63,641 
Covenants Not To Compete [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
3,194 
2,688 
Accumulated Amortization
(918)
(1,382)
Net
2,276 
1,306 
Customer Relationships [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
10,050 
4,355 
Accumulated Amortization
(3,065)
 
Net
$ 6,985 
$ 4,355 
Summary Of Significant Accounting Policies (Changes In Warranty Reserve) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Summary Of Significant Accounting Policies [Abstract]
 
 
Beginning balance
$ 2,063 
$ 604 
Warranty expense
22,364 
9,351 
Warranty claims
(20,802)
(8,882)
Business acquisitions
3,722 
990 
Ending balance
$ 7,347 
$ 2,063 
Discontinued Operations (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Jan. 15, 2010
Oct. 1, 2009
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
Number of self service retail facilities sold
 
 
 
Proceeds from sale of businesses, net of cash sold
 
$ 11,992,000 
$ 17,477,000 
 
 
Gain on sale of discontinued operations, net of taxes
   
1,729,000 
2,472,000 
 
 
Goodwill included in the cost basis of net assets disposed
 
 
 
6,700,000 
9,900,000 
Liabilities of discontinued operations
1,788,000 
2,744,000 
 
 
 
Loss on asset impairment
 
$ 1,265,000 
$ 3,539,000 
 
 
Portland, Oregon [Member]
 
 
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
Number of self service facilities from which certain business assets were sold
 
 
 
 
Northern California [Member]
 
 
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
Number of self service facilities from which certain business assets were sold
 
 
 
 
Discontinued Operations (Results Of Operations For Discontinued Operations) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Discontinued Operations [Abstract]
 
 
 
 
Revenue
 
    
$ 686 
$ 23,957 
Income (loss) before income tax provision (benefit)
 
   
355 
(3,314)
Income tax provision (benefit)
 
   
131 
(1,226)
Income (loss) from discontinued operations, net of taxes, before gain on sale of discontinued operations
 
   
224 
(2,088)
Gain on sale of discontinued operations, net of taxes of $1,015 and $1,452 in 2010 and 2009, respectively
 
   
1,729 
2,472 
Income from discontinued operations, net of taxes
1,953 
   
1,953 
384 
Tax portion of gain on sale of discontinued operations
 
 
$ 1,015 
$ 1,452 
Equity Incentive Plans (Narrative) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
years
Dec. 31, 2010
Dec. 31, 2009
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of stock-based compensation plans
 
 
Closing stock price
$ 30.08 
 
 
Period of time as a public company (in years)
 
 
Dividend yield
 
0.00% 
0.00% 
Equity Incentive Plan [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
The total number of shares approved under the Equity Incentive Plan
34,400,000 
 
 
Additional shares approved under Equity Incentive Plan
6,400,000 
 
 
Stock Options [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock options expiration (in years)
10 
 
 
Vesting periods (in years)
five 
 
 
Forfeiture rates used for grants to employees
 
9.00% 
9.00% 
Forfeiture rates used for grants to executive officers and directors
 
0.00% 
0.00% 
Fair value of options vested during period
$ 8.6 
$ 7.7 
$ 5.3 
Stock options exercised, intrinsic value
24.8 
43.2 
27.2 
Outstanding stock options, intrinsic value
112.1 
 
 
Exercisable stock options, intrinsic value
81.9 
 
 
Coupon issues risk-free rate
 
Restricted Stock [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Vesting periods (in years)
five 
 
 
Forfeiture rates used for grants to employees
8.00% 
 
 
Forfeiture rates used for grants to executive officers and directors
0.00% 
 
 
Fair value of restricted stock or RSU's vested during the period
1.1 
1.0 
0.4 
RSUs or Restricted Stock outstanding, intrinsic value
3.2 
 
 
RSUs [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Vesting periods (in years)
five 
 
 
Forfeiture rates used for grants to employees
8.00% 
 
 
Forfeiture rates used for grants to executive officers and directors
0.00% 
 
 
Fair value of restricted stock or RSU's vested during the period
2.2 
 
 
RSUs or Restricted Stock outstanding, intrinsic value
$ 21.6 
 
 
RSUs granted subsequent to balance sheet date
721,100 
 
 
Number of shares that restricted stock units convert into on the applicable vesting date
 
 
Equity Incentive Plans (Summary Of Stock-Based Compensation Plans) (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Ending Balance
6,539,046 
 
 
Ending Balance, Weighted Average Exercise Price
$ 12.93 
 
 
Shares Available For Grant [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Beginning balance
2,140,090 
3,642,803 
5,374,928 
Granted
(821,674)
(1,711,533)
(1,886,400)
Shares Issued for Director Compensation
(15,583)
 
 
Cancelled
173,352 
208,820 
154,275 
Additional Shares Authorized
6,400,000 
 
 
Ending balance
7,876,185 
2,140,090 
3,642,803 
Stock Options [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Beginning Balance
8,073,965 
9,329,407 
9,663,588 
Granted
 
1,711,533 
1,836,400 
Exercised
(1,384,019)
(2,758,155)
(2,016,306)
Cancelled
(150,900)
(208,820)
(154,275)
Ending Balance
6,539,046 
8,073,965 
9,329,407 
Beginning Balance, Weighted Average Exercise Price
$ 12.27 
$ 8.81 
$ 7.27 
Granted, Weighted Average Exercise Price
 
$ 19.95 
$ 12.15 
Exercised, Weighted Average Exercise Price
$ 8.61 
$ 5.06 
$ 4.09 
Cancelled, Weighted Average Exercise Price
$ 16.87 
$ 16.11 
$ 13.82 
Ending Balance, Weighted Average Exercise Price
$ 12.93 
$ 12.27 
$ 8.81 
RSUs [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Granted
821,674 
 
 
Restricted stock or RSUs vested
(82,431)
 
 
Cancelled
(22,452)
 
 
Ending balance
716,791 
 
 
Granted, Weighted Average Grant Date Fair Value
$ 23.60 
 
 
Restricted Stock or RSUs Vested, Weighted Average Grant Date Fair Value
$ 23.68 
 
 
Cancelled, Weighted Average Grant Date Fair Value
$ 23.54 
 
 
Ending Balance, Weighted Average Grant Date Fair Value
$ 23.59 
 
 
Restricted Stock [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Beginning balance
154,000 
202,000 
190,000 
Granted
 
 
50,000 
Restricted stock or RSUs vested
(48,000)
(48,000)
(38,000)
Ending balance
106,000 
154,000 
202,000 
Beginning Balance, Weighted Average Grant Date Fair Value
$ 19.00 
$ 19.00 
$ 19.14 
Granted, Weighted Average Grant Date Fair Value
 
 
$ 18.60 
Restricted Stock or RSUs Vested, Weighted Average Grant Date Fair Value
$ 19.02 
$ 19.02 
$ 19.14 
Ending Balance, Weighted Average Grant Date Fair Value
$ 18.98 
$ 19.00 
$ 19.00 
Equity Incentive Plans (Summary Of Expected To Vest Options, Restricted Shares, And RSUs) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Stock Options [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Shares
Weighted Average Remaining Contractual Life (Yrs)
5.6 
Stock options, Intrinsic Value
$ 111,978 
Weighted Average Exercise Price
$ 12.92 
RSUs [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Shares
Weighted Average Remaining Contractual Life (Yrs)
4.0 
Intrinsic Value
20,986 
Restricted Stock [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Shares
Weighted Average Remaining Contractual Life (Yrs)
1.5 
Intrinsic Value
$ 3,188 
6,526,736
697,667
106,000
Equity Incentive Plans (Summary Of Outstanding And Exercisable Stock Options) (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Outstanding Shares
6,539,046 
Weighted Average Remaining Contractual Life (Yrs), Outstanding
5.6 
Weighted Average Exercise Price, Outstanding
$ 12.93 
Exercisable Shares
4,248,660 
Weighted Average Remaining Contractual Life (Yrs), Exercisable
4.8 
Weighted Average Exercise Price, Exercisable
$ 10.79 
$0.75 - $5.00 [Member]
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Outstanding Shares
1,369,911 
Weighted Average Remaining Contractual Life (Yrs), Outstanding
2.2 
Weighted Average Exercise Price, Outstanding
$ 3.85 
Exercisable Shares
1,369,911 
Weighted Average Remaining Contractual Life (Yrs), Exercisable
2.2 
Weighted Average Exercise Price, Exercisable
$ 3.85 
Range of Exercise Prices, Lower Limit
$ 0.75 
Range of Exercise Prices, Upper Limit
$ 5.00 
$5.01 - $10.00 [Member]
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Outstanding Shares
536,180 
Weighted Average Remaining Contractual Life (Yrs), Outstanding
4.0 
Weighted Average Exercise Price, Outstanding
$ 9.24 
Exercisable Shares
536,180 
Weighted Average Remaining Contractual Life (Yrs), Exercisable
4.0 
Weighted Average Exercise Price, Exercisable
$ 9.24 
Range of Exercise Prices, Lower Limit
$ 5.01 
Range of Exercise Prices, Upper Limit
$ 10.00 
$10.01 - $15.00 [Member]
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Outstanding Shares
1,999,260 
Weighted Average Remaining Contractual Life (Yrs), Outstanding
6.4 
Weighted Average Exercise Price, Outstanding
$ 11.39 
Exercisable Shares
1,190,810 
Weighted Average Remaining Contractual Life (Yrs), Exercisable
6.1 
Weighted Average Exercise Price, Exercisable
$ 11.14 
Range of Exercise Prices, Lower Limit
$ 10.01 
Range of Exercise Prices, Upper Limit
$ 15.00 
$15.01 - $20.00 [Member]
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Outstanding Shares
2,611,695 
Weighted Average Remaining Contractual Life (Yrs), Outstanding
7.2 
Weighted Average Exercise Price, Outstanding
$ 19.57 
Exercisable Shares
1,136,909 
Weighted Average Remaining Contractual Life (Yrs), Exercisable
6.8 
Weighted Average Exercise Price, Exercisable
$ 19.39 
Range of Exercise Prices, Lower Limit
$ 15.01 
Range of Exercise Prices, Upper Limit
$ 20.00 
$20.01 + [Member]
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Outstanding Shares
22,000 
Weighted Average Remaining Contractual Life (Yrs), Outstanding
6.4 
Weighted Average Exercise Price, Outstanding
$ 21.28 
Exercisable Shares
14,850 
Weighted Average Remaining Contractual Life (Yrs), Exercisable
6.4 
Weighted Average Exercise Price, Exercisable
$ 21.31 
Range of Exercise Prices, Lower Limit
$ 20.01 
Equity Incentive Plans (Summary Of Weighted Average Assumptions Used To Compute Fair Value Of Stock Option Grants) (Details)
12 Months Ended
Dec. 31, 2010
Dec. 31, 2009
Equity Incentive Plans [Abstract]
 
 
Expected life (in years)
6.4 
6.3 
Risk-free interest rate
$ 3.17% 
$ 1.87% 
Volatility
43.90% 
44.60% 
Dividend yield
0.00% 
0.00% 
Weighted average fair value of options granted
$ 9.54 
$ 5.57 
Equity Incentive Plans (Pretax Stock-Based Compensation Expense) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
$ 13,107 
$ 9,974 
$ 7,283 
Stock Options [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
8,129 
8,771 
6,219 
RSUs [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
3,666 
 
 
Restricted Stock [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
913 
913 
774 
Stock Issued To Non-Employee Directors [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
$ 399 
$ 290 
$ 290 
Equity Incentive Plans (Stock-Based Compensation Expense Included In Statements Of Income) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Stock-based compensation expense, before tax
$ 13,107 
$ 9,974 
$ 7,283 
Income tax benefit
(5,059)
(3,920)
(2,862)
Total stock based compensation, net of tax
8,048 
6,054 
4,421 
Cost Of Goods Sold [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Stock-based compensation expense, before tax
327 
278 
47 
Facility And Warehouse Expenses [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Stock-based compensation expense, before tax
2,391 
2,069 
2,620 
Selling General And Administrative Expenses [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Stock-based compensation expense, before tax
$ 10,389 
$ 7,627 
$ 4,616 
Equity Incentive Plans (Stock-based Compensation Expense Expected To Be Recognized) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
2012
$ 11,587 
2013
8,632 
2014
6,894 
2015
3,680 
2016
162 
Total unrecognized compensation expense
30,955 
Stock Options [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
2012
6,883 
2013
4,722 
2014
3,116 
2015
78 
Total unrecognized compensation expense
14,799 
RSUs [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
2012
3,791 
2013
3,702 
2014
3,639 
2015
3,602 
2016
162 
Total unrecognized compensation expense
14,896 
Restricted Stock [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
2012
913 
2013
208 
2014
139 
Total unrecognized compensation expense
$ 1,260 
Long-Term Obligations (2007 Credit Agreement) (Narrative) (Details)
12 Months Ended
Dec. 31, 2011
USD ($)
Dec. 31, 2011
Credit Agreement 2007 [Member]
USD ($)
Dec. 31, 2010
Credit Agreement 2007 [Member]
USD ($)
Oct. 12, 2007
Credit Agreement 2007 [Member]
USD ($)
Oct. 12, 2007
Credit Agreement 2007 [Member]
CAD ($)
Oct. 12, 2007
Credit Agreement 2007 [Member]
Dual Currency [Member]
USD ($)
Oct. 12, 2007
Credit Agreement 2007 [Member]
U.S. Currency USD ($) [Member]
USD ($)
Debt Instrument [Line Items]
 
 
 
 
 
 
 
Term loan
 
 
$ 590,100,000 
$ 610,000,000 
$ 40,000,000 
 
 
Maximum amount of letters of credit
 
 
 
 
 
10,000,000 
35,000,000 
Maximum revolving credit facility borrowings
 
 
 
100,000,000 
 
15,000,000 
85,000,000 
Repayment of credit agreement
 
591,100,000 
 
 
 
 
 
Write-off of the unamortized balance of capitalized debt issuance costs
5,345,000 
 
 
 
 
 
 
Weighted average interest rates
 
 
3.97% 
 
 
 
 
Commitment fees on the unused portion of our revolving credit facilities, minimum
 
 
0.38% 
 
 
 
 
Commitment fees on the unused portion of our revolving credit facilities, maximum
 
 
0.50% 
 
 
 
 
Current maturities of credit agreement
 
 
$ 50,000,000 
 
 
 
 
Long-Term Obligations (2011 Credit Agreement) (Narrative) (Details) (USD $)
1 Months Ended
Dec. 31, 2011
Mar. 25, 2011
Original Credit Agreement 2011 [Member]
Dec. 31, 2011
Amended And Restated Credit Agreement 2011 [Member]
Sep. 30, 2011
Amended And Restated Credit Agreement 2011 [Member]
Sep. 30, 2011
Amended And Restated Credit Agreement 2011 [Member]
Original Term Loan [Member]
Dec. 31, 2011
Amended And Restated Credit Agreement 2011 [Member]
New Term Loan [Member]
Sep. 30, 2011
Amended And Restated Credit Agreement 2011 [Member]
New Term Loan [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
Maximum credit agreement borrowings
 
$ 1,000,000,000 
 
 
 
 
 
Maximum incremental term loan borrowings
 
 
 
200,000,000 
 
 
 
Maximum revolving credit facility borrowings
 
750,000,000 
 
950,000,000 
 
 
 
Maximum U.S Dollar value of foreign currency borrowings
 
300,000,000 
 
500,000,000 
 
 
 
Increase in revolving credit facility capacity
 
 
 
200,000,000 
 
 
 
Term loan
 
250,000,000 
 
 
 
 
 
Maximum amount of letters of credit
 
75,000,000 
 
125,000,000 
 
 
 
Bridge loan maximum capacity
 
25,000,000 
 
25,000,000 
 
 
 
Maximum increase of revolving credit facility or term loans
 
400,000,000 
 
400,000,000 
 
 
 
Incremental term loans subsequent to the balance sheet date
 
 
 
 
 
200,000,000 
 
Security interest in subsidiaries pledged as collateral
 
 
 
100.00% 
 
 
 
Foreign subsidiary voting equity interest
 
 
 
100.00% 
 
 
 
Minimum security interest percentage in foreign subsidiaries assigned to the guarantee of the debt agreement.
 
 
 
65.00% 
 
 
 
Original principal payment percentage in first and second years
 
 
 
 
5.00% 
 
 
Original principal payment percentage in quarters one to eight
 
 
 
 
 
 
1.25% 
Original principal payment percentage in third and fourth years
 
 
 
 
10.00% 
 
 
Original principal payment percentage in quarters nine to sixteen
 
 
 
 
 
 
2.50% 
Original principal payment percentage in fifth year
 
 
 
 
15.00% 
 
 
Original principal payment percentage thereafter
 
 
 
 
 
 
3.75% 
Number of periods between a change in the repayment rate
 
 
 
 
 
 
Maximum net leverage ratio
 
 
 
3.00 
 
 
 
Maximum net leverage ratio subsequent to acquisition
 
 
 
3.50 
 
 
 
Minimum interest coverage ratio
 
 
 
3.00 
 
 
 
Number of periods of permitted increased leverage ratio
 
 
 
 
 
 
Minimum consideration for acquisitions during 12 month period to change the maximum net leverage ratio
 
 
 
200,000,000 
 
 
 
Fees incurred related to the execution of the credit agreement
 
8,200,000 
2,800,000 
 
 
 
 
Increment change in applicable margin
 
 
 
0.25% 
 
 
 
Weighted average interest rates
 
 
2.59% 
 
 
 
 
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
901,400,000 
 
 
 
 
 
 
Current maturities of credit agreement
 
 
12,500,000 
 
 
 
 
Outstanding letters of credit
35,400,000 
 
 
 
 
 
 
Availability on the Revolving Credit Facility
253,900,000 
 
 
 
 
 
 
Availability on the Revolving Credit Facility after additional borrowings
$ 453,900,000 
 
 
 
 
 
 
Ticking fee percentage minimum
 
 
0.25% 
 
 
 
 
Ticking fee percentage maximum
 
 
0.50% 
 
 
 
 
Long-Term Obligations (Promissory Notes) (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Promissory notes issued
$ 34,219 
$ 5,530 
$ 1,200 
Maximum [Member]
 
 
 
Interest rate on promissory notes
4.00% 
 
 
Minimum [Member]
 
 
 
Interest rate on promissory notes
2.00% 
 
 
Long-Term Obligations (Schedule Of Long-Term Obligations) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Debt Instrument [Line Items]
 
 
Long-term obligations, total
$ 956,076 
$ 600,954 
Less current maturities
(29,524)
(52,888)
Long-term obligations, excluding current portion
926,552 
548,066 
Term Loans Payable [Member]
 
 
Debt Instrument [Line Items]
 
 
Term loans payable
240,625 
590,099 
Revolving Credit Facility [Member]
 
 
Debt Instrument [Line Items]
 
 
Revolving credit facility
660,730 
 
Notes Payable [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes payable
38,338 
6,869 
Weighted average interest rates
2.00% 
2.40% 
Other Long-Term Debt [Member]
 
 
Debt Instrument [Line Items]
 
 
Other long-term debt
$ 16,383 
$ 3,986 
Weighted average interest rates
3.20% 
6.60% 
Long-Term Obligations (Schedule Of Maturities Of Long-Term Obligations) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Long-Term Obligations [Abstract]
 
 
2012
$ 29,524 
 
2013
51,013 
 
2014
27,105 
 
2015
35,514 
 
2016
811,841 
 
Thereafter
1,079 
 
Long-term obligations, total
$ 956,076 
$ 600,954 
Derivative Instruments And Hedging Activities (Narrative) (Details)
12 Months Ended
Dec. 31, 2011
USD ($)
Dec. 31, 2010
USD ($)
Dec. 31, 2010
4.99% [Member]
USD ($)
Dec. 31, 2011
3.06% [Member]
USD ($)
Dec. 31, 2010
3.06% [Member]
USD ($)
Dec. 31, 2011
2.61% [Member]
USD ($)
Mar. 25, 2011
2.61% [Member]
USD ($)
Dec. 31, 2010
2.61% [Member]
USD ($)
Dec. 31, 2011
Euro Currency Forwards [Member]
EUR (€)
Dec. 31, 2011
Euro Currency Forwards [Member]
GBP (£)
Dec. 31, 2011
U.S. Dollar Currency Forwards [Member]
USD ($)
Dec. 31, 2011
U.S. Dollar Currency Forwards [Member]
GBP (£)
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Notional amount of interest rate swaps
 
 
$ 200,000,000 
$ 250,000,000 
$ 250,000,000 
$ 100,000,000 
$ 100,000,000 
$ 100,000,000 
 
 
 
 
Fair market value of interest rate swaps, current liability
 
1,400,000 
 
 
 
 
 
 
 
 
 
 
Fair market value of interest rate swaps, noncurrent asset
 
4,800,000 
 
 
 
 
 
 
 
 
 
 
Fair market value of interest rate swaps, noncurrent liabilities
10,600,000 
 
 
 
 
 
 
 
 
 
 
 
Loss from hedge ineffectiveness
(225,000)
 
 
 
 
 
 
 
 
 
 
 
Net loss included in Accumulated Other Comprehensive Income (Loss) to be reclassified into interest expense within the next 12 months
3,400,000 
 
 
 
 
 
 
 
 
 
 
 
Number of foreign currency forward contracts
 
 
 
 
 
 
 
 
Notional amount of foreign currency forward contracts
 
 
 
 
 
 
 
 
€ 10,400,000 
£ 8,800,000 
$ 1,500,000 
£ 900,000 
Derivative Instruments And Hedging Activities (Terms Of Interest Rate Swap Agreements) (Details)
Dec. 31, 2011
Dec. 31, 2011
3.06% [Member]
USD ($)
Dec. 31, 2010
3.06% [Member]
USD ($)
Dec. 31, 2011
2.61% [Member]
USD ($)
Mar. 25, 2011
2.61% [Member]
USD ($)
Dec. 31, 2010
2.61% [Member]
USD ($)
Dec. 31, 2011
2.70% [Member]
USD ($)
Dec. 31, 2011
2.86% [Member]
GBP (£)
Dec. 31, 2011
2.92% [Member]
CAD ($)
Dec. 31, 2011
$60,000,000 Notional Amount [Member]
2.69% [Member]
USD ($)
Dec. 31, 2011
$50,000,000 Notional Amount [Member]
2.69% [Member]
USD ($)
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Notional amount of interest rate swaps
 
$ 250,000,000 
$ 250,000,000 
$ 100,000,000 
$ 100,000,000 
$ 100,000,000 
$ 60,000,000 
£ 50,000,000 
$ 25,000,000 
$ 60,000,000 
$ 50,000,000 
Fixed Interest Rate
 
3.06% 1
 
2.61% 1
 
 
2.70% 1
2.86% 1
2.92% 1
2.69% 1
2.69% 1
Applicable margin per annum as of the balance sheet date, under the Credit Agreement
1.50% 
 
 
 
 
 
 
 
 
 
 
Derivative Instruments And Hedging Activities (Activity Of Interest Rate Swap Agreements) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Derivative Instruments And Hedging Activities [Abstract]
 
 
 
Gain (loss) in Other Comprehensive Income (Loss)
$ (19,391)
$ 3,230 
$ (7,994)
Loss reclassified to interest expense
(5,641)
(10,377)
(11,595)
Loss from hedge ineffectiveness
$ (225)
 
 
Fair Value Measurements (Fair Value, Assets And Liabilities Measured On A Recurring Basis) (Details) (USD $)
Dec. 31, 2011
Dec. 31, 2010
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value assets measured on recurring basis
$ 13,413,000 
$ 15,332,000 
Fair value liabilities measured on recurring basis
107,029,000 
14,661,000 
Contingent consideration liabilities included in Other Accrued Expenses
600,000 
500,000 
Cash Surrender Value Of Life Insurance [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value assets measured on recurring basis
13,413,000 
10,517,000 
Deferred Compensation Liabilities [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value liabilities measured on recurring basis
14,071,000 
11,245,000 
Interest Rate Swaps [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value assets measured on recurring basis
 
4,815,000 
Fair value liabilities measured on recurring basis
10,576,000 
1,416,000 
Contingent Consideration Liabilities [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value liabilities measured on recurring basis
82,382,000 
2,000,000 
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value assets measured on recurring basis
   
   
Fair value liabilities measured on recurring basis
   
   
Fair Value, Inputs, Level 1 [Member] |
Cash Surrender Value Of Life Insurance [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value assets measured on recurring basis
   
   
Fair Value, Inputs, Level 1 [Member] |
Deferred Compensation Liabilities [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value liabilities measured on recurring basis
   
   
Fair Value, Inputs, Level 1 [Member] |
Interest Rate Swaps [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value assets measured on recurring basis
 
   
Fair value liabilities measured on recurring basis
   
   
Fair Value, Inputs, Level 1 [Member] |
Contingent Consideration Liabilities [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value liabilities measured on recurring basis
   
   
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value assets measured on recurring basis
13,413,000 
15,332,000 
Fair value liabilities measured on recurring basis
24,647,000 
12,661,000 
Fair Value, Inputs, Level 2 [Member] |
Cash Surrender Value Of Life Insurance [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value assets measured on recurring basis
13,413,000 
10,517,000 
Fair Value, Inputs, Level 2 [Member] |
Deferred Compensation Liabilities [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value liabilities measured on recurring basis
14,071,000 
11,245,000 
Fair Value, Inputs, Level 2 [Member] |
Interest Rate Swaps [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value assets measured on recurring basis
 
4,815,000 
Fair value liabilities measured on recurring basis
10,576,000 
1,416,000 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value assets measured on recurring basis
   
   
Fair value liabilities measured on recurring basis
82,382,000 
2,000,000 
Fair Value, Inputs, Level 3 [Member] |
Cash Surrender Value Of Life Insurance [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value assets measured on recurring basis
   
   
Fair Value, Inputs, Level 3 [Member] |
Deferred Compensation Liabilities [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value liabilities measured on recurring basis
   
   
Fair Value, Inputs, Level 3 [Member] |
Interest Rate Swaps [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value assets measured on recurring basis
 
   
Fair value liabilities measured on recurring basis
   
   
Fair Value, Inputs, Level 3 [Member] |
Contingent Consideration Liabilities [Member]
 
 
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
 
 
Fair value liabilities measured on recurring basis
$ 82,382,000 
$ 2,000,000 
Fair Value Measurements (Changes In The Fair Value Of Level 3 Contingent Consideration Obligations) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Fair Value Measurements [Abstract]
 
 
Balance, beginning
$ 2,000 
 
Contingent consideration liabilities recorded for business acquisitions
81,239 
2,000 
(Gain) loss included in earnings, net
(1,408)
 
Exchange rate effects
551 
 
Balance, ending
$ 82,382 
$ 2,000 
Commitments And Contingencies (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Commitments And Contingencies [Abstract]
 
 
 
Rental expense for operating leases
$ 83.7 
$ 66.9 
$ 57.2 
Guaranteed residual value of operating leases
35.7 
 
 
Expected recovery from legal settlements, net of legal fees
$ 15 
 
 
Commitments And Contingencies (Future Minimum Lease Commitments) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Commitments And Contingencies [Abstract]
 
2012
$ 84,977 
2013
77,306 
2014
66,013 
2015
56,116 
2016
43,179 
Thereafter
123,137 
Future Minimum Lease Payments
$ 450,728 
Business Combinations (Narrative) (Details)
12 Months Ended 0 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2011
USD ($)
Dec. 31, 2010
USD ($)
Dec. 31, 2009
USD ($)
Oct. 1, 2009
Greenleaf Auto Recyclers, LLC [Member]
USD ($)
Dec. 31, 2011
Self Service Segment [Member]
Dec. 31, 2010
Self Service Segment [Member]
Dec. 31, 2011
Wholesale - North America Segment [Member]
Dec. 31, 2010
Wholesale - North America Segment [Member]
Dec. 31, 2011
Wholesale - North America Segment [Member]
Akzo Nobel [Member]
USD ($)
Dec. 31, 2011
Wholesale - North America Segment [Member]
Engine Remanufacturers [Member]
Dec. 31, 2009
Wholesale - North America Segment Excluding Greenleaf [Member]
Dec. 31, 2011
Heavy-Duty Truck Segment [Member]
Dec. 31, 2010
Heavy-Duty Truck Segment [Member]
Dec. 31, 2009
Heavy-Duty Truck Segment [Member]
Dec. 31, 2010
Tire Recycling Business [Member]
Dec. 31, 2011
ECP [Member]
USD ($)
Dec. 31, 2011
ECP [Member]
GBP (£)
Oct. 3, 2011
ECP [Member]
2012 Contingent Payment [Member]
GBP (£)
Oct. 3, 2011
ECP [Member]
2013 Contingent Payment [Member]
GBP (£)
Dec. 31, 2011
All Acquisitions Excluding ECP [Member]
USD ($)
Dec. 31, 2011
Other 2011 Acquisitions Excluding ECP And Akzo [Member]
USD ($)
Dec. 31, 2009
All Acquisitions Excluding Greenleaf [Member]
USD ($)
Dec. 31, 2011
2010 Acquisitions [Member]
USD ($)
Dec. 31, 2010
2010 Acquisitions [Member]
USD ($)
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of acquisitions
 
20 
 
 
12 
16 
 
 
 
 
 
20 
 
 
 
Total consideration for acquisitions, net of cash acquired
 
$ 170,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 403,700,000 
£ 261,600,000 
 
 
$ 207,300,000 
 
 
 
 
Cash used in acquisitions, net of cash acquired
486,934,000 
143,578,000 
65,171,000 
38,800,000 
 
 
 
 
 
 
 
 
 
 
 
293,725,000 
190,300,000 
 
 
193,209,000 
 
29,500,000 
 
 
Notes issued in acquisitions
34,219,000 
5,530,000 
1,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
28,302,000 
18,400,000 
 
 
5,917,000 
 
1,200,000 
 
 
Stock issued in acquisition
 
14,945,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other purchase price obligations
8,646,000 
4,359,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,136,000 
2,700,000 
 
 
4,510,000 
 
 
 
 
Minimum payment under contingent consideration agreement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22,000,000 
23,000,000 
 
 
 
 
 
Maximum payment under contingent consideration agreement
 
 
 
 
 
 
 
 
21,000,000 
 
 
 
 
 
 
 
 
25,000,000 
30,000,000 
 
4,600,000 
 
 
 
Acquisition date fair value of contingent consideration
81,239,000 
2,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
77,539,000 
50,200,000 
 
 
3,700,000 
 
 
 
2,000,000 
Stock issued in acquisitions, shares
 
689,655 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-taxable gain on bargain purchase for acquisition
 
 
4,339,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change in fair value of contingent consideration liabilities
1,408,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,000,000 
 
Goodwill recorded for acquisitions
(442,208,000)
(91,757,000)
(26,137,000)
 
 
 
 
 
 
 
 
 
 
 
 
(337,031,000)
 
 
 
(105,177,000)
 
 
 
 
Goodwill expected to be deductible for income tax purposes
 
74,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
88,300,000 
 
 
 
 
Revenue generated by acquisitions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
138,500,000 
 
 
 
189,800,000 
 
 
 
 
Operating income generated by acquisitions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 10,100,000 
 
 
 
$ 9,100,000 
 
 
 
 
Business Combinations (Purchase Price Allocations For Acquisitions) (Details)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
USD ($)
Dec. 31, 2010
USD ($)
Dec. 31, 2009
USD ($)
Dec. 31, 2011
ECP [Member]
USD ($)
Dec. 31, 2011
ECP [Member]
GBP (£)
Dec. 31, 2011
All Acquisitions Excluding ECP [Member]
USD ($)
Business Acquisition [Line Items]
 
 
 
 
 
 
Receivables
$ 77,763 
$ 27,774 
 
$ 54,225 
 
$ 23,538 
Receivable reserves
(4,953)
(2,186)
 
(3,832)
 
(1,121)
Inventory
153,681 
38,121 
 
93,835 
 
59,846 
Prepaid expenses and other current assets
6,009 
1,480 
 
3,189 
 
2,820 
Property and equipment
52,444 
18,517 
 
41,830 
 
10,614 
Goodwill
442,208 
91,757 
26,137 
337,031 
 
105,177 
Other intangibles
47,266 
6,163 
 
39,583 
 
7,683 
Other assets
9,433 
1,529 
 
13 
 
9,420 
Deferred income taxes
(5,983)
2,922 
 
(13,218)
 
7,235 
Current liabilities assumed
(152,647)
(15,665)
 
(135,390)
 
(17,257)
Debt assumed
(13,564)
 
 
(13,564)
 
 
Other noncurrent liabilities assumed
(619)
 
 
 
 
(619)
Contingent consideration liabilities
(81,239)
(2,000)
 
(77,539)
(50,200)
(3,700)
Other purchase price obligations
(8,646)
(4,359)
 
(4,136)
(2,700)
(4,510)
Notes issued
(34,219)
(5,530)
(1,200)
(28,302)
(18,400)
(5,917)
Stock issued
 
(14,945)
 
 
 
 
Cash used in acquisitions, net of cash acquired
$ 486,934 
$ 143,578 
$ 65,171 
$ 293,725 
£ 190,300 
$ 193,209 
Business Combinations (Effect Of Businesses Acquired) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2010
Jun. 30, 2010
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue as reported
$ 939,632 1
$ 783,898 
$ 759,684 
$ 786,648 
$ 674,063 
$ 607,621 
$ 584,681 
$ 603,516 
$ 3,269,862 
$ 2,469,881 
$ 2,047,942 
Pro forma revenue
 
 
 
 
 
 
 
 
3,804,179 
3,394,694 
 
Income from continuing operations, as reported
56,145 1
49,231 
46,706 
58,182 
41,328 
35,901 
37,906 
51,983 
210,264 
167,118 
127,137 
Pro forma income from continuing operations
 
 
 
 
 
 
 
 
239,108 
189,783 
 
Basic earnings per share from continuing operations, as reported
$ 0.38 1 2
$ 0.34 2
$ 0.32 2
$ 0.40 2
$ 0.29 2
$ 0.25 2
$ 0.27 2
$ 0.37 2
$ 1.44 3
$ 1.17 3
$ 0.90 3
Pro forma basic earnings per share from continuing operations
 
 
 
 
 
 
 
 
$ 1.64 3
$ 1.32 3
 
Diluted earnings per share from continuing operations, as reported
$ 0.38 1 2
$ 0.33 2
$ 0.32 2
$ 0.39 2
$ 0.28 2
$ 0.25 2
$ 0.26 2
$ 0.36 2
$ 1.42 3
$ 1.15 3
$ 0.88 3
Pro forma diluted earnings per share from continuing operations
 
 
 
 
 
 
 
 
$ 1.61 3
$ 1.30 3
 
ECP [Member]
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
22,266 
9,669 
 
Effect of purchased businesses for the period prior to acquisition
 
 
 
 
 
 
 
 
$ 0.15 
$ 0.07 
 
Effect of purchased businesses for the period prior to acquisition
 
 
 
 
 
 
 
 
$ 0.15 
$ 0.07 
 
All Acquisitions Excluding ECP [Member]
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue of purchased businesses for the period prior to acquisition
 
 
 
 
 
 
 
 
127,275 
504,044 
 
Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments
 
 
 
 
 
 
 
 
$ 6,578 
$ 12,996 
 
Effect of purchased businesses for the period prior to acquisition
 
 
 
 
 
 
 
 
$ 0.05 
$ 0.09 
 
Effect of purchased businesses for the period prior to acquisition
 
 
 
 
 
 
 
 
$ 0.04 
$ 0.09 
 
Retirement Plans (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
401(k) Plan [Member]
 
 
 
Defined Contribution Plan [Line Items]
 
 
 
Defined contribution plan expense
$ 5.3 
$ 4.8 
$ 3.7 
Nonqualified Deferred Compensation Plan [Member]
 
 
 
Defined Contribution Plan [Line Items]
 
 
 
Defined contribution plan expense
0.8 
0.7 
0.5 
Total deferred compensation liabilities
14.1 
11.2 
 
Percentage of eligible employee contribution matched by employer
50.00% 
 
 
Maximum percentage of employee deferrals subject to match by employer
6.00% 
 
 
Vesting period of retirement plan (in years)
 
 
Face value of contracts
80.6 
72.7 
 
Cash surrender value of life insurance policy
$ 13.4 
$ 10.5 
 
Number of contracts under deferred compensation plan
184 
166 
 
Earnings Per Share (Computation Of Earnings Per Share) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2010
Jun. 30, 2010
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Earnings Per Share [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations
$ 56,145 1
$ 49,231 
$ 46,706 
$ 58,182 
$ 41,328 
$ 35,901 
$ 37,906 
$ 51,983 
$ 210,264 
$ 167,118 
$ 127,137 
Denominator for basic earnings per share-Weighted-average shares outstanding
 
 
 
 
 
 
 
 
146,126 
143,271 
140,541 
Stock options
 
 
 
 
 
 
 
 
2,125 
2,559 
3,438 
RSUs
 
 
 
 
 
 
 
 
91 
 
 
Restricted stock
 
 
 
 
 
 
 
 
33 
27 
11 
Denominator for diluted earnings per share-Adjusted weighted-average shares outstanding
 
 
 
 
 
 
 
 
148,375 
145,857 
143,990 
Basic earnings per share from continuing operations
$ 0.38 1 2
$ 0.34 2
$ 0.32 2
$ 0.40 2
$ 0.29 2
$ 0.25 2
$ 0.27 2
$ 0.37 2
$ 1.44 3
$ 1.17 3
$ 0.90 3
Diluted earnings per share from continuing operations
$ 0.38 1 2
$ 0.33 2
$ 0.32 2
$ 0.39 2
$ 0.28 2
$ 0.25 2
$ 0.26 2
$ 0.36 2
$ 1.42 3
$ 1.15 3
$ 0.88 3
Earnings Per Share (Number Of Employee Stock-Based Compensation Awards Outstanding) (Details)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Stock Options [Member]
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive securities
1,170 
2,857 
1,398 
Restricted Stock [Member]
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive securities
 
40 
 
Income Taxes (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Income Taxes [Abstract]
 
 
 
Revaluation of Deferred Taxes
 
$ 1,500,000 
 
Non-taxable gain on bargain purchase for acquisition
 
 
4,339,000 
Current deferred tax liabilities
1,561,000 
 
 
Operating loss carryforwards
4,722,000 
4,681,000 
 
Tax credit carryforwards
1,000,000 
1,400,000 
 
Valuation allowance
1,911,000 
2,607,000 
 
Change in valuation allowance
700,000 
 
 
Accumulated interest and penalties
1,200,000 
1,100,000 
 
Accumulated interest and penalties recorded through the income tax provision
200,000 
200,000 
 
Deferred tax asset, accumulated interest balance
200,000 
300,000 
 
Unrecognized Tax Benefits that Would Impact Effective Tax Rate
3,800,000 
3,800,000 
 
Estimated upper bound of reasonably possible changes in unrecognized tax benefits within the next 12 months
600,000 
 
 
Estimated upper bound of reasonably possible changes in unrecognized tax benefits that will impact the effective tax rate within the next 12 months
400,000 
 
 
Unrecognized tax benefits that would impact deferred taxes
$ 1,669,000 
$ 1,657,000 
 
Income Taxes (Summary Of Provision For Income Taxes) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Income Taxes [Abstract]
 
 
 
Federal, Current
$ 97,887 
$ 75,009 
$ 58,854 
State, Current
14,435 
16,552 
12,619 
Foreign, Current
3,883 
2,483 
825 
Total current income tax expense
116,205 
94,044 
72,298 
Deferred income tax expense
9,302 
8,963 
5,882 
Provision for income taxes
$ 125,507 
$ 103,007 
$ 78,180 
Income Taxes (Summary Of Income Taxes From Continuing Operations Before Provision For Income Taxes) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Income Taxes [Abstract]
 
 
 
Domestic
$ 319,305 
$ 264,438 
$ 202,558 
Foreign
16,466 
5,687 
2,759 
Income from continuing operations before provision for income taxes
$ 335,771 
$ 270,125 
$ 205,317 
Income Taxes (Summary Of Effective Tax Rate) (Details)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Income Taxes [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% 
3.40% 
4.10% 
Non-deductible expenses
0.70% 
0.30% 
0.50% 
Impact of international operations
(0.80%)
(0.30%)
(0.20%)
Federal production incentives and credits
(0.40%)
(0.20%)
(0.40%)
Revaluation of deferred taxes
 
(0.50%)
 
Non-taxable gain on bargain purchase
 
 
(0.80%)
Other, net
(0.20%)
0.40% 
(0.10%)
Effective tax rate
37.40% 
38.10% 
38.10% 
Income Taxes (Summary Of Deferred Tax Assets And Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Income Taxes [Abstract]
 
 
DTA - Inventory
$ 22,267 
$ 16,409 
DTA - Accrued expenses and reserves
18,357 
17,379 
DTA - Accounts receivable
10,860 
9,330 
DTA - Stock based compensation
8,945 
6,609 
DTA - Qualified and nonqualified retirement plans
5,157 
4,422 
DTA - Net operating loss carryforwards
4,722 
4,681 
DTA - Interest rate swaps
3,679 
 
DTA - Long term incentive plan
3,260 
1,889 
DTA - Unrecognized tax benefits
1,669 
1,657 
DTA - Other
3,692 
2,015 
Total deferred tax assets, gross
82,608 
64,391 
Less valuation allowance
(1,911)
(2,607)
Total deferred tax assets
80,697 
61,784 
DTL - Goodwill and other intangible assets
46,373 
38,648 
DTL - Property and equipment
44,535 
29,049 
DTL - Trade name
32,592 
23,695 
DTL - Other
1,864 
3,945 
Total deferred tax liabilities
125,364 
95,337 
Net deferred tax liability
$ (44,667)
$ (33,553)
Income Taxes (Schedule Of Deferred Tax Assets And Liabilities Reflected In Consolidated Balance Sheets) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Income Taxes [Abstract]
 
 
Current deferred tax assets
$ 45,690 
$ 32,506 
Current deferred tax liabilities
1,561 
 
Noncurrent deferred tax liabilities
$ 88,796 
$ 66,059 
Income Taxes (Summary Of Reconciliation Of Gross Unrecognized Tax Benefits) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Income Taxes [Abstract]
 
 
 
Balance at January 1
$ 5,441 
$ 8,526 
$ 7,949 
Additions based on tax positions related to the current year
952 
713 
1,811 
Additions for tax positions of prior years
192 
281 
483 
Reductions for tax positions of prior years
 
(86)
(90)
Reductions for tax positions of prior years-timing differences
 
(2,041)
 
Lapse of statutes of limitations
(892)
(1,952)
(1,489)
Settlements with taxing authorities
(196)
 
(138)
Balance at December 31
$ 5,497 
$ 5,441 
$ 8,526 
Accumulated Other Comprehensive Income (Loss) (Schedule Of Accumulated Other Comprehensive Income (Loss)) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Balance, beginning
$ 4,378 
$ (7,397)
$ (13,764)
Pretax income (loss)
(23,664)
6,308 
(4,014)
Income tax benefit (expense)
6,847 
(1,054)
2,960 
Reversal of unrealized loss
5,641 
 
11,595 
Reversal of unrealized (gain) loss
 
10,362 
 
Reversal of deferred income taxes
(2,019)
(3,841)
(4,174)
Balance, ending
(8,961)
4,378 
(7,397)
Foreign Currency Translation [Member]
 
 
 
Balance, beginning
2,202 
(876)
(5,067)
Pretax income (loss)
(4,273)
3,078 
4,191 
Balance, ending
(2,071)
2,202 
(876)
Unrealized Gain (Loss) On Pension Plan [Member]
 
 
 
Balance, beginning
 
15 
144 
Pretax income (loss)
 
 
(211)
Income tax benefit (expense)
 
 
82 
Reversal of unrealized (gain) loss
 
(15)
 
Balance, ending
 
 
15 
Unrealized (Loss) Gain On Interest Rate Swaps [Member]
 
 
 
Balance, beginning
2,176 
(6,536)
(8,841)
Pretax income (loss)
(19,391)
3,230 
(7,994)
Income tax benefit (expense)
6,847 
(1,054)
2,878 
Reversal of unrealized loss
5,641 
 
11,595 
Reversal of unrealized (gain) loss
 
10,377 
 
Reversal of deferred income taxes
(2,019)
(3,841)
(4,174)
Hedge ineffectiveness
(225)
 
 
Income tax benefit
81 
 
 
Balance, ending
$ (6,890)
$ 2,176 
$ (6,536)
Long Term Incentive Plan (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
years
Dec. 31, 2010
Dec. 31, 2009
Long Term Incentive Plan [Abstract]
 
 
 
Normal retirement age
65 
 
 
Number of installments
 
 
Long term incentive plan performance period
 
 
Long term incentive plan, award components
 
 
Long term incentive plan anniversary period (years)
 
 
Expense related to long term incentive plan
$ 3.7 
$ 3.5 
$ 3.4 
third calendar year
Segment And Geographic Information (Schedule Of Financial Performance By Reportable Segments) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2010
Jun. 30, 2010
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 939,632 1
$ 783,898 
$ 759,684 
$ 786,648 
$ 674,063 
$ 607,621 
$ 584,681 
$ 603,516 
$ 3,269,862 
$ 2,469,881 
$ 2,047,942 
EBITDA
 
 
 
 
 
 
 
 
418,068 
339,869 
273,666 
Depreciation and amortization
 
 
 
 
 
 
 
 
54,505 
41,428 
37,450 
North America [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
3,131,376 
2,469,881 
2,047,942 
EBITDA
 
 
 
 
 
 
 
 
405,924 
339,869 
273,666 
Depreciation and amortization
 
 
 
 
 
 
 
 
52,481 
41,428 
37,450 
Europe [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
138,486 
 
 
EBITDA
 
 
 
 
 
 
 
 
12,144 
 
 
Depreciation and amortization
 
 
 
 
 
 
 
 
$ 2,024 
 
 
Segment And Geographic Information (Schedule Of Reconciliation Of EBITDA To Income From Continuing Operations) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2010
Jun. 30, 2010
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Segment And Geographic Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
EBITDA
 
 
 
 
 
 
 
 
$ 418,068 
$ 339,869 
$ 273,666 
Depreciation and amortization
 
 
 
 
 
 
 
 
54,505 
41,428 
37,450 
Interest expense, net
 
 
 
 
 
 
 
 
22,447 
28,316 
30,899 
Loss on debt extinguishment
 
 
 
 
 
 
 
 
5,345 
 
 
Provision for income taxes
 
 
 
 
 
 
 
 
125,507 
103,007 
78,180 
Income from continuing operations
$ 56,145 1
$ 49,231 
$ 46,706 
$ 58,182 
$ 41,328 
$ 35,901 
$ 37,906 
$ 51,983 
$ 210,264 
$ 167,118 
$ 127,137 
Segment And Geographic Information (Segment Reporting Capital Expenditure) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Segment Reporting Information [Line Items]
 
 
 
Total capital expenditure
$ 86,416 
$ 61,438 
$ 55,870 
North America [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Total capital expenditure
84,856 
61,438 
55,870 
Europe [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Total capital expenditure
$ 1,560 
 
 
Segment And Geographic Information (Schedule Of Assets By Reportable Segment) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Segment Reporting Information [Line Items]
 
 
 
Total receivables, net
$ 281,764 
$ 191,085 
$ 152,443 
Total inventory
736,846 
492,688 
385,686 
Total property and equipment, net
424,098 
331,312 
289,902 
Other unallocated assets
1,756,996 
1,284,424 
1,192,090 
Assets
3,199,704 
2,299,509 
2,020,121 
North America [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Total receivables, net
230,871 
191,085 
152,443 
Total inventory
636,145 
492,688 
385,686 
Total property and equipment, net
380,282 
331,312 
289,902 
Europe [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Total receivables, net
50,893 
 
 
Total inventory
100,701 
 
 
Total property and equipment, net
$ 43,816 
 
 
Segment And Geographic Information (Schedule Of Revenue By Geographic Area) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2010
Jun. 30, 2010
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 939,632 1
$ 783,898 
$ 759,684 
$ 786,648 
$ 674,063 
$ 607,621 
$ 584,681 
$ 603,516 
$ 3,269,862 
$ 2,469,881 
$ 2,047,942 
United States [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
2,952,620 
2,366,224 
1,971,654 
United Kingdom [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
138,486 
 
 
Other Countries [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
$ 178,756 
$ 103,657 
$ 76,288 
Segment And Geographic Information (Schedule Of Tangible Long-lived Assets By Geographic Area) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Segment Reporting Information [Line Items]
 
 
 
Long-lived Assets
$ 424,098 
$ 331,312 
$ 289,902 
United States [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Long-lived Assets
360,961 
316,002 
 
United Kingdom [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Long-lived Assets
43,816 
 
 
Other Countries [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Long-lived Assets
$ 19,321 
$ 15,310 
 
Segment And Geographic Information (Schedule Of Revenue By Product Category) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2010
Jun. 30, 2010
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Product Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 939,632 1
$ 783,898 
$ 759,684 
$ 786,648 
$ 674,063 
$ 607,621 
$ 584,681 
$ 603,516 
$ 3,269,862 
$ 2,469,881 
$ 2,047,942 
Aftermarket, Other New And Refurbished Products [Member]
 
 
 
 
 
 
 
 
 
 
 
Product Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
1,634,003 
1,236,806 
1,093,157 
Recycled, Remanufactured And Related Products And Services [Member]
 
 
 
 
 
 
 
 
 
 
 
Product Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
1,115,088 
888,320 
749,012 
Other [Member]
 
 
 
 
 
 
 
 
 
 
 
Product Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
$ 520,771 
$ 344,755 
$ 205,773 
Selected Quarterly Data (Summary Of Selected Quarterly Financial Data) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2010
Jun. 30, 2010
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Selected Quarterly Data [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 939,632 1
$ 783,898 
$ 759,684 
$ 786,648 
$ 674,063 
$ 607,621 
$ 584,681 
$ 603,516 
$ 3,269,862 
$ 2,469,881 
$ 2,047,942 
Gross margin
391,789 1
334,322 
322,236 
343,646 
287,500 
261,424 
261,266 
283,290 
1,391,993 
1,093,480 
927,813 
Operating income
90,138 1
85,488 
78,486 
107,371 
73,132 
65,207 
69,609 
89,929 
361,483 
297,877 
231,448 
Income from continuing operations
56,145 1
49,231 
46,706 
58,182 
41,328 
35,901 
37,906 
51,983 
210,264 
167,118 
127,137 
Income from discontinued operations
 
 
 
 
 
 
 
1,953 
   
1,953 
384 
Net income
$ 56,145 1
$ 49,231 
$ 46,706 
$ 58,182 
$ 41,328 
$ 35,901 
$ 37,906 
$ 53,936 
$ 210,264 
$ 169,071 
$ 127,521 
Basic earnings per share from continuing operations
$ 0.38 1 2
$ 0.34 2
$ 0.32 2
$ 0.40 2
$ 0.29 2
$ 0.25 2
$ 0.27 2
$ 0.37 2
$ 1.44 3
$ 1.17 3
$ 0.90 3
Diluted earnings per share from continuing operations
$ 0.38 1 2
$ 0.33 2
$ 0.32 2
$ 0.39 2
$ 0.28 2
$ 0.25 2
$ 0.26 2
$ 0.36 2
$ 1.42 3
$ 1.15 3
$ 0.88 3
Schedule II-Valuation And Qualifying Accounts And Reserves (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Allowance For Doubtful Accounts [Member]
 
 
 
Valuation and Qualifying Accounts Disclosure [Line Items]
 
 
 
Balance at Beginning of Period
$ 6,895 
$ 6,507 
$ 5,757 
Additions Charged to Costs and Expenses
5,084 
4,326 
5,102 
Acquisitions and Other
2,199 
1,125 
831 
Deductions
(5,831)
(5,063)
(5,183)
Balance at End of Period
8,347 
6,895 
6,507 
Allowance For Estimated Returns, Discounts & Allowances [Member]
 
 
 
Valuation and Qualifying Accounts Disclosure [Line Items]
 
 
 
Balance at Beginning of Period
18,185 
15,802 
11,169 
Additions Charged to Costs and Expenses
668,936 
541,314 
469,178 
Acquisitions and Other
2,754 
1,061 
1,915 
Deductions
(667,071)
(539,992)
(466,460)
Balance at End of Period
$ 22,804 
$ 18,185 
$ 15,802