Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 24, 2018 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | LKQ | |
Entity Registrant Name | LKQ CORP | |
Entity Central Index Key | 1,065,696 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 318,202,654 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |||||
Income Statement [Abstract] | ||||||||
Revenue | $ 3,122,378 | $ 2,465,800 | $ 8,873,893 | $ 7,267,054 | ||||
Cost of goods sold | 1,925,180 | 1,508,924 | 5,460,845 | 4,415,076 | ||||
Gross margin | 1,197,198 | 956,876 | 3,413,048 | 2,851,978 | ||||
Selling, general and administrative expenses (1) | 879,150 | 695,978 | [1] | 2,472,085 | [1] | 2,003,065 | [1] | |
Restructuring and acquisition related expenses | 6,614 | 4,922 | 26,546 | 10,371 | ||||
Depreciation and amortization | 76,701 | 56,877 | 196,322 | 159,178 | ||||
Operating income | 234,733 | 199,099 | 718,095 | 679,364 | ||||
Other expense (income): | ||||||||
Interest expense, net | 40,860 | 25,222 | 107,647 | 73,806 | ||||
Gains on bargain purchases | (913) | (328) | (3,990) | |||||
Other income, net | (6,959) | (3,107) | (9,086) | (6,884) | ||||
Total other expense, net | 33,901 | 21,202 | 98,233 | 62,932 | ||||
Income from continuing operations before provision for income taxes | 200,832 | 177,897 | 619,862 | 616,432 | ||||
Provision for income taxes | 46,068 | 58,189 | 156,427 | 206,206 | ||||
Equity in (losses) earnings of unconsolidated subsidiaries | (20,284) | 2,673 | (18,326) | 3,878 | ||||
Income from continuing operations | 134,480 | 122,381 | 445,109 | 414,104 | ||||
Net loss from discontinued operations | (4,531) | |||||||
Net income | 134,480 | 122,381 | 445,109 | 409,573 | ||||
Less: net income attributable to noncontrolling interest | 378 | 1,040 | ||||||
Net income attributable to LKQ stockholders | $ 134,102 | $ 122,381 | $ 444,069 | $ 409,573 | ||||
Basic earnings per share: (2) | ||||||||
Income from continuing operations | $ 0.42 | $ 0.40 | $ 1.42 | $ 1.34 | ||||
Net loss from discontinued operations | (0.01) | |||||||
Net income | 0.42 | 0.40 | 1.42 | 1.33 | ||||
Less: net income attributable to noncontrolling interest | 0 | 0 | ||||||
Net income attributable to LKQ stockholders | [2] | 0.42 | 0.40 | 1.42 | 1.33 | |||
Diluted earnings per share: (2) | ||||||||
Income from continuing operations | 0.42 | 0.39 | 1.41 | 1.33 | ||||
Net loss from discontinued operations | (0.01) | |||||||
Net income | 0.42 | 0.39 | 1.41 | 1.32 | ||||
Net income attributable to Noncontrolling Interest Per Share, Diluted | 0 | 0 | ||||||
Net income attributable to LKQ stockholders | [2] | $ 0.42 | $ 0.39 | $ 1.41 | $ 1.32 | |||
[1] | (1) Selling, general and administrative expenses contain facility and warehouses expenses and distribution expenses that were previously shown separately. | |||||||
[2] | (2) The sum of the individual earnings per share amounts may not equal the total due to rounding. |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 134,480 | $ 122,381 | $ 445,109 | $ 409,573 |
Less: net income attributable to noncontrolling interest | 378 | 1,040 | ||
Net income attributable to LKQ stockholders | 134,102 | 122,381 | 444,069 | 409,573 |
Other comprehensive income (loss): | ||||
Foreign currency translation, net of tax | (20,951) | 59,618 | (77,630) | 174,794 |
Net change in unrealized gains/losses on cash flow hedges, net of tax | 304 | (1,776) | 5,964 | 457 |
Net change in unrealized gains/losses on pension plans, net of tax | (1,274) | (150) | 154 | 4,053 |
Net change in other comprehensive income (loss) from unconsolidated subsidiaries | 643 | (1,034) | 2,160 | (1,635) |
Other comprehensive (loss) income | (18,730) | 56,658 | (69,660) | 169,563 |
Comprehensive income | 115,750 | 179,039 | 375,449 | 579,136 |
Less: comprehensive income attributable to noncontrolling interest | 378 | 1,040 | ||
Comprehensive income attributable to LKQ stockholders | $ 115,372 | $ 179,039 | $ 374,409 | $ 579,136 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 341,346 | $ 279,766 |
Receivables, net | 1,255,876 | 1,027,106 |
Inventories | 2,794,894 | 2,380,783 |
Prepaid expenses and other current assets | 200,944 | 134,479 |
Total current assets | 4,593,060 | 3,822,134 |
Property, plant and equipment, net | 1,201,003 | 913,089 |
Intangible assets: | ||
Goodwill | 4,475,266 | 3,536,511 |
Other intangibles, net | 953,372 | 743,769 |
Equity method investments | 157,409 | 208,404 |
Other assets | 205,226 | 142,965 |
Total assets | 11,585,336 | 9,366,872 |
Current liabilities: | ||
Accounts payable | 941,747 | 788,613 |
Accrued expenses: | ||
Accrued payroll-related liabilities | 153,536 | 143,424 |
Other accrued expenses | 358,212 | 218,600 |
Refund liability | 106,732 | |
Other current liabilities | 57,088 | 45,727 |
Current portion of long-term obligations | 118,365 | 126,360 |
Total current liabilities | 1,735,680 | 1,322,724 |
Long-term obligations, excluding current portion | 4,250,137 | 3,277,620 |
Deferred income taxes | 325,537 | 252,359 |
Other noncurrent liabilities | 376,566 | 307,516 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 318,197,309 and 309,126,386 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 3,182 | 3,091 |
Additional paid-in capital | 1,409,242 | 1,141,451 |
Retained earnings | 3,562,827 | 3,124,103 |
Accumulated other comprehensive loss | (134,791) | (70,476) |
Total Company stockholders' equity | 4,840,460 | 4,198,169 |
Noncontrolling interest | 56,956 | 8,484 |
Total stockholders' equity | 4,897,416 | 4,206,653 |
Total liabilities and stockholders’ equity | $ 11,585,336 | $ 9,366,872 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 318,197,309 | 309,126,386 |
Common stock, shares outstanding | 318,197,309 | 309,126,386 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 445,109 | $ 409,573 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 210,977 | 166,508 |
Impairment on Mekonomen equity method investment | 22,715 | |
Stock-based compensation expense | 17,544 | 17,582 |
Loss on sale of business | 8,580 | |
Other | (7,187) | (11,982) |
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions: | ||
Receivables, net | (70,797) | (75,444) |
Inventories | (71,058) | (97,584) |
Prepaid income taxes/income taxes payable | 7,262 | (928) |
Accounts payable | (71,997) | 42,175 |
Other operating assets and liabilities | 38,599 | (9,237) |
Net cash provided by operating activities | 521,167 | 449,243 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (171,763) | (135,537) |
Acquisitions, net of cash acquired | (1,206,067) | (252,667) |
Proceeds from disposals of business/investment | 0 | 301,297 |
Investments in unconsolidated subsidiaries | (11,066) | (7,114) |
Receipts of deferred purchase price on receivables under factoring arrangements | 9,410 | 0 |
Other investing activities, net | 7,970 | 9,864 |
Net cash used in investing activities | (1,371,516) | (84,157) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from exercise of stock options | 3,772 | 6,465 |
Taxes paid related to net share settlements of stock-based compensation awards | (4,768) | (5,095) |
Debt issuance costs | (16,938) | |
Proceeds from issuance of Euro Notes (2026/28) | 1,232,100 | |
Borrowings under revolving credit facilities | 1,025,496 | 424,976 |
Repayments under revolving credit facilities | (1,110,035) | (770,884) |
Repayments under term loans | (114,800) | (27,884) |
Borrowings under receivables securitization facility | 8,525 | |
Repayments under receivables securitization facility | (9,925) | |
(Repayments) borrowings of other debt, net | (38,695) | 24,522 |
Payments of other obligations | (2,079) | |
Other financing activities, net | 3,182 | 4,316 |
Net cash provided by (used in) financing activities | 979,314 | (347,063) |
Effect of exchange rate changes on cash and cash equivalents | (67,385) | 22,538 |
Net increase in cash and cash equivalents | 61,580 | 40,561 |
Cash and cash equivalents of continuing operations, beginning of period | 279,766 | 227,400 |
Add: Cash and cash equivalents of discontinued operations, beginning of period | 7,116 | |
Cash and cash equivalents of continuing and discontinued operations, beginning of period | 279,766 | 234,516 |
Cash and cash equivalents, end of period | 341,346 | 275,077 |
Supplemental disclosure of cash paid for: | ||
Income taxes, net of refunds | 158,740 | 218,332 |
Interest | 74,417 | 57,519 |
Supplemental disclosure of noncash investing and financing activities: | ||
Stock issued in acquisitions | 251,334 | |
Contingent consideration liabilities | 3,107 | 6,234 |
Notes payable and other financing obligations, including notes issued and debt assumed in connection with business acquisitions/investment | 82,664 | 52,576 |
Noncash property, plant and equipment additions | $ 11,010 | 4,918 |
Notes and other financing receivables in connection with disposals of business/investment | $ 5,848 |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest |
July 1, 2018 at Dec. 31, 2016 | 307,545 | |||||
July 1, 2018 at Dec. 31, 2016 | $ 3,442,949 | $ 3,075 | $ 1,116,690 | $ 2,590,359 | $ (267,175) | |
Net income | 409,573 | |||||
Net income attributable to LKQ stockholders | 409,573 | 409,573 | ||||
Other comprehensive income | 169,563 | 169,563 | ||||
Vesting of restricted stock units, net of shares withheld for employee tax | 736 | |||||
Vesting of restricted stock units, net of shares withheld for employee tax | (3,895) | $ 7 | (3,902) | |||
Stock-based compensation expense | 17,582 | 17,582 | ||||
Exercise of stock options | 772 | |||||
Exercise of stock options | 6,465 | $ 8 | 6,457 | |||
Shares withheld for net share settlement of stock option awards | (35) | |||||
Shares withheld for net share settlement of stock option awards | (1,200) | (1,200) | ||||
September 30, 2018 at Sep. 30, 2017 | 309,018 | |||||
September 30, 2018 at Sep. 30, 2017 | 4,041,037 | $ 3,090 | 1,135,627 | 2,999,932 | (97,612) | |
July 1, 2018 at Jun. 30, 2017 | 308,621 | |||||
July 1, 2018 at Jun. 30, 2017 | 3,856,685 | $ 3,086 | 1,130,318 | 2,877,551 | (154,270) | |
Net income | 122,381 | |||||
Net income attributable to LKQ stockholders | 122,381 | 122,381 | ||||
Other comprehensive income | 56,658 | 56,658 | ||||
Vesting of restricted stock units, net of shares withheld for employee tax | 259 | |||||
Vesting of restricted stock units, net of shares withheld for employee tax | (1,140) | $ 2 | (1,142) | |||
Stock-based compensation expense | 5,139 | 5,139 | ||||
Exercise of stock options | 139 | |||||
Exercise of stock options | 1,314 | $ 2 | 1,312 | |||
Shares withheld for net share settlement of stock option awards | (1) | |||||
September 30, 2018 at Sep. 30, 2017 | 309,018 | |||||
September 30, 2018 at Sep. 30, 2017 | 4,041,037 | $ 3,090 | 1,135,627 | 2,999,932 | (97,612) | |
Noncontrolling interest | 8,484 | $ 8,484 | ||||
July 1, 2018 at Dec. 31, 2017 | 309,127 | |||||
July 1, 2018 at Dec. 31, 2017 | 4,206,653 | $ 3,091 | 1,141,451 | 3,124,103 | (70,476) | |
Net income | 445,109 | |||||
Less: net income attributable to noncontrolling interest | 1,040 | 1,040 | ||||
Net income attributable to LKQ stockholders | 444,069 | 444,069 | ||||
Other comprehensive income | (69,660) | (69,660) | ||||
Stock issued in acquisitions | 8,056 | |||||
Stock issued in acquisitions | 251,334 | $ 81 | 251,253 | |||
Vesting of restricted stock units, net of shares withheld for employee tax | 600 | |||||
Vesting of restricted stock units, net of shares withheld for employee tax | (3,711) | $ 6 | (3,717) | |||
Stock-based compensation expense | 17,544 | 17,544 | ||||
Exercise of stock options | 441 | |||||
Exercise of stock options | 3,772 | $ 4 | 3,768 | |||
Shares withheld for net share settlement of stock option awards | (27) | |||||
Shares withheld for net share settlement of stock option awards | (1,057) | (1,057) | ||||
Adoption of ASU 2018-02 (see Note 4) | 5,345 | (5,345) | 5,345 | |||
Capital contributions from, net of dividends to, noncontrolling interest shareholder | 3,182 | 3,182 | ||||
Acquired noncontrolling interest | 44,250 | 44,250 | ||||
September 30, 2018 at Sep. 30, 2018 | 318,197 | |||||
September 30, 2018 at Sep. 30, 2018 | 4,897,416 | $ 3,182 | 1,409,242 | 3,562,827 | (134,791) | 56,956 |
Noncontrolling interest | 57,503 | |||||
July 1, 2018 at Jun. 30, 2018 | 317,821 | |||||
July 1, 2018 at Jun. 30, 2018 | 4,776,975 | $ 3,178 | 1,403,630 | 3,428,725 | (116,061) | |
Net income | 134,480 | |||||
Less: net income attributable to noncontrolling interest | 378 | 378 | ||||
Net income attributable to LKQ stockholders | 134,102 | 134,102 | ||||
Other comprehensive income | (18,730) | (18,730) | ||||
Vesting of restricted stock units, net of shares withheld for employee tax | 256 | |||||
Vesting of restricted stock units, net of shares withheld for employee tax | (934) | $ 3 | (937) | |||
Stock-based compensation expense | 5,700 | 5,700 | ||||
Exercise of stock options | 120 | |||||
Exercise of stock options | 850 | $ 1 | 849 | |||
Capital contributions from, net of dividends to, noncontrolling interest shareholder | (925) | (925) | ||||
September 30, 2018 at Sep. 30, 2018 | 318,197 | |||||
September 30, 2018 at Sep. 30, 2018 | 4,897,416 | $ 3,182 | $ 1,409,242 | $ 3,562,827 | $ (134,791) | $ 56,956 |
Noncontrolling interest | $ 56,956 |
Interim Financial Statements (N
Interim Financial Statements (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Interim Financial Statements | Interim Financial Statements The accompanying unaudited condensed consolidated financial statements represent the consolidation of LKQ Corporation, a Delaware corporation, and its subsidiaries. LKQ Corporation is a holding company and all operations are conducted by subsidiaries. When the terms "LKQ," "the Company," "we," "us," or "our" are used in this document, those terms refer to LKQ Corporation and its consolidated subsidiaries. We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to interim financial statements. Accordingly, certain information related to our significant accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted. These unaudited condensed consolidated financial statements reflect, in the opinion of management, all material adjustments (which include only normally recurring adjustments) necessary to fairly state, in all material respects, our financial position, results of operations and cash flows for the periods presented. Operating results for interim periods are not necessarily indicative of the results that can be expected for any subsequent interim period or for a full year. These interim financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 28, 2018 ("2017 Form 10-K"). |
Business Combinations (Notes)
Business Combinations (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations On May 30, 2018 , we acquired Stahlgruber GmbH ("Stahlgruber"), a leading European wholesale distributor of aftermarket spare parts for passenger cars, tools, capital equipment and accessories with operations in Germany, Austria, Slovenia, Croatia, and with further sales to Switzerland. Total acquisition date fair value of the consideration for our Stahlgruber acquisition was € 1.2 billion ($ 1.4 billion ), composed of € 1.0 billion ($ 1.1 billion ) of cash paid (net of cash acquired), and € 215 million ($ 251 million ) of newly issued shares of LKQ common stock. We financed the acquisition with the proceeds from €1.0 billion ( $1.2 billion ) of senior notes, the direct issuance to Stahlgruber's owner of 8,055,569 newly issued shares of LKQ common stock, and borrowings under our existing revolving credit facility. On May 3, 2018, the European Commission cleared the acquisition for the entire European Union, except with respect to the wholesale automotive parts business in the Czech Republic. The acquisition of the Czech Republic wholesale business has been referred to the Czech Republic competition authority for review. The Czech Republic wholesale business represents an immaterial portion of Stahlgruber's revenue and profitability. We recorded $ 929 million of goodwill related to our acquisition of Stahlgruber, of which we expect $292 million to be deductible for income tax purposes. In the period between the acquisition date and September 30, 2018 , Stahlgruber, which is reported in our Europe reportable segment, generated revenue of $ 637 million and operating income of $ 34 million . In addition to our acquisition of Stahlgruber, during the nine months ended September 30, 2018, we completed acquisitions of one wholesale business in North America and seven wholesale businesses in Europe. Total acquisition date fair value of the consideration for these acquisitions was $ 86 million , composed of $ 76 million of cash paid (net of cash acquired), $7 million of notes payable, and $3 million for the estimated value of contingent payments to former owners (with maximum potential payments totaling $5 million ). During the nine months ended September 30, 2018 , we recorded $72 million of goodwill related to these acquisitions, of which we expect an immaterial amount to be deductible for income tax purposes. In the period between the acquisition dates and September 30, 2018 , these acquisitions generated revenue of $19 million and operating income of $2 million . During the year ended December 31, 2017, we completed 26 acquisitions including 6 wholesale businesses in North America, 16 wholesale businesses in Europe and 4 Specialty businesses. Our acquisitions in Europe included the acquisition of four aftermarket parts distribution businesses in Belgium in July 2017 . Our Specialty acquisitions included the acquisition of the aftermarket business of Warn Industries, Inc. ("Warn"), a leading designer, manufacturer and marketer of high performance vehicle equipment and accessories, in November 2017 . Total acquisition date fair value of the consideration for our 2017 acquisitions was $542 million , composed of $510 million of cash paid (net of cash acquired), $6 million for the estimated value of contingent payments to former owners (with maximum potential payments totaling $19 million ), $5 million of other purchase price obligations (non-interest bearing) and $20 million of notes payable. We typically fund our acquisitions using borrowings under our credit facilities or other financing arrangements. During the year ended December 31, 2017, we recorded $307 million of goodwill related to these acquisitions, of which we expect $21 million to be deductible for income tax purposes. Our acquisitions are accounted for under the purchase method of accounting and are included in our consolidated financial statements from the dates of acquisition. The purchase prices were allocated to the net assets acquired based upon estimated fair values at the dates of acquisition. The purchase price allocations for the acquisitions made during the nine months ended September 30, 2018 and the last three months of the year ended December 31, 2017 are preliminary as we are in the process of determining the following: 1) valuation amounts for certain receivables, inventories and fixed assets acquired; 2) valuation amounts for certain intangible assets acquired; 3) the acquisition date fair value of certain liabilities assumed; and 4) the tax basis of the entities acquired. We have recorded preliminary estimates for certain of the items noted above and will record adjustments, if any, to the preliminary amounts upon finalization of the valuations. From the date of our preliminary allocation for Stahlgruber in the second quarter of 2018 through September 30, 2018, we recorded adjustments based on our valuation procedures, primarily related to inventory and current liabilities that resulted in the allocation of $1 million of goodwill to acquired net assets. From the date of our preliminary allocations for our other acquisitions completed in the first half of 2018, the measurement period adjustments recorded for acquisitions completed in prior periods were not material. The income statement effect of these measurement period adjustments for our Stahlgruber acquisition and our other acquisitions completed in the first half of 2018 that would have been recorded in previous reporting periods if the adjustments had been recognized as of the acquisition dates was immaterial. The balance sheet impact and income statement effect of other measurement-period adjustments recorded for acquisitions completed in prior periods were immaterial. The purchase price allocations for the acquisitions completed during the nine months ended September 30, 2018 and the year ended December 31, 2017 are as follows (in thousands): Nine Months Ended Year Ended September 30, 2018 December, 31, 2017 Stahlgruber Other Acquisitions (2) Total All (1) Receivables $ 140,979 $ 15,369 $ 156,348 $ 73,782 Receivable reserves (2,818 ) (875 ) (3,693 ) (7,032 ) Inventories (3) 374,056 12,240 386,296 150,342 Prepaid expenses and other current assets 9,537 1,806 11,343 (295 ) Property , plant and equipment 260,661 6,089 266,750 41,039 Goodwill 929,376 68,254 997,630 314,817 Other intangibles 285,529 16,315 301,844 181,216 Other assets 16,625 37 16,662 3,257 Deferred income taxes (97,805 ) (716 ) (98,521 ) (65,087 ) Current liabilities assumed (343,221 ) (20,662 ) (363,883 ) (111,484 ) Debt assumed (65,852 ) (4,410 ) (70,262 ) (33,586 ) Other noncurrent liabilities assumed (4) (81,689 ) (9,993 ) (91,682 ) (1,917 ) Noncontrolling interest (44,250 ) — (44,250 ) — Contingent consideration liabilities — (3,107 ) (3,107 ) (6,234 ) Other purchase price obligations (2,349 ) 3,853 1,504 (5,074 ) Stock issued (251,334 ) — (251,334 ) — Notes issued — (6,948 ) (6,948 ) (20,187 ) Settlement of pre-existing balances — — — 242 Gains on bargain purchases (5) — (328 ) (328 ) (3,870 ) Settlement of other purchase price obligations (non-interest bearing) — 1,698 1,698 3,159 Cash used in acquisitions, net of cash acquired $ 1,127,445 $ 78,622 $ 1,206,067 $ 513,088 (1) The amounts recorded during the year ended December 31, 2017 include $6 million and $3 million of adjustments to reduce property, plant and equipment and other assets for Rhiag-Inter Auto Parts Italia S.r.l. (“Rhiag”) and Pittsburgh Glass Works LLC (“PGW”), respectively. (2) The amounts recorded during the nine months ended September 30, 2018 include a $5 million adjustment to increase other intangibles related to our Warn acquisition and $4 million of adjustments to reduce other purchase price obligations related to other 2017 acquisitions. (3) The amounts for our 2017 acquisitions include a $4 million step-up adjustment related to our Warn acquisition. (4) The amount recorded for our acquisition of Stahlgruber includes a $75 million liability for certain pension obligations. See Note 13, "Employee Benefit Plans" for information related to our defined benefit plans. (5) The amount recorded during the nine months ended September 30, 2018 is due to the gain on bargain purchase related to an acquisition in Europe completed in the second quarter of 2017 as a result of a change in the acquisition date fair value of the consideration. The amount recorded during the year ended December 31, 2017 includes a $2 million increase to the gain on bargain purchase recorded for our Andrew Page Limited ("Andrew Page") acquisition as a result of changes to our estimate of the fair value of the net assets acquired. The remainder of the gain on bargain purchase recorded during the year ended December 31, 2017 is an immaterial amount related to the previously mentioned acquisition in Europe completed in the second quarter of 2017. The fair value of our intangible assets is based on a number of inputs, including projections of future cash flows, assumed royalty rates and customer attrition rates, all of which are Level 3 inputs. The fair value of our property, plant and equipment is determined using inputs such as market comparables and current replacement or reproduction costs of the asset, adjusted for physical, functional and economic factors; these adjustments to arrive at fair value use unobservable inputs in which little or no market data exists, and therefore, these inputs are considered to be Level 3 inputs. See Note 12, "Fair Value Measurements " for further information regarding the tiers in the fair value hierarchy. The acquisition of Stahlgruber expands LKQ's geographic presence in continental Europe and serves as an additional strategic hub for our European operations. In addition, we believe the acquisition of Stahlgruber will allow for continued improvement in procurement, logistics and infrastructure optimization. The primary objectives of our other acquisitions made during the nine months ended September 30, 2018 and the year ended December 31, 2017 were to create economic value for our stockholders by enhancing our position as a leading source for alternative collision and mechanical repair products and to expand into other product lines and businesses that may benefit from our operating strengths. Certain 2017 acquisitions were completed to enable us to align our distribution model in the Benelux region. When we identify potential acquisitions, we attempt to target companies with a leading market presence, an experienced management team and workforce that provides a fit with our existing operations, and strong cash flows. For certain of our acquisitions, we have identified cost savings and synergies as a result of integrating the company with our existing business that provide additional value to the combined entity. In many cases, acquiring companies with these characteristics will result in purchase prices that include a significant amount of goodwill. The following pro forma summary presents the effect of the businesses acquired during the nine months ended September 30, 2018 as though the businesses had been acquired as of January 1, 2017, and the businesses acquired during the year ended December 31, 2017 as though they had been acquired as of January 1, 2016. The pro forma adjustments are based upon unaudited financial information of the acquired entities (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Revenue, as reported $ 3,122,378 $ 2,465,800 $ 8,873,893 $ 7,267,054 Revenue of purchased businesses for the period prior to acquisition: Stahlgruber — 473,326 815,405 1,289,083 Other acquisitions 6,641 83,893 51,132 387,844 Pro forma revenue $ 3,129,019 $ 3,023,019 $ 9,740,430 $ 8,943,981 Income from continuing operations, as reported (1) $ 134,480 $ 122,381 $ 445,109 $ 414,104 Income from continuing operations of purchased businesses for the period prior to acquisition, and pro forma purchase accounting adjustments: Stahlgruber 5,054 6,061 14,114 5,298 Other acquisitions 161 3,478 1,588 17,014 Acquisition related expenses, net of tax (2) 681 2,301 13,986 5,010 Pro forma income from continuing operations 140,376 134,221 474,797 441,426 Less: Pro forma net income attributable to noncontrolling interest — 888 2,799 2,157 Pro forma income from continuing operations attributable to LKQ stockholders $ 140,376 $ 133,333 $ 471,998 $ 439,269 Earnings per share from continuing operations, basic - as reported $ 0.42 $ 0.40 $ 1.42 $ 1.34 Effect of purchased businesses for the period prior to acquisition: Stahlgruber 0.02 0.02 0.05 0.02 Other acquisitions 0.00 0.01 0.01 0.06 Acquisition related expenses, net of tax (2) 0.00 0.01 0.04 0.02 Impact of share issuance from acquisition of Stahlgruber — (0.01 ) (0.02 ) (0.03 ) Pro forma earnings per share from continuing operations, basic (3) 0.44 0.42 1.49 1.39 Less: Pro forma net income attributable to noncontrolling interest — 0.00 0.01 0.01 Pro forma income from continuing operations attributable to LKQ stockholders $ 0.44 $ 0.42 $ 1.49 $ 1.39 Earnings per share from continuing operations, diluted - as reported $ 0.42 $ 0.39 $ 1.41 $ 1.33 Effect of purchased businesses for the period prior to acquisition: Stahlgruber 0.02 0.02 0.04 0.02 Other acquisitions 0.00 0.01 0.01 0.05 Acquisition related expenses, net of tax (2) 0.00 0.01 0.04 0.02 Impact of share issuance from acquisition of Stahlgruber — (0.01 ) (0.02 ) (0.03 ) Pro forma earnings per share from continuing operations, diluted (3) 0.44 0.42 1.49 1.39 Less: Pro forma net income attributable to noncontrolling interest — 0.00 0.01 0.01 Pro forma income from continuing operations attributable to LKQ stockholders $ 0.44 $ 0.42 $ 1.48 $ 1.38 (1) Includes interest expense for the period from April 9, 2018 through September 30, 2018 recorded on the senior notes issued in connection with our acquisition of Stahlgruber. (2) Includes expenses related to acquisitions closed in the period and excludes expenses for acquisitions not yet completed. (3) The sum of the individual earnings per share amounts may not equal the total due to rounding. Unaudited pro forma supplemental information is based upon accounting estimates and judgments that we believe are reasonable. The unaudited pro forma supplemental information includes the effect of purchase accounting adjustments, such as the adjustment of inventory acquired to fair value, adjustments to depreciation on acquired property, plant and equipment, adjustments to rent expense for above or below market leases, adjustments to amortization on acquired intangible assets, adjustments to interest expense, and the related tax effects. The pro forma impact of our acquisitions also reflects the elimination of acquisition related expenses, net of tax. Refer to Note 6, "Restructuring and Acquisition Related Expenses," for further information regarding our acquisition related expenses. The pro forma information also includes the impact of the common stock issued to Stahlgruber as if it were issued on January 1, 2017. These pro forma results are not necessarily indicative of what would have occurred if the acquisitions had been in effect for the periods presented or of future results. |
Discontinued Operations (Notes)
Discontinued Operations (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations [Abstract] | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Discontinued Operations On March 1, 2017 , LKQ completed the sale of the glass manufacturing business of its PGW subsidiary to a subsidiary of Vitro S.A.B. de C.V. ("Vitro") for a sales price of $301 million , including cash received of $316 million , net of cash disposed of $15 million . Related to this transaction, the remaining portion of the Glass operating segment was combined with our Wholesale - North America operating segment, which is part of our North America reportable segment, in the first quarter of 2017. See Note 16, "Segment and Geographic Information " for further information regarding our segments. In connection with the Stock and Asset Purchase Agreement, the Company and Vitro entered into a twelve-month Transition Services Agreement commencing on the transaction date with two six-month renewal periods, a three-year Purchase and Supply Agreement, and an Intellectual Property Agreement. The following table summarizes the operating results of the Company’s discontinued operations related to the sale described above for the nine months ended September 30, 2017, as presented in Net loss from discontinued operations on the Unaudited Condensed Consolidated Statements of Income (in thousands): Nine Months Ended September 30, 2017 Revenue $ 111,130 Cost of goods sold 100,084 Selling, general and administrative expenses 8,369 Operating income 2,677 Interest and other income, net (1) 1,204 Income from discontinued operations before taxes 3,881 Provision for income taxes 3,598 Equity in loss of unconsolidated subsidiaries (534 ) Loss from discontinued operations, net of tax (251 ) Loss on sale of discontinued operations, net of tax (2) (4,280 ) Net loss from discontinued operations $ (4,531 ) (1) The Company elected to allocate interest expense to discontinued operations based on the expected debt to be repaid. Under this approach, allocated interest from January 1, 2017 through the date of sale was $2 million . This expense was offset by foreign currency gains. (2) In the first quarter of 2017, upon closing of the sale and write-off of the net assets of the glass manufacturing business, we recorded a pre-tax loss on sale of $9 million , and a $4 million tax benefit. The incremental loss primarily reflects a $6 million payable for intercompany sales from the glass manufacturing business to the aftermarket automotive glass distribution business incurred prior to closing, which was paid by LKQ during the second quarter of 2017, and capital expenditures in 2017 that were not reimbursed by the buyer. The glass manufacturing business had $4 million of operating cash outflows, $4 million of investing cash outflows mainly consisting of capital expenditures, and $15 million of financing cash inflows made up of parent financing for the period from January 1, 2017 through March 1, 2017. Pursuant to the Purchase and Supply Agreement , our aftermarket automotive glass distribution business will source various products from Vitro's glass manufacturing business annually for a three-year period beginning on March 1, 2017. Between January 1, 2017 and the sale date of March 1, 2017, intercompany sales between the glass manufacturing business and the continuing aftermarket automotive glass distribution business of PGW, which were eliminated in consolidation, were $8 million . All purchases from Vitro, including those outside of the Purchase and Supply Agreement, were $4 million and $22 million for the three and nine months ended September 30, 2018, respectively, and were $ 10 million and $27 million for the three months ended September 30, 2017 and the period between the sale date of March 1, 2017 and September 30, 2017, respectively. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Inventory | Inventories consist of the following (in thousands): September 30, December 31, 2018 2017 Aftermarket and refurbished products $ 2,287,776 $ 1,877,653 Salvage and remanufactured products 484,761 487,108 Manufactured products 22,357 16,022 Total inventories $ 2,794,894 $ 2,380,783 Aftermarket and refurbished products and salvage and remanufactured products are primarily composed of finished goods. As of September 30, 2018, manufactured products inventory was composed of $16 million of raw materials, $2 million of work in process, and $4 million of finished goods. As of December 31, 2017, manufactured products inventory was composed of $10 million of raw materials, $2 million of work in process, and $4 million of finished goods. Our May 2018 acquisition of Stahlgruber contributed $374 million to our aftermarket and refurbished products inventory. See Note 2, "Business Combinations" for further information on our acquisitions. |
Receivables, Policy [Policy Text Block] | We have a reserve for uncollectible accounts, which was approximately $63 million and $58 million at September 30, 2018 and December 31, 2017, respectively. Our May 2018 acquisition of Stahlgruber contributed $ 3 million to our reserve for uncollectible accounts. See Note 2, "Business Combinations" for further information on our acquisitions. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adoption of New Revenue Standard In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). This update outlines a new comprehensive revenue recognition model that supersedes the prior revenue recognition guidance and requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB has issued several updates to ASU 2014-09, which collectively with ASU 2014-09, represent the FASB Accounting Standards Codification Topic 606 (“ASC 606”). On January 1, 2018, we adopted ASC 606 for all contracts using the modified retrospective method, which means the historical periods are presented under the previous revenue standards with the cumulative net income effect being adjusted through retained earnings. Most of the changes resulting from our adoption of ASC 606 were changes in presentation within the Unaudited Condensed Consolidated Balance Sheets and the Unaudited Condensed Consolidated Statements of Income. Therefore, while we made adjustments to certain opening balances on our January 1, 2018 balance sheet, we made no adjustments to opening retained earnings. We expect the impact of the adoption of ASC 606 to be immaterial to our net income on an ongoing basis. See Note 5, "Revenue Recognition" for the required disclosures under ASC 606. With the adoption of ASC 606, we reclassified certain amounts related to variable consideration. Under ASC 606, we are required to present a refund liability and a returns asset within the Unaudited Condensed Consolidated Balance Sheet, whereas in periods prior to adoption, we presented the estimated margin impact of expected returns as a contra-asset within accounts receivable. Additionally, under ASC 606, the changes in the refund liability are reported in revenue, and the changes in the returns assets are reported in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. Prior to adoption, the change in the reserve for returns was generally reported as a net amount within revenue. As a result, the income statement presentation was adjusted concurrently with the balance sheet change beginning in 2018. The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 was as follows (in thousands): Balance as of December 31, 2017 Adjustments Due to ASC 606 Balance as of January 1, 2018 Balance Sheet Assets Accounts receivable $ 1,027,106 $ 38,511 $ 1,065,617 Prepaid expenses and other current assets 134,479 44,508 178,987 Liabilities Refund liability — 83,019 83,019 The impact of the adoption of ASC 606 on our Unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 and our Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2018 was as follows (in thousands): Balance as of September 30, 2018 As Reported Amounts Without Adoption of ASC 606 Effect of Change Higher/(Lower) Balance Sheet Assets Accounts receivable $ 1,255,876 $ 1,205,833 $ 50,043 Prepaid expenses and other current assets 200,944 144,255 56,689 Liabilities Refund liability 106,732 — 106,732 For the three months ended September 30, 2018 As Reported Amounts Without Adoption of ASC 606 Effect of Change Higher/(Lower) Income Statement Revenue $ 3,122,378 $ 3,123,468 $ (1,090 ) Cost of goods sold 1,925,180 1,925,107 73 Selling, general and administrative expenses 879,150 880,313 (1,163 ) For the nine months ended September 30, 2018 As Reported Amounts Without Adoption of ASC 606 Effect of Change Higher/(Lower) Income Statement Revenue $ 8,873,893 $ 8,882,558 $ (8,665 ) Cost of goods sold 5,460,845 5,467,061 (6,216 ) Selling, general and administrative expenses 2,472,085 2,474,534 (2,449 ) We have not included a table of the impact of the balance sheet adjustments on the Unaudited Condensed Consolidated Statement of Cash Flows as the adjustment will net to zero within the operating activities section of this statement. Under ASC 606, we have elected not to adjust consideration for the effect of a significant financing component at contract inception if the period between the transfer of goods to the customer and payment received from the customer is one year or less. Generally, our payment terms are short term in nature, but in some instances we may offer extended terms to customers exceeding one year such that interest would be accrued with respect to those contracts. The interest that would be accrued related to these contracts is immaterial at September 30, 2018. Under ASC 340, "Other Assets and Deferred Costs," we have elected to recognize incremental costs of obtaining a contract (commissions earned by our sales representatives on product sales) as an expense when incurred, as we believe the amortization period of the asset would be one year or less due to the short-term nature of our contracts. Other Recently Adopted Accounting Pronouncements During the first quarter of 2018, we adopted ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which changes how entities will recognize, measure, present and make disclosures about certain financial assets and financial liabilities. The adoption of ASU 2016-01 did not have a significant impact on our financial position, results of operations, cash flows or disclosures. During the first quarter of 2018, we adopted ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"), which includes guidance on classification for the following items: debt prepayment or debt extinguishment costs, settlement of zero coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and corporate-owned or bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and other separately identifiable cash flows where application of the predominance principle is prescribed. No adjustments were required in our Unaudited Condensed Consolidated Statement of Cash Flows upon adoption. Within our Unaudited Condensed Consolidating Statements of Cash Flows in Note 18, "Condensed Consolidating Financial Information ," we now present a new line item, Payments of deferred purchase price on receivables securitization, as a result of adopting ASU 2016-15; prior year cash flow information within this footnote has been recast to reflect the impact of adopting this accounting standard. Other than the addition of this new line item, there was no impact to our Unaudited Condensed Consolidating Statements of Cash Flows upon adoption. During the first quarter of 2018, we adopted ASU No. 2017-01, "Clarifying the Definition of a Business" (“ASU 2017-01”), which requires an evaluation of whether substantially all of the fair value of assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the transaction does not qualify as a business. The guidance also requires an acquired business to include at least one substantive process and narrows the definition of outputs. The adoption of ASU 2017-01 did not have a material impact on our unaudited condensed consolidated financial statements. During the first quarter of 2018, we adopted ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02"), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the reduction of the U.S. federal statutory income tax rate to 21% from 35% due to the enactment of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). In addition, under ASU 2018-02, an entity is required to provide certain disclosures regarding stranded tax effects. ASU 2018-02 is effective for fiscal years and interim periods beginning after December 15, 2018; early adoption is permitted. As a result of the adoption of ASU 2018-02, we recorded a $5 million reclassification to increase Accumulated Other Comprehensive (Loss) Income and decrease Retained Earnings. During the first quarter of 2018, we adopted ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" ("ASU 2017-07"), which requires presentation of the current service cost component of net periodic benefit expense with other current compensation expenses for the related employees, and requires presentation of the remaining components of net periodic benefit expense, such as interest, expected return on plan assets, and amortization of actuarial gains and losses, outside of operating income. ASU 2017-07 also specifies that, on a prospective basis, only the service cost component is eligible for capitalization into inventory or other assets. While the income statement classification provisions of ASU 2017-07 are applicable on a retrospective basis, due to the immaterial impact to our Unaudited Condensed Consolidated Statements of Income in prior periods, we did not recast prior period income statement information and adopted the classification provisions on a prospective basis. The change in the capitalization provisions under ASU 2017-07 did not have a material impact on our unaudited condensed consolidated financial statements. See Note 13, "Employee Benefit Plans ," for further disclosure on the components of net periodic benefit expense and classification of the components within our Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2018 and 2017. During the third quarter of 2018, the FASB issued ASU No. 2018-15, "Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" ("ASU 2018-15"). This update requires an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. ASU 2018-15 is effective for fiscal years and interim periods beginning after December 15, 2019; early adoption is permitted. We have adopted ASU 2018-15 in the third quarter of 2018 as we believe that our existing policy is consistent with the new guidance and thus no adjustments were required to be in compliance with this standard update. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, "Leases" ("ASU 2016-02"), to increase transparency and comparability by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between current GAAP and ASU 2016-02 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current GAAP. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The standard requires that entities apply the effects of these changes using a modified retrospective approach, which includes a number of optional practical expedients. While we are still in the process of quantifying the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements and related disclosures, we anticipate the adoption will materially affect our consolidated balance sheet and disclosures, as the majority of our operating leases will be recorded on the balance sheet under ASU 2016-02. While we do not anticipate the adoption of this accounting standard to have a material impact on our consolidated statements of income at this time, this conclusion may change as we finalize our assessment. In order to assist in our timely implementation of the new standard, we have purchased new software to track our leases. We have engaged a third party to assist with the implementation of the new software with an expectation to complete the implementation by the end of 2018. During the second quarter, we completed phase one of the software roll-out for our North America and Specialty operations. We are nearing completion of the phase one roll-out in our Europe operations as of the filing date of this Quarterly Report on Form 10-Q. In August 2017, the FASB issued ASU No. 2017-12, "Targeted Improvements to Accounting for Hedging Activities" ("ASU 2017-12"), which amends the hedge accounting recognition and presentation requirements in ASC 815 ("Derivatives and Hedging"). ASU 2017-12 significantly alters the hedge accounting model by making it easier for an entity to achieve and maintain hedge accounting and provides for accounting that better reflects an entity's risk management activities. ASU 2017-12 is effective for fiscal years and interim periods beginning after December 15, 2018; early adoption is permitted. Entities will adopt the provisions of ASU 2017-12 by applying a modified retrospective approach to existing hedging relationships as of the adoption date. At this time, we are still evaluating the impact of this standard on our financial statements. In August 2018, the FASB issued ASU No. 2018-13, "Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement" ("ASU 2018-13"), which removes, modifies, and adds certain disclosure requirements in ASC 820. ASU 2018-13 is effective for fiscal years and interim periods beginning after December 15, 2019; early adoption is permitted. We are in the process of evaluating the impact of this standard on our disclosures but do not believe that it will have a material impact. In August 2018, the FASB issued ASU No. 2018-14, "Disclosure Framework- Changes to the Disclosure Requirements for Defined Benefit Plans" ("ASU 2018-14"), which removes, modifies, and adds certain disclosure requirements to ASC 715-20. ASU 2018-14 is effective for fiscal years and interim periods beginning after December 15, 2020; early adoption is permitted. We are in the process of evaluating the impact of this standard on our disclosures. |
Financial Statement Information [Line Items] | Financial Statement Information Allowance for Doubtful Accounts We have a reserve for uncollectible accounts, which was approximately $63 million and $58 million at September 30, 2018 and December 31, 2017, respectively. Our May 2018 acquisition of Stahlgruber contributed $ 3 million to our reserve for uncollectible accounts. See Note 2, "Business Combinations" for further information on our acquisitions. Inventories Inventories consist of the following (in thousands): September 30, December 31, 2018 2017 Aftermarket and refurbished products $ 2,287,776 $ 1,877,653 Salvage and remanufactured products 484,761 487,108 Manufactured products 22,357 16,022 Total inventories $ 2,794,894 $ 2,380,783 Aftermarket and refurbished products and salvage and remanufactured products are primarily composed of finished goods. As of September 30, 2018, manufactured products inventory was composed of $16 million of raw materials, $2 million of work in process, and $4 million of finished goods. As of December 31, 2017, manufactured products inventory was composed of $10 million of raw materials, $2 million of work in process, and $4 million of finished goods. Our May 2018 acquisition of Stahlgruber contributed $374 million to our aftermarket and refurbished products inventory. See Note 2, "Business Combinations" for further information on our acquisitions. Property, Plant and Equipment Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant 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. Our estimated useful lives are as follows: Land improvements 10-20 years Buildings and improvements 20-40 years Machinery and equipment 3-20 years Computer equipment and software 3-10 years Vehicles and trailers 3-10 years Furniture and fixtures 5-7 years Property, plant and equipment consists of the following (in thousands): September 30, December 31, 2018 2017 Land and improvements $ 189,404 $ 137,790 Buildings and improvements 373,607 233,078 Machinery and equipment 618,209 521,526 Computer equipment and software 142,719 133,753 Vehicles and trailers 177,778 161,269 Furniture and fixtures 52,595 31,794 Leasehold improvements 283,603 257,506 1,837,915 1,476,716 Less—Accumulated depreciation (691,086 ) (606,112 ) Construction in progress 54,174 42,485 Total property, plant and equipment, net $ 1,201,003 $ 913,089 The components of opening property, plant and equipment acquired as part of our acquisition of Stahlgruber in May 2018 are as follows (in thousands): Gross Amount Land and improvements $ 47,281 Buildings and improvements 125,649 Machinery and equipment 49,384 Computer equipment and software 3,760 Vehicles and trailers 643 Furniture and fixtures 28,535 Leasehold improvements 1,890 257,142 Construction in progress 3,519 Total property, plant and equipment $ 260,661 We record depreciation expense associated with our refurbishing, remanufacturing, manufacturing and furnace operations as well as our distribution centers in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. All other depreciation expense is reported in Depreciation and amortization. Total depreciation expense for the three and nine months ended September 30, 2018 was $39 million and $115 million , respectively, and $34 million and $93 million during the three and nine months ended September 30, 2017, respectively. Intangible Assets Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer and supplier relationships, software and other technology related assets, and covenants not to compete. The changes in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2018 are as follows (in thousands): North America Europe Specialty Total Balance as of January 1, 2018 $ 1,709,354 $ 1,414,898 $ 412,259 $ 3,536,511 Business acquisitions and adjustments to previously recorded goodwill 1,073 1,002,277 (5,720 ) 997,630 Exchange rate effects (3,049 ) (55,901 ) 75 (58,875 ) Balance as of September 30, 2018 $ 1,707,378 $ 2,361,274 $ 406,614 $ 4,475,266 During the nine months ended September 30, 2018, we recorded $ 929 million of goodwill related to our acquisition of Stahlgruber. See Note 2, "Business Combinations" for further information on our acquisitions. The components of other intangibles, net are as follows (in thousands): September 30, 2018 December 31, 2017 Intangible assets subject to amortization $ 872,072 $ 664,969 Indefinite-lived intangible assets Trademarks 81,300 78,800 Total $ 953,372 $ 743,769 The components of intangible assets subject to amortization are as follows (in thousands): September 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Trade names and trademarks $ 495,839 $ (88,805 ) $ 407,034 $ 327,332 $ (75,095 ) $ 252,237 Customer and supplier relationships 586,221 (223,085 ) 363,136 510,113 (167,532 ) 342,581 Software and other technology related assets 172,391 (73,760 ) 98,631 124,049 (59,081 ) 64,968 Covenants not to compete 13,488 (10,217 ) 3,271 14,981 (9,798 ) 5,183 Total $ 1,267,939 $ (395,867 ) $ 872,072 $ 976,475 $ (311,506 ) $ 664,969 The components of intangible assets acquired as part of our acquisitions in 2018 are as follows (in thousands): Nine Months Ended September 30, 2018 Stahlgruber Other Acquisitions Total Trade names and trademarks $ 173,946 $ 2,895 $ 176,841 Customer and supplier relationships 78,239 8,194 86,433 Software and other technology related assets 33,344 92 33,436 Total $ 285,529 $ 11,181 $ 296,710 The weighted-average amortization periods for our intangible assets acquired during the nine months ended September 30, 2018 and the year ended December 31, 2017 are as follows (in years): Nine Months Ended Year Ended September 30, 2018 December 31, 2017 Stahlgruber Other Acquisitions Total All Acquisitions Trade names and trademarks 19.9 20.0 19.9 11.2 Customer and supplier relationships 3.0 9.6 3.6 18.6 Software and other technology related assets 6.8 6.0 6.8 11.1 Covenants not to compete - - - 4.4 Total acquired finite-lived intangible assets 13.7 12.2 13.7 16.5 Our estimated useful lives for our finite-lived intangible assets are as follows: Method of Amortization Useful Life Trade names and trademarks Straight-line 4-30 years Customer and supplier relationships Accelerated 3-20 years Software and other technology related assets Straight-line 3-15 years Covenants not to compete Straight-line 2-5 years Amortization expense for intangibles was $42 million and $96 million during the three and nine months ended September 30, 2018, respectively, and $26 million and $74 million during the three and nine months ended September 30, 2017, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2022 is $40 million (for the remaining three months of 2018), $136 million , $104 million , $75 million and $62 million , respectively. Investments in Unconsolidated Subsidiaries Our investment in unconsolidated subsidiaries was $157 million and $208 million as of September 30, 2018 and December 31, 2017, respectively. On December 1, 2016 , we acquired a 26.5% equity interest in Mekonomen AB ("Mekonomen") for an aggregate purchase price of $181 million . Headquartered in Stockholm, Sweden, Mekonomen is the leading independent car parts and service chain in the Nordic region of Europe, offering a range of products including spare parts and accessories for cars, and workshop services for consumers and businesses. As a result of the investment, we nominated two representatives for election to Mekonomen's board of directors; both representatives were subsequently elected to and continue to serve on the board of directors, including one as the chairman of the board. We are accounting for our interest in Mekonomen using the equity method of accounting, as our investment gives us the ability to exercise significant influence, but not control, over the investee. As of September 30, 2018, the book value of our investment in Mekonomen exceeded our share of the book value of Mekonomen's net assets by $64 million ; this difference is primarily related to goodwill and the fair value of other intangible assets. We are recording our equity in the net earnings of Mekonomen on a one quarter lag. We recorded equity losses of $20 million and $18 million during the three and nine months ended September 30, 2018, respectively, and equity in earnings of $3 million and $5 million during the three and nine months ended September 30, 2017 related to our investment in Mekonomen, including adjustments to convert the results to GAAP and to recognize the impact of our purchase accounting adjustments. In May 2018 and May 2017, we received cash dividends of $8 million (SEK 67 million ) and $7 million (SEK 67 million ), respectively, related to our investment in Mekonomen. On July 6, 2018, Mekonomen announced the acquisition of two automotive spare parts distributors in Denmark and Poland. The objective of the acquisition is to strengthen Mekonomen's position in the sale of automotive spare parts in northern Europe and to establish a strong market position in Denmark and Poland, where Mekonomen has no current operations. The acquisition is partially being financed by a rights issue with preferential rights for Mekonomen's existing shareholders, who were given the right to subscribe for four new Mekonomen shares per seven existing owned shares at a discounted share price. On October 5, 2018, we subscribed for our pro rata share in the rights issue giving us the right to acquire an additional $48 million of equity in Mekonomen at a discounted share price, retaining our 26.5% equity interest. We recorded a derivative instrument of $29 million in Other assets on our Unaudited Condensed Consolidated Balance Sheets, which represents our right to acquire Mekonomen shares at a discount. We are measuring the derivative instrument at fair value, and we recorded a $3 million gain on our fair value remeasurement during the three months ended September 30, 2018; the gain is recorded in Other income, net on the Unaudited Condensed Consolidated Statements of Income. In the fourth quarter, we will record an $8 million loss related to the settlement of the derivative instrument in October 2018 due to a decrease in the Mekonomen share price from the last day of the third quarter to the settlement date. We evaluated our investment in Mekonomen for other-than-temporary impairment as of September 30, 2018, and concluded the decline in fair value was other-than-temporary due to a prolonged and significant stock price decrease. Therefore, we recognized an other-than-temporary impairment of $23 million , which represents the difference in the carrying value and the fair value of our investment in Mekonomen. The fair value of our investment in Mekonomen was determined using the Mekonomen share price as of September 30, 2018. The impairment charge is recorded in Equity in (losses) earnings of unconsolidated subsidiaries in our Unaudited Condensed Consolidated Statements of Income. Equity in losses and earnings from our investment in Mekonomen are reported in the Europe segment. As a result of the impairment charge, the Level 1 fair value of our equity investment in the publicly traded Mekonomen common stock at September 30, 2018 approximated the carrying value of $134 million . Warranty Reserve Some of our salvage mechanical products are sold with a standard six month warranty against defects. Additionally, some of our remanufactured engines are sold with a standard three year warranty against defects. We also provide a limited lifetime warranty for certain of our aftermarket products. These assurance-type warranties are not considered a separate performance obligation, and thus no transaction price is allocated to them. We record the warranty costs in Cost of goods sold on our Unaudited Condensed Consolidated Statements of Income. Our warranty reserve is calculated using historical claim information to project future warranty claims activity and is recorded within Other accrued expenses and Other noncurrent liabilities on our Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments. The changes in the warranty reserve are as follows (in thousands): Balance as of December 31, 2017 $ 23,151 Warranty expense 33,670 Warranty claims (31,980 ) Balance as of September 30, 2018 $ 24,841 Recent Accounting Pronouncements Adoption of New Revenue Standard In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). This update outlines a new comprehensive revenue recognition model that supersedes the prior revenue recognition guidance and requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB has issued several updates to ASU 2014-09, which collectively with ASU 2014-09, represent the FASB Accounting Standards Codification Topic 606 (“ASC 606”). On January 1, 2018, we adopted ASC 606 for all contracts using the modified retrospective method, which means the historical periods are presented under the previous revenue standards with the cumulative net income effect being adjusted through retained earnings. Most of the changes resulting from our adoption of ASC 606 were changes in presentation within the Unaudited Condensed Consolidated Balance Sheets and the Unaudited Condensed Consolidated Statements of Income. Therefore, while we made adjustments to certain opening balances on our January 1, 2018 balance sheet, we made no adjustments to opening retained earnings. We expect the impact of the adoption of ASC 606 to be immaterial to our net income on an ongoing basis. See Note 5, "Revenue Recognition" for the required disclosures under ASC 606. With the adoption of ASC 606, we reclassified certain amounts related to variable consideration. Under ASC 606, we are required to present a refund liability and a returns asset within the Unaudited Condensed Consolidated Balance Sheet, whereas in periods prior to adoption, we presented the estimated margin impact of expected returns as a contra-asset within accounts receivable. Additionally, under ASC 606, the changes in the refund liability are reported in revenue, and the changes in the returns assets are reported in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. Prior to adoption, the change in the reserve for returns was generally reported as a net amount within revenue. As a result, the income statement presentation was adjusted concurrently with the balance sheet change beginning in 2018. The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 was as follows (in thousands): Balance as of December 31, 2017 Adjustments Due to ASC 606 Balance as of January 1, 2018 Balance Sheet Assets Accounts receivable $ 1,027,106 $ 38,511 $ 1,065,617 Prepaid expenses and other current assets 134,479 44,508 178,987 Liabilities Refund liability — 83,019 83,019 The impact of the adoption of ASC 606 on our Unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 and our Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2018 was as follows (in thousands): Balance as of September 30, 2018 As Reported Amounts Without Adoption of ASC 606 Effect of Change Higher/(Lower) Balance Sheet Assets Accounts receivable $ 1,255,876 $ 1,205,833 $ 50,043 Prepaid expenses and other current assets 200,944 144,255 56,689 Liabilities Refund liability 106,732 — 106,732 For the three months ended September 30, 2018 As Reported Amounts Without Adoption of ASC 606 Effect of Change Higher/(Lower) Income Statement Revenue $ 3,122,378 $ 3,123,468 $ (1,090 ) Cost of goods sold 1,925,180 1,925,107 73 Selling, general and administrative expenses 879,150 880,313 (1,163 ) For the nine months ended September 30, 2018 As Reported Amounts Without Adoption of ASC 606 Effect of Change Higher/(Lower) Income Statement Revenue $ 8,873,893 $ 8,882,558 $ (8,665 ) Cost of goods sold 5,460,845 5,467,061 (6,216 ) Selling, general and administrative expenses 2,472,085 2,474,534 (2,449 ) We have not included a table of the impact of the balance sheet adjustments on the Unaudited Condensed Consolidated Statement of Cash Flows as the adjustment will net to zero within the operating activities section of this statement. Under ASC 606, we have elected not to adjust consideration for the effect of a significant financing component at contract inception if the period between the transfer of goods to the customer and payment received from the customer is one year or less. Generally, our payment terms are short term in nature, but in some instances we may offer extended terms to customers exceeding one year such that interest would be accrued with respect to those contracts. The interest that would be accrued related to these contracts is immaterial at September 30, 2018. Under ASC 340, "Other Assets and Deferred Costs," we have elected to recognize incremental costs of obtaining a contract (commissions earned by our sales representatives on product sales) as an expense when incurred, as we believe the amortization period of the asset would be one year or less due to the short-term nature of our contracts. Other Recently Adopted Accounting Pronouncements During the first quarter of 2018, we adopted ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which changes how entities will recognize, measure, present and make disclosures about certain financial assets and financial liabilities. The adoption of ASU 2016-01 did not have a significant impact on our financial position, results of operations, cash flows or disclosures. During the first quarter of 2018, we adopted ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"), which includes guidance on classification for the following items: debt prepayment or debt extinguishment costs, settlement of zero coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and corporate-owned or bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and other separately identifiable cash flows where application of the predominance principle is prescribed. No adjustments were required in our Unaudited Condensed Consolidated Statement of Cash Flows upon adoption. Within our Unaudited Condensed Consolidating Statements of Cash Flows in Note 18, "Condensed Consolidating Financial Information ," we now present a new line item, Payments of deferred purchase price on receivables securitization, as a result of adopting ASU 2016-15; prior year cash flow information within this footnote has been recast to reflect the impact of adopting this accounting standard. Other than the addition of this new line item, there was no impact to our Unaudited Condensed Consolidating Statements of Cash Flows upon adoption. During the first quarter of 2018, we adopted ASU No. 2017-01, "Clarifying the Definition of a Business" (“ASU 2017-01”), which requires an evaluation of whether substantially all of the fair value of assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the transaction does not qualify as a business. The guidance also requires an acquired business to include at least one substantive process and narrows the definition of outputs. The adoption of ASU 2017-01 did not have a material impact on our unaudited condensed consolidated financial statements. During the first quarter of 2018, we adopted ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02"), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the reduction of the U.S. federal statutory income tax rate to 21% from 35% due to the enactment of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). In addition, under ASU 2018-02, an entity is required to provide certain disclosures regarding stranded tax effects. ASU 2018-02 is effective for fiscal years and interim periods beginning after December 15, 2018; early adoption is permitted. As a result of the adoption of ASU 2018-02, we recorded a $5 million reclassification to increase Accumulated Other Comprehensive (Loss) Income and decrease Retained Earnings. During the first quarter of 2018, we adopted ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" ("ASU 2017-07"), which requires presentation of the current service cost component of net periodic benefit expense with other current compensation expenses for the related employees, and requires presentation of the remaining components of net periodic benefit expense, such as interest, expected return on plan assets, and amortization of actuarial gains and losses, outside of operating income. ASU 2017-07 also specifies that, on a prospective basis, only the service cost component is eligible for capitalization into inventory or other assets. While the income statement classification provisions of ASU 2017-07 are applicable on a retrospective basis, due to the immaterial impact to our Unaudited Condensed Consolidated Statements of Income in prior periods, we did not recast prior period income statement information and adopted the classification provisions on a prospective basis. The change in the capitalization provisions under ASU 2017-07 did not have a material impact on our unaudited condensed consolidated financial statements. See Note 13, "Employee Benefit Plans ," for further disclosure on the components of net periodic benefit expense and classification of the components within our Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2018 and 2017. During the third quarter of 2018, the FASB issued ASU No. 2018-15, "Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" ("ASU 2018-15"). This update requires an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. ASU 2018-15 is effective for fiscal years and interim periods beginning after December 15, 2019; early adoption is permitted. We have adopted ASU 2018-15 in the third quarter of 2018 as we believe that our existing policy is consistent with the new guidance and thus no adjustments were required to be in compliance with this standard update. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, "Leases" ("ASU 2016-02"), to increase transparency and comparability by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between current GAAP and ASU 2016-02 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current GAAP. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The standard requires that entities apply the effects of these changes using a modified retrospective approach, which includes a number of optional practical expedients. While we are still in the process of quantifying the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements and related disclosures, we anticipate the adoption will materially affect our consolidated balance sheet and disclosures, as the majority of our operating leases will be recorded on the balance sheet under ASU 2016-02. While we do not anticipate the adoption of this accounting standard to have a material impact on our consolidated statements of income at this time, this conclusion may change as we finalize our assessment. In order to assist in our timely implementation of the new standard, we have purchased new software to track our leases. We have engaged a third party to assist with the implementation of the new software with an expectation to complete the implementation by the end of 2018. During the second quarter, we completed phase one of the software roll-out for our North America and Specialty operations. We are nearing completion of the phase one roll-out in our Europe operations as of the filing date of this Quarterly Report on Form 10-Q. In August 2017, the FASB issued ASU No. 2017-12, "Targeted Improvements to Accounting for Hedging Activities" ("ASU 2017-12"), which amends the hedge accounting recognition and presentation requirements in ASC 815 ("Derivatives and Hedging"). ASU 2017-12 significantly alters the hedge accounting model by making it easier for an entity to achieve and maintain hedge accounting and provides for accounting that better reflects an entity's risk management activities. ASU 2017-12 is effective for fiscal years and interim periods beginning after December 15, 2018; early adoption is permitted. Entities will adopt the provisions of ASU 2017-12 by applying a modified retrospective approach to existing hedging relationships as of the adoption date. At this time, we are still evaluating the impact of this standard on our financial statements. In August 2018, the FASB issued ASU No. 2018-13, "Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement" ("ASU 2018-13"), which removes, modifies, and adds certain disclosure requirements in ASC 820. ASU 2018-13 is effective for fiscal years and interim periods beginning after December 15, 2019; early adoption is permitted. We are in the process of evaluating the impact of this standard on our disclosures but do not believe that it will have a material impact. In August 2018, the FASB issued ASU No. 2018-14, "Disclosure Framework- Changes to the Disclosure Requirements for Defined Benefit Plans" ("ASU 2018-14"), which removes, modifies, and adds certain disclosure requirements to ASC 715-20. ASU 2018-14 is effective for fiscal years and interim periods beginning after December 15, 2020; early adoption is permitted. We are in the process of evaluating the impact of this standard on our disclosures. |
Revenue Recognition Revenue Rec
Revenue Recognition Revenue Reconition (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition [Abstract] | |
Revenue From Contract With Customer | Revenue Recognition The core principle of ASC 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASC 606 defines a five-step process to achieve this core principle, which includes: 1. Identifying contracts with customers, 2. Identifying performance obligations within those contracts, 3. Determining the transaction price, 4. Allocating the transaction price to the performance obligations in the contract, which may include an estimate of variable consideration, and 5. Recognizing revenue when or as each performance obligation is satisfied. The majority of our revenue is derived from the sale of vehicle parts. Under both the previous revenue standards and ASC 606, we recognize revenue when the products are shipped to, delivered to or picked up by customers and title has transferred. Sources of Revenue We report our revenue in two categories: (i) parts and services and (ii) other. The following table sets forth our revenue by category, with our parts and services revenue further disaggregated by reportable segment (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 North America $ 1,109,067 $ 1,051,470 $ 3,447,074 $ 3,207,001 Europe 1,464,049 952,765 3,781,091 2,659,804 Specialty 388,865 329,522 1,151,172 1,005,776 Parts and services 2,961,981 2,333,757 8,379,337 6,872,581 Other 160,397 132,043 494,556 394,473 Total revenue $ 3,122,378 $ 2,465,800 $ 8,873,893 $ 7,267,054 Parts and Services Our parts revenue is generated from the sale of vehicle products including replacement parts, components and systems used in the repair and maintenance of vehicles and specialty products and accessories to improve the performance, functionality and appearance of vehicles. Services revenue includes additional services that are generally billed concurrently with the related product sales, such as the sale of service-type warranties and fees for admission to our self service yards. In North America, our vehicle replacement products include sheet metal collision parts such as doors, hoods, and fenders; bumper covers; head and tail lamps; automotive glass products such as windshields; mirrors and grilles; wheels; and large mechanical items such as engines and transmissions. In Europe, our products include a wide variety of small mechanical products such as brake pads, discs and sensors; clutches; electrical products such as spark plugs and batteries; steering and suspension products; filters; and oil and automotive fluids. In our Specialty operations, we serve six product segments: truck and off-road; speed and performance; RV; towing; wheels, tires and performance handling; and miscellaneous accessories. Our service-type warranties typically have service periods ranging from 6 months to 36 months . Under ASC 606, proceeds from these service-type warranties are deferred at contract inception and amortized on a straight-line basis to revenue over the contract period. The changes in deferred service-type warranty revenue are as follows (in thousands): Balance as of January 1, 2018 $ 19,465 Additional warranty revenue deferred 28,889 Warranty revenue recognized (25,200 ) Balance as of September 30, 2018 $ 23,154 Other Revenue Revenue from other sources includes scrap sales, bulk sales to mechanical manufacturers (including cores) and sales of aluminum ingots and sows from our furnace operations. We derive scrap metal from several sources, including vehicles that have been used in both our wholesale and self service recycling operations and from OEMs and other entities that contract with us for secure disposal of "crush only" vehicles. The sale of hulks in our wholesale and self service recycling operations represents one performance obligation, and revenue is recognized based on a price per weight when the customer (processor) collects the scrap. Some adjustments may occur when the customer weighs the scrap at their location, and revenue is adjusted accordingly. We constrain our estimate of consideration to be received to the extent that we believe there will be a significant reversal in revenue. Revenue by Geographic Area See Note 16, "Segment and Geographic Information" for information related to our revenue by geographic region. Variable Consideration The amount of revenue ultimately received from the customer can vary due to variable consideration which includes returns, discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, or other similar items. The previous revenue guidance required us to estimate the transaction price using a best estimate approach. Under ASC 606 we are required to select the “expected value method” or the “most likely amount” method in order to estimate variable consideration. We utilize both methods in practice depending on the type of variable consideration. In addition, our estimates of variable consideration are constrained to the extent that a significant reversal in revenue is expected. We recorded a refund liability and return asset for expected returns of $107 million and $57 million , respectively, as of September 30, 2018 and a net reserve of $38 million as of December 31, 2017. The refund liability is presented separately on the balance sheet within current liabilities while the return asset is presented within prepaid expenses and other current assets. Other types of variable consideration consist primarily of discounts, volume rebates, and other customer sales incentives which are recorded in Receivables, net on the Unaudited Condensed Consolidated Balance Sheets. We recorded a reserve for our variable consideration of $114 million and $78 million as of September 30, 2018 and December 31, 2017, respectively. While other customer incentive programs exist, we characterize them as material rights in the context of our sales transactions. We consider these programs to be immaterial to our consolidated financial statements. |
Restructuring and Acquisition R
Restructuring and Acquisition Related Expenses (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Acquisition Related Expenses | Restructuring and Acquisition Related Expenses Acquisition Related Expenses Acquisition related expenses, which include external costs such as legal, accounting and advisory fees, totaled $1 million and $17 million for the three and nine months ended September 30, 2018, respectively. Our 2018 expenses primarily consisted of external costs related to our acquisition of Stahlgruber totaling $1 million and $15 million for the three and nine months ended September 30, 2018, respectively. The remaining acquisition related costs related to (i) completed acquisitions, (ii) pending acquisitions as of September 30, 2018, and (iii) potential acquisitions that were terminated. Acquisition related expenses for the three and nine months ended September 30, 2017 totaled $3 million and $8 million , respectively. Our 2017 expenses related to completed acquisitions and acquisitions that were pending as of September 30, 2017. Acquisition Integration Plans and Restructuring During the three and nine months ended September 30, 2018 , we incurred $5 million and $10 million of restructuring expenses, respectively. Restructuring expenses for the three months ended September 30, 2018 primarily consisted of $4 million related to the integration of our acquisition of Andrew Page and $1 million related to our Specialty segment; restructuring expenses for the nine months ended September 30, 2018 primarily consisted of $8 million related to the integration of our acquisition of Andrew Page and $2 million related to our Specialty segment. These integration activities included the closure of duplicate facilities and termination of employees. During each of the three and nine months ended September 30, 2017 , we incurred $2 million of restructuring expenses, primarily related to the ongoing integration activities in our Specialty segment. Expenses incurred were primarily related to facility closures and the merger of existing facilities into larger distribution centers. We expect to incur additional expenses related to the integration of certain of our acquisitions into our existing operations in 2018 and 2019. These integration activities are expected to include the closure of duplicate facilities, rationalization of personnel in connection with the consolidation of overlapping facilities with our existing business, and moving expenses. Future expenses to complete these integration plans are expected to be less than $10 million . |
Equity Incentive Plans
Equity Incentive Plans | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity Incentive Plans | In order to attract and retain employees, non-employee directors, consultants, and other persons associated with us, we may grant qualified and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares and performance units under the LKQ Corporation 1998 Equity Incentive Plan (the “Equity Incentive Plan”). We have granted RSUs, stock options, and restricted stock under the Equity Incentive Plan. We expect to issue new or treasury shares of common stock to cover past and future equity grants. RSUs RSUs vest over periods of up to five years, subject to a continued service condition. Currently outstanding RSUs contain either a time-based vesting condition or a combination of a performance-based vesting condition and a time-based vesting condition, in which case both conditions must be met before any RSUs vest. For most of the RSUs containing a performance-based vesting condition, the Company must report positive diluted earnings per share, subject to certain adjustments, during any fiscal year period within five years following the grant date; we have an immaterial amount of RSUs containing other performance-based vesting conditions. Each RSU converts into one share of LKQ common stock on the applicable vesting date. The grant date fair value of RSUs is based on the market price of LKQ stock on the grant date. The fair value of RSUs that vested during the nine months ended September 30, 2018 was $27 million . The following table summarizes activity related to our RSUs under the Equity Incentive Plan for the nine months ended September 30, 2018: Number Outstanding Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) (1) Unvested as of January 1, 2018 1,624,390 $ 29.94 Granted 601,802 $ 42.58 Vested (698,903 ) $ 30.07 Forfeited / Canceled (33,767 ) $ 33.28 Unvested as of September 30, 2018 1,493,522 $ 34.89 Expected to vest after September 30, 2018 1,344,519 $ 34.88 2.6 $ 42,581 (1) The aggregate intrinsic value of expected to vest RSUs represents the total pretax intrinsic value (the fair value of the Company's stock on the last day of each period multiplied by the number of units) that would have been received by the holders had all RSUs vested. This amount changes based on the market price of the Company’s common stock. Stock Options Stock options vest over periods of up to five years, subject to a continued service condition. Stock options expire either six or ten years from the date they are granted. No options were granted during the nine months ended September 30, 2018. No options vested during the nine months ended September 30, 2018; all of our outstanding options are fully vested. The following table summarizes activity related to our stock options under the Equity Incentive Plan for the nine months ended September 30, 2018: Number Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) (1) Balance as of January 1, 2018 1,738,073 $ 9.20 Exercised (441,495 ) $ 8.54 $ 12,678 Canceled (509 ) $ 32.31 Balance as of September 30, 2018 1,296,069 $ 9.42 1.0 $ 28,862 Exercisable as of September 30, 2018 1,296,069 $ 9.42 1.0 $ 28,862 (1) The aggregate intrinsic value of outstanding and exercisable options represents the total pretax intrinsic value (the difference between the fair value of the Company's stock on the last day of each period and the exercise price, multiplied by the number of options where the fair value exceeds the exercise price) that would have been received by the option holders had all option holders exercised their options as of the last day of the period indicated. This amount changes based on the market price of the Company’s common stock. Stock-Based Compensation Expense Pre-tax stock-based compensation expense for RSUs totaled $6 million and $18 million for the three and nine months ended September 30, 2018, respectively, and $5 million and $18 million for the three and nine months ended September 30, 2017, respectively. As of September 30, 2018, unrecognized compensation expense related to unvested RSUs is $40 million . Stock-based compensation expense related to these awards will be different to the extent that forfeitures ar e realized. |
Earnings Per Share Earnings Per
Earnings Per Share Earnings Per Share (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | Earnings Per Share The following chart sets forth the computation of earnings per share (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Income from continuing operations $ 134,480 $ 122,381 $ 445,109 $ 414,104 Denominator for basic earnings per share—Weighted-average shares outstanding 318,082 308,909 313,417 308,451 Effect of dilutive securities: RSUs 333 485 452 501 Stock options 987 1,385 1,082 1,543 Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding 319,402 310,779 314,951 310,495 Basic earnings per share from continuing operations $ 0.42 $ 0.40 $ 1.42 $ 1.34 Diluted earnings per share from continuing operations $ 0.42 $ 0.39 $ 1.41 $ 1.33 The following table sets forth the number of employee stock-based compensation awards outstanding but not included in the computation of diluted earnings per share because their effect would have been antidilutive for the three and nine months ended September 30, 2018 and 2017 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Antidilutive securities: RSUs 375 — 317 50 Stock options — — — 51 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands): Three Months Ended September 30, 2018 Foreign Unrealized Gain (Loss) Unrealized (Loss) Gain on Pension Plans Other Comprehensive Income from Unconsolidated Subsidiaries Accumulated Beginning balance $ (125,753 ) $ 19,684 $ (10,200 ) $ 208 $ (116,061 ) Pretax (loss) income (23,405 ) 7,681 1,217 — (14,507 ) Income tax effect 2,454 (1,796 ) 41 — 699 Reclassification of unrealized (gain) loss — (7,284 ) 21 — (7,263 ) Reclassification of deferred income taxes — 1,703 (5 ) — 1,698 Other comprehensive income from unconsolidated subsidiaries — — — 643 643 Ending balance $ (146,704 ) $ 19,988 $ (8,926 ) $ 851 $ (134,791 ) Three Months Ended September 30, 2017 Foreign Unrealized Gain Unrealized (Loss) Gain Other Comprehensive Loss from Unconsolidated Subsidiaries Accumulated Beginning balance $ (157,353 ) $ 10,324 $ (6,640 ) $ (601 ) $ (154,270 ) Pretax income (loss) 63,769 (15,402 ) — — 48,367 Income tax effect (4,151 ) 5,683 — — 1,532 Reclassification of unrealized loss (gain) — 12,591 (200 ) — 12,391 Reclassification of deferred income taxes — (4,648 ) 50 — (4,598 ) Other comprehensive loss from unconsolidated subsidiaries — — — (1,034 ) (1,034 ) Ending balance $ (97,735 ) $ 8,548 $ (6,790 ) $ (1,635 ) $ (97,612 ) Nine Months Ended September 30, 2018 Foreign Unrealized Gain (Loss) on Cash Flow Hedges Unrealized (Loss) Gain on Pension Plans Other Comprehensive (Loss) Income from Unconsolidated Subsidiaries Accumulated Beginning balance $ (71,933 ) $ 11,538 $ (8,772 ) $ (1,309 ) $ (70,476 ) Pretax (loss) income (82,137 ) 33,901 (102 ) — (48,338 ) Income tax effect 4,507 (7,926 ) (125 ) — (3,544 ) Reclassification of unrealized (gain) loss — (26,117 ) 97 — (26,020 ) Reclassification of deferred income taxes — 6,106 (24 ) — 6,082 Other comprehensive income from unconsolidated subsidiaries — — — 2,160 2,160 Adoption of ASU 2018-02 2,859 2,486 — — 5,345 Ending balance $ (146,704 ) $ 19,988 $ (8,926 ) $ 851 $ (134,791 ) Nine Months Ended September 30, 2017 Foreign Unrealized Gain Unrealized (Loss) Gain Other Comprehensive Loss from Unconsolidated Subsidiaries Accumulated Beginning balance $ (272,529 ) $ 8,091 $ (2,737 ) $ — $ (267,175 ) Pretax income (loss) 177,434 (44,749 ) 112 — 132,797 Income tax effect (4,151 ) 16,463 (43 ) — 12,269 Reclassification of unrealized loss (gain) — 45,551 (921 ) — 44,630 Reclassification of deferred income taxes — (16,808 ) 235 — (16,573 ) Disposal of business, net 1,511 — (3,436 ) — (1,925 ) Other comprehensive loss from unconsolidated subsidiaries — — — (1,635 ) (1,635 ) Ending balance $ (97,735 ) $ 8,548 $ (6,790 ) $ (1,635 ) $ (97,612 ) Net unrealized gains on our interest rate swaps totaling $2 million and $5 million were reclassified to Interest expense, net in our Unaudited Condensed Consolidated Statements of Income during the three and nine months ended September 30, 2018, respectively, compared to a loss of $1 million during the nine months ended September 30, 2017; the amount reclassified to Interest expense, net during the three months ended September 30, 2017 was immaterial. We also reclassified gains of $2 million to Interest expense, net related to the foreign currency forward component of our cross currency swaps during each of the three months ended September 30, 2018 and 2017, and gains of $6 million during each of the nine months ended September 30, 2018 and 2017. Also related to our cross currency swaps, we reclassified gains of $3 million and $15 million to Other income, net in our Unaudited Condensed Consolidated Statements of Income during the three and nine months ended September 30, 2018, respectively, compared to losses of $15 million and $50 million during the three and nine months ended September 30, 2017; these gains and losses offset the impact of the remeasurement of the underlying contracts. The deferred income taxes related to our cash flow hedges were reclassified from Accumulated other comprehensive income (loss) to provision for income taxes. As a result of the adoption of ASU 2018-02 in the first quarter of 2018, we recorded a $5 million reclassification to increase Accumulated Other Comprehensive (Loss) Income and decrease Retained Earnings. See Note 4, "Financial Statement Information" for further information regarding the adoption of ASU 2018-02. The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands): Three Months Ended September 30, 2018 Foreign Unrealized Gain (Loss) Unrealized (Loss) Gain on Pension Plans Other Comprehensive Income from Unconsolidated Subsidiaries Accumulated Beginning balance $ (125,753 ) $ 19,684 $ (10,200 ) $ 208 $ (116,061 ) Pretax (loss) income (23,405 ) 7,681 1,217 — (14,507 ) Income tax effect 2,454 (1,796 ) 41 — 699 Reclassification of unrealized (gain) loss — (7,284 ) 21 — (7,263 ) Reclassification of deferred income taxes — 1,703 (5 ) — 1,698 Other comprehensive income from unconsolidated subsidiaries — — — 643 643 Ending balance $ (146,704 ) $ 19,988 $ (8,926 ) $ 851 $ (134,791 ) Three Months Ended September 30, 2017 Foreign Unrealized Gain Unrealized (Loss) Gain Other Comprehensive Loss from Unconsolidated Subsidiaries Accumulated Beginning balance $ (157,353 ) $ 10,324 $ (6,640 ) $ (601 ) $ (154,270 ) Pretax income (loss) 63,769 (15,402 ) — — 48,367 Income tax effect (4,151 ) 5,683 — — 1,532 Reclassification of unrealized loss (gain) — 12,591 (200 ) — 12,391 Reclassification of deferred income taxes — (4,648 ) 50 — (4,598 ) Other comprehensive loss from unconsolidated subsidiaries — — — (1,034 ) (1,034 ) Ending balance $ (97,735 ) $ 8,548 $ (6,790 ) $ (1,635 ) $ (97,612 ) Nine Months Ended September 30, 2018 Foreign Unrealized Gain (Loss) on Cash Flow Hedges Unrealized (Loss) Gain on Pension Plans Other Comprehensive (Loss) Income from Unconsolidated Subsidiaries Accumulated Beginning balance $ (71,933 ) $ 11,538 $ (8,772 ) $ (1,309 ) $ (70,476 ) Pretax (loss) income (82,137 ) 33,901 (102 ) — (48,338 ) Income tax effect 4,507 (7,926 ) (125 ) — (3,544 ) Reclassification of unrealized (gain) loss — (26,117 ) 97 — (26,020 ) Reclassification of deferred income taxes — 6,106 (24 ) — 6,082 Other comprehensive income from unconsolidated subsidiaries — — — 2,160 2,160 Adoption of ASU 2018-02 2,859 2,486 — — 5,345 Ending balance $ (146,704 ) $ 19,988 $ (8,926 ) $ 851 $ (134,791 ) Nine Months Ended September 30, 2017 Foreign Unrealized Gain Unrealized (Loss) Gain Other Comprehensive Loss from Unconsolidated Subsidiaries Accumulated Beginning balance $ (272,529 ) $ 8,091 $ (2,737 ) $ — $ (267,175 ) Pretax income (loss) 177,434 (44,749 ) 112 — 132,797 Income tax effect (4,151 ) 16,463 (43 ) — 12,269 Reclassification of unrealized loss (gain) — 45,551 (921 ) — 44,630 Reclassification of deferred income taxes — (16,808 ) 235 — (16,573 ) Disposal of business, net 1,511 — (3,436 ) — (1,925 ) Other comprehensive loss from unconsolidated subsidiaries — — — (1,635 ) (1,635 ) Ending balance $ (97,735 ) $ 8,548 $ (6,790 ) $ (1,635 ) $ (97,612 ) |
Long-Term Obligations
Long-Term Obligations | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Obligations | Long-Term Obligations Long-term obligations consist of the following (in thousands): September 30, December 31, 2018 2017 Senior secured credit agreement: Term loans payable $ 590,000 $ 704,800 Revolving credit facilities 1,183,626 1,283,551 U.S. Notes (2023) 600,000 600,000 Euro Notes (2024) 580,200 600,150 Euro Notes (2026/28) 1,160,400 — Receivables securitization facility 100,000 100,000 Notes payable through May 2027 at weighted average interest rates of 1.5% and 1.4%, respectively 38,641 29,146 Other long-term debt at weighted average interest rates of 2.2% and 1.7%, respectively 151,502 110,633 Total debt 4,404,369 3,428,280 Less: long-term debt issuance costs (31,251 ) (21,476 ) Less: current debt issuance costs (4,616 ) (2,824 ) Total debt, net of debt issuance costs 4,368,502 3,403,980 Less: current maturities, net of debt issuance costs (118,365 ) (126,360 ) Long term debt, net of debt issuance costs $ 4,250,137 $ 3,277,620 Senior Secured Credit Agreement On December 1, 2017, LKQ Corporation, LKQ Delaware LLP, and certain other subsidiaries (collectively, the "Borrowers") entered into Amendment No. 2 to the Fourth Amended and Restated Credit Agreement ("Credit Agreement"), which amended the Fourth Amended and Restated Credit Agreement dated January 29, 2016 by modifying certain terms to (1) extend the maturity date by approximately two years to January 29, 2023; (2) increase the total availability under the revolving credit facility's multicurrency component from $2.45 billion to $2.75 billion ; (3) increase the permitted net leverage ratio thresholds, including a temporary step-up in the allowable net leverage ratio in the case of permitted acquisitions; (4) modify the applicable margins and fees in the pricing grid; (5) increase the ability of LKQ and its subsidiaries to incur additional indebtedness; and (6) make other immaterial or clarifying modifications and amendments. The increase in the revolving credit facility's multicurrency component of $300 million will be used for general corporate purposes. Amounts under the revolving credit facility are due and payable upon maturity of the Credit Agreement on January 29, 2023. Term loan borrowings, which totaled $590 million as of September 30, 2018, are due and payable in quarterly installments equal to $9 million on the last day of each fiscal quarter ending on or after December 31, 2021, with the remaining balance due and payable on January 29, 2023. During the three months ended September 30, 2018, we prepaid our required quarterly installments through September 30, 2021. We are required to prepay the term loan by amounts equal to proceeds from the sale or disposition of certain assets if the proceeds are not reinvested within twelve months. We also have the option to prepay outstanding amounts under the Credit Agreement without penalty. The Credit Agreement contains customary representations and warranties and customary covenants that provide limitations and conditions on our ability to enter into certain transactions. The Credit Agreement also contains financial and affirmative covenants, including limitations on our net leverage ratio and a minimum interest coverage ratio. Borrowings under the Credit Agreement bear interest at variable rates, which depend on the currency and duration of the borrowing elected, plus an applicable margin. The applicable margin is subject to change in increments of 0.25% depending on our net leverage ratio. Interest payments are due on the last day of the selected interest period or quarterly in arrears depending on the type of borrowing. Including the effect of the interest rate swap agreements described in Note 11, "Derivative Instruments and Hedging Activities," the weighted average interest rates on borrowings outstanding under the Credit Agreement at both September 30, 2018 and December 31, 2017 was 2.2% . We also pay a commitment fee based on the average daily unused amount of the revolving credit facilities. The commitment fee is subject to change in increments of 0.025% and 0.05% depending on our net leverage ratio. In addition, we pay a participation commission on outstanding letters of credit at an applicable rate based on our net leverage ratio, and a fronting fee of 0.125% to the issuing bank, which are due quarterly in arrears. Of the total borrowings outstanding under the Credit Agreement, there were no borrowings classified as current maturities at September 30, 2018 compared to $18 million at December 31, 2017. As of September 30, 2018, there were letters of credit outstanding in the aggregate amount of $65 million . The amounts available under the revolving credit facilities are reduced by the amounts outstanding under letters of credit, and thus availability under the revolving credit facilities at September 30, 2018 was $1.5 billion . Related to the execution of Amendment No. 2 to the Fourth Amended and Restated Credit Agreement in December 2017, we incurred $5 million of fees, the majority of which were capitalized as an offset to Long-Term Obligations and are amortized over the term of the agreement. U.S. Notes (2023) In 2013, we issued $600 million aggregate principal amount of 4.75% senior notes due 2023 (the "U.S. Notes (2023)"). The U.S. Notes (2023) are governed by the Indenture dated as of May 9, 2013 (the "U.S. Notes (2023) Indenture") among LKQ Corporation, certain of our subsidiaries (the "Guarantors"), the trustee, paying agent, transfer agent and registrar. The U.S. Notes (2023) are registered under the Securities Act of 1933. The U.S. Notes (2023) bear interest at a rate of 4.75% per year from the most recent payment date on which interest has been paid or provided for. Interest on the U.S. Notes (2023) is payable in arrears on May 15 and November 15 of each year. The U.S. Notes (2023) are fully and unconditionally guaranteed, jointly and severally, by the Guarantors. The U.S. Notes (2023) and the related guarantees are, respectively, LKQ Corporation's and each Guarantor's senior unsecured obligations and are subordinated to all of the Guarantors' existing and future secured debt to the extent of the assets securing that secured debt. In addition, the U.S. Notes (2023) are effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the U.S. Notes (2023) to the extent of the assets of those subsidiaries. Euro Notes (2024) On April 14, 2016, LKQ Italia Bondco S.p.A. (“LKQ Italia”), an indirect, wholly-owned subsidiary of LKQ Corporation, completed an offering of €500 million aggregate principal amount of senior notes due April 1, 2024 (the “Euro Notes (2024)”) in a private placement conducted pursuant to Regulation S and Rule 144A under the Securities Act of 1933. The proceeds from the offering were used to repay a portion of the revolver borrowings under the Credit Agreement and to pay related fees and expenses. The Euro Notes (2024) are governed by the Indenture dated as of April 14, 2016 (the “Euro Notes (2024) Indenture”) among LKQ Italia, LKQ Corporation and certain of our subsidiaries (the “Euro Notes (2024) Subsidiaries”), the trustee, and the paying agent, transfer agent, and registrar. The Euro Notes (2024) bear interest at a rate of 3.875% per year from the date of original issuance or from the most recent payment date on which interest has been paid or provided for. Interest on the Euro Notes (2024) is payable in arrears on April 1 and October 1 of each year. The Euro Notes (2024) are fully and unconditionally guaranteed by LKQ Corporation and the Euro Notes (2024) Subsidiaries (the "Euro Notes (2024) Guarantors"). The Euro Notes (2024) and the related guarantees are, respectively, LKQ Italia’s and each Euro Notes (2024) Guarantor’s senior unsecured obligations and are subordinated to all of LKQ Italia's and the Euro Notes (2024) Guarantors’ existing and future secured debt to the extent of the assets securing that secured debt. In addition, the Euro Notes (2024) are effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the Euro Notes (2024) to the extent of the assets of those subsidiaries. The Euro Notes (2024) have been listed on the ExtraMOT, Professional Segment of the Borsa Italia S.p.A. securities exchange and the Global Exchange Market of Euronext Dublin. Euro Notes (2026/28) On April 9, 2018, LKQ European Holdings B.V. ("LKQ Euro Holdings"), a wholly-owned subsidiary of LKQ Corporation, completed an offering of €1.0 billion aggregate principal amount of senior notes. The offering consisted of €750 million senior notes due 2026 (the "2026 notes") and €250 million senior notes due 2028 (the "2028 notes" and, together with the 2026 notes, the "Euro Notes (2026/28)") in a private placement conducted pursuant to Regulation S and Rule 144A under the Securities Act of 1933. The proceeds from the offering, together with borrowings under our senior secured credit facility, were or will be used to (i) finance a portion of the consideration paid for the Stahlgruber acquisition, (ii) for general corporate purposes and (iii) to pay related fees and expenses, including the refinancing of net financial debt. The Euro Notes (2026/28) are governed by the Indenture dated as of April 9, 2018 (the “Euro Notes (2026/28) Indenture”) among LKQ Euro Holdings, LKQ Corporation and certain of our subsidiaries (the “Euro Notes (2026/28) Subsidiaries”), the trustee, paying agent, transfer agent, and registrar. The 2026 notes and 2028 notes bear interest at a rate of 3.625% and 4.125% , respectively, per year from the date of original issuance or from the most recent payment date on which interest has been paid or provided for. Interest on the Euro Notes (2026/28) is payable in arrears on April 1 and October 1 of each year, beginning on October 1, 2018. The Euro Notes (2026/28) are fully and unconditionally guaranteed by LKQ Corporation and the Euro Notes (2026/28) Subsidiaries (the "Euro Notes (2026/28) Guarantors"). The Euro Notes (2026/28) and the related guarantees are, respectively, LKQ Euro Holdings' and each Euro Notes (2026/28) Guarantor’s senior unsecured obligations and will be subordinated to all of LKQ Euro Holdings' and the Euro Notes (2026/28) Guarantors’ existing and future secured debt to the extent of the assets securing that secured debt. In addition, the Euro Notes (2026/28) are effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the Euro Notes (2026/28) to the extent of the assets of those subsidiaries. The Euro Notes (2026/28) have been listed on the Global Exchange Market of Euronext Dublin. Related to the execution of the Euro Notes (2026/28) in April 2018, we incurred $16 million of fees, which were capitalized as an offset to Long-Term Obligations and are amortized over the term of the Euro Notes (2026/28). Receivables Securitization Facility On November 29, 2016, we amended the terms of our receivables securitization facility with The Bank of Tokyo-Mitsubishi UFJ, LTD. ("BTMU") to: (i) extend the term of the facility to November 8, 2019; (ii) increase the maximum amount available to $100 million ; and (iii) make other clarifying and updating changes. Under the facility, LKQ sells an ownership interest in certain receivables, related collections and security interests to BTMU for the benefit of conduit investors and/or financial institutions for cash proceeds. Upon payment of the receivables by customers, rather than remitting to BTMU the amounts collected, LKQ retains such collections as proceeds for the sale of new receivables generated by certain of the ongoing operations of the Company. The sale of the ownership interest in the receivables is accounted for as a secured borrowing in our Consolidated Balance Sheets, under which the receivables included in the program collateralize the amounts invested by BTMU, the conduit investors and/or financial institutions (the "Purchasers"). The receivables are held by LKQ Receivables Finance Company, LLC ("LRFC"), a wholly owned bankruptcy-remote special purpose subsidiary of LKQ, and therefore, the receivables are available first to satisfy the creditors of LRFC, including the Purchasers. Net receivables totaling $127 million and $144 million were collateral for the investment under the receivables facility as of September 30, 2018 and December 31, 2017, respectively. Under the receivables facility, we pay variable interest rates plus a margin on the outstanding amounts invested by the Purchasers. The variable rates are based on (i) commercial paper rates, (ii) the London InterBank Offered Rate ("LIBOR"), or (iii) base rates, and are payable monthly in arrears. The commercial paper rate is the applicable variable rate unless conduit investors are not available to invest in the receivables at commercial paper rates. In such case, financial institutions will invest at the LIBOR rate or at base rates. We also pay a commitment fee on the excess of the investment maximum over the average daily outstanding investment, payable monthly in arrears. As of September 30, 2018, the interest rate under the receivables facility was based on commercial paper rates and was 3.1% . The outstanding balances of $100 million as of both September 30, 2018 and December 31, 2017 were classified as long-term on the Unaudited Condensed Consolidated Balance Sheets because we have the ability and intent to refinance these borrowings on a long-term basis. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | 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 and changing foreign exchange rates for certain foreign currency denominated transactions. We do not hold or issue derivatives for trading purposes. Cash Flow Hedges We hold interest rate swap agreements to hedge a portion of the variable interest rate risk on our variable rate borrowings under our Credit Agreement, with the objective of minimizing the impact of interest rate fluctuations and stabilizing cash flows. Under the terms of the interest rate swap agreements, we pay the fixed interest rate and receive payment at a variable rate of interest based on LIBOR for the respective currency of each interest rate swap agreement’s notional amount. The effective portion of changes in the fair value of the interest rate swap agreements is recorded in Accumulated Other Comprehensive Income (Loss) and is reclassified to interest expense when the underlying interest payment has an impact on earnings. The ineffective portion of changes in the fair value of the interest rate swap agreements is reported in interest expense. Our interest rate swap contracts have maturity dates ranging from January to June 2021. As of September 30, 2018 , we held interest rate swap contracts representing $590 million of U.S. dollar-denominated debt. From time to time, we may hold foreign currency forward contracts related to certain foreign currency denominated intercompany transactions, with the objective of minimizing the impact of fluctuating exchange rates on these future cash flows. Under the terms of the foreign currency forward contracts, we will sell the foreign currency in exchange for U.S. dollars at a fixed rate on the maturity dates of the contracts. The effective portion of the changes in fair value of the foreign currency forward contracts is recorded in Accumulated Other Comprehensive Income (Loss) and reclassified to other income, net when the underlying transaction has an impact on earnings. In 2016, we entered into three cross currency swap agreements for a total notional amount of $422 million ( €400 million ). The notional amount steps down by €15 million annually through 2020 with the remainder maturing in January 2021. These cross currency swaps contain an interest rate swap component and a foreign currency forward contract component that, combined with related intercompany financing arrangements, effectively convert variable rate U.S. dollar-denominated borrowings into fixed rate euro-denominated borrowings. The swaps are intended to minimize the impact of fluctuating exchange rates and interest rates on the cash flows resulting from the related intercompany financing arrangements. The effective portion of the changes in the fair value of the derivative instruments is recorded in Accumulated Other Comprehensive Income (Loss) and is reclassified to interest expense, net when the underlying transactions have an impact on earnings. In October 2018, we entered into two cross currency swap agreements for a total notional amount of $184 million ( €160 million ). Half of the notional amount matures in October 2019 with the remainder in October 2020. The purpose and accounting of the swaps are similar to those described in the previous paragraph. The activity related to our cash flow hedges is presented in operating activities in our Unaudited Condensed Consolidated Statements of Cash Flows. The following table summarizes the notional amounts and fair values of our designated cash flow hedges as of September 30, 2018 and December 31, 2017 (in thousands): Notional Amount Fair Value at September 30, 2018 (USD) Fair Value at December 31, 2017 (USD) September 30, 2018 December 31, 2017 Other Assets Other Noncurrent Liabilities Other Assets Other Noncurrent Liabilities Interest rate swap agreements USD denominated $ 590,000 $ 590,000 $ 25,719 $ — $ 19,102 $ — Cross currency swap agreements USD/euro $ 394,649 $ 406,546 10,881 49,212 5,504 61,492 Total cash flow hedges $ 36,600 $ 49,212 $ 24,606 $ 61,492 While certain derivative instruments executed with the same counterparty are subject to master netting arrangements, we present our cash flow hedge derivative instruments on a gross basis in our Unaudited Condensed Consolidated Balance Sheets. The impact of netting the fair values of these contracts would result in a decrease to Other Assets and Other Noncurrent Liabilities on our Unaudited Condensed Consolidated Balance Sheets of $19 million and $12 million at September 30, 2018 and December 31, 2017 , respectively. The activity related to our cash flow hedges is included in Note 9, "Accumulated Other Comprehensive Income (Loss) ." Ineffectiveness related to our cash flow hedges was immaterial to our results of operations during each of the three and nine months ended September 30, 2018 and 2017 . We do not expect future ineffectiveness related to our cash flow hedges to have a material effect on our results of operations. As of September 30, 2018 , we estimate that $4 million of derivative gains (net of tax) included in Accumulated Other Comprehensive Income (Loss) will be reclassified into our Unaudited Condensed Consolidated Statements of Income within the next 12 months. Other Derivative Instruments During the third quarter of 2018, we recorded the fair value of a derivative instrument of $29 million in Other assets on our Unaudited Condensed Consolidated Balance Sheets related to our right to acquire Mekonomen shares at a discount. We are measuring the derivative instrument at fair value, and we recorded a $3 million gain on our fair value remeasurement during the three months ended September 30, 2018; the gain is recorded in Other income, net on the Unaudited Condensed Consolidated Statements of Income. In the fourth quarter, we will record an $8 million loss related to the settlement of the derivative instrument in October 2018 due to a decrease in the Mekonomen share price from the last day of the third quarter to the settlement date. Refer to Note 4, "Financial Statement Information," for more information on the derivative instrument. We hold other short-term derivative instruments, including foreign currency forward contracts, to manage our exposure to variability related to inventory purchases and intercompany financing transactions denominated in a non-functional currency. We have elected not to apply hedge accounting for these transactions, and therefore the contracts are adjusted to fair value through our results of operations as of each balance sheet date, which could result in volatility in our earnings. The notional amount and fair value of these contracts at September 30, 2018 and December 31, 2017, along with the effect on our results of operations during each of the three and nine months ended September 30, 2018 and 2017 , were immaterial. |
Fair Value Disclosures (Notes)
Fair Value Disclosures (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | Fair Value Measurements Financial Assets and Liabilities Measured at Fair Value We use the market and income approaches to estimate the fair value of our financial assets and liabilities, and during the three and nine months ended September 30, 2018, there were no significant changes in valuation techniques or inputs related to the financial assets or liabilities that we have historically recorded at fair value. The tiers in the fair value hierarchy include: Level 1, defined as observable inputs such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as significant unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation inputs we utilized to determine such fair value as of September 30, 2018 and December 31, 2017 (in thousands): Balance as of September 30, 2018 Fair Value Measurements as of September 30, 2018 Level 1 Level 2 Level 3 Assets: Cash surrender value of life insurance $ 53,691 $ — $ 53,691 $ — Rights to acquire Mekonomen shares 28,683 — 28,683 — Interest rate swaps 25,719 — 25,719 — Cross currency swap agreements 10,881 — 10,881 — Total Assets $ 118,974 $ — $ 118,974 $ — Liabilities: Contingent consideration liabilities $ 5,243 $ — $ — $ 5,243 Deferred compensation liabilities 54,419 — 54,419 — Cross currency swap agreements 49,212 — 49,212 — Total Liabilities $ 108,874 $ — $ 103,631 $ 5,243 Balance as of December 31, 2017 Fair Value Measurements as of December 31, 2017 Level 1 Level 2 Level 3 Assets: Cash surrender value of life insurance $ 45,984 $ — $ 45,984 $ — Interest rate swaps 19,102 — 19,102 — Cross currency swap agreements 5,504 — 5,504 — Total Assets $ 70,590 $ — $ 70,590 $ — Liabilities: Contingent consideration liabilities $ 2,636 $ — $ — $ 2,636 Deferred compensation liabilities 47,199 — 47,199 — Cross currency swap agreements 61,492 — 61,492 — Total Liabilities $ 111,327 $ — $ 108,691 $ 2,636 The cash surrender value of life insurance and the derivative instrument related to Mekonomen are both included in Other assets on our Unaudited Condensed Consolidated Balance Sheets. The current portion of deferred compensation is included in Accrued payroll-related liabilities and the current portion of contingent consideration liabilities is included in Other current liabilities on our Unaudited Condensed Consolidated Balance Sheets; the noncurrent portion of these amounts is included in Other noncurrent liabilities on our Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments. The balance sheet classification of the interest rate swaps and cross currency swap agreements is presented in Note 11, "Derivative Instruments and Hedging Activities." Our Level 2 assets and liabilities are valued using inputs from third parties and market observable data. We obtain valuation data for the cash surrender value of life insurance and deferred compensation liabilities from third party sources, which determine the net asset values for our accounts using quoted market prices, investment allocations and reportable trades. We valued the rights to acquire Mekonomen shares using the Mekonomen share price as of the last day of the period and the discounted share price under the rights issue. We value our other derivative instruments using a third party valuation model that performs a discounted cash flow analysis based on the terms of the contracts and market observable inputs such as current and forward interest rates and current and forward foreign exchange rates. Our contingent consideration liabilities are related to our business acquisitions. Under the terms of the contingent consideration agreements, payments may be made at specified future dates depending on the performance of the acquired business subsequent to the acquisition. The liabilities for these payments are classified as Level 3 liabilities because the related fair value measurement, which is determined using an income approach, includes significant inputs not observable in the market. Financial Assets and Liabilities Not Measured at Fair Value Our debt is reflected on the Unaudited Condensed Consolidated Balance Sheets at cost. Based on market conditions as of September 30, 2018 and December 31, 2017, the fair value of our credit agreement borrowings reasonably approximated the carrying values of $1.8 billion and $2.0 billion , respectively. In addition, based on market conditions, the fair values of the outstanding borrowings under the receivables facility reasonably approximated the carrying values of $100 million at both September 30, 2018 and December 31, 2017. As of September 30, 2018 and December 31, 2017, the fair values of the U.S. Notes (2023) were approximately $601 million and $615 million , respectively, compared to a carrying value of $600 million . As of September 30, 2018 and December 31, 2017, the fair values of the Euro Notes (2024) were approximately $615 million and $658 million compared to carrying values of $580 million and $600 million , respectively. As of September 30, 2018, the fair value of the Euro Notes (2026/28) approximated the carrying value of $ 1.2 billion . The fair value measurements of the borrowings under our credit agreement and receivables facility are classified as Level 2 within the fair value hierarchy since they are determined based upon significant inputs observable in the market, including interest rates on recent financing transactions with similar terms and maturities. We estimated the fair value by calculating the upfront cash payment a market participant would require at September 30, 2018 to assume these obligations. The fair value of our U.S. Notes (2023) is classified as Level 1 within the fair value hierarchy since it is determined based upon observable market inputs including quoted market prices in an active market. The fair values of our Euro Notes (2024) and Euro Notes (2026/28) are determined based upon observable market inputs including quoted market prices in markets that are not active, and therefore are classified as Level 2 within the fair value hierarchy. |
Income Taxes (Notes)
Income Taxes (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes At the end of each interim period, we estimate our annual effective tax rate and apply that rate to our interim earnings. We also record the tax impact of certain unusual or infrequently occurring items, including changes in judgment about valuation allowances and the effects of changes in tax laws or rates, in the interim period in which they occur. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in state and foreign jurisdictions, permanent and temporary differences between book and taxable income, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the tax environment changes. Our effective income tax rate for the nine months ended September 30, 2018 was 25.2% , compared to 33.5% for the comparable prior year period. The decrease was primarily attributable to the reduction of the U.S. federal statutory income tax rate from 35% to 21% as a result of the enactment of the Tax Act in December 2017. Partially offsetting this decrease was a 1.0% increase in the effective income tax rate as a result of the Stahlgruber acquisition, including non-deductible interest and acquisition related expenses, as well as the higher effective tax rate in Germany. The effective tax rate also reflects the impact of net favorable discrete items of approximately $12 million and $8 million for the nine months ended September 30, 2018 and 2017, respectively. The net favorable discrete items are primarily composed of a $10 million favorable adjustment to the Tax Act transition tax for the nine months ended September 30, 2018, as well as $4 million and $7 million for the nine months ended September 30, 2018 and 2017, respectively, for excess tax benefits from stock-based payments. The year over year change in discrete items decreased the effective tax rate by 0.6% compared to the prior year. Our acquisition of Stahlgruber in May 2018 contributed $98 million of deferred tax liabilities relating to intangible assets; property, plant and equipment; and reserves, including pension and other post-retirement benefit obligations. The Tax Act introduced broad and complex changes to the U.S. tax code, including the aforementioned reduction in the U.S. corporate tax rate, a one-time transition tax on the historical unremitted earnings of foreign subsidiaries, and a new minimum tax on foreign earnings (Global Intangible Low-Taxed Income, “GILTI”). On December 22, 2017, the SEC staff issued Staff Accounting Bulletin 118 ("SAB 118"), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the related accounting for provisional amounts under ASC 740, "Accounting for Income Taxes." As a result of the Tax Act, in 2017, we recognized a provisional tax liability of $51 million related to the one-time transition tax on historical foreign earnings, payable over a period of eight years. We also recorded a provisional decrease to net U.S. deferred tax liabilities of $73 million . For a description of the impact of the Tax Act for the year ended December 31, 2017, refer to Note 13, "Income Taxes" of our financial statements as of and for the year ended December 31, 2017 included in the 2017 Form 10-K. During the nine-month period ended September 30, 2018, we recorded a $10 million favorable adjustment to the provisional amount recognized in 2017 related to the transition tax. We continue to gather the information necessary to finalize the provisional amounts. Our estimates could be affected as we gain a more thorough understanding of the Tax Act from additional guidance issued by the U.S. tax authorities. Changes to the provisional estimates of the tax effect of the Tax Act will be recorded as a discrete item in the interim period the amounts are considered complete. The Company has included the estimated 2018 impact of the GILTI Tax as a period cost and included it as part of the estimated annual effective tax rate. The 2018 estimated annual effective tax rate also includes the impact of all other U.S. tax reform provisions that were effective on January 1, 2018. These estimates are subject to change as additional guidance on the tax reform provisions is issued. |
Employee Benefit Plans (Notes)
Employee Benefit Plans (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | Employee Benefit Plans We have funded and unfunded defined benefit plans covering certain employee groups in the U.S. and various European countries. The defined benefit plans are generally frozen to new participants and, in some cases, existing participants no longer accrue benefits. As of September 30, 2018 and December 31, 2017, the aggregate funded status of the defined benefit plans was a liability of $111 million and $46 million , respectively, and is reported in Other noncurrent liabilities and Accrued payroll-related liabilities on our Unaudited Condensed Consolidated Balance Sheets. Of the liability at September 30, 2018, $75 million was related to our acquisition of Stahlgruber on May 30, 2018. Net periodic benefit expense for our defined benefit plans included the following components for the three and nine months ended September 30, 2018 and 2017 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Service cost $ 628 $ 1,126 $ 1,612 $ 2,902 Interest cost 996 750 2,442 2,091 Expected return on plan assets (720 ) (507 ) (2,220 ) (1,059 ) Amortization of prior service credit — (71 ) — (201 ) Amortization of actuarial (gain) loss 21 (129 ) 97 (720 ) Net periodic benefit expense $ 925 $ 1,169 $ 1,931 $ 3,013 For the three and nine months ended September 30, 2018, the service cost component of net periodic benefit expense was classified in Selling, general and administrative expenses, while the other components of net periodic benefit expense were classified in Other income, net in our Unaudited Condensed Consolidated Statements of Income. For the three and nine months ended September 30, 2017, all components of net periodic benefit expense were included in Selling, general, and administrative expenses in our Unaudited Condensed Consolidated Statements of Income. During the nine months ended September 30, 2018 , we contributed $12 million to our pension plans. We estimate that contributions to our pension plans during the last three months of 2018 will be $1 million . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases We are obligated under noncancelable operating leases for corporate office space, warehouse and distribution facilities, trucks and certain equipment. The future minimum lease commitments under these leases at September 30, 2018 are as follows (in thousands): Three months ending December 31, 2018 $ 72,780 Years ending December 31: 2019 271,642 2020 226,936 2021 179,921 2022 144,700 2023 122,149 Thereafter 689,583 Future Minimum Lease Payments $ 1,707,711 Litigation and Related Contingencies We have certain contingencies resulting from litigation, claims and other commitments and are subject to a variety of environmental and pollution control laws and regulations incident to the ordinary course of business. We currently expect that the resolution of such contingencies will not materially affect our financial position, results of operations or cash flows. |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information We have four operating segments: Wholesale – North America, Europe, Specialty and Self Service. Our Wholesale – North America and Self Service operating segments are aggregated into one reportable segment, North America, because they possess similar economic characteristics and have common products and services, customers, and methods of distribution. Our reportable segments are organized based on a combination of geographic areas served and type of product lines offered. The reportable segments are managed separately as each business serves different customers (i.e. geographic in the case of North America and Europe and product type in the case of Specialty) and is affected by different economic conditions. Therefore, we present three reportable segments: North America, Europe and Specialty. The following tables present our financial performance by reportable segment for the periods indicated (in thousands): North America Europe Specialty Eliminations Consolidated Three Months Ended September 30, 2018 Revenue: Third Party $ 1,262,657 $ 1,470,856 $ 388,865 $ — $ 3,122,378 Intersegment 142 — 1,196 (1,338 ) — Total segment revenue $ 1,262,799 $ 1,470,856 $ 390,061 $ (1,338 ) $ 3,122,378 Segment EBITDA $ 154,049 $ 129,358 $ 42,937 $ — $ 326,344 Depreciation and amortization (1) 22,151 52,139 7,183 — 81,473 Three Months Ended September 30, 2017 Revenue: Third Party $ 1,181,756 $ 954,522 $ 329,522 $ — $ 2,465,800 Intersegment 187 — 1,072 (1,259 ) — Total segment revenue $ 1,181,943 $ 954,522 $ 330,594 $ (1,259 ) $ 2,465,800 Segment EBITDA $ 152,627 $ 79,294 $ 35,114 $ — $ 267,035 Depreciation and amortization (1) 22,104 32,326 5,472 — 59,902 North America Europe Specialty Eliminations Consolidated Nine Months Ended September 30, 2018 Revenue: Third Party $ 3,927,282 $ 3,795,439 $ 1,151,172 $ — $ 8,873,893 Intersegment 526 — 3,554 (4,080 ) — Total segment revenue $ 3,927,808 $ 3,795,439 $ 1,154,726 $ (4,080 ) $ 8,873,893 Segment EBITDA $ 506,772 $ 315,785 $ 140,974 $ — $ 963,531 Depreciation and amortization (1) 64,985 124,697 21,295 — 210,977 Nine Months Ended September 30, 2017 Revenue: Third Party $ 3,596,108 $ 2,665,170 $ 1,005,776 $ — $ 7,267,054 Intersegment 589 — 3,222 (3,811 ) — Total segment revenue $ 3,596,697 $ 2,665,170 $ 1,008,998 $ (3,811 ) $ 7,267,054 Segment EBITDA $ 502,494 $ 241,537 $ 119,133 $ — $ 863,164 Depreciation and amortization (1) 64,305 85,809 16,394 — 166,508 (1) Amounts presented include depreciation and amortization expense recorded within cost of goods sold. The key measure of segment profit or loss reviewed by our chief operating decision maker, who is our Chief Executive Officer, is Segment EBITDA. Segment EBITDA includes revenue and expenses that are controllable by the segment. Corporate general and administrative expenses are allocated to the segments based on usage, with shared expenses apportioned based on the segment's percentage of consolidated revenue. We calculate Segment EBITDA as EBITDA excluding restructuring and acquisition related expenses, change in fair value of contingent consideration liabilities, other gains and losses related to acquisitions, equity method investments, or divestitures and equity in losses and earnings of unconsolidated subsidiaries. EBITDA, which is the basis for Segment EBITDA, is calculated as net income excluding noncontrolling interest, discontinued operations, depreciation, amortization, interest and income tax expense. The table below provides a reconciliation of Net Income to Segment EBITDA (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Net income $ 134,480 $ 122,381 $ 445,109 $ 409,573 Less: net income attributable to noncontrolling interest 378 — 1,040 — Net income attributable to LKQ stockholders 134,102 122,381 444,069 409,573 Subtract: Net loss from discontinued operations — — — (4,531 ) Net income from continuing operations attributable to LKQ stockholders 134,102 122,381 444,069 414,104 Add: Depreciation and amortization 76,701 56,877 196,322 159,178 Depreciation and amortization - cost of goods sold 4,772 3,025 14,655 7,330 Interest expense, net 40,860 25,222 107,647 73,806 Provision for income taxes 46,068 58,189 156,427 206,206 EBITDA 302,503 265,694 919,120 860,624 Subtract: Equity in (losses) earnings of unconsolidated subsidiaries (1) (20,284 ) 2,673 (18,326 ) 3,878 Fair value gain on Mekonomen derivative instrument (1) 2,509 — 2,509 — Gains on bargain purchases (2) — 913 328 3,990 Add: Restructuring and acquisition related expenses (3) 6,614 4,922 26,546 10,371 Inventory step-up adjustment - acquisition related — — 403 — Impairment of net assets held for sale — — 2,438 — Change in fair value of contingent consideration liabilities (548 ) 5 (465 ) 37 Segment EBITDA $ 326,344 $ 267,035 $ 963,531 $ 863,164 (1) See Note 4, "Financial Statement Information," for further information. (2) Reflects the gains on bargain purchases related to our acquisitions of a wholesale business in Europe and Andrew Page. See Note 2, "Business Combinations," for further information. (3) See Note 6, "Restructuring and Acquisition Related Expenses," for further information. The following table presents capital expenditures by reportable segment (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Capital Expenditures North America $ 27,996 $ 31,021 $ 86,864 $ 69,934 Europe 23,904 12,119 69,582 55,253 Specialty 4,442 852 15,317 6,752 Discontinued operations — — — 3,598 Total capital expenditures $ 56,342 $ 43,992 $ 171,763 $ 135,537 The following table presents assets by reportable segment (in thousands): September 30, December 31, 2018 2017 Receivables, net North America $ 437,429 $ 379,666 Europe (1) 696,106 555,372 Specialty 122,341 92,068 Total receivables, net (2) 1,255,876 1,027,106 Inventories North America 1,058,310 1,076,393 Europe (1) 1,391,578 964,068 Specialty 345,006 340,322 Total inventories 2,794,894 2,380,783 Property, Plant and Equipment, net North America 560,918 537,286 Europe (1) 554,550 293,539 Specialty 85,535 82,264 Total property, plant and equipment, net 1,201,003 913,089 Equity Method Investments North America 16,075 336 Europe (3) 141,334 208,068 Total equity method investments 157,409 208,404 Other unallocated assets 6,176,154 4,837,490 Total assets $ 11,585,336 $ 9,366,872 (1) The increase in assets for the Europe segment is primarily attributable to the Stahlgruber acquisition. Refer to Note 2, “Business Combinations,” for further detail on the opening balance sheet amounts. (2) Refer to Note 4, "Financial Statement Information," for the increase in total receivables, net compared to December 31, 2017 as a result of the adoption of ASC 606. (3) Refer to Note 4, "Financial Statement Information," for further information. We report net receivables; inventories; net property , plant and equipment; and equity method investments 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 and cash equivalents, prepaid and other current and noncurrent assets, goodwill and other intangibles. Our largest countries of operation are the U.S., followed by the U.K. and Germany. Our other European operations are located in the Netherlands, Belgium, Italy, Czech Republic, Austria, Poland, Slovakia and other European countries. Our operations in other countries include operations in Canada, engine remanufacturing and bumper refurbishing operations in Mexico, an aftermarket parts freight consolidation warehouse in Taiwan, and administrative support functions in India. Our net sales are attributed to geographic area based on the location of the selling operation. The following table sets forth our revenue by geographic area (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Revenue United States $ 1,535,557 $ 1,395,495 $ 4,716,927 $ 4,268,600 United Kingdom 408,474 399,155 1,294,155 1,171,829 Germany 415,748 549 564,698 862 Other countries 762,599 670,601 2,298,113 1,825,763 Total revenue $ 3,122,378 $ 2,465,800 $ 8,873,893 $ 7,267,054 The following table sets forth our tangible long-lived assets by geographic area (in thousands): September 30, December 31, 2018 2017 Long-lived Assets United States $ 609,562 $ 583,236 Germany 210,344 41 United Kingdom 170,940 178,021 Other countries 210,157 151,791 Total long-lived assets $ 1,201,003 $ 913,089 |
Subsequent Events (Notes)
Subsequent Events (Notes) | 3 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Event On October 25, 2018, we announced that our Board of Directors authorized a stock repurchase program under which we may purchase up to $500 million of our common stock from time to time through October 25, 2021. Repurchases under the program may be made in the open market or in privately negotiated transactions, with the amount and timing of repurchases depending on market conditions and corporate needs. The repurchase program does not obligate us to acquire any specific number of shares and may be suspended or discontinued at any time. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 9 Months Ended |
Sep. 30, 2018 | |
Condensed Consolidating Financial Information [Abstract] | |
Condensed Consolidating Financial Information | Condensed Consolidating Financial Information LKQ Corporation (the "Parent") issued, and the Guarantors have fully and unconditionally guaranteed, jointly and severally, the U.S. Notes (2023) due on May 15, 2023. A Guarantor's guarantee will be unconditionally and automatically released and discharged upon the occurrence of any of the following events: (i) a transfer (including as a result of consolidation or merger) by the Guarantor to any person that is not a Guarantor of all or substantially all assets and properties of such Guarantor, provided the Guarantor is also released from its obligations with respect to indebtedness under the Credit Agreement or other indebtedness of ours, which obligation gave rise to the guarantee of the U.S. Notes (2023); (ii) a transfer (including as a result of consolidation or merger) to any person that is not a Guarantor of the equity interests of a Guarantor or issuance by a Guarantor of its equity interests such that the Guarantor ceases to be a subsidiary, as defined in the U.S. Notes (2023) Indenture, provided the Guarantor is also released from its obligations with respect to indebtedness under the Credit Agreement or other indebtedness of ours, which obligation gave rise to the guarantee of the U.S. Notes (2023); (iii) the release of the Guarantor from its obligations with respect to indebtedness under the Credit Agreement or other indebtedness of ours, which obligation gave rise to the guarantee of the U.S. Notes (2023); and (iv) upon legal defeasance, covenant defeasance or satisfaction and discharge of the U.S. Notes (2023) Indenture, as defined in the U.S. Notes (2023) Indenture. Presented below are the unaudited condensed consolidating financial statements of the Parent, the Guarantors, the non-guarantor subsidiaries (the "Non-Guarantors"), and the elimination entries necessary to present our financial statements on a consolidated basis as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934 resulting from the guarantees of the U.S. Notes (2023). Investments in consolidated subsidiaries have been presented under the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries, intercompany balances, and intercompany revenue and expenses. The unaudited condensed consolidating financial statements below have been prepared from our financial information on the same basis of accounting as the unaudited condensed consolidated financial statements, and may not necessarily be indicative of the financial position, results of operations or cash flows had the Parent, Guarantors and Non-Guarantors operated as independent entities. LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands) For the Three Months Ended September 30, 2018 Parent Guarantors Non-Guarantors Eliminations Consolidated Revenue $ — $ 1,550,301 $ 1,609,525 $ (37,448 ) $ 3,122,378 Cost of goods sold — 934,913 1,027,715 (37,448 ) 1,925,180 Gross margin — 615,388 581,810 — 1,197,198 Selling, general and administrative expenses 6,725 434,965 437,460 — 879,150 Restructuring and acquisition related expenses — 1,638 4,976 — 6,614 Depreciation and amortization 34 25,238 51,429 — 76,701 Operating (loss) income (6,759 ) 153,547 87,945 — 234,733 Other expense (income): Interest expense (income), net 16,191 (193 ) 24,862 — 40,860 Intercompany interest (income) expense, net (15,121 ) 10,014 5,107 — — Other income, net (178 ) (3,514 ) (3,267 ) — (6,959 ) Total other expense, net 892 6,307 26,702 — 33,901 (Loss) income before (benefit) provision for income taxes (7,651 ) 147,240 61,243 — 200,832 (Benefit) provision for income taxes (12,008 ) 41,875 16,201 — 46,068 Equity in losses of unconsolidated subsidiaries — (156 ) (20,128 ) — (20,284 ) Equity in earnings of subsidiaries 129,745 4,467 — (134,212 ) — Net income 134,102 109,676 24,914 (134,212 ) 134,480 Less: net income attributable to noncontrolling interest — — 378 — 378 Net income attributable to LKQ stockholders $ 134,102 $ 109,676 $ 24,536 $ (134,212 ) $ 134,102 LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands) For the Three Months Ended September 30, 2017 Parent Guarantors Non-Guarantors Eliminations Consolidated Revenue $ — $ 1,433,742 $ 1,069,682 $ (37,624 ) $ 2,465,800 Cost of goods sold — 861,078 685,470 (37,624 ) 1,508,924 Gross margin — 572,664 384,212 — 956,876 Selling, general and administrative expenses 7,861 394,926 293,191 — 695,978 Restructuring and acquisition related expenses — 1,473 3,449 — 4,922 Depreciation and amortization 29 25,005 31,843 — 56,877 Operating (loss) income (7,890 ) 151,260 55,729 — 199,099 Other expense (income): Interest expense, net 16,232 57 8,933 — 25,222 Intercompany interest (income) expense, net (2,389 ) (2,814 ) 5,203 — — Gain on bargain purchase — — (913 ) — (913 ) Other expense (income), net 32 (4,011 ) 872 — (3,107 ) Total other expense (income), net 13,875 (6,768 ) 14,095 — 21,202 (Loss) income before (benefit) provision for income taxes (21,765 ) 158,028 41,634 — 177,897 (Benefit) provision for income taxes (8,436 ) 56,920 9,705 — 58,189 Equity in earnings of unconsolidated subsidiaries — — 2,673 — 2,673 Equity in earnings of subsidiaries 135,710 6,674 — (142,384 ) — Net income $ 122,381 $ 107,782 $ 34,602 $ (142,384 ) $ 122,381 LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands) For the Nine Months Ended September 30, 2018 Parent Guarantors Non-Guarantors Eliminations Consolidated Revenue $ — $ 4,768,292 $ 4,216,417 $ (110,816 ) $ 8,873,893 Cost of goods sold — 2,869,499 2,702,162 (110,816 ) 5,460,845 Gross margin — 1,898,793 1,514,255 — 3,413,048 Selling, general and administrative expenses 25,538 1,292,455 1,154,092 — 2,472,085 Restructuring and acquisition related expenses — 1,968 24,578 — 26,546 Depreciation and amortization 84 74,102 122,136 — 196,322 Operating (loss) income (25,622 ) 530,268 213,449 — 718,095 Other expense (income): Interest expense (income), net 52,004 (94 ) 55,737 — 107,647 Intercompany interest (income) expense, net (45,927 ) 29,559 16,368 — — Gains on bargain purchases — — (328 ) — (328 ) Other (income) expense, net (1,076 ) (13,793 ) 5,783 — (9,086 ) Total other expense, net 5,001 15,672 77,560 — 98,233 (Loss) income before (benefit) provision for income taxes (30,623 ) 514,596 135,889 — 619,862 (Benefit) provision for income taxes (19,656 ) 141,295 34,788 — 156,427 Equity in losses of unconsolidated subsidiaries — (156 ) (18,170 ) — (18,326 ) Equity in earnings of subsidiaries 455,036 14,028 — (469,064 ) — Net income 444,069 387,173 82,931 (469,064 ) 445,109 Less: net income attributable to noncontrolling interest — — 1,040 — 1,040 Net income attributable to LKQ stockholders $ 444,069 $ 387,173 $ 81,891 $ (469,064 ) $ 444,069 LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands) For the Nine Months Ended September 30, 2017 Parent Guarantors Non-Guarantors Eliminations Consolidated Revenue $ — $ 4,374,693 $ 3,001,386 $ (109,025 ) $ 7,267,054 Cost of goods sold — 2,613,540 1,910,561 (109,025 ) 4,415,076 Gross margin — 1,761,153 1,090,825 — 2,851,978 Selling, general and administrative expenses 26,209 1,165,897 810,959 — 2,003,065 Restructuring and acquisition related expenses — 4,010 6,361 — 10,371 Depreciation and amortization 89 73,072 86,017 — 159,178 Operating (loss) income (26,298 ) 518,174 187,488 — 679,364 Other expense (income): Interest expense, net 48,904 281 24,621 — 73,806 Intercompany interest (income) expense, net (10,221 ) (4,530 ) 14,751 — — Gains on bargain purchases — — (3,990 ) — (3,990 ) Other expense (income), net 286 (8,247 ) 1,077 — (6,884 ) Total other expense (income), net 38,969 (12,496 ) 36,459 — 62,932 (Loss) income from continuing operations before (benefit) provision for income taxes (65,267 ) 530,670 151,029 — 616,432 (Benefit) provision for income taxes (27,034 ) 200,321 32,919 — 206,206 Equity in earnings of unconsolidated subsidiaries — — 3,878 — 3,878 Equity in earnings of subsidiaries 452,337 17,282 — (469,619 ) — Income from continuing operations 414,104 347,631 121,988 (469,619 ) 414,104 Net (loss) income from discontinued operations (4,531 ) (4,531 ) 2,050 2,481 (4,531 ) Net income $ 409,573 $ 343,100 $ 124,038 $ (467,138 ) $ 409,573 LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands) For the Three Months Ended September 30, 2018 Parent Guarantors Non-Guarantors Eliminations Consolidated Net income $ 134,102 $ 109,676 $ 24,914 $ (134,212 ) $ 134,480 Less: net income attributable to noncontrolling interest — — 378 — 378 Net income attributable to LKQ stockholders 134,102 109,676 24,536 (134,212 ) 134,102 Other comprehensive (loss) income: Foreign currency translation, net of tax (20,951 ) 1,686 (23,901 ) 22,215 (20,951 ) Net change in unrealized gains/losses on cash flow hedges, net of tax 304 — — — 304 Net change in unrealized gains/losses on pension plans, net of tax 1,274 1,246 28 (1,274 ) 1,274 Net change in other comprehensive income from unconsolidated subsidiaries 643 — 643 (643 ) 643 Other comprehensive (loss) income (18,730 ) 2,932 (23,230 ) 20,298 (18,730 ) Comprehensive income 115,372 112,608 1,684 (113,914 ) 115,750 Less: comprehensive income attributable to noncontrolling interest — — 378 — 378 Comprehensive income attributable to LKQ stockholders $ 115,372 $ 112,608 $ 1,306 $ (113,914 ) $ 115,372 For the Three Months Ended September 30, 2017 Parent Guarantors Non-Guarantors Eliminations Consolidated Net income $ 122,381 $ 107,782 $ 34,602 $ (142,384 ) $ 122,381 Other comprehensive income (loss): Foreign currency translation, net of tax 59,618 3,590 62,734 (66,324 ) 59,618 Net change in unrecognized gains/losses on cash flow hedges, net of tax (1,776 ) — — — (1,776 ) Net change in unrealized gains/losses on pension plans, net of tax (150 ) — (150 ) 150 (150 ) Net change in other comprehensive loss from unconsolidated subsidiaries (1,034 ) — (1,034 ) 1,034 (1,034 ) Total other comprehensive income 56,658 3,590 61,550 (65,140 ) 56,658 Total comprehensive income $ 179,039 $ 111,372 $ 96,152 $ (207,524 ) $ 179,039 LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands) For the Nine Months Ended September 30, 2018 Parent Guarantors Non-Guarantors Eliminations Consolidated Net income $ 444,069 $ 387,173 $ 82,931 $ (469,064 ) $ 445,109 Less: net income attributable to noncontrolling interest — — 1,040 — 1,040 Net income attributable to LKQ stockholders 444,069 387,173 81,891 (469,064 ) 444,069 Other comprehensive (loss) income: Foreign currency translation, net of tax (77,630 ) (2,800 ) (81,456 ) 84,256 (77,630 ) Net change in unrealized gains/losses on cash flow hedges, net of tax 5,964 — — — 5,964 Net change in unrealized gains/losses on pension plans, net of tax (154 ) (239 ) 85 154 (154 ) Net change in other comprehensive income from unconsolidated subsidiaries 2,160 — 2,160 (2,160 ) 2,160 Other comprehensive loss (69,660 ) (3,039 ) (79,211 ) 82,250 (69,660 ) Comprehensive income 374,409 384,134 3,720 (386,814 ) 375,449 Less: comprehensive income attributable to noncontrolling interest — — 1,040 — 1,040 Comprehensive income attributable to LKQ stockholders $ 374,409 $ 384,134 $ 2,680 $ (386,814 ) $ 374,409 For the Nine Months Ended September 30, 2017 Parent Guarantors Non-Guarantors Eliminations Consolidated Net income $ 409,573 $ 343,100 $ 124,038 $ (467,138 ) $ 409,573 Other comprehensive income (loss): Foreign currency translation, net of tax 174,794 17,565 176,769 (194,334 ) 174,794 Net change in unrecognized gains/losses on cash flow hedges, net of tax 457 (133 ) — 133 457 Net change in unrealized gains/losses on pension plans, net of tax (4,053 ) (3,253 ) (800 ) 4,053 (4,053 ) Net change in other comprehensive loss from unconsolidated subsidiaries (1,635 ) — (1,635 ) 1,635 (1,635 ) Total other comprehensive income 169,563 14,179 174,334 (188,513 ) 169,563 Total comprehensive income $ 579,136 $ 357,279 $ 298,372 $ (655,651 ) $ 579,136 LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Balance Sheets (In thousands) September 30, 2018 Parent Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 48,265 $ 31,082 $ 261,999 $ — $ 341,346 Receivables, net 341 366,781 888,754 — 1,255,876 Intercompany receivables, net 7,173 — 20,573 (27,746 ) — Inventories — 1,323,201 1,471,693 — 2,794,894 Prepaid expenses and other current assets 15,452 94,787 90,705 — 200,944 Total current assets 71,231 1,815,851 2,733,724 (27,746 ) 4,593,060 Property, plant and equipment, net 845 589,898 610,260 — 1,201,003 Intangible assets: Goodwill — 2,005,560 2,469,706 — 4,475,266 Other intangibles, net 286 280,229 672,857 — 953,372 Investment in subsidiaries 5,351,986 114,721 — (5,466,707 ) — Intercompany notes receivable 1,067,356 14,958 — (1,082,314 ) — Equity method investments — 16,075 141,334 — 157,409 Other assets 90,293 38,434 76,499 — 205,226 Total assets $ 6,581,997 $ 4,875,726 $ 6,704,380 $ (6,576,767 ) $ 11,585,336 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 2,615 $ 345,660 $ 593,472 $ — $ 941,747 Intercompany payables, net — 20,573 7,173 (27,746 ) — Accrued expenses: Accrued payroll-related liabilities 7,169 48,463 97,904 — 153,536 Other accrued expenses 12,656 106,543 239,013 — 358,212 Refund liability — 54,554 52,178 — 106,732 Other current liabilities 283 18,210 38,595 — 57,088 Current portion of long-term obligations — 2,317 116,048 — 118,365 Total current liabilities 22,723 596,320 1,144,383 (27,746 ) 1,735,680 Long-term obligations, excluding current portion 1,569,387 14,027 2,666,723 — 4,250,137 Intercompany notes payable — 617,389 464,925 (1,082,314 ) — Deferred income taxes 9,715 115,924 199,898 — 325,537 Other noncurrent liabilities 139,712 98,133 138,721 — 376,566 Stockholders' equity: Total Company stockholders’ equity 4,840,460 3,433,933 2,032,774 (5,466,707 ) 4,840,460 Noncontrolling interest — — 56,956 — 56,956 Total stockholders’ equity 4,840,460 3,433,933 2,089,730 (5,466,707 ) 4,897,416 Total liabilities and stockholders' equity $ 6,581,997 $ 4,875,726 $ 6,704,380 $ (6,576,767 ) $ 11,585,336 LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Balance Sheets (In thousands) December 31, 2017 Parent Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 34,360 $ 35,131 $ 210,275 $ — $ 279,766 Receivables, net — 290,958 736,148 — 1,027,106 Intercompany receivables, net 2,669 3,010 230 (5,909 ) — Inventories — 1,334,766 1,046,017 — 2,380,783 Prepaid expenses and other current assets 34,136 44,849 55,494 — 134,479 Total current assets 71,165 1,708,714 2,048,164 (5,909 ) 3,822,134 Property, plant and equipment, net 910 563,262 348,917 — 913,089 Intangible assets: Goodwill — 2,010,209 1,526,302 — 3,536,511 Other intangibles, net — 291,036 452,733 — 743,769 Investment in subsidiaries 5,952,687 102,931 — (6,055,618 ) — Intercompany notes receivable 1,156,550 782,638 — (1,939,188 ) — Equity method investments — 336 208,068 — 208,404 Other assets 70,590 33,597 38,778 — 142,965 Total assets $ 7,251,902 $ 5,492,723 $ 4,622,962 $ (8,000,715 ) $ 9,366,872 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 5,742 $ 340,951 $ 441,920 $ — $ 788,613 Intercompany payables, net — 230 5,679 (5,909 ) — Accrued expenses: Accrued payroll-related liabilities 9,448 65,811 68,165 — 143,424 Other accrued expenses 5,219 95,900 117,481 — 218,600 Other current liabilities 282 27,066 18,379 — 45,727 Current portion of long-term obligations 16,468 1,912 107,980 — 126,360 Total current liabilities 37,159 531,870 759,604 (5,909 ) 1,322,724 Long-term obligations, excluding current portion 2,095,826 7,372 1,174,422 — 3,277,620 Intercompany notes payable 750,000 677,708 511,480 (1,939,188 ) — Deferred income taxes 12,402 116,021 123,936 — 252,359 Other noncurrent liabilities 158,346 101,189 47,981 — 307,516 Stockholders' equity: Total Company stockholders’ equity 4,198,169 4,058,563 1,997,055 (6,055,618 ) 4,198,169 Noncontrolling interest — — 8,484 — 8,484 Total stockholders’ equity 4,198,169 4,058,563 2,005,539 (6,055,618 ) 4,206,653 Total liabilities and stockholders' equity $ 7,251,902 $ 5,492,723 $ 4,622,962 $ (8,000,715 ) $ 9,366,872 LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Cash Flows (In thousands) For the Nine Months Ended September 30, 2018 Parent Guarantors Non-Guarantors Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net cash provided by operating activities $ 334,226 $ 142,626 $ 97,506 $ (53,191 ) $ 521,167 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment (315 ) (93,063 ) (78,385 ) — (171,763 ) Investment and intercompany note activity with subsidiaries 73,096 — — (73,096 ) — Return of investment in subsidiaries 152,443 — — (152,443 ) — Acquisitions, net of cash acquired — (2,888 ) (1,203,179 ) — (1,206,067 ) Investments in unconsolidated subsidiaries — (11,066 ) — — (11,066 ) Receipts of deferred purchase price on receivables under factoring arrangements — 224,753 9,410 (224,753 ) 9,410 Other investing activities, net 887 2,162 4,921 — 7,970 Net cash provided by (used in) investing activities 226,111 119,898 (1,267,233 ) (450,292 ) (1,371,516 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 3,772 — — — 3,772 Taxes paid related to net share settlements of stock-based compensation awards (4,768 ) — — — (4,768 ) Debt issuance costs (1,354 ) — (15,584 ) — (16,938 ) Proceeds from issuance of Euro Notes (2026/28) — — 1,232,100 — 1,232,100 Borrowings under revolving credit facilities 304,000 — 721,496 — 1,025,496 Repayments under revolving credit facilities (732,897 ) — (377,138 ) — (1,110,035 ) Repayments under term loans (114,800 ) — — — (114,800 ) (Repayments) borrowings of other debt, net (385 ) 101 (38,411 ) — (38,695 ) Other financing activities, net — — 3,182 — 3,182 Investment and intercompany note activity with parent — (62,763 ) (10,333 ) 73,096 — Dividends — (203,448 ) (226,939 ) 430,387 — Net cash (used in) provided by financing activities (546,432 ) (266,110 ) 1,288,373 503,483 979,314 Effect of exchange rate changes on cash and cash equivalents — (463 ) (66,922 ) — (67,385 ) Net increase (decrease) in cash and cash equivalents 13,905 (4,049 ) 51,724 — 61,580 Cash and cash equivalents, beginning of period 34,360 35,131 210,275 — 279,766 Cash and cash equivalents, end of period $ 48,265 $ 31,082 $ 261,999 $ — $ 341,346 LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Cash Flows (In thousands) For the Nine Months Ended September 30, 2017 Parent Guarantors Non-Guarantors Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net cash provided by operating activities $ 227,314 $ 162,114 $ 108,095 $ (48,280 ) $ 449,243 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment (509 ) (70,292 ) (64,736 ) — (135,537 ) Investment and intercompany note activity with subsidiaries 296,561 — — (296,561 ) — Acquisitions, net of cash acquired — (79,496 ) (173,171 ) — (252,667 ) Proceeds from disposals of business/investment — 305,740 (4,443 ) — 301,297 Investments in unconsolidated subsidiaries — (2,200 ) (4,914 ) — (7,114 ) Receipts of deferred purchase price on receivables under factoring arrangements (1) — 226,395 — (226,395 ) — Other investing activities, net — 3,100 6,764 — 9,864 Net cash provided by (used in) investing activities 296,052 383,247 (240,500 ) (522,956 ) (84,157 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 6,465 — — — 6,465 Taxes paid related to net share settlements of stock-based compensation awards (5,095 ) — — — (5,095 ) Borrowings under revolving credit facilities 187,000 — 237,976 — 424,976 Repayments under revolving credit facilities (694,896 ) — (75,988 ) — (770,884 ) Repayments under term loans (27,884 ) — — — (27,884 ) Borrowings under receivables securitization facility — — 8,525 — 8,525 Repayments under receivables securitization facility — — (9,925 ) — (9,925 ) (Repayments) borrowings of other debt, net (1,700 ) (1,238 ) 27,460 — 24,522 Payments of other obligations — (1,336 ) (743 ) — (2,079 ) Other financing activities, net — 5,000 (684 ) — 4,316 Investment and intercompany note activity with parent — (286,530 ) (10,031 ) 296,561 — Dividends — (274,675 ) — 274,675 — Net cash (used in) provided by financing activities (536,110 ) (558,779 ) 176,590 571,236 (347,063 ) Effect of exchange rate changes on cash and cash equivalents — 322 22,216 — 22,538 Net (decrease) increase in cash and cash equivalents (12,744 ) (13,096 ) 66,401 — 40,561 Cash and cash equivalents of continuing operations, beginning of period 33,030 35,360 159,010 — 227,400 Add: Cash and cash equivalents of discontinued operations, beginning of period — 149 6,967 — 7,116 Cash and cash equivalents of continuing and discontinued operations, beginning of period 33,030 35,509 165,977 — 234,516 Cash and cash equivalents, end of period $ 20,286 $ 22,413 $ 232,378 $ — $ 275,077 (1) Reflects the impact of adopting ASU 2016-15 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Receivables and Allowance for Doubtful Accounts | We have a reserve for uncollectible accounts, which was approximately $63 million and $58 million at September 30, 2018 and December 31, 2017, respectively. Our May 2018 acquisition of Stahlgruber contributed $ 3 million to our reserve for uncollectible accounts. See Note 2, "Business Combinations" for further information on our acquisitions. |
Inventory | Inventories consist of the following (in thousands): September 30, December 31, 2018 2017 Aftermarket and refurbished products $ 2,287,776 $ 1,877,653 Salvage and remanufactured products 484,761 487,108 Manufactured products 22,357 16,022 Total inventories $ 2,794,894 $ 2,380,783 Aftermarket and refurbished products and salvage and remanufactured products are primarily composed of finished goods. As of September 30, 2018, manufactured products inventory was composed of $16 million of raw materials, $2 million of work in process, and $4 million of finished goods. As of December 31, 2017, manufactured products inventory was composed of $10 million of raw materials, $2 million of work in process, and $4 million of finished goods. Our May 2018 acquisition of Stahlgruber contributed $374 million to our aftermarket and refurbished products inventory. See Note 2, "Business Combinations" for further information on our acquisitions. |
Property and Equipment | Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant 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. Our estimated useful lives are as follows: Land improvements 10-20 years Buildings and improvements 20-40 years Machinery and equipment 3-20 years Computer equipment and software 3-10 years Vehicles and trailers 3-10 years Furniture and fixtures 5-7 years Property, plant and equipment consists of the following (in thousands): September 30, December 31, 2018 2017 Land and improvements $ 189,404 $ 137,790 Buildings and improvements 373,607 233,078 Machinery and equipment 618,209 521,526 Computer equipment and software 142,719 133,753 Vehicles and trailers 177,778 161,269 Furniture and fixtures 52,595 31,794 Leasehold improvements 283,603 257,506 1,837,915 1,476,716 Less—Accumulated depreciation (691,086 ) (606,112 ) Construction in progress 54,174 42,485 Total property, plant and equipment, net $ 1,201,003 $ 913,089 Property, Plant and Equipment Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant 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. Our estimated useful lives are as follows: Land improvements 10-20 years Buildings and improvements 20-40 years Machinery and equipment 3-20 years Computer equipment and software 3-10 years Vehicles and trailers 3-10 years Furniture and fixtures 5-7 years Property, plant and equipment consists of the following (in thousands): September 30, December 31, 2018 2017 Land and improvements $ 189,404 $ 137,790 Buildings and improvements 373,607 233,078 Machinery and equipment 618,209 521,526 Computer equipment and software 142,719 133,753 Vehicles and trailers 177,778 161,269 Furniture and fixtures 52,595 31,794 Leasehold improvements 283,603 257,506 1,837,915 1,476,716 Less—Accumulated depreciation (691,086 ) (606,112 ) Construction in progress 54,174 42,485 Total property, plant and equipment, net $ 1,201,003 $ 913,089 The components of opening property, plant and equipment acquired as part of our acquisition of Stahlgruber in May 2018 are as follows (in thousands): Gross Amount Land and improvements $ 47,281 Buildings and improvements 125,649 Machinery and equipment 49,384 Computer equipment and software 3,760 Vehicles and trailers 643 Furniture and fixtures 28,535 Leasehold improvements 1,890 257,142 Construction in progress 3,519 Total property, plant and equipment $ 260,661 We record depreciation expense associated with our refurbishing, remanufacturing, manufacturing and furnace operations as well as our distribution centers in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. All other depreciation expense is reported in Depreciation and amortization. Total depreciation expense for the three and nine months ended September 30, 2018 was $39 million and $115 million , respectively, and $34 million and $93 million during the three and nine months ended September 30, 2017, respectively. |
Intangible Assets | Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer and supplier relationships, software and other technology related assets, and covenants not to compete. The changes in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2018 are as follows (in thousands): North America Europe Specialty Total Balance as of January 1, 2018 $ 1,709,354 $ 1,414,898 $ 412,259 $ 3,536,511 Business acquisitions and adjustments to previously recorded goodwill 1,073 1,002,277 (5,720 ) 997,630 Exchange rate effects (3,049 ) (55,901 ) 75 (58,875 ) Balance as of September 30, 2018 $ 1,707,378 $ 2,361,274 $ 406,614 $ 4,475,266 During the nine months ended September 30, 2018, we recorded $ 929 million of goodwill related to our acquisition of Stahlgruber. See Note 2, "Business Combinations" for further information on our acquisitions. The components of other intangibles, net are as follows (in thousands): September 30, 2018 December 31, 2017 Intangible assets subject to amortization $ 872,072 $ 664,969 Indefinite-lived intangible assets Trademarks 81,300 78,800 Total $ 953,372 $ 743,769 The components of intangible assets subject to amortization are as follows (in thousands): September 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Trade names and trademarks $ 495,839 $ (88,805 ) $ 407,034 $ 327,332 $ (75,095 ) $ 252,237 Customer and supplier relationships 586,221 (223,085 ) 363,136 510,113 (167,532 ) 342,581 Software and other technology related assets 172,391 (73,760 ) 98,631 124,049 (59,081 ) 64,968 Covenants not to compete 13,488 (10,217 ) 3,271 14,981 (9,798 ) 5,183 Total $ 1,267,939 $ (395,867 ) $ 872,072 $ 976,475 $ (311,506 ) $ 664,969 The components of intangible assets acquired as part of our acquisitions in 2018 are as follows (in thousands): Nine Months Ended September 30, 2018 Stahlgruber Other Acquisitions Total Trade names and trademarks $ 173,946 $ 2,895 $ 176,841 Customer and supplier relationships 78,239 8,194 86,433 Software and other technology related assets 33,344 92 33,436 Total $ 285,529 $ 11,181 $ 296,710 The weighted-average amortization periods for our intangible assets acquired during the nine months ended September 30, 2018 and the year ended December 31, 2017 are as follows (in years): Nine Months Ended Year Ended September 30, 2018 December 31, 2017 Stahlgruber Other Acquisitions Total All Acquisitions Trade names and trademarks 19.9 20.0 19.9 11.2 Customer and supplier relationships 3.0 9.6 3.6 18.6 Software and other technology related assets 6.8 6.0 6.8 11.1 Covenants not to compete - - - 4.4 Total acquired finite-lived intangible assets 13.7 12.2 13.7 16.5 Our estimated useful lives for our finite-lived intangible assets are as follows: Method of Amortization Useful Life Trade names and trademarks Straight-line 4-30 years Customer and supplier relationships Accelerated 3-20 years Software and other technology related assets Straight-line 3-15 years Covenants not to compete Straight-line 2-5 years Amortization expense for intangibles was $42 million and $96 million during the three and nine months ended September 30, 2018, respectively, and $26 million and $74 million during the three and nine months ended September 30, 2017, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2022 is $40 million (for the remaining three months of 2018), $136 million , $104 million , $75 million and $62 million , respectively. |
Equity Method Investments [Policy Text Block] | Our investment in unconsolidated subsidiaries was $157 million and $208 million as of September 30, 2018 and December 31, 2017, respectively. On December 1, 2016 , we acquired a 26.5% equity interest in Mekonomen AB ("Mekonomen") for an aggregate purchase price of $181 million . Headquartered in Stockholm, Sweden, Mekonomen is the leading independent car parts and service chain in the Nordic region of Europe, offering a range of products including spare parts and accessories for cars, and workshop services for consumers and businesses. As a result of the investment, we nominated two representatives for election to Mekonomen's board of directors; both representatives were subsequently elected to and continue to serve on the board of directors, including one as the chairman of the board. We are accounting for our interest in Mekonomen using the equity method of accounting, as our investment gives us the ability to exercise significant influence, but not control, over the investee. As of September 30, 2018, the book value of our investment in Mekonomen exceeded our share of the book value of Mekonomen's net assets by $64 million ; this difference is primarily related to goodwill and the fair value of other intangible assets. We are recording our equity in the net earnings of Mekonomen on a one quarter lag. We recorded equity losses of $20 million and $18 million during the three and nine months ended September 30, 2018, respectively, and equity in earnings of $3 million and $5 million during the three and nine months ended September 30, 2017 related to our investment in Mekonomen, including adjustments to convert the results to GAAP and to recognize the impact of our purchase accounting adjustments. In May 2018 and May 2017, we received cash dividends of $8 million (SEK 67 million ) and $7 million (SEK 67 million ), respectively, related to our investment in Mekonomen. On July 6, 2018, Mekonomen announced the acquisition of two automotive spare parts distributors in Denmark and Poland. The objective of the acquisition is to strengthen Mekonomen's position in the sale of automotive spare parts in northern Europe and to establish a strong market position in Denmark and Poland, where Mekonomen has no current operations. The acquisition is partially being financed by a rights issue with preferential rights for Mekonomen's existing shareholders, who were given the right to subscribe for four new Mekonomen shares per seven existing owned shares at a discounted share price. On October 5, 2018, we subscribed for our pro rata share in the rights issue giving us the right to acquire an additional $48 million of equity in Mekonomen at a discounted share price, retaining our 26.5% equity interest. We recorded a derivative instrument of $29 million in Other assets on our Unaudited Condensed Consolidated Balance Sheets, which represents our right to acquire Mekonomen shares at a discount. We are measuring the derivative instrument at fair value, and we recorded a $3 million gain on our fair value remeasurement during the three months ended September 30, 2018; the gain is recorded in Other income, net on the Unaudited Condensed Consolidated Statements of Income. In the fourth quarter, we will record an $8 million loss related to the settlement of the derivative instrument in October 2018 due to a decrease in the Mekonomen share price from the last day of the third quarter to the settlement date. We evaluated our investment in Mekonomen for other-than-temporary impairment as of September 30, 2018, and concluded the decline in fair value was other-than-temporary due to a prolonged and significant stock price decrease. Therefore, we recognized an other-than-temporary impairment of $23 million , which represents the difference in the carrying value and the fair value of our investment in Mekonomen. The fair value of our investment in Mekonomen was determined using the Mekonomen share price as of September 30, 2018. The impairment charge is recorded in Equity in (losses) earnings of unconsolidated subsidiaries in our Unaudited Condensed Consolidated Statements of Income. Equity in losses and earnings from our investment in Mekonomen are reported in the Europe segment. As a result of the impairment charge, the Level 1 fair value of our equity investment in the publicly traded Mekonomen common stock at September 30, 2018 approximated the carrying value of $134 million . |
Warranty Reserve | Some of our salvage mechanical products are sold with a standard six month warranty against defects. Additionally, some of our remanufactured engines are sold with a standard three year warranty against defects. We also provide a limited lifetime warranty for certain of our aftermarket products. These assurance-type warranties are not considered a separate performance obligation, and thus no transaction price is allocated to them. We record the warranty costs in Cost of goods sold on our Unaudited Condensed Consolidated Statements of Income. Our warranty reserve is calculated using historical claim information to project future warranty claims activity and is recorded within Other accrued expenses and Other noncurrent liabilities on our Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments. The changes in the warranty reserve are as follows (in thousands): Balance as of December 31, 2017 $ 23,151 Warranty expense 33,670 Warranty claims (31,980 ) Balance as of September 30, 2018 $ 24,841 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adoption of New Revenue Standard In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). This update outlines a new comprehensive revenue recognition model that supersedes the prior revenue recognition guidance and requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB has issued several updates to ASU 2014-09, which collectively with ASU 2014-09, represent the FASB Accounting Standards Codification Topic 606 (“ASC 606”). On January 1, 2018, we adopted ASC 606 for all contracts using the modified retrospective method, which means the historical periods are presented under the previous revenue standards with the cumulative net income effect being adjusted through retained earnings. Most of the changes resulting from our adoption of ASC 606 were changes in presentation within the Unaudited Condensed Consolidated Balance Sheets and the Unaudited Condensed Consolidated Statements of Income. Therefore, while we made adjustments to certain opening balances on our January 1, 2018 balance sheet, we made no adjustments to opening retained earnings. We expect the impact of the adoption of ASC 606 to be immaterial to our net income on an ongoing basis. See Note 5, "Revenue Recognition" for the required disclosures under ASC 606. With the adoption of ASC 606, we reclassified certain amounts related to variable consideration. Under ASC 606, we are required to present a refund liability and a returns asset within the Unaudited Condensed Consolidated Balance Sheet, whereas in periods prior to adoption, we presented the estimated margin impact of expected returns as a contra-asset within accounts receivable. Additionally, under ASC 606, the changes in the refund liability are reported in revenue, and the changes in the returns assets are reported in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. Prior to adoption, the change in the reserve for returns was generally reported as a net amount within revenue. As a result, the income statement presentation was adjusted concurrently with the balance sheet change beginning in 2018. The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 was as follows (in thousands): Balance as of December 31, 2017 Adjustments Due to ASC 606 Balance as of January 1, 2018 Balance Sheet Assets Accounts receivable $ 1,027,106 $ 38,511 $ 1,065,617 Prepaid expenses and other current assets 134,479 44,508 178,987 Liabilities Refund liability — 83,019 83,019 The impact of the adoption of ASC 606 on our Unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 and our Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2018 was as follows (in thousands): Balance as of September 30, 2018 As Reported Amounts Without Adoption of ASC 606 Effect of Change Higher/(Lower) Balance Sheet Assets Accounts receivable $ 1,255,876 $ 1,205,833 $ 50,043 Prepaid expenses and other current assets 200,944 144,255 56,689 Liabilities Refund liability 106,732 — 106,732 For the three months ended September 30, 2018 As Reported Amounts Without Adoption of ASC 606 Effect of Change Higher/(Lower) Income Statement Revenue $ 3,122,378 $ 3,123,468 $ (1,090 ) Cost of goods sold 1,925,180 1,925,107 73 Selling, general and administrative expenses 879,150 880,313 (1,163 ) For the nine months ended September 30, 2018 As Reported Amounts Without Adoption of ASC 606 Effect of Change Higher/(Lower) Income Statement Revenue $ 8,873,893 $ 8,882,558 $ (8,665 ) Cost of goods sold 5,460,845 5,467,061 (6,216 ) Selling, general and administrative expenses 2,472,085 2,474,534 (2,449 ) We have not included a table of the impact of the balance sheet adjustments on the Unaudited Condensed Consolidated Statement of Cash Flows as the adjustment will net to zero within the operating activities section of this statement. Under ASC 606, we have elected not to adjust consideration for the effect of a significant financing component at contract inception if the period between the transfer of goods to the customer and payment received from the customer is one year or less. Generally, our payment terms are short term in nature, but in some instances we may offer extended terms to customers exceeding one year such that interest would be accrued with respect to those contracts. The interest that would be accrued related to these contracts is immaterial at September 30, 2018. Under ASC 340, "Other Assets and Deferred Costs," we have elected to recognize incremental costs of obtaining a contract (commissions earned by our sales representatives on product sales) as an expense when incurred, as we believe the amortization period of the asset would be one year or less due to the short-term nature of our contracts. Other Recently Adopted Accounting Pronouncements During the first quarter of 2018, we adopted ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which changes how entities will recognize, measure, present and make disclosures about certain financial assets and financial liabilities. The adoption of ASU 2016-01 did not have a significant impact on our financial position, results of operations, cash flows or disclosures. During the first quarter of 2018, we adopted ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"), which includes guidance on classification for the following items: debt prepayment or debt extinguishment costs, settlement of zero coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and corporate-owned or bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and other separately identifiable cash flows where application of the predominance principle is prescribed. No adjustments were required in our Unaudited Condensed Consolidated Statement of Cash Flows upon adoption. Within our Unaudited Condensed Consolidating Statements of Cash Flows in Note 18, "Condensed Consolidating Financial Information ," we now present a new line item, Payments of deferred purchase price on receivables securitization, as a result of adopting ASU 2016-15; prior year cash flow information within this footnote has been recast to reflect the impact of adopting this accounting standard. Other than the addition of this new line item, there was no impact to our Unaudited Condensed Consolidating Statements of Cash Flows upon adoption. During the first quarter of 2018, we adopted ASU No. 2017-01, "Clarifying the Definition of a Business" (“ASU 2017-01”), which requires an evaluation of whether substantially all of the fair value of assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the transaction does not qualify as a business. The guidance also requires an acquired business to include at least one substantive process and narrows the definition of outputs. The adoption of ASU 2017-01 did not have a material impact on our unaudited condensed consolidated financial statements. During the first quarter of 2018, we adopted ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02"), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the reduction of the U.S. federal statutory income tax rate to 21% from 35% due to the enactment of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). In addition, under ASU 2018-02, an entity is required to provide certain disclosures regarding stranded tax effects. ASU 2018-02 is effective for fiscal years and interim periods beginning after December 15, 2018; early adoption is permitted. As a result of the adoption of ASU 2018-02, we recorded a $5 million reclassification to increase Accumulated Other Comprehensive (Loss) Income and decrease Retained Earnings. During the first quarter of 2018, we adopted ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" ("ASU 2017-07"), which requires presentation of the current service cost component of net periodic benefit expense with other current compensation expenses for the related employees, and requires presentation of the remaining components of net periodic benefit expense, such as interest, expected return on plan assets, and amortization of actuarial gains and losses, outside of operating income. ASU 2017-07 also specifies that, on a prospective basis, only the service cost component is eligible for capitalization into inventory or other assets. While the income statement classification provisions of ASU 2017-07 are applicable on a retrospective basis, due to the immaterial impact to our Unaudited Condensed Consolidated Statements of Income in prior periods, we did not recast prior period income statement information and adopted the classification provisions on a prospective basis. The change in the capitalization provisions under ASU 2017-07 did not have a material impact on our unaudited condensed consolidated financial statements. See Note 13, "Employee Benefit Plans ," for further disclosure on the components of net periodic benefit expense and classification of the components within our Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2018 and 2017. During the third quarter of 2018, the FASB issued ASU No. 2018-15, "Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" ("ASU 2018-15"). This update requires an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. ASU 2018-15 is effective for fiscal years and interim periods beginning after December 15, 2019; early adoption is permitted. We have adopted ASU 2018-15 in the third quarter of 2018 as we believe that our existing policy is consistent with the new guidance and thus no adjustments were required to be in compliance with this standard update. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, "Leases" ("ASU 2016-02"), to increase transparency and comparability by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between current GAAP and ASU 2016-02 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current GAAP. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The standard requires that entities apply the effects of these changes using a modified retrospective approach, which includes a number of optional practical expedients. While we are still in the process of quantifying the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements and related disclosures, we anticipate the adoption will materially affect our consolidated balance sheet and disclosures, as the majority of our operating leases will be recorded on the balance sheet under ASU 2016-02. While we do not anticipate the adoption of this accounting standard to have a material impact on our consolidated statements of income at this time, this conclusion may change as we finalize our assessment. In order to assist in our timely implementation of the new standard, we have purchased new software to track our leases. We have engaged a third party to assist with the implementation of the new software with an expectation to complete the implementation by the end of 2018. During the second quarter, we completed phase one of the software roll-out for our North America and Specialty operations. We are nearing completion of the phase one roll-out in our Europe operations as of the filing date of this Quarterly Report on Form 10-Q. In August 2017, the FASB issued ASU No. 2017-12, "Targeted Improvements to Accounting for Hedging Activities" ("ASU 2017-12"), which amends the hedge accounting recognition and presentation requirements in ASC 815 ("Derivatives and Hedging"). ASU 2017-12 significantly alters the hedge accounting model by making it easier for an entity to achieve and maintain hedge accounting and provides for accounting that better reflects an entity's risk management activities. ASU 2017-12 is effective for fiscal years and interim periods beginning after December 15, 2018; early adoption is permitted. Entities will adopt the provisions of ASU 2017-12 by applying a modified retrospective approach to existing hedging relationships as of the adoption date. At this time, we are still evaluating the impact of this standard on our financial statements. In August 2018, the FASB issued ASU No. 2018-13, "Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement" ("ASU 2018-13"), which removes, modifies, and adds certain disclosure requirements in ASC 820. ASU 2018-13 is effective for fiscal years and interim periods beginning after December 15, 2019; early adoption is permitted. We are in the process of evaluating the impact of this standard on our disclosures but do not believe that it will have a material impact. In August 2018, the FASB issued ASU No. 2018-14, "Disclosure Framework- Changes to the Disclosure Requirements for Defined Benefit Plans" ("ASU 2018-14"), which removes, modifies, and adds certain disclosure requirements to ASC 715-20. ASU 2018-14 is effective for fiscal years and interim periods beginning after December 15, 2020; early adoption is permitted. We are in the process of evaluating the impact of this standard on our disclosures. |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Purchase Price Allocations For Acquisitions | The purchase price allocations for the acquisitions completed during the nine months ended September 30, 2018 and the year ended December 31, 2017 are as follows (in thousands): Nine Months Ended Year Ended September 30, 2018 December, 31, 2017 Stahlgruber Other Acquisitions (2) Total All (1) Receivables $ 140,979 $ 15,369 $ 156,348 $ 73,782 Receivable reserves (2,818 ) (875 ) (3,693 ) (7,032 ) Inventories (3) 374,056 12,240 386,296 150,342 Prepaid expenses and other current assets 9,537 1,806 11,343 (295 ) Property , plant and equipment 260,661 6,089 266,750 41,039 Goodwill 929,376 68,254 997,630 314,817 Other intangibles 285,529 16,315 301,844 181,216 Other assets 16,625 37 16,662 3,257 Deferred income taxes (97,805 ) (716 ) (98,521 ) (65,087 ) Current liabilities assumed (343,221 ) (20,662 ) (363,883 ) (111,484 ) Debt assumed (65,852 ) (4,410 ) (70,262 ) (33,586 ) Other noncurrent liabilities assumed (4) (81,689 ) (9,993 ) (91,682 ) (1,917 ) Noncontrolling interest (44,250 ) — (44,250 ) — Contingent consideration liabilities — (3,107 ) (3,107 ) (6,234 ) Other purchase price obligations (2,349 ) 3,853 1,504 (5,074 ) Stock issued (251,334 ) — (251,334 ) — Notes issued — (6,948 ) (6,948 ) (20,187 ) Settlement of pre-existing balances — — — 242 Gains on bargain purchases (5) — (328 ) (328 ) (3,870 ) Settlement of other purchase price obligations (non-interest bearing) — 1,698 1,698 3,159 Cash used in acquisitions, net of cash acquired $ 1,127,445 $ 78,622 $ 1,206,067 $ 513,088 |
Pro Forma Effect Of Businesses Acquired | The following pro forma summary presents the effect of the businesses acquired during the nine months ended September 30, 2018 as though the businesses had been acquired as of January 1, 2017, and the businesses acquired during the year ended December 31, 2017 as though they had been acquired as of January 1, 2016. The pro forma adjustments are based upon unaudited financial information of the acquired entities (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Revenue, as reported $ 3,122,378 $ 2,465,800 $ 8,873,893 $ 7,267,054 Revenue of purchased businesses for the period prior to acquisition: Stahlgruber — 473,326 815,405 1,289,083 Other acquisitions 6,641 83,893 51,132 387,844 Pro forma revenue $ 3,129,019 $ 3,023,019 $ 9,740,430 $ 8,943,981 Income from continuing operations, as reported (1) $ 134,480 $ 122,381 $ 445,109 $ 414,104 Income from continuing operations of purchased businesses for the period prior to acquisition, and pro forma purchase accounting adjustments: Stahlgruber 5,054 6,061 14,114 5,298 Other acquisitions 161 3,478 1,588 17,014 Acquisition related expenses, net of tax (2) 681 2,301 13,986 5,010 Pro forma income from continuing operations 140,376 134,221 474,797 441,426 Less: Pro forma net income attributable to noncontrolling interest — 888 2,799 2,157 Pro forma income from continuing operations attributable to LKQ stockholders $ 140,376 $ 133,333 $ 471,998 $ 439,269 Earnings per share from continuing operations, basic - as reported $ 0.42 $ 0.40 $ 1.42 $ 1.34 Effect of purchased businesses for the period prior to acquisition: Stahlgruber 0.02 0.02 0.05 0.02 Other acquisitions 0.00 0.01 0.01 0.06 Acquisition related expenses, net of tax (2) 0.00 0.01 0.04 0.02 Impact of share issuance from acquisition of Stahlgruber — (0.01 ) (0.02 ) (0.03 ) Pro forma earnings per share from continuing operations, basic (3) 0.44 0.42 1.49 1.39 Less: Pro forma net income attributable to noncontrolling interest — 0.00 0.01 0.01 Pro forma income from continuing operations attributable to LKQ stockholders $ 0.44 $ 0.42 $ 1.49 $ 1.39 Earnings per share from continuing operations, diluted - as reported $ 0.42 $ 0.39 $ 1.41 $ 1.33 Effect of purchased businesses for the period prior to acquisition: Stahlgruber 0.02 0.02 0.04 0.02 Other acquisitions 0.00 0.01 0.01 0.05 Acquisition related expenses, net of tax (2) 0.00 0.01 0.04 0.02 Impact of share issuance from acquisition of Stahlgruber — (0.01 ) (0.02 ) (0.03 ) Pro forma earnings per share from continuing operations, diluted (3) 0.44 0.42 1.49 1.39 Less: Pro forma net income attributable to noncontrolling interest — 0.00 0.01 0.01 Pro forma income from continuing operations attributable to LKQ stockholders $ 0.44 $ 0.42 $ 1.48 $ 1.38 |
Discontinued Operations Discont
Discontinued Operations Discontinued Operations Income statement (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | The following table summarizes the operating results of the Company’s discontinued operations related to the sale described above for the nine months ended September 30, 2017, as presented in Net loss from discontinued operations on the Unaudited Condensed Consolidated Statements of Income (in thousands): Nine Months Ended September 30, 2017 Revenue $ 111,130 Cost of goods sold 100,084 Selling, general and administrative expenses 8,369 Operating income 2,677 Interest and other income, net (1) 1,204 Income from discontinued operations before taxes 3,881 Provision for income taxes 3,598 Equity in loss of unconsolidated subsidiaries (534 ) Loss from discontinued operations, net of tax (251 ) Loss on sale of discontinued operations, net of tax (2) (4,280 ) Net loss from discontinued operations $ (4,531 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Line Items] | |
Warranty Reserve | Some of our salvage mechanical products are sold with a standard six month warranty against defects. Additionally, some of our remanufactured engines are sold with a standard three year warranty against defects. We also provide a limited lifetime warranty for certain of our aftermarket products. These assurance-type warranties are not considered a separate performance obligation, and thus no transaction price is allocated to them. We record the warranty costs in Cost of goods sold on our Unaudited Condensed Consolidated Statements of Income. Our warranty reserve is calculated using historical claim information to project future warranty claims activity and is recorded within Other accrued expenses and Other noncurrent liabilities on our Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments. The changes in the warranty reserve are as follows (in thousands): Balance as of December 31, 2017 $ 23,151 Warranty expense 33,670 Warranty claims (31,980 ) Balance as of September 30, 2018 $ 24,841 |
Equity Method Investments [Policy Text Block] | Our investment in unconsolidated subsidiaries was $157 million and $208 million as of September 30, 2018 and December 31, 2017, respectively. On December 1, 2016 , we acquired a 26.5% equity interest in Mekonomen AB ("Mekonomen") for an aggregate purchase price of $181 million . Headquartered in Stockholm, Sweden, Mekonomen is the leading independent car parts and service chain in the Nordic region of Europe, offering a range of products including spare parts and accessories for cars, and workshop services for consumers and businesses. As a result of the investment, we nominated two representatives for election to Mekonomen's board of directors; both representatives were subsequently elected to and continue to serve on the board of directors, including one as the chairman of the board. We are accounting for our interest in Mekonomen using the equity method of accounting, as our investment gives us the ability to exercise significant influence, but not control, over the investee. As of September 30, 2018, the book value of our investment in Mekonomen exceeded our share of the book value of Mekonomen's net assets by $64 million ; this difference is primarily related to goodwill and the fair value of other intangible assets. We are recording our equity in the net earnings of Mekonomen on a one quarter lag. We recorded equity losses of $20 million and $18 million during the three and nine months ended September 30, 2018, respectively, and equity in earnings of $3 million and $5 million during the three and nine months ended September 30, 2017 related to our investment in Mekonomen, including adjustments to convert the results to GAAP and to recognize the impact of our purchase accounting adjustments. In May 2018 and May 2017, we received cash dividends of $8 million (SEK 67 million ) and $7 million (SEK 67 million ), respectively, related to our investment in Mekonomen. On July 6, 2018, Mekonomen announced the acquisition of two automotive spare parts distributors in Denmark and Poland. The objective of the acquisition is to strengthen Mekonomen's position in the sale of automotive spare parts in northern Europe and to establish a strong market position in Denmark and Poland, where Mekonomen has no current operations. The acquisition is partially being financed by a rights issue with preferential rights for Mekonomen's existing shareholders, who were given the right to subscribe for four new Mekonomen shares per seven existing owned shares at a discounted share price. On October 5, 2018, we subscribed for our pro rata share in the rights issue giving us the right to acquire an additional $48 million of equity in Mekonomen at a discounted share price, retaining our 26.5% equity interest. We recorded a derivative instrument of $29 million in Other assets on our Unaudited Condensed Consolidated Balance Sheets, which represents our right to acquire Mekonomen shares at a discount. We are measuring the derivative instrument at fair value, and we recorded a $3 million gain on our fair value remeasurement during the three months ended September 30, 2018; the gain is recorded in Other income, net on the Unaudited Condensed Consolidated Statements of Income. In the fourth quarter, we will record an $8 million loss related to the settlement of the derivative instrument in October 2018 due to a decrease in the Mekonomen share price from the last day of the third quarter to the settlement date. We evaluated our investment in Mekonomen for other-than-temporary impairment as of September 30, 2018, and concluded the decline in fair value was other-than-temporary due to a prolonged and significant stock price decrease. Therefore, we recognized an other-than-temporary impairment of $23 million , which represents the difference in the carrying value and the fair value of our investment in Mekonomen. The fair value of our investment in Mekonomen was determined using the Mekonomen share price as of September 30, 2018. The impairment charge is recorded in Equity in (losses) earnings of unconsolidated subsidiaries in our Unaudited Condensed Consolidated Statements of Income. Equity in losses and earnings from our investment in Mekonomen are reported in the Europe segment. As a result of the impairment charge, the Level 1 fair value of our equity investment in the publicly traded Mekonomen common stock at September 30, 2018 approximated the carrying value of $134 million . |
Property and Equipment | Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant 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. Our estimated useful lives are as follows: Land improvements 10-20 years Buildings and improvements 20-40 years Machinery and equipment 3-20 years Computer equipment and software 3-10 years Vehicles and trailers 3-10 years Furniture and fixtures 5-7 years Property, plant and equipment consists of the following (in thousands): September 30, December 31, 2018 2017 Land and improvements $ 189,404 $ 137,790 Buildings and improvements 373,607 233,078 Machinery and equipment 618,209 521,526 Computer equipment and software 142,719 133,753 Vehicles and trailers 177,778 161,269 Furniture and fixtures 52,595 31,794 Leasehold improvements 283,603 257,506 1,837,915 1,476,716 Less—Accumulated depreciation (691,086 ) (606,112 ) Construction in progress 54,174 42,485 Total property, plant and equipment, net $ 1,201,003 $ 913,089 Property, Plant and Equipment Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant 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. Our estimated useful lives are as follows: Land improvements 10-20 years Buildings and improvements 20-40 years Machinery and equipment 3-20 years Computer equipment and software 3-10 years Vehicles and trailers 3-10 years Furniture and fixtures 5-7 years Property, plant and equipment consists of the following (in thousands): September 30, December 31, 2018 2017 Land and improvements $ 189,404 $ 137,790 Buildings and improvements 373,607 233,078 Machinery and equipment 618,209 521,526 Computer equipment and software 142,719 133,753 Vehicles and trailers 177,778 161,269 Furniture and fixtures 52,595 31,794 Leasehold improvements 283,603 257,506 1,837,915 1,476,716 Less—Accumulated depreciation (691,086 ) (606,112 ) Construction in progress 54,174 42,485 Total property, plant and equipment, net $ 1,201,003 $ 913,089 The components of opening property, plant and equipment acquired as part of our acquisition of Stahlgruber in May 2018 are as follows (in thousands): Gross Amount Land and improvements $ 47,281 Buildings and improvements 125,649 Machinery and equipment 49,384 Computer equipment and software 3,760 Vehicles and trailers 643 Furniture and fixtures 28,535 Leasehold improvements 1,890 257,142 Construction in progress 3,519 Total property, plant and equipment $ 260,661 We record depreciation expense associated with our refurbishing, remanufacturing, manufacturing and furnace operations as well as our distribution centers in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. All other depreciation expense is reported in Depreciation and amortization. Total depreciation expense for the three and nine months ended September 30, 2018 was $39 million and $115 million , respectively, and $34 million and $93 million during the three and nine months ended September 30, 2017, respectively. |
Schedule Of Inventory | Inventories consist of the following (in thousands): September 30, December 31, 2018 2017 Aftermarket and refurbished products $ 2,287,776 $ 1,877,653 Salvage and remanufactured products 484,761 487,108 Manufactured products 22,357 16,022 Total inventories $ 2,794,894 $ 2,380,783 |
Changes In Carrying Amount Of Goodwill | Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer and supplier relationships, software and other technology related assets, and covenants not to compete. The changes in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2018 are as follows (in thousands): North America Europe Specialty Total Balance as of January 1, 2018 $ 1,709,354 $ 1,414,898 $ 412,259 $ 3,536,511 Business acquisitions and adjustments to previously recorded goodwill 1,073 1,002,277 (5,720 ) 997,630 Exchange rate effects (3,049 ) (55,901 ) 75 (58,875 ) Balance as of September 30, 2018 $ 1,707,378 $ 2,361,274 $ 406,614 $ 4,475,266 During the nine months ended September 30, 2018, we recorded $ 929 million of goodwill related to our acquisition of Stahlgruber. See Note 2, "Business Combinations" for further information on our acquisitions. |
Schedule of Finite-Lived and Indefinite-Lived Intangibles [Table Text Block] | The components of other intangibles, net are as follows (in thousands): September 30, 2018 December 31, 2017 Intangible assets subject to amortization $ 872,072 $ 664,969 Indefinite-lived intangible assets Trademarks 81,300 78,800 Total $ 953,372 $ 743,769 |
Cumulative Impact of ASC 606 on Balance Sheet as of the Beginning of Fiscal Year | The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 was as follows (in thousands): Balance as of December 31, 2017 Adjustments Due to ASC 606 Balance as of January 1, 2018 Balance Sheet Assets Accounts receivable $ 1,027,106 $ 38,511 $ 1,065,617 Prepaid expenses and other current assets 134,479 44,508 178,987 Liabilities Refund liability — 83,019 83,019 |
Schedule of Estimated Useful Lives, Finite Lived Intangible Assets [Table Text Block] | Our estimated useful lives for our finite-lived intangible assets are as follows: Method of Amortization Useful Life Trade names and trademarks Straight-line 4-30 years Customer and supplier relationships Accelerated 3-20 years Software and other technology related assets Straight-line 3-15 years Covenants not to compete Straight-line 2-5 years |
Components Of Other Intangibles | The components of intangible assets subject to amortization are as follows (in thousands): September 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Trade names and trademarks $ 495,839 $ (88,805 ) $ 407,034 $ 327,332 $ (75,095 ) $ 252,237 Customer and supplier relationships 586,221 (223,085 ) 363,136 510,113 (167,532 ) 342,581 Software and other technology related assets 172,391 (73,760 ) 98,631 124,049 (59,081 ) 64,968 Covenants not to compete 13,488 (10,217 ) 3,271 14,981 (9,798 ) 5,183 Total $ 1,267,939 $ (395,867 ) $ 872,072 $ 976,475 $ (311,506 ) $ 664,969 Useful Life - Intangible Assets Method of Amortization Useful Life Min Useful Life Max Trade names and trademarks Straight-line 4 years 30 years Customer and supplier relationships Accelerated 3 years 20 years Software and other technology related assets Straight-line 3 years 15 years Covenants not to compete Straight-line 2 years 5 years |
Cumulative Effect of Adoption of ASC 606 on Consolidated Financial Statements | The impact of the adoption of ASC 606 on our Unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 and our Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2018 was as follows (in thousands): Balance as of September 30, 2018 As Reported Amounts Without Adoption of ASC 606 Effect of Change Higher/(Lower) Balance Sheet Assets Accounts receivable $ 1,255,876 $ 1,205,833 $ 50,043 Prepaid expenses and other current assets 200,944 144,255 56,689 Liabilities Refund liability 106,732 — 106,732 For the three months ended September 30, 2018 As Reported Amounts Without Adoption of ASC 606 Effect of Change Higher/(Lower) Income Statement Revenue $ 3,122,378 $ 3,123,468 $ (1,090 ) Cost of goods sold 1,925,180 1,925,107 73 Selling, general and administrative expenses 879,150 880,313 (1,163 ) For the nine months ended September 30, 2018 As Reported Amounts Without Adoption of ASC 606 Effect of Change Higher/(Lower) Income Statement Revenue $ 8,873,893 $ 8,882,558 $ (8,665 ) Cost of goods sold 5,460,845 5,467,061 (6,216 ) Selling, general and administrative expenses 2,472,085 2,474,534 (2,449 ) |
Schedule of Product Warranty Liability [Table Text Block] | The changes in the warranty reserve are as follows (in thousands): Balance as of December 31, 2017 $ 23,151 Warranty expense 33,670 Warranty claims (31,980 ) Balance as of September 30, 2018 $ 24,841 The changes in deferred service-type warranty revenue are as follows (in thousands): Balance as of January 1, 2018 $ 19,465 Additional warranty revenue deferred 28,889 Warranty revenue recognized (25,200 ) Balance as of September 30, 2018 $ 23,154 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The components of intangible assets acquired as part of our acquisitions in 2018 are as follows (in thousands): Nine Months Ended September 30, 2018 Stahlgruber Other Acquisitions Total Trade names and trademarks $ 173,946 $ 2,895 $ 176,841 Customer and supplier relationships 78,239 8,194 86,433 Software and other technology related assets 33,344 92 33,436 Total $ 285,529 $ 11,181 $ 296,710 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life [Table Text Block] | The weighted-average amortization periods for our intangible assets acquired during the nine months ended September 30, 2018 and the year ended December 31, 2017 are as follows (in years): Nine Months Ended Year Ended September 30, 2018 December 31, 2017 Stahlgruber Other Acquisitions Total All Acquisitions Trade names and trademarks 19.9 20.0 19.9 11.2 Customer and supplier relationships 3.0 9.6 3.6 18.6 Software and other technology related assets 6.8 6.0 6.8 11.1 Covenants not to compete - - - 4.4 Total acquired finite-lived intangible assets 13.7 12.2 13.7 16.5 |
Intangible Assets | Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer and supplier relationships, software and other technology related assets, and covenants not to compete. The changes in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2018 are as follows (in thousands): North America Europe Specialty Total Balance as of January 1, 2018 $ 1,709,354 $ 1,414,898 $ 412,259 $ 3,536,511 Business acquisitions and adjustments to previously recorded goodwill 1,073 1,002,277 (5,720 ) 997,630 Exchange rate effects (3,049 ) (55,901 ) 75 (58,875 ) Balance as of September 30, 2018 $ 1,707,378 $ 2,361,274 $ 406,614 $ 4,475,266 During the nine months ended September 30, 2018, we recorded $ 929 million of goodwill related to our acquisition of Stahlgruber. See Note 2, "Business Combinations" for further information on our acquisitions. The components of other intangibles, net are as follows (in thousands): September 30, 2018 December 31, 2017 Intangible assets subject to amortization $ 872,072 $ 664,969 Indefinite-lived intangible assets Trademarks 81,300 78,800 Total $ 953,372 $ 743,769 The components of intangible assets subject to amortization are as follows (in thousands): September 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Trade names and trademarks $ 495,839 $ (88,805 ) $ 407,034 $ 327,332 $ (75,095 ) $ 252,237 Customer and supplier relationships 586,221 (223,085 ) 363,136 510,113 (167,532 ) 342,581 Software and other technology related assets 172,391 (73,760 ) 98,631 124,049 (59,081 ) 64,968 Covenants not to compete 13,488 (10,217 ) 3,271 14,981 (9,798 ) 5,183 Total $ 1,267,939 $ (395,867 ) $ 872,072 $ 976,475 $ (311,506 ) $ 664,969 The components of intangible assets acquired as part of our acquisitions in 2018 are as follows (in thousands): Nine Months Ended September 30, 2018 Stahlgruber Other Acquisitions Total Trade names and trademarks $ 173,946 $ 2,895 $ 176,841 Customer and supplier relationships 78,239 8,194 86,433 Software and other technology related assets 33,344 92 33,436 Total $ 285,529 $ 11,181 $ 296,710 The weighted-average amortization periods for our intangible assets acquired during the nine months ended September 30, 2018 and the year ended December 31, 2017 are as follows (in years): Nine Months Ended Year Ended September 30, 2018 December 31, 2017 Stahlgruber Other Acquisitions Total All Acquisitions Trade names and trademarks 19.9 20.0 19.9 11.2 Customer and supplier relationships 3.0 9.6 3.6 18.6 Software and other technology related assets 6.8 6.0 6.8 11.1 Covenants not to compete - - - 4.4 Total acquired finite-lived intangible assets 13.7 12.2 13.7 16.5 Our estimated useful lives for our finite-lived intangible assets are as follows: Method of Amortization Useful Life Trade names and trademarks Straight-line 4-30 years Customer and supplier relationships Accelerated 3-20 years Software and other technology related assets Straight-line 3-15 years Covenants not to compete Straight-line 2-5 years Amortization expense for intangibles was $42 million and $96 million during the three and nine months ended September 30, 2018, respectively, and $26 million and $74 million during the three and nine months ended September 30, 2017, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2022 is $40 million (for the remaining three months of 2018), $136 million , $104 million , $75 million and $62 million , respectively. |
Financial Statement Information
Financial Statement Information Property, Plant and Equipment [Table Text Block] (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Policy [Policy Text Block] | Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant 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. Our estimated useful lives are as follows: Land improvements 10-20 years Buildings and improvements 20-40 years Machinery and equipment 3-20 years Computer equipment and software 3-10 years Vehicles and trailers 3-10 years Furniture and fixtures 5-7 years Property, plant and equipment consists of the following (in thousands): September 30, December 31, 2018 2017 Land and improvements $ 189,404 $ 137,790 Buildings and improvements 373,607 233,078 Machinery and equipment 618,209 521,526 Computer equipment and software 142,719 133,753 Vehicles and trailers 177,778 161,269 Furniture and fixtures 52,595 31,794 Leasehold improvements 283,603 257,506 1,837,915 1,476,716 Less—Accumulated depreciation (691,086 ) (606,112 ) Construction in progress 54,174 42,485 Total property, plant and equipment, net $ 1,201,003 $ 913,089 Property, Plant and Equipment Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant 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. Our estimated useful lives are as follows: Land improvements 10-20 years Buildings and improvements 20-40 years Machinery and equipment 3-20 years Computer equipment and software 3-10 years Vehicles and trailers 3-10 years Furniture and fixtures 5-7 years Property, plant and equipment consists of the following (in thousands): September 30, December 31, 2018 2017 Land and improvements $ 189,404 $ 137,790 Buildings and improvements 373,607 233,078 Machinery and equipment 618,209 521,526 Computer equipment and software 142,719 133,753 Vehicles and trailers 177,778 161,269 Furniture and fixtures 52,595 31,794 Leasehold improvements 283,603 257,506 1,837,915 1,476,716 Less—Accumulated depreciation (691,086 ) (606,112 ) Construction in progress 54,174 42,485 Total property, plant and equipment, net $ 1,201,003 $ 913,089 The components of opening property, plant and equipment acquired as part of our acquisition of Stahlgruber in May 2018 are as follows (in thousands): Gross Amount Land and improvements $ 47,281 Buildings and improvements 125,649 Machinery and equipment 49,384 Computer equipment and software 3,760 Vehicles and trailers 643 Furniture and fixtures 28,535 Leasehold improvements 1,890 257,142 Construction in progress 3,519 Total property, plant and equipment $ 260,661 We record depreciation expense associated with our refurbishing, remanufacturing, manufacturing and furnace operations as well as our distribution centers in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. All other depreciation expense is reported in Depreciation and amortization. Total depreciation expense for the three and nine months ended September 30, 2018 was $39 million and $115 million , respectively, and $34 million and $93 million during the three and nine months ended September 30, 2017, respectively. |
Property, Plant and Equipment [Table Text Block] | Useful Life - Property Plant & Equipment Useful Life Min Useful Life Max Land improvements 10 years 20 years Buildings and improvements 20 years 40 years Machinery and equipment 3 years 20 years Computer equipment and software 3 years 10 years Vehicles and trailers 3 years 10 years Furniture and fixtures 5 years 7 years |
Financial Statement Informati_2
Financial Statement Information Finite-Lived Intangible Assets Acquired as Part of Business Combination (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Schedule of Goodwill [Table Text Block] | Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer and supplier relationships, software and other technology related assets, and covenants not to compete. The changes in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2018 are as follows (in thousands): North America Europe Specialty Total Balance as of January 1, 2018 $ 1,709,354 $ 1,414,898 $ 412,259 $ 3,536,511 Business acquisitions and adjustments to previously recorded goodwill 1,073 1,002,277 (5,720 ) 997,630 Exchange rate effects (3,049 ) (55,901 ) 75 (58,875 ) Balance as of September 30, 2018 $ 1,707,378 $ 2,361,274 $ 406,614 $ 4,475,266 During the nine months ended September 30, 2018, we recorded $ 929 million of goodwill related to our acquisition of Stahlgruber. See Note 2, "Business Combinations" for further information on our acquisitions. | |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The components of intangible assets acquired as part of our acquisitions in 2018 are as follows (in thousands): Nine Months Ended September 30, 2018 Stahlgruber Other Acquisitions Total Trade names and trademarks $ 173,946 $ 2,895 $ 176,841 Customer and supplier relationships 78,239 8,194 86,433 Software and other technology related assets 33,344 92 33,436 Total $ 285,529 $ 11,181 $ 296,710 | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 16 years 6 months | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life [Table Text Block] | The weighted-average amortization periods for our intangible assets acquired during the nine months ended September 30, 2018 and the year ended December 31, 2017 are as follows (in years): Nine Months Ended Year Ended September 30, 2018 December 31, 2017 Stahlgruber Other Acquisitions Total All Acquisitions Trade names and trademarks 19.9 20.0 19.9 11.2 Customer and supplier relationships 3.0 9.6 3.6 18.6 Software and other technology related assets 6.8 6.0 6.8 11.1 Covenants not to compete - - - 4.4 Total acquired finite-lived intangible assets 13.7 12.2 13.7 16.5 |
Revenue Recognition Disaggregat
Revenue Recognition Disaggregation of Revenue (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | |
Disaggregation of Revenue [Table Text Block] | The following table sets forth our revenue by category, with our parts and services revenue further disaggregated by reportable segment (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 North America $ 1,109,067 $ 1,051,470 $ 3,447,074 $ 3,207,001 Europe 1,464,049 952,765 3,781,091 2,659,804 Specialty 388,865 329,522 1,151,172 1,005,776 Parts and services 2,961,981 2,333,757 8,379,337 6,872,581 Other 160,397 132,043 494,556 394,473 Total revenue $ 3,122,378 $ 2,465,800 $ 8,873,893 $ 7,267,054 |
Revenue Recognition Product War
Revenue Recognition Product Warranty Liability (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability [Table Text Block] | The changes in the warranty reserve are as follows (in thousands): Balance as of December 31, 2017 $ 23,151 Warranty expense 33,670 Warranty claims (31,980 ) Balance as of September 30, 2018 $ 24,841 The changes in deferred service-type warranty revenue are as follows (in thousands): Balance as of January 1, 2018 $ 19,465 Additional warranty revenue deferred 28,889 Warranty revenue recognized (25,200 ) Balance as of September 30, 2018 $ 23,154 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes activity related to our RSUs under the Equity Incentive Plan for the nine months ended September 30, 2018: Number Outstanding Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) (1) Unvested as of January 1, 2018 1,624,390 $ 29.94 Granted 601,802 $ 42.58 Vested (698,903 ) $ 30.07 Forfeited / Canceled (33,767 ) $ 33.28 Unvested as of September 30, 2018 1,493,522 $ 34.89 Expected to vest after September 30, 2018 1,344,519 $ 34.88 2.6 $ 42,581 |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes activity related to our stock options under the Equity Incentive Plan for the nine months ended September 30, 2018: Number Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) (1) Balance as of January 1, 2018 1,738,073 $ 9.20 Exercised (441,495 ) $ 8.54 $ 12,678 Canceled (509 ) $ 32.31 Balance as of September 30, 2018 1,296,069 $ 9.42 1.0 $ 28,862 Exercisable as of September 30, 2018 1,296,069 $ 9.42 1.0 $ 28,862 |
Earnings Per Share Schedule of
Earnings Per Share Schedule of Earnings Per Share, Basic and Diluted (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Schedule of Earnings Per Share, Basic and Diluted [Line Items] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following chart sets forth the computation of earnings per share (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Income from continuing operations $ 134,480 $ 122,381 $ 445,109 $ 414,104 Denominator for basic earnings per share—Weighted-average shares outstanding 318,082 308,909 313,417 308,451 Effect of dilutive securities: RSUs 333 485 452 501 Stock options 987 1,385 1,082 1,543 Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding 319,402 310,779 314,951 310,495 Basic earnings per share from continuing operations $ 0.42 $ 0.40 $ 1.42 $ 1.34 Diluted earnings per share from continuing operations $ 0.42 $ 0.39 $ 1.41 $ 1.33 |
Earnings Per Share Schedule o_2
Earnings Per Share Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The following table sets forth the number of employee stock-based compensation awards outstanding but not included in the computation of diluted earnings per share because their effect would have been antidilutive for the three and nine months ended September 30, 2018 and 2017 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Antidilutive securities: RSUs 375 — 317 50 Stock options — — — 51 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands): Three Months Ended September 30, 2018 Foreign Unrealized Gain (Loss) Unrealized (Loss) Gain on Pension Plans Other Comprehensive Income from Unconsolidated Subsidiaries Accumulated Beginning balance $ (125,753 ) $ 19,684 $ (10,200 ) $ 208 $ (116,061 ) Pretax (loss) income (23,405 ) 7,681 1,217 — (14,507 ) Income tax effect 2,454 (1,796 ) 41 — 699 Reclassification of unrealized (gain) loss — (7,284 ) 21 — (7,263 ) Reclassification of deferred income taxes — 1,703 (5 ) — 1,698 Other comprehensive income from unconsolidated subsidiaries — — — 643 643 Ending balance $ (146,704 ) $ 19,988 $ (8,926 ) $ 851 $ (134,791 ) Three Months Ended September 30, 2017 Foreign Unrealized Gain Unrealized (Loss) Gain Other Comprehensive Loss from Unconsolidated Subsidiaries Accumulated Beginning balance $ (157,353 ) $ 10,324 $ (6,640 ) $ (601 ) $ (154,270 ) Pretax income (loss) 63,769 (15,402 ) — — 48,367 Income tax effect (4,151 ) 5,683 — — 1,532 Reclassification of unrealized loss (gain) — 12,591 (200 ) — 12,391 Reclassification of deferred income taxes — (4,648 ) 50 — (4,598 ) Other comprehensive loss from unconsolidated subsidiaries — — — (1,034 ) (1,034 ) Ending balance $ (97,735 ) $ 8,548 $ (6,790 ) $ (1,635 ) $ (97,612 ) Nine Months Ended September 30, 2018 Foreign Unrealized Gain (Loss) on Cash Flow Hedges Unrealized (Loss) Gain on Pension Plans Other Comprehensive (Loss) Income from Unconsolidated Subsidiaries Accumulated Beginning balance $ (71,933 ) $ 11,538 $ (8,772 ) $ (1,309 ) $ (70,476 ) Pretax (loss) income (82,137 ) 33,901 (102 ) — (48,338 ) Income tax effect 4,507 (7,926 ) (125 ) — (3,544 ) Reclassification of unrealized (gain) loss — (26,117 ) 97 — (26,020 ) Reclassification of deferred income taxes — 6,106 (24 ) — 6,082 Other comprehensive income from unconsolidated subsidiaries — — — 2,160 2,160 Adoption of ASU 2018-02 2,859 2,486 — — 5,345 Ending balance $ (146,704 ) $ 19,988 $ (8,926 ) $ 851 $ (134,791 ) Nine Months Ended September 30, 2017 Foreign Unrealized Gain Unrealized (Loss) Gain Other Comprehensive Loss from Unconsolidated Subsidiaries Accumulated Beginning balance $ (272,529 ) $ 8,091 $ (2,737 ) $ — $ (267,175 ) Pretax income (loss) 177,434 (44,749 ) 112 — 132,797 Income tax effect (4,151 ) 16,463 (43 ) — 12,269 Reclassification of unrealized loss (gain) — 45,551 (921 ) — 44,630 Reclassification of deferred income taxes — (16,808 ) 235 — (16,573 ) Disposal of business, net 1,511 — (3,436 ) — (1,925 ) Other comprehensive loss from unconsolidated subsidiaries — — — (1,635 ) (1,635 ) Ending balance $ (97,735 ) $ 8,548 $ (6,790 ) $ (1,635 ) $ (97,612 ) Net unrealized gains on our interest rate swaps totaling $2 million and $5 million were reclassified to Interest expense, net in our Unaudited Condensed Consolidated Statements of Income during the three and nine months ended September 30, 2018, respectively, compared to a loss of $1 million during the nine months ended September 30, 2017; the amount reclassified to Interest expense, net during the three months ended September 30, 2017 was immaterial. We also reclassified gains of $2 million to Interest expense, net related to the foreign currency forward component of our cross currency swaps during each of the three months ended September 30, 2018 and 2017, and gains of $6 million during each of the nine months ended September 30, 2018 and 2017. Also related to our cross currency swaps, we reclassified gains of $3 million and $15 million to Other income, net in our Unaudited Condensed Consolidated Statements of Income during the three and nine months ended September 30, 2018, respectively, compared to losses of $15 million and $50 million during the three and nine months ended September 30, 2017; these gains and losses offset the impact of the remeasurement of the underlying contracts. The deferred income taxes related to our cash flow hedges were reclassified from Accumulated other comprehensive income (loss) to provision for income taxes. As a result of the adoption of ASU 2018-02 in the first quarter of 2018, we recorded a $5 million reclassification to increase Accumulated Other Comprehensive (Loss) Income and decrease Retained Earnings. See Note 4, "Financial Statement Information" for further information regarding the adoption of ASU 2018-02. The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands): Three Months Ended September 30, 2018 Foreign Unrealized Gain (Loss) Unrealized (Loss) Gain on Pension Plans Other Comprehensive Income from Unconsolidated Subsidiaries Accumulated Beginning balance $ (125,753 ) $ 19,684 $ (10,200 ) $ 208 $ (116,061 ) Pretax (loss) income (23,405 ) 7,681 1,217 — (14,507 ) Income tax effect 2,454 (1,796 ) 41 — 699 Reclassification of unrealized (gain) loss — (7,284 ) 21 — (7,263 ) Reclassification of deferred income taxes — 1,703 (5 ) — 1,698 Other comprehensive income from unconsolidated subsidiaries — — — 643 643 Ending balance $ (146,704 ) $ 19,988 $ (8,926 ) $ 851 $ (134,791 ) Three Months Ended September 30, 2017 Foreign Unrealized Gain Unrealized (Loss) Gain Other Comprehensive Loss from Unconsolidated Subsidiaries Accumulated Beginning balance $ (157,353 ) $ 10,324 $ (6,640 ) $ (601 ) $ (154,270 ) Pretax income (loss) 63,769 (15,402 ) — — 48,367 Income tax effect (4,151 ) 5,683 — — 1,532 Reclassification of unrealized loss (gain) — 12,591 (200 ) — 12,391 Reclassification of deferred income taxes — (4,648 ) 50 — (4,598 ) Other comprehensive loss from unconsolidated subsidiaries — — — (1,034 ) (1,034 ) Ending balance $ (97,735 ) $ 8,548 $ (6,790 ) $ (1,635 ) $ (97,612 ) Nine Months Ended September 30, 2018 Foreign Unrealized Gain (Loss) on Cash Flow Hedges Unrealized (Loss) Gain on Pension Plans Other Comprehensive (Loss) Income from Unconsolidated Subsidiaries Accumulated Beginning balance $ (71,933 ) $ 11,538 $ (8,772 ) $ (1,309 ) $ (70,476 ) Pretax (loss) income (82,137 ) 33,901 (102 ) — (48,338 ) Income tax effect 4,507 (7,926 ) (125 ) — (3,544 ) Reclassification of unrealized (gain) loss — (26,117 ) 97 — (26,020 ) Reclassification of deferred income taxes — 6,106 (24 ) — 6,082 Other comprehensive income from unconsolidated subsidiaries — — — 2,160 2,160 Adoption of ASU 2018-02 2,859 2,486 — — 5,345 Ending balance $ (146,704 ) $ 19,988 $ (8,926 ) $ 851 $ (134,791 ) Nine Months Ended September 30, 2017 Foreign Unrealized Gain Unrealized (Loss) Gain Other Comprehensive Loss from Unconsolidated Subsidiaries Accumulated Beginning balance $ (272,529 ) $ 8,091 $ (2,737 ) $ — $ (267,175 ) Pretax income (loss) 177,434 (44,749 ) 112 — 132,797 Income tax effect (4,151 ) 16,463 (43 ) — 12,269 Reclassification of unrealized loss (gain) — 45,551 (921 ) — 44,630 Reclassification of deferred income taxes — (16,808 ) 235 — (16,573 ) Disposal of business, net 1,511 — (3,436 ) — (1,925 ) Other comprehensive loss from unconsolidated subsidiaries — — — (1,635 ) (1,635 ) Ending balance $ (97,735 ) $ 8,548 $ (6,790 ) $ (1,635 ) $ (97,612 ) |
Long-Term Obligations (Tables)
Long-Term Obligations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule Of Long-Term Obligations | Long-term obligations consist of the following (in thousands): September 30, December 31, 2018 2017 Senior secured credit agreement: Term loans payable $ 590,000 $ 704,800 Revolving credit facilities 1,183,626 1,283,551 U.S. Notes (2023) 600,000 600,000 Euro Notes (2024) 580,200 600,150 Euro Notes (2026/28) 1,160,400 — Receivables securitization facility 100,000 100,000 Notes payable through May 2027 at weighted average interest rates of 1.5% and 1.4%, respectively 38,641 29,146 Other long-term debt at weighted average interest rates of 2.2% and 1.7%, respectively 151,502 110,633 Total debt 4,404,369 3,428,280 Less: long-term debt issuance costs (31,251 ) (21,476 ) Less: current debt issuance costs (4,616 ) (2,824 ) Total debt, net of debt issuance costs 4,368,502 3,403,980 Less: current maturities, net of debt issuance costs (118,365 ) (126,360 ) Long term debt, net of debt issuance costs $ 4,250,137 $ 3,277,620 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Schedule of Derivative Instruments [Table Text Block] | The following table summarizes the notional amounts and fair values of our designated cash flow hedges as of September 30, 2018 and December 31, 2017 (in thousands): Notional Amount Fair Value at September 30, 2018 (USD) Fair Value at December 31, 2017 (USD) September 30, 2018 December 31, 2017 Other Assets Other Noncurrent Liabilities Other Assets Other Noncurrent Liabilities Interest rate swap agreements USD denominated $ 590,000 $ 590,000 $ 25,719 $ — $ 19,102 $ — Cross currency swap agreements USD/euro $ 394,649 $ 406,546 10,881 49,212 5,504 61,492 Total cash flow hedges $ 36,600 $ 49,212 $ 24,606 $ 61,492 |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation inputs we utilized to determine such fair value as of September 30, 2018 and December 31, 2017 (in thousands): Balance as of September 30, 2018 Fair Value Measurements as of September 30, 2018 Level 1 Level 2 Level 3 Assets: Cash surrender value of life insurance $ 53,691 $ — $ 53,691 $ — Rights to acquire Mekonomen shares 28,683 — 28,683 — Interest rate swaps 25,719 — 25,719 — Cross currency swap agreements 10,881 — 10,881 — Total Assets $ 118,974 $ — $ 118,974 $ — Liabilities: Contingent consideration liabilities $ 5,243 $ — $ — $ 5,243 Deferred compensation liabilities 54,419 — 54,419 — Cross currency swap agreements 49,212 — 49,212 — Total Liabilities $ 108,874 $ — $ 103,631 $ 5,243 Balance as of December 31, 2017 Fair Value Measurements as of December 31, 2017 Level 1 Level 2 Level 3 Assets: Cash surrender value of life insurance $ 45,984 $ — $ 45,984 $ — Interest rate swaps 19,102 — 19,102 — Cross currency swap agreements 5,504 — 5,504 — Total Assets $ 70,590 $ — $ 70,590 $ — Liabilities: Contingent consideration liabilities $ 2,636 $ — $ — $ 2,636 Deferred compensation liabilities 47,199 — 47,199 — Cross currency swap agreements 61,492 — 61,492 — Total Liabilities $ 111,327 $ — $ 108,691 $ 2,636 |
Income Taxes Income Taxes (Tabl
Income Taxes Income Taxes (Tables) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Percent | 25.20% | 33.50% | ||
U.S. federal statutory rate | 35.00% | 21.00% | 35.00% | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities | $ (98,521) | $ (65,087) | ||
Tax Cuts and Jobs Act of 2017, transition tax for accumulated foreign earnings, provisional amount | 51,000 | |||
Tax Cuts and Jobs Act of 2017, tax benefit from decrease to net deferred tax liabilities, provisional amount | $ 73,000 | |||
Stahlgruber [Member] | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities | $ (97,805) |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Defined Benefit Plans Disclosures [Table Text Block] | Net periodic benefit expense for our defined benefit plans included the following components for the three and nine months ended September 30, 2018 and 2017 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Service cost $ 628 $ 1,126 $ 1,612 $ 2,902 Interest cost 996 750 2,442 2,091 Expected return on plan assets (720 ) (507 ) (2,220 ) (1,059 ) Amortization of prior service credit — (71 ) — (201 ) Amortization of actuarial (gain) loss 21 (129 ) 97 (720 ) Net periodic benefit expense $ 925 $ 1,169 $ 1,931 $ 3,013 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Commitments | The future minimum lease commitments under these leases at September 30, 2018 are as follows (in thousands): Three months ending December 31, 2018 $ 72,780 Years ending December 31: 2019 271,642 2020 226,936 2021 179,921 2022 144,700 2023 122,149 Thereafter 689,583 Future Minimum Lease Payments $ 1,707,711 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule Of Financial Performance By Reportable Segment | The following tables present our financial performance by reportable segment for the periods indicated (in thousands): North America Europe Specialty Eliminations Consolidated Three Months Ended September 30, 2018 Revenue: Third Party $ 1,262,657 $ 1,470,856 $ 388,865 $ — $ 3,122,378 Intersegment 142 — 1,196 (1,338 ) — Total segment revenue $ 1,262,799 $ 1,470,856 $ 390,061 $ (1,338 ) $ 3,122,378 Segment EBITDA $ 154,049 $ 129,358 $ 42,937 $ — $ 326,344 Depreciation and amortization (1) 22,151 52,139 7,183 — 81,473 Three Months Ended September 30, 2017 Revenue: Third Party $ 1,181,756 $ 954,522 $ 329,522 $ — $ 2,465,800 Intersegment 187 — 1,072 (1,259 ) — Total segment revenue $ 1,181,943 $ 954,522 $ 330,594 $ (1,259 ) $ 2,465,800 Segment EBITDA $ 152,627 $ 79,294 $ 35,114 $ — $ 267,035 Depreciation and amortization (1) 22,104 32,326 5,472 — 59,902 North America Europe Specialty Eliminations Consolidated Nine Months Ended September 30, 2018 Revenue: Third Party $ 3,927,282 $ 3,795,439 $ 1,151,172 $ — $ 8,873,893 Intersegment 526 — 3,554 (4,080 ) — Total segment revenue $ 3,927,808 $ 3,795,439 $ 1,154,726 $ (4,080 ) $ 8,873,893 Segment EBITDA $ 506,772 $ 315,785 $ 140,974 $ — $ 963,531 Depreciation and amortization (1) 64,985 124,697 21,295 — 210,977 Nine Months Ended September 30, 2017 Revenue: Third Party $ 3,596,108 $ 2,665,170 $ 1,005,776 $ — $ 7,267,054 Intersegment 589 — 3,222 (3,811 ) — Total segment revenue $ 3,596,697 $ 2,665,170 $ 1,008,998 $ (3,811 ) $ 7,267,054 Segment EBITDA $ 502,494 $ 241,537 $ 119,133 $ — $ 863,164 Depreciation and amortization (1) 64,305 85,809 16,394 — 166,508 (1) Amounts presented include depreciation and amortization expense recorded within cost of goods sold. |
Reconciliation Of Segment EBITDA To Net Income Table | The table below provides a reconciliation of Net Income to Segment EBITDA (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Net income $ 134,480 $ 122,381 $ 445,109 $ 409,573 Less: net income attributable to noncontrolling interest 378 — 1,040 — Net income attributable to LKQ stockholders 134,102 122,381 444,069 409,573 Subtract: Net loss from discontinued operations — — — (4,531 ) Net income from continuing operations attributable to LKQ stockholders 134,102 122,381 444,069 414,104 Add: Depreciation and amortization 76,701 56,877 196,322 159,178 Depreciation and amortization - cost of goods sold 4,772 3,025 14,655 7,330 Interest expense, net 40,860 25,222 107,647 73,806 Provision for income taxes 46,068 58,189 156,427 206,206 EBITDA 302,503 265,694 919,120 860,624 Subtract: Equity in (losses) earnings of unconsolidated subsidiaries (1) (20,284 ) 2,673 (18,326 ) 3,878 Fair value gain on Mekonomen derivative instrument (1) 2,509 — 2,509 — Gains on bargain purchases (2) — 913 328 3,990 Add: Restructuring and acquisition related expenses (3) 6,614 4,922 26,546 10,371 Inventory step-up adjustment - acquisition related — — 403 — Impairment of net assets held for sale — — 2,438 — Change in fair value of contingent consideration liabilities (548 ) 5 (465 ) 37 Segment EBITDA $ 326,344 $ 267,035 $ 963,531 $ 863,164 (1) See Note 4, "Financial Statement Information," for further information. (2) Reflects the gains on bargain purchases related to our acquisitions of a wholesale business in Europe and Andrew Page. See Note 2, "Business Combinations," for further information. (3) See Note 6, "Restructuring and Acquisition Related Expenses," for further information. |
Schedule Of Capital Expenditures By Reportable Segment | The following table presents capital expenditures by reportable segment (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Capital Expenditures North America $ 27,996 $ 31,021 $ 86,864 $ 69,934 Europe 23,904 12,119 69,582 55,253 Specialty 4,442 852 15,317 6,752 Discontinued operations — — — 3,598 Total capital expenditures $ 56,342 $ 43,992 $ 171,763 $ 135,537 |
Schedule Of Assets By Reportable Segment | The following table presents assets by reportable segment (in thousands): September 30, December 31, 2018 2017 Receivables, net North America $ 437,429 $ 379,666 Europe (1) 696,106 555,372 Specialty 122,341 92,068 Total receivables, net (2) 1,255,876 1,027,106 Inventories North America 1,058,310 1,076,393 Europe (1) 1,391,578 964,068 Specialty 345,006 340,322 Total inventories 2,794,894 2,380,783 Property, Plant and Equipment, net North America 560,918 537,286 Europe (1) 554,550 293,539 Specialty 85,535 82,264 Total property, plant and equipment, net 1,201,003 913,089 Equity Method Investments North America 16,075 336 Europe (3) 141,334 208,068 Total equity method investments 157,409 208,404 Other unallocated assets 6,176,154 4,837,490 Total assets $ 11,585,336 $ 9,366,872 |
Revenue from External Customers by Geographic Area | The following table sets forth our revenue by geographic area (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Revenue United States $ 1,535,557 $ 1,395,495 $ 4,716,927 $ 4,268,600 United Kingdom 408,474 399,155 1,294,155 1,171,829 Germany 415,748 549 564,698 862 Other countries 762,599 670,601 2,298,113 1,825,763 Total revenue $ 3,122,378 $ 2,465,800 $ 8,873,893 $ 7,267,054 |
Schedule Of Tangible Long-Lived Assets By Geographic Area | The following table sets forth our tangible long-lived assets by geographic area (in thousands): September 30, December 31, 2018 2017 Long-lived Assets United States $ 609,562 $ 583,236 Germany 210,344 41 United Kingdom 170,940 178,021 Other countries 210,157 151,791 Total long-lived assets $ 1,201,003 $ 913,089 |
Condensed Consolidating Finan_2
Condensed Consolidating Financial Information (Tables) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Consolidating Financial Information [Abstract] | |||
Consolidated Condensed Statements of Income | LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands) For the Three Months Ended September 30, 2018 Parent Guarantors Non-Guarantors Eliminations Consolidated Revenue $ — $ 1,550,301 $ 1,609,525 $ (37,448 ) $ 3,122,378 Cost of goods sold — 934,913 1,027,715 (37,448 ) 1,925,180 Gross margin — 615,388 581,810 — 1,197,198 Selling, general and administrative expenses 6,725 434,965 437,460 — 879,150 Restructuring and acquisition related expenses — 1,638 4,976 — 6,614 Depreciation and amortization 34 25,238 51,429 — 76,701 Operating (loss) income (6,759 ) 153,547 87,945 — 234,733 Other expense (income): Interest expense (income), net 16,191 (193 ) 24,862 — 40,860 Intercompany interest (income) expense, net (15,121 ) 10,014 5,107 — — Other income, net (178 ) (3,514 ) (3,267 ) — (6,959 ) Total other expense, net 892 6,307 26,702 — 33,901 (Loss) income before (benefit) provision for income taxes (7,651 ) 147,240 61,243 — 200,832 (Benefit) provision for income taxes (12,008 ) 41,875 16,201 — 46,068 Equity in losses of unconsolidated subsidiaries — (156 ) (20,128 ) — (20,284 ) Equity in earnings of subsidiaries 129,745 4,467 — (134,212 ) — Net income 134,102 109,676 24,914 (134,212 ) 134,480 Less: net income attributable to noncontrolling interest — — 378 — 378 Net income attributable to LKQ stockholders $ 134,102 $ 109,676 $ 24,536 $ (134,212 ) $ 134,102 LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands) For the Three Months Ended September 30, 2017 Parent Guarantors Non-Guarantors Eliminations Consolidated Revenue $ — $ 1,433,742 $ 1,069,682 $ (37,624 ) $ 2,465,800 Cost of goods sold — 861,078 685,470 (37,624 ) 1,508,924 Gross margin — 572,664 384,212 — 956,876 Selling, general and administrative expenses 7,861 394,926 293,191 — 695,978 Restructuring and acquisition related expenses — 1,473 3,449 — 4,922 Depreciation and amortization 29 25,005 31,843 — 56,877 Operating (loss) income (7,890 ) 151,260 55,729 — 199,099 Other expense (income): Interest expense, net 16,232 57 8,933 — 25,222 Intercompany interest (income) expense, net (2,389 ) (2,814 ) 5,203 — — Gain on bargain purchase — — (913 ) — (913 ) Other expense (income), net 32 (4,011 ) 872 — (3,107 ) Total other expense (income), net 13,875 (6,768 ) 14,095 — 21,202 (Loss) income before (benefit) provision for income taxes (21,765 ) 158,028 41,634 — 177,897 (Benefit) provision for income taxes (8,436 ) 56,920 9,705 — 58,189 Equity in earnings of unconsolidated subsidiaries — — 2,673 — 2,673 Equity in earnings of subsidiaries 135,710 6,674 — (142,384 ) — Net income $ 122,381 $ 107,782 $ 34,602 $ (142,384 ) $ 122,381 LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands) For the Nine Months Ended September 30, 2018 Parent Guarantors Non-Guarantors Eliminations Consolidated Revenue $ — $ 4,768,292 $ 4,216,417 $ (110,816 ) $ 8,873,893 Cost of goods sold — 2,869,499 2,702,162 (110,816 ) 5,460,845 Gross margin — 1,898,793 1,514,255 — 3,413,048 Selling, general and administrative expenses 25,538 1,292,455 1,154,092 — 2,472,085 Restructuring and acquisition related expenses — 1,968 24,578 — 26,546 Depreciation and amortization 84 74,102 122,136 — 196,322 Operating (loss) income (25,622 ) 530,268 213,449 — 718,095 Other expense (income): Interest expense (income), net 52,004 (94 ) 55,737 — 107,647 Intercompany interest (income) expense, net (45,927 ) 29,559 16,368 — — Gains on bargain purchases — — (328 ) — (328 ) Other (income) expense, net (1,076 ) (13,793 ) 5,783 — (9,086 ) Total other expense, net 5,001 15,672 77,560 — 98,233 (Loss) income before (benefit) provision for income taxes (30,623 ) 514,596 135,889 — 619,862 (Benefit) provision for income taxes (19,656 ) 141,295 34,788 — 156,427 Equity in losses of unconsolidated subsidiaries — (156 ) (18,170 ) — (18,326 ) Equity in earnings of subsidiaries 455,036 14,028 — (469,064 ) — Net income 444,069 387,173 82,931 (469,064 ) 445,109 Less: net income attributable to noncontrolling interest — — 1,040 — 1,040 Net income attributable to LKQ stockholders $ 444,069 $ 387,173 $ 81,891 $ (469,064 ) $ 444,069 | LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands) For the Nine Months Ended September 30, 2018 Parent Guarantors Non-Guarantors Eliminations Consolidated Revenue $ — $ 4,768,292 $ 4,216,417 $ (110,816 ) $ 8,873,893 Cost of goods sold — 2,869,499 2,702,162 (110,816 ) 5,460,845 Gross margin — 1,898,793 1,514,255 — 3,413,048 Selling, general and administrative expenses 25,538 1,292,455 1,154,092 — 2,472,085 Restructuring and acquisition related expenses — 1,968 24,578 — 26,546 Depreciation and amortization 84 74,102 122,136 — 196,322 Operating (loss) income (25,622 ) 530,268 213,449 — 718,095 Other expense (income): Interest expense (income), net 52,004 (94 ) 55,737 — 107,647 Intercompany interest (income) expense, net (45,927 ) 29,559 16,368 — — Gains on bargain purchases — — (328 ) — (328 ) Other (income) expense, net (1,076 ) (13,793 ) 5,783 — (9,086 ) Total other expense, net 5,001 15,672 77,560 — 98,233 (Loss) income before (benefit) provision for income taxes (30,623 ) 514,596 135,889 — 619,862 (Benefit) provision for income taxes (19,656 ) 141,295 34,788 — 156,427 Equity in losses of unconsolidated subsidiaries — (156 ) (18,170 ) — (18,326 ) Equity in earnings of subsidiaries 455,036 14,028 — (469,064 ) — Net income 444,069 387,173 82,931 (469,064 ) 445,109 Less: net income attributable to noncontrolling interest — — 1,040 — 1,040 Net income attributable to LKQ stockholders $ 444,069 $ 387,173 $ 81,891 $ (469,064 ) $ 444,069 LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands) For the Nine Months Ended September 30, 2017 Parent Guarantors Non-Guarantors Eliminations Consolidated Revenue $ — $ 4,374,693 $ 3,001,386 $ (109,025 ) $ 7,267,054 Cost of goods sold — 2,613,540 1,910,561 (109,025 ) 4,415,076 Gross margin — 1,761,153 1,090,825 — 2,851,978 Selling, general and administrative expenses 26,209 1,165,897 810,959 — 2,003,065 Restructuring and acquisition related expenses — 4,010 6,361 — 10,371 Depreciation and amortization 89 73,072 86,017 — 159,178 Operating (loss) income (26,298 ) 518,174 187,488 — 679,364 Other expense (income): Interest expense, net 48,904 281 24,621 — 73,806 Intercompany interest (income) expense, net (10,221 ) (4,530 ) 14,751 — — Gains on bargain purchases — — (3,990 ) — (3,990 ) Other expense (income), net 286 (8,247 ) 1,077 — (6,884 ) Total other expense (income), net 38,969 (12,496 ) 36,459 — 62,932 (Loss) income from continuing operations before (benefit) provision for income taxes (65,267 ) 530,670 151,029 — 616,432 (Benefit) provision for income taxes (27,034 ) 200,321 32,919 — 206,206 Equity in earnings of unconsolidated subsidiaries — — 3,878 — 3,878 Equity in earnings of subsidiaries 452,337 17,282 — (469,619 ) — Income from continuing operations 414,104 347,631 121,988 (469,619 ) 414,104 Net (loss) income from discontinued operations (4,531 ) (4,531 ) 2,050 2,481 (4,531 ) Net income $ 409,573 $ 343,100 $ 124,038 $ (467,138 ) $ 409,573 | |
Consolidated Condensed Statements of Comprehensive Income (Loss) | LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands) For the Three Months Ended September 30, 2018 Parent Guarantors Non-Guarantors Eliminations Consolidated Net income $ 134,102 $ 109,676 $ 24,914 $ (134,212 ) $ 134,480 Less: net income attributable to noncontrolling interest — — 378 — 378 Net income attributable to LKQ stockholders 134,102 109,676 24,536 (134,212 ) 134,102 Other comprehensive (loss) income: Foreign currency translation, net of tax (20,951 ) 1,686 (23,901 ) 22,215 (20,951 ) Net change in unrealized gains/losses on cash flow hedges, net of tax 304 — — — 304 Net change in unrealized gains/losses on pension plans, net of tax 1,274 1,246 28 (1,274 ) 1,274 Net change in other comprehensive income from unconsolidated subsidiaries 643 — 643 (643 ) 643 Other comprehensive (loss) income (18,730 ) 2,932 (23,230 ) 20,298 (18,730 ) Comprehensive income 115,372 112,608 1,684 (113,914 ) 115,750 Less: comprehensive income attributable to noncontrolling interest — — 378 — 378 Comprehensive income attributable to LKQ stockholders $ 115,372 $ 112,608 $ 1,306 $ (113,914 ) $ 115,372 For the Three Months Ended September 30, 2017 Parent Guarantors Non-Guarantors Eliminations Consolidated Net income $ 122,381 $ 107,782 $ 34,602 $ (142,384 ) $ 122,381 Other comprehensive income (loss): Foreign currency translation, net of tax 59,618 3,590 62,734 (66,324 ) 59,618 Net change in unrecognized gains/losses on cash flow hedges, net of tax (1,776 ) — — — (1,776 ) Net change in unrealized gains/losses on pension plans, net of tax (150 ) — (150 ) 150 (150 ) Net change in other comprehensive loss from unconsolidated subsidiaries (1,034 ) — (1,034 ) 1,034 (1,034 ) Total other comprehensive income 56,658 3,590 61,550 (65,140 ) 56,658 Total comprehensive income $ 179,039 $ 111,372 $ 96,152 $ (207,524 ) $ 179,039 LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands) For the Nine Months Ended September 30, 2018 Parent Guarantors Non-Guarantors Eliminations Consolidated Net income $ 444,069 $ 387,173 $ 82,931 $ (469,064 ) $ 445,109 Less: net income attributable to noncontrolling interest — — 1,040 — 1,040 Net income attributable to LKQ stockholders 444,069 387,173 81,891 (469,064 ) 444,069 Other comprehensive (loss) income: Foreign currency translation, net of tax (77,630 ) (2,800 ) (81,456 ) 84,256 (77,630 ) Net change in unrealized gains/losses on cash flow hedges, net of tax 5,964 — — — 5,964 Net change in unrealized gains/losses on pension plans, net of tax (154 ) (239 ) 85 154 (154 ) Net change in other comprehensive income from unconsolidated subsidiaries 2,160 — 2,160 (2,160 ) 2,160 Other comprehensive loss (69,660 ) (3,039 ) (79,211 ) 82,250 (69,660 ) Comprehensive income 374,409 384,134 3,720 (386,814 ) 375,449 Less: comprehensive income attributable to noncontrolling interest — — 1,040 — 1,040 Comprehensive income attributable to LKQ stockholders $ 374,409 $ 384,134 $ 2,680 $ (386,814 ) $ 374,409 | LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands) For the Nine Months Ended September 30, 2018 Parent Guarantors Non-Guarantors Eliminations Consolidated Net income $ 444,069 $ 387,173 $ 82,931 $ (469,064 ) $ 445,109 Less: net income attributable to noncontrolling interest — — 1,040 — 1,040 Net income attributable to LKQ stockholders 444,069 387,173 81,891 (469,064 ) 444,069 Other comprehensive (loss) income: Foreign currency translation, net of tax (77,630 ) (2,800 ) (81,456 ) 84,256 (77,630 ) Net change in unrealized gains/losses on cash flow hedges, net of tax 5,964 — — — 5,964 Net change in unrealized gains/losses on pension plans, net of tax (154 ) (239 ) 85 154 (154 ) Net change in other comprehensive income from unconsolidated subsidiaries 2,160 — 2,160 (2,160 ) 2,160 Other comprehensive loss (69,660 ) (3,039 ) (79,211 ) 82,250 (69,660 ) Comprehensive income 374,409 384,134 3,720 (386,814 ) 375,449 Less: comprehensive income attributable to noncontrolling interest — — 1,040 — 1,040 Comprehensive income attributable to LKQ stockholders $ 374,409 $ 384,134 $ 2,680 $ (386,814 ) $ 374,409 For the Nine Months Ended September 30, 2017 Parent Guarantors Non-Guarantors Eliminations Consolidated Net income $ 409,573 $ 343,100 $ 124,038 $ (467,138 ) $ 409,573 Other comprehensive income (loss): Foreign currency translation, net of tax 174,794 17,565 176,769 (194,334 ) 174,794 Net change in unrecognized gains/losses on cash flow hedges, net of tax 457 (133 ) — 133 457 Net change in unrealized gains/losses on pension plans, net of tax (4,053 ) (3,253 ) (800 ) 4,053 (4,053 ) Net change in other comprehensive loss from unconsolidated subsidiaries (1,635 ) — (1,635 ) 1,635 (1,635 ) Total other comprehensive income 169,563 14,179 174,334 (188,513 ) 169,563 Total comprehensive income $ 579,136 $ 357,279 $ 298,372 $ (655,651 ) $ 579,136 | |
Consolidated Condensed Balance Sheets | LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Balance Sheets (In thousands) September 30, 2018 Parent Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 48,265 $ 31,082 $ 261,999 $ — $ 341,346 Receivables, net 341 366,781 888,754 — 1,255,876 Intercompany receivables, net 7,173 — 20,573 (27,746 ) — Inventories — 1,323,201 1,471,693 — 2,794,894 Prepaid expenses and other current assets 15,452 94,787 90,705 — 200,944 Total current assets 71,231 1,815,851 2,733,724 (27,746 ) 4,593,060 Property, plant and equipment, net 845 589,898 610,260 — 1,201,003 Intangible assets: Goodwill — 2,005,560 2,469,706 — 4,475,266 Other intangibles, net 286 280,229 672,857 — 953,372 Investment in subsidiaries 5,351,986 114,721 — (5,466,707 ) — Intercompany notes receivable 1,067,356 14,958 — (1,082,314 ) — Equity method investments — 16,075 141,334 — 157,409 Other assets 90,293 38,434 76,499 — 205,226 Total assets $ 6,581,997 $ 4,875,726 $ 6,704,380 $ (6,576,767 ) $ 11,585,336 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 2,615 $ 345,660 $ 593,472 $ — $ 941,747 Intercompany payables, net — 20,573 7,173 (27,746 ) — Accrued expenses: Accrued payroll-related liabilities 7,169 48,463 97,904 — 153,536 Other accrued expenses 12,656 106,543 239,013 — 358,212 Refund liability — 54,554 52,178 — 106,732 Other current liabilities 283 18,210 38,595 — 57,088 Current portion of long-term obligations — 2,317 116,048 — 118,365 Total current liabilities 22,723 596,320 1,144,383 (27,746 ) 1,735,680 Long-term obligations, excluding current portion 1,569,387 14,027 2,666,723 — 4,250,137 Intercompany notes payable — 617,389 464,925 (1,082,314 ) — Deferred income taxes 9,715 115,924 199,898 — 325,537 Other noncurrent liabilities 139,712 98,133 138,721 — 376,566 Stockholders' equity: Total Company stockholders’ equity 4,840,460 3,433,933 2,032,774 (5,466,707 ) 4,840,460 Noncontrolling interest — — 56,956 — 56,956 Total stockholders’ equity 4,840,460 3,433,933 2,089,730 (5,466,707 ) 4,897,416 Total liabilities and stockholders' equity $ 6,581,997 $ 4,875,726 $ 6,704,380 $ (6,576,767 ) $ 11,585,336 LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Balance Sheets (In thousands) December 31, 2017 Parent Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 34,360 $ 35,131 $ 210,275 $ — $ 279,766 Receivables, net — 290,958 736,148 — 1,027,106 Intercompany receivables, net 2,669 3,010 230 (5,909 ) — Inventories — 1,334,766 1,046,017 — 2,380,783 Prepaid expenses and other current assets 34,136 44,849 55,494 — 134,479 Total current assets 71,165 1,708,714 2,048,164 (5,909 ) 3,822,134 Property, plant and equipment, net 910 563,262 348,917 — 913,089 Intangible assets: Goodwill — 2,010,209 1,526,302 — 3,536,511 Other intangibles, net — 291,036 452,733 — 743,769 Investment in subsidiaries 5,952,687 102,931 — (6,055,618 ) — Intercompany notes receivable 1,156,550 782,638 — (1,939,188 ) — Equity method investments — 336 208,068 — 208,404 Other assets 70,590 33,597 38,778 — 142,965 Total assets $ 7,251,902 $ 5,492,723 $ 4,622,962 $ (8,000,715 ) $ 9,366,872 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 5,742 $ 340,951 $ 441,920 $ — $ 788,613 Intercompany payables, net — 230 5,679 (5,909 ) — Accrued expenses: Accrued payroll-related liabilities 9,448 65,811 68,165 — 143,424 Other accrued expenses 5,219 95,900 117,481 — 218,600 Other current liabilities 282 27,066 18,379 — 45,727 Current portion of long-term obligations 16,468 1,912 107,980 — 126,360 Total current liabilities 37,159 531,870 759,604 (5,909 ) 1,322,724 Long-term obligations, excluding current portion 2,095,826 7,372 1,174,422 — 3,277,620 Intercompany notes payable 750,000 677,708 511,480 (1,939,188 ) — Deferred income taxes 12,402 116,021 123,936 — 252,359 Other noncurrent liabilities 158,346 101,189 47,981 — 307,516 Stockholders' equity: Total Company stockholders’ equity 4,198,169 4,058,563 1,997,055 (6,055,618 ) 4,198,169 Noncontrolling interest — — 8,484 — 8,484 Total stockholders’ equity 4,198,169 4,058,563 2,005,539 (6,055,618 ) 4,206,653 Total liabilities and stockholders' equity $ 7,251,902 $ 5,492,723 $ 4,622,962 $ (8,000,715 ) $ 9,366,872 | ||
Consolidated Condensed Statements of Cash Flows | LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Cash Flows (In thousands) For the Nine Months Ended September 30, 2018 Parent Guarantors Non-Guarantors Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net cash provided by operating activities $ 334,226 $ 142,626 $ 97,506 $ (53,191 ) $ 521,167 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment (315 ) (93,063 ) (78,385 ) — (171,763 ) Investment and intercompany note activity with subsidiaries 73,096 — — (73,096 ) — Return of investment in subsidiaries 152,443 — — (152,443 ) — Acquisitions, net of cash acquired — (2,888 ) (1,203,179 ) — (1,206,067 ) Investments in unconsolidated subsidiaries — (11,066 ) — — (11,066 ) Receipts of deferred purchase price on receivables under factoring arrangements — 224,753 9,410 (224,753 ) 9,410 Other investing activities, net 887 2,162 4,921 — 7,970 Net cash provided by (used in) investing activities 226,111 119,898 (1,267,233 ) (450,292 ) (1,371,516 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 3,772 — — — 3,772 Taxes paid related to net share settlements of stock-based compensation awards (4,768 ) — — — (4,768 ) Debt issuance costs (1,354 ) — (15,584 ) — (16,938 ) Proceeds from issuance of Euro Notes (2026/28) — — 1,232,100 — 1,232,100 Borrowings under revolving credit facilities 304,000 — 721,496 — 1,025,496 Repayments under revolving credit facilities (732,897 ) — (377,138 ) — (1,110,035 ) Repayments under term loans (114,800 ) — — — (114,800 ) (Repayments) borrowings of other debt, net (385 ) 101 (38,411 ) — (38,695 ) Other financing activities, net — — 3,182 — 3,182 Investment and intercompany note activity with parent — (62,763 ) (10,333 ) 73,096 — Dividends — (203,448 ) (226,939 ) 430,387 — Net cash (used in) provided by financing activities (546,432 ) (266,110 ) 1,288,373 503,483 979,314 Effect of exchange rate changes on cash and cash equivalents — (463 ) (66,922 ) — (67,385 ) Net increase (decrease) in cash and cash equivalents 13,905 (4,049 ) 51,724 — 61,580 Cash and cash equivalents, beginning of period 34,360 35,131 210,275 — 279,766 Cash and cash equivalents, end of period $ 48,265 $ 31,082 $ 261,999 $ — $ 341,346 | LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Cash Flows (In thousands) For the Nine Months Ended September 30, 2017 Parent Guarantors Non-Guarantors Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net cash provided by operating activities $ 227,314 $ 162,114 $ 108,095 $ (48,280 ) $ 449,243 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment (509 ) (70,292 ) (64,736 ) — (135,537 ) Investment and intercompany note activity with subsidiaries 296,561 — — (296,561 ) — Acquisitions, net of cash acquired — (79,496 ) (173,171 ) — (252,667 ) Proceeds from disposals of business/investment — 305,740 (4,443 ) — 301,297 Investments in unconsolidated subsidiaries — (2,200 ) (4,914 ) — (7,114 ) Receipts of deferred purchase price on receivables under factoring arrangements (1) — 226,395 — (226,395 ) — Other investing activities, net — 3,100 6,764 — 9,864 Net cash provided by (used in) investing activities 296,052 383,247 (240,500 ) (522,956 ) (84,157 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 6,465 — — — 6,465 Taxes paid related to net share settlements of stock-based compensation awards (5,095 ) — — — (5,095 ) Borrowings under revolving credit facilities 187,000 — 237,976 — 424,976 Repayments under revolving credit facilities (694,896 ) — (75,988 ) — (770,884 ) Repayments under term loans (27,884 ) — — — (27,884 ) Borrowings under receivables securitization facility — — 8,525 — 8,525 Repayments under receivables securitization facility — — (9,925 ) — (9,925 ) (Repayments) borrowings of other debt, net (1,700 ) (1,238 ) 27,460 — 24,522 Payments of other obligations — (1,336 ) (743 ) — (2,079 ) Other financing activities, net — 5,000 (684 ) — 4,316 Investment and intercompany note activity with parent — (286,530 ) (10,031 ) 296,561 — Dividends — (274,675 ) — 274,675 — Net cash (used in) provided by financing activities (536,110 ) (558,779 ) 176,590 571,236 (347,063 ) Effect of exchange rate changes on cash and cash equivalents — 322 22,216 — 22,538 Net (decrease) increase in cash and cash equivalents (12,744 ) (13,096 ) 66,401 — 40,561 Cash and cash equivalents of continuing operations, beginning of period 33,030 35,360 159,010 — 227,400 Add: Cash and cash equivalents of discontinued operations, beginning of period — 149 6,967 — 7,116 Cash and cash equivalents of continuing and discontinued operations, beginning of period 33,030 35,509 165,977 — 234,516 Cash and cash equivalents, end of period $ 20,286 $ 22,413 $ 232,378 $ — $ 275,077 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) $ in Thousands, € in Millions | 1 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Nov. 30, 2017 | Jul. 30, 2017 | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($)shares | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2018EUR (€) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Jun. 30, 2018EUR (€) | Apr. 09, 2018USD ($) | Apr. 09, 2018EUR (€) | |
Business Acquisition | ||||||||||||||
Cash used in acquisitions, net of cash acquired | $ 1,206,067 | $ 252,667 | $ 513,088 | |||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | $ 6,948 | $ 6,948 | 6,948 | $ 20,187 | ||||||||||
Revenue | 3,122,378 | $ 2,465,800 | 8,873,893 | 7,267,054 | ||||||||||
Operating Income (Loss) | 234,733 | 199,099 | 718,095 | 679,364 | ||||||||||
Number of acquisitions | 26 | |||||||||||||
Contingent consideration liabilities | (3,107) | (3,107) | (3,107) | $ (6,234) | ||||||||||
Goodwill, Purchase Accounting Adjustments | 1,000 | |||||||||||||
Warn Industries [Member] | ||||||||||||||
Business Acquisition | ||||||||||||||
Business Acquisition, Effective Date of Acquisition | Nov. 30, 2017 | |||||||||||||
Stahlgruber [Member] | ||||||||||||||
Business Acquisition | ||||||||||||||
Business Acquisition, Effective Date of Acquisition | May 30, 2018 | |||||||||||||
Business Acquisition, Name of Acquired Entity | Stahlgruber GmbH | Stahlgruber GmbH | ||||||||||||
Total acquisition date fair value of the consideration for acquisitions | $ 1,400,000 | € 1,200 | ||||||||||||
Cash used in acquisitions, net of cash acquired | $ 1,100,000 | € 1,000 | 1,127,445 | |||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | $ 251,000 | $ 251,000 | € 215 | |||||||||||
Debt Instrument, Face Amount | $ 1,200,000 | € 1,000 | ||||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 8,055,569 | |||||||||||||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | 292,000 | 292,000 | 292,000 | |||||||||||
Revenue | 637,000 | |||||||||||||
Operating Income (Loss) | 34,000 | |||||||||||||
Goodwill, Acquired During Period | 929,000 | |||||||||||||
Other Than Stahlgruber [Member] | ||||||||||||||
Business Acquisition | ||||||||||||||
Total acquisition date fair value of the consideration for acquisitions | 86,000 | |||||||||||||
Cash used in acquisitions, net of cash acquired | 76,000 | |||||||||||||
Revenue | 19,000 | |||||||||||||
Operating Income (Loss) | 2,000 | |||||||||||||
Goodwill, Acquired During Period | 72,000 | |||||||||||||
All 2018 Acquisitions excluding Stahlgruber [Member] | ||||||||||||||
Business Acquisition | ||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | 7,000 | 7,000 | $ 7,000 | |||||||||||
Wholesale - NA [Member] | ||||||||||||||
Business Acquisition | ||||||||||||||
Number of acquisitions | 1 | 6 | ||||||||||||
Wholesale Europe [Member] | ||||||||||||||
Business Acquisition | ||||||||||||||
Number of acquisitions | 7 | 16 | ||||||||||||
2017 acquisitions and adjustments to 2016 acquisitions [Member] | ||||||||||||||
Business Acquisition | ||||||||||||||
Total acquisition date fair value of the consideration for acquisitions | $ 542,000 | |||||||||||||
Cash used in acquisitions, net of cash acquired | 510,000 | |||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | 20,000 | |||||||||||||
All 2017 Acquisitions [Member] | ||||||||||||||
Business Acquisition | ||||||||||||||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | 21,000 | |||||||||||||
Goodwill, Acquired During Period | $ 307,000 | |||||||||||||
Specialty | ||||||||||||||
Business Acquisition | ||||||||||||||
Number of acquisitions | 4 | |||||||||||||
Aftermarket Parts Distribution Businesses In Europe [Member] | ||||||||||||||
Business Acquisition | ||||||||||||||
Business Acquisition, Effective Date of Acquisition | Jul. 31, 2017 | |||||||||||||
Number of acquisitions | 4 | |||||||||||||
Payment To Former Owners [Member] | ||||||||||||||
Business Acquisition | ||||||||||||||
Contingent consideration liabilities | (3,000) | (3,000) | $ (3,000) | $ (6,000) | ||||||||||
Payment To Former Owners [Member] | 2017 acquisitions and adjustments to 2016 acquisitions [Member] | ||||||||||||||
Business Acquisition | ||||||||||||||
Contingent consideration liabilities | (19,000) | |||||||||||||
Payment To Former Owners [Member] | Maximum | All 2018 Acquisitions excluding Stahlgruber [Member] | ||||||||||||||
Business Acquisition | ||||||||||||||
Contingent consideration liabilities | (5,000) | $ (5,000) | (5,000) | |||||||||||
Non-interest Bearing [Member] | 2017 acquisitions and adjustments to 2016 acquisitions [Member] | ||||||||||||||
Business Acquisition | ||||||||||||||
Contingent consideration liabilities | $ (5,000) | |||||||||||||
Specialty | ||||||||||||||
Business Acquisition | ||||||||||||||
Revenue | $ 390,061 | $ 330,594 | $ 1,154,726 | $ 1,008,998 |
Purchase Price Allocations for
Purchase Price Allocations for Acquisitions (Details) $ in Thousands, € in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2018EUR (€) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Business Acquisition | ||||||
Receivables | $ 156,348 | $ 73,782 | ||||
Receivable reserves | (3,693) | (7,032) | ||||
Inventories (3) | 386,296 | 150,342 | ||||
Prepaid expenses and other current assets | 11,343 | (295) | ||||
Property, plant and equipment | 266,750 | 41,039 | ||||
Goodwill | 4,475,266 | 3,536,511 | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | 314,817 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 301,844 | 181,216 | ||||
Other assets | 16,662 | 3,257 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities | (98,521) | (65,087) | ||||
Current liabilities assumed | (363,883) | (111,484) | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt | (70,262) | (33,586) | ||||
Other noncurrent liabilities assumed | (91,682) | (1,917) | ||||
Consolidation, Less Than Wholly Owned Subsidiary, Non Controlling Interest Acquired, Value | (44,250) | |||||
Contingent consideration liabilities | (3,107) | (6,234) | ||||
Other purchase price obligations | 1,504 | (5,074) | ||||
Stock Issued During Period, Value, Acquisitions | (251,334) | |||||
Notes issued | (6,948) | (20,187) | ||||
Settlement of pre-existing balances | 242 | |||||
Gains on bargain purchases | $ (913) | (328) | $ (3,990) | 3,870 | ||
Settlement of other purchase price obligations (non-interest bearing) | 1,698 | 3,159 | ||||
Cash used in acquisitions, net of cash acquired | 1,206,067 | $ 252,667 | 513,088 | |||
Warn Industries [Member] | ||||||
Business Acquisition | ||||||
Increase (Decrease) in Intangible Assets, Current | 5,000 | |||||
Inventory step-up adjustment - acquisition related | 4,000 | |||||
2017 Acquisitions Excluding Warn [Member] | ||||||
Business Acquisition | ||||||
Business Acquisition Cost Of Acquired Entity Other Purchase Price Obligations Non Interest Bearing, Post Purchase Adjustment | (4,000) | |||||
2017 acquisitions and adjustments to 2016 acquisitions [Member] | ||||||
Business Acquisition | ||||||
Notes issued | (20,000) | |||||
Cash used in acquisitions, net of cash acquired | 510,000 | |||||
Stahlgruber [Member] | ||||||
Business Acquisition | ||||||
Receivables | 140,979 | |||||
Receivable reserves | (2,818) | |||||
Inventories (3) | 374,056 | |||||
Prepaid expenses and other current assets | 9,537 | |||||
Property, plant and equipment | 260,661 | |||||
Goodwill | 929,376 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 285,529 | |||||
Other assets | 16,625 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities | (97,805) | |||||
Current liabilities assumed | (343,221) | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt | (65,852) | |||||
Other noncurrent liabilities assumed | (81,689) | |||||
Consolidation, Less Than Wholly Owned Subsidiary, Non Controlling Interest Acquired, Value | (44,250) | |||||
Other purchase price obligations | (2,349) | |||||
Stock Issued During Period, Value, Acquisitions | (251,334) | |||||
Cash used in acquisitions, net of cash acquired | $ 1,100,000 | € 1,000 | 1,127,445 | |||
Defined Benefit Plan, Benefit Obligation, Business Combination | 75,000 | |||||
All 2018 Acquisitions and adjustments to 2017 acquisitions excluding Stahlgruber | ||||||
Business Acquisition | ||||||
Receivables | 15,369 | |||||
Receivable reserves | (875) | |||||
Inventories (3) | 12,240 | |||||
Prepaid expenses and other current assets | 1,806 | |||||
Property, plant and equipment | 6,089 | |||||
Goodwill | 68,254 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 16,315 | |||||
Other assets | 37 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities | (716) | |||||
Current liabilities assumed | (20,662) | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt | (4,410) | |||||
Other noncurrent liabilities assumed | (9,993) | |||||
Contingent consideration liabilities | (3,107) | |||||
Other purchase price obligations | 3,853 | |||||
Notes issued | (6,948) | |||||
Gains on bargain purchases | 328 | |||||
Settlement of other purchase price obligations (non-interest bearing) | 1,698 | |||||
Cash used in acquisitions, net of cash acquired | 78,622 | |||||
All 2018 and 2017 Acquisitions [Member] | ||||||
Business Acquisition | ||||||
Goodwill | $ 997,630 | |||||
Rhiag [Member] | ||||||
Business Acquisition | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 6,000 | |||||
PGW [Member] | ||||||
Business Acquisition | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 3,000 | |||||
Andrew Page | ||||||
Business Acquisition | ||||||
Gain on bargain purchase | $ (2,000) |
Pro Forma Effect of Businesses
Pro Forma Effect of Businesses Acquired (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 4 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Business Acquisition | |||||
Revenue, as reported | $ 3,122,378 | $ 2,465,800 | $ 8,873,893 | $ 7,267,054 | |
Income from continuing operations | $ 134,480 | $ 122,381 | $ 445,109 | $ 414,104 | |
Basic earnings per share from continuing operations | $ 0.42 | $ 0.40 | $ 1.42 | $ 1.34 | |
Diluted earnings per share from continuing operations | $ 0.42 | 0.39 | $ 1.41 | 1.33 | |
All 2018 Acquisitions [Member] | |||||
Business Acquisition | |||||
Business Acquisition Pro Forma Net Income attributable to noncontrolling interest | $ 2,799 | ||||
Business Acquisition Pro Forma Income Loss From Share Issuance attributable to noncontrolling interest, Per Basic Share Effect | $ 0.01 | ||||
Business Acquisition Pro Forma Income Loss From Share Issuance attributable to noncontrolling interest, Per Diluted Share Effect | 0.01 | ||||
Stahlgruber [Member] | |||||
Business Acquisition | |||||
Revenue, as reported | $ 637,000 | ||||
Business Acquisition Pro Forma Income Loss From Share Issuance, Per Basic Share Effect | (0.01) | (0.02) | (0.03) | ||
Business Acquisition Pro Forma Income Loss From Share Issuance, Per Diluted Share Effect | $ (0.01) | $ (0.02) | $ (0.03) | ||
All 2017 acquisitions [Member] | |||||
Business Acquisition | |||||
Business Acquisition Pro Forma Net Income attributable to noncontrolling interest | $ 888 | $ 2,157 | |||
Acquisition Related Costs, Net of Tax | $ 681 | $ 2,301 | $ 13,986 | $ 5,010 | |
Business Acquisition Pro Forma Income Loss From Acquisition Related Costs, Net of Tax, Per Basic Share Effect | $ 0 | $ 0.01 | $ 0.04 | $ 0.02 | |
Business Acquisition Pro Forma Income Loss From Share Issuance attributable to noncontrolling interest, Per Basic Share Effect | 0 | 0.01 | |||
Business Acquisition Pro Forma Income Loss From Acquisition Related Costs, Net of Tax, Per Diluted Share Effect | $ 0 | 0.01 | $ 0.04 | 0.02 | |
Business Acquisition Pro Forma Income Loss From Share Issuance attributable to noncontrolling interest, Per Diluted Share Effect | $ 0 | $ 0.01 | |||
Pro Forma [Member] | |||||
Business Acquisition | |||||
Revenue, as reported | $ 3,129,019 | $ 3,023,019 | $ 9,740,430 | $ 8,943,981 | |
Income from continuing operations | 140,376 | 134,221 | 474,797 | 441,426 | |
Income (Loss) from Continuing Operations, Net of Tax, Excluding Portion Attributable to Noncontrolling Interest | $ 140,376 | $ 133,333 | $ 471,998 | $ 439,269 | |
Basic earnings per share from continuing operations | $ 0.44 | $ 0.42 | $ 1.49 | $ 1.39 | |
Income (Loss) from Continuing Operations attributable to LKQ stockholders, Per Basic Share | 0.44 | 0.42 | 1.49 | 1.39 | |
Pro forma earnings per share from continuing operations, diluted (3) | 0.44 | 0.42 | 1.49 | 1.39 | |
Business Acquisition, Pro Forma Income (Loss) from Continuing Operations attributable to LKQ stockholders, Net of Tax, Per Share, Diluted | $ 0.44 | $ 0.42 | $ 1.48 | $ 1.38 | |
Pro Forma [Member] | Stahlgruber [Member] | |||||
Business Acquisition | |||||
Revenue, as reported | $ 473,326 | $ 815,405 | $ 1,289,083 | ||
Income from continuing operations | $ 5,054 | $ 6,061 | $ 14,114 | $ 5,298 | |
Basic earnings per share from continuing operations | $ 0.02 | $ 0.02 | $ 0.05 | $ 0.02 | |
Diluted earnings per share from continuing operations | $ 0.02 | $ 0.02 | $ 0.04 | $ 0.02 | |
Pro Forma [Member] | All 2018 Acquisitions excluding Stahlgruber [Member] | |||||
Business Acquisition | |||||
Revenue, as reported | $ 6,641 | $ 51,132 | |||
Income from continuing operations | $ 161 | $ 1,588 | |||
Basic earnings per share from continuing operations | $ 0 | $ 0.01 | |||
Diluted earnings per share from continuing operations | $ 0 | $ 0.01 | |||
Pro Forma [Member] | All 2018 and 2017 acquisitions excluding Stahlgruber [Member] | |||||
Business Acquisition | |||||
Revenue, as reported | $ 83,893 | $ 387,844 | |||
Income from continuing operations | $ 3,478 | $ 17,014 | |||
Basic earnings per share from continuing operations | $ 0.01 | $ 0.06 | |||
Diluted earnings per share from continuing operations | $ 0.01 | $ 0.05 |
Discontinued Operations Results
Discontinued Operations Results Of Discontinued Operations (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 9 Months Ended |
Mar. 01, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||
Net loss from discontinued operations | $ (4,531) | ||
DCO Footnote 2 [Abstract] | |||
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax | (8,580) | ||
PGW [Member] | |||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||
Disposal Group, Including Discontinued Operation, Revenue | 111,130 | ||
Disposal Group, Including Discontinued Operation, Costs of Goods Sold | 100,084 | ||
Disposal Group, Including Discontinued Operation, General and Administrative Expense | 8,369 | ||
Disposal Group, Including Discontinued Operation, Operating Income (Loss) | 2,677 | ||
Disposal Group, Including Discontinued Operation, Other Expense | 1,204 | ||
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax | 3,881 | ||
Discontinued Operation, Tax Effect of Discontinued Operation | 3,598 | ||
disposal group, including discontinued operation, equity in earnings | (534) | ||
IncomeLossFromDiscontinuedOperationsExcludingLossOnSaleNetOfTaxAttributableToReportingEntity | (251) | ||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | (4,280) | ||
Net loss from discontinued operations | $ (4,531) | ||
DCO Footnote 1 [Abstract] | |||
Interest Allocated to Discontinued Operations | $ 2,000 | ||
DCO Footnote 2 [Abstract] | |||
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax | $ (8,580) | ||
Discontinued Operation, Tax Effect of Gain (Loss) from Disposal of Discontinued Operation | 4,000 | ||
Discontinued Operation, Intra-Entity Amounts, Discontinued Operation after Disposal, Expense | $ 6,000 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | ||||
Mar. 01, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2016 | |
Proceeds from Divestiture of Businesses, Net of Cash Divested | $ 301,297 | |||||||
Proceeds from disposals of business/investment | $ 0 | $ 301,297 | ||||||
Cash disposed as part of divestment | $ 7,116 | |||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||
Related Party Transaction, Purchases from Related Party | $ 4,000 | $ 10,000 | $ 27,000 | $ 22,000 | ||||
PGW [Member] | ||||||||
Proceeds from Divestiture of Businesses, Net of Cash Divested | $ 301,000 | |||||||
Proceeds from disposals of business/investment | 316,000 | |||||||
Cash disposed as part of divestment | $ 15,000 | |||||||
Cash Provided by (Used in) Operating Activities, Discontinued Operations | $ (4,000) | |||||||
Cash Provided by (Used in) Investing Activities, Discontinued Operations | (4,000) | |||||||
Cash Provided by (Used in) Financing Activities, Discontinued Operations | 15,000 | |||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||
Intercompany Sales between Continuing and Discontinued Operations | $ (8,000) | |||||||
Vitro S. A. B. de C.V. [Member] | PGW [Member] | ||||||||
Disposal Date | Mar. 1, 2017 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands, kr in Millions | Dec. 01, 2016USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018SEK (kr) | Jun. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017SEK (kr) | Jun. 30, 2017USD ($) | Mar. 31, 2017 | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | ||||||||||||
Reserve for uncollectible accounts | $ 63,000 | $ 63,000 | $ 58,000 | |||||||||
Inventory Disclosure [Abstract] | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 386,296 | $ 386,296 | 150,342 | |||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||
Property, Plant and Equipment, Depreciation Methods | straight-line method | |||||||||||
Depreciation | 39,000 | $ 34,000 | $ 115,000 | $ 93,000 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||
Amortization expense | 42,000 | 26,000 | 96,000 | 74,000 | ||||||||
Estimated annual amortization expense in year one | 40,000 | 40,000 | ||||||||||
Estimated annual amortization expense in year two | 136,000 | 136,000 | ||||||||||
Estimated annual amortization expense in year three | 104,000 | 104,000 | ||||||||||
Estimated annual amortization expense in year four | 75,000 | 75,000 | ||||||||||
Estimated annual amortization expense in year five | 62,000 | 62,000 | ||||||||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | ||||||||||||
Equity method investments | 157,409 | 157,409 | 208,404 | |||||||||
Investments in unconsolidated subsidiaries | 11,066 | 7,114 | ||||||||||
Derivative Asset, Noncurrent | 36,600 | 36,600 | 24,606 | |||||||||
Equity in (losses) earnings of unconsolidated subsidiaries | 20,284 | (2,673) | $ 18,326 | $ (3,878) | ||||||||
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||||||||||||
U.S. federal statutory rate | 35.00% | 21.00% | 35.00% | |||||||||
Adoption of ASU 2018-02 (see Note 4) | $ 5,345 | |||||||||||
ManufacturedProducts [Member] | ||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||
Inventory, Raw Materials and Supplies, Gross | 16,000 | 16,000 | 10,000 | |||||||||
Inventory, Work in Process, Gross | 2,000 | 2,000 | 2,000 | |||||||||
Inventory, Finished Goods, Gross | 4,000 | 4,000 | $ 4,000 | |||||||||
Stahlgruber [Member] | ||||||||||||
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | ||||||||||||
Reserve for uncollectible accounts | 3,000 | 3,000 | ||||||||||
Inventory Disclosure [Abstract] | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 374,056 | 374,056 | ||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||
Goodwill, Acquired During Period | 929,000 | |||||||||||
Mekonomen [Member] | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Equity Method Investments, Fair Value Disclosure | 134,000 | 134,000 | ||||||||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | ||||||||||||
Equity method investments | 134,000 | 134,000 | ||||||||||
Equity Method Investment, Additional Information | December 1, 2016 | |||||||||||
Equity Method Investment, Ownership Percentage | 26.50% | |||||||||||
Investments in unconsolidated subsidiaries | $ 181,000 | $ 48,000 | ||||||||||
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity | 64,000 | 64,000 | ||||||||||
Equity in (losses) earnings of unconsolidated subsidiaries | 20,000 | $ (3,000) | 18,000 | $ (5,000) | ||||||||
Proceeds from Equity Method Investment, Distribution | kr 67 | $ 8,000 | kr 67 | $ 7,000 | ||||||||
Other than Temporary Impairment Losses, Investments | 23,000 | |||||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||||
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||||||||||||
Adoption of ASU 2018-02 (see Note 4) | 5,345 | |||||||||||
Right to acquire equity method investment [Domain] | Mekonomen [Member] | ||||||||||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | ||||||||||||
Derivative Asset, Noncurrent | 29,000 | 29,000 | ||||||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | $ (8,000) | $ 2,509 | $ 2,509 | |||||||||
Amendment No. 2, Fourth Amended and Restate Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Weighted average interest rates | 2.20% | 2.20% | 2.20% |
Financial Statement Informati_3
Financial Statement Information Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Product Information | ||
Inventories (3) | $ 386,296 | $ 150,342 |
Inventories | 2,794,894 | 2,380,783 |
Aftermarket and refurbished products | ||
Product Information | ||
Inventories | 2,287,776 | 1,877,653 |
Salvage and remanufactured products | ||
Product Information | ||
Inventories | 484,761 | 487,108 |
ManufacturedProducts [Member] | ||
Accounting Policies [Abstract] | ||
Inventory, Raw Materials, Gross | 16,000 | 10,000 |
Inventory, Work in Process, Gross | 2,000 | 2,000 |
Inventory, Finished Goods, Gross | 4,000 | 4,000 |
Product Information | ||
Inventories | $ 22,357 | $ 16,022 |
Financial Statement Informati_4
Financial Statement Information Schedule of Estimated Useful Lives (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Buildings and improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 20 years |
Buildings and improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 40 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 20 years |
Computer equipment and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Computer equipment and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Furniture and Fixtures [Member] | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Furniture and Fixtures [Member] | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 7 years |
Financial Statement Informati_5
Financial Statement Information Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | $ 1,837,915 | $ 1,837,915 | $ 1,476,716 | ||
Less—Accumulated depreciation | (691,086) | (691,086) | (606,112) | ||
Property, Plant and Equipment, Net | 1,201,003 | 1,201,003 | 913,089 | ||
Depreciation | 39,000 | $ 34,000 | 115,000 | $ 93,000 | |
Land and improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | 189,404 | 189,404 | 137,790 | ||
Buildings and improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | 373,607 | 373,607 | 233,078 | ||
Machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | 618,209 | 618,209 | 521,526 | ||
Computer equipment and software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | 142,719 | 142,719 | 133,753 | ||
Vehicles And Trailers [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | 177,778 | 177,778 | 161,269 | ||
Furniture and Fixtures [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | 52,595 | 52,595 | 31,794 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | 283,603 | 283,603 | 257,506 | ||
Construction in Progress [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | 54,174 | $ 54,174 | $ 42,485 | ||
Minimum | Land and improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 10 years | ||||
Minimum | Buildings and improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 20 years | ||||
Minimum | Machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 3 years | ||||
Minimum | Computer equipment and software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 3 years | ||||
Minimum | Vehicles And Trailers [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 3 years | ||||
Minimum | Furniture and Fixtures [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 5 years | ||||
Maximum | Land and improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 20 years | ||||
Maximum | Buildings and improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 40 years | ||||
Maximum | Machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 20 years | ||||
Maximum | Computer equipment and software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 10 years | ||||
Maximum | Vehicles And Trailers [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 10 years | ||||
Maximum | Furniture and Fixtures [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 7 years | ||||
Stahlgruber [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | 257,142 | $ 257,142 | |||
Property, Plant and Equipment, Net | 260,661 | 260,661 | |||
Stahlgruber [Member] | Land and improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | 47,281 | 47,281 | |||
Stahlgruber [Member] | Buildings and improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | 125,649 | 125,649 | |||
Stahlgruber [Member] | Machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | 49,384 | 49,384 | |||
Stahlgruber [Member] | Computer equipment and software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | 3,760 | 3,760 | |||
Stahlgruber [Member] | Vehicles And Trailers [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | 643 | 643 | |||
Stahlgruber [Member] | Furniture and Fixtures [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | 28,535 | 28,535 | |||
Stahlgruber [Member] | Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | 1,890 | 1,890 | |||
Stahlgruber [Member] | Construction in Progress [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment excluding construction in progress, gross | $ 3,519 | $ 3,519 |
Changes in Carrying Amount of G
Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 3,536,511 |
Business acquisitions and adjustments to previously recorded goodwill | 997,630 |
Exchange rate effects | (58,875) |
Ending balance | 4,475,266 |
North America | |
Goodwill [Roll Forward] | |
Beginning balance | 1,709,354 |
Business acquisitions and adjustments to previously recorded goodwill | 1,073 |
Exchange rate effects | (3,049) |
Ending balance | 1,707,378 |
Europe | |
Goodwill [Roll Forward] | |
Beginning balance | 1,414,898 |
Business acquisitions and adjustments to previously recorded goodwill | 1,002,277 |
Exchange rate effects | (55,901) |
Ending balance | 2,361,274 |
Specialty | |
Goodwill [Roll Forward] | |
Beginning balance | 412,259 |
Business acquisitions and adjustments to previously recorded goodwill | (5,720) |
Exchange rate effects | 75 |
Ending balance | 406,614 |
Stahlgruber [Member] | |
Goodwill [Line Items] | |
Goodwill, Acquired During Period | 929,000 |
Goodwill [Roll Forward] | |
Ending balance | $ 929,376 |
Components of Other Intangibles
Components of Other Intangibles (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets | ||
Gross carrying amount | $ 1,267,939 | $ 976,475 |
Accumulated amortization | (395,867) | (311,506) |
Net | 872,072 | 664,969 |
Other intangibles, net | $ 953,372 | $ 743,769 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 16 years 6 months | |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Amortization Method | Straight-line | |
Gross carrying amount | $ 495,839 | $ 327,332 |
Accumulated amortization | (88,805) | (75,095) |
Net | 407,034 | $ 252,237 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 11 years 2 months 12 days | |
Customer and supplier relationships | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 586,221 | $ 510,113 |
Accumulated amortization | (223,085) | (167,532) |
Net | $ 363,136 | 342,581 |
Software and technology related assets [Member] | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Amortization Method | Straight-line | |
Gross carrying amount | $ 172,391 | 124,049 |
Accumulated amortization | (73,760) | (59,081) |
Net | $ 98,631 | $ 64,968 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 11 years 1 month 6 days | |
Covenants not to compete | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Amortization Method | Straight-line | |
Gross carrying amount | $ 13,488 | $ 14,981 |
Accumulated amortization | (10,217) | (9,798) |
Net | $ 3,271 | $ 5,183 |
Customer and supplier relationships [Member] | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Amortization Method | Accelerated | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 18 years 7 months 6 days | |
Maximum | Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 30 years | |
Maximum | Software and technology related assets [Member] | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 15 years | |
Maximum | Covenants not to compete | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 5 years | |
Maximum | Customer and supplier relationships [Member] | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 20 years | |
Minimum | Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 4 years | |
Minimum | Software and technology related assets [Member] | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | |
Minimum | Covenants not to compete | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 2 years | |
Minimum | Customer and supplier relationships [Member] | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | |
Trademarks [Member] | ||
Finite-Lived Intangible Assets | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $ 81,300 | $ 78,800 |
Changes in Warranty Reserve (De
Changes in Warranty Reserve (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Warranty Reserve [Roll Forward] | |
Beginning balance | $ 23,151 |
Warranty expense | 33,670 |
Warranty claims | (31,980) |
Ending balance | $ 24,841 |
Financial Statement Informati_6
Financial Statement Information Schedule of New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Income Statement Related Disclosures [Abstract] | |||
Receivables, Net, Current | $ 1,255,876 | $ 1,065,617 | $ 1,027,106 |
Prepaid Expense and Other Assets, Current | 200,944 | $ 178,987 | 134,479 |
Other assets | 205,226 | 142,965 | |
Other current liabilities | 57,088 | 45,727 | |
Deferred Income Taxes | $ (325,537) | $ (252,359) |
Financial Statement Informati_7
Financial Statement Information Impact to quarterly financial statements as result of adoption of ASU 2016-09 (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |||||
Assets | ||||||||||
Revenue | $ 3,122,378 | $ 2,465,800 | $ 8,873,893 | $ 7,267,054 | ||||||
Receivables, net | 1,255,876 | 1,255,876 | $ 1,065,617 | $ 1,027,106 | ||||||
Net Cash Provided by (Used in) Operating Activities | 521,167 | 449,243 | ||||||||
Net Cash Provided by (Used in) Financing Activities | 979,314 | (347,063) | ||||||||
Net income attributable to LKQ stockholders | $ 134,102 | $ 122,381 | $ 444,069 | $ 409,573 | ||||||
Net income attributable to LKQ stockholders | [1] | $ 0.42 | $ 0.40 | $ 1.42 | $ 1.33 | |||||
Net income attributable to LKQ stockholders | [1] | $ 0.42 | $ 0.39 | $ 1.41 | $ 1.32 | |||||
Prepaid expenses and other current assets | $ 200,944 | $ 200,944 | 178,987 | 134,479 | ||||||
Liabilities [Abstract] | ||||||||||
Refund liability | 106,732 | 106,732 | 83,019 | |||||||
Accounts payable | 941,747 | 941,747 | 788,613 | |||||||
Other current liabilities | 57,088 | 57,088 | $ 45,727 | |||||||
Cost of goods sold | 1,925,180 | $ 1,508,924 | 5,460,845 | $ 4,415,076 | ||||||
Selling, general and administrative expenses (1) | 879,150 | $ 695,978 | [2] | 2,472,085 | [2] | $ 2,003,065 | [2] | |||
Adjustment Due to ASC 606 [Member] | ||||||||||
Assets | ||||||||||
Receivables, net | 38,511 | |||||||||
Prepaid expenses and other current assets | 44,508 | |||||||||
Liabilities [Abstract] | ||||||||||
Refund liability | $ 83,019 | |||||||||
Amount of adjustment to prior balance [Member] | ||||||||||
Assets | ||||||||||
Revenue | 3,123,468 | 8,882,558 | ||||||||
Receivables, net | 1,205,833 | 1,205,833 | ||||||||
Prepaid expenses and other current assets | 144,255 | 144,255 | ||||||||
Liabilities [Abstract] | ||||||||||
Cost of goods sold | 1,925,107 | 5,467,061 | ||||||||
Selling, general and administrative expenses (1) | 880,313 | 2,474,534 | ||||||||
Adjustment Due to ASC 606 [Member] | ||||||||||
Assets | ||||||||||
Revenue | (1,090) | (8,665) | ||||||||
Receivables, net | 50,043 | 50,043 | ||||||||
Prepaid expenses and other current assets | 56,689 | 56,689 | ||||||||
Liabilities [Abstract] | ||||||||||
Refund liability | 106,732 | 106,732 | ||||||||
Cost of goods sold | 73 | (6,216) | ||||||||
Selling, general and administrative expenses (1) | $ (1,163) | $ (2,449) | ||||||||
[1] | (2) The sum of the individual earnings per share amounts may not equal the total due to rounding. | |||||||||
[2] | (1) Selling, general and administrative expenses contain facility and warehouses expenses and distribution expenses that were previously shown separately. |
Financial Statement Informati_8
Financial Statement Information Equity Method Investments (Details) | Dec. 01, 2016 |
Mekonomen [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Additional Information | December 1, 2016 |
Financial Statement Informati_9
Financial Statement Information Finite-Lived Intangible Assets Acquired as Part of Business Combination (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Stahlgruber [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 285,529,000 |
Stahlgruber [Member] | Trademarks and Trade Names [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | 173,946,000 |
Stahlgruber [Member] | Customer and supplier relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | 78,239,000 |
Stahlgruber [Member] | Software and technology related assets [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | 33,344,000 |
All 2018 Acquisitions excluding Stahlgruber [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | 11,181,000 |
All 2018 Acquisitions excluding Stahlgruber [Member] | Trademarks and Trade Names [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | 2,895,000 |
All 2018 Acquisitions excluding Stahlgruber [Member] | Customer and supplier relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | 8,194,000 |
All 2018 Acquisitions excluding Stahlgruber [Member] | Software and technology related assets [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | 92,000 |
All 2018 Acquisitions [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | 296,710,000 |
All 2018 Acquisitions [Member] | Trademarks and Trade Names [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | 176,841,000 |
All 2018 Acquisitions [Member] | Customer and supplier relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | 86,433,000 |
All 2018 Acquisitions [Member] | Software and technology related assets [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 33,436,000 |
Financial Statement Informat_10
Financial Statement Information Finite-Lived Intangible Assets Acquired As Part Of Business Combination, Remaining Useful Life (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 16 years 6 months | |
Customer and supplier relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 11 years 2 months 12 days | |
Customer and supplier relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 18 years 7 months 6 days | |
Computer Software, Intangible Asset [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 11 years 1 month 6 days | |
Covenants not to compete [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 4 years 4 months 24 days | |
All 2018 Acquisitions excluding Stahlgruber [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 12 years 2 months 12 days | |
All 2018 Acquisitions excluding Stahlgruber [Member] | Customer and supplier relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 20 years | |
All 2018 Acquisitions excluding Stahlgruber [Member] | Customer and supplier relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years 7 months 6 days | |
All 2018 Acquisitions excluding Stahlgruber [Member] | Computer Software, Intangible Asset [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 6 years | |
Stahlgruber [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 13 years 8 months 12 days | |
Stahlgruber [Member] | Customer and supplier relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 19 years 10 months 24 days | |
Stahlgruber [Member] | Customer and supplier relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | |
Stahlgruber [Member] | Computer Software, Intangible Asset [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 6 years 9 months 18 days | |
All 2018 Acquisitions [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 13 years 8 months 12 days | |
All 2018 Acquisitions [Member] | Customer and supplier relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 19 years 10 months 24 days | |
All 2018 Acquisitions [Member] | Customer and supplier relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years 7 months 6 days | |
All 2018 Acquisitions [Member] | Computer Software, Intangible Asset [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 6 years 9 months 18 days |
Revenue Recognition Disaggreg_2
Revenue Recognition Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Revenue Recognition [Line Items] | |||||
Revenue | $ 3,122,378 | $ 2,465,800 | $ 8,873,893 | $ 7,267,054 | |
Contract with Customer, Refund Liability | 107,000 | 107,000 | |||
Contract with Customer, Right to Recover Product | 57,000 | 57,000 | |||
Contract With Customer, Right Of Return, Net | $ 38,000 | ||||
Revenue, Variable Consideration Reserve | 114,000 | 114,000 | $ 78,000 | ||
North America | |||||
Revenue Recognition [Line Items] | |||||
Revenue | 1,262,799 | 1,181,943 | 3,927,808 | 3,596,697 | |
Europe | |||||
Revenue Recognition [Line Items] | |||||
Revenue | 1,470,856 | 954,522 | 3,795,439 | 2,665,170 | |
Specialty | |||||
Revenue Recognition [Line Items] | |||||
Revenue | 390,061 | 330,594 | 1,154,726 | 1,008,998 | |
Parts and Services | |||||
Revenue Recognition [Line Items] | |||||
Revenue | 2,961,981 | 2,333,757 | 8,379,337 | 6,872,581 | |
Parts and Services | North America | |||||
Revenue Recognition [Line Items] | |||||
Revenue | 1,109,067 | 1,051,470 | 3,447,074 | 3,207,001 | |
Parts and Services | Europe | |||||
Revenue Recognition [Line Items] | |||||
Revenue | 1,464,049 | 952,765 | 3,781,091 | 2,659,804 | |
Parts and Services | Specialty | |||||
Revenue Recognition [Line Items] | |||||
Revenue | 388,865 | 329,522 | 1,151,172 | 1,005,776 | |
Other Revenue | |||||
Revenue Recognition [Line Items] | |||||
Revenue | $ 160,397 | $ 132,043 | $ 494,556 | $ 394,473 |
Revenue Recognition Movement in
Revenue Recognition Movement in Standard Prodcut Warranty Accrual (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Product Warranty Liability [Line Items] | ||
Deferred Service-Type Warranty Revenue | $ 23,154 | $ 19,465 |
Deferred Revenue, Additions | 28,889 | |
Deferred Revenue, Revenue Recognized | $ (25,200) | |
Minimum | ||
Product Warranty Liability [Line Items] | ||
Standard Product Warranty Period | 6 months | |
Maximum | ||
Product Warranty Liability [Line Items] | ||
Standard Product Warranty Period | 36 months |
Restructuring and Acquisition_2
Restructuring and Acquisition Related Expenses - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Acquisition Related Expenses [Abstract] | ||||
Business Combination, Acquisition Related Costs | $ 1 | $ 3 | $ 17 | $ 8 |
Acquisition And Restructuring Integration Plans [Abstract] | ||||
Restructuring Costs | 5 | $ 2 | 10 | |
Specialty | ||||
Acquisition And Restructuring Integration Plans [Abstract] | ||||
Restructuring Costs | 1 | 2 | ||
Stahlgruber [Member] | ||||
Acquisition Related Expenses [Abstract] | ||||
Business Combination, Acquisition Related Costs | 1 | 15 | ||
Andrew Page | ||||
Acquisition And Restructuring Integration Plans [Abstract] | ||||
Restructuring Costs | 4 | 8 | ||
Maximum | ||||
Acquisition And Restructuring Integration Plans [Abstract] | ||||
Expected future restructuring expenses | $ (10) | $ (10) |
Equity Incentive Plans - Additi
Equity Incentive Plans - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($)shares | |
RSUs | |
RSUs [Abstract] | |
Fair value of RSUs vested during the period | $ | $ 27 |
Performance Shares [Member] | |
RSUs [Abstract] | |
Reporting period of positive diluted earnings per share | 5 years |
Stock options | |
Stock Options [Abstract] | |
Options granted during the period | 0 |
Options vested during the period | 0 |
Minimum | Stock options | |
Stock Options [Abstract] | |
Stock options expiration period | 6 years |
Maximum | RSUs | |
Stock Options [Abstract] | |
Vesting period | 5 years |
Maximum | Stock options | |
Stock Options [Abstract] | |
Stock options expiration period | 10 years |
Vesting period | 5 years |
Equity Incentive Plans Schedule
Equity Incentive Plans Schedule of Unvested Restricted Stock Units Activity (Details) - RSUs - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Shares Outstanding [Abstract] | ||
Unvested RSUs, shares | 1,493,522 | 1,624,390 |
RSUs granted, shares | 601,802 | |
RSUs vested, shares | (698,903) | |
RSUs forfeited/canceled, shares | (33,767) | |
RSUs expected to vest | 1,344,519 | |
lkq_expected_to_vest_other_than_options_weighted_average_per_share | $ 34.88 | |
Weighted Average Fair Value [Abstract] | ||
Unvested RSUs, weighted average grant date fair value | 34.89 | $ 29.94 |
RSUs granted, weighted average grant date fair value | 42.58 | |
RSUs vested, weighted average grant date fair value | 30.07 | |
RSUs forfeited/canceled, weighted average grant date fair value | $ 33.28 | |
RSUs expected to vest, weighted average remaining contractual term | 2 years 7 months 6 days | |
RSUs expected to vest, aggregate intrinsic value | $ 42,581 |
Equity Incentive Plans Schedu_2
Equity Incentive Plans Schedule of Stock Option Activity (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Shares Outstanding [Abstract] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 1,296,069 | 1,738,073 |
Stock options exercised, shares | (441,495) | |
Stock options forfeited/canceled, shares | (509) | |
Exercisable and expected to vest stock options, shares | 1,296,069 | |
Weighted Average Fair Value [Abstract] | ||
Stock options outstanding, weighted average exercise price | $ 9.42 | $ 9.20 |
Stock options exercised, weighted average exercise price | 8.54 | |
Stock options forfeited/canceled, weighted average exercise price | 32.31 | |
Exercisable and expected to vest stock options, weighted average exercise price | $ 9.42 | |
Weighted Average Contractual Term [Abstract] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 1 year | |
Exercisable and expected to vest stock options, weighted average remaining contractual term (years) | 1 year | |
Aggregate Intrinsic Value [Abstract] | ||
Stock options exercised, aggregate intrinsic value | $ 12,678 | |
Stock options outstanding, aggregate intrinsic value | 28,862 | |
Exercisable and expected to vest stock options, aggregate intrinsic value | $ 28,862 |
Schedule of Stock-Based Compens
Schedule of Stock-Based Compensation Expense Expected to be Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock-based compensation expense | $ 17,544 | $ 17,582 | ||
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock-based compensation expense | $ 5,700 | $ 5,158 | 17,544 | $ 17,582 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 40,000 | $ 40,000 |
Earnings Per Share Earnings P_2
Earnings Per Share Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule of Earnings Per Share, Basic and Diluted [Line Items] | ||||
Income from continuing operations | $ 134,480 | $ 122,381 | $ 445,109 | $ 414,104 |
Denominator for basic earnings per share—Weighted-average shares outstanding | 318,082 | 308,909 | 313,417 | 308,451 |
Effect of dilutive securities: | ||||
Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding | 319,402 | 310,779 | 314,951 | 310,495 |
Basic earnings per share from continuing operations | $ 0.42 | $ 0.40 | $ 1.42 | $ 1.34 |
Diluted earnings per share from continuing operations | $ 0.42 | $ 0.39 | $ 1.41 | $ 1.33 |
RSUs | ||||
Effect of dilutive securities: | ||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 333 | 485 | 452 | 501 |
Stock options | ||||
Effect of dilutive securities: | ||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 987 | 1,385 | 1,082 | 1,543 |
Schedule of Antidilutive Securi
Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restricted Stock Units (RSUs) [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive securities | 375 | 317 | 50 |
Employee Stock Option [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive securities | 51 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Accumulated other comprehensive loss | $ 134,791 | $ 97,612 | $ 134,791 | $ 97,612 | $ 116,061 | $ 70,476 | $ 154,270 | $ 267,175 |
Pretax income (loss) | (14,507) | 48,367 | (48,338) | 132,797 | ||||
Income tax effect | (699) | (1,532) | 3,544 | (12,269) | ||||
Reclassification of unrealized loss (gain) | (7,263) | 12,391 | (26,020) | 44,630 | ||||
Reclassification of deferred income taxes | (1,698) | 4,598 | (6,082) | 16,573 | ||||
Other comprehensive income from unconsolidated subsidiaries | 643 | (1,034) | 2,160 | (1,635) | ||||
Disposal of business, net | (1,925) | |||||||
Adoption of ASU 2018-02 (see Note 4) | 5,345 | |||||||
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Accumulated other comprehensive loss | 146,704 | 97,735 | 146,704 | 97,735 | 125,753 | 71,933 | 157,353 | 272,529 |
Pretax income (loss) | (23,405) | 63,769 | (82,137) | 177,434 | ||||
Income tax effect | (2,454) | 4,151 | (4,507) | 4,151 | ||||
Reclassification of unrealized loss (gain) | 0 | |||||||
Reclassification of deferred income taxes | 0 | |||||||
Other comprehensive income from unconsolidated subsidiaries | 0 | |||||||
Disposal of business, net | 1,511 | |||||||
Adoption of ASU 2018-02 (see Note 4) | 2,859 | |||||||
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Accumulated other comprehensive loss | (19,988) | (8,548) | (19,988) | (8,548) | (19,684) | (11,538) | (10,324) | (8,091) |
Pretax income (loss) | 7,681 | (15,402) | 33,901 | (44,749) | ||||
Income tax effect | 1,796 | (5,683) | 7,926 | (16,463) | ||||
Reclassification of unrealized loss (gain) | (7,284) | 12,591 | (26,117) | 45,551 | ||||
Reclassification of deferred income taxes | (1,703) | 4,648 | (6,106) | 16,808 | ||||
Other comprehensive income from unconsolidated subsidiaries | 0 | |||||||
Adoption of ASU 2018-02 (see Note 4) | 2,486 | |||||||
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Accumulated other comprehensive loss | 6,790 | 6,790 | ||||||
Reclassification of unrealized loss (gain) | (200) | |||||||
Reclassification of deferred income taxes | 50 | |||||||
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Accumulated other comprehensive loss | 8,926 | 6,790 | 8,926 | 6,790 | (10,200) | (8,772) | (6,640) | $ (2,737) |
Pretax income (loss) | 1,217 | (102) | 112 | |||||
Income tax effect | (41) | 125 | 43 | |||||
Reclassification of unrealized loss (gain) | 21 | 97 | (921) | |||||
Reclassification of deferred income taxes | 5 | 24 | (235) | |||||
Other comprehensive income from unconsolidated subsidiaries | 0 | |||||||
Disposal of business, net | (3,436) | |||||||
Accumulated Gain (Loss) from Unconsoldated Subsidiaries [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Accumulated other comprehensive loss | (851) | 1,635 | (851) | 1,635 | $ (208) | $ 1,309 | $ 601 | |
Pretax income (loss) | 0 | |||||||
Income tax effect | 0 | |||||||
Reclassification of unrealized loss (gain) | 0 | |||||||
Reclassification of deferred income taxes | 0 | |||||||
Other comprehensive income from unconsolidated subsidiaries | 643 | (1,034) | 2,160 | (1,635) | ||||
Cross Currency Fx Forward Contract [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | $ 2,000 | $ 2,000 | $ 6,000 | $ 6,000 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Adoption of ASU 2018-02 (see Note 4) | $ 5,345 | |||
Interest Rate Swap | ||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | $ 2,000 | 5,000 | $ 1,000 | |
Cross Currency Fx Forward Contract [Member] | ||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | 2,000 | $ 2,000 | 6,000 | 6,000 |
Cross Currency Interest Rate Contract [Member] | ||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | $ 3,000 | $ (15,000) | 15,000 | $ (50,000) |
Accumulated Other Comprehensive Income (Loss) | ||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Adoption of ASU 2018-02 (see Note 4) | $ 5,345 |
Long-Term Obligations - Additio
Long-Term Obligations - Additional Information (Details) $ in Thousands, € in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | 13 Months Ended | ||||||
Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Jan. 29, 2023USD ($) | Apr. 09, 2018EUR (€) | Dec. 01, 2017USD ($) | Nov. 29, 2016USD ($) | Apr. 14, 2016 | Jan. 29, 2016USD ($) | May 09, 2013USD ($) | |
US Notes (2023) [Member] | ||||||||||
Debt Instrument | ||||||||||
Long-term Debt | $ 600,000 | $ 600,000 | $ 600,000 | |||||||
Senior notes interest rate | 4.75% | |||||||||
Euro Notes (2024) | ||||||||||
Debt Instrument | ||||||||||
Long-term Debt | 580,200 | 580,200 | 600,150 | |||||||
Senior notes interest rate | 3.875% | |||||||||
Euro Notes 2026/28 [Member] | ||||||||||
Debt Instrument | ||||||||||
Payments of Financing Costs | 16,000 | |||||||||
Long-term Debt | 1,160,400 | 1,160,400 | € 1,000 | |||||||
Receivables securitization | ||||||||||
Debt Instrument | ||||||||||
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount | 100,000 | 100,000 | 100,000 | |||||||
Revolving Credit Facility [Member] | ||||||||||
Debt Instrument | ||||||||||
Long-term Line of Credit | $ 1,800,000 | $ 1,800,000 | 2,000,000 | |||||||
Amendment No. 2, Fourth Amended and Restate Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||||||||
Debt Instrument | ||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,750,000 | |||||||||
Line of Credit Facility, Increase (Decrease), Net | $ 300,000 | |||||||||
Line of Credit Facility, Frequency of Payments | quarterly installments | |||||||||
Line of Credit Facility, Periodic Payment | $ 9,000 | |||||||||
Increment change in applicable margin | 0.25% | |||||||||
Weighted average interest rates | 2.20% | 2.20% | 2.20% | |||||||
Long-Term Line of Credit, Current | $ 18,000 | |||||||||
Outstanding letters of credit | $ 65,000 | $ 65,000 | ||||||||
Availability on the revolving credit facility | $ 1,500,000 | $ 1,500,000 | ||||||||
Payments of Financing Costs | 5,000 | |||||||||
Amendment No. 2, Fourth Amended and Restate Credit Agreement [Member] | Letter of Credit [Member] | ||||||||||
Debt Instrument | ||||||||||
Line of Credit Facility, Commitment Fee Percentage | 0.125% | |||||||||
Fourth Amended Credit Agreement | Revolving Credit Facility [Member] | ||||||||||
Debt Instrument | ||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,450,000 | |||||||||
Mitsubishi UFJ [Member] | Receivables securitization | ||||||||||
Debt Instrument | ||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000 | |||||||||
Weighted average interest rates | 3.10% | 3.10% | ||||||||
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount | $ 100,000 | $ 100,000 | 100,000 | |||||||
Twenty Twenty Three [Domain] | US Notes (2023) [Member] | ||||||||||
Debt Instrument | ||||||||||
Long-term Debt | $ 600,000 | |||||||||
TwentyTwentySix [Member] | Euro Notes 2026/28 [Member] | ||||||||||
Debt Instrument | ||||||||||
Long-term Debt | € | € 750 | |||||||||
Senior notes interest rate | 3.625% | |||||||||
TwentyTwentyEight [Member] | Euro Notes 2026/28 [Member] | ||||||||||
Debt Instrument | ||||||||||
Long-term Debt | € | € 250 | |||||||||
Senior notes interest rate | 4.125% | |||||||||
Net Receivables [Member] | Mitsubishi UFJ [Member] | Receivables securitization | ||||||||||
Debt Instrument | ||||||||||
Debt Instrument, Collateral Amount | $ 127,000 | $ 127,000 | $ 144,000 | |||||||
Minimum increment [Member] | Amendment No. 2, Fourth Amended and Restate Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||||||||
Debt Instrument | ||||||||||
Increment change in commitment fees | 0.025% | 0.025% | ||||||||
Maximum increment [Member] | Amendment No. 2, Fourth Amended and Restate Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||||||||
Debt Instrument | ||||||||||
Increment change in commitment fees | 0.05% | 0.05% |
Schedule of Long-Term Obligatio
Schedule of Long-Term Obligations (Details) $ in Thousands, € in Millions | Sep. 30, 2018USD ($) | Apr. 09, 2018EUR (€) | Dec. 31, 2017USD ($) | Apr. 14, 2016EUR (€) |
Debt Instrument | ||||
Long-term obligations, total | $ 4,404,369 | $ 3,428,280 | ||
Deferred Finance Costs, Noncurrent, Net | (31,251) | (21,476) | ||
Deferred Finance Costs, Current, Net | (4,616) | (2,824) | ||
Long-term obligations, total, net | 4,368,502 | 3,403,980 | ||
Current portion of long-term obligations | (118,365) | (126,360) | ||
Long-term obligations, excluding current portion | 4,250,137 | 3,277,620 | ||
Loans Payable | ||||
Debt Instrument | ||||
Term loan | 590,000 | 704,800 | ||
Revolving Credit Facility [Member] | ||||
Debt Instrument | ||||
Long-term Line of Credit | 1,183,626 | 1,283,551 | ||
US Notes (2023) [Member] | ||||
Debt Instrument | ||||
Long-term Debt | 600,000 | 600,000 | ||
Euro Notes (2024) | ||||
Debt Instrument | ||||
Long-term Debt | 580,200 | 600,150 | ||
Euro Notes 2026/28 [Member] | ||||
Debt Instrument | ||||
Long-term Debt | 1,160,400 | € 1,000 | ||
Receivables securitization | ||||
Debt Instrument | ||||
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount | 100,000 | 100,000 | ||
Notes payable | ||||
Debt Instrument | ||||
Notes Payable | 38,641 | 29,146 | ||
Other Long Term Debt | ||||
Debt Instrument | ||||
Other long-term debt | 151,502 | 110,633 | ||
Revolving Credit Facility [Member] | ||||
Debt Instrument | ||||
Long-term Line of Credit | $ 1,800,000 | $ 2,000,000 | ||
Twenty Twenty Four [Domain] | Euro Notes (2024) | ||||
Debt Instrument | ||||
Long-term Debt | € | € 500 | |||
TwentyTwentySix [Member] | Euro Notes 2026/28 [Member] | ||||
Debt Instrument | ||||
Long-term Debt | € | 750 | |||
TwentyTwentyEight [Member] | Euro Notes 2026/28 [Member] | ||||
Debt Instrument | ||||
Long-term Debt | € | € 250 |
Schedule of Long-Term Obligat_2
Schedule of Long-Term Obligations (Parenthetical) (Details) | Jun. 30, 2018 | Dec. 31, 2017 |
Notes payable | ||
Debt Instrument | ||
Weighted average interest rates | 1.50% | 1.40% |
Other Long Term Debt | ||
Debt Instrument | ||
Weighted average interest rates | 2.20% | 1.70% |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities (Details) $ in Thousands, € in Millions | 3 Months Ended | 9 Months Ended | ||||||
Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018EUR (€) | Sep. 30, 2018EUR (€) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2016EUR (€) | |
Effect of Netting Derivative Instruments | $ (19,000) | $ (19,000) | $ (12,000) | |||||
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net | 4,000 | 4,000 | ||||||
Settlement of Notional Amounts | € | € (15) | |||||||
Derivative Asset, Noncurrent | 36,600 | 36,600 | 24,606 | |||||
Derivative Liability, Noncurrent | 49,212 | 49,212 | 61,492 | |||||
Interest Rate Swap [Member] | ||||||||
Derivative, Notional Amount | 590,000 | 590,000 | 590,000 | |||||
Derivative Asset, Noncurrent | 25,719 | 25,719 | 19,102 | |||||
Cross Currency Interest Rate Contract [Member] | ||||||||
Derivative, Notional Amount | 394,649 | 394,649 | 406,546 | $ 422,000 | € 400 | |||
Derivative Asset, Noncurrent | 10,881 | 10,881 | 5,504 | |||||
Derivative Liability, Noncurrent | 49,212 | 49,212 | $ 61,492 | |||||
Right to acquire equity method investment [Domain] | Mekonomen [Member] | ||||||||
Derivative Asset, Noncurrent | 29,000 | 29,000 | ||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | $ 8,000 | $ (2,509) | $ (2,509) | |||||
2018 Cross Currency Swaps [Member] | Cross Currency Interest Rate Contract [Member] | ||||||||
Derivative, Notional Amount | $ 184,000 | € 160 |
Fair Value Disclosures (Details
Fair Value Disclosures (Details) $ in Thousands, € in Billions | Sep. 30, 2018USD ($) | Apr. 09, 2018EUR (€) | Dec. 31, 2017USD ($) |
Fair Value, Measurements, Recurring [Member] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Assets, Fair Value Disclosure | $ 118,974 | $ 70,590 | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 108,874 | 111,327 | |
Fair Value, Measurements, Recurring [Member] | Cash Surrender Value [Member] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Assets, Fair Value Disclosure | 53,691 | 45,984 | |
Fair Value, Measurements, Recurring [Member] | Interest Rate Swap [Member] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Assets, Fair Value Disclosure | 25,719 | 19,102 | |
Fair Value, Measurements, Recurring [Member] | Cross Currency Interest Rate Contract [Member] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Assets, Fair Value Disclosure | 10,881 | 5,504 | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 49,212 | 61,492 | |
Fair Value, Measurements, Recurring [Member] | Contingent Consideration Liabilities [Member] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 5,243 | 2,636 | |
Fair Value, Measurements, Recurring [Member] | Deferred Compensation Liabilities [Member] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 54,419 | 47,199 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Assets, Fair Value Disclosure | 118,974 | 70,590 | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 103,631 | 108,691 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Cash Surrender Value [Member] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Assets, Fair Value Disclosure | 53,691 | 45,984 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Assets, Fair Value Disclosure | 25,719 | 19,102 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Cross Currency Interest Rate Contract [Member] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Assets, Fair Value Disclosure | 10,881 | 5,504 | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 49,212 | 61,492 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Deferred Compensation Liabilities [Member] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 54,419 | 47,199 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 5,243 | 2,636 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Contingent Consideration Liabilities [Member] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 5,243 | 2,636 | |
Revolving Credit Facility [Member] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Long-term Line of Credit | 1,800,000 | 2,000,000 | |
Euro Notes 2026/28 [Member] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Long-term Debt | 1,160,400 | € 1 | |
Euro Notes (2024) | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Long-term Debt, Fair Value | 615,000 | 658,000 | |
Long-term Debt | 580,200 | 600,150 | |
Receivables securitization | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount | 100,000 | 100,000 | |
US Notes (2023) [Member] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Long-term Debt, Fair Value | 601,000 | 615,000 | |
Long-term Debt | 600,000 | $ 600,000 | |
Mekonomen [Member] | Fair Value, Measurements, Recurring [Member] | Right to acquire equity method investment [Domain] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Assets, Fair Value Disclosure | 28,683 | ||
Mekonomen [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Right to acquire equity method investment [Domain] | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||
Assets, Fair Value Disclosure | $ 28,683 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Other Adjustments, Percent | 1.00% | ||
Effective Income Tax Rate Reconciliation, Change in the Discrete Items, Amount | $ 12 | $ 8 | |
Tax Cuts and Jobs Act of 2017 Transition Tax Adjustment for Accumulated Foreign Earnings Provisional Amount | 10 | ||
Excess Tax Benefit on Stock Based Payments | $ 4 | $ 7 | |
Tax Cuts and Jobs Act of 2017, transition tax for accumulated foreign earnings, provisional amount | $ 51 | ||
Effective Income Tax Rate Reconciliation, Change as a result of the Discrete Items, Percent | 0.60% |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||||||
Liability, Defined Benefit Plan | $ 111,000 | $ 111,000 | ||||
Liability, Defined Benefit Plan, Noncurrent | $ 46,000 | |||||
Service Cost | 628 | $ 1,126 | 1,612 | $ 2,902 | ||
Interest Cost | 996 | 750 | 2,442 | 2,091 | ||
Expected Return on Plan Assets | (720) | (507) | (2,220) | (1,059) | ||
Amortization of Prior Service Credit | (71) | (201) | ||||
Amortization of Actuarial (Gain) Loss | 21 | (129) | 97 | (720) | ||
Net Periodic Benefit Expense | 925 | $ 1,169 | 1,931 | $ 3,013 | ||
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 1,000 | 12,000 | ||||
Stahlgruber [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Liability, Defined Benefit Plan | $ 75,000 | $ 75,000 |
Future Minimum Lease Commitment
Future Minimum Lease Commitments (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year | $ 72,780 |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 271,642 |
Operating Leases, Future Minimum Payments, Due in Two Years | 226,936 |
Operating Leases, Future Minimum Payments, Due in Three Years | 179,921 |
Operating Leases, Future Minimum Payments, Due in Four Years | 144,700 |
Operating Leases, Future Minimum Payments, Due in Five Years | 122,149 |
Thereafter | 689,583 |
Future Minimum Lease Payments | $ 1,707,711 |
Segment and Geographic Inform_3
Segment and Geographic Information - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | |
Segment Reporting Information | ||||
Revenue | $ 3,122,378 | $ 2,465,800 | $ 8,873,893 | $ 7,267,054 |
Segment EBITDA | 326,344 | 267,035 | 963,531 | 863,164 |
Depreciation and amortization | $ 81,473 | 59,902 | 210,977 | 166,508 |
Number of operating segments | 4 | |||
Number of reportable segments | 3 | |||
Third Party [Member] | ||||
Segment Reporting Information | ||||
Revenue | $ 3,122,378 | 2,465,800 | 8,873,893 | 7,267,054 |
North America | ||||
Segment Reporting Information | ||||
Revenue | 1,262,799 | 1,181,943 | 3,927,808 | 3,596,697 |
Segment EBITDA | 154,049 | 152,627 | 506,772 | 502,494 |
Depreciation and amortization | $ 22,151 | 22,104 | 64,985 | 64,305 |
Number of reportable segments | 1 | |||
North America | Intersegment [Member] | ||||
Segment Reporting Information | ||||
Revenue | $ 142 | 187 | 526 | 589 |
North America | Third Party [Member] | ||||
Segment Reporting Information | ||||
Revenue | 1,262,657 | 1,181,756 | 3,927,282 | 3,596,108 |
Europe | ||||
Segment Reporting Information | ||||
Revenue | 1,470,856 | 954,522 | 3,795,439 | 2,665,170 |
Segment EBITDA | 129,358 | 79,294 | 315,785 | 241,537 |
Depreciation and amortization | 52,139 | 32,326 | 124,697 | 85,809 |
Europe | Third Party [Member] | ||||
Segment Reporting Information | ||||
Revenue | 1,470,856 | 954,522 | 3,795,439 | 2,665,170 |
Specialty | ||||
Segment Reporting Information | ||||
Revenue | 390,061 | 330,594 | 1,154,726 | 1,008,998 |
Segment EBITDA | 42,937 | 35,114 | 140,974 | 119,133 |
Depreciation and amortization | 7,183 | 5,472 | 21,295 | 16,394 |
Specialty | Intersegment [Member] | ||||
Segment Reporting Information | ||||
Revenue | 1,196 | 1,072 | 3,554 | 3,222 |
Specialty | Third Party [Member] | ||||
Segment Reporting Information | ||||
Revenue | 388,865 | 329,522 | 1,151,172 | 1,005,776 |
Intersegment Eliminations [Member] | ||||
Segment Reporting Information | ||||
Revenue | (1,338) | (1,259) | (4,080) | (3,811) |
Intersegment Eliminations [Member] | Intersegment [Member] | ||||
Segment Reporting Information | ||||
Revenue | $ (1,338) | $ (1,259) | $ (4,080) | $ (3,811) |
Schedule of Financial Performan
Schedule of Financial Performance by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information | ||||
Revenue | $ 3,122,378 | $ 2,465,800 | $ 8,873,893 | $ 7,267,054 |
Segment EBITDA | 326,344 | 267,035 | 963,531 | 863,164 |
Depreciation and amortization | 81,473 | 59,902 | 210,977 | 166,508 |
North America | ||||
Segment Reporting Information | ||||
Revenue | 1,262,799 | 1,181,943 | 3,927,808 | 3,596,697 |
Segment EBITDA | 154,049 | 152,627 | 506,772 | 502,494 |
Depreciation and amortization | 22,151 | 22,104 | 64,985 | 64,305 |
Europe | ||||
Segment Reporting Information | ||||
Revenue | 1,470,856 | 954,522 | 3,795,439 | 2,665,170 |
Segment EBITDA | 129,358 | 79,294 | 315,785 | 241,537 |
Depreciation and amortization | 52,139 | 32,326 | 124,697 | 85,809 |
Specialty | ||||
Segment Reporting Information | ||||
Revenue | 390,061 | 330,594 | 1,154,726 | 1,008,998 |
Segment EBITDA | 42,937 | 35,114 | 140,974 | 119,133 |
Depreciation and amortization | 7,183 | 5,472 | 21,295 | 16,394 |
Intersegment Eliminations [Member] | ||||
Segment Reporting Information | ||||
Revenue | (1,338) | (1,259) | (4,080) | (3,811) |
Third Party [Member] | ||||
Segment Reporting Information | ||||
Revenue | 3,122,378 | 2,465,800 | 8,873,893 | 7,267,054 |
Third Party [Member] | North America | ||||
Segment Reporting Information | ||||
Revenue | 1,262,657 | 1,181,756 | 3,927,282 | 3,596,108 |
Third Party [Member] | Europe | ||||
Segment Reporting Information | ||||
Revenue | 1,470,856 | 954,522 | 3,795,439 | 2,665,170 |
Third Party [Member] | Specialty | ||||
Segment Reporting Information | ||||
Revenue | 388,865 | 329,522 | 1,151,172 | 1,005,776 |
Intersegment [Member] | North America | ||||
Segment Reporting Information | ||||
Revenue | 142 | 187 | 526 | 589 |
Intersegment [Member] | Specialty | ||||
Segment Reporting Information | ||||
Revenue | 1,196 | 1,072 | 3,554 | 3,222 |
Intersegment [Member] | Intersegment Eliminations [Member] | ||||
Segment Reporting Information | ||||
Revenue | $ (1,338) | $ (1,259) | $ (4,080) | $ (3,811) |
Reconciliation Of Segment EBITD
Reconciliation Of Segment EBITDA To Net Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Reconciliation of Segment Earnings Before Interest Taxes Depreciation And Amortization to Net Income Table [Line Items] | ||||||
Interest expense, net | $ 40,860 | $ 25,222 | $ 107,647 | $ 73,806 | ||
Net income | 134,480 | 122,381 | 445,109 | 409,573 | ||
Less: net income attributable to noncontrolling interest | 378 | 1,040 | ||||
Noncontrolling interest | 56,956 | 56,956 | $ 8,484 | |||
Net income attributable to LKQ stockholders | 134,102 | 122,381 | 444,069 | 409,573 | ||
Net loss from discontinued operations | (4,531) | |||||
Net income from continuing operations attributable to LKQ stockholders | 134,102 | 122,381 | 444,069 | 414,104 | ||
Depreciation and amortization | 76,701 | 56,877 | 196,322 | 159,178 | ||
Depreciation and amortization - cost of goods sold | 4,772 | 3,025 | 14,655 | 7,330 | ||
Provision for income taxes | 46,068 | 58,189 | 156,427 | 206,206 | ||
EBITDA | 302,503 | 265,694 | 919,120 | 860,624 | ||
Equity in (losses) earnings of unconsolidated subsidiaries | (20,284) | 2,673 | (18,326) | 3,878 | ||
Gains on bargain purchases | 913 | 328 | 3,990 | $ (3,870) | ||
Restructuring and acquisition related expenses | 6,614 | 4,922 | 26,546 | 10,371 | ||
Inventory step-up adjustment - acquisition related | 403 | |||||
Impairment of net assets held for sale | 2,438 | |||||
Change in fair value of contingent consideration liabilities | 548 | (5) | 465 | (37) | ||
Segment EBITDA | 326,344 | $ 267,035 | 963,531 | $ 863,164 | ||
Right to acquire equity method investment [Domain] | Mekonomen [Member] | ||||||
Reconciliation of Segment Earnings Before Interest Taxes Depreciation And Amortization to Net Income Table [Line Items] | ||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | $ (8,000) | $ 2,509 | $ 2,509 |
Schedule of Capital Expenditure
Schedule of Capital Expenditures by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information | ||||
Capital Expenditures | $ 56,342 | $ 43,992 | $ 171,763 | $ 135,537 |
North America | ||||
Segment Reporting Information | ||||
Capital Expenditures | 27,996 | 31,021 | 86,864 | 69,934 |
Europe | ||||
Segment Reporting Information | ||||
Capital Expenditures | 23,904 | 12,119 | 69,582 | 55,253 |
Specialty | ||||
Segment Reporting Information | ||||
Capital Expenditures | $ 4,442 | $ 852 | $ 15,317 | 6,752 |
Discontinued Operations [Member] | ||||
Segment Reporting Information | ||||
Capital Expenditures | $ 3,598 |
Schedule of Assets by Reportabl
Schedule of Assets by Reportable Segment (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Segment Reporting Information | |||
Receivables, net | $ 1,255,876 | $ 1,065,617 | $ 1,027,106 |
Inventories | 2,794,894 | 2,380,783 | |
Property, plant and equipment, net | 1,201,003 | 913,089 | |
Equity method investments | 157,409 | 208,404 | |
Other unallocated assets | 6,176,154 | 4,837,490 | |
Total assets | 11,585,336 | 9,366,872 | |
North America | |||
Segment Reporting Information | |||
Receivables, net | 437,429 | 379,666 | |
Inventories | 1,058,310 | 1,076,393 | |
Property, plant and equipment, net | 560,918 | 537,286 | |
Equity method investments | 16,075 | 336 | |
Europe | |||
Segment Reporting Information | |||
Receivables, net | 696,106 | 555,372 | |
Inventories | 1,391,578 | 964,068 | |
Property, plant and equipment, net | 554,550 | 293,539 | |
Equity method investments | 141,334 | 208,068 | |
Specialty | |||
Segment Reporting Information | |||
Receivables, net | 122,341 | 92,068 | |
Inventories | 345,006 | 340,322 | |
Property, plant and equipment, net | $ 85,535 | $ 82,264 |
Segment and Geographic Inform_4
Segment and Geographic Information Schedule of Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues from External Customers and Long-Lived Assets | ||||
Revenue | $ 3,122,378 | $ 2,465,800 | $ 8,873,893 | $ 7,267,054 |
UNITED STATES | ||||
Revenues from External Customers and Long-Lived Assets | ||||
Revenue | 1,535,557 | 1,395,495 | 4,716,927 | 4,268,600 |
UNITED KINGDOM | ||||
Revenues from External Customers and Long-Lived Assets | ||||
Revenue | 408,474 | 399,155 | 1,294,155 | 1,171,829 |
GERMANY | ||||
Revenues from External Customers and Long-Lived Assets | ||||
Revenue | 415,748 | 549 | 564,698 | 862 |
Other countries | ||||
Revenues from External Customers and Long-Lived Assets | ||||
Revenue | $ 762,599 | $ 670,601 | $ 2,298,113 | $ 1,825,763 |
Schedule of Tangible Long-Lived
Schedule of Tangible Long-Lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Revenues from External Customers and Long-Lived Assets | ||
Long-lived Assets | $ 1,201,003 | $ 913,089 |
UNITED STATES | ||
Revenues from External Customers and Long-Lived Assets | ||
Long-lived Assets | 609,562 | 583,236 |
UNITED KINGDOM | ||
Revenues from External Customers and Long-Lived Assets | ||
Long-lived Assets | 170,940 | 178,021 |
Other countries | ||
Revenues from External Customers and Long-Lived Assets | ||
Long-lived Assets | 210,157 | 151,791 |
GERMANY | ||
Revenues from External Customers and Long-Lived Assets | ||
Long-lived Assets | $ 210,344 | $ 41 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Dec. 31, 2018USD ($) |
Subsequent Events [Abstract] | |
Stock Repurchase Program, Authorized Amount | $ 500 |
Condensed Consolidating Stateme
Condensed Consolidating Statements of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | ||||
Condensed Financial Statements, Captions [Line Items] | ||||||||
Revenue | $ 3,122,378 | $ 2,465,800 | $ 8,873,893 | $ 7,267,054 | ||||
Cost of goods sold | 1,925,180 | 1,508,924 | 5,460,845 | 4,415,076 | ||||
Gross margin | 1,197,198 | 956,876 | 3,413,048 | 2,851,978 | ||||
Selling, general and administrative expenses (1) | 879,150 | 695,978 | [1] | 2,472,085 | [1] | 2,003,065 | [1] | |
Restructuring and acquisition related expenses | 6,614 | 4,922 | 26,546 | 10,371 | ||||
Depreciation and amortization | 76,701 | 56,877 | 196,322 | 159,178 | ||||
Operating Income (Loss) | 234,733 | 199,099 | 718,095 | 679,364 | ||||
Other expense (income): | ||||||||
Interest expense, net | 40,860 | 25,222 | 107,647 | 73,806 | ||||
Gains on bargain purchases | (913) | (328) | (3,990) | $ 3,870 | ||||
Other (income) expense, net | (6,959) | (3,107) | (9,086) | (6,884) | ||||
Total other expense, net | 33,901 | 21,202 | 98,233 | 62,932 | ||||
(Loss) income before (benefit) provision for income taxes | 200,832 | 177,897 | 619,862 | 616,432 | ||||
Provision for income taxes | 46,068 | 58,189 | 156,427 | 206,206 | ||||
Equity in (losses) earnings of unconsolidated subsidiaries | (20,284) | 2,673 | (18,326) | 3,878 | ||||
Income from continuing operations | 134,480 | 122,381 | 445,109 | 414,104 | ||||
Net loss from discontinued operations | (4,531) | |||||||
Less: net income attributable to noncontrolling interest | 378 | 1,040 | ||||||
Net income attributable to LKQ stockholders | 134,102 | 122,381 | 444,069 | 409,573 | ||||
Parent | ||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||
Gross margin | 0 | 0 | ||||||
Selling, general and administrative expenses (1) | 6,725 | 7,861 | 25,538 | 26,209 | ||||
Depreciation and amortization | 34 | 29 | 84 | 89 | ||||
Operating Income (Loss) | (6,759) | (7,890) | (25,622) | (26,298) | ||||
Other expense (income): | ||||||||
Interest expense, net | 16,191 | 16,232 | 52,004 | 48,904 | ||||
Intercompany interest (income) expense, net | (15,121) | (2,389) | (45,927) | (10,221) | ||||
Other (income) expense, net | (178) | 32 | (1,076) | 286 | ||||
Total other expense, net | (892) | (13,875) | (5,001) | (38,969) | ||||
(Loss) income before (benefit) provision for income taxes | (7,651) | (21,765) | (30,623) | (65,267) | ||||
Provision for income taxes | (12,008) | (8,436) | (19,656) | (27,034) | ||||
Equity in earnings of subsidiaries | 129,745 | 135,710 | 455,036 | 452,337 | ||||
Income from continuing operations | 134,102 | 414,104 | ||||||
Net loss from discontinued operations | (4,531) | |||||||
Net income attributable to LKQ stockholders | 134,102 | 122,381 | 444,069 | 409,573 | ||||
Guarantors | ||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||
Revenue | 1,550,301 | 1,433,742 | 4,768,292 | 4,374,693 | ||||
Cost of goods sold | 934,913 | 861,078 | 2,869,499 | 2,613,540 | ||||
Gross margin | 615,388 | 572,664 | 1,898,793 | 1,761,153 | ||||
Selling, general and administrative expenses (1) | 434,965 | 394,926 | 1,292,455 | 1,165,897 | ||||
Restructuring and acquisition related expenses | 1,638 | 1,473 | 1,968 | 4,010 | ||||
Depreciation and amortization | 25,238 | 25,005 | 74,102 | 73,072 | ||||
Operating Income (Loss) | 153,547 | 151,260 | 530,268 | 518,174 | ||||
Other expense (income): | ||||||||
Interest expense, net | (193) | 57 | (94) | 281 | ||||
Intercompany interest (income) expense, net | 10,014 | (2,814) | 29,559 | (4,530) | ||||
Other (income) expense, net | (3,514) | (4,011) | (13,793) | (8,247) | ||||
Total other expense, net | (6,307) | 6,768 | (15,672) | 12,496 | ||||
(Loss) income before (benefit) provision for income taxes | 147,240 | 158,028 | 514,596 | 530,670 | ||||
Provision for income taxes | 41,875 | 56,920 | 141,295 | 200,321 | ||||
Equity in (losses) earnings of unconsolidated subsidiaries | (156) | (156) | ||||||
Equity in earnings of subsidiaries | 4,467 | 6,674 | 14,028 | 17,282 | ||||
Income from continuing operations | 109,676 | 347,631 | ||||||
Net loss from discontinued operations | (4,531) | |||||||
Net income attributable to LKQ stockholders | 109,676 | 107,782 | 387,173 | 343,100 | ||||
Non-Guarantors | ||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||
Revenue | 1,609,525 | 1,069,682 | 4,216,417 | 3,001,386 | ||||
Cost of goods sold | 1,027,715 | 685,470 | 2,702,162 | 1,910,561 | ||||
Gross margin | 581,810 | 384,212 | 1,514,255 | 1,090,825 | ||||
Selling, general and administrative expenses (1) | 437,460 | 293,191 | 1,154,092 | 810,959 | ||||
Restructuring and acquisition related expenses | 4,976 | 3,449 | 24,578 | 6,361 | ||||
Depreciation and amortization | 51,429 | 31,843 | 122,136 | 86,017 | ||||
Operating Income (Loss) | 87,945 | 55,729 | 213,449 | 187,488 | ||||
Other expense (income): | ||||||||
Interest expense, net | 24,862 | 8,933 | 55,737 | 24,621 | ||||
Intercompany interest (income) expense, net | 5,107 | 5,203 | 16,368 | 14,751 | ||||
Gains on bargain purchases | (913) | (328) | (3,990) | |||||
Other (income) expense, net | (3,267) | 872 | 5,783 | 1,077 | ||||
Total other expense, net | (26,702) | (14,095) | (77,560) | (36,459) | ||||
(Loss) income before (benefit) provision for income taxes | 61,243 | 41,634 | 135,889 | 151,029 | ||||
Provision for income taxes | 16,201 | 9,705 | 34,788 | 32,919 | ||||
Equity in (losses) earnings of unconsolidated subsidiaries | (20,128) | 2,673 | (18,170) | 3,878 | ||||
Income from continuing operations | 24,914 | 121,988 | ||||||
Net loss from discontinued operations | 2,050 | |||||||
Less: net income attributable to noncontrolling interest | 378 | 1,040 | ||||||
Net income attributable to LKQ stockholders | 24,536 | 34,602 | 81,891 | 124,038 | ||||
Eliminations | ||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||
Revenue | (37,448) | (37,624) | (110,816) | (109,025) | ||||
Cost of goods sold | (37,448) | (37,624) | (110,816) | (109,025) | ||||
Other expense (income): | ||||||||
Equity in earnings of subsidiaries | (134,212) | (142,384) | (469,064) | (469,619) | ||||
Income from continuing operations | (134,212) | (469,619) | ||||||
Net loss from discontinued operations | 2,481 | |||||||
Net income attributable to LKQ stockholders | $ (134,212) | $ (142,384) | $ (469,064) | $ (467,138) | ||||
[1] | (1) Selling, general and administrative expenses contain facility and warehouses expenses and distribution expenses that were previously shown separately. |
Condensed Consolidating State_2
Condensed Consolidating Statements of Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | $ 134,480 | $ 122,381 | $ 445,109 | $ 409,573 |
Less: net income attributable to noncontrolling interest | 378 | 1,040 | ||
Net income attributable to LKQ stockholders | 134,102 | 122,381 | 444,069 | 409,573 |
Other comprehensive income (loss): | ||||
Foreign currency translation, net of tax | (20,951) | 59,618 | (77,630) | 174,794 |
Net change in unrealized gains/losses on cash flow hedges, net of tax | 304 | (1,776) | 5,964 | 457 |
Net change in unrealized gains/losses on pension plans, net of tax | 1,274 | 150 | (154) | (4,053) |
Net change in other comprehensive loss from unconsolidated subsidiaries | 643 | (1,034) | 2,160 | (1,635) |
Other comprehensive (loss) income | (18,730) | 56,658 | (69,660) | 169,563 |
Comprehensive income | 115,750 | 179,039 | 375,449 | 579,136 |
Less: comprehensive income attributable to noncontrolling interest | 378 | 1,040 | ||
Comprehensive income (loss) attributable to LKQ stockholders | 115,372 | 179,039 | 374,409 | 579,136 |
Parent | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 134,102 | 444,069 | ||
Net income attributable to LKQ stockholders | 134,102 | 122,381 | 444,069 | 409,573 |
Other comprehensive income (loss): | ||||
Foreign currency translation, net of tax | (20,951) | 59,618 | (77,630) | 174,794 |
Net change in unrealized gains/losses on cash flow hedges, net of tax | 304 | (1,776) | 5,964 | 457 |
Net change in unrealized gains/losses on pension plans, net of tax | (1,274) | 150 | (154) | (4,053) |
Net change in other comprehensive loss from unconsolidated subsidiaries | 643 | (1,034) | 2,160 | (1,635) |
Other comprehensive (loss) income | (18,730) | 56,658 | (69,660) | 169,563 |
Comprehensive income | 115,372 | 374,409 | ||
Comprehensive income (loss) attributable to LKQ stockholders | 115,372 | 179,039 | 374,409 | 579,136 |
Guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 109,676 | 387,173 | ||
Net income attributable to LKQ stockholders | 109,676 | 107,782 | 387,173 | 343,100 |
Other comprehensive income (loss): | ||||
Foreign currency translation, net of tax | 1,686 | 3,590 | (2,800) | 17,565 |
Net change in unrealized gains/losses on cash flow hedges, net of tax | (133) | |||
Net change in unrealized gains/losses on pension plans, net of tax | (1,246) | (239) | (3,253) | |
Other comprehensive (loss) income | 2,932 | 3,590 | (3,039) | 14,179 |
Comprehensive income | 112,608 | 384,134 | ||
Comprehensive income (loss) attributable to LKQ stockholders | 112,608 | 111,372 | 384,134 | 357,279 |
Non-Guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 24,914 | 82,931 | ||
Less: net income attributable to noncontrolling interest | 378 | 1,040 | ||
Net income attributable to LKQ stockholders | 24,536 | 34,602 | 81,891 | 124,038 |
Other comprehensive income (loss): | ||||
Foreign currency translation, net of tax | (23,901) | 62,734 | (81,456) | 176,769 |
Net change in unrealized gains/losses on pension plans, net of tax | (28) | 150 | 85 | (800) |
Net change in other comprehensive loss from unconsolidated subsidiaries | 643 | (1,034) | 2,160 | (1,635) |
Other comprehensive (loss) income | (23,230) | 61,550 | (79,211) | 174,334 |
Comprehensive income | 1,684 | 3,720 | ||
Less: comprehensive income attributable to noncontrolling interest | 378 | 1,040 | ||
Comprehensive income (loss) attributable to LKQ stockholders | 1,306 | 96,152 | 2,680 | 298,372 |
Eliminations | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | (134,212) | (469,064) | ||
Net income attributable to LKQ stockholders | (134,212) | (142,384) | (469,064) | (467,138) |
Other comprehensive income (loss): | ||||
Foreign currency translation, net of tax | 22,215 | (66,324) | 84,256 | (194,334) |
Net change in unrealized gains/losses on cash flow hedges, net of tax | 133 | |||
Net change in unrealized gains/losses on pension plans, net of tax | 1,274 | (150) | 154 | 4,053 |
Net change in other comprehensive loss from unconsolidated subsidiaries | (643) | 1,034 | (2,160) | 1,635 |
Other comprehensive (loss) income | 20,298 | (65,140) | 82,250 | (188,513) |
Comprehensive income | (113,914) | (386,814) | ||
Comprehensive income (loss) attributable to LKQ stockholders | $ (113,914) | $ (207,524) | $ (386,814) | $ (655,651) |
Condensed Consolidating Balance
Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | |||||||
Cash and cash equivalents | $ 341,346 | $ 279,766 | $ 275,077 | ||||
Receivables, net | 1,255,876 | $ 1,065,617 | 1,027,106 | ||||
Inventories | 2,794,894 | 2,380,783 | |||||
Prepaid expenses and other current assets | 200,944 | 178,987 | 134,479 | ||||
Total current assets | 4,593,060 | 3,822,134 | |||||
Property, plant and equipment, net | 1,201,003 | 913,089 | |||||
Intangible assets: | |||||||
Goodwill | 4,475,266 | 3,536,511 | |||||
Other intangibles, net | 953,372 | 743,769 | |||||
Equity method investments | 157,409 | 208,404 | |||||
Other assets | 205,226 | 142,965 | |||||
Total assets | 11,585,336 | 9,366,872 | |||||
Current liabilities: | |||||||
Accounts payable | 941,747 | 788,613 | |||||
Accrued expenses: | |||||||
Accrued payroll-related liabilities | 153,536 | 143,424 | |||||
Other accrued expenses | 358,212 | 218,600 | |||||
Refund liability | 106,732 | $ 83,019 | |||||
Other current liabilities | 57,088 | 45,727 | |||||
Current portion of long-term obligations | 118,365 | 126,360 | |||||
Total current liabilities | 1,735,680 | 1,322,724 | |||||
Long-term obligations, excluding current portion | 4,250,137 | 3,277,620 | |||||
Deferred income taxes | 325,537 | 252,359 | |||||
Other noncurrent liabilities | 376,566 | 307,516 | |||||
Total Company stockholders' equity | 4,840,460 | 4,198,169 | |||||
Noncontrolling interest | 56,956 | 8,484 | |||||
Total stockholders' equity | 4,897,416 | $ 4,776,975 | 4,206,653 | 4,041,037 | $ 3,856,685 | $ 3,442,949 | |
Total liabilities and stockholders’ equity | 11,585,336 | 9,366,872 | |||||
Parent | |||||||
Current assets: | |||||||
Cash and cash equivalents | 48,265 | 34,360 | 20,286 | ||||
Receivables, net | 341 | ||||||
Intercompany receivables, net | 7,173 | 2,669 | |||||
Prepaid expenses and other current assets | 15,452 | 34,136 | |||||
Total current assets | 71,231 | 71,165 | |||||
Property, plant and equipment, net | 845 | 910 | |||||
Intangible assets: | |||||||
Other intangibles, net | 286 | ||||||
Investment in subsidiaries | 5,351,986 | 5,952,687 | |||||
Intercompany notes receivable | 1,067,356 | 1,156,550 | |||||
Other assets | 90,293 | 70,590 | |||||
Total assets | 6,581,997 | 7,251,902 | |||||
Current liabilities: | |||||||
Accounts payable | 2,615 | 5,742 | |||||
Accrued expenses: | |||||||
Accrued payroll-related liabilities | 7,169 | 9,448 | |||||
Other accrued expenses | 12,656 | 5,219 | |||||
Other current liabilities | 283 | 282 | |||||
Current portion of long-term obligations | 0 | 16,468 | |||||
Total current liabilities | 22,723 | 37,159 | |||||
Long-term obligations, excluding current portion | 1,569,387 | 2,095,826 | |||||
Intercompany notes payable | 750,000 | ||||||
Deferred income taxes | 9,715 | 12,402 | |||||
Other noncurrent liabilities | 139,712 | 158,346 | |||||
Total Company stockholders' equity | 4,840,460 | 4,198,169 | |||||
Total stockholders' equity | 4,840,460 | 4,198,169 | |||||
Total liabilities and stockholders’ equity | 6,581,997 | 7,251,902 | |||||
Guarantors | |||||||
Current assets: | |||||||
Cash and cash equivalents | 31,082 | 35,131 | 22,413 | ||||
Receivables, net | 366,781 | 290,958 | |||||
Intercompany receivables, net | 3,010 | ||||||
Inventories | 1,323,201 | 1,334,766 | |||||
Prepaid expenses and other current assets | 94,787 | 44,849 | |||||
Total current assets | 1,815,851 | 1,708,714 | |||||
Property, plant and equipment, net | 589,898 | 563,262 | |||||
Intangible assets: | |||||||
Goodwill | 2,005,560 | 2,010,209 | |||||
Other intangibles, net | 280,229 | 291,036 | |||||
Investment in subsidiaries | 114,721 | 102,931 | |||||
Intercompany notes receivable | 14,958 | 782,638 | |||||
Equity method investments | 16,075 | 336 | |||||
Other assets | 38,434 | 33,597 | |||||
Total assets | 4,875,726 | 5,492,723 | |||||
Current liabilities: | |||||||
Accounts payable | 345,660 | 340,951 | |||||
Intercompany payables, net | 20,573 | 230 | |||||
Accrued expenses: | |||||||
Accrued payroll-related liabilities | 48,463 | 65,811 | |||||
Other accrued expenses | 106,543 | 95,900 | |||||
Refund liability | 54,554 | ||||||
Other current liabilities | 18,210 | 27,066 | |||||
Current portion of long-term obligations | 2,317 | 1,912 | |||||
Total current liabilities | 596,320 | 531,870 | |||||
Long-term obligations, excluding current portion | 14,027 | 7,372 | |||||
Intercompany notes payable | 617,389 | 677,708 | |||||
Deferred income taxes | 115,924 | 116,021 | |||||
Other noncurrent liabilities | 98,133 | 101,189 | |||||
Total Company stockholders' equity | 3,433,933 | 4,058,563 | |||||
Total stockholders' equity | 3,433,933 | 4,058,563 | |||||
Total liabilities and stockholders’ equity | 4,875,726 | 5,492,723 | |||||
Non-Guarantors | |||||||
Current assets: | |||||||
Cash and cash equivalents | 261,999 | 210,275 | $ 232,378 | ||||
Receivables, net | 888,754 | 736,148 | |||||
Intercompany receivables, net | 20,573 | 230 | |||||
Inventories | 1,471,693 | 1,046,017 | |||||
Prepaid expenses and other current assets | 90,705 | 55,494 | |||||
Total current assets | 2,733,724 | 2,048,164 | |||||
Property, plant and equipment, net | 610,260 | 348,917 | |||||
Intangible assets: | |||||||
Goodwill | 2,469,706 | 1,526,302 | |||||
Other intangibles, net | 672,857 | 452,733 | |||||
Equity method investments | 141,334 | 208,068 | |||||
Other assets | 76,499 | 38,778 | |||||
Total assets | 6,704,380 | 4,622,962 | |||||
Current liabilities: | |||||||
Accounts payable | 593,472 | 441,920 | |||||
Intercompany payables, net | 7,173 | 5,679 | |||||
Accrued expenses: | |||||||
Accrued payroll-related liabilities | 97,904 | 68,165 | |||||
Other accrued expenses | 239,013 | 117,481 | |||||
Refund liability | 52,178 | ||||||
Other current liabilities | 38,595 | 18,379 | |||||
Current portion of long-term obligations | 116,048 | 107,980 | |||||
Total current liabilities | 1,144,383 | 759,604 | |||||
Long-term obligations, excluding current portion | 2,666,723 | 1,174,422 | |||||
Intercompany notes payable | 464,925 | 511,480 | |||||
Deferred income taxes | 199,898 | 123,936 | |||||
Other noncurrent liabilities | 138,721 | 47,981 | |||||
Total Company stockholders' equity | 2,032,774 | 1,997,055 | |||||
Noncontrolling interest | 56,956 | 8,484 | |||||
Total stockholders' equity | 2,089,730 | 2,005,539 | |||||
Total liabilities and stockholders’ equity | 6,704,380 | 4,622,962 | |||||
Eliminations | |||||||
Current assets: | |||||||
Intercompany receivables, net | (27,746) | (5,909) | |||||
Total current assets | (27,746) | (5,909) | |||||
Intangible assets: | |||||||
Investment in subsidiaries | (5,466,707) | (6,055,618) | |||||
Intercompany notes receivable | (1,082,314) | (1,939,188) | |||||
Total assets | (6,576,767) | (8,000,715) | |||||
Current liabilities: | |||||||
Intercompany payables, net | (27,746) | (5,909) | |||||
Accrued expenses: | |||||||
Total current liabilities | (27,746) | (5,909) | |||||
Intercompany notes payable | (1,082,314) | (1,939,188) | |||||
Total Company stockholders' equity | (5,466,707) | (6,055,618) | |||||
Total stockholders' equity | (5,466,707) | (6,055,618) | |||||
Total liabilities and stockholders’ equity | $ (6,576,767) | $ (8,000,715) |
Condensed Consolidating State_3
Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net cash provided by operating activities | $ 521,167 | $ 449,243 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Purchases of property, plant and equipment | $ (56,342) | $ (43,992) | (171,763) | (135,537) | ||
Acquisitions, net of cash acquired | (1,206,067) | (252,667) | $ (513,088) | |||
Payments to Acquire Equity Method Investments | (11,066) | (7,114) | ||||
Proceeds from Divestiture of Businesses, Net of Cash Divested | 301,297 | |||||
Receipts of deferred purchase price on receivables under factoring arrangements | 9,410 | 0 | ||||
Other investing activities, net | 7,970 | 9,864 | ||||
Net cash used in investing activities | (1,371,516) | (84,157) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Proceeds from exercise of stock options | 3,772 | 6,465 | ||||
Taxes paid related to net share settlements of stock-based compensation awards | (4,768) | (5,095) | ||||
Debt issuance costs | (16,938) | |||||
Proceeds from issuance of Euro Notes (2026/28) | 1,232,100 | |||||
Borrowings under revolving credit facilities | 1,025,496 | 424,976 | ||||
Repayments under revolving credit facilities | (1,110,035) | (770,884) | ||||
Repayments under term loans | (114,800) | (27,884) | ||||
Borrowings under receivables securitization facility | 8,525 | |||||
(Repayments) borrowings of other debt, net | (38,695) | (24,522) | ||||
Payments of other obligations | (2,079) | |||||
Other financing activities, net | 3,182 | 4,316 | ||||
Net cash provided by (used in) financing activities | 979,314 | (347,063) | ||||
Effect of exchange rate changes on cash and cash equivalents | (67,385) | 22,538 | ||||
Net increase (decrease) in cash and equivalents | 61,580 | 40,561 | ||||
Cash and cash equivalents of continuing operations, beginning of period | 279,766 | $ 227,400 | ||||
Add: Cash and cash equivalents of discontinued operations, beginning of period | 7,116 | 7,116 | ||||
Cash and cash equivalents of continuing and discontinued operations, beginning of period | 341,346 | 275,077 | 341,346 | 275,077 | 279,766 | 234,516 |
Cash and cash equivalents, end of period | 341,346 | 275,077 | 341,346 | 275,077 | 279,766 | |
Repayments under receivables securitization facility | (9,925) | |||||
Parent | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net cash provided by operating activities | 334,226 | 227,314 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Purchases of property, plant and equipment | (315) | (509) | ||||
Investment and intercompany note activity with subsidiaries | 73,096 | 296,561 | ||||
Proceeds from investment in subsidiary, distribution, return of capital | 152,443 | |||||
Other investing activities, net | 887 | |||||
Net cash used in investing activities | 226,111 | 296,052 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Proceeds from exercise of stock options | 3,772 | 6,465 | ||||
Taxes paid related to net share settlements of stock-based compensation awards | (4,768) | 5,095 | ||||
Debt issuance costs | (1,354) | |||||
Borrowings under revolving credit facilities | 304,000 | 187,000 | ||||
Repayments under revolving credit facilities | (732,897) | (694,896) | ||||
Repayments under term loans | (114,800) | (27,884) | ||||
(Repayments) borrowings of other debt, net | (385) | (1,700) | ||||
Net cash provided by (used in) financing activities | (546,432) | (536,110) | ||||
Net increase (decrease) in cash and equivalents | 13,905 | (12,744) | ||||
Cash and cash equivalents of continuing operations, beginning of period | 34,360 | 33,030 | ||||
Cash and cash equivalents of continuing and discontinued operations, beginning of period | 33,030 | |||||
Cash and cash equivalents, end of period | 48,265 | 20,286 | 48,265 | 20,286 | 34,360 | |
Eliminations | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Proceeds from investment in subsidiary, distribution, return of capital | (152,443) | |||||
Guarantors | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net cash provided by operating activities | 142,626 | 162,114 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Purchases of property, plant and equipment | (93,063) | (70,292) | ||||
Acquisitions, net of cash acquired | (2,888) | (79,496) | ||||
Payments to Acquire Equity Method Investments | 11,066 | 2,200 | ||||
Proceeds from Divestiture of Businesses, Net of Cash Divested | 305,740 | |||||
Receipts of deferred purchase price on receivables under factoring arrangements | 224,753 | 226,395 | ||||
Other investing activities, net | 2,162 | (3,100) | ||||
Net cash used in investing activities | 119,898 | 383,247 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
(Repayments) borrowings of other debt, net | 101 | (1,238) | ||||
Payments of other obligations | 1,336 | |||||
Other financing activities, net | 5,000 | |||||
Investment and intercompany note activity with parent | (62,763) | (286,530) | ||||
Dividends | (203,448) | (274,675) | ||||
Net cash provided by (used in) financing activities | (266,110) | (558,779) | ||||
Effect of exchange rate changes on cash and cash equivalents | (463) | 322 | ||||
Net increase (decrease) in cash and equivalents | (4,049) | (13,096) | ||||
Cash and cash equivalents of continuing operations, beginning of period | 35,131 | 35,360 | ||||
Cash and cash equivalents of continuing and discontinued operations, beginning of period | 35,509 | |||||
Cash and cash equivalents, end of period | 31,082 | 22,413 | 31,082 | 22,413 | 35,131 | |
Non-Guarantors | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net cash provided by operating activities | 97,506 | 108,095 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Purchases of property, plant and equipment | (78,385) | (64,736) | ||||
Investment and intercompany note activity with subsidiaries | 0 | |||||
Acquisitions, net of cash acquired | (1,203,179) | (173,171) | ||||
Payments to Acquire Equity Method Investments | 4,914 | |||||
Proceeds from Divestiture of Businesses, Net of Cash Divested | (4,443) | |||||
Receipts of deferred purchase price on receivables under factoring arrangements | 9,410 | |||||
Other investing activities, net | 4,921 | (6,764) | ||||
Net cash used in investing activities | (1,267,233) | (240,500) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Debt issuance costs | (15,584) | |||||
Proceeds from issuance of Euro Notes (2026/28) | 1,232,100 | |||||
Borrowings under revolving credit facilities | 721,496 | 237,976 | ||||
Repayments under revolving credit facilities | (377,138) | (75,988) | ||||
Repayments under term loans | 0 | |||||
Borrowings under receivables securitization facility | 8,525 | |||||
(Repayments) borrowings of other debt, net | (38,411) | 27,460 | ||||
Payments of other obligations | 743 | |||||
Other financing activities, net | 3,182 | (684) | ||||
Investment and intercompany note activity with parent | (10,333) | (10,031) | ||||
Dividends | (226,939) | |||||
Net cash provided by (used in) financing activities | 1,288,373 | 176,590 | ||||
Effect of exchange rate changes on cash and cash equivalents | (66,922) | 22,216 | ||||
Net increase (decrease) in cash and equivalents | 51,724 | 66,401 | ||||
Cash and cash equivalents of continuing operations, beginning of period | 210,275 | 159,010 | ||||
Cash and cash equivalents of continuing and discontinued operations, beginning of period | $ 165,977 | |||||
Cash and cash equivalents, end of period | $ 261,999 | $ 232,378 | 261,999 | 232,378 | 210,275 | |
Repayments under receivables securitization facility | (9,925) | |||||
Continuing and Discontinued Operations | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Add: Cash and cash equivalents of discontinued operations, beginning of period | 7,116 | 7,116 | ||||
Continuing and Discontinued Operations | Guarantors | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Add: Cash and cash equivalents of discontinued operations, beginning of period | 149 | 149 | ||||
Continuing and Discontinued Operations | Non-Guarantors | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Add: Cash and cash equivalents of discontinued operations, beginning of period | 6,967 | $ 6,967 | ||||
Eliminations | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net cash provided by operating activities | (53,191) | (48,280) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Purchases of property, plant and equipment | 0 | |||||
Investment and intercompany note activity with subsidiaries | (73,096) | (296,561) | ||||
Receipts of deferred purchase price on receivables under factoring arrangements | (224,753) | (226,395) | ||||
Net cash used in investing activities | (450,292) | (522,956) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Investment and intercompany note activity with parent | 73,096 | 296,561 | ||||
Dividends | 430,387 | 274,675 | ||||
Net cash provided by (used in) financing activities | $ 503,483 | $ 571,236 |