Document and Entity Information - shares |
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Jun. 30, 2018 |
Jul. 27, 2018 |
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Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
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 | 318,081,581 |
Unaudited Condensed Consolidated Statements of Income - USD ($) $ in Thousands |
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Income Statement [Abstract] | ||||||||||||
Revenue | $ 3,030,751 | $ 2,458,411 | $ 5,751,515 | $ 4,801,254 | ||||||||
Cost of goods sold | 1,868,872 | 1,493,402 | 3,535,665 | 2,906,152 | ||||||||
Gross margin | 1,161,879 | 965,009 | 2,215,850 | 1,895,102 | ||||||||
Selling, general and administrative expenses (1) | 826,044 | 664,270 | [1] | 1,592,935 | [1] | 1,307,087 | [1] | |||||
Restructuring and acquisition related expenses | 15,878 | 2,521 | 19,932 | 5,449 | ||||||||
Depreciation and amortization | 63,163 | 53,645 | 119,621 | 102,301 | ||||||||
Operating income | 256,794 | 244,573 | 483,362 | 480,265 | ||||||||
Other expense (income): | ||||||||||||
Interest expense, net | 38,272 | 24,596 | 66,787 | 48,584 | ||||||||
Gains on bargain purchases | (328) | (3,077) | (328) | (3,077) | ||||||||
Other expense (income), net | 755 | (2,731) | (2,127) | (3,777) | ||||||||
Total other expense, net | 38,699 | 18,788 | 64,332 | 41,730 | ||||||||
Income from continuing operations before provision for income taxes | 218,095 | 225,785 | 419,030 | 438,535 | ||||||||
Provision for income taxes | 60,775 | 75,862 | 110,359 | 148,017 | ||||||||
Equity in earnings of unconsolidated subsidiaries | 546 | 991 | 1,958 | 1,205 | ||||||||
Income from continuing operations | 157,866 | 150,914 | 310,629 | 291,723 | ||||||||
Net loss from discontinued operations | 0 | 0 | 0 | (4,531) | ||||||||
Net income | 157,866 | 150,914 | 310,629 | 287,192 | ||||||||
Less: net income attributable to noncontrolling interest | 859 | 0 | 662 | 0 | ||||||||
Net income attributable to LKQ stockholders | $ 157,007 | $ 150,914 | $ 309,967 | $ 287,192 | ||||||||
Basic earnings per share: (2) | ||||||||||||
Income from continuing operations | $ 0.51 | $ 0.49 | $ 1.00 | $ 0.95 | ||||||||
Net loss from discontinued operations | (0.01) | |||||||||||
Net income | 0.51 | 0.49 | 1.00 | 0.93 | ||||||||
Less: net income attributable to noncontrolling interest | 0.00 | 0.00 | ||||||||||
Net income attributable to LKQ stockholders | [2] | 0.50 | 0.49 | 1.00 | 0.93 | |||||||
Diluted earnings per share: (2) | ||||||||||||
Income from continuing operations | 0.50 | 0.49 | 0.99 | 0.94 | ||||||||
Net loss from discontinued operations | (0.01) | |||||||||||
Net income | 0.50 | 0.49 | 0.99 | 0.93 | ||||||||
Net income attributable to Noncontrolling Interest Per Share, Diluted | 0.00 | 0.00 | ||||||||||
Net income attributable to LKQ stockholders | [2] | $ 0.50 | $ 0.49 | $ 0.99 | $ 0.93 | |||||||
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Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2018 |
Dec. 31, 2017 |
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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 | 317,820,824 | 309,126,386 |
Common stock, shares outstanding | 317,820,824 | 309,126,386 |
Interim Financial Statements (Notes) |
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Interim Financial Statements | Interim Financial Statements The accompanying unaudited condensed consolidated financial statements represent the consolidation of LKQ Corporation, a Delaware corporation, and its subsidiaries. LKQ Corporation is a holding company and all operations are conducted by subsidiaries. When the terms "LKQ," "the Company," "we," "us," or "our" are used in this document, those terms refer to LKQ Corporation and its consolidated subsidiaries. We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to interim financial statements. Accordingly, certain information related to our significant accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted. These unaudited condensed consolidated financial statements reflect, in the opinion of management, all material adjustments (which include only normally recurring adjustments) necessary to fairly state, in all material respects, our financial position, results of operations and cash flows for the periods presented. Operating results for interim periods are not necessarily indicative of the results that can be expected for any subsequent interim period or for a full year. These interim financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 28, 2018 ("2017 Form 10-K"). |
Business Combinations (Notes) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | Business Combinations On May 30, 2018, we acquired Stahlgruber GmbH ("Stahlgruber"), a leading European wholesale distributor of aftermarket spare parts for passenger cars, tools, capital equipment and accessories with operations in Germany, Austria, Slovenia, Croatia, and with further sales to Switzerland. Total acquisition date fair value of the consideration for our Stahlgruber acquisition was €1.2 billion ($1.4 billion), composed of €1.0 billion ($1.1 billion) of cash paid (net of cash acquired), and €215 million ($251 million) of newly issued shares of LKQ common stock. We financed the acquisition with the proceeds from €1.0 billion ($1.2 billion) of senior notes, the direct issuance to Stahlgruber's owner of 8,055,569 newly issued shares of LKQ common stock, and borrowings under our existing revolving credit facility. On May 3, 2018, the European Commission cleared the acquisition for the entire European Union, except with respect to the wholesale automotive parts business in the Czech Republic. The acquisition of the Czech Republic wholesale business has been referred to the Czech Republic competition authority for review. The Czech Republic wholesale business represents an immaterial portion of Stahlgruber's revenue and profitability. We recorded $931 million of goodwill related to our acquisition of Stahlgruber, of which we expect $240 million to be deductible for income tax purposes. In the period between the acquisition date and June 30, 2018, Stahlgruber, which is reported in our Europe reportable segment, generated revenue of $168 million and operating income of $6 million. In addition to our acquisition of Stahlgruber, we completed acquisitions of one wholesale business in North America and four wholesale businesses in Europe. Total acquisition date fair value of the consideration for these acquisitions was $7 million, composed of $6 million of cash paid (net of cash acquired) and $1 million of notes payable. During the six months ended June 30, 2018, we recorded $3 million of goodwill related to these acquisitions, which we do not expect to be deductible for income tax purposes. In the period between the acquisition dates and June 30, 2018, these acquisitions generated revenue of $4 million and operating income of $0.5 million. During the year ended December 31, 2017, we completed 26 acquisitions including 6 wholesale businesses in North America, 16 wholesale businesses in Europe and 4 Specialty businesses. Our acquisitions in Europe included the acquisition of four aftermarket parts distribution businesses in Belgium in July 2017. Our Specialty acquisitions included the acquisition of the aftermarket business of Warn Industries, Inc. ("Warn"), a leading designer, manufacturer and marketer of high performance vehicle equipment and accessories, in November 2017. Total acquisition date fair value of the consideration for our 2017 acquisitions was $542 million, composed of $510 million of cash paid (net of cash acquired), $6 million for the estimated value of contingent payments to former owners (with maximum potential payments totaling $19 million), $5 million of other purchase price obligations (non-interest bearing) and $20 million of notes payable. We typically fund our acquisitions using borrowings under our credit facilities or other financing arrangements. During the year ended December 31, 2017, we recorded $307 million of goodwill related to these acquisitions, of which we expect $21 million to be deductible for income tax purposes. Our acquisitions are accounted for under the purchase method of accounting and are included in our consolidated financial statements from the dates of acquisition. The purchase prices were allocated to the net assets acquired based upon estimated fair values at the dates of acquisition. The purchase price allocations for the acquisitions made during the six months ended June 30, 2018 and the last six months of the year ended December 31, 2017 are preliminary as we are in the process of determining the following: 1) valuation amounts for certain receivables, inventories and fixed assets acquired; 2) valuation amounts for certain intangible assets acquired; 3) the acquisition date fair value of certain liabilities assumed; and 4) the tax basis of the entities acquired. We have recorded preliminary estimates for certain of the items noted above and will record adjustments, if any, to the preliminary amounts upon finalization of the valuations. During the first half 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 six months ended June 30, 2018 and the year ended December 31, 2017 are as follows (in thousands):
The fair value of our intangible assets is based on a number of inputs, including projections of future cash flows, assumed royalty rates and customer attrition rates, all of which are Level 3 inputs. The fair value of our property, plant and equipment is determined using inputs such as market comparables and current replacement or reproduction costs of the asset, adjusted for physical, functional and economic factors; these adjustments to arrive at fair value use unobservable inputs in which little or no market data exists, and therefore, these inputs are considered to be Level 3 inputs. See Note 12, "Fair Value Measurements" for further information regarding the tiers in the fair value hierarchy. The acquisition of Stahlgruber expands LKQ's geographic presence in continental Europe and serves as an additional strategic hub for our European operations. In addition, we believe the acquisition of Stahlgruber will allow for continued improvement in procurement, logistics and infrastructure optimization. The primary objectives of our other acquisitions made during the six months ended June 30, 2018 and the year ended December 31, 2017 were to create economic value for our stockholders by enhancing our position as a leading source for alternative collision and mechanical repair products and to expand into other product lines and businesses that may benefit from our operating strengths. Certain 2017 acquisitions were completed to enable us to align our distribution model in the Benelux region. When we identify potential acquisitions, we attempt to target companies with a leading market presence, an experienced management team and workforce that provides a fit with our existing operations, and strong cash flows. For certain of our acquisitions, we have identified cost savings and synergies as a result of integrating the company with our existing business that provide additional value to the combined entity. In many cases, acquiring companies with these characteristics will result in purchase prices that include a significant amount of goodwill. The following pro forma summary presents the effect of the businesses acquired during the six months ended June 30, 2018 as though the businesses had been acquired as of January 1, 2017, and the businesses acquired during the year ended December 31, 2017 as though they had been acquired as of January 1, 2016. The pro forma adjustments are based upon unaudited financial information of the acquired entities (in thousands, except per share data):
Unaudited pro forma supplemental information is based upon accounting estimates and judgments that we believe are reasonable. The unaudited pro forma supplemental information includes the effect of purchase accounting adjustments, such as the adjustment of inventory acquired to fair value, adjustments to depreciation on acquired property, plant and equipment, adjustments to rent expense for above or below market leases, adjustments to amortization on acquired intangible assets, adjustments to interest expense, and the related tax effects. The pro forma impact of our acquisitions also reflects the elimination of acquisition related expenses, net of tax. Refer to Note 6, "Restructuring and Acquisition Related Expenses," for further information regarding our acquisition related expenses. The pro forma information also includes the impact of the common stock issued to Stahlgruber as if it were issued on January 1, 2017. These pro forma results are not necessarily indicative of what would have occurred if the acquisitions had been in effect for the periods presented or of future results. |
Discontinued Operations (Notes) |
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Discontinued Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Discontinued Operations On March 1, 2017, LKQ completed the sale of the glass manufacturing business of its PGW subsidiary to a subsidiary of Vitro S.A.B. de C.V. ("Vitro") for a sales price of $301 million, including cash received of $316 million, net of cash disposed of $15 million. Related to this transaction, the remaining portion of the Glass operating segment was combined with our Wholesale - North America operating segment, which is part of our North America reportable segment, in the first quarter of 2017. See Note 16, "Segment and Geographic Information" for further information regarding our segments. In connection with the Stock and Asset Purchase Agreement, the Company and Vitro entered into a twelve-month Transition Services Agreement commencing on the transaction date with two six-month renewal periods, a three-year Purchase and Supply Agreement, and an Intellectual Property Agreement. The following table summarizes the operating results of the Company’s discontinued operations related to the sale described above for the six months ended June 30, 2017, as presented in Net loss from discontinued operations on the Unaudited Condensed Consolidated Statements of Income (in thousands):
(1) The Company elected to allocate interest expense to discontinued operations based on the expected debt to be repaid. Under this approach, allocated interest from January 1, 2017 through the date of sale was $2 million. This expense was offset by foreign currency gains. (2) In the first quarter of 2017, upon closing of the sale and write-off of the net assets of the glass manufacturing business, we recorded a pre-tax loss on sale of $9 million, and a $4 million tax benefit. The incremental loss primarily reflects a $6 million payable for intercompany sales from the glass manufacturing business to the aftermarket automotive glass distribution business incurred prior to closing, which was paid by LKQ during the second quarter of 2017, and capital expenditures in 2017 that were not reimbursed by the buyer. The glass manufacturing business had $4 million of operating cash outflows, $4 million of investing cash outflows mainly consisting of capital expenditures, and $15 million of financing cash inflows made up of parent financing for the period from January 1, 2017 through March 1, 2017. Pursuant to the Purchase and Supply Agreement, our aftermarket automotive glass distribution business will source various products from Vitro's glass manufacturing business annually for a three-year period beginning on March 1, 2017. Between January 1, 2017 and the sale date of March 1, 2017, intercompany sales between the glass manufacturing business and the continuing aftermarket automotive glass distribution business of PGW, which were eliminated in consolidation, were $8 million. All purchases from Vitro, including those outside of the Purchase and Supply Agreement, were $8 million and $18 million for the three and six months ended June 30, 2018, respectively, and were $13 million and $17 million for the three months ended June 30, 2017 and the period between the sale date of March 1, 2017 and June 30, 2017, respectively. |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables, Policy [Policy Text Block] | We have a reserve for uncollectible accounts, which was approximately $64 million and $58 million at June 30, 2018 and December 31, 2017, respectively. Our May 2018 acquisition of Stahlgruber contributed $3 million to our reserve for uncollectible accounts. See Note 2, "Business Combinations" for further information on our acquisitions. |
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Summary of Significant Accounting Policies | Financial Statement Information Allowance for Doubtful Accounts We have a reserve for uncollectible accounts, which was approximately $64 million and $58 million at June 30, 2018 and December 31, 2017, respectively. Our May 2018 acquisition of Stahlgruber contributed $3 million to our reserve for uncollectible accounts. See Note 2, "Business Combinations" for further information on our acquisitions. Inventories Inventories consist of the following (in thousands):
Aftermarket and refurbished products and salvage and remanufactured products are primarily composed of finished goods. As of June 30, 2018, manufactured products inventory was composed of $13 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. Our May 2018 acquisition of Stahlgruber contributed $352 million to our aftermarket and refurbished products inventory. See Note 2, "Business Combinations" for further information on our acquisitions. Property, Plant and Equipment Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized. Construction in progress consists primarily of building and land improvements at our existing facilities. Depreciation is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term of the related lease and reasonably assured renewal periods, if shorter. Our estimated useful lives are as follows:
Property, plant and equipment consists of the following (in thousands):
The components of opening property, plant and equipment acquired as part of our acquisition of Stahlgruber in May 2018 are as follows (in thousands):
We record depreciation expense associated with our refurbishing, remanufacturing, manufacturing and furnace operations as well as our distribution centers in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. All other depreciation expense is reported in Depreciation and amortization. Total depreciation expense for the three and six months ended June 30, 2018 was $39 million and $76 million, respectively, and $32 million and $59 million during the three and six months ended June 30, 2017, respectively. Intangible Assets Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer and supplier relationships, software and other technology related assets, and covenants not to compete. The changes in the carrying amount of goodwill by reportable segment for the six months ended June 30, 2018 are as follows (in thousands):
During the six months ended June 30, 2018, we recorded $931 million of goodwill related to our acquisition of Stahlgruber. See Note 2, "Business Combinations" for further information on our acquisitions. The components of other intangibles, net are as follows (in thousands):
The components of intangible assets subject to amortization are as follows (in thousands):
The components of intangible assets acquired as part of our acquisition of Stahlgruber in May 2018 are as follows (in thousands):
The weighted-average amortization periods for our intangible assets acquired during the six months ended June 30, 2018 and the year ended December 31, 2017 are as follows (in years):
Our estimated useful lives for our finite-lived intangible assets are as follows:
Amortization expense for intangibles was $30 million and $54 million during the three and six months ended June 30, 2018, respectively, and $25 million and $48 million during the three and six months ended June 30, 2017, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2022 is $78 million (for the remaining six months of 2018), $129 million, $98 million, $73 million and $61 million, respectively. Investments in Unconsolidated Subsidiaries Our investment in unconsolidated subsidiaries was $203 million and $208 million as of June 30, 2018 and December 31, 2017, respectively. On December 1, 2016, we acquired a 26.5% equity interest in Mekonomen AB ("Mekonomen") for an aggregate purchase price of $181 million. Headquartered in Stockholm, Sweden, Mekonomen is the leading independent car parts and service chain in the Nordic region of Europe, offering a range of products including spare parts and accessories for cars, and workshop services for consumers and businesses. 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 June 30, 2018, the book value of our investment in Mekonomen exceeded our share of the book value of Mekonomen's net assets by $122 million; this difference is primarily related to goodwill and the fair value of other intangible assets. We are recording our equity in the net earnings of Mekonomen on a one quarter lag. We recorded equity in earnings of $1 million and $2 million during the three and six months ended June 30, 2018, respectively, and $2 million during each of the three and six months ended June 30, 2017 related to our investment in Mekonomen, including adjustments to convert the results to GAAP and to recognize the impact of our purchase accounting adjustments. In May 2018 and May 2017, we received cash dividends of $8 million (SEK 67 million) and $7 million (SEK 67 million), respectively, related to our investment in Mekonomen. The Level 1 fair value of our equity investment in the publicly traded Mekonomen common stock at June 30, 2018 was $132 million ($168 million as of August 2, 2018) compared to a carrying value of $194 million. We evaluated our investment in Mekonomen for other-than-temporary impairment and concluded the decline in fair value was not other-than-temporary, but a prolonged stock price decrease will cause the decline to be a permanent impairment. Warranty Reserve Some of our salvage mechanical products are sold with a standard six month warranty against defects. Additionally, some of our remanufactured engines are sold with a standard three year warranty against defects. We also provide a limited lifetime warranty for certain of our aftermarket products. These assurance-type warranties are not considered a separate performance obligation and thus, no transaction price is allocated to them. We record the warranty costs in Cost of goods sold on our Unaudited Condensed Consolidated Statements of Income. Our warranty reserve is calculated using historical claim information to project future warranty claims activity and is recorded within Other accrued expenses and Other noncurrent liabilities on our Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments. The changes in the warranty reserve are as follows (in thousands):
Recent Accounting Pronouncements Adoption of New Revenue Standard In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). This update outlines a new comprehensive revenue recognition model that supersedes the prior revenue recognition guidance and requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB has issued several updates to ASU 2014-09, which collectively with ASU 2014-09, represent the FASB Accounting Standards Codification Topic 606 (“ASC 606”). On January 1, 2018, we adopted ASC 606 for all contracts using the modified retrospective method, which means the historical periods are presented under the previous revenue standards with the cumulative net income effect being adjusted through retained earnings. Most of the changes resulting from our adoption of ASC 606 were changes in presentation within the Unaudited Condensed Consolidated Balance Sheets and the Unaudited Condensed Consolidated Statements of Income. Therefore, while we made adjustments to certain opening balances on our January 1, 2018 balance sheet, we made no adjustments to opening retained earnings. We expect the impact of the adoption of ASC 606 to be immaterial to our net income on an ongoing basis. See Note 5, "Revenue Recognition" for the required disclosures under ASC 606. With the adoption of ASC 606, we reclassified certain amounts related to variable consideration. Under ASC 606, we are required to present a refund liability and a returns asset within the Unaudited Condensed Consolidated Balance Sheet, whereas in periods prior to adoption, we presented the estimated margin impact of expected returns as a contra-asset within accounts receivable. Additionally, under ASC 606, the changes in the refund liability are reported in revenue, and the changes in the returns assets are reported in Cost of goods sold 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):
The impact of the adoption of ASC 606 on our Unaudited Condensed Consolidated Balance Sheet as of June 30, 2018 and our Unaudited Condensed Consolidated Statement of Income for the three and six months ended June 30, 2018 was as follows (in thousands):
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 June 30, 2018. Under ASC 340, "Other Assets and Deferred Costs," we have elected to recognize incremental costs of obtaining a contract (commissions earned by our sales representatives on product sales) as an expense when incurred, as we believe the amortization period of the asset would be one year or less due to the short-term nature of our contracts. Other Recently Adopted Accounting Pronouncements During the first quarter of 2018, we adopted ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which changes how entities will recognize, measure, present and make disclosures about certain financial assets and financial liabilities. The adoption of ASU 2016-01 did not have a significant impact on our financial position, results of operations, cash flows or disclosures. During the first quarter of 2018, we adopted ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"), which includes guidance on classification for the following items: debt prepayment or debt extinguishment costs, settlement of zero coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and corporate-owned or bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and other separately identifiable cash flows where application of the predominance principle is prescribed. No adjustments were required in our Unaudited Condensed Consolidated Statement of Cash Flows upon adoption. Within our Unaudited Condensed Consolidating Statements of Cash Flows in Note 17, "Condensed Consolidating Financial Information," we now present a new line item, Payments of deferred purchase price on receivables securitization, as a result of adopting ASU 2016-15; prior year cash flow information within this footnote has been recast to reflect the impact of adopting this accounting standard. Other than the addition of this new line item, there was no impact to our Unaudited Condensed Consolidating Statements of Cash Flows upon adoption. During the first quarter of 2018, we adopted ASU No. 2017-01 "Clarifying the Definition of a Business" (“ASU 2017-01”), which requires an evaluation of whether substantially all of the fair value of assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the transaction does not qualify as a business. The guidance also requires an acquired business to include at least one substantive process and narrows the definition of outputs. The adoption of ASU 2017-01 did not have a material impact on our unaudited condensed consolidated financial statements. During the first quarter of 2018, we adopted ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02"), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the reduction of the U.S. federal statutory income tax rate to 21% from 35% due to the enactment of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). In addition, under ASU 2018-02, an entity is required to provide certain disclosures regarding stranded tax effects. ASU 2018-02 is effective for fiscal years and interim periods beginning after December 15, 2018; early adoption is permitted. As a result of the adoption of ASU 2018-02, we recorded a $5 million reclassification to increase Accumulated Other Comprehensive (Loss) Income and decrease Retained Earnings. During the first quarter of 2018, we adopted ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" ("ASU 2017-07"), which requires presentation of the current service cost component of net periodic benefit expense with other current compensation expenses for the related employees, and requires presentation of the remaining components of net periodic benefit expense, such as interest, expected return on plan assets, and amortization of actuarial gains and losses, outside of operating income. ASU 2017-07 also specifies that, on a prospective basis, only the service cost component is eligible for capitalization into inventory or other assets. While the income statement classification provisions of ASU 2017-07 are applicable on a retrospective basis, due to the immaterial impact to our Unaudited Condensed Consolidated Statements of Income in prior periods, we did not recast prior period income statement information and adopted the classification provisions on a prospective basis. The change in the capitalization provisions under ASU 2017-07 did not have a material impact on our unaudited condensed consolidated financial statements. See Note 13, "Employee Benefit Plans," for further disclosure on the components of net periodic benefit expense and classification of the components within our Unaudited Condensed Consolidated Statements of Income for the three and six months ended June 30, 2018 and 2017. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, "Leases" ("ASU 2016-02"), to increase transparency and comparability by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between current GAAP and ASU 2016-02 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current GAAP. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The standard requires that entities apply the effects of these changes using a modified retrospective approach, which includes a number of optional practical expedients. While we are still in the process of quantifying the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements and related disclosures, we anticipate the adoption will materially affect our consolidated balance sheet and disclosures, as the majority of our operating leases will be recorded on the balance sheet under ASU 2016-02. While we do not anticipate the adoption of this accounting standard to have a material impact on our consolidated statements of income at this time, this conclusion may change as we finalize our assessment. In order to assist in our timely implementation of the new standard, we have purchased new software to track our leases. We have engaged a third party to assist with the implementation of the new software with an expectation to complete the implementation by the end of 2018. During the second quarter, we completed phase one of the software roll-out for our North America and Specialty operations. 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. |
Revenue Recognition Revenue Reconition (Notes) |
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Revenue From Contract With Customer | Revenue Recognition The core principle of ASC 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASC 606 defines a five-step process to achieve this core principle, which includes:
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):
Parts and Services Our parts revenue is generated from the sale of vehicle products including replacement parts, components and systems used in the repair and maintenance of vehicles and specialty products and accessories to improve the performance, functionality and appearance of vehicles. Services revenue includes additional services that are generally billed concurrently with the related product sales, such as the sale of service-type warranties and fees for admission to our self service yards. In North America, our vehicle replacement products include sheet metal collision parts such as doors, hoods, and fenders; bumper covers; head and tail lamps; automotive glass products such as windshields; mirrors and grilles; wheels; and large mechanical items such as engines and transmissions. In Europe, our products include a wide variety of small mechanical products such as brake pads, discs and sensors; clutches; electrical products such as spark plugs and batteries; steering and suspension products; filters; and oil and automotive fluids. In our Specialty operations, we serve six product segments: truck and off-road; speed and performance; RV; towing; wheels, tires and performance handling; and miscellaneous accessories. Our service-type warranties typically have service periods ranging from 6 months to 36 months. Under ASC 606, proceeds from these service-type warranties are deferred at contract inception and amortized on a straight-line basis to revenue over the contract period. The changes in deferred service-type warranty revenue are as follows (in thousands):
Other Revenue Revenue from other sources includes scrap sales, bulk sales to mechanical manufacturers (including cores) and sales of aluminum ingots and sows from our furnace operations. We derive scrap metal from several sources, including vehicles that have been used in both our wholesale and self service recycling operations and from OEMs and other entities that contract with us for secure disposal of "crush only" vehicles. The sale of hulks in our wholesale and self service recycling operations represents one performance obligation, and revenue is recognized based on a price per weight when the customer (processor) collects the scrap. Some adjustments may occur when the customer weighs the scrap at their location, and revenue is adjusted accordingly. We constrain our estimate of consideration to be received to the extent that we believe there will be a significant reversal in revenue. Revenue by Geographic Area See Note 16, "Segment and Geographic Information" for information related to our revenue by geographic region. Variable Consideration The amount of revenue ultimately received from the customer can vary due to variable consideration which includes returns, discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, or other similar items. The previous revenue guidance required us to estimate the transaction price using a best estimate approach. Under ASC 606 we are required to select the “expected value method” or the “most likely amount” method in order to estimate variable consideration. We utilize both methods in practice depending on the type of variable consideration. In addition, our estimates of variable consideration are constrained to the extent that a significant reversal in revenue is expected. We recorded a refund liability and return asset for expected returns of $104 million and $56 million, respectively, as of June 30, 2018 and a net reserve of $38 million as of December 31, 2017. The refund liability is presented separately on the balance sheet within current liabilities while the return asset is presented within prepaid expenses and other current assets. Other types of variable consideration consist primarily of discounts, volume rebates, and other customer sales incentives which are recorded in Receivables, net on the Unaudited Condensed Consolidated Balance Sheets. We recorded a reserve for our variable consideration of $89 million and $78 million as of June 30, 2018 and December 31, 2017, respectively. While other customer incentive programs exist, we characterize them as material rights in the context of our sales transactions. We consider these programs to be immaterial to our consolidated financial statements. |
Restructuring and Acquisition Related Expenses (Notes) |
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Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Acquisition Related Expenses | Restructuring and Acquisition Related Expenses Acquisition Related Expenses Acquisition related expenses, which include external costs such as legal, accounting and advisory fees, totaled $14 million and $16 million for the three and six months ended June 30, 2018, respectively. Our 2018 expenses primarily consisted of external costs related to our acquisition of Stahlgruber totaling $13 million and $15 million for the three and six months ended June 30, 2018, respectively. The remaining acquisition related costs related to (i) completed acquisitions, (ii) pending acquisitions as of June 30, 2018, and (iii) potential acquisitions that were terminated. Acquisition related expenses for the three and six months ended June 30, 2017 totaled $2 million and $5 million, respectively. Our 2017 expenses related to completed acquisitions and acquisitions that were pending as of June 30, 2017. Acquisition Integration Plans and Restructuring During the three and six months ended June 30, 2018, we incurred $2 million and $4 million of restructuring expenses, respectively. Expenses incurred during the three and six months ended June 30, 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 and six months ended June 30, 2017, we incurred $0.4 million and $1 million of restructuring expenses, respectively, 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. |
Equity Incentive Plans |
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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 six months ended June 30, 2018 was $17 million. The following table summarizes activity related to our RSUs under the Equity Incentive Plan for the six months ended June 30, 2018:
(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 six months ended June 30, 2018. No options vested during the six months ended June 30, 2018; all of our outstanding options are fully vested. The following table summarizes activity related to our stock options under the Equity Incentive Plan for the six months ended June 30, 2018:
(1) The aggregate intrinsic value of outstanding and exercisable options represents the total pretax intrinsic value (the difference between the fair value of the Company's stock on the last day of each period and the exercise price, multiplied by the number of options where the fair value exceeds the exercise price) that would have been received by the option holders had all option holders exercised their options as of the last day of the period indicated. This amount changes based on the market price of the Company’s common stock. Stock-Based Compensation Expense Pre-tax stock-based compensation expense for RSUs totaled $6 million and $12 million for the three and six months ended June 30, 2018, respectively, and $5 million and $12 million for the three and six months ended June 30, 2017, respectively. As of June 30, 2018, unrecognized compensation expense related to unvested RSUs is $46 million. Stock-based compensation expense related to these awards will be different to the extent that forfeitures are realized. |
Earnings Per Share Earnings Per Share (Notes) |
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Earnings Per Share [Text Block] | Earnings Per Share The following chart sets forth the computation of earnings per share (in thousands, except per share amounts):
The following table sets forth the number of employee stock-based compensation awards outstanding but not included in the computation of diluted earnings per share because their effect would have been antidilutive for the three and six months ended June 30, 2018 and 2017 (in thousands):
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Accumulated Other Comprehensive Income (Loss) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):
Accumulated Other Comprehensive Income (Loss) The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):
Net unrealized gains on our interest rate swaps totaling $1 million and $3 million were reclassified to Interest expense, net in our Unaudited Condensed Consolidated Statements of Income during the three and six months ended June 30, 2018, respectively, compared to a loss of $2 million during the six months ended June 30, 2017; the amount reclassified to Interest expense, net during the three months ended June 30, 2017 was immaterial. We also reclassified gains of $3 million and $4 million to Interest expense, net related to the foreign currency forward component of our cross currency swaps during the three and six months ended June 30, 2018, respectively, compared to $2 million and $4 million during the three and six months ended June 30, 2017. Also related to our cross currency swaps, we reclassified gains of $24 million and $12 million to Other income, net in our Unaudited Condensed Consolidated Statements of Income during the three and six months ended June 30, 2018, respectively, compared to losses of $30 million and $36 million during the three and six months ended June 30, 2017; these gains and losses offset the impact of the remeasurement of the underlying contracts. The deferred income taxes related to our cash flow hedges were reclassified from Accumulated other comprehensive income (loss) to provision for income taxes. As a result of the adoption of ASU 2018-02 in the first quarter of 2018, we recorded a $5 million reclassification to increase Accumulated Other Comprehensive (Loss) Income and decrease Retained Earnings. See Note 4, "Financial Statement Information" for further information regarding the adoption of ASU 2018-02. |
Long-Term Obligations |
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Long-Term Obligations | Long-Term Obligations Long-term obligations consist of the following (in thousands):
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 $696 million as of June 30, 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 June 30, 2018 and December 31, 2017 were 2.5% and 2.2%, respectively. We also pay a commitment fee based on the average daily unused amount of the revolving credit facilities. The commitment fee is subject to change in increments of 0.025% 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, $26 million and $18 million were classified as current maturities at June 30, 2018 and December 31, 2017, respectively. As of June 30, 2018, there were letters of credit outstanding in the aggregate amount of $65 million. The amounts available under the revolving credit facilities are reduced by the amounts outstanding under letters of credit, and thus availability under the revolving credit facilities at June 30, 2018 was $1.6 billion. Related to the execution of Amendment No. 2 to the Fourth Amended and Restated Credit Agreement in December 2017, we incurred $5 million of fees, the majority of which were capitalized as an offset to Long-Term Obligations and are amortized over the term of the agreement. U.S. Notes (2023) In 2013, we issued $600 million aggregate principal amount of 4.75% senior notes due 2023 (the "U.S. Notes (2023)"). The U.S. Notes (2023) are governed by the Indenture dated as of May 9, 2013 (the "U.S. Notes (2023) Indenture") among LKQ Corporation, certain of our subsidiaries (the "Guarantors"), the trustee, paying agent, transfer agent and registrar. The U.S. Notes (2023) are registered under the Securities Act of 1933. The U.S. Notes (2023) bear interest at a rate of 4.75% per year from the most recent payment date on which interest has been paid or provided for. Interest on the U.S. Notes (2023) is payable in arrears on May 15 and November 15 of each year. The U.S. Notes (2023) are fully and unconditionally guaranteed, jointly and severally, by the Guarantors. The U.S. Notes (2023) and the related guarantees are, respectively, LKQ Corporation's and each Guarantor's senior unsecured obligations and are subordinated to all of the Guarantors' existing and future secured debt to the extent of the assets securing that secured debt. In addition, the U.S. Notes (2023) are effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the U.S. Notes (2023) to the extent of the assets of those subsidiaries. Euro Notes (2024) On April 14, 2016, LKQ Italia Bondco S.p.A. (“LKQ Italia”), an indirect, wholly-owned subsidiary of LKQ Corporation, completed an offering of €500 million aggregate principal amount of senior notes due April 1, 2024 (the “Euro Notes (2024)”) in a private placement conducted pursuant to Regulation S and Rule 144A under the Securities Act of 1933. The proceeds from the offering were used to repay a portion of the revolver borrowings under the Credit Agreement and to pay related fees and expenses. The Euro Notes (2024) are governed by the Indenture dated as of April 14, 2016 (the “Euro Notes (2024) Indenture”) among LKQ Italia, LKQ Corporation and certain of our subsidiaries (the “Euro Notes (2024) Subsidiaries”), the trustee, and the paying agent, transfer agent, and registrar. The Euro Notes (2024) bear interest at a rate of 3.875% per year from the date of original issuance or from the most recent payment date on which interest has been paid or provided for. Interest on the Euro Notes (2024) is payable in arrears on April 1 and October 1 of each year. The Euro Notes (2024) are fully and unconditionally guaranteed by LKQ Corporation and the Euro Notes (2024) Subsidiaries (the "Euro Notes (2024) Guarantors"). The Euro Notes (2024) and the related guarantees are, respectively, LKQ Italia’s and each Euro Notes (2024) Guarantor’s senior unsecured obligations and are subordinated to all of LKQ Italia's and the Euro Notes (2024) Guarantors’ existing and future secured debt to the extent of the assets securing that secured debt. In addition, the Euro Notes (2024) are effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the Euro Notes (2024) to the extent of the assets of those subsidiaries. The Euro Notes (2024) have been listed on the ExtraMOT, Professional Segment of the Borsa Italia S.p.A. securities exchange and the Global Exchange Market of Euronext Dublin. Euro Notes (2026/28) On April 9, 2018, LKQ European Holdings B.V. ("LKQ Euro Holdings"), a wholly-owned subsidiary of LKQ Corporation, completed an offering of €1.0 billion aggregate principal amount of senior notes. The offering consisted of €750 million senior notes due 2026 (the "2026 notes") and €250 million senior notes due 2028 (the "2028 notes" and, together with the 2026 notes, the "Euro Notes (2026/28)") in a private placement conducted pursuant to Regulation S and Rule 144A under the Securities Act of 1933. The proceeds from the offering, together with borrowings under our senior secured credit facility, were or will be used to (i) finance a portion of the consideration paid for the Stahlgruber acquisition, (ii) for general corporate purposes and (iii) to pay related fees and expenses, including the refinancing of net financial debt. The Euro Notes (2026/28) are governed by the Indenture dated as of April 9, 2018 (the “Euro Notes (2026/28) Indenture”) among LKQ Euro Holdings, LKQ Corporation and certain of our subsidiaries (the “Euro Notes (2026/28) Subsidiaries”), the trustee, paying agent, transfer agent, and registrar. The 2026 notes and 2028 notes bear interest at a rate of 3.625% and 4.125%, respectively, per year from the date of original issuance or from the most recent payment date on which interest has been paid or provided for. Interest on the Euro Notes (2026/28) is payable in arrears on April 1 and October 1 of each year, beginning on October 1, 2018. The Euro Notes (2026/28) are fully and unconditionally guaranteed by LKQ Corporation and the Euro Notes (2026/28) Subsidiaries (the "Euro Notes (2026/28) Guarantors"). The Euro Notes (2026/28) and the related guarantees are, respectively, LKQ Euro Holdings' and each Euro Notes (2026/28) Guarantor’s senior unsecured obligations and will be subordinated to all of LKQ Euro Holdings' and the Euro Notes (2026/28) Guarantors’ existing and future secured debt to the extent of the assets securing that secured debt. In addition, the Euro Notes (2026/28) are effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the Euro Notes (2026/28) to the extent of the assets of those subsidiaries. The Euro Notes (2026/28) have been listed on the Global Exchange Market of Euronext Dublin. Related to the execution of the Euro Notes (2026/28) in April 2018, we incurred $15 million of fees, which were capitalized as an offset to Long-Term Obligations and are amortized over the term of the Euro Notes (2026/28). Receivables Securitization Facility On November 29, 2016, we amended the terms of our receivables securitization facility with The Bank of Tokyo-Mitsubishi UFJ, LTD. ("BTMU") to: (i) extend the term of the facility to November 8, 2019; (ii) increase the maximum amount available to $100 million; and (iii) make other clarifying and updating changes. Under the facility, LKQ sells an ownership interest in certain receivables, related collections and security interests to BTMU for the benefit of conduit investors and/or financial institutions for cash proceeds. Upon payment of the receivables by customers, rather than remitting to BTMU the amounts collected, LKQ retains such collections as proceeds for the sale of new receivables generated by certain of the ongoing operations of the Company. The sale of the ownership interest in the receivables is accounted for as a secured borrowing in our Consolidated Balance Sheets, under which the receivables included in the program collateralize the amounts invested by BTMU, the conduit investors and/or financial institutions (the "Purchasers"). The receivables are held by LKQ Receivables Finance Company, LLC ("LRFC"), a wholly owned bankruptcy-remote special purpose subsidiary of LKQ, and therefore, the receivables are available first to satisfy the creditors of LRFC, including the Purchasers. Net receivables totaling $138 million and $144 million were collateral for the investment under the receivables facility as of June 30, 2018 and December 31, 2017, respectively. Under the receivables facility, we pay variable interest rates plus a margin on the outstanding amounts invested by the Purchasers. The variable rates are based on (i) commercial paper rates, (ii) the London InterBank Offered Rate ("LIBOR"), or (iii) base rates, and are payable monthly in arrears. The commercial paper rate is the applicable variable rate unless conduit investors are not available to invest in the receivables at commercial paper rates. In such case, financial institutions will invest at the LIBOR rate or at base rates. We also pay a commitment fee on the excess of the investment maximum over the average daily outstanding investment, payable monthly in arrears. As of June 30, 2018, the interest rate under the receivables facility was based on commercial paper rates and was 3.1%. The outstanding balances of $100 million as of both June 30, 2018 and December 31, 2017 were classified as long-term on the Unaudited Condensed Consolidated Balance Sheets because we have the ability and intent to refinance these borrowings on a long-term basis. |
Derivative Instruments and Hedging Activities |
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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 June 30, 2018 and December 31, 2017 (in thousands):
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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 June 30, 2018, we held interest rate swap contracts representing $590 million of U.S. dollar-denominated debt. From time to time, we may hold foreign currency forward contracts related to certain foreign currency denominated intercompany transactions, with the objective of minimizing the impact of fluctuating exchange rates on these future cash flows. Under the terms of the foreign currency forward contracts, we will sell the foreign currency in exchange for U.S. dollars at a fixed rate on the maturity dates of the contracts. The effective portion of the changes in fair value of the foreign currency forward contracts is recorded in Accumulated Other Comprehensive Income (Loss) and reclassified to other income, net when the underlying transaction has an impact on earnings. In 2016, we entered into three cross currency swap agreements for a total notional amount of $422 million (€400 million). The notional amount steps down by €15 million annually through 2020 with the remainder maturing in January 2021. These cross currency swaps contain an interest rate swap component and a foreign currency forward contract component that, combined with related intercompany financing arrangements, effectively convert variable rate U.S. dollar-denominated borrowings into fixed rate euro-denominated borrowings. The swaps are intended to minimize the impact of fluctuating exchange rates and interest rates on the cash flows resulting from the related intercompany financing arrangements. The effective portion of the changes in the fair value of the derivative instruments is recorded in Accumulated Other Comprehensive Income (Loss) and is reclassified to interest expense, net when the underlying transactions have an impact on earnings. The activity related to our cash flow hedges is presented in operating activities in our Unaudited Condensed Consolidated Statements of Cash Flows. The following table summarizes the notional amounts and fair values of our designated cash flow hedges as of June 30, 2018 and December 31, 2017 (in thousands):
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 $18 million and $12 million at June 30, 2018 and December 31, 2017, respectively. The activity related to our cash flow hedges is included in Note 9, "Accumulated Other Comprehensive Income (Loss)." Ineffectiveness related to our cash flow hedges was immaterial to our results of operations during each of the three and six months ended June 30, 2018 and 2017. We do not expect future ineffectiveness related to our cash flow hedges to have a material effect on our results of operations. As of June 30, 2018, we estimate that $3 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 June 30, 2018 and December 31, 2017, along with the effect on our results of operations during each of the three and six months ended June 30, 2018 and 2017, were immaterial. |
Fair Value Measurements |
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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 of our financial assets and liabilities, and during the three months ended June 30, 2018, there were no significant changes in valuation techniques or inputs related to the financial assets or liabilities that we have historically recorded at fair value. The tiers in the fair value hierarchy include: Level 1, defined as observable inputs such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as significant unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation inputs we utilized to determine such fair value as of June 30, 2018 and December 31, 2017 (in thousands):
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 June 30, 2018 and December 31, 2017, the fair value of our credit agreement borrowings reasonably approximated the carrying values of $1.8 billion and $2.0 billion, respectively. In addition, based on market conditions, the fair values of the outstanding borrowings under the receivables facility reasonably approximated the carrying values of $100 million at both June 30, 2018 and December 31, 2017. As of June 30, 2018 and December 31, 2017, the fair values of the U.S. Notes (2023) were approximately $598 million and $615 million, respectively, compared to a carrying value of $600 million. As of June 30, 2018 and December 31, 2017, the fair values of the Euro Notes (2024) were approximately $609 million and $658 million compared to carrying values of $584 million and $600 million, respectively. As of June 30, 2018, the fair value of the Euro Notes (2026/28) approximated the carrying value of $1.2 billion. The fair value measurements of the borrowings under our credit agreement and receivables facility are classified as Level 2 within the fair value hierarchy since they are determined based upon significant inputs observable in the market, including interest rates on recent financing transactions with similar terms and maturities. We estimated the fair value by calculating the upfront cash payment a market participant would require at June 30, 2018 to assume these obligations. The fair value of our U.S. Notes (2023) is classified as Level 1 within the fair value hierarchy since it is determined based upon observable market inputs including quoted market prices in an active market. The fair values of our Euro Notes (2024) and Euro Notes (2026/28) are determined based upon observable market inputs including quoted market prices in markets that are not active, and therefore are classified as Level 2 within the fair value hierarchy. |
Employee Benefit Plans (Notes) |
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Pension and Other Postretirement Benefits Disclosure [Text Block] | Employee Benefit Plans We have funded and unfunded defined benefit plans covering certain employee groups in the U.S. and various European countries. The defined benefit plans are generally frozen to new participants and, in some cases, existing participants no longer accrue benefits. As of June 30, 2018 and December 31, 2017, the aggregate funded status of the defined benefit plans was a liability of $121 million and $46 million, respectively, and is reported in Other noncurrent liabilities on our Unaudited Condensed Consolidated Balance Sheets. Of the liability at June 30, 2018, $75 million was related to our acquisition of Stahlgruber on May 30, 2018. Net periodic benefit expense for our defined benefit plans included the following components for the three and six months ended June 30, 2018 and 2017 (in thousands):
For the three and six months ended June 30, 2018, the service cost component of net periodic benefit expense was classified in Selling, general and administrative expenses, while the other components of net periodic benefit expense were classified in Other income, net in our Unaudited Condensed Consolidated Statements of Income. For the three and six months ended June 30, 2017, all components of net periodic benefit expense were included in Selling, general, and administrative expenses in our Unaudited Condensed Consolidated Statements of Income. During the six months ended, June 30, 2018, we contributed $2 million to our pension plans. We estimate that contributions to our pension plans during the last six months of 2018 will be $3 million. |
Commitments and Contingencies |
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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 June 30, 2018 are as follows (in thousands):
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. |
Income Taxes (Notes) |
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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 six months ended June 30, 2018 was 26.3%, compared to 33.8% for the comparable prior year period. The decrease was primarily attributable to the reduction of the U.S. federal statutory income tax rate from 35% to 21% as a result of the enactment of the Tax Act in December 2017. Partially offsetting this decrease was a 1.0% increase in the effective income tax rate as a result of the Stahlgruber acquisition, including non-deductible interest and acquisition related expenses, as well as the higher effective tax rate in Germany. The effective tax rate also reflects the impact of favorable discrete items of approximately $3 million and $6 million for the six months ended June 30, 2018 and 2017, respectively, for excess tax benefits from stock-based payments. The year over year change in these amounts increased the effective tax rate by 0.5% compared to the prior year. Our acquisition of Stahlgruber in May 2018 contributed $98 million of deferred tax liabilities relating to intangible assets; property, plant and equipment; and reserves, including pension and other post-retirement benefit obligations. The Tax Act introduced broad and complex changes to the U.S. tax code, including the aforementioned reduction in the U.S. corporate tax rate, a one-time transition tax on the historical unremitted earnings of foreign subsidiaries, and a new minimum tax on foreign earnings (Global Intangible Low-Taxed Income, “GILTI”). On December 22, 2017, the SEC staff issued Staff Accounting Bulletin 118 ("SAB 118"), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the related accounting for provisional amounts under ASC 740, "Accounting for Income Taxes." As a result of the Tax Act, in 2017, we recognized a provisional tax liability of $51 million related to the one-time transition tax on historical foreign earnings, payable over a period of eight years. We also recorded a provisional decrease to net U.S. deferred tax liabilities of $73 million. For a description of the impact of the Tax Act for the year ended December 31, 2017, refer to Note 13, "Income Taxes" of our financial statements as of and for the year ended December 31, 2017 included in the 2017 Form 10-K. During the six-month period ended June 30, 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. |
Segment and Geographic Information |
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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):
The key measure of segment profit or loss reviewed by our chief operating decision maker, who is our Chief Executive Officer, is Segment EBITDA. Segment EBITDA includes revenue and expenses that are controllable by the segment. Corporate general and administrative expenses are allocated to the segments based on usage, with shared expenses apportioned based on the segment's percentage of consolidated revenue. We calculate Segment EBITDA as EBITDA excluding restructuring and acquisition related expenses, change in fair value of contingent consideration liabilities, other gains and losses related to acquisitions or divestitures 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):
The following table presents capital expenditures by reportable segment (in thousands):
The following table presents assets by reportable segment (in thousands):
We report net receivables; inventories; net property, plant and equipment; and equity method investments by segment as that information is used by the chief operating decision maker in assessing segment performance. These assets provide a measure for the operating capital employed in each segment. Unallocated assets include cash and cash equivalents, prepaid and other current and noncurrent assets, goodwill and other intangibles. Our largest country of operation is the U.S., followed by the U.K. Our other European operations are located in the Netherlands, Belgium, Italy, Czech Republic, Poland, Slovakia and other European countries. As a result of the Stahlgruber acquisition, we expanded our operations into Germany, Austria, Slovenia, and Croatia. 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):
The following table sets forth our tangible long-lived assets by geographic area (in thousands):
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Condensed Consolidating Financial Information |
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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.
(1) Reflects the impact of adopting ASU 2016-15 |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables and Allowance for Doubtful Accounts | We have a reserve for uncollectible accounts, which was approximately $64 million and $58 million at June 30, 2018 and December 31, 2017, respectively. Our May 2018 acquisition of Stahlgruber contributed $3 million to our reserve for uncollectible accounts. See Note 2, "Business Combinations" for further information on our acquisitions. |
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Inventory | Inventories consist of the following (in thousands):
Aftermarket and refurbished products and salvage and remanufactured products are primarily composed of finished goods. As of June 30, 2018, manufactured products inventory was composed of $13 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. Our May 2018 acquisition of Stahlgruber contributed $352 million to our aftermarket and refurbished products inventory. See Note 2, "Business Combinations" for further information on our acquisitions. |
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Property and Equipment | Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized. Construction in progress consists primarily of building and land improvements at our existing facilities. Depreciation is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term of the related lease and reasonably assured renewal periods, if shorter. Our estimated useful lives are as follows:
Property, plant and equipment consists of the following (in thousands):
The components of opening property, plant and equipment acquired as part of our acquisition of Stahlgruber in May 2018 are as follows (in thousands):
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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 six months ended June 30, 2018 are as follows (in thousands):
During the six months ended June 30, 2018, we recorded $931 million of goodwill related to our acquisition of Stahlgruber. See Note 2, "Business Combinations" for further information on our acquisitions. The components of other intangibles, net are as follows (in thousands):
The components of intangible assets subject to amortization are as follows (in thousands):
The components of intangible assets acquired as part of our acquisition of Stahlgruber in May 2018 are as follows (in thousands):
The weighted-average amortization periods for our intangible assets acquired during the six months ended June 30, 2018 and the year ended December 31, 2017 are as follows (in years):
Our estimated useful lives for our finite-lived intangible assets are as follows:
Amortization expense for intangibles was $30 million and $54 million during the three and six months ended June 30, 2018, respectively, and $25 million and $48 million during the three and six months ended June 30, 2017, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2022 is $78 million (for the remaining six months of 2018), $129 million, $98 million, $73 million and $61 million, respectively. |
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Investment in Unconsolidated Subsidiary | Our investment in unconsolidated subsidiaries was $203 million and $208 million as of June 30, 2018 and December 31, 2017, respectively. On December 1, 2016, we acquired a 26.5% equity interest in Mekonomen AB ("Mekonomen") for an aggregate purchase price of $181 million. Headquartered in Stockholm, Sweden, Mekonomen is the leading independent car parts and service chain in the Nordic region of Europe, offering a range of products including spare parts and accessories for cars, and workshop services for consumers and businesses. 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 June 30, 2018, the book value of our investment in Mekonomen exceeded our share of the book value of Mekonomen's net assets by $122 million; this difference is primarily related to goodwill and the fair value of other intangible assets. We are recording our equity in the net earnings of Mekonomen on a one quarter lag. We recorded equity in earnings of $1 million and $2 million during the three and six months ended June 30, 2018, respectively, and $2 million during each of the three and six months ended June 30, 2017 related to our investment in Mekonomen, including adjustments to convert the results to GAAP and to recognize the impact of our purchase accounting adjustments. In May 2018 and May 2017, we received cash dividends of $8 million (SEK 67 million) and $7 million (SEK 67 million), respectively, related to our investment in Mekonomen. The Level 1 fair value of our equity investment in the publicly traded Mekonomen common stock at June 30, 2018 was $132 million ($168 million as of August 2, 2018) compared to a carrying value of $194 million. We evaluated our investment in Mekonomen for other-than-temporary impairment and concluded the decline in fair value was not other-than-temporary, but a prolonged stock price decrease will cause the decline to be a permanent impairment. |
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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 them. We record the warranty costs in Cost of goods sold on our Unaudited Condensed Consolidated Statements of Income. Our warranty reserve is calculated using historical claim information to project future warranty claims activity and is recorded within Other accrued expenses and Other noncurrent liabilities on our Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments. The changes in the warranty reserve are as follows (in thousands):
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Adoption of New Revenue Standard In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). This update outlines a new comprehensive revenue recognition model that supersedes the prior revenue recognition guidance and requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB has issued several updates to ASU 2014-09, which collectively with ASU 2014-09, represent the FASB Accounting Standards Codification Topic 606 (“ASC 606”). On January 1, 2018, we adopted ASC 606 for all contracts using the modified retrospective method, which means the historical periods are presented under the previous revenue standards with the cumulative net income effect being adjusted through retained earnings. Most of the changes resulting from our adoption of ASC 606 were changes in presentation within the Unaudited Condensed Consolidated Balance Sheets and the Unaudited Condensed Consolidated Statements of Income. Therefore, while we made adjustments to certain opening balances on our January 1, 2018 balance sheet, we made no adjustments to opening retained earnings. We expect the impact of the adoption of ASC 606 to be immaterial to our net income on an ongoing basis. See Note 5, "Revenue Recognition" for the required disclosures under ASC 606. With the adoption of ASC 606, we reclassified certain amounts related to variable consideration. Under ASC 606, we are required to present a refund liability and a returns asset within the Unaudited Condensed Consolidated Balance Sheet, whereas in periods prior to adoption, we presented the estimated margin impact of expected returns as a contra-asset within accounts receivable. Additionally, under ASC 606, the changes in the refund liability are reported in revenue, and the changes in the returns assets are reported in Cost of goods sold 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):
The impact of the adoption of ASC 606 on our Unaudited Condensed Consolidated Balance Sheet as of June 30, 2018 and our Unaudited Condensed Consolidated Statement of Income for the three and six months ended June 30, 2018 was as follows (in thousands):
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 June 30, 2018. Under ASC 340, "Other Assets and Deferred Costs," we have elected to recognize incremental costs of obtaining a contract (commissions earned by our sales representatives on product sales) as an expense when incurred, as we believe the amortization period of the asset would be one year or less due to the short-term nature of our contracts. Other Recently Adopted Accounting Pronouncements During the first quarter of 2018, we adopted ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which changes how entities will recognize, measure, present and make disclosures about certain financial assets and financial liabilities. The adoption of ASU 2016-01 did not have a significant impact on our financial position, results of operations, cash flows or disclosures. During the first quarter of 2018, we adopted ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"), which includes guidance on classification for the following items: debt prepayment or debt extinguishment costs, settlement of zero coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and corporate-owned or bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and other separately identifiable cash flows where application of the predominance principle is prescribed. No adjustments were required in our Unaudited Condensed Consolidated Statement of Cash Flows upon adoption. Within our Unaudited Condensed Consolidating Statements of Cash Flows in Note 17, "Condensed Consolidating Financial Information," we now present a new line item, Payments of deferred purchase price on receivables securitization, as a result of adopting ASU 2016-15; prior year cash flow information within this footnote has been recast to reflect the impact of adopting this accounting standard. Other than the addition of this new line item, there was no impact to our Unaudited Condensed Consolidating Statements of Cash Flows upon adoption. During the first quarter of 2018, we adopted ASU No. 2017-01 "Clarifying the Definition of a Business" (“ASU 2017-01”), which requires an evaluation of whether substantially all of the fair value of assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the transaction does not qualify as a business. The guidance also requires an acquired business to include at least one substantive process and narrows the definition of outputs. The adoption of ASU 2017-01 did not have a material impact on our unaudited condensed consolidated financial statements. During the first quarter of 2018, we adopted ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02"), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the reduction of the U.S. federal statutory income tax rate to 21% from 35% due to the enactment of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). In addition, under ASU 2018-02, an entity is required to provide certain disclosures regarding stranded tax effects. ASU 2018-02 is effective for fiscal years and interim periods beginning after December 15, 2018; early adoption is permitted. As a result of the adoption of ASU 2018-02, we recorded a $5 million reclassification to increase Accumulated Other Comprehensive (Loss) Income and decrease Retained Earnings. During the first quarter of 2018, we adopted ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" ("ASU 2017-07"), which requires presentation of the current service cost component of net periodic benefit expense with other current compensation expenses for the related employees, and requires presentation of the remaining components of net periodic benefit expense, such as interest, expected return on plan assets, and amortization of actuarial gains and losses, outside of operating income. ASU 2017-07 also specifies that, on a prospective basis, only the service cost component is eligible for capitalization into inventory or other assets. While the income statement classification provisions of ASU 2017-07 are applicable on a retrospective basis, due to the immaterial impact to our Unaudited Condensed Consolidated Statements of Income in prior periods, we did not recast prior period income statement information and adopted the classification provisions on a prospective basis. The change in the capitalization provisions under ASU 2017-07 did not have a material impact on our unaudited condensed consolidated financial statements. See Note 13, "Employee Benefit Plans," for further disclosure on the components of net periodic benefit expense and classification of the components within our Unaudited Condensed Consolidated Statements of Income for the three and six months ended June 30, 2018 and 2017. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, "Leases" ("ASU 2016-02"), to increase transparency and comparability by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between current GAAP and ASU 2016-02 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current GAAP. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The standard requires that entities apply the effects of these changes using a modified retrospective approach, which includes a number of optional practical expedients. While we are still in the process of quantifying the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements and related disclosures, we anticipate the adoption will materially affect our consolidated balance sheet and disclosures, as the majority of our operating leases will be recorded on the balance sheet under ASU 2016-02. While we do not anticipate the adoption of this accounting standard to have a material impact on our consolidated statements of income at this time, this conclusion may change as we finalize our assessment. In order to assist in our timely implementation of the new standard, we have purchased new software to track our leases. We have engaged a third party to assist with the implementation of the new software with an expectation to complete the implementation by the end of 2018. During the second quarter, we completed phase one of the software roll-out for our North America and Specialty operations. 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. |
Business Combinations (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase Price Allocations For Acquisitions | The purchase price allocations for the acquisitions completed during the six months ended June 30, 2018 and the year ended December 31, 2017 are as follows (in thousands):
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Pro Forma Effect Of Businesses Acquired | The following pro forma summary presents the effect of the businesses acquired during the six months ended June 30, 2018 as though the businesses had been acquired as of January 1, 2017, and the businesses acquired during the year ended December 31, 2017 as though they had been acquired as of January 1, 2016. The pro forma adjustments are based upon unaudited financial information of the acquired entities (in thousands, except per share data):
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Discontinued Operations Discontinued Operations Income statement (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations [Table Text Block] | The following table summarizes the operating results of the Company’s discontinued operations related to the sale described above for the six months ended June 30, 2017, as presented in Net loss from discontinued operations on the Unaudited Condensed Consolidated Statements of Income (in thousands):
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Summary of Significant Accounting Policies (Tables) |
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Property and Equipment | Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized. Construction in progress consists primarily of building and land improvements at our existing facilities. Depreciation is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term of the related lease and reasonably assured renewal periods, if shorter. Our estimated useful lives are as follows:
Property, plant and equipment consists of the following (in thousands):
The components of opening property, plant and equipment acquired as part of our acquisition of Stahlgruber in May 2018 are as follows (in thousands):
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Schedule Of Inventory | Inventories consist of the following (in thousands):
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Changes In Carrying Amount Of Goodwill | Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer and supplier relationships, software and other technology related assets, and covenants not to compete. The changes in the carrying amount of goodwill by reportable segment for the six months ended June 30, 2018 are as follows (in thousands):
During the six months ended June 30, 2018, we recorded $931 million of goodwill related to our acquisition of Stahlgruber. See Note 2, "Business Combinations" for further information on our acquisitions. |
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Schedule of Finite-Lived and Indefinite-Lived Intangibles [Table Text Block] | The components of other intangibles, net are as follows (in thousands):
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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):
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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:
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Components Of Other Intangibles | The components of intangible assets subject to amortization are as follows (in thousands):
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Cumulative Effect of Adoption of ASC 606 on Consolidated Financial Statements | The impact of the adoption of ASC 606 on our Unaudited Condensed Consolidated Balance Sheet as of June 30, 2018 and our Unaudited Condensed Consolidated Statement of Income for the three and six months ended June 30, 2018 was as follows (in thousands):
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Schedule of Product Warranty Liability [Table Text Block] | The changes in the warranty reserve are as follows (in thousands):
The changes in deferred service-type warranty revenue are as follows (in thousands):
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Financial Statement Information Property, Plant and Equipment [Table Text Block] (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Property, Plant and Equipment, Policy [Policy Text Block] | Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized. Construction in progress consists primarily of building and land improvements at our existing facilities. Depreciation is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term of the related lease and reasonably assured renewal periods, if shorter. Our estimated useful lives are as follows:
Property, plant and equipment consists of the following (in thousands):
The components of opening property, plant and equipment acquired as part of our acquisition of Stahlgruber in May 2018 are as follows (in thousands):
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Property, Plant and Equipment [Table Text Block] |
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Financial Statement Information Finite-Lived Intangible Assets Acquired as Part of Business Combination (Tables) |
6 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 |
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Acquired Finite-Lived Intangible Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill [Table Text Block] | Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer and supplier relationships, software and other technology related assets, and covenants not to compete. The changes in the carrying amount of goodwill by reportable segment for the six months ended June 30, 2018 are as follows (in thousands):
During the six months ended June 30, 2018, we recorded $931 million of goodwill related to our acquisition of Stahlgruber. See Note 2, "Business Combinations" for further information on our acquisitions. |
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Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The components of intangible assets acquired as part of our acquisition of Stahlgruber in May 2018 are as follows (in thousands):
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Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 13 years 10 months 24 days | 16 years 6 months | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life [Table Text Block] | The weighted-average amortization periods for our intangible assets acquired during the six months ended June 30, 2018 and the year ended December 31, 2017 are as follows (in years):
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Revenue Recognition Disaggregation of Revenue (Tables) |
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Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue [Table Text Block] | 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):
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Revenue Recognition Product Warranty Liability (Tables) |
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Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability [Table Text Block] | The changes in the warranty reserve are as follows (in thousands):
The changes in deferred service-type warranty revenue are as follows (in thousands):
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Equity Incentive Plans (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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 six months ended June 30, 2018:
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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 six months ended June 30, 2018:
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Earnings Per Share Schedule of Earnings Per Share, Basic and Diluted (Tables) |
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Schedule of Earnings Per Share, Basic and Diluted [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following chart sets forth the computation of earnings per share (in thousands, except per share amounts):
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Earnings Per Share Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Tables) |
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Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The following table sets forth the number of employee stock-based compensation awards outstanding but not included in the computation of diluted earnings per share because their effect would have been antidilutive for the three and six months ended June 30, 2018 and 2017 (in thousands):
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Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):
Accumulated Other Comprehensive Income (Loss) The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):
Net unrealized gains on our interest rate swaps totaling $1 million and $3 million were reclassified to Interest expense, net in our Unaudited Condensed Consolidated Statements of Income during the three and six months ended June 30, 2018, respectively, compared to a loss of $2 million during the six months ended June 30, 2017; the amount reclassified to Interest expense, net during the three months ended June 30, 2017 was immaterial. We also reclassified gains of $3 million and $4 million to Interest expense, net related to the foreign currency forward component of our cross currency swaps during the three and six months ended June 30, 2018, respectively, compared to $2 million and $4 million during the three and six months ended June 30, 2017. Also related to our cross currency swaps, we reclassified gains of $24 million and $12 million to Other income, net in our Unaudited Condensed Consolidated Statements of Income during the three and six months ended June 30, 2018, respectively, compared to losses of $30 million and $36 million during the three and six months ended June 30, 2017; these gains and losses offset the impact of the remeasurement of the underlying contracts. The deferred income taxes related to our cash flow hedges were reclassified from Accumulated other comprehensive income (loss) to provision for income taxes. As a result of the adoption of ASU 2018-02 in the first quarter of 2018, we recorded a $5 million reclassification to increase Accumulated Other Comprehensive (Loss) Income and decrease Retained Earnings. See Note 4, "Financial Statement Information" for further information regarding the adoption of ASU 2018-02. |
Long-Term Obligations (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Long-Term Obligations | Long-term obligations consist of the following (in thousands):
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Derivative Instruments and Hedging Activities Derivative Instruments and Hedging Activities (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments [Table Text Block] | The following table summarizes the notional amounts and fair values of our designated cash flow hedges as of June 30, 2018 and December 31, 2017 (in thousands):
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Fair Value Measurements (Tables) |
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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 June 30, 2018 and December 31, 2017 (in thousands):
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Employee Benefit Plans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Defined Benefit Plans Disclosures [Table Text Block] | Net periodic benefit expense for our defined benefit plans included the following components for the three and six months ended June 30, 2018 and 2017 (in thousands):
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Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Future Minimum Lease Commitments | The future minimum lease commitments under these leases at June 30, 2018 are as follows (in thousands):
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Segment and Geographic Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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):
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Reconciliation Of Segment EBITDA To Net Income Table | The table below provides a reconciliation of Net Income to Segment EBITDA (in thousands):
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Schedule Of Capital Expenditures By Reportable Segment | The following table presents capital expenditures by reportable segment (in thousands):
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Schedule Of Assets By Reportable Segment | The following table presents assets by reportable segment (in thousands):
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Revenue from External Customers by Geographic Area | The following table sets forth our revenue by geographic area (in thousands):
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Schedule Of Tangible Long-Lived Assets By Geographic Area | The following table sets forth our tangible long-lived assets by geographic area (in thousands):
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Condensed Consolidating Financial Information (Tables) |
3 Months Ended | 6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 |
Jun. 30, 2018 |
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Condensed Consolidating Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Condensed Statements of Income |
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Consolidated Condensed Statements of Comprehensive Income (Loss) |
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Consolidated Condensed Balance Sheets |
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Consolidated Condensed Statements of Cash Flows |
|
Financial Statement Information Schedule of Inventory (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Product Information | ||
Inventories (3) | $ 356,221 | $ 150,342 |
Inventories | 2,718,158 | 2,380,783 |
Aftermarket and refurbished products | ||
Product Information | ||
Inventories | 2,208,122 | 1,877,653 |
Salvage and remanufactured products | ||
Product Information | ||
Inventories | 490,325 | 487,108 |
ManufacturedProducts [Member] | ||
Accounting Policies [Abstract] | ||
Inventory, Raw Materials, Gross | 13,000 | 10,000 |
Inventory, Work in Process, Gross | 2,000 | 2,000 |
Inventory, Finished Goods, Gross | 5,000 | 4,000 |
Product Information | ||
Inventories | $ 19,711 | $ 16,022 |
Financial Statement Information Schedule of Estimated Useful Lives (Details) |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Land improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Land improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 20 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 20 years |
Computer equipment and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Computer equipment and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Furniture and Fixtures [Member] | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Furniture and Fixtures [Member] | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 7 years |
Changes in Carrying Amount of Goodwill (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Goodwill [Roll Forward] | |
Beginning balance | $ 3,536,511 |
Business acquisitions and adjustments to previously recorded goodwill | 929,891 |
Exchange rate effects | (44,426) |
Ending balance | 4,421,976 |
North America | |
Goodwill [Roll Forward] | |
Beginning balance | 1,709,354 |
Business acquisitions and adjustments to previously recorded goodwill | 714 |
Exchange rate effects | (5,078) |
Ending balance | 1,704,990 |
Europe | |
Goodwill [Roll Forward] | |
Beginning balance | 1,414,898 |
Business acquisitions and adjustments to previously recorded goodwill | 934,844 |
Exchange rate effects | (39,536) |
Ending balance | 2,310,206 |
Specialty | |
Goodwill [Roll Forward] | |
Beginning balance | 412,259 |
Business acquisitions and adjustments to previously recorded goodwill | (5,667) |
Exchange rate effects | 188 |
Ending balance | 406,780 |
Stahlgruber [Member] | |
Goodwill [Line Items] | |
Goodwill, Acquired During Period | 931,000 |
Goodwill [Roll Forward] | |
Ending balance | $ 930,567 |
Changes in Warranty Reserve (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Warranty Reserve [Roll Forward] | |
Beginning balance | $ 23,151 |
Warranty expense | 22,992 |
Warranty claims | (21,088) |
Ending balance | $ 25,055 |
Financial Statement Information Schedule of New Accounting Pronouncements (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Income Statement Related Disclosures [Abstract] | |||
Receivables, Net, Current | $ 1,301,514 | $ 1,065,617 | $ 1,027,106 |
Prepaid Expense and Other Assets, Current | 228,732 | $ 178,987 | 134,479 |
Other assets | 168,901 | 142,965 | |
Other current liabilities | 49,603 | 45,727 | |
Deferred Income Taxes | $ (332,602) | $ (252,359) |
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 | 6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jan. 01, 2018 |
Dec. 31, 2017 |
|||||||||
Assets | ||||||||||||||
Revenue | $ 3,030,751 | $ 2,458,411 | $ 5,751,515 | $ 4,801,254 | ||||||||||
Receivables, net | 1,301,514 | 1,301,514 | $ 1,065,617 | $ 1,027,106 | ||||||||||
Net Cash Provided by (Used in) Operating Activities | 328,669 | 362,097 | ||||||||||||
Net Cash Provided by (Used in) Financing Activities | 1,054,343 | (423,076) | ||||||||||||
Net income attributable to LKQ stockholders | $ 157,007 | $ 150,914 | $ 309,967 | $ 287,192 | ||||||||||
Net income attributable to LKQ stockholders | [1] | $ 0.50 | $ 0.49 | $ 1.00 | $ 0.93 | |||||||||
Net income attributable to LKQ stockholders | [1] | $ 0.50 | $ 0.49 | $ 0.99 | $ 0.93 | |||||||||
Prepaid expenses and other current assets | $ 228,732 | $ 228,732 | 178,987 | 134,479 | ||||||||||
Liabilities [Abstract] | ||||||||||||||
Refund liability | 103,694 | 103,694 | 83,019 | 0 | ||||||||||
Accounts payable | 981,643 | 981,643 | 788,613 | |||||||||||
Other current liabilities | 49,603 | 49,603 | $ 45,727 | |||||||||||
Cost of goods sold | 1,868,872 | $ 1,493,402 | 3,535,665 | $ 2,906,152 | ||||||||||
Selling, general and administrative expenses (1) | 826,044 | $ 664,270 | [2] | 1,592,935 | [2] | $ 1,307,087 | [2] | |||||||
Adjustment Due to ASC 606 [Member] | ||||||||||||||
Assets | ||||||||||||||
Receivables, net | 38,511 | |||||||||||||
Prepaid expenses and other current assets | 44,508 | |||||||||||||
Liabilities [Abstract] | ||||||||||||||
Refund liability | $ 83,019 | |||||||||||||
Amount of adjustment to prior balance [Member] | ||||||||||||||
Assets | ||||||||||||||
Revenue | 3,030,378 | 5,759,091 | ||||||||||||
Receivables, net | 1,254,189 | 1,254,189 | ||||||||||||
Prepaid expenses and other current assets | 172,363 | 172,363 | ||||||||||||
Liabilities [Abstract] | ||||||||||||||
Refund liability | 0 | 0 | ||||||||||||
Cost of goods sold | 1,867,781 | 3,541,955 | ||||||||||||
Selling, general and administrative expenses (1) | 826,762 | 1,594,221 | ||||||||||||
Adjustment Due to ASC 606 [Member] | ||||||||||||||
Assets | ||||||||||||||
Revenue | 373 | (7,576) | ||||||||||||
Receivables, net | 47,325 | 47,325 | ||||||||||||
Prepaid expenses and other current assets | 56,369 | 56,369 | ||||||||||||
Liabilities [Abstract] | ||||||||||||||
Refund liability | 103,694 | 103,694 | ||||||||||||
Cost of goods sold | 1,091 | (6,290) | ||||||||||||
Selling, general and administrative expenses (1) | $ (718) | $ (1,286) | ||||||||||||
|
Financial Statement Information Equity Method Investments (Details) |
Dec. 01, 2016 |
---|---|
Mekonomen [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Additional Information | December 1, 2016 |
Financial Statement Information Finite-Lived Intangible Assets Acquired as Part of Business Combination (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 280,399,000 |
Trademarks and Trade Names [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | 173,382,000 |
Customer and supplier relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | 78,239,000 |
Software and technology related assets [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 28,778,000 |
Revenue Recognition Movement in Standard Prodcut Warranty Accrual (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Dec. 31, 2017 |
|
Product Warranty Liability [Line Items] | ||
Deferred Service-Type Warranty Revenue | $ 22 | $ 19 |
Deferred Revenue, Additions | 19 | |
Deferred Revenue, Revenue Recognized | $ (16) | |
Minimum | ||
Product Warranty Liability [Line Items] | ||
Standard Product Warranty Period | 6 months | |
Maximum | ||
Product Warranty Liability [Line Items] | ||
Standard Product Warranty Period | 36 months |
Restructuring and Acquisition Related Expenses - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Acquisition Related Expenses [Abstract] | ||||
Business Combination, Acquisition Related Costs | $ 14 | $ 2 | $ 16 | $ 5 |
Acquisition And Restructuring Integration Plans [Abstract] | ||||
Restructuring Costs | 2 | $ 0 | $ 4 | $ 1 |
Restructuring and Related Cost, Description | Expenses incurred during the three and six months ended June 30, 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. | 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. | ||
Stahlgruber [Member] | ||||
Acquisition Related Expenses [Abstract] | ||||
Business Combination, Acquisition Related Costs | 13 | $ 15 | ||
Maximum | ||||
Acquisition And Restructuring Integration Plans [Abstract] | ||||
Expected future restructuring expenses | $ (15) | $ (15) |
Equity Incentive Plans - Additional Information (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
shares
| |
RSUs | |
RSUs [Abstract] | |
Fair value of RSUs vested during the period | $ | $ 17 |
Performance Shares [Member] | |
RSUs [Abstract] | |
Reporting period of positive diluted earnings per share | 5 years |
Stock options | |
Stock Options [Abstract] | |
Options granted during the period | 0 |
Options vested during the period | 0 |
Minimum | Stock options | |
Stock Options [Abstract] | |
Stock options expiration period | 6 years |
Maximum | RSUs | |
Stock Options [Abstract] | |
Vesting period | 5 years |
Maximum | Stock options | |
Stock Options [Abstract] | |
Stock options expiration period | 10 years |
Vesting period | 5 years |
Equity Incentive Plans Schedule of Unvested Restricted Stock Units Activity (Details) - RSUs - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Dec. 31, 2017 |
|
Shares Outstanding [Abstract] | ||
Unvested RSUs, shares | 1,776,935 | 1,624,390 |
RSUs granted, shares | 593,131 | |
RSUs vested, shares | (414,625) | |
RSUs forfeited/canceled, shares | (25,961) | |
RSUs expected to vest | 1,618,650 | |
lkq_expected_to_vest_other_than_options_weighted_average_per_share | $ 34.34 | |
Weighted Average Fair Value [Abstract] | ||
Unvested RSUs, weighted average grant date fair value | 34.40 | $ 29.94 |
RSUs granted, weighted average grant date fair value | 42.72 | |
RSUs vested, weighted average grant date fair value | 28.95 | |
RSUs forfeited/canceled, weighted average grant date fair value | $ 32.62 | |
RSUs expected to vest, weighted average remaining contractual term | 2 years 9 months 18 days | |
RSUs expected to vest, aggregate intrinsic value | $ 51,633 |
Schedule of Stock-Based Compensation Expense Expected to be Recognized (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock-based compensation expense | $ 11,844 | $ 12,443 | ||
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock-based compensation expense | $ 5,862 | $ 5,158 | 11,844 | $ 12,443 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 46,000 | $ 46,000 |
Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive securities | 0 | 0 | 0 | |
Restricted Stock Units (RSUs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive securities | 575 | 288 | 73 | |
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive securities | 76 | 77 |
Schedule of Long-Term Obligations (Parenthetical) (Details) |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Notes payable | ||
Debt Instrument | ||
Weighted average interest rates | 1.50% | 1.40% |
Other Long Term Debt | ||
Debt Instrument | ||
Weighted average interest rates | 2.10% | 1.70% |
Derivative Instruments and Hedging Activities - Additional Information (Details) $ in Thousands, € in Millions |
Jun. 30, 2018
USD ($)
|
Jun. 30, 2018
EUR (€)
|
Dec. 31, 2017
USD ($)
|
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 | 398,614 | $ 406,546 | |||
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 |
Schedule of Cash Flow Hedges (Details) € in Millions, $ in Millions |
Jun. 30, 2018
USD ($)
|
Jun. 30, 2018
EUR (€)
|
Dec. 31, 2017
USD ($)
|
---|---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Effect of Netting Derivative Instruments | $ (18) | $ (12) | |
Net loss included in accumulated other comprehensive income (loss) to be reclassified into interest expense within the next 12 months | $ 3 | ||
Settlement of Notional Amounts | € | € (15) |
Future Minimum Lease Commitments (Details) $ in Thousands |
Jun. 30, 2018
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year | $ 142,000 |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 248,418 |
Operating Leases, Future Minimum Payments, Due in Two Years | 206,988 |
Operating Leases, Future Minimum Payments, Due in Three Years | 161,302 |
Operating Leases, Future Minimum Payments, Due in Four Years | 128,298 |
Operating Leases, Future Minimum Payments, Due in Five Years | 107,904 |
Thereafter | 611,801 |
Future Minimum Lease Payments | $ 1,606,711 |
Schedule of Capital Expenditures by Reportable Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Segment Reporting Information | ||||
Capital Expenditures | $ 53,232 | $ 47,147 | $ 115,421 | $ 91,545 |
North America | ||||
Segment Reporting Information | ||||
Capital Expenditures | 29,206 | 22,153 | 58,868 | 38,913 |
Europe | ||||
Segment Reporting Information | ||||
Capital Expenditures | 16,863 | 22,676 | 45,678 | 43,134 |
Specialty | ||||
Segment Reporting Information | ||||
Capital Expenditures | 7,163 | 2,318 | 10,875 | 5,900 |
Discontinued Operations [Member] | ||||
Segment Reporting Information | ||||
Capital Expenditures | $ 0 | $ 0 | $ 0 | $ 3,598 |
Schedule of Assets by Reportable Segment (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Segment Reporting Information | |||
Receivables, net | $ 1,301,514 | $ 1,065,617 | $ 1,027,106 |
Inventories | 2,718,158 | 2,380,783 | |
Property, plant and equipment, net | 1,188,464 | 913,089 | |
Equity method investments | 202,653 | 208,404 | |
Other unallocated assets | 6,137,842 | 4,837,490 | |
Total assets | 11,548,631 | 9,366,872 | |
North America | |||
Segment Reporting Information | |||
Receivables, net | 443,651 | 379,666 | |
Inventories | 1,068,146 | 1,076,393 | |
Property, plant and equipment, net | 548,981 | 537,286 | |
Equity method investments | 336 | 336 | |
Europe | |||
Segment Reporting Information | |||
Receivables, net | 716,609 | 555,372 | |
Inventories | 1,296,608 | 964,068 | |
Property, plant and equipment, net | 553,448 | 293,539 | |
Equity method investments | 202,317 | 208,068 | |
Specialty | |||
Segment Reporting Information | |||
Receivables, net | 141,254 | 92,068 | |
Inventories | 353,404 | 340,322 | |
Property, plant and equipment, net | $ 86,035 | $ 82,264 |
Segment and Geographic Information Schedule of Revenue by Geographic Area (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Revenues from External Customers and Long-Lived Assets | ||||
Revenue | $ 3,030,751 | $ 2,458,411 | $ 5,751,515 | $ 4,801,254 |
UNITED STATES | ||||
Revenues from External Customers and Long-Lived Assets | ||||
Revenue | 1,621,343 | 1,456,065 | 3,181,370 | 2,873,105 |
UNITED KINGDOM | ||||
Revenues from External Customers and Long-Lived Assets | ||||
Revenue | 454,689 | 390,022 | 885,681 | 772,674 |
Other countries | ||||
Revenues from External Customers and Long-Lived Assets | ||||
Revenue | $ 954,719 | $ 612,324 | $ 1,684,464 | $ 1,155,475 |
Schedule of Tangible Long-Lived Assets by Geographic Area (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Revenues from External Customers and Long-Lived Assets | ||
Long-lived Assets | $ 1,188,464 | $ 913,089 |
UNITED STATES | ||
Revenues from External Customers and Long-Lived Assets | ||
Long-lived Assets | 599,515 | 583,236 |
UNITED KINGDOM | ||
Revenues from External Customers and Long-Lived Assets | ||
Long-lived Assets | 175,782 | 178,021 |
Other countries | ||
Revenues from External Customers and Long-Lived Assets | ||
Long-lived Assets | 201,034 | 151,791 |
GERMANY | ||
Revenues from External Customers and Long-Lived Assets | ||
Long-lived Assets | $ 212,133 | $ 41 |
Condensed Consolidating Statements of Comprehensive Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | $ 157,866 | $ 150,914 | $ 310,629 | $ 287,192 |
Less: net income attributable to noncontrolling interest | 859 | 0 | 662 | 0 |
Net income attributable to LKQ stockholders | 157,007 | 150,914 | 309,967 | 287,192 |
Other comprehensive income (loss): | ||||
Foreign currency translation, net of tax | (105,164) | 93,597 | (56,679) | 115,176 |
Net change in unrealized gains/losses on cash flow hedges, net of tax | 2,406 | (930) | 5,660 | 2,233 |
Net change in unrealized gains/losses on pension plans, net of tax | (807) | (862) | (1,428) | (3,903) |
Net change in other comprehensive loss from unconsolidated subsidiaries | 2,122 | (439) | 1,517 | (601) |
Other comprehensive (loss) income | (101,443) | 91,366 | (50,930) | 112,905 |
Comprehensive income | 56,423 | 242,280 | 259,699 | 400,097 |
Less: comprehensive income attributable to noncontrolling interest | 859 | 662 | ||
Comprehensive income (loss) attributable to LKQ stockholders | 55,564 | 242,280 | 259,037 | 400,097 |
Parent | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 157,007 | 309,967 | ||
Less: net income attributable to noncontrolling interest | 0 | 0 | ||
Net income attributable to LKQ stockholders | 157,007 | 150,914 | 309,967 | 287,192 |
Other comprehensive income (loss): | ||||
Foreign currency translation, net of tax | (105,164) | 93,597 | (56,679) | 115,176 |
Net change in unrealized gains/losses on cash flow hedges, net of tax | 2,406 | (930) | 5,660 | 2,233 |
Net change in unrealized gains/losses on pension plans, net of tax | (807) | (862) | 1,428 | 3,903 |
Net change in other comprehensive loss from unconsolidated subsidiaries | 2,122 | (439) | 1,517 | (601) |
Other comprehensive (loss) income | (101,443) | 91,366 | (50,930) | 112,905 |
Comprehensive income | 55,564 | 259,037 | ||
Comprehensive income (loss) attributable to LKQ stockholders | 55,564 | 242,280 | 259,037 | 400,097 |
Guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 142,059 | 277,497 | ||
Less: net income attributable to noncontrolling interest | 0 | 0 | ||
Net income attributable to LKQ stockholders | 142,059 | 126,873 | 277,497 | 235,318 |
Other comprehensive income (loss): | ||||
Foreign currency translation, net of tax | (2,303) | 10,097 | (4,486) | 13,975 |
Net change in unrealized gains/losses on cash flow hedges, net of tax | 0 | 0 | 0 | (133) |
Net change in unrealized gains/losses on pension plans, net of tax | (864) | (448) | 1,485 | 3,253 |
Net change in other comprehensive loss from unconsolidated subsidiaries | 0 | 0 | 0 | 0 |
Other comprehensive (loss) income | (3,167) | 9,649 | (5,971) | 10,589 |
Comprehensive income | 138,892 | 271,526 | ||
Comprehensive income (loss) attributable to LKQ stockholders | 138,892 | 136,522 | 271,526 | 245,907 |
Non-Guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 28,734 | 58,017 | ||
Less: net income attributable to noncontrolling interest | 859 | 662 | ||
Net income attributable to LKQ stockholders | 27,875 | 41,983 | 57,355 | 89,436 |
Other comprehensive income (loss): | ||||
Foreign currency translation, net of tax | (106,610) | 92,903 | (57,555) | 114,035 |
Net change in unrealized gains/losses on cash flow hedges, net of tax | 0 | 0 | 0 | 0 |
Net change in unrealized gains/losses on pension plans, net of tax | 57 | (414) | (57) | 650 |
Net change in other comprehensive loss from unconsolidated subsidiaries | 2,122 | (439) | 1,517 | (601) |
Other comprehensive (loss) income | (104,431) | 92,050 | (55,981) | 112,784 |
Comprehensive income | (75,697) | 2,036 | ||
Less: comprehensive income attributable to noncontrolling interest | 859 | 662 | ||
Comprehensive income (loss) attributable to LKQ stockholders | (76,556) | 134,033 | 1,374 | 202,220 |
Eliminations | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | (169,934) | (334,852) | ||
Less: net income attributable to noncontrolling interest | 0 | 0 | ||
Net income attributable to LKQ stockholders | (169,934) | (168,856) | (334,852) | (324,754) |
Other comprehensive income (loss): | ||||
Foreign currency translation, net of tax | 108,913 | (103,000) | 62,041 | (128,010) |
Net change in unrealized gains/losses on cash flow hedges, net of tax | 0 | 0 | 0 | 133 |
Net change in unrealized gains/losses on pension plans, net of tax | 807 | 862 | (1,428) | (3,903) |
Net change in other comprehensive loss from unconsolidated subsidiaries | (2,122) | 439 | (1,517) | 601 |
Other comprehensive (loss) income | 107,598 | (101,699) | 61,952 | (123,373) |
Comprehensive income | (62,336) | (272,900) | ||
Comprehensive income (loss) attributable to LKQ stockholders | $ (62,336) | $ (270,555) | $ (272,900) | $ (448,127) |
Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
Jun. 30, 2017 |
---|---|---|---|---|
Current assets: | ||||
Cash and cash equivalents | $ 345,202 | $ 279,766 | $ 303,544 | |
Receivables, net | 1,301,514 | $ 1,065,617 | 1,027,106 | |
Intercompany receivables, net | 0 | 0 | ||
Inventories | 2,718,158 | 2,380,783 | ||
Prepaid expenses and other current assets | 228,732 | 178,987 | 134,479 | |
Total current assets | 4,593,606 | 3,822,134 | ||
Property, plant and equipment, net | 1,188,464 | 913,089 | ||
Intangible assets: | ||||
Goodwill | 4,421,976 | 3,536,511 | ||
Other intangibles, net | 973,031 | 743,769 | ||
Investment in subsidiaries | 0 | 0 | ||
Intercompany notes receivable | 0 | 0 | ||
Equity method investments | 202,653 | 208,404 | ||
Other assets | 168,901 | 142,965 | ||
Total assets | 11,548,631 | 9,366,872 | ||
Current liabilities: | ||||
Accounts payable | 981,643 | 788,613 | ||
Intercompany payables, net | 0 | 0 | ||
Accrued expenses: | ||||
Accrued payroll-related liabilities | 163,294 | 143,424 | ||
Other accrued expenses | 312,702 | 218,600 | ||
Refund liability | 103,694 | $ 83,019 | 0 | |
Other current liabilities | 49,603 | 45,727 | ||
Current portion of long-term obligations | 177,372 | 126,360 | ||
Total current liabilities | 1,788,308 | 1,322,724 | ||
Long-term obligations, excluding current portion | 4,261,176 | 3,277,620 | ||
Intercompany notes payable | 0 | 0 | ||
Deferred income taxes | 332,602 | 252,359 | ||
Other noncurrent liabilities | 389,570 | 307,516 | ||
Total Company stockholders' equity | 4,719,472 | 4,198,169 | ||
Noncontrolling interest | 57,503 | 8,484 | ||
Total stockholders' equity | 4,776,975 | 4,206,653 | ||
Total liabilities and stockholders’ equity | 11,548,631 | 9,366,872 | ||
Parent | ||||
Current assets: | ||||
Cash and cash equivalents | 33,859 | 34,360 | 27,445 | |
Receivables, net | 65 | 0 | ||
Intercompany receivables, net | 6,946 | 2,669 | ||
Inventories | 0 | 0 | ||
Prepaid expenses and other current assets | 32,457 | 34,136 | ||
Total current assets | 73,327 | 71,165 | ||
Property, plant and equipment, net | 979 | 910 | ||
Intangible assets: | ||||
Goodwill | 0 | 0 | ||
Other intangibles, net | 0 | 0 | ||
Investment in subsidiaries | 5,573,396 | 5,952,687 | ||
Intercompany notes receivable | 1,094,619 | 1,156,550 | ||
Equity method investments | 0 | 0 | ||
Other assets | 86,030 | 70,590 | ||
Total assets | 6,828,351 | 7,251,902 | ||
Current liabilities: | ||||
Accounts payable | 15,084 | 5,742 | ||
Intercompany payables, net | 0 | 0 | ||
Accrued expenses: | ||||
Accrued payroll-related liabilities | 6,143 | 9,448 | ||
Other accrued expenses | 6,163 | 5,219 | ||
Refund liability | 0 | |||
Other current liabilities | 282 | 282 | ||
Current portion of long-term obligations | 24,886 | 16,468 | ||
Total current liabilities | 52,558 | 37,159 | ||
Long-term obligations, excluding current portion | 1,891,254 | 2,095,826 | ||
Intercompany notes payable | 0 | 750,000 | ||
Deferred income taxes | 12,251 | 12,402 | ||
Other noncurrent liabilities | 152,816 | 158,346 | ||
Total Company stockholders' equity | 4,719,472 | 4,198,169 | ||
Total stockholders' equity | 4,719,472 | 4,198,169 | ||
Total liabilities and stockholders’ equity | 6,828,351 | 7,251,902 | ||
Guarantors | ||||
Current assets: | ||||
Cash and cash equivalents | 38,302 | 35,131 | 45,865 | |
Receivables, net | 380,076 | 290,958 | ||
Intercompany receivables, net | 0 | 3,010 | ||
Inventories | 1,337,934 | 1,334,766 | ||
Prepaid expenses and other current assets | 95,198 | 44,849 | ||
Total current assets | 1,851,510 | 1,708,714 | ||
Property, plant and equipment, net | 578,952 | 563,262 | ||
Intangible assets: | ||||
Goodwill | 2,005,253 | 2,010,209 | ||
Other intangibles, net | 284,460 | 291,036 | ||
Investment in subsidiaries | 108,485 | 102,931 | ||
Intercompany notes receivable | 26,716 | 782,638 | ||
Equity method investments | 336 | 336 | ||
Other assets | 37,286 | 33,597 | ||
Total assets | 4,892,998 | 5,492,723 | ||
Current liabilities: | ||||
Accounts payable | 342,529 | 340,951 | ||
Intercompany payables, net | 28,589 | 230 | ||
Accrued expenses: | ||||
Accrued payroll-related liabilities | 57,909 | 65,811 | ||
Other accrued expenses | 99,766 | 95,900 | ||
Refund liability | 53,660 | |||
Other current liabilities | 19,050 | 27,066 | ||
Current portion of long-term obligations | 1,561 | 1,912 | ||
Total current liabilities | 603,064 | 531,870 | ||
Long-term obligations, excluding current portion | 8,012 | 7,372 | ||
Intercompany notes payable | 637,495 | 677,708 | ||
Deferred income taxes | 115,736 | 116,021 | ||
Other noncurrent liabilities | 106,007 | 101,189 | ||
Total Company stockholders' equity | 3,422,684 | 4,058,563 | ||
Total stockholders' equity | 3,422,684 | 4,058,563 | ||
Total liabilities and stockholders’ equity | 4,892,998 | 5,492,723 | ||
Non-Guarantors | ||||
Current assets: | ||||
Cash and cash equivalents | 273,041 | 210,275 | 230,234 | |
Receivables, net | 921,373 | 736,148 | ||
Intercompany receivables, net | 28,589 | 230 | ||
Inventories | 1,380,224 | 1,046,017 | ||
Prepaid expenses and other current assets | 101,077 | 55,494 | ||
Total current assets | 2,704,304 | 2,048,164 | ||
Property, plant and equipment, net | 608,533 | 348,917 | ||
Intangible assets: | ||||
Goodwill | 2,416,723 | 1,526,302 | ||
Other intangibles, net | 688,571 | 452,733 | ||
Investment in subsidiaries | 0 | 0 | ||
Intercompany notes receivable | 0 | 0 | ||
Equity method investments | 202,317 | 208,068 | ||
Other assets | 45,585 | 38,778 | ||
Total assets | 6,666,033 | 4,622,962 | ||
Current liabilities: | ||||
Accounts payable | 624,030 | 441,920 | ||
Intercompany payables, net | 6,946 | 5,679 | ||
Accrued expenses: | ||||
Accrued payroll-related liabilities | 99,242 | 68,165 | ||
Other accrued expenses | 206,773 | 117,481 | ||
Refund liability | 50,034 | |||
Other current liabilities | 30,271 | 18,379 | ||
Current portion of long-term obligations | 150,925 | 107,980 | ||
Total current liabilities | 1,168,221 | 759,604 | ||
Long-term obligations, excluding current portion | 2,361,910 | 1,174,422 | ||
Intercompany notes payable | 483,840 | 511,480 | ||
Deferred income taxes | 204,615 | 123,936 | ||
Other noncurrent liabilities | 130,747 | 47,981 | ||
Total Company stockholders' equity | 2,259,197 | 1,997,055 | ||
Noncontrolling interest | 57,503 | 8,484 | ||
Total stockholders' equity | 2,316,700 | 2,005,539 | ||
Total liabilities and stockholders’ equity | 6,666,033 | 4,622,962 | ||
Eliminations | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | |
Receivables, net | 0 | 0 | ||
Intercompany receivables, net | (35,535) | (5,909) | ||
Inventories | 0 | 0 | ||
Prepaid expenses and other current assets | 0 | 0 | ||
Total current assets | (35,535) | (5,909) | ||
Property, plant and equipment, net | 0 | 0 | ||
Intangible assets: | ||||
Goodwill | 0 | 0 | ||
Other intangibles, net | 0 | 0 | ||
Investment in subsidiaries | (5,681,881) | (6,055,618) | ||
Intercompany notes receivable | (1,121,335) | (1,939,188) | ||
Equity method investments | 0 | 0 | ||
Other assets | 0 | 0 | ||
Total assets | (6,838,751) | (8,000,715) | ||
Current liabilities: | ||||
Accounts payable | 0 | 0 | ||
Intercompany payables, net | (35,535) | (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 | (35,535) | (5,909) | ||
Long-term obligations, excluding current portion | 0 | 0 | ||
Intercompany notes payable | (1,121,335) | (1,939,188) | ||
Deferred income taxes | 0 | 0 | ||
Other noncurrent liabilities | 0 | 0 | ||
Total Company stockholders' equity | (5,681,881) | (6,055,618) | ||
Total stockholders' equity | (5,681,881) | (6,055,618) | ||
Total liabilities and stockholders’ equity | $ (6,838,751) | $ (8,000,715) |
Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net cash provided by operating activities | $ 328,669 | $ 362,097 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Purchases of property, plant and equipment | $ (53,232) | $ (47,147) | (115,421) | (91,545) | ||
Investment and intercompany note activity with subsidiaries | 0 | 0 | ||||
Acquisitions, net of cash acquired | (1,135,970) | (100,728) | $ (513,088) | |||
Proceeds from Divestiture of Businesses, Net of Cash Divested | 301,297 | |||||
Payments of deferred purchase price on receivables securitization | 0 | 0 | ||||
Other investing activities, net | 2,174 | 4,712 | ||||
Net cash (used in) provided by investing activities | (1,249,217) | 113,736 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Proceeds from exercise of stock options | 2,922 | 5,151 | ||||
Taxes paid related to net share settlements of stock-based compensation awards | (3,834) | (3,955) | ||||
Debt issuance costs | (16,759) | |||||
Proceeds from issuance of Euro Notes (2026/28) | 1,232,100 | |||||
Borrowings under revolving credit facilities | 613,658 | 162,794 | ||||
Repayments under revolving credit facilities | (766,597) | (585,454) | ||||
Repayments under term loans | (8,810) | (18,590) | ||||
Borrowings under receivables securitization facility | 150 | |||||
(Repayments) borrowings of other debt, net | (2,444) | (19,591) | ||||
Payments of other obligations | (2,079) | |||||
Other financing activities, net | 4,107 | 4,316 | ||||
Investment and intercompany note activity with parent | 0 | 0 | ||||
Dividends | 0 | 0 | ||||
Net cash provided by (used in) financing activities | 1,054,343 | (423,076) | ||||
Effect of exchange rate changes on cash and cash equivalents | (68,359) | 16,271 | ||||
Net increase (decrease) in cash and equivalents | 65,436 | 69,028 | ||||
Cash and cash equivalents of continuing operations, beginning of period | 279,766 | $ 227,400 | ||||
Add: Cash and cash equivalents of discontinued operations, beginning of period | 7,116 | 7,116 | ||||
Cash and cash equivalents of continuing and discontinued operations, beginning of period | 345,202 | 303,544 | 345,202 | 303,544 | 279,766 | 234,516 |
Cash and cash equivalents, end of period | 345,202 | 303,544 | 345,202 | 303,544 | 279,766 | |
Repayments under receivables securitization facility | (5,000) | |||||
Parent | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net cash provided by operating activities | 149,253 | 156,127 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Purchases of property, plant and equipment | (260) | 64 | ||||
Investment and intercompany note activity with subsidiaries | 48,339 | (276,377) | ||||
Acquisitions, net of cash acquired | 0 | 0 | ||||
Proceeds from Divestiture of Businesses, Net of Cash Divested | 0 | |||||
Payments of deferred purchase price on receivables securitization | 0 | 0 | ||||
Other investing activities, net | (887) | 0 | ||||
Net cash (used in) provided by investing activities | 48,966 | 276,313 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Proceeds from exercise of stock options | 2,922 | 5,151 | ||||
Taxes paid related to net share settlements of stock-based compensation awards | (3,834) | 3,955 | ||||
Debt issuance costs | (682) | |||||
Borrowings under revolving credit facilities | 264,000 | 97,000 | ||||
Repayments under revolving credit facilities | (451,931) | 515,931 | ||||
Repayments under term loans | (8,810) | 18,590 | ||||
Borrowings under receivables securitization facility | 0 | |||||
(Repayments) borrowings of other debt, net | (385) | 1,700 | ||||
Payments of other obligations | 0 | |||||
Other financing activities, net | 0 | |||||
Investment and intercompany note activity with parent | 0 | 0 | ||||
Dividends | 0 | 0 | ||||
Net cash provided by (used in) financing activities | (198,720) | (438,025) | ||||
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | ||||
Net increase (decrease) in cash and equivalents | (501) | (5,585) | ||||
Cash and cash equivalents of continuing operations, beginning of period | 34,360 | 33,030 | ||||
Cash and cash equivalents of continuing and discontinued operations, beginning of period | 33,030 | |||||
Cash and cash equivalents, end of period | 33,859 | 27,445 | 33,859 | 27,445 | 34,360 | |
Repayments under receivables securitization facility | 0 | |||||
Guarantors | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net cash provided by operating activities | 244,304 | 284,227 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Purchases of property, plant and equipment | (62,744) | 41,718 | ||||
Investment and intercompany note activity with subsidiaries | 0 | 0 | ||||
Acquisitions, net of cash acquired | (2,527) | 78,121 | ||||
Proceeds from Divestiture of Businesses, Net of Cash Divested | 305,740 | |||||
Payments of deferred purchase price on receivables securitization | 14,926 | 6,362 | ||||
Other investing activities, net | (423) | (395) | ||||
Net cash (used in) provided by investing activities | (49,922) | 191,868 | ||||
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 | ||||
Borrowings under receivables securitization facility | 0 | |||||
(Repayments) borrowings of other debt, net | 289 | 1,161 | ||||
Payments of other obligations | (1,336) | |||||
Other financing activities, net | 5,000 | |||||
Investment and intercompany note activity with parent | (42,596) | (269,668) | ||||
Dividends | (148,099) | 199,095 | ||||
Net cash provided by (used in) financing activities | (190,406) | (466,260) | ||||
Effect of exchange rate changes on cash and cash equivalents | (805) | 521 | ||||
Net increase (decrease) in cash and equivalents | 3,171 | 10,356 | ||||
Cash and cash equivalents of continuing operations, beginning of period | 35,131 | 35,360 | ||||
Cash and cash equivalents of continuing and discontinued operations, beginning of period | 35,509 | |||||
Cash and cash equivalents, end of period | 38,302 | 45,865 | 38,302 | 45,865 | 35,131 | |
Repayments under receivables securitization facility | 0 | |||||
Non-Guarantors | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net cash provided by operating activities | 68,285 | 114,476 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Purchases of property, plant and equipment | (52,417) | 49,763 | ||||
Investment and intercompany note activity with subsidiaries | 0 | 0 | ||||
Acquisitions, net of cash acquired | (1,133,443) | 22,607 | ||||
Proceeds from Divestiture of Businesses, Net of Cash Divested | (4,443) | |||||
Payments of deferred purchase price on receivables securitization | 0 | 0 | ||||
Other investing activities, net | (864) | 5,107 | ||||
Net cash (used in) provided by investing activities | (1,184,996) | (71,706) | ||||
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 | (16,077) | |||||
Proceeds from issuance of Euro Notes (2026/28) | 1,232,100 | |||||
Borrowings under revolving credit facilities | 349,658 | 65,794 | ||||
Repayments under revolving credit facilities | (314,666) | 69,523 | ||||
Repayments under term loans | 0 | 0 | ||||
Borrowings under receivables securitization facility | 150 | |||||
(Repayments) borrowings of other debt, net | (2,348) | (22,452) | ||||
Payments of other obligations | (743) | |||||
Other financing activities, net | 4,107 | (684) | ||||
Investment and intercompany note activity with parent | (5,743) | (6,709) | ||||
Dividends | 0 | 0 | ||||
Net cash provided by (used in) financing activities | 1,247,031 | 5,737 | ||||
Effect of exchange rate changes on cash and cash equivalents | (67,554) | 15,750 | ||||
Net increase (decrease) in cash and equivalents | 62,766 | 64,257 | ||||
Cash and cash equivalents of continuing operations, beginning of period | 210,275 | 159,010 | ||||
Cash and cash equivalents of continuing and discontinued operations, beginning of period | 165,977 | |||||
Cash and cash equivalents, end of period | 273,041 | 230,234 | 273,041 | 230,234 | 210,275 | |
Repayments under receivables securitization facility | (5,000) | |||||
Continuing and Discontinued Operations | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Add: Cash and cash equivalents of discontinued operations, beginning of period | 7,116 | 7,116 | ||||
Continuing and Discontinued Operations | Parent | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Add: Cash and cash equivalents of discontinued operations, beginning of period | 0 | 0 | ||||
Continuing and Discontinued Operations | Guarantors | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Add: Cash and cash equivalents of discontinued operations, beginning of period | 149 | 149 | ||||
Continuing and Discontinued Operations | Non-Guarantors | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Add: Cash and cash equivalents of discontinued operations, beginning of period | 6,967 | 6,967 | ||||
Eliminations | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net cash provided by operating activities | (133,173) | (192,733) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Purchases of property, plant and equipment | 0 | 0 | ||||
Investment and intercompany note activity with subsidiaries | (48,339) | 276,377 | ||||
Acquisitions, net of cash acquired | 0 | 0 | ||||
Proceeds from Divestiture of Businesses, Net of Cash Divested | 0 | |||||
Payments of deferred purchase price on receivables securitization | (14,926) | (6,362) | ||||
Other investing activities, net | 0 | 0 | ||||
Net cash (used in) provided by investing activities | (63,265) | (282,739) | ||||
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 | ||||
Borrowings under receivables securitization facility | 0 | |||||
(Repayments) borrowings of other debt, net | 0 | 0 | ||||
Payments of other obligations | 0 | |||||
Other financing activities, net | 0 | |||||
Investment and intercompany note activity with parent | 48,339 | 276,377 | ||||
Dividends | 148,099 | (199,095) | ||||
Net cash provided by (used in) financing activities | 196,438 | 475,472 | ||||
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 | ||||
Add: Cash and cash equivalents of discontinued operations, beginning of period | 0 | 0 | ||||
Cash and cash equivalents of continuing and discontinued operations, beginning of period | $ 0 | |||||
Cash and cash equivalents, end of period | $ 0 | $ 0 | $ 0 | 0 | $ 0 | |
Repayments under receivables securitization facility | $ 0 |