LKQ CORP, 10-Q filed on 5/7/2018
Quarterly Report
v3.8.0.1
Document and Entity Information - shares
 3 Months Ended
Mar. 31, 2018
Apr. 27, 2018
Document and Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 31, 2018  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q1  
Trading Symbol LKQ  
Entity Registrant Name LKQ CORP  
Entity Central Index Key 0001065696  
Current Fiscal Year End Date --12-31  
Entity Filer Category Large Accelerated Filer  
Entity Common Stock, Shares Outstanding   309,710,577
v3.8.0.1
Unaudited Condensed Consolidated Statements of Income - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Income Statement [Abstract]    
Revenue $ 2,720,764 $ 2,342,843
Cost of goods sold 1,666,793 1,412,750
Gross margin 1,053,971 930,093
Selling, general and administrative expenses (1) 766,891 642,817
Restructuring and acquisition related expenses 4,054 2,928
Depreciation and amortization 56,458 48,656
Operating income 226,568 235,692
Other expense (income):    
Interest expense, net 28,515 23,988
Other income, net (2,882) (1,046)
Total other expense, net 25,633 22,942
Income from continuing operations before provision for income taxes 200,935 212,750
Provision for income taxes 49,584 72,155
Equity in earnings of unconsolidated subsidiaries 1,412 214
Income from continuing operations 152,763 140,809
Net loss from discontinued operations 0 (4,531)
Net income 152,763 136,278
Less: net loss attributable to noncontrolling interest (197)  
Net income attributable to LKQ stockholders $ 152,960 $ 136,278
Basic earnings per share: (2)    
Income from continuing operations $ 0.49 $ 0.46
Net loss from discontinued operations   (0.01)
Net income 0.49 0.44
Less: net loss attributable to noncontrolling interest (0.00)  
Net income attributable to LKQ stockholders 0.49 0.44
Diluted earnings per share: (1)    
Income from continuing operations 0.49 0.45
Net loss from discontinued operations   (0.01)
Net income 0.49 0.44
Less: net loss attributable to noncontrolling interest (0.00)  
Net income attributable to LKQ stockholders $ 0.49 $ 0.44
v3.8.0.1
Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Statement of Comprehensive Income [Abstract]    
Net income $ 152,763 $ 136,278
Less: net loss attributable to noncontrolling interest (197)  
Net income attributable to LKQ stockholders 152,960 136,278
Other comprehensive income (loss):    
Foreign currency translation, net of tax 48,485 21,579
Net change in unrealized gains/losses on cash flow hedges, net of tax 3,254 3,163
Net change in unrealized gains/losses on pension plans, net of tax (621) (3,041)
Net change in other comprehensive loss from unconsolidated subsidiaries (605) (162)
Other comprehensive income 50,513 21,539
Comprehensive income 203,276 157,817
Less: comprehensive loss attributable to noncontrolling interest (197)  
Comprehensive income attributable to LKQ stockholders $ 203,473 $ 157,817
v3.8.0.1
Unaudited Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 31, 2018
Dec. 31, 2017
Current assets:    
Cash and cash equivalents $ 245,679 $ 279,766
Receivables, net 1,211,788 1,027,106
Inventories 2,401,309 2,380,783
Prepaid expenses and other current assets 180,367 134,479
Total current assets 4,039,143 3,822,134
Property, plant and equipment, net 929,756 913,089
Intangible assets:    
Goodwill 3,572,198 3,536,511
Other intangibles, net 740,804 743,769
Equity method investments 208,210 208,404
Other assets 146,067 142,965
Total assets 9,636,178 9,366,872
Current liabilities:    
Accounts payable 812,661 788,613
Accrued expenses:    
Accrued payroll-related liabilities 112,140 143,424
Other accrued expenses 267,364 218,600
Refund liability 99,179 0
Other current liabilities 41,167 45,727
Current portion of long-term obligations 142,277 126,360
Total current liabilities 1,474,788 1,322,724
Long-term obligations, excluding current portion 3,170,788 3,277,620
Deferred income taxes 242,226 252,359
Other noncurrent liabilities 329,395 307,516
Commitments and Contingencies
Stockholders’ equity:    
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 309,630,976 and 309,126,386 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively 3,096 3,091
Additional paid-in capital 1,146,391 1,141,451
Retained earnings 3,271,718 3,124,103
Accumulated other comprehensive loss (14,618) (70,476)
Total Company stockholders' equity 4,406,587 4,198,169
Noncontrolling interest 12,394 8,484
Total stockholders' equity 4,418,981 4,206,653
Total liabilities and stockholders’ equity $ 9,636,178 $ 9,366,872
v3.8.0.1
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Mar. 31, 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 309,630,976 309,126,386
Common stock, shares outstanding 309,630,976 309,126,386
v3.8.0.1
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $ 152,763 $ 136,278
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 61,066 50,604
Stock-based compensation expense 5,982 7,285
Loss on sale of business   8,580
Other (3,134) 1,343
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions:    
Receivables, net (130,520) (108,893)
Inventories 5,016 (745)
Prepaid income taxes/income taxes payable 37,362 61,064
Accounts payable 23,924 24,449
Other operating assets and liabilities (7,296) (7,672)
Net cash provided by operating activities 145,163 172,293
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of property, plant and equipment (62,189) (44,398)
Acquisitions, net of cash acquired (2,966) (77,056)
Proceeds from disposals of business/investment   301,297
Other investing activities, net 534 1,314
Net cash (used in) provided by investing activities (64,621) 181,157
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from exercise of stock options 2,255 2,464
Taxes paid related to net share settlements of stock-based compensation awards (3,292) (3,644)
Debt issuance costs (724)  
Borrowings under revolving credit facilities 201,669 45,239
Repayments under revolving credit facilities (321,525) (389,313)
Repayments under term loans (4,405) (9,295)
Repayments under receivables securitization facility   (150)
Borrowings of Other Long-term Debt 4,409 23,313
Other financing activities, net 4,107 5,000
Net cash used in financing activities (117,506) (326,386)
Effect of exchange rate changes on cash and cash equivalents 2,877 3,034
Net (decrease) increase in cash and cash equivalents (34,087) 30,098
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 0 7,116
Cash and cash equivalents of continuing and discontinued operations, beginning of period 279,766 227,400
Cash and cash equivalents, end of period 245,679 264,614
Supplemental disclosure of cash paid for:    
Income taxes, net of refunds 15,464 13,746
Interest 13,975 10,965
Supplemental disclosure of noncash investing and financing activities:    
Noncash property, plant and equipment additions 4,199 2,936
Notes and other financing receivables in connection with disposals of business/investment   5,848
Continuing and Discontinued Operations    
CASH FLOWS FROM FINANCING ACTIVITIES:    
Cash and cash equivalents of continuing operations, beginning of period   234,516
Cash and cash equivalents of continuing and discontinued operations, beginning of period   234,516
Supplemental disclosure of noncash investing and financing activities:    
Business Acquisition Contingent Consideration And Liabilities At Fair Value $ 34 $ 10,969
v3.8.0.1
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($)
$ in Thousands
Total
Common Stock
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Noncontrolling Interest
Noncontrolling interest $ 8,484         $ 8,484
Beginning balance, shares at Dec. 31, 2017   309,127,000        
Beginning balance at Dec. 31, 2017 4,198,169 $ 3,091 $ 1,141,451 $ 3,124,103 $ (70,476)  
Beginning Balance at January 1, 2018 at Dec. 31, 2017 4,206,653          
Net income 152,960     152,960    
Less: net loss attributable to noncontrolling interest (197)          
Net income 152,763          
Other comprehensive income 50,513          
Vesting of restricted stock units, net of shares withheld for employee tax   300,000        
Vesting of restricted stock units, net of shares withheld for employee tax (2,396) $ 3 (2,399)      
Stock-based compensation expense $ 5,982   5,982      
Exercise of stock options 226,260 226,000        
Exercise of stock options, value $ 2,255 $ 2 2,253      
Shares withheld for net share settlements of stock option awards, shares   22,000        
Shares withheld for net share settlement of stock option awards, value (896)   (896)      
Adoption of ASU 2018-02 (see Note 4) 5,345     (5,345)    
Capital contributions from noncontrolling interest shareholder 4,107         4,107
Ending balance, shares at Mar. 31, 2018   309,631,000        
Ending balance at Mar. 31, 2018 4,406,587 $ 3,096 $ 1,146,391 $ 3,271,718 $ (14,618)  
Ending Balance at March 31, 2018 at Mar. 31, 2018 4,418,981          
Noncontrolling interest $ 12,394         $ 12,394
v3.8.0.1
Interim Financial Statements (Notes)
 3 Months Ended
Mar. 31, 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").
v3.8.0.1
Business Combinations (Notes)
 3 Months Ended
Mar. 31, 2018
Business Combinations [Abstract]  
Business Combinations
Business Combinations
During the three months ended March 31, 2018, we completed one acquisition of a wholesale business in North America. This acquisition was not material to our results of operations or financial position as of and for the three months ended March 31, 2018.
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 acquisitions in Specialty 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.
On December 10, 2017, we entered into an agreement to acquire 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, Czech Republic, Italy, Slovenia, and Croatia with further sales to Switzerland. This acquisition will expand LKQ's geographic presence in continental Europe and serve as an additional strategic hub for our European operations. In addition, we believe this acquisition will allow for continued improvement in procurement, logistics and infrastructure optimization. The enterprise value for the pending Stahlgruber acquisition is €1.5 billion, which will be financed with the proceeds from €1.0 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 proposed 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 competition authority for review. We anticipate that the closing of the transaction with respect to Stahlgruber's operations outside of the Czech Republic will occur during the second quarter of 2018. The Czech Republic wholesale business represents an immaterial portion of Stahlgruber's revenue and profitability.
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 three months ended March 31, 2018 and the last nine 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 final estimation of the tax basis of the entities acquired. We have recorded preliminary estimates for certain of the items noted above and will record adjustments, if any, to the preliminary amounts upon finalization of the valuations. During the first quarter of 2018, the measurement period adjustments recorded for acquisitions completed in prior periods were not material.
The purchase price allocations for the acquisitions completed during the year ended December 31, 2017 are as follows (in thousands):
 
Year Ended
 
December, 31, 2017
 
All
Acquisitions (1)
Receivables
$
73,782

Receivable reserves
(7,032
)
Inventories (2)
150,342

Prepaid expenses and other current assets
(295
)
Property, plant and equipment
41,039

Goodwill
314,817

Other intangibles
181,216

Other assets
3,257

Deferred income taxes
(65,087
)
Current liabilities assumed
(111,484
)
Debt assumed
(33,586
)
Other noncurrent liabilities assumed
(1,917
)
Contingent consideration liabilities
(6,234
)
Other purchase price obligations
(5,074
)
Notes issued
(20,187
)
Settlement of pre-existing balances
242

Gains on bargain purchases (3)
(3,870
)
Settlement of other purchase price obligations (non-interest bearing)
3,159

Cash used in acquisitions, net of cash acquired
$
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.p.A. (“Rhiag”) and Pittsburgh Glass Works LLC (“PGW”), respectively.
(2)
The amount for our 2017 acquisitions includes a $4 million step-up adjustment related to our Warn acquisition.
(3)
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 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 another 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 primary objectives of our acquisitions made during 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 provide a fit with our existing operations, and strong cash flows. For certain of our acquisitions, we have identified cost savings and synergies as a result of integrating the company with our existing business that provide additional value to the combined entity. In many cases, acquiring companies with these characteristics will result in purchase prices that include a significant amount of goodwill.
The following pro forma summary presents the effect of the businesses acquired during the three months ended March 31, 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
 
March 31,
 
2018
 
2017
Revenue, as reported
$
2,720,764

 
$
2,342,843

Revenue of purchased businesses for the period prior to acquisition:
 
 
 
All acquisitions
26

 
139,216

Pro forma revenue
$
2,720,790

 
$
2,482,059

 
 
 
 
Income from continuing operations, as reported
$
152,763

 
$
140,809

Income from continuing operations of purchased businesses for the period prior to acquisition, and pro forma purchase accounting adjustments:
 
 
 
All acquisitions
0

 
7,470

Acquisition related expenses, net of tax (1)
623

 
1,243

Pro forma income from continuing operations
$
153,386

 
$
149,522

 
 
 
 
Earnings per share from continuing operations, basic - as reported
$
0.49

 
$
0.46

Effect of purchased businesses for the period prior to acquisition:
 
 
 
All acquisitions
0.00

 
0.02

Acquisition related expenses, net of tax (1)
0.00

 
0.00

Pro forma earnings per share from continuing operations, basic (2) 
$
0.50

 
$
0.49

 
 
 
 
Earnings per share from continuing operations, diluted - as reported
$
0.49

 
$
0.45

Effect of purchased businesses for the period prior to acquisition:
 
 
 
All acquisitions
0.00

 
0.02

Acquisition related expenses, net of tax (1)
0.00

 
0.00

Pro forma earnings per share from continuing operations, diluted (2) 
$
0.49

 
$
0.48


(1)
Includes expenses related to acquisitions closed in the period and excludes expenses for acquisitions not yet completed.
(2)
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. 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.
v3.8.0.1
Discontinued Operations (Notes)
 3 Months Ended
Mar. 31, 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 15, "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 three months ended March 31, 2017, as presented in Net loss from discontinued operations on the Unaudited Condensed Consolidated Statements of Income (in thousands):
 
Three Months Ended
 
March 31, 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, for the three months ended March 31, 2018 and for the period between the sale date of March 1, 2017 and March 31, 2017, were $10 million and $4 million, respectively.
v3.8.0.1
Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2018
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
Financial Statement Information
Allowance for Doubtful Accounts
We have a reserve for uncollectible accounts, which was approximately $63 million and $58 million at March 31, 2018 and December 31, 2017, respectively.
Inventories
Inventories consist of the following (in thousands):
 
March 31,
 
December 31,
 
2018
 
2017
Aftermarket and refurbished products
$
1,915,537

 
$
1,877,653

Salvage and remanufactured products
469,648

 
487,108

Manufactured products
16,124

 
16,022

Total inventories
$
2,401,309

 
$
2,380,783


    Aftermarket and refurbished products and salvage and remanufactured products are primarily composed of finished goods. As of March 31, 2018, manufactured products inventory was composed of $9 million of raw materials, $2 million of work in process, and $5 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.
Property, Plant and Equipment
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 months ended March 31, 2018 and 2017 was $37 million and $27 million, 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 three months ended March 31, 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
584

 
259

 
(4,977
)
 
(4,134
)
Exchange rate effects
(2,891
)
 
42,510

 
202

 
39,821

Balance as of March 31, 2018
$
1,707,047

 
$
1,457,667

 
$
407,484

 
$
3,572,198


The components of other intangibles, net are as follows (in thousands):
 
March 31, 2018
 
December 31, 2017
Intangible assets subject to amortization
$
658,704

 
$
664,969

Indefinite-lived intangible assets
 
 
 
Trademarks
81,300

 
78,800

Other indefinite-lived intangible assets
800

 
—

Total
$
740,804

 
$
743,769


The components of intangible assets subject to amortization are as follows (in thousands):
 
March 31, 2018
 
December 31, 2017
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Trade names and trademarks
$
333,802

 
$
(79,437
)
 
$
254,365

 
$
327,332

 
$
(75,095
)
 
$
252,237

Customer and supplier relationships
520,386

 
(185,417
)
 
334,969

 
510,113

 
(167,532
)
 
342,581

Software and other technology related assets
129,851

 
(65,070
)
 
64,781

 
124,049

 
(59,081
)
 
64,968

Covenants not to compete
13,920

 
(9,331
)
 
4,589

 
14,981

 
(9,798
)
 
5,183

Total
$
997,959

 
$
(339,255
)
 
$
658,704

 
$
976,475

 
$
(311,506
)
 
$
664,969



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
 
6-20 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 $24 million and $23 million during the three months ended March 31, 2018 and 2017, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2022 is $75 million (for the remaining nine months of 2018), $85 million, $72 million, $60 million and $51 million, respectively.
Investments in Unconsolidated Subsidiaries
Our investment in unconsolidated subsidiaries was $208 million at both March 31, 2018 and December 31, 2017. On December 1, 2016, we acquired a 26.5% equity interest in Mekonomen AB ("Mekonomen") from AxMeko AB, an affiliate of Axel Johnson AB, 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. 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 March 31, 2018, the book value of our investment in Mekonomen exceeded our share of the book value of Mekonomen's net assets by $125 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. For the three months ended March 31, 2018 and 2017, we recorded equity in earnings totaling $2 million and $0.3 million, respectively, related to our investment in Mekonomen, which represents our share of the results for the three months ended December 31, 2017 and 2016, respectively, including adjustments to convert the results to GAAP and to recognize the impact of our purchase accounting adjustments. In May 2017, we received a cash dividend of $7 million (SEK 67 million) related to our investment in Mekonomen. The Level 1 fair value of our equity investment in the publicly traded Mekonomen common stock at March 31, 2018 was $163 million compared to a carrying value of $202 million. We evaluated our investment in Mekonomen for other-than-temporary impairment and concluded the decline in fair value was not other-than-temporary.
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 it. 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
10,000

Warranty claims
(9,294
)
Balance as of March 31, 2018
$
23,857


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 most current revenue recognition guidance and requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. 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 in 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 and Unaudited Condensed Consolidated Statement of Income as of and for the three months ended March 31, 2018 was as follows (in thousands):
 
Balance as of March 31, 2018
 
As Reported
 
Amounts Without Adoption of ASC 606
 
Effect of Change Higher/(Lower)
Balance Sheet
 
 
 
 
 
Assets
 
 
 
 
 
Accounts receivable
$
1,211,788

 
$
1,165,618

 
$
46,170

Prepaid expenses and other current assets
180,367

 
127,358

 
53,009

Liabilities
 
 
 
 
 
Refund liability
99,179

 
—

 
99,179

 
For the three months ended March 31, 2018
 
As Reported
 
Amounts Without Adoption of ASC 606
 
Effect of Change Higher/(Lower)
Income Statement
 
 
 
 
 
Revenue
$
2,720,764

 
$
2,728,712

 
$
(7,948
)
Cost of goods sold
1,666,793

 
1,674,173

 
(7,380
)
Selling, general and administrative expenses
766,891

 
767,459

 
(568
)
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 March 31, 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 for the three months ended March 31, 2018. Within our Unaudited Condensed Consolidating Statements of Cash Flows in Note 16, "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.
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.
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.
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.
v3.8.0.1
Revenue Recognition Revenue Reconition (Notes)
 3 Months Ended
Mar. 31, 2018
Revenue Recognition [Abstract]  
Revenue Recognition DIsclosure
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 obligation 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
 
March 31,
 
2018
 
2017
North America
$
1,172,585

 
$
1,079,875

Europe
1,037,046

 
819,167

Specialty
350,674

 
313,899

Parts and services
2,560,305

 
2,212,941

Other
160,459

 
129,902

Total revenue
$
2,720,764

 
$
2,342,843


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 recorded 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, fenders; bumper covers; head and tail lamps; automotive glass products such as windshields; mirrors and grills; 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 Specialty, 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 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 January 1, 2018
$
19,465

Additional warranty revenue deferred
10,097

Warranty revenue recognized
(8,055
)
Balance March 31, 2018
$
21,507


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 15, "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 $99 million and $53 million, respectively as of March 31, 2018 and a net reserve of $38 million as of December 31, 2017. The refund liability is presented separately on the balance sheet within liabilities while the return asset is presented within prepaid expenses and other current assets. Additionally, we recorded a reserve for our variable consideration of $44 million and $78 million as of March 31, 2018 and December 31, 2017, respectively. Variable consideration consists primarily of discounts, volume rebates, and other customer sales incentives which are recorded in Receivables, net on the Unaudited Condensed Consolidated Balance Sheets. 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.
v3.8.0.1
Restructuring and Acquisition Related Expenses
 3 Months Ended
Mar. 31, 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 $2 million and $3 million for the three months ended March 31, 2018 and 2017, respectively. Acquisition related expenses for the three months ended March 31, 2018 consisted of external costs for (i) completed acquisitions, (ii) pending acquisitions as of March 31, 2018, including $1 million related to Stahlgruber, and (iii) potential acquisitions that were terminated.
Acquisition related expenses for the three months ended March 31, 2017 consisted of $1 million of costs related to our acquisition of Andrew Page, with the remaining $2 million related to other completed acquisitions and acquisitions that were pending as of March 31, 2017.
Acquisition Integration Plans and Restructuring
During the three months ended March 31, 2018, we incurred $2 million of restructuring expenses. Expenses incurred during the three months ended March 31, 2018 were primarily related to the integration of our acquisition of Andrew Page. This integration included the closure of duplicate facilities and termination of employees.
During the three months ended March 31, 2017, we incurred less than $1 million of restructuring expenses, primarily related to the ongoing integration activities in our Specialty segment. Expenses incurred were primarily related to facility closure 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. 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 $15 million.
v3.8.0.1
Equity Incentive Plans
 3 Months Ended
Mar. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Equity Incentive Plans
Stock-Based Compensation
In order to attract and retain employees, non-employee directors, consultants, and other persons associated with us, we may grant qualified and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares and performance units under the LKQ Corporation 1998 Equity Incentive Plan (the “Equity Incentive Plan”). We have granted RSUs, stock options, and restricted stock under the Equity Incentive Plan. We expect to issue new shares of common stock to cover past and future equity grants.
RSUs
RSUs vest over periods of up to five years, subject to a continued service condition. Currently outstanding RSUs contain either a time-based vesting condition or a combination of a performance-based vesting condition and a time-based vesting condition, in which case both conditions must be met before any RSUs vest. For 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 three months ended March 31, 2018 was $15 million.
The following table summarizes activity related to our RSUs under the Equity Incentive Plan for the three months ended March 31, 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
562,380

 
$
43.35

 
 
 
 
Vested
(359,863
)
 
$
29.00

 
 
 
 
Forfeited / Canceled
(18,015
)
 
$
31.29

 
 
 
 
Unvested as of March 31, 2018
1,808,892

 
$
34.28

 
 
 
 
Expected to vest after March 31, 2018
1,630,647

 
$
34.26

 
3.0
 
$
61,883


(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 three months ended March 31, 2018. No options vested during the three months ended March 31, 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 three months ended March 31, 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
(226,260
)
 
$
9.97

 
 
 
$
7,123

Canceled
(509
)
 
$
32.31

 
 
 
 
Balance as of March 31, 2018
1,511,304

 
$
9.08

 
1.4
 
$
43,631

Exercisable as of March 31, 2018
1,511,304

 
$
9.08

 
1.4
 
$
43,631


(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
Total pre-tax stock-based compensation expense for RSUs totaled $6 million and $7 million for the three months ended March 31, 2018 and 2017, respectively. As of March 31, 2018, unrecognized compensation expense related to unvested RSUs is $51 million. Stock-based compensation expense related to these awards will be different to the extent that forfeitures are realized.
v3.8.0.1
Earnings Per Share
 3 Months Ended
Mar. 31, 2018
Earnings Per Share [Abstract]  
Earnings Per Share
Earnings Per Share
The following chart sets forth the computation of earnings per share (in thousands, except per share amounts):
 
Three Months Ended
 
March 31,
 
2018
 
2017
Income from continuing operations
$
152,763

 
$
140,809

Denominator for basic earnings per share—Weighted-average shares outstanding
309,517

 
308,028

Effect of dilutive securities:
 
 
 
RSUs
619

 
564

Stock options
1,211

 
1,708

Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding
311,347

 
310,300

Basic earnings per share from continuing operations
$
0.49

 
$
0.46

Diluted earnings per share from continuing operations
$
0.49

 
$
0.45

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 months ended March 31, 2018 and 2017 (in thousands):
 
Three Months Ended
 
March 31,
 
2018
 
2017
Antidilutive securities:
 
 
 
RSUs
—

 
147

Stock options
—

 
78
v3.8.0.1
Accumulated Other Comprehensive Income (Loss)
 3 Months Ended
Mar. 31, 2018
Equity [Abstract]  
Accumulated Other Comprehensive Income (Loss)
 
 
Three Months Ended
 
 
March 31, 2017
 
 
Foreign
Currency
Translation
 
Unrealized Gain
(Loss) on Cash Flow Hedges
 
Unrealized (Loss) Gain
on Pension Plans
 
Other Comprehensive Loss from Unconsolidated Subsidiaries
 
Accumulated
Other
Comprehensive
(Loss) Income
Beginning balance
 
$
(272,529
)
 
$
8,091

 
$
(2,737
)
 
$
—

 
$
(267,175
)
Pretax income
 
20,068

 
832

 
836

 
—

 
21,736

Income tax effect
 
—

 
(356
)
 
(318
)
 
—

 
(674
)
Reclassification of unrealized loss (gain)
 
—

 
4,257

 
(171
)
 
—

 
4,086

Reclassification of deferred income taxes
 
—

 
(1,570
)
 
48

 
—

 
(1,522
)
Disposal of business, net
 
1,511

 
—

 
(3,436
)
 
—

 
(1,925
)
Other comprehensive (loss) income from unconsolidated subsidiaries
 
—

 
—

 
—

 
(162
)
 
(162
)
Ending balance
 
$
(250,950
)
 
$
11,254

 
$
(5,778
)
 
$
(162
)
 
$
(245,636
)
The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):
 
 
Three Months Ended
 
 
March 31, 2018
 
 
Foreign
Currency
Translation
 
Unrealized (Loss) Gain
on Cash Flow Hedges
 
Unrealized (Loss) Gain on Pension Plans
 
Other Comprehensive Loss from Unconsolidated Subsidiaries
 
Accumulated
Other
Comprehensive (Loss) Income
Beginning balance
 
$
(71,933
)
 
$
11,538

 
$
(8,772
)
 
$
(1,309
)
 
$
(70,476
)
Pretax income (loss)
 
48,435

 
(4,501
)
 
(629
)
 
—

 
43,305

Income tax effect
 
50

 
1,053

 
8

 
—

 
1,111

Reclassification of unrealized loss
 
—

 
8,747

 
—

 
—

 
8,747

Reclassification of deferred income taxes
 
—

 
(2,045
)
 
—

 
—

 
(2,045
)
Other comprehensive loss from unconsolidated subsidiaries
 
—

 
—

 
—

 
(605
)
 
(605
)
Adoption of ASU 2018-02
 
2,859

 
2,486

 
—

 
—

 
5,345

Ending balance
 
$
(20,589
)
 
$
17,278

 
$
(9,393
)
 
$
(1,914
)
 
$
(14,618
)
Accumulated Other Comprehensive Income (Loss)
The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):
 
 
Three Months Ended
 
 
March 31, 2018
 
 
Foreign
Currency
Translation
 
Unrealized (Loss) Gain
on Cash Flow Hedges
 
Unrealized (Loss) Gain on Pension Plans
 
Other Comprehensive Loss from Unconsolidated Subsidiaries
 
Accumulated
Other
Comprehensive (Loss) Income
Beginning balance
 
$
(71,933
)
 
$
11,538

 
$
(8,772
)
 
$
(1,309
)
 
$
(70,476
)
Pretax income (loss)
 
48,435

 
(4,501
)
 
(629
)
 
—

 
43,305

Income tax effect
 
50

 
1,053

 
8

 
—

 
1,111

Reclassification of unrealized loss
 
—

 
8,747

 
—

 
—

 
8,747

Reclassification of deferred income taxes
 
—

 
(2,045
)
 
—

 
—

 
(2,045
)
Other comprehensive loss from unconsolidated subsidiaries
 
—

 
—

 
—

 
(605
)
 
(605
)
Adoption of ASU 2018-02
 
2,859

 
2,486

 
—

 
—

 
5,345

Ending balance
 
$
(20,589
)
 
$
17,278

 
$
(9,393
)
 
$
(1,914
)
 
$
(14,618
)


 
 
Three Months Ended
 
 
March 31, 2017
 
 
Foreign
Currency
Translation
 
Unrealized Gain
(Loss) on Cash Flow Hedges
 
Unrealized (Loss) Gain
on Pension Plans
 
Other Comprehensive Loss from Unconsolidated Subsidiaries
 
Accumulated
Other
Comprehensive
(Loss) Income
Beginning balance
 
$
(272,529
)
 
$
8,091

 
$
(2,737
)
 
$
—

 
$
(267,175
)
Pretax income
 
20,068

 
832

 
836

 
—

 
21,736

Income tax effect
 
—

 
(356
)
 
(318
)
 
—

 
(674
)
Reclassification of unrealized loss (gain)
 
—

 
4,257

 
(171
)
 
—

 
4,086

Reclassification of deferred income taxes
 
—

 
(1,570
)
 
48

 
—

 
(1,522
)
Disposal of business, net
 
1,511

 
—

 
(3,436
)
 
—

 
(1,925
)
Other comprehensive (loss) income from unconsolidated subsidiaries
 
—

 
—

 
—

 
(162
)
 
(162
)
Ending balance
 
$
(250,950
)
 
$
11,254

 
$
(5,778
)
 
$
(162
)
 
$
(245,636
)

Net unrealized gains on our interest rate swaps totaling $2 million and net unrealized losses of $1 million were reclassified to Interest expense, net in our Unaudited Condensed Consolidated Statements of Income during the three months ended March 31, 2018 and 2017, respectively. We also reclassified gains of $1 million and $2 million to Interest expense, net related to our cross currency swaps during the three months ended March 31, 2018 and 2017, respectively. Also related to our cross currency swaps, we reclassified losses of $12 million and $5 million to Other income, net in our Unaudited Condensed Consolidated Statements of Income during the three months ended March 31, 2018 and 2017, respectively; 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.
v3.8.0.1
Long-Term Obligations
 3 Months Ended
Mar. 31, 2018
Debt Disclosure [Abstract]  
Long-Term Obligations
Long-Term Obligations
Long-term obligations consist of the following (in thousands):
 
March 31,
 
December 31,
 
2018
 
2017
Senior secured credit agreement:
 
 
 
Term loans payable
$
700,395

 
$
704,800

Revolving credit facilities
1,172,140

 
1,283,551

U.S. Notes (2023)
600,000

 
600,000

Euro Notes (2024)
616,200

 
600,150

Receivables securitization facility
100,000

 
100,000

Notes payable through October 2025 at weighted average interest rates of 1.4% and 1.4%, respectively
29,413

 
29,146

Other long-term debt at weighted average interest rates of 1.9% and 1.7%, respectively
120,940

 
110,633

Total debt
3,339,088

 
3,428,280

Less: long-term debt issuance costs
(23,157
)
 
(21,476
)
Less: current debt issuance costs
(2,866
)
 
(2,824
)
Total debt, net of debt issuance costs
3,313,065

 
3,403,980

Less: current maturities, net of debt issuance costs
(142,277
)
 
(126,360
)
Long term debt, net of debt issuance costs
$
3,170,788

 
$
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 $700 million as of March 31, 2018, are due and payable in quarterly installments equal to $4 million on the last day of each fiscal quarter ending on or after March 31, 2018 and prior to March 31, 2019 and $9 million on the last day of each fiscal quarter ending on or after March 31, 2019, with the remaining balance due and payable on January 29, 2023.
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 March 31, 2018 and December 31, 2017 were 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, $22 million and $18 million were classified as current maturities at March 31, 2018 and December 31, 2017. As of March 31, 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 March 31, 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") and U.S. Bank National Association, as trustee. 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 the Irish Stock Exchange.
Euro Notes (2026/28) - Subsequent Event
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, will be used to (i) finance a portion of the consideration payable for the pending 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, the Company and certain of the Company’s 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. We have agreed to use commercially reasonable efforts to cause the Euro Notes (2026/28) to be listed on the Global Exchange Market of Euronext Dublin as promptly as practicable after the issue date of the Euro Notes (2026/28) (and in any event prior to May 24, 2018, the 45th day following the issue date of the notes). In addition to other conventional redemption provisions, the Euro Notes (2026/28) are subject to a special mandatory redemption in the event that on or prior to October 6, 2018, (a) the Stahlgruber acquisition is not consummated or (b) the purchase and sale agreement governing the Stahlgruber acquisition is terminated. The special mandatory redemption price will be equal to 100% of the initial issue price of the notes, plus accrued and unpaid interest from the date of initial issuance (or, if after the October 1, 2018 interest payment date, from October 1, 2018) up to, but excluding, the special mandatory redemption date.
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. As of both March 31, 2018 and December 31, 2017, $144 million of net receivables were collateral for the investment under the receivables facility.
Under the receivables facility, we pay variable interest rates plus a margin on the outstanding amounts invested by the Purchasers. The variable rates are based on (i) commercial paper rates, (ii) the London InterBank Offered Rate ("LIBOR"), or (iii) base rates, and are payable monthly in arrears. 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 March 31, 2018, the interest rate under the receivables facility was based on commercial paper rates and was 2.7%. The outstanding balances of $100 million as of both March 31, 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.
v3.8.0.1
Derivative Instruments and Hedging Activities
 3 Months Ended
Mar. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities
Derivative Instruments and Hedging Activities
We are exposed to market risks, including the effect of changes in interest rates, foreign currency exchange rates and commodity prices. Under our current policies, we use derivatives to manage our exposure to variable interest rates on our senior secured debt 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 March 31, 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.
The following table summarizes the notional amounts and fair values of our designated cash flow hedges as of March 31, 2018 and December 31, 2017 (in thousands):
 
 
Notional Amount
 
Fair Value at March 31, 2018 (USD)
 
Fair Value at December 31, 2017 (USD)
 
 
March 31, 2018
 
December 31, 2017
 
Other Assets
 
Other Noncurrent Liabilities
 
Other Assets
 
Other Noncurrent Liabilities
Interest rate swap agreements
 
 
 
 
 
 
 
 
USD denominated
 
$
590,000

 
$
590,000

 
$
24,253

 
$
—

 
$
19,102

 
$
—

Cross currency swap agreements
 
 
 
 
 
 
 
 
USD/euro
 
$
402,580

 
$
406,546

 
9,208

 
77,812

 
5,504

 
61,492

Total cash flow hedges
 
$
33,461

 
$
77,812

 
$
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 $17 million and $12 million at March 31, 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 the three months ended March 31, 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 March 31, 2018, we estimate that less than $1 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
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 March 31, 2018 and December 31, 2017, along with the effect on our results of operations during the three months ended March 31, 2018 and 2017, were immaterial.
v3.8.0.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements
Financial Assets and Liabilities Measured at Fair Value
We use the market and income approaches to estimate the fair value our financial assets and liabilities, and during the three months ended March 31, 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 March 31, 2018 and December 31, 2017 (in thousands):
 
Balance as of March 31, 2018
 
Fair Value Measurements as of March 31, 2018
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
Cash surrender value of life insurance
$
46,196

 
$
—

 
$
46,196

 
$
—

Interest rate swaps
24,253

 
—

 
24,253

 
—

Cross currency swap agreements
9,208

 
—

 
9,208

 
—

Total Assets
$
79,657

 
$
—

 
$
79,657

 
$
—

Liabilities:
 
 
 
 
 
 
 
Contingent consideration liabilities
$
2,700

 
$
—

 
$
—

 
$
2,700

Deferred compensation liabilities
50,676

 
—

 
50,676

 
—

Cross currency swap agreements
77,812

 
—

 
77,812

 
—

Total Liabilities
$
131,188

 
$
—

 
$
128,488

 
$
2,700

 
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 is 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 value our derivative instruments using a third party valuation model that performs a discounted cash flow analysis based on the terms of the contracts and market observable inputs such as current and forward interest rates and current and forward foreign exchange rates.
Our contingent consideration liabilities are related to 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 March 31, 2018 and December 31, 2017, the fair value of our credit agreement borrowings reasonably approximated the carrying values of $1.9 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 March 31, 2018 and December 31, 2017. As of March 31, 2018 and December 31, 2017, the fair values of the U.S. Notes (2023) were approximately $602 million and $615 million, respectively, compared to a carrying value of $600 million. As of March 31, 2018 and December 31, 2017, the fair values of the Euro Notes (2024) were approximately $652 million and $658 million compared to carrying values of $616 million and $600 million, respectively.
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 March 31, 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 value of our Euro Notes (2024) is determined based upon observable market inputs including quoted market prices in a market that is not active, and therefore is classified as Level 2 within the fair value hierarchy.
v3.8.0.1
Commitments and Contingencies
 3 Months Ended
Mar. 31, 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 March 31, 2018 are as follows (in thousands):
Nine months ending December 31, 2018
$
186,038

Years ending December 31:
 
2019
207,724

2020
171,530

2021
132,755

2022
107,405

2023
91,007

Thereafter
532,760

Future Minimum Lease Payments
$
1,429,219


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.
v3.8.0.1
Income Taxes
 3 Months Ended
Mar. 31, 2018
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
At the end of each interim period, we estimate our annual effective tax rate and apply that rate to our interim earnings. We also record the tax impact of certain unusual or infrequently occurring items, including changes in judgment about valuation allowances and the effects of changes in tax laws or rates, in the interim period in which they occur.
The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in state and foreign jurisdictions, permanent and temporary differences between book and taxable income, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the tax environment changes.    
Our effective income tax rate for the three months ended March 31, 2018 was 24.7%, compared to 33.9% 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. The effective tax rate also reflects the impact of favorable discrete items of approximately $3 million for each of the three months ended March 31, 2018 and 2017 for excess tax benefits from stock-based payments. The quarter over quarter change in these amounts increased the effective tax rate by 0.2% compared to the prior year. 
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 three-month period ended March 31, 2018, there were no changes made to the provisional amounts recognized in 2017. We continue to gather the information necessary to finalize those 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.
v3.8.0.1
Segment and Geographic Information
 3 Months Ended
Mar. 31, 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 March 31, 2018
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
Third Party
$
1,329,660

 
$
1,040,430

 
$
350,674

 
$
—

 
$
2,720,764

Intersegment
183

 
—

 
1,118

 
(1,301
)
 
—

Total segment revenue
$
1,329,843

 
$
1,040,430

 
$
351,792

 
$
(1,301
)
 
$
2,720,764

Segment EBITDA
$
177,713

 
$
75,534

 
$
41,969

 
$
—

 
$
295,216

Depreciation and amortization (1)
21,228

 
32,757

 
7,081

 
—

 
61,066

Three Months Ended March 31, 2017
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
Third Party
$
1,208,047

 
$
820,897

 
$
313,899

 
$
—

 
$
2,342,843

Intersegment
193

 
—

 
1,035

 
(1,228
)
 
—

Total segment revenue
$
1,208,240

 
$
820,897

 
$
314,934

 
$
(1,228
)
 
$
2,342,843

Segment EBITDA
$
176,135

 
$
78,694

 
$
35,441

 
$
—

 
$
290,270

Depreciation and amortization (1)
20,378

 
24,751

 
5,475

 
—

 
50,604


(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 acquisition related gains and losses and equity in 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
 
March 31,
2018
 
2017
Net income
$
152,763

 
$
136,278

Less: net loss attributable to noncontrolling interest
(197
)
 
—

Net income attributable to LKQ stockholders
152,960

 
136,278

Subtract:
 
 
 
Net loss from discontinued operations
—

 
(4,531
)
Net income from continuing operations attributable to LKQ stockholders
152,960

 
140,809

Add:
 
 
 
Depreciation and amortization
56,458

 
48,656

Depreciation and amortization - cost of goods sold
4,608

 
1,948

Interest expense, net
28,515

 
23,988

Provision for income taxes
49,584

 
72,155

EBITDA
292,125

 
287,556

Subtract:
 
 
 
Equity in earnings of unconsolidated subsidiaries
1,412

 
214

Add:
 
 
 
Restructuring and acquisition related expenses (1)
4,054

 
2,928

Inventory step-up adjustment - acquisition related
403

 
—

Change in fair value of contingent consideration liabilities
46

 
—

Segment EBITDA
$
295,216

 
$
290,270


(1)
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
March 31,
2018
 
2017
Capital Expenditures
 
 
 
North America
$
29,662

 
$
16,760

Europe
28,815

 
20,458

Specialty
3,712

 
3,582

Discontinued operations
—

 
3,598

Total capital expenditures
$
62,189

 
$
44,398


The following table presents assets by reportable segment (in thousands):
 
March 31,
 
December 31,
2018
 
2017
Receivables, net
 
 
 
North America
$
448,973

 
$
379,666

Europe
622,592

 
555,372

Specialty
140,223

 
92,068

Total receivables, net (1)
1,211,788

 
1,027,106

Inventories
 
 
 
North America
1,053,322

 
1,076,393

Europe
998,617

 
964,068

Specialty
349,370

 
340,322

Total inventories
2,401,309

 
2,380,783

Property, Plant and Equipment, net
 
 
 
North America
542,453

 
537,286

Europe
304,048

 
293,539

Specialty
83,255

 
82,264

Total property, plant and equipment, net
929,756

 
913,089

Equity Method Investments
 
 
 
North America
336

 
336

Europe 
207,874

 
208,068

Total equity method investments
208,210

 
208,404

Other unallocated assets
4,885,115

 
4,837,490

Total assets
$
9,636,178

 
$
9,366,872


(1)
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.
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, prepaid and other current and noncurrent assets, goodwill, other intangibles and income taxes.
The majority of our operations are conducted in the U.S. Our European operations are located in the U.K., the Netherlands, Belgium, Italy, Czech Republic, 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
 
March 31,
 
2018
 
2017
Revenue
 
 
 
United States
$
1,560,027

 
$
1,417,040

United Kingdom
430,992

 
382,652

Other countries
729,745

 
543,151

Total revenue
$
2,720,764

 
$
2,342,843



The following table sets forth our tangible long-lived assets by geographic area (in thousands):
 
March 31,
 
December 31,
 
2018
 
2017
Long-lived Assets
 
 
 
United States
$
589,848

 
$
583,236

United Kingdom
186,347

 
178,021

Other countries
153,561

 
151,832

Total long-lived assets
$
929,756

 
$
913,089
v3.8.0.1
Condensed Consolidating Financial Information
 3 Months Ended
Mar. 31, 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 March 31, 2018
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Revenue
$
—

 
$
1,577,595

 
$
1,180,242

 
$
(37,073
)
 
$
2,720,764

Cost of goods sold
—

 
945,915

 
757,951

 
(37,073
)
 
1,666,793

Gross margin
—

 
631,680

 
422,291

 
—

 
1,053,971

Selling, general and administrative expenses
9,130

 
426,797

 
330,964

 
—

 
766,891

Restructuring and acquisition related expenses
—

 
330

 
3,724

 
—

 
4,054

Depreciation and amortization
29

 
24,338

 
32,091

 
—

 
56,458

Operating (loss) income
(9,159
)
 
180,215

 
55,512

 
—

 
226,568

Other expense (income):
 
 
 
 
 
 
 
 
 
Interest expense, net
18,008

 
212

 
10,295

 
—

 
28,515

Intercompany interest (income) expense, net
(15,400
)
 
9,680

 
5,720

 
—

 
—

Other (income) expense, net
(1,015
)
 
(5,882
)
 
4,015

 
—

 
(2,882
)
Total other expense, net
1,593

 
4,010

 
20,030

 
—

 
25,633

(Loss) income before (benefit) provision for income taxes
(10,752
)
 
176,205

 
35,482

 
—

 
200,935

(Benefit) provision for income taxes
(3,904
)
 
45,877

 
7,611

 
—

 
49,584

Equity in earnings of unconsolidated subsidiaries
—

 
—

 
1,412

 
—

 
1,412

Equity in earnings (loss) of subsidiaries
159,808

 
5,110

 
—

 
(164,918
)
 
—

Net income
152,960

 
135,438

 
29,283

 
(164,918
)
 
152,763

Less: net loss attributable to noncontrolling interest
—

 
—

 
(197
)
 
—

 
(197
)
Net income attributable to LKQ stockholders
$
152,960

 
$
135,438

 
$
29,480

 
$
(164,918
)
 
$
152,960


LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Income
(In thousands)
 
For the Three Months Ended March 31, 2017
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Revenue
$
—

 
$
1,453,516

 
$
929,971

 
$
(40,644
)
 
$
2,342,843

Cost of goods sold
—

 
863,375

 
590,019

 
(40,644
)
 
1,412,750

     Gross margin
—

 
590,141

 
339,952

 
—

 
930,093

Selling, general and administrative expenses
9,183

 
385,528

 
248,106

 
—

 
642,817

Restructuring and acquisition related expenses
—

 
1,883

 
1,045

 
—

 
2,928

Depreciation and amortization
30

 
23,481

 
25,145

 
—

 
48,656

     Operating (loss) income
(9,213
)
 
179,249

 
65,656

 
—

 
235,692

Other expense (income):
 
 
 
 
 
 
 
 
 
Interest expense, net
16,180

 
198

 
7,610

 
—

 
23,988

Intercompany interest (income) expense, net
(5,672
)
 
1,019

 
4,653

 
—

 
—

Other expense (income), net
291

 
(169
)
 
(1,168
)
 
—

 
(1,046
)
     Total other expense, net
10,799

 
1,048

 
11,095

 
—

 
22,942

(Loss) income from continuing operations before (benefit) provision for income taxes
(20,012
)
 
178,201

 
54,561

 
—

 
212,750

 (Benefit) provision for income taxes
(7,437
)
 
70,038

 
9,554

 
—

 
72,155

Equity in (loss) earnings of unconsolidated subsidiaries
(182
)
 
—

 
396

 
—

 
214

Equity in earnings of subsidiaries
153,566

 
4,813

 
—

 
(158,379
)
 
—

Income from continuing operations
140,809

 
112,976

 
45,403

 
(158,379
)
 
140,809

Net (loss) income from discontinued operations
(4,531
)
 
(4,531
)
 
2,050

 
2,481

 
(4,531
)
     Net income
$
136,278

 
$
108,445

 
$
47,453

 
$
(155,898
)
 
$
136,278


LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Comprehensive Income
(In thousands)
 
For the Three Months Ended March 31, 2018
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net income
$
152,960

 
$
135,438

 
$
29,283

 
$
(164,918
)
 
$
152,763

Less: net loss attributable to noncontrolling interest
—

 
—

 
(197
)
 
—

 
(197
)
Net income attributable to LKQ stockholders
152,960

 
135,438

 
29,480

 
(164,918
)
 
152,960

 
 
 
 
 
 
 
 
 
 
Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
Foreign currency translation, net of tax
48,485

 
(2,183
)
 
49,055

 
(46,872
)
 
48,485

Net change in unrealized gains/losses on cash flow hedges, net of tax
3,254

 
—

 
—

 
—

 
3,254

Net change in unrealized gains/losses on pension plans, net of tax
(621
)
 
(621
)
 
—

 
621

 
(621
)
Net change in other comprehensive loss from unconsolidated subsidiaries
(605
)
 
—

 
(605
)
 
605

 
(605
)
Other comprehensive income (loss)
50,513

 
(2,804
)
 
48,450

 
(45,646
)
 
50,513

 
 
 
 
 
 
 
 
 


Comprehensive income
203,473

 
132,634

 
77,733

 
(210,564
)
 
203,276

Less: comprehensive loss attributable to noncontrolling interest
—

 
—

 
(197
)
 
—

 
(197
)
Comprehensive income attributable to LKQ stockholders
$
203,473

 
$
132,634

 
$
77,930

 
$
(210,564
)
 
$
203,473





LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Comprehensive Income
(In thousands)
 
For the Three Months Ended March 31, 2017
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net income
$
136,278

 
$
108,445

 
$
47,453

 
$
(155,898
)
 
$
136,278

Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
Foreign currency translation, net of tax
21,579

 
3,878

 
21,132

 
(25,010
)
 
21,579

Net change in unrealized gains/losses on cash flow hedges, net of tax
3,163

 
(133
)
 
—

 
133

 
3,163

Net change in unrealized gains/losses on pension plans, net of tax
(3,041
)
 
(2,805
)
 
(236
)
 
3,041

 
(3,041
)
Net change in other comprehensive loss from unconsolidated subsidiaries
(162
)
 
—

 
(162
)
 
162

 
(162
)
Other comprehensive income
21,539

 
940

 
20,734

 
(21,674
)
 
21,539

Total comprehensive income
$
157,817

 
$
109,385

 
$
68,187

 
$
(177,572
)
 
$
157,817



LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Balance Sheets
(In thousands)
 
March 31, 2018
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
17,340

 
$
28,975

 
$
199,364

 
$
—

 
$
245,679

Receivables, net
843

 
372,264

 
838,681

 
—

 
1,211,788

Intercompany receivables, net
6,747

 
—

 
21,170

 
(27,917
)
 
—

Inventories
—

 
1,319,468

 
1,081,841

 
—

 
2,401,309

Prepaid expenses and other current assets
1,864

 
94,231

 
84,272

 
—

 
180,367

Total current assets
26,794

 
1,814,938

 
2,225,328

 
(27,917
)
 
4,039,143

Property, plant and equipment, net
904

 
569,829

 
359,023

 
—

 
929,756

Intangible assets:
 
 
 
 
 
 
 
 
 
Goodwill
—

 
2,005,814

 
1,566,384

 
—

 
3,572,198

Other intangibles, net
—

 
289,057

 
451,747

 
—

 
740,804

Investment in subsidiaries
5,355,015

 
105,772

 
—

 
(5,460,787
)
 
—

Intercompany notes receivable
1,143,818

 
32,777

 
—

 
(1,176,595
)
 
—

Equity method investments
—

 
336

 
207,874

 
—

 
208,210

Other assets
79,657

 
36,403

 
30,007

 
—

 
146,067

Total assets
$
6,606,188

 
$
4,854,926

 
$
4,840,363

 
$
(6,665,299
)
 
$
9,636,178

Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
8,407

 
$
358,971

 
$
445,283

 
$
—

 
$
812,661

Intercompany payables, net
—

 
21,170

 
6,747

 
(27,917
)
 
—

Accrued expenses:
 
 
 
 
 
 
 
 
 
Accrued payroll-related liabilities
5,224

 
34,590

 
72,326

 
—

 
112,140

Other accrued expenses
12,360

 
101,274

 
153,730

 
—

 
267,364

Refund liability
—

 
54,270

 
44,909

 
—

 
99,179

Other current liabilities
6,224

 
19,255

 
15,688

 
—

 
41,167

Current portion of long-term obligations
20,863

 
1,912

 
119,502

 
—

 
142,277

Total current liabilities
53,078

 
591,442

 
858,185

 
(27,917
)
 
1,474,788

Long-term obligations, excluding current portion
1,956,376

 
7,341

 
1,207,071

 
—

 
3,170,788

Intercompany notes payable
—

 
657,601

 
518,994

 
(1,176,595
)
 
—

Deferred income taxes
13,345

 
115,736

 
113,145

 
—

 
242,226

Other noncurrent liabilities
176,802

 
102,559

 
50,034

 
—

 
329,395

Stockholders' equity:
 
 
 
 
 
 
 
 
 
Total Company stockholders’ equity
4,406,587

 
3,380,247

 
2,080,540

 
(5,460,787
)
 
4,406,587

Noncontrolling interest
—

 
—

 
12,394

 
—

 
12,394

Total stockholders’ equity
4,406,587

 
3,380,247

 
2,092,934

 
(5,460,787
)
 
4,418,981

Total liabilities and stockholders' equity
$
6,606,188

 
$
4,854,926

 
$
4,840,363

 
$
(6,665,299
)
 
$
9,636,178



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 Three Months Ended March 31, 2018
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
95,942

 
$
96,517

 
$
243

 
$
(47,539
)
 
$
145,163

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Purchases of property, plant and equipment
(163
)
 
(29,908
)
 
(32,118
)
 
—

 
(62,189
)
Investment and intercompany note activity with subsidiaries
24,333

 
—

 
—

 
(24,333
)
 
—

Acquisitions, net of cash acquired
—

 
(2,966
)
 
—

 
—

 
(2,966
)
Payments of deferred purchase price on receivables securitization
—

 
7,456

 
—

 
(7,456
)
 
—

Other investing activities, net
—

 
(145
)
 
679

 
—

 
534

Net cash provided by (used in) investing activities
24,170

 
(25,563
)
 
(31,439
)
 
(31,789
)
 
(64,621
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Proceeds from exercise of stock options
2,255

 
—

 
—

 
—

 
2,255

Taxes paid related to net share settlements of stock-based compensation awards
(3,292
)
 
—

 
—

 
—

 
(3,292
)
Debt issuance costs
(724
)
 
—

 
—

 
—

 
(724
)
Borrowings under revolving credit facilities
161,000

 
—

 
40,669

 
—

 
201,669

Repayments under revolving credit facilities
(291,966
)
 
—

 
(29,559
)
 
—

 
(321,525
)
Repayments under term loans
(4,405
)
 
—

 
—

 
—

 
(4,405
)
(Repayments) borrowings of other debt, net
—

 
(30
)
 
4,439

 
—

 
4,409

Other financing activities, net
—

 
—

 
4,107

 
—

 
4,107

Investment and intercompany note activity with parent
—

 
(21,759
)
 
(2,574
)
 
24,333

 
—

Dividends
—

 
(54,995
)
 
—

 
54,995

 
—

Net cash (used in) provided by financing activities
(137,132
)
 
(76,784
)
 
17,082

 
79,328

 
(117,506
)
Effect of exchange rate changes on cash and cash equivalents
—

 
(326
)
 
3,203

 
—

 
2,877

Net decrease in cash and cash equivalents
(17,020
)
 
(6,156
)
 
(10,911
)
 
—

 
(34,087
)
Cash and cash equivalents, beginning of period
34,360

 
35,131

 
210,275

 
—

 
279,766

Cash and cash equivalents, end of period
$
17,340

 
$
28,975

 
$
199,364

 
$
—

 
$
245,679



LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Cash Flows
(In thousands)
 
For the Three Months Ended March 31, 2017
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
118,537

 
$
106,243

 
$
35,789

 
$
(88,276
)
 
$
172,293

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Purchases of property, plant and equipment
—

 
(18,226
)
 
(26,172
)
 
—

 
(44,398
)
Investment and intercompany note activity with subsidiaries
249,828

 
—

 
—

 
(249,828
)
 
—

Acquisitions, net of cash acquired
—

 
(74,937
)
 
(2,119
)
 
—

 
(77,056
)
Proceeds from disposals of business/investment
—

 
305,740

 
(4,443
)
 
—

 
301,297

Payments of deferred purchase price on receivables securitization (1)
—

 
6,362

 
—

 
(6,362
)
 
—

Other investing activities, net
—

 
1,008

 
306

 
—

 
1,314

Net cash provided by (used in) investing activities
249,828

 
219,947

 
(32,428
)
 
(256,190
)
 
181,157

CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Proceeds from exercise of stock options
2,464

 
—

 
—

 
—

 
2,464

Taxes paid related to net share settlements of stock-based compensation awards
(3,644
)
 
—

 
—

 
—

 
(3,644
)
Borrowings under revolving credit facilities
10,000

 
—

 
35,239

 
—

 
45,239

Repayments under revolving credit facilities
(376,966
)
 
—

 
(12,347
)
 
—

 
(389,313
)
Repayments under term loans
(9,295
)
 
—

 
—

 
—

 
(9,295
)
Repayments under receivables securitization facility
—

 
—

 
(150
)
 
—

 
(150
)
(Repayments) borrowings of other debt, net
(1,698
)
 
(1,099
)
 
26,110

 
—

 
23,313

Other financing activities, net
—

 
5,000

 
—

 
—

 
5,000

Investment and intercompany note activity with parent
—

 
(246,463
)
 
(3,365
)
 
249,828

 
—

Dividends
—

 
(94,638
)
 
—

 
94,638

 
—

Net cash (used in) provided by financing activities
(379,139
)
 
(337,200
)
 
45,487

 
344,466

 
(326,386
)
Effect of exchange rate changes on cash and cash equivalents
—

 
30

 
3,004

 
—

 
3,034

Net (decrease) increase in cash and cash equivalents
(10,774
)
 
(10,980
)
 
51,852

 
—

 
30,098

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
$
22,256

 
$
24,529

 
$
217,829

 
$
—

 
$
264,614

 
 
 
 
 
 
 
 
 


(1) Reflects the impact of adopting ASU 2016-15
 
 
 
 
 
 
 
 
v3.8.0.1
Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Mar. 31, 2018
Accounting Policies [Abstract]  
Receivables and Allowance for Doubtful Accounts
Allowance for Doubtful Accounts
We have a reserve for uncollectible accounts, which was approximately $63 million and $58 million at March 31, 2018 and December 31, 2017, respectively.
Inventory
Inventories
Inventories consist of the following (in thousands):
 
March 31,
 
December 31,
 
2018
 
2017
Aftermarket and refurbished products
$
1,915,537

 
$
1,877,653

Salvage and remanufactured products
469,648

 
487,108

Manufactured products
16,124

 
16,022

Total inventories
$
2,401,309

 
$
2,380,783


    Aftermarket and refurbished products and salvage and remanufactured products are primarily composed of finished goods. As of March 31, 2018, manufactured products inventory was composed of $9 million of raw materials, $2 million of work in process, and $5 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.
Property and Equipment
Property, Plant and Equipment
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 months ended March 31, 2018 and 2017 was $37 million and $27 million, respectively.
Intangible Assets
Intangible Assets
Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer 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 three months ended March 31, 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
584

 
259

 
(4,977
)
 
(4,134
)
Exchange rate effects
(2,891
)
 
42,510

 
202

 
39,821

Balance as of March 31, 2018
$
1,707,047

 
$
1,457,667

 
$
407,484

 
$
3,572,198


The components of other intangibles, net are as follows (in thousands):
 
March 31, 2018
 
December 31, 2017
Intangible assets subject to amortization
$
658,704

 
$
664,969

Indefinite-lived intangible assets
 
 
 
Trademarks
81,300

 
78,800

Other indefinite-lived intangible assets
800

 
—

Total
$
740,804

 
$
743,769


The components of intangible assets subject to amortization are as follows (in thousands):
 
March 31, 2018
 
December 31, 2017
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Trade names and trademarks
$
333,802

 
$
(79,437
)
 
$
254,365

 
$
327,332

 
$
(75,095
)
 
$
252,237

Customer and supplier relationships
520,386

 
(185,417
)
 
334,969

 
510,113

 
(167,532
)
 
342,581

Software and other technology related assets
129,851

 
(65,070
)
 
64,781

 
124,049

 
(59,081
)
 
64,968

Covenants not to compete
13,920

 
(9,331
)
 
4,589

 
14,981

 
(9,798
)
 
5,183

Total
$
997,959

 
$
(339,255
)
 
$
658,704

 
$
976,475

 
$
(311,506
)
 
$
664,969



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
 
6-20 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 $24 million and $23 million during the three months ended March 31, 2018 and 2017, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2022 is $75 million (for the remaining nine months of 2018), $85 million, $72 million, $60 million and $51 million, respectively.
Warranty Reserve
Warranty Reserve
Some of our salvage mechanical products are sold with a standard six month warranty against defects. Additionally, some of our remanufactured engines are sold with a standard three year warranty against defects. We also provide a limited lifetime warranty for certain of our aftermarket products. These assurance-type warranties are not considered a separate performance obligation and thus, no transaction price is allocated to it. 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
10,000

Warranty claims
(9,294
)
Balance as of March 31, 2018
$
23,857
Investment in Unconsolidated Subsidiary
Investments in Unconsolidated Subsidiaries
Our investment in unconsolidated subsidiaries was $208 million at both March 31, 2018 and December 31, 2017. On December 1, 2016, we acquired a 26.5% equity interest in Mekonomen AB ("Mekonomen") from AxMeko AB, an affiliate of Axel Johnson AB, 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. 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 March 31, 2018, the book value of our investment in Mekonomen exceeded our share of the book value of Mekonomen's net assets by $125 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. For the three months ended March 31, 2018 and 2017, we recorded equity in earnings totaling $2 million and $0.3 million, respectively, related to our investment in Mekonomen, which represents our share of the results for the three months ended December 31, 2017 and 2016, respectively, including adjustments to convert the results to GAAP and to recognize the impact of our purchase accounting adjustments. In May 2017, we received a cash dividend of $7 million (SEK 67 million) related to our investment in Mekonomen. The Level 1 fair value of our equity investment in the publicly traded Mekonomen common stock at March 31, 2018 was $163 million compared to a carrying value of $202 million. We evaluated our investment in Mekonomen for other-than-temporary impairment and concluded the decline in fair value was not other-than-temporary.
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 most current revenue recognition guidance and requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. 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 in 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 and Unaudited Condensed Consolidated Statement of Income as of and for the three months ended March 31, 2018 was as follows (in thousands):
 
Balance as of March 31, 2018
 
As Reported
 
Amounts Without Adoption of ASC 606
 
Effect of Change Higher/(Lower)
Balance Sheet
 
 
 
 
 
Assets
 
 
 
 
 
Accounts receivable
$
1,211,788

 
$
1,165,618

 
$
46,170

Prepaid expenses and other current assets
180,367

 
127,358

 
53,009

Liabilities
 
 
 
 
 
Refund liability
99,179

 
—

 
99,179

 
For the three months ended March 31, 2018
 
As Reported
 
Amounts Without Adoption of ASC 606
 
Effect of Change Higher/(Lower)
Income Statement
 
 
 
 
 
Revenue
$
2,720,764

 
$
2,728,712

 
$
(7,948
)
Cost of goods sold
1,666,793

 
1,674,173

 
(7,380
)
Selling, general and administrative expenses
766,891

 
767,459

 
(568
)
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 March 31, 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 for the three months ended March 31, 2018. Within our Unaudited Condensed Consolidating Statements of Cash Flows in Note 16, "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.
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.
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.
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.
v3.8.0.1
Business Combinations (Tables)
 3 Months Ended
Mar. 31, 2018
Business Combinations [Abstract]  
Purchase Price Allocations For Acquisitions
The purchase price allocations for the acquisitions completed during the year ended December 31, 2017 are as follows (in thousands):
 
Year Ended
 
December, 31, 2017
 
All
Acquisitions (1)
Receivables
$
73,782

Receivable reserves
(7,032
)
Inventories (2)
150,342

Prepaid expenses and other current assets
(295
)
Property, plant and equipment
41,039

Goodwill
314,817

Other intangibles
181,216

Other assets
3,257

Deferred income taxes
(65,087
)
Current liabilities assumed
(111,484
)
Debt assumed
(33,586
)
Other noncurrent liabilities assumed
(1,917
)
Contingent consideration liabilities
(6,234
)
Other purchase price obligations
(5,074
)
Notes issued
(20,187
)
Settlement of pre-existing balances
242

Gains on bargain purchases (3)
(3,870
)
Settlement of other purchase price obligations (non-interest bearing)
3,159

Cash used in acquisitions, net of cash acquired
$
513,088
Pro Forma Effect Of Businesses Acquired
The following pro forma summary presents the effect of the businesses acquired during the three months ended March 31, 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
 
March 31,
 
2018
 
2017
Revenue, as reported
$
2,720,764

 
$
2,342,843

Revenue of purchased businesses for the period prior to acquisition:
 
 
 
All acquisitions
26

 
139,216

Pro forma revenue
$
2,720,790

 
$
2,482,059

 
 
 
 
Income from continuing operations, as reported
$
152,763

 
$
140,809

Income from continuing operations of purchased businesses for the period prior to acquisition, and pro forma purchase accounting adjustments:
 
 
 
All acquisitions
0

 
7,470

Acquisition related expenses, net of tax (1)
623

 
1,243

Pro forma income from continuing operations
$
153,386

 
$
149,522

 
 
 
 
Earnings per share from continuing operations, basic - as reported
$
0.49

 
$
0.46

Effect of purchased businesses for the period prior to acquisition:
 
 
 
All acquisitions
0.00

 
0.02

Acquisition related expenses, net of tax (1)
0.00

 
0.00

Pro forma earnings per share from continuing operations, basic (2) 
$
0.50

 
$
0.49

 
 
 
 
Earnings per share from continuing operations, diluted - as reported
$
0.49

 
$
0.45

Effect of purchased businesses for the period prior to acquisition:
 
 
 
All acquisitions
0.00

 
0.02

Acquisition related expenses, net of tax (1)
0.00

 
0.00

Pro forma earnings per share from continuing operations, diluted (2) 
$
0.49

 
$
0.48
v3.8.0.1
Discontinued Operations Discontinued Operations Income statement (Tables)
 3 Months Ended
Mar. 31, 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 three months ended March 31, 2017, as presented in Net loss from discontinued operations on the Unaudited Condensed Consolidated Statements of Income (in thousands):
 
Three Months Ended
 
March 31, 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
)
v3.8.0.1
Summary of Significant Accounting Policies (Tables)
 3 Months Ended
Mar. 31, 2018
Accounting Policies [Abstract]  
Schedule Of Inventory
Inventories consist of the following (in thousands):
 
March 31,
 
December 31,
 
2018
 
2017
Aftermarket and refurbished products
$
1,915,537

 
$
1,877,653

Salvage and remanufactured products
469,648

 
487,108

Manufactured products
16,124

 
16,022

Total inventories
$
2,401,309

 
$
2,380,783
Changes In Carrying Amount Of Goodwill
The changes in the carrying amount of goodwill by reportable segment for the three months ended March 31, 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
584

 
259

 
(4,977
)
 
(4,134
)
Exchange rate effects
(2,891
)
 
42,510

 
202

 
39,821

Balance as of March 31, 2018
$
1,707,047

 
$
1,457,667

 
$
407,484

 
$
3,572,198
Schedule of Finite-Lived and Indefinite-Lived Intangibles [Table Text Block]
The components of other intangibles, net are as follows (in thousands):
 
March 31, 2018
 
December 31, 2017
Intangible assets subject to amortization
$
658,704

 
$
664,969

Indefinite-lived intangible assets
 
 
 
Trademarks
81,300

 
78,800

Other indefinite-lived intangible assets
800

 
—

Total
$
740,804

 
$
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
 
6-20 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):
 
March 31, 2018
 
December 31, 2017
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Trade names and trademarks
$
333,802

 
$
(79,437
)
 
$
254,365

 
$
327,332

 
$
(75,095
)
 
$
252,237

Customer and supplier relationships
520,386

 
(185,417
)
 
334,969

 
510,113

 
(167,532
)
 
342,581

Software and other technology related assets
129,851

 
(65,070
)
 
64,781

 
124,049

 
(59,081
)
 
64,968

Covenants not to compete
13,920

 
(9,331
)
 
4,589

 
14,981

 
(9,798
)
 
5,183

Total
$
997,959

 
$
(339,255
)
 
$
658,704

 
$
976,475

 
$
(311,506
)
 
$
664,969
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 and Unaudited Condensed Consolidated Statement of Income as of and for the three months ended March 31, 2018 was as follows (in thousands):
 
Balance as of March 31, 2018
 
As Reported
 
Amounts Without Adoption of ASC 606
 
Effect of Change Higher/(Lower)
Balance Sheet
 
 
 
 
 
Assets
 
 
 
 
 
Accounts receivable
$
1,211,788

 
$
1,165,618

 
$
46,170

Prepaid expenses and other current assets
180,367

 
127,358

 
53,009

Liabilities
 
 
 
 
 
Refund liability
99,179

 
—

 
99,179

 
For the three months ended March 31, 2018
 
As Reported
 
Amounts Without Adoption of ASC 606
 
Effect of Change Higher/(Lower)
Income Statement
 
 
 
 
 
Revenue
$
2,720,764

 
$
2,728,712

 
$
(7,948
)
Cost of goods sold
1,666,793

 
1,674,173

 
(7,380
)
Selling, general and administrative expenses
766,891

 
767,459

 
(568
)
Changes In Warranty Reserve
The changes in the warranty reserve are as follows (in thousands):
Balance as of December 31, 2017
$
23,151

Warranty expense
10,000

Warranty claims
(9,294
)
Balance as of March 31, 2018
$
23,857
v3.8.0.1
Revenue Recognition Revenue Recognition (Tables)
 3 Months Ended
Mar. 31, 2018
Revenue Recognition [Abstract]  
Schedule Of Revenue By Product Category
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
 
March 31,
 
2018
 
2017
North America
$
1,172,585

 
$
1,079,875

Europe
1,037,046

 
819,167

Specialty
350,674

 
313,899

Parts and services
2,560,305

 
2,212,941

Other
160,459

 
129,902

Total revenue
$
2,720,764

 
$
2,342,843
Schedule of Deferred Service-type Warranty Revenue
Our service-type warranties typically have service periods ranging from 6 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 January 1, 2018
$
19,465

Additional warranty revenue deferred
10,097

Warranty revenue recognized
(8,055
)
Balance March 31, 2018
$
21,507
v3.8.0.1
Equity Incentive Plans (Tables)
 3 Months Ended
Mar. 31, 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 three months ended March 31, 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
562,380

 
$
43.35

 
 
 
 
Vested
(359,863
)
 
$
29.00

 
 
 
 
Forfeited / Canceled
(18,015
)
 
$
31.29

 
 
 
 
Unvested as of March 31, 2018
1,808,892

 
$
34.28

 
 
 
 
Expected to vest after March 31, 2018
1,630,647

 
$
34.26

 
3.0
 
$
61,883
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 three months ended March 31, 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
(226,260
)
 
$
9.97

 
 
 
$
7,123

Canceled
(509
)
 
$
32.31

 
 
 
 
Balance as of March 31, 2018
1,511,304

 
$
9.08

 
1.4
 
$
43,631

Exercisable as of March 31, 2018
1,511,304

 
$
9.08

 
1.4
 
$
43,631
v3.8.0.1
Earnings Per Share (Tables)
 3 Months Ended
Mar. 31, 2018
Earnings Per Share [Abstract]  
Computation Of Earnings Per Share
The following chart sets forth the computation of earnings per share (in thousands, except per share amounts):
 
Three Months Ended
 
March 31,
 
2018
 
2017
Income from continuing operations
$
152,763

 
$
140,809

Denominator for basic earnings per share—Weighted-average shares outstanding
309,517

 
308,028

Effect of dilutive securities:
 
 
 
RSUs
619

 
564

Stock options
1,211

 
1,708

Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding
311,347

 
310,300

Basic earnings per share from continuing operations
$
0.49

 
$
0.46

Diluted earnings per share from continuing operations
$
0.49

 
$
0.45
Schedule Of Antidilutive Securities Excluded From Computation Of Diluted Earnings Per Share
The following table sets forth the number of employee stock-based compensation awards outstanding but not included in the computation of diluted earnings per share because their effect would have been antidilutive for the three months ended March 31, 2018 and 2017 (in thousands):
 
Three Months Ended
 
March 31,
 
2018
 
2017
Antidilutive securities:
 
 
 
RSUs
—

 
147

Stock options
—

 
78
v3.8.0.1
Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) (Tables)
 3 Months Ended
Mar. 31, 2018
Equity [Abstract]  
Accumulated Other Comprehensive Income (Loss)
 
 
Three Months Ended
 
 
March 31, 2017
 
 
Foreign
Currency
Translation
 
Unrealized Gain
(Loss) on Cash Flow Hedges
 
Unrealized (Loss) Gain
on Pension Plans
 
Other Comprehensive Loss from Unconsolidated Subsidiaries
 
Accumulated
Other
Comprehensive
(Loss) Income
Beginning balance
 
$
(272,529
)
 
$
8,091

 
$
(2,737
)
 
$
—

 
$
(267,175
)
Pretax income
 
20,068

 
832

 
836

 
—

 
21,736

Income tax effect
 
—

 
(356
)
 
(318
)
 
—

 
(674
)
Reclassification of unrealized loss (gain)
 
—

 
4,257

 
(171
)
 
—

 
4,086

Reclassification of deferred income taxes
 
—

 
(1,570
)
 
48

 
—

 
(1,522
)
Disposal of business, net
 
1,511

 
—

 
(3,436
)
 
—

 
(1,925
)
Other comprehensive (loss) income from unconsolidated subsidiaries
 
—

 
—

 
—

 
(162
)
 
(162
)
Ending balance
 
$
(250,950
)
 
$
11,254

 
$
(5,778
)
 
$
(162
)
 
$
(245,636
)
The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):
 
 
Three Months Ended
 
 
March 31, 2018
 
 
Foreign
Currency
Translation
 
Unrealized (Loss) Gain
on Cash Flow Hedges
 
Unrealized (Loss) Gain on Pension Plans
 
Other Comprehensive Loss from Unconsolidated Subsidiaries
 
Accumulated
Other
Comprehensive (Loss) Income
Beginning balance
 
$
(71,933
)
 
$
11,538

 
$
(8,772
)
 
$
(1,309
)
 
$
(70,476
)
Pretax income (loss)
 
48,435

 
(4,501
)
 
(629
)
 
—

 
43,305

Income tax effect
 
50

 
1,053

 
8

 
—

 
1,111

Reclassification of unrealized loss
 
—

 
8,747

 
—

 
—

 
8,747

Reclassification of deferred income taxes
 
—

 
(2,045
)
 
—

 
—

 
(2,045
)
Other comprehensive loss from unconsolidated subsidiaries
 
—

 
—

 
—

 
(605
)
 
(605
)
Adoption of ASU 2018-02
 
2,859

 
2,486

 
—

 
—

 
5,345

Ending balance
 
$
(20,589
)
 
$
17,278

 
$
(9,393
)
 
$
(1,914
)
 
$
(14,618
)
Accumulated Other Comprehensive Income (Loss)
The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):
 
 
Three Months Ended
 
 
March 31, 2018
 
 
Foreign
Currency
Translation
 
Unrealized (Loss) Gain
on Cash Flow Hedges
 
Unrealized (Loss) Gain on Pension Plans
 
Other Comprehensive Loss from Unconsolidated Subsidiaries
 
Accumulated
Other
Comprehensive (Loss) Income
Beginning balance
 
$
(71,933
)
 
$
11,538

 
$
(8,772
)
 
$
(1,309
)
 
$
(70,476
)
Pretax income (loss)
 
48,435

 
(4,501
)
 
(629
)
 
—

 
43,305

Income tax effect
 
50

 
1,053

 
8

 
—

 
1,111

Reclassification of unrealized loss
 
—

 
8,747

 
—

 
—

 
8,747

Reclassification of deferred income taxes
 
—

 
(2,045
)
 
—

 
—

 
(2,045
)
Other comprehensive loss from unconsolidated subsidiaries
 
—

 
—

 
—

 
(605
)
 
(605
)
Adoption of ASU 2018-02
 
2,859

 
2,486

 
—

 
—

 
5,345

Ending balance
 
$
(20,589
)
 
$
17,278

 
$
(9,393
)
 
$
(1,914
)
 
$
(14,618
)


 
 
Three Months Ended
 
 
March 31, 2017
 
 
Foreign
Currency
Translation
 
Unrealized Gain
(Loss) on Cash Flow Hedges
 
Unrealized (Loss) Gain
on Pension Plans
 
Other Comprehensive Loss from Unconsolidated Subsidiaries
 
Accumulated
Other
Comprehensive
(Loss) Income
Beginning balance
 
$
(272,529
)
 
$
8,091

 
$
(2,737
)
 
$
—

 
$
(267,175
)
Pretax income
 
20,068

 
832

 
836

 
—

 
21,736

Income tax effect
 
—

 
(356
)
 
(318
)
 
—

 
(674
)
Reclassification of unrealized loss (gain)
 
—

 
4,257

 
(171
)
 
—

 
4,086

Reclassification of deferred income taxes
 
—

 
(1,570
)
 
48

 
—

 
(1,522
)
Disposal of business, net
 
1,511

 
—

 
(3,436
)
 
—

 
(1,925
)
Other comprehensive (loss) income from unconsolidated subsidiaries
 
—

 
—

 
—

 
(162
)
 
(162
)
Ending balance
 
$
(250,950
)
 
$
11,254

 
$
(5,778
)
 
$
(162
)
 
$
(245,636
)

Net unrealized gains on our interest rate swaps totaling $2 million and net unrealized losses of $1 million were reclassified to Interest expense, net in our Unaudited Condensed Consolidated Statements of Income during the three months ended March 31, 2018 and 2017, respectively. We also reclassified gains of $1 million and $2 million to Interest expense, net related to our cross currency swaps during the three months ended March 31, 2018 and 2017, respectively. Also related to our cross currency swaps, we reclassified losses of $12 million and $5 million to Other income, net in our Unaudited Condensed Consolidated Statements of Income during the three months ended March 31, 2018 and 2017, respectively; 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.
v3.8.0.1
Long-Term Obligations (Tables)
 3 Months Ended
Mar. 31, 2018
Debt Disclosure [Abstract]  
Schedule Of Long-Term Obligations
Long-term obligations consist of the following (in thousands):
 
March 31,
 
December 31,
 
2018
 
2017
Senior secured credit agreement:
 
 
 
Term loans payable
$
700,395

 
$
704,800

Revolving credit facilities
1,172,140

 
1,283,551

U.S. Notes (2023)
600,000

 
600,000

Euro Notes (2024)
616,200

 
600,150

Receivables securitization facility
100,000

 
100,000

Notes payable through October 2025 at weighted average interest rates of 1.4% and 1.4%, respectively
29,413

 
29,146

Other long-term debt at weighted average interest rates of 1.9% and 1.7%, respectively
120,940

 
110,633

Total debt
3,339,088

 
3,428,280

Less: long-term debt issuance costs
(23,157
)
 
(21,476
)
Less: current debt issuance costs
(2,866
)
 
(2,824
)
Total debt, net of debt issuance costs
3,313,065

 
3,403,980

Less: current maturities, net of debt issuance costs
(142,277
)
 
(126,360
)
Long term debt, net of debt issuance costs
$
3,170,788

 
$
3,277,620
v3.8.0.1
Derivative Instruments and Hedging Activities (Tables)
 3 Months Ended
Mar. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Cash Flow Hedges
The following table summarizes the notional amounts and fair values of our designated cash flow hedges as of March 31, 2018 and December 31, 2017 (in thousands):
 
 
Notional Amount
 
Fair Value at March 31, 2018 (USD)
 
Fair Value at December 31, 2017 (USD)
 
 
March 31, 2018
 
December 31, 2017
 
Other Assets
 
Other Noncurrent Liabilities
 
Other Assets
 
Other Noncurrent Liabilities
Interest rate swap agreements
 
 
 
 
 
 
 
 
USD denominated
 
$
590,000

 
$
590,000

 
$
24,253

 
$
—

 
$
19,102

 
$
—

Cross currency swap agreements
 
 
 
 
 
 
 
 
USD/euro
 
$
402,580

 
$
406,546

 
9,208

 
77,812

 
5,504

 
61,492

Total cash flow hedges
 
$
33,461

 
$
77,812

 
$
24,606

 
$
61,492
v3.8.0.1
Fair Value Measurements (Tables)
 3 Months Ended
Mar. 31, 2018
Fair Value Disclosures [Abstract]  
Financial Assets And Liabilities Measured At Fair Value On A Recurring Basis
The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation inputs we utilized to determine such fair value as of March 31, 2018 and December 31, 2017 (in thousands):
 
Balance as of March 31, 2018
 
Fair Value Measurements as of March 31, 2018
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
Cash surrender value of life insurance
$
46,196

 
$
—

 
$
46,196

 
$
—

Interest rate swaps
24,253

 
—

 
24,253

 
—

Cross currency swap agreements
9,208

 
—

 
9,208

 
—

Total Assets
$
79,657

 
$
—

 
$
79,657

 
$
—

Liabilities:
 
 
 
 
 
 
 
Contingent consideration liabilities
$
2,700

 
$
—

 
$
—

 
$
2,700

Deferred compensation liabilities
50,676

 
—

 
50,676

 
—

Cross currency swap agreements
77,812

 
—

 
77,812

 
—

Total Liabilities
$
131,188

 
$
—

 
$
128,488

 
$
2,700

 
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
v3.8.0.1
Commitments and Contingencies (Tables)
 3 Months Ended
Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]  
Future Minimum Lease Commitments
The future minimum lease commitments under these leases at March 31, 2018 are as follows (in thousands):
Nine months ending December 31, 2018
$
186,038

Years ending December 31:
 
2019
207,724

2020
171,530

2021
132,755

2022
107,405

2023
91,007

Thereafter
532,760

Future Minimum Lease Payments
$
1,429,219
v3.8.0.1
Segment and Geographic Information (Tables)
 3 Months Ended
Mar. 31, 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 March 31, 2018
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
Third Party
$
1,329,660

 
$
1,040,430

 
$
350,674

 
$
—

 
$
2,720,764

Intersegment
183

 
—

 
1,118

 
(1,301
)
 
—

Total segment revenue
$
1,329,843

 
$
1,040,430

 
$
351,792

 
$
(1,301
)
 
$
2,720,764

Segment EBITDA
$
177,713

 
$
75,534

 
$
41,969

 
$
—

 
$
295,216

Depreciation and amortization (1)
21,228

 
32,757

 
7,081

 
—

 
61,066

Three Months Ended March 31, 2017
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
Third Party
$
1,208,047

 
$
820,897

 
$
313,899

 
$
—

 
$
2,342,843

Intersegment
193

 
—

 
1,035

 
(1,228
)
 
—

Total segment revenue
$
1,208,240

 
$
820,897

 
$
314,934

 
$
(1,228
)
 
$
2,342,843

Segment EBITDA
$
176,135

 
$
78,694

 
$
35,441

 
$
—

 
$
290,270

Depreciation and amortization (1)
20,378

 
24,751

 
5,475

 
—

 
50,604
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
 
March 31,
2018
 
2017
Net income
$
152,763

 
$
136,278

Less: net loss attributable to noncontrolling interest
(197
)
 
—

Net income attributable to LKQ stockholders
152,960

 
136,278

Subtract:
 
 
 
Net loss from discontinued operations
—

 
(4,531
)
Net income from continuing operations attributable to LKQ stockholders
152,960

 
140,809

Add:
 
 
 
Depreciation and amortization
56,458

 
48,656

Depreciation and amortization - cost of goods sold
4,608

 
1,948

Interest expense, net
28,515

 
23,988

Provision for income taxes
49,584

 
72,155

EBITDA
292,125

 
287,556

Subtract:
 
 
 
Equity in earnings of unconsolidated subsidiaries
1,412

 
214

Add:
 
 
 
Restructuring and acquisition related expenses (1)
4,054

 
2,928

Inventory step-up adjustment - acquisition related
403

 
—

Change in fair value of contingent consideration liabilities
46

 
—

Segment EBITDA
$
295,216

 
$
290,270
Schedule Of Capital Expenditures By Reportable Segment
The following table presents capital expenditures by reportable segment (in thousands):
 
Three Months Ended
March 31,
2018
 
2017
Capital Expenditures
 
 
 
North America
$
29,662

 
$
16,760

Europe
28,815

 
20,458

Specialty
3,712

 
3,582

Discontinued operations
—

 
3,598

Total capital expenditures
$
62,189

 
$
44,398
Schedule Of Assets By Reportable Segment
The following table presents assets by reportable segment (in thousands):
 
March 31,
 
December 31,
2018
 
2017
Receivables, net
 
 
 
North America
$
448,973

 
$
379,666

Europe
622,592

 
555,372

Specialty
140,223

 
92,068

Total receivables, net (1)
1,211,788

 
1,027,106

Inventories
 
 
 
North America
1,053,322

 
1,076,393

Europe
998,617

 
964,068

Specialty
349,370

 
340,322

Total inventories
2,401,309

 
2,380,783

Property, Plant and Equipment, net
 
 
 
North America
542,453

 
537,286

Europe
304,048

 
293,539

Specialty
83,255

 
82,264

Total property, plant and equipment, net
929,756

 
913,089

Equity Method Investments
 
 
 
North America
336

 
336

Europe 
207,874

 
208,068

Total equity method investments
208,210

 
208,404

Other unallocated assets
4,885,115

 
4,837,490

Total assets
$
9,636,178

 
$
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
 
March 31,
 
2018
 
2017
Revenue
 
 
 
United States
$
1,560,027

 
$
1,417,040

United Kingdom
430,992

 
382,652

Other countries
729,745

 
543,151

Total revenue
$
2,720,764

 
$
2,342,843
Schedule Of Tangible Long-Lived Assets By Geographic Area
The following table sets forth our tangible long-lived assets by geographic area (in thousands):
 
March 31,
 
December 31,
 
2018
 
2017
Long-lived Assets
 
 
 
United States
$
589,848

 
$
583,236

United Kingdom
186,347

 
178,021

Other countries
153,561

 
151,832

Total long-lived assets
$
929,756

 
$
913,089
v3.8.0.1
Condensed Consolidating Financial Information (Tables)
 3 Months Ended
Mar. 31, 2018
Mar. 31, 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 March 31, 2018
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Revenue
$
—

 
$
1,577,595

 
$
1,180,242

 
$
(37,073
)
 
$
2,720,764

Cost of goods sold
—

 
945,915

 
757,951

 
(37,073
)
 
1,666,793

Gross margin
—

 
631,680

 
422,291

 
—

 
1,053,971

Selling, general and administrative expenses
9,130

 
426,797

 
330,964

 
—

 
766,891

Restructuring and acquisition related expenses
—

 
330

 
3,724

 
—

 
4,054

Depreciation and amortization
29

 
24,338

 
32,091

 
—

 
56,458

Operating (loss) income
(9,159
)
 
180,215

 
55,512

 
—

 
226,568

Other expense (income):
 
 
 
 
 
 
 
 
 
Interest expense, net
18,008

 
212

 
10,295

 
—

 
28,515

Intercompany interest (income) expense, net
(15,400
)
 
9,680

 
5,720

 
—

 
—

Other (income) expense, net
(1,015
)
 
(5,882
)
 
4,015

 
—

 
(2,882
)
Total other expense, net
1,593

 
4,010

 
20,030

 
—

 
25,633

(Loss) income before (benefit) provision for income taxes
(10,752
)
 
176,205

 
35,482

 
—

 
200,935

(Benefit) provision for income taxes
(3,904
)
 
45,877

 
7,611

 
—

 
49,584

Equity in earnings of unconsolidated subsidiaries
—

 
—

 
1,412

 
—

 
1,412

Equity in earnings (loss) of subsidiaries
159,808

 
5,110

 
—

 
(164,918
)
 
—

Net income
152,960

 
135,438

 
29,283

 
(164,918
)
 
152,763

Less: net loss attributable to noncontrolling interest
—

 
—

 
(197
)
 
—

 
(197
)
Net income attributable to LKQ stockholders
$
152,960

 
$
135,438

 
$
29,480

 
$
(164,918
)
 
$
152,960


LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Income
(In thousands)
 
For the Three Months Ended March 31, 2017
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Revenue
$
—

 
$
1,453,516

 
$
929,971

 
$
(40,644
)
 
$
2,342,843

Cost of goods sold
—

 
863,375

 
590,019

 
(40,644
)
 
1,412,750

     Gross margin
—

 
590,141

 
339,952

 
—

 
930,093

Selling, general and administrative expenses
9,183

 
385,528

 
248,106

 
—

 
642,817

Restructuring and acquisition related expenses
—

 
1,883

 
1,045

 
—

 
2,928

Depreciation and amortization
30

 
23,481

 
25,145

 
—

 
48,656

     Operating (loss) income
(9,213
)
 
179,249

 
65,656

 
—

 
235,692

Other expense (income):
 
 
 
 
 
 
 
 
 
Interest expense, net
16,180

 
198

 
7,610

 
—

 
23,988

Intercompany interest (income) expense, net
(5,672
)
 
1,019

 
4,653

 
—

 
—

Other expense (income), net
291

 
(169
)
 
(1,168
)
 
—

 
(1,046
)
     Total other expense, net
10,799

 
1,048

 
11,095

 
—

 
22,942

(Loss) income from continuing operations before (benefit) provision for income taxes
(20,012
)
 
178,201

 
54,561

 
—

 
212,750

 (Benefit) provision for income taxes
(7,437
)
 
70,038

 
9,554

 
—

 
72,155

Equity in (loss) earnings of unconsolidated subsidiaries
(182
)
 
—

 
396

 
—

 
214

Equity in earnings of subsidiaries
153,566

 
4,813

 
—

 
(158,379
)
 
—

Income from continuing operations
140,809

 
112,976

 
45,403

 
(158,379
)
 
140,809

Net (loss) income from discontinued operations
(4,531
)
 
(4,531
)
 
2,050

 
2,481

 
(4,531
)
     Net income
$
136,278

 
$
108,445

 
$
47,453

 
$
(155,898
)
 
$
136,278


  
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 March 31, 2018
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net income
$
152,960

 
$
135,438

 
$
29,283

 
$
(164,918
)
 
$
152,763

Less: net loss attributable to noncontrolling interest
—

 
—

 
(197
)
 
—

 
(197
)
Net income attributable to LKQ stockholders
152,960

 
135,438

 
29,480

 
(164,918
)
 
152,960

 
 
 
 
 
 
 
 
 
 
Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
Foreign currency translation, net of tax
48,485

 
(2,183
)
 
49,055

 
(46,872
)
 
48,485

Net change in unrealized gains/losses on cash flow hedges, net of tax
3,254

 
—

 
—

 
—

 
3,254

Net change in unrealized gains/losses on pension plans, net of tax
(621
)
 
(621
)
 
—

 
621

 
(621
)
Net change in other comprehensive loss from unconsolidated subsidiaries
(605
)
 
—

 
(605
)
 
605

 
(605
)
Other comprehensive income (loss)
50,513

 
(2,804
)
 
48,450

 
(45,646
)
 
50,513

 
 
 
 
 
 
 
 
 


Comprehensive income
203,473

 
132,634

 
77,733

 
(210,564
)
 
203,276

Less: comprehensive loss attributable to noncontrolling interest
—

 
—

 
(197
)
 
—

 
(197
)
Comprehensive income attributable to LKQ stockholders
$
203,473

 
$
132,634

 
$
77,930

 
$
(210,564
)
 
$
203,473





LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Comprehensive Income
(In thousands)
 
For the Three Months Ended March 31, 2017
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net income
$
136,278

 
$
108,445

 
$
47,453

 
$
(155,898
)
 
$
136,278

Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
Foreign currency translation, net of tax
21,579

 
3,878

 
21,132

 
(25,010
)
 
21,579

Net change in unrealized gains/losses on cash flow hedges, net of tax
3,163

 
(133
)
 
—

 
133

 
3,163

Net change in unrealized gains/losses on pension plans, net of tax
(3,041
)
 
(2,805
)
 
(236
)
 
3,041

 
(3,041
)
Net change in other comprehensive loss from unconsolidated subsidiaries
(162
)
 
—

 
(162
)
 
162

 
(162
)
Other comprehensive income
21,539

 
940

 
20,734

 
(21,674
)
 
21,539

Total comprehensive income
$
157,817

 
$
109,385

 
$
68,187

 
$
(177,572
)
 
$
157,817



  
Consolidated Condensed Balance Sheets
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Balance Sheets
(In thousands)
 
March 31, 2018
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
17,340

 
$
28,975

 
$
199,364

 
$
—

 
$
245,679

Receivables, net
843

 
372,264

 
838,681

 
—

 
1,211,788

Intercompany receivables, net
6,747

 
—

 
21,170

 
(27,917
)
 
—

Inventories
—

 
1,319,468

 
1,081,841

 
—

 
2,401,309

Prepaid expenses and other current assets
1,864

 
94,231

 
84,272

 
—

 
180,367

Total current assets
26,794

 
1,814,938

 
2,225,328

 
(27,917
)
 
4,039,143

Property, plant and equipment, net
904

 
569,829

 
359,023

 
—

 
929,756

Intangible assets:
 
 
 
 
 
 
 
 
 
Goodwill
—

 
2,005,814

 
1,566,384

 
—

 
3,572,198

Other intangibles, net
—

 
289,057

 
451,747

 
—

 
740,804

Investment in subsidiaries
5,355,015

 
105,772

 
—

 
(5,460,787
)
 
—

Intercompany notes receivable
1,143,818

 
32,777

 
—

 
(1,176,595
)
 
—

Equity method investments
—

 
336

 
207,874

 
—

 
208,210

Other assets
79,657

 
36,403

 
30,007

 
—

 
146,067

Total assets
$
6,606,188

 
$
4,854,926

 
$
4,840,363

 
$
(6,665,299
)
 
$
9,636,178

Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
8,407

 
$
358,971

 
$
445,283

 
$
—

 
$
812,661

Intercompany payables, net
—

 
21,170

 
6,747

 
(27,917
)
 
—

Accrued expenses:
 
 
 
 
 
 
 
 
 
Accrued payroll-related liabilities
5,224

 
34,590

 
72,326

 
—

 
112,140

Other accrued expenses
12,360

 
101,274

 
153,730

 
—

 
267,364

Refund liability
—

 
54,270

 
44,909

 
—

 
99,179

Other current liabilities
6,224

 
19,255

 
15,688

 
—

 
41,167

Current portion of long-term obligations
20,863

 
1,912

 
119,502

 
—

 
142,277

Total current liabilities
53,078

 
591,442

 
858,185

 
(27,917
)
 
1,474,788

Long-term obligations, excluding current portion
1,956,376

 
7,341

 
1,207,071

 
—

 
3,170,788

Intercompany notes payable
—

 
657,601

 
518,994

 
(1,176,595
)
 
—

Deferred income taxes
13,345

 
115,736

 
113,145

 
—

 
242,226

Other noncurrent liabilities
176,802

 
102,559

 
50,034

 
—

 
329,395

Stockholders' equity:
 
 
 
 
 
 
 
 
 
Total Company stockholders’ equity
4,406,587

 
3,380,247

 
2,080,540

 
(5,460,787
)
 
4,406,587

Noncontrolling interest
—

 
—

 
12,394

 
—

 
12,394

Total stockholders’ equity
4,406,587

 
3,380,247

 
2,092,934

 
(5,460,787
)
 
4,418,981

Total liabilities and stockholders' equity
$
6,606,188

 
$
4,854,926

 
$
4,840,363

 
$
(6,665,299
)
 
$
9,636,178



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 Three Months Ended March 31, 2018
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
95,942

 
$
96,517

 
$
243

 
$
(47,539
)
 
$
145,163

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Purchases of property, plant and equipment
(163
)
 
(29,908
)
 
(32,118
)
 
—

 
(62,189
)
Investment and intercompany note activity with subsidiaries
24,333

 
—

 
—

 
(24,333
)
 
—

Acquisitions, net of cash acquired
—

 
(2,966
)
 
—

 
—

 
(2,966
)
Payments of deferred purchase price on receivables securitization
—

 
7,456

 
—

 
(7,456
)
 
—

Other investing activities, net
—

 
(145
)
 
679

 
—

 
534

Net cash provided by (used in) investing activities
24,170

 
(25,563
)
 
(31,439
)
 
(31,789
)
 
(64,621
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Proceeds from exercise of stock options
2,255

 
—

 
—

 
—

 
2,255

Taxes paid related to net share settlements of stock-based compensation awards
(3,292
)
 
—

 
—

 
—

 
(3,292
)
Debt issuance costs
(724
)
 
—

 
—

 
—

 
(724
)
Borrowings under revolving credit facilities
161,000

 
—

 
40,669

 
—

 
201,669

Repayments under revolving credit facilities
(291,966
)
 
—

 
(29,559
)
 
—

 
(321,525
)
Repayments under term loans
(4,405
)
 
—

 
—

 
—

 
(4,405
)
(Repayments) borrowings of other debt, net
—

 
(30
)
 
4,439

 
—

 
4,409

Other financing activities, net
—

 
—

 
4,107

 
—

 
4,107

Investment and intercompany note activity with parent
—

 
(21,759
)
 
(2,574
)
 
24,333

 
—

Dividends
—

 
(54,995
)
 
—

 
54,995

 
—

Net cash (used in) provided by financing activities
(137,132
)
 
(76,784
)
 
17,082

 
79,328

 
(117,506
)
Effect of exchange rate changes on cash and cash equivalents
—

 
(326
)
 
3,203

 
—

 
2,877

Net decrease in cash and cash equivalents
(17,020
)
 
(6,156
)
 
(10,911
)
 
—

 
(34,087
)
Cash and cash equivalents, beginning of period
34,360

 
35,131

 
210,275

 
—

 
279,766

Cash and cash equivalents, end of period
$
17,340

 
$
28,975

 
$
199,364

 
$
—

 
$
245,679
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidating Statements of Cash Flows
(In thousands)
 
For the Three Months Ended March 31, 2017
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
118,537

 
$
106,243

 
$
35,789

 
$
(88,276
)
 
$
172,293

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Purchases of property, plant and equipment
—

 
(18,226
)
 
(26,172
)
 
—

 
(44,398
)
Investment and intercompany note activity with subsidiaries
249,828

 
—

 
—

 
(249,828
)
 
—

Acquisitions, net of cash acquired
—

 
(74,937
)
 
(2,119
)
 
—

 
(77,056
)
Proceeds from disposals of business/investment
—

 
305,740

 
(4,443
)
 
—

 
301,297

Payments of deferred purchase price on receivables securitization (1)
—

 
6,362

 
—

 
(6,362
)
 
—

Other investing activities, net
—

 
1,008

 
306

 
—

 
1,314

Net cash provided by (used in) investing activities
249,828

 
219,947

 
(32,428
)
 
(256,190
)
 
181,157

CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Proceeds from exercise of stock options
2,464

 
—

 
—

 
—

 
2,464

Taxes paid related to net share settlements of stock-based compensation awards
(3,644
)
 
—

 
—

 
—

 
(3,644
)
Borrowings under revolving credit facilities
10,000

 
—

 
35,239

 
—

 
45,239

Repayments under revolving credit facilities
(376,966
)
 
—

 
(12,347
)
 
—

 
(389,313
)
Repayments under term loans
(9,295
)
 
—

 
—

 
—

 
(9,295
)
Repayments under receivables securitization facility
—

 
—

 
(150
)
 
—

 
(150
)
(Repayments) borrowings of other debt, net
(1,698
)
 
(1,099
)
 
26,110

 
—

 
23,313

Other financing activities, net
—

 
5,000

 
—

 
—

 
5,000

Investment and intercompany note activity with parent
—

 
(246,463
)
 
(3,365
)
 
249,828

 
—

Dividends
—

 
(94,638
)
 
—

 
94,638

 
—

Net cash (used in) provided by financing activities
(379,139
)
 
(337,200
)
 
45,487

 
344,466

 
(326,386
)
Effect of exchange rate changes on cash and cash equivalents
—

 
30

 
3,004

 
—

 
3,034

Net (decrease) increase in cash and cash equivalents
(10,774
)
 
(10,980
)
 
51,852

 
—

 
30,098

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
$
22,256

 
$
24,529

 
$
217,829

 
$
—

 
$
264,614

 
 
 
 
 
 
 
 
 


(1) Reflects the impact of adopting ASU 2016-15
 
 
 
 
 
 
 
 
v3.8.0.1
Business Combinations - Additional Information (Details)
$ in Thousands, € in Billions
 3 Months Ended 12 Months Ended
Mar. 31, 2018
USD ($)
Mar. 31, 2017
USD ($)
Dec. 31, 2017
USD ($)
Apr. 09, 2018
EUR (€)
Dec. 10, 2017
EUR (€)
shares
Business Acquisition          
Income from continuing operations   $ 140,809      
Number of acquisitions     26    
Cash used in acquisitions, net of cash acquired $ 2,966 77,056      
Goodwill 3,572,198   $ 3,536,511    
Pending Acquisition, Enterprise Value | €         € 1.5
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares         8,055,569
Restructuring and acquisition related expenses $ 4,054 2,928      
Disposal Group, Including Discontinued Operation, Revenue   111,130      
Disposal Groups, including Discontinued Operations, Operating income   $ 2,677      
Wholesale Distribution Businesses in North America [Member]          
Business Acquisition          
Number of acquisitions 1        
Europe          
Business Acquisition          
Number of acquisitions     16    
Goodwill $ 1,457,667   $ 1,414,898    
North America Segment [Member]          
Business Acquisition          
Number of acquisitions     6    
North America          
Business Acquisition          
Goodwill 1,707,047   $ 1,709,354    
Specialty          
Business Acquisition          
Number of acquisitions     4    
Goodwill $ 407,484   $ 412,259    
Wholesale Distribution Businesses in Belgium [Member]          
Business Acquisition          
Number of acquisitions     4    
All 2017 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    
Notes issued     20,187    
Goodwill     307,000    
Business Acquisition, Goodwill, Expected Tax Deductible Amount     21,000    
Business Combincation, Contingent Consideration Arrangements, Maximum Potential Consideration     19,000    
2017 acquisitions and adjustments to 2016 acquisitions [Member]          
Business Acquisition          
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment     41,039    
Cash used in acquisitions, net of cash acquired     513,088    
Gains on bargain purchases     (3,870)    
Notes issued     20,187    
Other purchase price obligations     5,074    
Settlement of pre-existing balances     242    
Goodwill     314,817    
Debt assumed     33,586    
Contingent consideration liabilities     (6,234)    
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets     (295)    
Andrew Page          
Business Acquisition          
Gains on bargain purchases     (2,000)    
Adjustments in 2017 [Member] | Rhiag          
Business Acquisition          
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment     6,000    
Adjustments in 2017 [Member] | PGW          
Business Acquisition          
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets     $ 3,000    
Euro Notes 2026/28 [Member]          
Business Acquisition          
Debt Instrument, Face Amount | €       € 1.0  
v3.8.0.1
Purchase Price Allocations for Acquisitions (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Dec. 31, 2017
Business Acquisition      
Inventory step-up adjustment - acquisition related $ 403    
Goodwill 3,572,198   $ 3,536,511
Cash used in acquisitions, net of cash acquired $ 2,966 $ 77,056  
Warn Industries [Member]      
Business Acquisition      
Inventory step-up adjustment - acquisition related     4,000
2017 acquisitions and adjustments to 2016 acquisitions [Member]      
Business Acquisition      
Receivables     73,782
Receivable reserves     (7,032)
Inventories (2)     150,342
Prepaid expenses and other current assets     (295)
Property, plant and equipment     41,039
Goodwill     314,817
Finite and Indefinite-Lived Asset, Gross     181,216
Other assets     3,257
Deferred income taxes     (65,087)
Current liabilities assumed     (111,484)
Debt assumed     (33,586)
Other noncurrent liabilities assumed     (1,917)
Contingent consideration liabilities     (6,234)
Other purchase price obligations     (5,074)
Notes issued     (20,187)
Settlement of pre-existing balances     242
Gains on bargain purchases     (3,870)
Subsequent payments on purchase price payables     3,159
Cash used in acquisitions, net of cash acquired     $ 513,088
v3.8.0.1
Pro Forma Effect of Businesses Acquired (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Business Acquisition    
Revenue, as reported $ 2,720,764 $ 2,342,843
Pro forma revenue 2,720,790 2,482,059
Income from continuing operations 152,763 140,809
Pro forma income from continuing operations $ 153,386 $ 149,522
Basic earnings per share from continuing operations $ 0.49 $ 0.46
Pro forma earnings per share from continuing operations, basic (2) 0.50 0.49
Diluted earnings per share from continuing operations 0.49 0.45
Pro forma earnings per share from continuing operations, diluted (2) $ 0.49 $ 0.48
Restructuring and acquisition related expenses $ 4,054 $ 2,928
All 2018 Acquisitions [Member]    
Business Acquisition    
Revenue of purchased businesses for the period prior to acquisition 26  
Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments 0  
Acquisition Related Costs, Net of Tax $ 623  
Effect of purchased businesses for the period prior to acquisition $ 0.00  
Business Acquisition Pro Forma Income Loss From Acquisition Related Costs, Net of Tax, Per Basic Share Effect 0.00  
Effect of purchased businesses for the period prior to acquisition 0.00  
Business Acquisition Pro Forma Income Loss From Acquisition Related Costs, Net of Tax, Per Diluted Share Effect $ 0.00  
All 2017 acquisitions [Member]    
Business Acquisition    
Revenue of purchased businesses for the period prior to acquisition   139,216
Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments   7,470
Acquisition Related Costs, Net of Tax   $ 1,243
Effect of purchased businesses for the period prior to acquisition   $ 0.02
Business Acquisition Pro Forma Income Loss From Acquisition Related Costs, Net of Tax, Per Basic Share Effect   0.00
Effect of purchased businesses for the period prior to acquisition   0.02
Business Acquisition Pro Forma Income Loss From Acquisition Related Costs, Net of Tax, Per Diluted Share Effect   $ 0.00
Acquisition related expenses    
Business Acquisition    
Restructuring and acquisition related expenses $ 2,000 $ 3,000
v3.8.0.1
Discontinued Operations Net assets of discontinued operations (Details) - USD ($)
$ in Thousands
 1 Months Ended 2 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2017
Mar. 01, 2017
Mar. 31, 2018
Mar. 31, 2017
Dec. 31, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Loss on sale of business       $ (8,580)  
Proceeds from disposals of business/investment       301,297 $ 316,000
Cash disposed as part of divestment         $ 15,000
Discontinued Operation, Tax Effect of Gain (Loss) from Disposal of Discontinued Operation       (4,000)  
Intercompany payable between discontinued operations and continuing operations $ 6,000     6,000  
Interest Allocated to Discontinued Operations   $ 2,000      
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  
Intercompany Sales between Continuing and Discontinued Operations   $ 8,000      
Purchases under supply agreement $ 4,000   $ 10,000    
Payments to Acquire Productive Assets     (62,189) (44,398)  
Discontinued Operations          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Payments to Acquire Productive Assets     $ 0 $ (3,598)  
v3.8.0.1
Discontinued Operations (Details) - USD ($)
$ in Thousands
 1 Months Ended 2 Months Ended 3 Months Ended
Mar. 31, 2017
Mar. 01, 2017
Mar. 31, 2018
Mar. 31, 2017
Intercompany Sales between Continuing and Discontinued Operations   $ 8,000    
Disposal Group, Including Discontinued Operation, Revenue       $ 111,130
Disposal Group, Including Discontinued Operation, Costs of Goods Sold       100,084
Disposal Group, Including Discontinued Operation, Operating Expense       8,369
Discontinued Operation, Tax Effect of Gain (Loss) from Disposal of Discontinued Operation       4,000
Disposal Groups, including Discontinued Operations, Operating income       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 Gain (Loss) from Disposal of Discontinued Operation       3,598
disposal group, including discontinued operation, equity in earnings       (534)
IncomeLossFromDiscontinuedOperationsExcludingLossonSaleNetOfTaxAttributableToReportingEntity       (251)
Net loss from discontinued operations     $ 0 (4,531)
Interest Allocated to Discontinued Operations   $ 2,000    
Capital Expenditures     62,189 44,398
Cash Provided by (Used in) Operating Activities, Discontinued Operations       (4,000)
Cash Provided by (Used in) Investing Activities, Discontinued Operations       (4,000)
Loss on sale of business       (4,280)
Purchases under supply agreement $ 4,000   10,000  
Discontinued Operations        
Capital Expenditures     $ 0 $ 3,598
v3.8.0.1
Summary of Significant Accounting Policies - Additional Information (Details)
$ in Thousands, kr in Millions
 3 Months Ended 12 Months Ended
Mar. 31, 2018
USD ($)
Mar. 31, 2017
USD ($)
Dec. 31, 2017
SEK (kr)
Dec. 31, 2017
USD ($)
Dec. 01, 2016
USD ($)
Summary of Significant Accounting Policies [Line Items]          
U.S. federal statutory rate 21.00% 35.00%      
Adoption of ASU 2018-02 (see Note 4) $ 5,345        
Reserve for uncollectible accounts 63,000     $ 58,000  
Depreciation 37,000 $ 27,000      
Amortization expense 24,000 23,000      
Estimated annual amortization expense in year one 75,000        
Estimated annual amortization expense in year two 85,000        
Estimated annual amortization expense in year three 72,000        
Estimated annual amortization expense in year four 60,000        
Estimated annual amortization expense in year five 51,000        
Equity method investments 208,210     208,404  
Equity in earnings of unconsolidated subsidiaries 1,412 214      
Raw Materials [Member]          
Summary of Significant Accounting Policies [Line Items]          
Manufactured Inventory $ 9,000     10,000  
Salvage Mechanical Products          
Summary of Significant Accounting Policies [Line Items]          
Standard warranty period 6 months        
Remanufactured Engines          
Summary of Significant Accounting Policies [Line Items]          
Standard warranty period 3 years        
Trade names and trademarks | Minimum          
Summary of Significant Accounting Policies [Line Items]          
Useful life, years 4 years        
Trade names and trademarks | Maximum          
Summary of Significant Accounting Policies [Line Items]          
Useful life, years 30 years        
Software and technology related assets | Minimum          
Summary of Significant Accounting Policies [Line Items]          
Useful life, years 3 years        
Software and technology related assets | Maximum          
Summary of Significant Accounting Policies [Line Items]          
Useful life, years 15 years        
Covenants not to compete | Minimum          
Summary of Significant Accounting Policies [Line Items]          
Useful life, years 2 years        
Covenants not to compete | Maximum          
Summary of Significant Accounting Policies [Line Items]          
Useful life, years 5 years        
Customer and supplier relationships [Member] | Minimum          
Summary of Significant Accounting Policies [Line Items]          
Useful life, years 6 years        
Customer and supplier relationships [Member] | Maximum          
Summary of Significant Accounting Policies [Line Items]          
Useful life, years 20 years        
Mekonomen [Member]          
Summary of Significant Accounting Policies [Line Items]          
Investment in unconsolidated subsidiary, ownership percentage 26.50%        
Equity method investments $ 202,000       $ 181,000
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity 125,000        
Equity in earnings of unconsolidated subsidiaries 2,000 $ 300      
Equity Method Investments, Fair Value Disclosure $ 163,000        
Proceeds from Equity Method Investment, Dividends or Distributions     kr 67 $ 7,000  
v3.8.0.1
Financial Statement Information Schedule of Inventory (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Mar. 31, 2018
Dec. 31, 2017
Product Information    
Inventories $ 2,401,309 $ 2,380,783
Aftermarket and refurbished products    
Product Information    
Inventories 1,915,537 1,877,653
Salvage and remanufactured products    
Product Information    
Inventories 469,648 487,108
ManufacturedProducts [Member]    
Product Information    
Inventories 16,124 16,022
Raw Materials [Member]    
Product Information    
Manufactured Inventory 9,000 10,000
Work In Process [Member]    
Product Information    
Manufactured Inventory 2,000 2,000
Finished goods Inventory [Member]    
Product Information    
Manufactured Inventory $ 5,000 $ 4,000
v3.8.0.1
Financial Statement Information Schedule of Property and Equipment (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Dec. 31, 2017
Property, Plant and Equipment      
Property, Plant and Equipment, Net $ 929,756   $ 913,089
Depreciation $ 37,000 $ 27,000  
v3.8.0.1
Changes in Carrying Amount of Goodwill (Details)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
USD ($)
Goodwill [Roll Forward]  
Beginning balance $ 3,536,511
Business acquisitions and adjustments to previously recorded goodwill (4,134)
Exchange rate effects 39,821
Ending balance 3,572,198
North America  
Goodwill [Roll Forward]  
Beginning balance 1,709,354
Business acquisitions and adjustments to previously recorded goodwill 584
Exchange rate effects (2,891)
Ending balance 1,707,047
Europe  
Goodwill [Roll Forward]  
Beginning balance 1,414,898
Business acquisitions and adjustments to previously recorded goodwill 259
Exchange rate effects 42,510
Ending balance 1,457,667
Specialty  
Goodwill [Roll Forward]  
Beginning balance 412,259
Business acquisitions and adjustments to previously recorded goodwill (4,977)
Exchange rate effects 202
Ending balance $ 407,484
v3.8.0.1
Components of Other Intangibles (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Dec. 31, 2017
Finite-Lived Intangible Assets    
Gross carrying amount $ 997,959 $ 976,475
Accumulated amortization (339,255) (311,506)
Net 658,704 664,969
Other intangibles, net 740,804 743,769
Trade names and trademarks    
Finite-Lived Intangible Assets    
Gross carrying amount 333,802 327,332
Accumulated amortization (79,437) (75,095)
Net 254,365 252,237
Customer and supplier relationships    
Finite-Lived Intangible Assets    
Gross carrying amount 520,386 510,113
Accumulated amortization (185,417) (167,532)
Net 334,969 342,581
Software and technology related assets    
Finite-Lived Intangible Assets    
Gross carrying amount 129,851 124,049
Accumulated amortization (65,070) (59,081)
Net 64,781 64,968
Covenants not to compete    
Finite-Lived Intangible Assets    
Gross carrying amount 13,920 14,981
Accumulated amortization (9,331) (9,798)
Net $ 4,589 5,183
Maximum | Trade names and trademarks    
Finite-Lived Intangible Assets    
Finite-Lived Intangible Asset, Useful Life 30 years  
Maximum | Software and technology related assets    
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 | Trade names and trademarks    
Finite-Lived Intangible Assets    
Finite-Lived Intangible Asset, Useful Life 4 years  
Minimum | Software and technology related assets    
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 6 years  
Trademarks [Member]    
Finite-Lived Intangible Assets    
Indefinite-Lived Intangible Assets (Excluding Goodwill) $ 81,300 78,800
Unclassified Indefinite-lived Intangible Assets [Member]    
Finite-Lived Intangible Assets    
Indefinite-Lived Intangible Assets (Excluding Goodwill) $ 800 $ 0
v3.8.0.1
Changes in Warranty Reserve (Details)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
USD ($)
Warranty Reserve [Roll Forward]  
Beginning balance $ 23,151
Warranty expense 10,000
Warranty claims (9,294)
Ending balance $ 23,857
v3.8.0.1
Financial Statement Information Schedule of New Accounting Pronouncements (Details) - USD ($)
$ in Thousands
Mar. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
New Accounting Pronouncement, Early Adoption [Line Items]      
Receivables, Net, Current $ 1,211,788 $ 1,065,617 $ 1,027,106
Prepaid Expense and Other Assets, Current 180,367 $ 178,987 134,479
Other assets 146,067   142,965
Other current liabilities 41,167   45,727
Deferred Income Taxes $ (242,226)   $ (252,359)
v3.8.0.1
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
Mar. 31, 2018
Mar. 31, 2017
Jan. 01, 2018
Dec. 31, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Revenue $ 2,720,764 $ 2,342,843    
Receivables, net 1,211,788   $ 1,065,617 $ 1,027,106
Net Cash Provided by (Used in) Operating Activities 145,163 172,293    
Net Cash Provided by (Used in) Financing Activities (117,506) (326,386)    
Net income attributable to LKQ stockholders $ 152,960 $ 136,278    
Net income attributable to LKQ stockholders $ 0.49 $ 0.44    
Net income attributable to LKQ stockholders $ 0.49 $ 0.44    
Prepaid expenses and other current assets $ 180,367   178,987 134,479
Refund liability 99,179   83,019 0
Accounts payable 812,661     788,613
Other current liabilities 41,167     $ 45,727
Cost of goods sold 1,666,793 $ 1,412,750    
Selling, general and administrative expenses (1) 766,891 $ 642,817    
Adjustment Due to ASC 606 [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Receivables, net     38,511  
Prepaid expenses and other current assets     44,508  
Refund liability     $ 83,019  
Amount of adjustment to prior balance [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Revenue 2,728,712      
Receivables, net 1,165,618      
Prepaid expenses and other current assets 127,358      
Refund liability 0      
Cost of goods sold 1,674,173      
Selling, general and administrative expenses (1) 767,459      
Adjustment Due to ASC 606 [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Revenue (7,948)      
Receivables, net 46,170      
Prepaid expenses and other current assets 53,009      
Refund liability 99,179      
Cost of goods sold (7,380)      
Selling, general and administrative expenses (1) $ (568)      
v3.8.0.1
Revenue Recognition Revenue Recognition (Details)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
USD ($)
Mar. 31, 2017
USD ($)
Dec. 31, 2017
USD ($)
Revenue Recognition [Line Items]      
Revenue $ 2,720,764 $ 2,342,843  
Deferred Service-Type Warranty Revenue 22   $ 19
Deferred Revenue, Additions 10    
Deferred Revenue, Revenue Recognized (8)    
Reserve for Returns, net     (38,000)
Reserve for Variable Consideration 44,000   $ 78,000
Customer Refund Liability, Current      
Revenue Recognition [Line Items]      
Reserve for Returns, net 99,000    
Customer Returns Asset      
Revenue Recognition [Line Items]      
Reserve for Returns, net $ 53,000    
Maximum      
Revenue Recognition [Line Items]      
Service-Type Product Warranty Time Period 36    
Minimum      
Revenue Recognition [Line Items]      
Service-Type Product Warranty Time Period 6    
North America      
Revenue Recognition [Line Items]      
Revenue $ 1,329,843 1,208,240  
Europe      
Revenue Recognition [Line Items]      
Revenue 1,040,430 820,897  
Specialty      
Revenue Recognition [Line Items]      
Revenue 351,792 314,934  
Parts and Services      
Revenue Recognition [Line Items]      
Revenue 2,560,305 2,212,941  
Parts and Services | North America      
Revenue Recognition [Line Items]      
Revenue 1,172,585 1,079,875  
Parts and Services | Europe      
Revenue Recognition [Line Items]      
Revenue 1,037,046 819,167  
Parts and Services | Specialty      
Revenue Recognition [Line Items]      
Revenue 350,674 313,899  
Other Revenue      
Revenue Recognition [Line Items]      
Revenue $ 160,459 $ 129,902  
v3.8.0.1
Schedule of Revenue by Product Category (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Segment Reporting [Abstract]    
Revenue $ 2,720,764 $ 2,342,843
Parts and Services    
Segment Reporting [Abstract]    
Revenue 2,560,305 2,212,941
Other Revenue    
Segment Reporting [Abstract]    
Revenue 160,459 129,902
North America    
Segment Reporting [Abstract]    
Revenue 1,329,843 1,208,240
North America | Parts and Services    
Segment Reporting [Abstract]    
Revenue 1,172,585 1,079,875
Europe    
Segment Reporting [Abstract]    
Revenue 1,040,430 820,897
Europe | Parts and Services    
Segment Reporting [Abstract]    
Revenue 1,037,046 819,167
Specialty    
Segment Reporting [Abstract]    
Revenue 351,792 314,934
Specialty | Parts and Services    
Segment Reporting [Abstract]    
Revenue $ 350,674 $ 313,899
v3.8.0.1
Restructuring and Acquisition Related Expenses - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Restructuring Cost and Reserve    
Restructuring and acquisition related expenses $ 4,054 $ 2,928
Acquisition related expenses    
Restructuring Cost and Reserve    
Restructuring and acquisition related expenses 2,000 3,000
Restructuring expenses    
Restructuring Cost and Reserve    
Restructuring and acquisition related expenses 2,000 1,000
Expected future restructuring expenses 15,000  
Andrew Page | Acquisition related expenses    
Restructuring Cost and Reserve    
Restructuring and acquisition related expenses   1,000
Stahlgruber | Acquisition related expenses    
Restructuring Cost and Reserve    
Restructuring and acquisition related expenses $ 1,000  
Stahlgruber | All Q1 2017 acquisitions excluding Andrew Page [Member]    
Restructuring Cost and Reserve    
Restructuring and acquisition related expenses   $ 2,000
v3.8.0.1
Equity Incentive Plans - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award    
Stock options exercised, aggregate intrinsic value $ 7,123  
Stock-based compensation expense $ 5,982 $ 7,285
RSUs    
Share-based Compensation Arrangement by Share-based Payment Award    
Vesting period 5 years  
RSUs granted, shares 562,380  
Fair value of RSUs vested during the period $ 15,000  
Stock-based compensation expense $ 5,982 $ 7,279
Stock Options    
Share-based Compensation Arrangement by Share-based Payment Award    
Vesting period 5 years  
Minimum | Stock Options    
Share-based Compensation Arrangement by Share-based Payment Award    
Stock options expiration period 6 years  
Maximum | Stock Options    
Share-based Compensation Arrangement by Share-based Payment Award    
Stock options expiration period 10 years  
v3.8.0.1
Equity Incentive Plans Schedule of Unvested Restricted Stock Units Activity (Details) - RSUs - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended
Mar. 31, 2018
Dec. 31, 2017
Summary of Expected to Vest RSUs [Line Items]    
Unvested RSUs, shares 1,808,892 1,624,390
RSUs granted, shares 562,380  
RSUs vested, shares (359,863)  
RSUs forfeited/canceled, shares (18,015)  
RSUs expected to vest, shares 1,630,647  
Unvested RSUs, weighted average grant date fair value $ 34.28 $ 29.94
RSUs granted, weighted average grant date fair value 43.35  
RSUs vested, weighted average grant date fair value 29.00  
RSUs forfeited/canceled, weighted average grant date fair value 31.29  
RSUs expected to vest, weighted average grant date fair value $ 34.26  
RSUs expected to vest, weighted average remaining contractual term 3 years  
RSUs expected to vest, aggregate intrinsic value $ 61,883  
v3.8.0.1
Equity Incentive Plans Schedule of Stock Option Activity (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended
Mar. 31, 2018
Dec. 31, 2017
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]    
Stock options outstanding, shares 1,511,304 1,738,073
Stock options exercised, shares (226,260)  
Stock options forfeited/canceled, shares (509)  
Exercisable stock options, shares 1,511,304  
Stock options outstanding, weighted average exercise price $ 9.08 $ 9.20
Stock options exercised, weighted average exercise price 9.97  
Stock options forfeited/canceled, weighted average exercise price 32.31  
Exercisable stock options, weighted average exercise price $ 9.08  
Stock options outstanding, weighted average remaining contractual term (years) 1 year 4 months 24 days  
Exercisable stock options, weighted average remaining contractual term (years) 1 year 4 months 24 days  
Stock options exercised, aggregate intrinsic value $ 7,123  
Stock options outstanding, aggregate intrinsic value 43,631  
Exercisable stock options, aggregate intrinsic value $ 43,631  
v3.8.0.1
Schedule of Pre-Tax Stock-Based Compensation Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award    
Stock-based compensation expense $ 5,982 $ 7,285
RSUs    
Share-based Compensation Arrangement by Share-based Payment Award    
Stock-based compensation expense $ 5,982 $ 7,279
v3.8.0.1
Schedule of Stock-Based Compensation Expense Included in Statements of Income (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Employee Service Share-based Compensation, Allocation of Recognized Period Costs    
Stock-based compensation expense, before tax $ 5,982 $ 7,285
v3.8.0.1
Schedule of Stock-Based Compensation Expense Expected to be Recognized (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award    
Stock-based compensation expense $ 5,982 $ 7,285
RSUs    
Share-based Compensation Arrangement by Share-based Payment Award    
Stock-based compensation expense 5,982 $ 7,279
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options $ 51,000  
v3.8.0.1
Computation of Earnings Per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Earnings Per Share [Abstract]    
Income from continuing operations $ 152,763 $ 140,809
Denominator for basic earnings per share—Weighted-average shares outstanding 309,517 308,028
Effect of dilutive securities:    
RSUs 619 564
Stock options 1,211 1,708
Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding 311,347 310,300
Basic earnings per share from continuing operations $ 0.49 $ 0.46
Diluted earnings per share from continuing operations $ 0.49 $ 0.45
v3.8.0.1
Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share (Details) - shares
shares in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
RSUs    
Antidilutive Securities Excluded from Computation of Earnings Per Share    
Antidilutive securities 0 147
Stock Options    
Antidilutive Securities Excluded from Computation of Earnings Per Share    
Antidilutive securities 0 78
v3.8.0.1
Accumulated Other Comprehensive Income (Loss) Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Dec. 31, 2017
Dec. 31, 2016
Equity [Abstract]        
Foreign currency translation, net of tax $ 48,485 $ 21,579    
Other comprehensive loss of unconsolidated subsidiaries (1,914) (162) $ (1,309) $ 0
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation        
Balance, beginning (71,933) (272,529)    
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax 48,435 20,068    
Income tax effect (50) 0    
Disposal of business, net   1,511    
Balance, ending (20,589) (250,950)    
Accumulated Other Comprehensive Income (Loss), Unrealized (Loss) Gain on Cash Flow Hedges        
Balance, beginning 11,538 8,091    
Pretax income (loss) 4,501 (832)    
Income tax effect (1,053) 356    
Reclassification of unrealized loss (gain) (8,747) 4,257    
Reclassification of deferred income taxes (2,045) (1,570)    
Balance, ending 17,278 11,254    
Accumulated Other Comprehensive Income (Loss), Unrealized (Loss) Gain on Pension Plans        
Balance, beginning (8,772) 2,737    
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, before Tax (629) 836    
Income tax effect 8 (318)    
Reclassification of unrealized loss (gain) 0 (171)    
Reclassification of deferred income taxes 0 48    
Disposal of business, net   (3,436)    
Balance, ending (9,393) (5,778)    
Balance, beginning (70,476) (267,175)    
Pretax income (loss) 43,305 21,736    
Income tax effect (1,111) (674)    
Reclassification of unrealized loss (gain) 8,747 4,086    
Reclassification of deferred income taxes 2,045 (1,522)    
Disposal of business, net   (1,925)    
Other comprehensive loss of unconsolidated subsidiaries (605) (162)    
Balance, ending $ (14,618) $ (245,636)    
v3.8.0.1
Accumulated Other Comprehensive Income (Loss) Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Dec. 31, 2017
Dec. 31, 2016
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]        
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax $ (20,589) $ (250,950) $ (71,933) $ (272,529)
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax 17,278 11,254 11,538 8,091
Accumulated other comprehensive loss (14,618) (245,636) (70,476) (267,175)
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax 48,435 20,068    
Unrealized gain (loss) on derivatives, before tax (4,501) 832    
Reclassification of unrealized loss (gain) (8,747) 4,257    
Reclassification of unrealized loss (gain) 0 (171)    
Accumulated Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net of Tax 9,393 5,778 8,772 (2,737)
Pretax income (loss) 43,305 21,736    
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax 50 0    
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax 1,053 (356)    
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, before Tax (629) 836    
Other Comprehensive Income (Loss), Tax (1,111) (674)    
Income tax effect 8 (318)    
reclassification of unrealized gains losses 8,747 4,086    
Reclassification of deferred income taxes (2,045) (1,570)    
Reclassification of deferred income taxes 0 48    
reclassification of deferred income taxes 2,045 (1,522)    
Disposal of business, net   1,511    
Disposal of business, net   (3,436)    
Disposal of business, net   (1,925)    
Other comprehensive loss of unconsolidated subsidiaries (605) (162)    
Other comprehensive loss of unconsolidated subsidiaries (1,914) (162) $ (1,309) $ 0
Adoption of ASU 2018-02 (see Note 4) 5,345      
Interest Rate Swap        
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]        
Reclassification of unrealized loss (gain) 2,000 (1,000)    
Cross Currency Fx Forward Contract [Member]        
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]        
Reclassification of unrealized loss (gain) (1,000) (2,000)    
Cross Currency Swap        
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]        
Reclassification of unrealized loss (gain) (12,000) 5,000    
Accumulated Gain (Loss) from Unconsoldated Subsidiaries [Member]        
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]        
Other comprehensive loss of unconsolidated subsidiaries   $ (162)    
Foreign Currency Translation [Member]        
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]        
Adoption of ASU 2018-02 (see Note 4) 2,859      
Derivative [Member]        
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]        
Adoption of ASU 2018-02 (see Note 4) $ 2,486      
v3.8.0.1
Long-Term Obligations - Additional Information (Details)
$ in Thousands, € in Millions
 9 Months Ended 12 Months Ended 46 Months Ended
Apr. 09, 2018
EUR (€)
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Jan. 29, 2023
USD ($)
Mar. 31, 2018
USD ($)
Dec. 01, 2017
USD ($)
Nov. 29, 2016
USD ($)
Apr. 14, 2016
EUR (€)
Jan. 29, 2016
USD ($)
May 09, 2013
USD ($)
Debt Instrument                    
Quarterly Payments on Term Loan   $ 4,000   $ 9,000            
Debt and capital lease obligations     $ 3,428,280   $ 3,339,088          
Deferred Finance Costs, Noncurrent, Net     21,476   23,157          
Debt Instrument, Redemption Price, Percentage 100.00%                  
Receivables used as collateral for receivables securitization facility     $ 144,000   $ 144,000          
Notes payable                    
Debt Instrument                    
Weighted average interest rates     1.40%   1.40%          
Other Long Term Debt                    
Debt Instrument                    
Weighted average interest rates     1.70%   1.90%          
Credit Agreement                    
Debt Instrument                    
Increment change in applicable margin           0.25%        
Weighted average interest rates     2.20%   2.20%          
Borrowings under credit agreement, carrying value     $ 2,000,000   $ 1,900,000          
Fronting fee on letters of credit in addition to participation commission           0.125%        
Current maturities of credit agreement     18,000   22,000          
Outstanding letters of credit         65,000          
Availability on the revolving credit facility         1,500,000          
US Notes (2023)                    
Debt Instrument                    
Debt instrument, face amount     600,000   600,000         $ 600,000
Euro Notes (2024)                    
Debt Instrument                    
Debt instrument, face amount     600,150   $ 616,200     € 500    
Senior notes interest rate               3.875%    
Receivables securitization                    
Debt Instrument                    
Weighted average interest rates         2.70%          
Receivables securitization maximum borrowing capacity             $ 100,000      
Borrowings under receivable securitization facility, carrying value     100,000   $ 100,000          
Euro Notes 2026/28 [Member]                    
Debt Instrument                    
Debt instrument, face amount | € € 1,000                  
Euro Notes 2026 [Member]                    
Debt Instrument                    
Debt instrument, face amount | € € 750                  
Senior notes interest rate 3.625%                  
Euro Notes 2028 [Member]                    
Debt Instrument                    
Debt instrument, face amount | € € 250                  
Senior notes interest rate 4.125%                  
Amended Credit Agreement | Credit Agreement                    
Debt Instrument                    
Maximum credit agreement borrowings           $ 2,800,000     $ 2,500,000  
Fourth Amended Credit Agreement | Credit Agreement                    
Debt Instrument                    
Payments of Financing Costs     $ 5,000              
US Notes (2023)                    
Debt Instrument                    
Senior notes interest rate                   4.75%
Maximum increment | Credit Agreement                    
Debt Instrument                    
Increment change in commitment fees           0.05%        
v3.8.0.1
Schedule of Long-Term Obligations (Details)
$ in Thousands, € in Millions
 12 Months Ended
Dec. 31, 2017
USD ($)
Apr. 09, 2018
EUR (€)
Mar. 31, 2018
USD ($)
Apr. 14, 2016
EUR (€)
Debt Instrument        
Line of Credit Facility, Increase (Decrease), Net $ 300,000      
Long-term obligations, total 3,428,280   $ 3,339,088  
Deferred Finance Costs, Current, Net (2,824)   (2,866)  
Deferred Finance Costs, Noncurrent, Net (21,476)   (23,157)  
Long-term obligations, total, net 3,403,980   3,313,065  
Current portion of long-term obligations (126,360)   (142,277)  
Long-term obligations, excluding current portion 3,277,620   3,170,788  
Credit Agreement        
Debt Instrument        
Secured Debt, Current 18,000   22,000  
Loans Payable        
Debt Instrument        
Term loan 704,800   700,395  
Revolving Credit Facility        
Debt Instrument        
Long-term Line of Credit 1,283,551   1,172,140  
Euro Notes (2024)        
Debt Instrument        
Debt instrument, face amount 600,150   616,200 € 500
Debt Instrument, Interest Rate, Stated Percentage       3.875%
Euro Notes 2026 [Member]        
Debt Instrument        
Debt instrument, face amount | €   € 750    
Debt Instrument, Interest Rate, Stated Percentage   3.625%    
Euro Notes 2028 [Member]        
Debt Instrument        
Debt instrument, face amount | €   € 250    
Debt Instrument, Interest Rate, Stated Percentage   4.125%    
Receivables securitization        
Debt Instrument        
Borrowings under receivable securitization facility, carrying value 100,000   100,000  
Notes payable        
Debt Instrument        
Notes Payable 29,146   29,413  
Other Long Term Debt        
Debt Instrument        
Other long-term debt 110,633   $ 120,940  
Fourth Amended Credit Agreement | Credit Agreement        
Debt Instrument        
Payments of Financing Costs $ 5,000      
v3.8.0.1
Schedule of Long-Term Obligations (Parenthetical) (Details) - USD ($)
$ in Millions
Mar. 31, 2018
Dec. 31, 2017
Dec. 01, 2017
Notes payable      
Debt Instrument      
Weighted average interest rates 1.40% 1.40%  
Other Long Term Debt      
Debt Instrument      
Weighted average interest rates 1.90% 1.70%  
Credit Agreement      
Debt Instrument      
Weighted average interest rates 2.20% 2.20%  
Current maturities of credit agreement $ 22 $ 18  
Minimum increment | Credit Agreement      
Debt Instrument      
Change in Increments in Commitment Fee     0.025%
v3.8.0.1
Long-Term Obligations Schedule of Maturities of Long-Term Obligations (Details) - USD ($)
$ in Thousands
 9 Months Ended 46 Months Ended
Dec. 31, 2018
Jan. 29, 2023
Mar. 31, 2018
Dec. 31, 2017
Debt Disclosure [Abstract]        
Quarterly Payments on Term Loan $ 4,000 $ 9,000    
Long-term obligations, total     $ 3,339,088 $ 3,428,280
v3.8.0.1
Derivative Instruments and Hedging Activities - Additional Information (Details)
$ in Thousands, € in Millions
Mar. 31, 2018
USD ($)
Mar. 31, 2018
EUR (€)
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Dec. 31, 2016
EUR (€)
Interest Rate Swap          
Derivative          
Derivative, Notional Amount $ 590,000   $ 590,000    
Cross Currency Swap          
Derivative          
Derivative, Notional Amount 402,580   406,546    
Effect of Netting Derivative Instruments (17,000)   $ (12,000)    
Net loss included in accumulated other comprehensive income (loss) to be reclassified into interest expense within the next 12 months 1,000        
Settlement of Notional Amounts | €   € (15)      
2016 Interest Rate Swaps [Member] | Interest Rate Swap          
Derivative          
Derivative, Notional Amount $ 590,000        
2016CrossCurrencySwaps [Member] | Cross Currency Swap          
Derivative          
Derivative, Notional Amount       $ 422,000 € 400
v3.8.0.1
Schedule of Cash Flow Hedges (Details)
$ in Thousands, € in Millions
Mar. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Dec. 31, 2016
EUR (€)
Interest Rate Swap [Member]        
Derivative        
Derivative, Notional Amount $ 590,000 $ 590,000    
Derivative Asset, Noncurrent 24,253 19,102    
Derivative Liability, Noncurrent 0      
Cross Currency Swap        
Derivative        
Derivative, Notional Amount 402,580 406,546    
Derivative Asset, Noncurrent 9,208 5,504    
Derivative Liability, Noncurrent 77,812 61,492    
Derivative Asset, Noncurrent 33,461 24,606    
Derivative Liability, Noncurrent 77,812 $ 61,492    
2016 Interest Rate Swaps [Member] | Interest Rate Swap [Member]        
Derivative        
Derivative, Notional Amount $ 590,000      
2016CrossCurrencySwaps [Member] | Cross Currency Swap        
Derivative        
Derivative, Notional Amount     $ 422,000 € 400
v3.8.0.1
Fair Value Measurements - Additional Information (Details)
$ in Thousands, € in Millions
 3 Months Ended
Mar. 31, 2018
USD ($)
Mar. 31, 2017
USD ($)
Dec. 31, 2017
USD ($)
Apr. 14, 2016
EUR (€)
May 09, 2013
USD ($)
Fair Value Measurements          
Change in fair value of contingent consideration liabilities $ 46 $ 0      
Credit Agreement          
Fair Value Measurements          
Borrowings under credit agreement, carrying value 1,900,000   $ 2,000,000    
Receivables securitization          
Fair Value Measurements          
Borrowings under receivable securitization facility, carrying value 100,000   100,000    
US Notes (2023)          
Fair Value Measurements          
Debt instrument, fair value 602,000   615,000    
Debt instrument, face amount 600,000   600,000   $ 600,000
Euro Notes (2024)          
Fair Value Measurements          
Debt instrument, fair value 652,000   658,000    
Debt instrument, face amount 616,200   600,150 € 500  
Fair Value, Measurements, Recurring [Member]          
Fair Value Measurements          
Assets, Fair Value Disclosure 79,657   70,590    
Financial and Nonfinancial Liabilities, Fair Value Disclosure 131,188   111,327    
Fair Value, Measurements, Recurring [Member] | Cash Surrender Value [Member]          
Fair Value Measurements          
Assets, Fair Value Disclosure 46,196   45,984    
Fair Value, Measurements, Recurring [Member] | Interest Rate Swap [Member]          
Fair Value Measurements          
Assets, Fair Value Disclosure 24,253   19,102    
Fair Value, Measurements, Recurring [Member] | Cross Currency Swap          
Fair Value Measurements          
Assets, Fair Value Disclosure 9,208        
Financial and Nonfinancial Liabilities, Fair Value Disclosure 77,812   61,492    
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]          
Fair Value Measurements          
Assets, Fair Value Disclosure 79,657   70,590    
Financial and Nonfinancial Liabilities, Fair Value Disclosure 128,488   108,691    
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Cash Surrender Value [Member]          
Fair Value Measurements          
Assets, Fair Value Disclosure $ 46,196   45,984    
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member]          
Fair Value Measurements          
Assets, Fair Value Disclosure     19,102    
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Cross Currency Swap          
Fair Value Measurements          
Assets, Fair Value Disclosure     5,504    
Financial and Nonfinancial Liabilities, Fair Value Disclosure     $ 61,492    
v3.8.0.1
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details)
$ in Thousands, € in Millions
Mar. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Apr. 14, 2016
EUR (€)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis      
Derivative Asset, Noncurrent $ 33,461 $ 24,606  
Fair Value, Measurements, Recurring [Member]      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis      
Fair value assets measured on recurring basis 79,657 70,590  
Fair value liabilities measured on recurring basis 131,188 111,327  
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis      
Fair value assets measured on recurring basis 79,657 70,590  
Fair value liabilities measured on recurring basis 128,488 108,691  
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis      
Fair value liabilities measured on recurring basis 2,700 2,636  
Fair Value, Measurements, Recurring [Member] | Cash surrender value of life insurance      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis      
Fair value assets measured on recurring basis 46,196 45,984  
Fair Value, Measurements, Recurring [Member] | Cash surrender value of life insurance | Fair Value, Inputs, Level 2      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis      
Fair value assets measured on recurring basis 46,196 45,984  
Fair Value, Measurements, Recurring [Member] | Contingent Consideration Liabilities      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis      
Fair value liabilities measured on recurring basis 2,700 2,636  
Fair Value, Measurements, Recurring [Member] | Contingent Consideration Liabilities | Fair Value, Inputs, Level 3      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis      
Fair value liabilities measured on recurring basis 2,700 2,636  
Fair Value, Measurements, Recurring [Member] | Deferred Compensation Liabilities      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis      
Fair value liabilities measured on recurring basis 50,676 47,199  
Fair Value, Measurements, Recurring [Member] | Deferred Compensation Liabilities | Fair Value, Inputs, Level 2      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis      
Fair value liabilities measured on recurring basis 50,676 47,199  
Fair Value, Measurements, Recurring [Member] | Cross Currency Swap      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis      
Fair value assets measured on recurring basis 9,208    
Fair value liabilities measured on recurring basis 77,812 61,492  
Fair Value, Measurements, Recurring [Member] | Cross Currency Swap | Fair Value, Inputs, Level 2      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis      
Fair value assets measured on recurring basis   5,504  
Fair value liabilities measured on recurring basis   61,492  
Fair Value, Measurements, Recurring [Member] | Interest Rate Swap [Member]      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis      
Fair value assets measured on recurring basis 24,253 19,102  
Fair Value, Measurements, Recurring [Member] | Interest Rate Swap [Member] | Fair Value, Inputs, Level 2      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis      
Fair value assets measured on recurring basis   19,102  
Euro Notes (2024)      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis      
Long-term Debt, Fair Value 652,000 658,000  
Debt Instrument, Face Amount 616,200 600,150 € 500
Cross Currency Swap      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis      
Derivative Asset, Noncurrent $ 9,208 $ 5,504  
v3.8.0.1
Future Minimum Lease Commitments (Details)
$ in Thousands
Mar. 31, 2018
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year $ 186,038
Operating Leases, Future Minimum Payments Due, Next Twelve Months 207,724
Operating Leases, Future Minimum Payments, Due in Two Years 171,530
Operating Leases, Future Minimum Payments, Due in Three Years 132,755
Operating Leases, Future Minimum Payments, Due in Four Years 107,405
Operating Leases, Future Minimum Payments, Due in Five Years 91,007
Thereafter 532,760
Future Minimum Lease Payments $ 1,429,219
v3.8.0.1
Income Taxes - Additional Information (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Dec. 31, 2017
Income Tax Disclosure [Abstract]      
Excess tax benefit on stock based payments $ 3 $ 3  
U.S. federal statutory rate 21.00% 35.00%  
Tax Cuts and Jobs Act of 2017, transition tax for accumulated foreign earnings, provisional amount     $ 51
Tax Cuts and Jobs Act of 2017, tax benefit from decrease to net deferred tax liabilities, provisional amount     $ 73
v3.8.0.1
Segment and Geographic Information - Additional Information (Details)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
USD ($)
Mar. 31, 2017
USD ($)
Segment Reporting Information    
Revenue $ 2,720,764 $ 2,342,843
Number of operating segments 4  
Number of reportable segments 3  
North America    
Segment Reporting Information    
Revenue $ 1,329,843 1,208,240
Number of reportable segments 1  
Europe    
Segment Reporting Information    
Revenue $ 1,040,430 820,897
Specialty    
Segment Reporting Information    
Revenue $ 351,792 $ 314,934
v3.8.0.1
Income Taxes Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Deferred:    
Provision for income taxes $ 49,584 $ 72,155
v3.8.0.1
Schedule of Financial Performance by Reportable Segment (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Segment Reporting Information    
Revenue $ 2,720,764 $ 2,342,843
Segment EBITDA 295,216 290,270
Depreciation and amortization 61,066 50,604
North America    
Segment Reporting Information    
Revenue 1,329,843 1,208,240
Segment EBITDA 177,713 176,135
Depreciation and amortization 21,228 20,378
Europe    
Segment Reporting Information    
Revenue 1,040,430 820,897
Segment EBITDA 75,534 78,694
Depreciation and amortization 32,757 24,751
Specialty    
Segment Reporting Information    
Revenue 351,792 314,934
Segment EBITDA 41,969 35,441
Depreciation and amortization 7,081 5,475
Intersegment Eliminations    
Segment Reporting Information    
Revenue (1,301) (1,228)
Third Party | North America    
Segment Reporting Information    
Revenue 1,329,660 1,208,047
Third Party | Europe    
Segment Reporting Information    
Revenue 1,040,430 820,897
Third Party | Specialty    
Segment Reporting Information    
Revenue 350,674 313,899
Intersegment | North America    
Segment Reporting Information    
Revenue 183 193
Intersegment | Europe    
Segment Reporting Information    
Revenue 0 0
Intersegment | Specialty    
Segment Reporting Information    
Revenue 1,118 1,035
Intersegment | Intersegment Eliminations    
Segment Reporting Information    
Revenue $ (1,301) $ (1,228)
v3.8.0.1
Income Taxes Schedule of Income before Income Tax, Domestic and Foreign (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Income Tax Disclosure [Abstract]    
Effective Income Tax Rate Reconciliation, Percent 24.70% 33.90%
Income from continuing operations before provision for income taxes $ 200,935 $ 212,750
v3.8.0.1
Reconciliation Of Segment EBITDA To Net Income (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Segment Reporting [Abstract]    
Net income attributable to LKQ stockholders $ 152,960 $ 136,278
Less: net loss attributable to noncontrolling interest (197)  
Net income 152,763 136,278
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest (197)  
Net loss from discontinued operations 0 (4,531)
Net income from continuing operations attributable to LKQ stockholders 152,960 140,809
Depreciation and amortization 56,458 48,656
Depreciation and amortization - cost of goods sold 4,608 1,948
Interest expense, net 28,515 23,988
Provision for income taxes 49,584 72,155
EBITDA 292,125 287,556
Equity in earnings of unconsolidated subsidiaries 1,412 214
Restructuring and acquisition related expenses 4,054 2,928
Inventory step-up adjustment - acquisition related 403  
Change in fair value of contingent consideration liabilities (46) 0
Segment EBITDA $ 295,216 $ 290,270
v3.8.0.1
Income Taxes Schedule of Effective Income Tax Rate Reconciliation (Details)
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Income Tax Disclosure [Abstract]    
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent 0.00%  
U.S. federal statutory rate 21.00% 35.00%
Effective Income Tax Rate Reconciliation, Percent 24.70% 33.90%
v3.8.0.1
Schedule of Capital Expenditures by Reportable Segment (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Segment Reporting Information    
Capital Expenditures $ 62,189 $ 44,398
North America    
Segment Reporting Information    
Capital Expenditures 29,662 16,760
Europe    
Segment Reporting Information    
Capital Expenditures 28,815 20,458
Specialty    
Segment Reporting Information    
Capital Expenditures 3,712 3,582
Discontinued Operations    
Segment Reporting Information    
Capital Expenditures $ 0 $ 3,598
v3.8.0.1
Schedule of Assets by Reportable Segment (Details) - USD ($)
$ in Thousands
Mar. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
Segment Reporting Information      
Receivables, net $ 1,211,788 $ 1,065,617 $ 1,027,106
Inventories 2,401,309   2,380,783
Property, plant and equipment, net 929,756   913,089
Equity method investments 208,210   208,404
Other unallocated assets 4,885,115   4,837,490
Total assets 9,636,178   9,366,872
North America      
Segment Reporting Information      
Receivables, net 448,973   379,666
Inventories 1,053,322   1,076,393
Property, plant and equipment, net 542,453   537,286
Equity method investments 336   336
Europe      
Segment Reporting Information      
Receivables, net 622,592   555,372
Inventories 998,617   964,068
Property, plant and equipment, net 304,048   293,539
Equity method investments 207,874   208,068
Specialty      
Segment Reporting Information      
Receivables, net 140,223   92,068
Inventories 349,370   340,322
Property, plant and equipment, net $ 83,255   $ 82,264
v3.8.0.1
Income Taxes Schedule of Deferred Tax Assets and Liabilities Classification (Details) - USD ($)
$ in Thousands
Mar. 31, 2018
Dec. 31, 2017
Income Tax Disclosure [Abstract]    
Noncurrent deferred tax liabilities $ 242,226 $ 252,359
v3.8.0.1
Segment and Geographic Information Schedule of Revenue by Geographic Area (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Revenues from External Customers and Long-Lived Assets    
Revenue $ 2,720,764 $ 2,342,843
UNITED STATES    
Revenues from External Customers and Long-Lived Assets    
Revenue 1,560,027 1,417,040
UNITED KINGDOM    
Revenues from External Customers and Long-Lived Assets    
Revenue 430,992 382,652
Other countries    
Revenues from External Customers and Long-Lived Assets    
Revenue $ 729,745 $ 543,151
v3.8.0.1
Schedule of Tangible Long-Lived Assets by Geographic Area (Details) - USD ($)
$ in Thousands
Mar. 31, 2018
Dec. 31, 2017
Revenues from External Customers and Long-Lived Assets    
Long-lived Assets $ 929,756 $ 913,089
UNITED STATES    
Revenues from External Customers and Long-Lived Assets    
Long-lived Assets 589,848 583,236
UNITED KINGDOM    
Revenues from External Customers and Long-Lived Assets    
Long-lived Assets 186,347 178,021
Other countries    
Revenues from External Customers and Long-Lived Assets    
Long-lived Assets $ 153,561 $ 151,832
v3.8.0.1
Condensed Consolidating Statements of Income (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Condensed Financial Statements, Captions [Line Items]    
Revenue $ 2,720,764 $ 2,342,843
Cost of goods sold 1,666,793 1,412,750
Gross margin 1,053,971 930,093
Selling, general and administrative expenses 766,891 642,817
Restructuring and acquisition related expenses 4,054 2,928
Depreciation and amortization 56,458 48,656
Operating (loss) income 226,568 235,692
Other expense (income):    
Interest expense, net 28,515 23,988
Intercompany interest (income) expense, net 0 0
Other (income) expense, net (2,882) (1,046)
Total other expense, net 25,633 22,942
(Loss) income from continuing operations before (benefit) provision for income taxes 200,935 212,750
(Benefit) provision for income taxes 49,584 72,155
Equity in earnings of unconsolidated subsidiaries 1,412 214
Equity in earnings (loss) of subsidiaries 0 0
Income from continuing operations   140,809
Net loss from discontinued operations 0 (4,531)
Net income 152,763 136,278
Less: net loss attributable to noncontrolling interest (197)  
Net income attributable to LKQ stockholders 152,960 136,278
Parent    
Condensed Financial Statements, Captions [Line Items]    
Revenue 0 0
Cost of goods sold 0 0
Gross margin 0 0
Selling, general and administrative expenses 9,130 9,183
Restructuring and acquisition related expenses 0 0
Depreciation and amortization 29 30
Operating (loss) income (9,159) (9,213)
Other expense (income):    
Interest expense, net 18,008 16,180
Intercompany interest (income) expense, net (15,400) (5,672)
Other (income) expense, net (1,015) 291
Total other expense, net 1,593 10,799
(Loss) income from continuing operations before (benefit) provision for income taxes (10,752) (20,012)
(Benefit) provision for income taxes (3,904) (7,437)
Equity in earnings of unconsolidated subsidiaries 0 (182)
Equity in earnings (loss) of subsidiaries 159,808 153,566
Income from continuing operations   140,809
Net loss from discontinued operations   (4,531)
Net income 152,960  
Less: net loss attributable to noncontrolling interest 0  
Net income attributable to LKQ stockholders 152,960 136,278
Guarantors    
Condensed Financial Statements, Captions [Line Items]    
Revenue 1,577,595 1,453,516
Cost of goods sold 945,915 863,375
Gross margin 631,680 590,141
Selling, general and administrative expenses 426,797 385,528
Restructuring and acquisition related expenses 330 1,883
Depreciation and amortization 24,338 23,481
Operating (loss) income 180,215 179,249
Other expense (income):    
Interest expense, net 212 198
Intercompany interest (income) expense, net 9,680 1,019
Other (income) expense, net (5,882) (169)
Total other expense, net 4,010 1,048
(Loss) income from continuing operations before (benefit) provision for income taxes 176,205 178,201
(Benefit) provision for income taxes 45,877 70,038
Equity in earnings of unconsolidated subsidiaries 0 0
Equity in earnings (loss) of subsidiaries 5,110 4,813
Income from continuing operations   112,976
Net loss from discontinued operations   (4,531)
Net income 135,438  
Less: net loss attributable to noncontrolling interest 0  
Net income attributable to LKQ stockholders 135,438 108,445
Non-Guarantors    
Condensed Financial Statements, Captions [Line Items]    
Revenue 1,180,242 929,971
Cost of goods sold 757,951 590,019
Gross margin 422,291 339,952
Selling, general and administrative expenses 330,964 248,106
Restructuring and acquisition related expenses 3,724 1,045
Depreciation and amortization 32,091 25,145
Operating (loss) income 55,512 65,656
Other expense (income):    
Interest expense, net 10,295 7,610
Intercompany interest (income) expense, net 5,720 4,653
Other (income) expense, net 4,015 (1,168)
Total other expense, net 20,030 11,095
(Loss) income from continuing operations before (benefit) provision for income taxes 35,482 54,561
(Benefit) provision for income taxes 7,611 9,554
Equity in earnings of unconsolidated subsidiaries 1,412 396
Equity in earnings (loss) of subsidiaries 0 0
Income from continuing operations   45,403
Net loss from discontinued operations   2,050
Net income 29,283  
Less: net loss attributable to noncontrolling interest (197)  
Net income attributable to LKQ stockholders 29,480 47,453
Eliminations    
Condensed Financial Statements, Captions [Line Items]    
Revenue (37,073) (40,644)
Cost of goods sold (37,073) (40,644)
Gross margin 0 0
Selling, general and administrative expenses 0 0
Restructuring and acquisition related expenses 0 0
Depreciation and amortization 0 0
Operating (loss) income 0 0
Other expense (income):    
Interest expense, net 0 0
Intercompany interest (income) expense, net 0 0
Other (income) expense, net 0 0
Total other expense, net 0 0
(Loss) income from continuing operations before (benefit) provision for income taxes 0 0
(Benefit) provision for income taxes 0 0
Equity in earnings of unconsolidated subsidiaries 0 0
Equity in earnings (loss) of subsidiaries (164,918) (158,379)
Income from continuing operations   (158,379)
Net loss from discontinued operations   2,481
Net income (164,918)  
Less: net loss attributable to noncontrolling interest 0  
Net income attributable to LKQ stockholders $ (164,918) $ (155,898)
v3.8.0.1
Condensed Consolidating Statements of Comprehensive Income (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Condensed Financial Statements, Captions [Line Items]    
Net income $ 152,763 $ 136,278
Less: net loss attributable to noncontrolling interest (197)  
Net income attributable to LKQ stockholders 152,960 136,278
Other comprehensive income (loss):    
Foreign currency translation, net of tax 48,485 21,579
Net change in unrealized gains/losses on cash flow hedges, net of tax 3,254 3,163
Net change in unrealized gains/losses on pension plans, net of tax 621 3,041
Net change in other comprehensive loss from unconsolidated subsidiaries (605) (162)
Other comprehensive income 50,513 21,539
Comprehensive income 203,276 157,817
Less: comprehensive loss attributable to noncontrolling interest (197)  
Comprehensive income (loss) attributable to LKQ stockholders 203,473 157,817
Parent    
Condensed Financial Statements, Captions [Line Items]    
Net income 152,960  
Less: net loss attributable to noncontrolling interest 0  
Net income attributable to LKQ stockholders 152,960 136,278
Other comprehensive income (loss):    
Foreign currency translation, net of tax 48,485 21,579
Net change in unrealized gains/losses on cash flow hedges, net of tax 3,254 3,163
Net change in unrealized gains/losses on pension plans, net of tax 621 3,041
Net change in other comprehensive loss from unconsolidated subsidiaries (605) (162)
Other comprehensive income 50,513 21,539
Comprehensive income 203,473  
Less: comprehensive loss attributable to noncontrolling interest 0  
Comprehensive income (loss) attributable to LKQ stockholders 203,473 157,817
Guarantors    
Condensed Financial Statements, Captions [Line Items]    
Net income 135,438  
Less: net loss attributable to noncontrolling interest 0  
Net income attributable to LKQ stockholders 135,438 108,445
Other comprehensive income (loss):    
Foreign currency translation, net of tax (2,183) 3,878
Net change in unrealized gains/losses on cash flow hedges, net of tax 0 (133)
Net change in unrealized gains/losses on pension plans, net of tax 621 2,805
Net change in other comprehensive loss from unconsolidated subsidiaries 0 0
Other comprehensive income (2,804) 940
Comprehensive income 132,634  
Less: comprehensive loss attributable to noncontrolling interest 0  
Comprehensive income (loss) attributable to LKQ stockholders 132,634 109,385
Non-Guarantors    
Condensed Financial Statements, Captions [Line Items]    
Net income 29,283  
Less: net loss attributable to noncontrolling interest (197)  
Net income attributable to LKQ stockholders 29,480 47,453
Other comprehensive income (loss):    
Foreign currency translation, net of tax 49,055 21,132
Net change in unrealized gains/losses on cash flow hedges, net of tax 0 0
Net change in unrealized gains/losses on pension plans, net of tax 0 236
Net change in other comprehensive loss from unconsolidated subsidiaries (605) (162)
Other comprehensive income 48,450 20,734
Comprehensive income 77,733  
Less: comprehensive loss attributable to noncontrolling interest (197)  
Comprehensive income (loss) attributable to LKQ stockholders 77,930 68,187
Eliminations    
Condensed Financial Statements, Captions [Line Items]    
Net income (164,918)  
Less: net loss attributable to noncontrolling interest 0  
Net income attributable to LKQ stockholders (164,918) (155,898)
Other comprehensive income (loss):    
Foreign currency translation, net of tax (46,872) (25,010)
Net change in unrealized gains/losses on cash flow hedges, net of tax 0 133
Net change in unrealized gains/losses on pension plans, net of tax (621) (3,041)
Net change in other comprehensive loss from unconsolidated subsidiaries 605 162
Other comprehensive income (45,646) (21,674)
Comprehensive income (210,564)  
Less: comprehensive loss attributable to noncontrolling interest 0  
Comprehensive income (loss) attributable to LKQ stockholders $ (210,564) $ (177,572)
v3.8.0.1
Condensed Consolidating Balance Sheets (Details) - USD ($)
$ in Thousands
Mar. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
Mar. 31, 2017
Dec. 31, 2016
Current assets:          
Cash and cash equivalents $ 245,679   $ 279,766 $ 264,614 $ 227,400
Receivables, net 1,211,788 $ 1,065,617 1,027,106    
Intercompany receivables, net 0   0    
Inventories 2,401,309   2,380,783    
Prepaid expenses and other current assets 180,367 178,987 134,479    
Total current assets 4,039,143   3,822,134    
Property, plant and equipment, net 929,756   913,089    
Intangible assets:          
Goodwill 3,572,198   3,536,511    
Other intangibles, net 740,804   743,769    
Investment in subsidiaries 0   0    
Intercompany notes receivable 0   0    
Equity method investments 208,210   208,404    
Other assets 146,067   142,965    
Total assets 9,636,178   9,366,872    
Current liabilities:          
Accounts payable 812,661   788,613    
Intercompany payables, net 0   0    
Accrued expenses:          
Accrued payroll-related liabilities 112,140   143,424    
Other accrued expenses 267,364   218,600    
Refund liability 99,179 $ 83,019 0    
Other current liabilities 41,167   45,727    
Current portion of long-term obligations 142,277   126,360    
Total current liabilities 1,474,788   1,322,724    
Long-term obligations, excluding current portion 3,170,788   3,277,620    
Intercompany notes payable 0   0    
Deferred income taxes 242,226   252,359    
Other noncurrent liabilities 329,395   307,516    
Total Company stockholders' equity 4,406,587   4,198,169    
Noncontrolling interest 12,394   8,484    
Total stockholders' equity 4,418,981   4,206,653    
Total liabilities and stockholders’ equity 9,636,178   9,366,872    
Parent          
Current assets:          
Cash and cash equivalents 17,340   34,360 22,256 33,030
Receivables, net 843   0    
Intercompany receivables, net 6,747   2,669    
Inventories 0   0    
Prepaid expenses and other current assets 1,864   34,136    
Total current assets 26,794   71,165    
Property, plant and equipment, net 904   910    
Intangible assets:          
Goodwill 0   0    
Other intangibles, net 0   0    
Investment in subsidiaries 5,355,015   5,952,687    
Intercompany notes receivable 1,143,818   1,156,550    
Equity method investments 0   0    
Other assets 79,657   70,590    
Total assets 6,606,188   7,251,902    
Current liabilities:          
Accounts payable 8,407   5,742    
Intercompany payables, net 0   0    
Accrued expenses:          
Accrued payroll-related liabilities 5,224   9,448    
Other accrued expenses 12,360   5,219    
Refund liability 0        
Other current liabilities 6,224   282    
Current portion of long-term obligations 20,863   16,468    
Total current liabilities 53,078   37,159    
Long-term obligations, excluding current portion 1,956,376   2,095,826    
Intercompany notes payable 0   750,000    
Deferred income taxes 13,345   12,402    
Other noncurrent liabilities 176,802   158,346    
Total Company stockholders' equity 4,406,587   4,198,169    
Total stockholders' equity 4,406,587   4,198,169    
Total liabilities and stockholders’ equity 6,606,188   7,251,902    
Guarantors          
Current assets:          
Cash and cash equivalents 28,975   35,131 24,529 35,360
Receivables, net 372,264   290,958    
Intercompany receivables, net 0   3,010    
Inventories 1,319,468   1,334,766    
Prepaid expenses and other current assets 94,231   44,849    
Total current assets 1,814,938   1,708,714    
Property, plant and equipment, net 569,829   563,262    
Intangible assets:          
Goodwill 2,005,814   2,010,209    
Other intangibles, net 289,057   291,036    
Investment in subsidiaries 105,772   102,931    
Intercompany notes receivable 32,777   782,638    
Equity method investments 336   336    
Other assets 36,403   33,597    
Total assets 4,854,926   5,492,723    
Current liabilities:          
Accounts payable 358,971   340,951    
Intercompany payables, net 21,170   230    
Accrued expenses:          
Accrued payroll-related liabilities 34,590   65,811    
Other accrued expenses 101,274   95,900    
Refund liability 54,270        
Other current liabilities 19,255   27,066    
Current portion of long-term obligations 1,912   1,912    
Total current liabilities 591,442   531,870    
Long-term obligations, excluding current portion 7,341   7,372    
Intercompany notes payable 657,601   677,708    
Deferred income taxes 115,736   116,021    
Other noncurrent liabilities 102,559   101,189    
Total Company stockholders' equity 3,380,247   4,058,563    
Total stockholders' equity 3,380,247   4,058,563    
Total liabilities and stockholders’ equity 4,854,926   5,492,723    
Non-Guarantors          
Current assets:          
Cash and cash equivalents 199,364   210,275 217,829 159,010
Receivables, net 838,681   736,148    
Intercompany receivables, net 21,170   230    
Inventories 1,081,841   1,046,017    
Prepaid expenses and other current assets 84,272   55,494    
Total current assets 2,225,328   2,048,164    
Property, plant and equipment, net 359,023   348,917    
Intangible assets:          
Goodwill 1,566,384   1,526,302    
Other intangibles, net 451,747   452,733    
Investment in subsidiaries 0   0    
Intercompany notes receivable 0   0    
Equity method investments 207,874   208,068    
Other assets 30,007   38,778    
Total assets 4,840,363   4,622,962    
Current liabilities:          
Accounts payable 445,283   441,920    
Intercompany payables, net 6,747   5,679    
Accrued expenses:          
Accrued payroll-related liabilities 72,326   68,165    
Other accrued expenses 153,730   117,481    
Refund liability 44,909        
Other current liabilities 15,688   18,379    
Current portion of long-term obligations 119,502   107,980    
Total current liabilities 858,185   759,604    
Long-term obligations, excluding current portion 1,207,071   1,174,422    
Intercompany notes payable 518,994   511,480    
Deferred income taxes 113,145   123,936    
Other noncurrent liabilities 50,034   47,981    
Total Company stockholders' equity 2,080,540   1,997,055    
Noncontrolling interest 12,394   8,484    
Total stockholders' equity 2,092,934   2,005,539    
Total liabilities and stockholders’ equity 4,840,363   4,622,962    
Eliminations          
Current assets:          
Cash and cash equivalents 0   0 $ 0 $ 0
Receivables, net 0   0    
Intercompany receivables, net (27,917)   (5,909)    
Inventories 0   0    
Prepaid expenses and other current assets 0   0    
Total current assets (27,917)   (5,909)    
Property, plant and equipment, net 0   0    
Intangible assets:          
Goodwill 0   0    
Other intangibles, net 0   0    
Investment in subsidiaries (5,460,787)   (6,055,618)    
Intercompany notes receivable (1,176,595)   (1,939,188)    
Equity method investments 0   0    
Other assets 0   0    
Total assets (6,665,299)   (8,000,715)    
Current liabilities:          
Accounts payable 0   0    
Intercompany payables, net (27,917)   (5,909)    
Accrued expenses:          
Accrued payroll-related liabilities 0   0    
Other accrued expenses 0   0    
Refund liability 0        
Other current liabilities 0   0    
Current portion of long-term obligations 0   0    
Total current liabilities (27,917)   (5,909)    
Long-term obligations, excluding current portion 0   0    
Intercompany notes payable (1,176,595)   (1,939,188)    
Deferred income taxes 0   0    
Other noncurrent liabilities 0   0    
Total Company stockholders' equity (5,460,787)   (6,055,618)    
Total stockholders' equity (5,460,787)   (6,055,618)    
Total liabilities and stockholders’ equity $ (6,665,299)   $ (8,000,715)    
v3.8.0.1
Condensed Consolidating Statements of Cash Flows (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Dec. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net cash provided by operating activities $ 145,163 $ 172,293  
CASH FLOWS FROM INVESTING ACTIVITIES:      
Purchases of property, plant and equipment (62,189) (44,398)  
Investment and intercompany note activity with subsidiaries 0 0  
Acquisitions, net of cash acquired (2,966) (77,056)  
Proceeds from disposal of businness/investment   301,297 $ 301,000
Payments of deferred purchase price on receivables securitization 0 0  
Other investing activities, net 534 1,314  
Net cash (used in) provided by investing activities (64,621) 181,157  
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from exercise of stock options 2,255 2,464  
Taxes paid related to net share settlements of stock-based compensation awards (3,292) (3,644)  
Debt issuance costs (724)    
Borrowings under revolving credit facilities 201,669 45,239  
Repayments under revolving credit facilities (321,525) (389,313)  
Repayments under term loans (4,405) (9,295)  
Repayments under receivables securitization facility   (150)  
(Repayments) borrowings of other debt, net 4,409 23,313  
Other financing activities, net 4,107 5,000  
Investment and intercompany note activity with parent 0 0  
Dividends 0 0  
Net cash used in financing activities (117,506) (326,386)  
Effect of exchange rate changes on cash and cash equivalents 2,877 3,034  
Net increase (decrease) in cash and equivalents (34,087) 30,098  
Cash and cash equivalents of continuing operations, beginning of period 279,766 227,400 227,400
Add: Cash and cash equivalents of discontinued operations, beginning of period 0 7,116 7,116
Cash and cash equivalents, end of period 245,679 264,614 279,766
Parent      
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net cash provided by operating activities 95,942 118,537  
CASH FLOWS FROM INVESTING ACTIVITIES:      
Purchases of property, plant and equipment (163) 0  
Investment and intercompany note activity with subsidiaries 24,333 249,828  
Acquisitions, net of cash acquired 0 0  
Proceeds from disposal of businness/investment   0  
Payments of deferred purchase price on receivables securitization 0 0  
Other investing activities, net 0 0  
Net cash (used in) provided by investing activities 24,170 249,828  
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from exercise of stock options 2,255 2,464  
Taxes paid related to net share settlements of stock-based compensation awards (3,292) (3,644)  
Debt issuance costs (724)    
Borrowings under revolving credit facilities 161,000 10,000  
Repayments under revolving credit facilities (291,966) (376,966)  
Repayments under term loans (4,405) (9,295)  
Repayments under receivables securitization facility   0  
(Repayments) borrowings of other debt, net 0 (1,698)  
Other financing activities, net   0  
Investment and intercompany note activity with parent 0 0  
Dividends 0 0  
Net cash used in financing activities (137,132) (379,139)  
Effect of exchange rate changes on cash and cash equivalents 0 0  
Net increase (decrease) in cash and equivalents (17,020) (10,774)  
Cash and cash equivalents of continuing operations, beginning of period 34,360 33,030 33,030
Add: Cash and cash equivalents of discontinued operations, beginning of period   0 0
Cash and cash equivalents, end of period 17,340 22,256 34,360
Guarantors      
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net cash provided by operating activities 96,517 106,243  
CASH FLOWS FROM INVESTING ACTIVITIES:      
Purchases of property, plant and equipment (29,908) (18,226)  
Investment and intercompany note activity with subsidiaries 0 0  
Acquisitions, net of cash acquired (2,966) (74,937)  
Proceeds from disposal of businness/investment   305,740  
Payments of deferred purchase price on receivables securitization 7,456 6,362  
Other investing activities, net (145) 1,008  
Net cash (used in) provided by investing activities (25,563) 219,947  
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from exercise of stock options 0 0  
Taxes paid related to net share settlements of stock-based compensation awards 0 0  
Debt issuance costs 0    
Borrowings under revolving credit facilities 0 0  
Repayments under revolving credit facilities 0 0  
Repayments under term loans 0 0  
Repayments under receivables securitization facility   0  
(Repayments) borrowings of other debt, net (30) (1,099)  
Other financing activities, net   5,000  
Investment and intercompany note activity with parent (21,759) (246,463)  
Dividends (54,995) (94,638)  
Net cash used in financing activities (76,784) (337,200)  
Effect of exchange rate changes on cash and cash equivalents (326) 30  
Net increase (decrease) in cash and equivalents (6,156) (10,980)  
Cash and cash equivalents of continuing operations, beginning of period 35,131 35,360 35,360
Add: Cash and cash equivalents of discontinued operations, beginning of period   149 149
Cash and cash equivalents, end of period 28,975 24,529 35,131
Non-Guarantors      
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net cash provided by operating activities 243 35,789  
CASH FLOWS FROM INVESTING ACTIVITIES:      
Purchases of property, plant and equipment (32,118) (26,172)  
Investment and intercompany note activity with subsidiaries 0 0  
Acquisitions, net of cash acquired 0 (2,119)  
Proceeds from disposal of businness/investment   (4,443)  
Payments of deferred purchase price on receivables securitization 0 0  
Other investing activities, net 679 306  
Net cash (used in) provided by investing activities (31,439) (32,428)  
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from exercise of stock options 0 0  
Taxes paid related to net share settlements of stock-based compensation awards 0 0  
Debt issuance costs 0    
Borrowings under revolving credit facilities 40,669 35,239  
Repayments under revolving credit facilities (29,559) (12,347)  
Repayments under term loans 0 0  
Repayments under receivables securitization facility   (150)  
(Repayments) borrowings of other debt, net 4,439 26,110  
Other financing activities, net 4,107 0  
Investment and intercompany note activity with parent (2,574) (3,365)  
Dividends 0 0  
Net cash used in financing activities 17,082 45,487  
Effect of exchange rate changes on cash and cash equivalents 3,203 3,004  
Net increase (decrease) in cash and equivalents (10,911) 51,852  
Cash and cash equivalents of continuing operations, beginning of period 210,275 159,010 159,010
Add: Cash and cash equivalents of discontinued operations, beginning of period   6,967 6,967
Cash and cash equivalents, end of period 199,364 217,829 210,275
Continuing and Discontinued Operations      
CASH FLOWS FROM FINANCING ACTIVITIES:      
Cash and cash equivalents of continuing operations, beginning of period   234,516 234,516
Continuing and Discontinued Operations | Parent      
CASH FLOWS FROM FINANCING ACTIVITIES:      
Cash and cash equivalents of continuing operations, beginning of period   33,030 33,030
Continuing and Discontinued Operations | Guarantors      
CASH FLOWS FROM FINANCING ACTIVITIES:      
Cash and cash equivalents of continuing operations, beginning of period   35,509 35,509
Continuing and Discontinued Operations | Non-Guarantors      
CASH FLOWS FROM FINANCING ACTIVITIES:      
Cash and cash equivalents of continuing operations, beginning of period   165,977 165,977
Eliminations      
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net cash provided by operating activities (47,539) (88,276)  
CASH FLOWS FROM INVESTING ACTIVITIES:      
Purchases of property, plant and equipment 0 0  
Investment and intercompany note activity with subsidiaries (24,333) (249,828)  
Acquisitions, net of cash acquired 0 0  
Proceeds from disposal of businness/investment   0  
Payments of deferred purchase price on receivables securitization (7,456) (6,362)  
Other investing activities, net 0 0  
Net cash (used in) provided by investing activities (31,789) (256,190)  
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from exercise of stock options 0 0  
Taxes paid related to net share settlements of stock-based compensation awards 0 0  
Debt issuance costs 0    
Borrowings under revolving credit facilities 0 0  
Repayments under revolving credit facilities 0 0  
Repayments under term loans 0 0  
Repayments under receivables securitization facility   0  
(Repayments) borrowings of other debt, net 0 0  
Other financing activities, net   0  
Investment and intercompany note activity with parent 24,333 249,828  
Dividends 54,995 94,638  
Net cash used in financing activities 79,328 344,466  
Effect of exchange rate changes on cash and cash equivalents 0 0  
Net increase (decrease) in cash and equivalents 0 0  
Cash and cash equivalents of continuing operations, beginning of period 0 0 0
Add: Cash and cash equivalents of discontinued operations, beginning of period   0 0
Cash and cash equivalents, end of period $ 0 $ 0 $ 0