|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
36-4215970
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification Number)
|
500 West Madison Street,
Suite 2800, Chicago, IL
|
|
60661
|
(Address of principal executive offices)
|
|
(Zip Code)
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Title of Each Class
|
|
Name of each exchange on which registered
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Common Stock, par value $.01 per share
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|
NASDAQ Global Select Market
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Large accelerated filer
|
x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
|
¨
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|
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|
|
•
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changes in economic and political activity in the U.S. and other countries in which we are located or do business, including the U.K. withdrawal from the European Union (also known as Brexit), and the impact of these changes on our businesses, the demand for our products and our ability to obtain financing for operations;
|
•
|
increasing competition in the automotive parts industry (including the potential competitive advantage to original equipment manufacturers ("OEMs") with "connected car" technology);
|
•
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fluctuations in the pricing of new OEM replacement products;
|
•
|
changes in the level of acceptance and promotion of alternative automotive parts by insurance companies and vehicle repairers;
|
•
|
changes to our business relationships with insurance companies or changes by insurance companies to their business practices relating to the use of our products;
|
•
|
our ability to identify sufficient acquisition candidates at reasonable prices to maintain our growth objectives;
|
•
|
our ability to integrate, realize expected synergies, and successfully operate acquired companies and any companies acquired in the future, and the risks associated with these companies;
|
•
|
the implementation of a border tax or tariff on imports and the negative impact on our business due to the amount of inventory we import;
|
•
|
restrictions or prohibitions on selling certain aftermarket products through enforcement by OEMs of intellectual property rights;
|
•
|
restrictions or prohibitions on importing certain aftermarket products by border enforcement agencies based on, among other things, intellectual property infringement claims;
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•
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variations in the number of vehicles manufactured and sold, vehicle accident rates, miles driven, and the age profile of vehicles in accidents;
|
•
|
the increase of accident avoidance systems being installed in vehicles;
|
•
|
the potential loss of sales of certain mechanical parts due to the rise of electric vehicle sales;
|
•
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fluctuations in the prices of fuel, scrap metal and other commodities;
|
•
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changes in laws or regulations affecting our business;
|
•
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higher costs and the resulting potential inability to service our customers to the extent that our suppliers decide to discontinue business relationships with us;
|
•
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price increases, interruptions or disruptions to the supply of vehicle parts from aftermarket suppliers and vehicles from salvage auctions;
|
•
|
changes in the demand for our products and the supply of our inventory due to severity of weather and seasonality of weather patterns;
|
•
|
the risks associated with operating in foreign jurisdictions, including foreign laws and economic and political instabilities;
|
•
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declines in the values of our assets;
|
•
|
additional unionization efforts, new collective bargaining agreements, and work stoppages;
|
•
|
our ability to develop and implement the operational and financial systems needed to manage our operations;
|
•
|
interruptions, outages or breaches of our operational systems, security systems, or infrastructure as a result of attacks on, or malfunctions of, our systems;
|
•
|
costs of complying with laws relating to the security of personal information;
|
•
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product liability claims by the end users of our products or claims by other parties who we have promised to indemnify for product liability matters;
|
•
|
costs associated with recalls of the products we sell;
|
•
|
potential losses of our right to operate at key locations if we are not able to negotiate lease renewals;
|
•
|
inaccuracies in the data relating to our industry published by independent sources upon which we rely;
|
•
|
currency fluctuations in the U.S. dollar, pound sterling and euro versus other currencies;
|
•
|
our ability to obtain financing on acceptable terms to finance our growth;
|
•
|
our ability to satisfy our debt obligations and to operate within the limitations imposed by financing arrangements;
|
•
|
changes to applicable U.S. and foreign tax laws, changes to interpretations of tax laws, and changes in our mix of earnings among the jurisdictions in which we operate; and
|
•
|
disruptions to the management and operations of our business and the uncertainties caused by activist investors.
|
•
|
2007 acquisition of Keystone Automotive Industries, Inc., which, at the time of acquisition, was the leading domestic distributor of aftermarket products, including collision replacement products, paint products, refurbished steel bumpers, bumper covers and alloy wheels.
|
•
|
2011 acquisition of Euro Car Parts Holdings Limited ("ECP"), a vehicle mechanical aftermarket parts distribution company operating in the United Kingdom. This acquisition served as our entry into the European automotive aftermarket business, from which we have expanded our European footprint through organic growth and subsequent acquisitions.
|
•
|
2013 acquisition of Sator Beheer B.V. ("Sator"), a vehicle mechanical aftermarket parts distribution company based in the Netherlands, with operations in the Netherlands, Belgium and Northern France. This acquisition allowed us to further expand our geographic presence into continental Europe.
|
•
|
2014 acquisition of Keystone Automotive Holdings, Inc. (“Keystone Specialty”), which expanded our product offering and increased our addressable market to include specialty vehicle aftermarket equipment and accessories.
|
•
|
2016 acquisition of Rhiag-Inter Auto Parts Italia S.r.l. (“Rhiag”), a distributor of aftermarket spare parts for passenger cars and commercial vehicles in Italy, Czech Republic, Slovakia, Switzerland, Hungary, Romania, Ukraine, Bulgaria, Poland and Spain. This acquisition expanded our geographic presence in continental Europe.
|
•
|
2018 acquisition of Stahlgruber GmbH (“Stahlgruber”), a wholesale distributor of aftermarket spare parts for passenger cars, tools, capital equipment and accessories with operations in Germany, Austria, Italy, Slovenia, and Croatia with further sales to Switzerland. This acquisition expanded our geographic presence in continental Europe and serves as an additional strategic hub for our European operations.
|
•
|
Extensive distribution network.
We have invested significant capital to develop a network of alternative and specialty vehicle parts facilities across our operating segments. Additionally, our ability to move inventory throughout our distribution networks increases the availability of our products and helps us to fill a relatively high percentage of our customers’ requests. In order to expand our distribution network, we will continue to seek to enter new markets and to improve penetration through both organic development and acquisitions. We will continue to seek opportunities to leverage the distribution network by delivering more parts through our existing network. We believe our North America segment has the largest distribution network of alternative vehicle parts and accessories for the automotive collision repair market in North America. In our Europe segment, we are implementing a similar strategy to our North America operations by establishing a Pan-European distribution network. We currently have operations in 24 different European countries, which we believe represents the broadest and largest footprint in the aftermarket industry in Europe. On a global basis, we have approximately
1,700
locations as part of our distribution network.
|
•
|
Broad product offering.
The breadth and depth of our inventory across all of our operating segments reinforces our ability to provide a “one-stop” solution for our customers’ alternative vehicle replacement, maintenance, and specialty vehicle product needs.
|
•
|
High fulfillment rates.
We manage local inventory levels to improve delivery and maximize customer service. Improving local order fulfillment rates reduces transfer costs and delivery times, and improves customer satisfaction.
|
•
|
Strong business relationships.
We have developed business relationships with key constituents, including customers, automobile insurance companies, suppliers and other industry participants in North America, Europe, and Asia.
|
•
|
Acquisitions.
The primary objective of our acquisitions is to expand our presence to new or adjacent geographic markets and to expand into other product lines and businesses that may benefit from our operating strengths, in each case with the aim of increasing the size of our addressable market. When we identify potential acquisitions, we attempt to target companies with a leading market presence, an experienced management team and workforce that provide a fit with our existing operations, and strong cash flows. After completing an acquisition, we focus on integrating the company with our existing business to provide additional value to the combined entity through cost savings and synergies, such as logistics cost synergies resulting from integration with our existing distribution network, administrative cost savings, shared procurement, and cross-selling opportunities.
|
•
|
Technology driven business processes.
We focus on technology development as a way to support our competitive advantage. We believe that we can more cost effectively leverage our data to make better business decisions than our smaller competitors.
|
•
|
Adaptation to evolving technology in the automotive industry.
We are committed to monitoring and adapting our business to the technological changes in the automotive industry. We have recently established a strategy and innovation team that will help us to be more forward-looking and to assess the potential opportunities and risks associated with several areas including, but not limited to, e-commerce, accident avoidance systems, vehicle connectivity, autonomous vehicles, electric vehicles and ride-sharing trends.
|
•
|
the key personnel of the acquired company may decide not to work for us;
|
•
|
customers of the acquired company may decide not to purchase products from us;
|
•
|
suppliers of the acquired company may decide not to sell products to us;
|
•
|
we may experience business disruptions as a result of information technology systems conversions;
|
•
|
we may experience additional financial and accounting challenges and complexities in areas such as tax planning, treasury management, and financial reporting;
|
•
|
we may be held liable for environmental, tax or other risks and liabilities as a result of our acquisitions, some of which we may not have discovered during our due diligence;
|
•
|
we may intentionally assume the liabilities of the companies we acquire, which could result in material adverse effects on our business;
|
•
|
our existing business may be disrupted or receive insufficient management attention;
|
•
|
we may not be able to realize the cost savings or other financial benefits we anticipated, either in the amount or in the time frame that we expect; and
|
•
|
we may incur debt or issue equity securities to pay for any future acquisition, the issuance of which could involve the imposition of restrictive covenants or be dilutive to our existing stockholders.
|
•
|
increase our vulnerability to adverse economic and general industry conditions, including interest rate fluctuations, because a portion of our borrowings are and will continue to be at variable rates of interest;
|
•
|
require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, which would reduce the availability of our cash flow from operations to fund working capital, capital expenditures or other general corporate purposes;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and industry;
|
•
|
place us at a disadvantage compared to competitors that may have proportionately less debt;
|
•
|
limit our ability to obtain additional debt or equity financing due to applicable financial and restrictive covenants in our debt agreements; and
|
•
|
increase our cost of borrowing.
|
•
|
incur, assume or permit to exist additional indebtedness (including guarantees thereof);
|
•
|
pay dividends or certain other distributions on our capital stock or repurchase our capital stock or prepay subordinated indebtedness;
|
•
|
incur liens on assets;
|
•
|
make certain investments or other restricted payments;
|
•
|
engage in transactions with affiliates;
|
•
|
sell certain assets or merge or consolidate with or into other companies;
|
•
|
guarantee indebtedness; and
|
•
|
alter the business we conduct.
|
•
|
was insolvent or rendered insolvent by reason of such incurrence;
|
•
|
was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital; or
|
•
|
intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature.
|
•
|
the sum of its debts, including contingent liabilities, was greater than the fair value of its assets;
|
•
|
the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or
|
•
|
it could not pay its debts as they become due.
|
ITEM 5.
|
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
12/31/2013
|
|
12/31/2014
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2017
|
|
12/31/2018
|
||||||||||||
LKQ Corporation
|
$
|
100
|
|
|
$
|
85
|
|
|
$
|
90
|
|
|
$
|
93
|
|
|
$
|
124
|
|
|
$
|
72
|
|
S&P 500 Index
|
$
|
100
|
|
|
$
|
111
|
|
|
$
|
111
|
|
|
$
|
121
|
|
|
$
|
145
|
|
|
$
|
136
|
|
Peer Group
|
$
|
100
|
|
|
$
|
131
|
|
|
$
|
144
|
|
|
$
|
162
|
|
|
$
|
156
|
|
|
$
|
195
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
|
|||||
October 1, 2018 - October 31, 2018
|
|
200
|
|
|
$
|
26.64
|
|
|
200
|
|
|
494,673
|
|
November 1, 2018 - November 30, 2018
|
|
805
|
|
|
$
|
27.87
|
|
|
805
|
|
|
472,233
|
|
December 1, 2018 - December 31, 2018
|
|
1,267
|
|
|
$
|
25.45
|
|
|
1,267
|
|
|
440,000
|
|
Total
|
|
2,272
|
|
|
|
|
2,272
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
(in thousands, except per share data)
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
|
(5)
|
||||||||||
Statements of Income Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
11,876,674
|
|
|
$
|
9,736,909
|
|
|
$
|
8,584,031
|
|
|
$
|
7,192,633
|
|
|
$
|
6,740,064
|
|
Cost of goods sold
|
7,301,817
|
|
|
5,937,286
|
|
|
5,232,328
|
|
|
4,359,104
|
|
|
4,088,151
|
|
|||||
Gross margin
|
4,574,857
|
|
|
3,799,623
|
|
|
3,351,703
|
|
|
2,833,529
|
|
|
2,651,913
|
|
|||||
Operating income
(6) (7)
|
882,241
|
|
|
844,998
|
|
|
763,398
|
|
|
704,627
|
|
|
649,868
|
|
|||||
Other expense (income):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
146,377
|
|
|
101,640
|
|
|
88,263
|
|
|
57,860
|
|
|
64,542
|
|
|||||
Other income, net
(6)
|
(7,567
|
)
|
|
(23,269
|
)
|
|
(2,146
|
)
|
|
(2,263
|
)
|
|
(2,562
|
)
|
|||||
Income from continuing operations before provision for income taxes
|
743,431
|
|
|
766,627
|
|
|
677,281
|
|
|
649,030
|
|
|
587,888
|
|
|||||
Provision for income taxes
|
191,395
|
|
|
235,560
|
|
|
220,566
|
|
|
219,703
|
|
|
204,264
|
|
|||||
Equity in (losses) earnings of unconsolidated subsidiaries
(8)
|
(64,471
|
)
|
|
5,907
|
|
|
(592
|
)
|
|
(6,104
|
)
|
|
(2,105
|
)
|
|||||
Income from continuing operations
|
487,565
|
|
|
536,974
|
|
|
456,123
|
|
|
423,223
|
|
|
381,519
|
|
|||||
Net (loss) income from discontinued operations
|
(4,397
|
)
|
|
(6,746
|
)
|
|
7,852
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
483,168
|
|
|
530,228
|
|
|
463,975
|
|
|
423,223
|
|
|
381,519
|
|
|||||
Less: net income (loss) attributable to noncontrolling interest
|
3,050
|
|
|
(3.516
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income attributable to LKQ stockholders
|
$
|
480,118
|
|
|
$
|
533,744
|
|
|
$
|
463,975
|
|
|
$
|
423,223
|
|
|
$
|
381,519
|
|
Basic earnings per share:
(9)
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations
|
$
|
1.55
|
|
|
$
|
1.74
|
|
|
$
|
1.49
|
|
|
$
|
1.39
|
|
|
$
|
1.26
|
|
Net (loss) income from discontinued operations
|
(0.01
|
)
|
|
(0.02
|
)
|
|
0.03
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
1.54
|
|
|
1.72
|
|
|
1.51
|
|
|
1.39
|
|
|
1.26
|
|
|||||
Less: net income (loss) attributable to noncontrolling interest
|
0.01
|
|
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income attributable to LKQ stockholders
|
$
|
1.53
|
|
|
$
|
1.73
|
|
|
$
|
1.51
|
|
|
$
|
1.39
|
|
|
$
|
1.26
|
|
Diluted earnings per share:
(9)
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations
|
$
|
1.54
|
|
|
$
|
1.73
|
|
|
$
|
1.47
|
|
|
$
|
1.38
|
|
|
$
|
1.25
|
|
Net (loss) income from discontinued operations
|
(0.01
|
)
|
|
(0.02
|
)
|
|
0.03
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
1.53
|
|
|
1.71
|
|
|
1.50
|
|
|
1.38
|
|
|
1.25
|
|
|||||
Less: net income (loss) attributable to noncontrolling interest
|
0.01
|
|
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income attributable to LKQ stockholders
|
$
|
1.52
|
|
|
$
|
1.72
|
|
|
$
|
1.50
|
|
|
$
|
1.38
|
|
|
$
|
1.25
|
|
Weighted average shares outstanding-basic
|
314,428
|
|
|
308,607
|
|
|
306,897
|
|
|
304,722
|
|
|
302,343
|
|
|||||
Weighted average shares outstanding-diluted
|
315,849
|
|
|
310,649
|
|
|
309,784
|
|
|
307,496
|
|
|
306,045
|
|
|
Year Ended December 31,
|
||||||||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
|
(5)
|
||||||||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
710,739
|
|
|
$
|
518,900
|
|
|
$
|
635,014
|
|
|
$
|
544,282
|
|
|
$
|
388,711
|
|
Net cash used in investing activities
|
(1,458,939
|
)
|
|
(384,595
|
)
|
|
(1,709,928
|
)
|
|
(329,993
|
)
|
|
(920,994
|
)
|
|||||
Net cash provided by (used in) financing activities
|
882,995
|
|
|
(112,567
|
)
|
|
1,225,737
|
|
|
(238,537
|
)
|
|
501,189
|
|
|||||
Capital expenditures
|
(250,027
|
)
|
|
(179,090
|
)
|
|
(207,074
|
)
|
|
(170,490
|
)
|
|
(140,950
|
)
|
|||||
Cash paid for acquisitions, net of cash acquired
|
(1,214,995
|
)
|
|
(513,088
|
)
|
|
(1,349,339
|
)
|
|
(160,517
|
)
|
|
(775,921
|
)
|
|||||
Depreciation and amortization
|
294,077
|
|
|
230,203
|
|
|
206,086
|
|
|
128,192
|
|
|
125,437
|
|
|||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
11,393,402
|
|
|
$
|
9,366,872
|
|
|
$
|
8,303,199
|
|
|
$
|
5,647,837
|
|
|
$
|
5,475,739
|
|
Working capital
(10)
|
2,830,601
|
|
|
2,499,410
|
|
|
2,045,273
|
|
|
1,588,742
|
|
|
1,491,169
|
|
|||||
Long-term obligations, including current portion
|
4,310,500
|
|
|
3,403,980
|
|
|
3,341,771
|
|
|
1,584,702
|
|
|
1,846,148
|
|
|||||
Total Company stockholders' equity
|
4,782,298
|
|
|
4,198,169
|
|
|
3,442,949
|
|
|
3,114,682
|
|
|
2,720,657
|
|
(1)
|
Includes the results o
f operations of Stahlgruber, from its acquisition effective May 30, 2018, and 13 other businesses from their respective acquisition dates in 2018.
|
(2)
|
I
ncludes the results of operations of
26
businesses from their respective acquisition dates in 2017.
|
(3)
|
Includes the results o
f operations of: (i) Rhiag, from its acquisition effective March 18, 2016; (ii) the aftermarket automotive glass distribution business of Pittsburgh Glass Works LLC ("PGW autoglass"), from its acquisition effective April 21, 2016; and (iii) 13 other businesses from their respective acquisition dates in 2016.
|
(4)
|
Includes the results of operations of 18 businesses from their respective acquisition dates in 2015.
|
(5)
|
Includes the results of operations of Keystone Specialty from its acquisition effective January 3, 2014 and
22
other businesses from their respective acquisition dates in 2014.
|
(6)
|
Certain
amounts for 2017 have been recast to reflect the 2018 adoption of ASU 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." See "
Other Recently Adopted Accounting Pronouncements" within
Note 4, "Summary of Significant Accounting Policies
" for further information.
|
(7)
|
Reflects $33 million goodwill impairment charge on the Aviation reporting unit.
See
Note 4, "Summary of Significant Accounting Policies
," for further information.
|
(8)
|
Reflects $71 million impairment charge related to the Mekonomen equity investment.
See
Note 4, "Summary of Significant Accounting Policies
," for further information.
|
(9)
|
The sum of the individual earnings per share amounts may not equal the total due to rounding.
|
(10)
|
Working capital amounts represent current assets less current liabilities, excluding assets and liabilities of discontinued operations. As of its acquisition date, Stahlgruber added $240 million in working capital.
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Year Ended December 31,
|
|
|
||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Restructuring expenses
|
$
|
14,313
|
|
(1)
|
$
|
5,012
|
|
(2)
|
$
|
9,301
|
|
Acquisition related expenses
|
18,115
|
|
(3)
|
14,660
|
|
(4)
|
3,455
|
|
|||
Total restructuring and acquisition related expenses
|
$
|
32,428
|
|
|
$
|
19,672
|
|
|
$
|
12,756
|
|
(1)
|
Restructuring expenses for the
year ended
December 31, 2018
primarily consisted of
$10 million
related to the integration of our acquisition of Andrew Page and
$3 million
related to our Specialty segment. These integration activities included the closure of duplicate facilities and termination of employees.
|
(2)
|
Restructuring expenses for the
year ended
December 31, 2017
included
$2 million
,
$2 million
, and
$1 million
related to the integration of acquired businesses in our North America, Specialty, and Europe segments, respectively. These integration activities included the closure of duplicate facilities and termination of employees.
|
(3)
|
Acquisition related expenses for the
year ended
December 31, 2018
primarily consisted of
$16 million
of costs for our acquisition of Stahlgruber. The remaining costs related to other completed acquisitions and acquisitions that were pending as of
December 31, 2018
.
|
(4)
|
Acquisition related expenses for the
year ended
December 31, 2017
included
$5 million
of costs for our acquisition of Andrew Page, primarily related to legal and other professional fees associated with the CMA review. The remaining acquisition related costs for the
year ended
December 31, 2017
consisted of external costs for completed acquisitions; pending acquisitions as of
December 31, 2017
, including
$4 million
related to Stahlgruber; and potential acquisitions that were terminated.
|
|
Year Ended December 31,
|
|
|
|
||||||||
|
2018
|
|
2017
|
|
Change
|
|
||||||
Depreciation
|
$
|
137,632
|
|
|
$
|
117,859
|
|
|
$
|
19,773
|
|
(1)
|
Amortization
|
136,581
|
|
|
101,687
|
|
|
34,894
|
|
(2)
|
|||
Total depreciation and amortization
|
$
|
274,213
|
|
|
$
|
219,546
|
|
|
$
|
54,667
|
|
|
(1)
|
The increase in depreciation expense primarily reflected an increase of
$17 million
in our Europe segment, composed of (i)
$10 million
of incremental depreciation expense from our acquisition of Stahlgruber, (ii) a
$3 million
increase due to a measurement period adjustment recorded in the
year ended
December 31, 2017
related to our valuation procedures for our acquisition of Rhiag that reduced depreciation expense, and (iii)
$3 million
of incremental depreciation expense from our acquisitions of aftermarket parts distribution businesses in Belgium and Poland in the third quarter of 2017. Depreciation expense also increased by
$2 million
related to the impact of foreign currency translation, primarily due to increases in the pound sterling, euro, and Czech koruna exchange rates during 2018 compared to the prior year.
|
(2)
|
The increase in amortization expense primarily reflected (i) an increase of
$37 million
from our acquisition of Stahlgruber, and (ii) an increase of
$4 million
from our acquisition of Warn, partially offset by (iii) a
$7 million
decrease due to our 2016 acquisitions of Rhiag and PGW, which had higher amortization expense in 2017 compared to 2018 as a result of the accelerated amortization on the customer relationship intangible assets.
|
(1)
|
Additional interest primarily related to (i) a
$38 million
increase resulting from higher outstanding debt during 2018 compared to the prior year (including the borrowings under our Euro Notes (2026/28)), (ii) a
$5 million
increase from higher interest rates on borrowings under our senior secured credit agreement compared to the prior year, and (iii) a
$2 million
increase from foreign currency translation, primarily related to an increase in the euro exchange rate during the
year ended
December 31, 2018
compared to the
year ended
December 31, 2017
.
|
(2)
|
Over the past three years, we have completed several European acquisitions that resulted in gains on bargain purchase. In 2018, newly recorded gains and adjustments related to preliminary gains decreased relative to the prior year amount.
|
(3)
|
The increase in other expense primarily consisted of (i) a $6 million increase in foreign currency losses, (ii) a
$5 million
fair value loss recorded during 2018 related to a preferential rights issue to subscribe for new shares at a discounted share price for our equity method investment in Mekonomen; see
Note 4, "Summary of Significant Accounting Policies
" to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further information, and (iii) a non-recurring $4 million gain recorded in 2017 due to a decrease in the fair value of contingent consideration liabilities.
|
|
Year Ended December 31,
|
|
||||||
|
2018
|
|
2017
|
|
||||
Base provision for income taxes
|
$
|
202,511
|
|
|
$
|
266,403
|
|
(1)
|
Excess tax benefits from stock-based payments
|
(4,859
|
)
|
|
(8,000
|
)
|
(2)
|
||
U.S. tax reform deferred tax rate adjustment
|
—
|
|
|
(72,988
|
)
|
(3)
|
||
U.S. tax reform transition tax on foreign earnings
|
(9,581
|
)
|
|
50,800
|
|
(4)
|
||
Other discrete items
|
3,324
|
|
|
(655
|
)
|
|
||
Provision for income taxes
|
$
|
191,395
|
|
|
$
|
235,560
|
|
|
(1)
|
Excluding the impact of discrete items, prior to the enactment of the Tax Act our recurring annual effective tax rate was approximately 35%. Largely due to the reduction in the U.S. federal tax rate to 21%, we now estimate the recurring rate to be approximately 27%. We continue to analyze the highly complex and interdependent 2017 U.S. tax legislation. Adjustments to that legislation, as well as regulations implemented by the U.S. Treasury Department, which could have an impact on our effective tax rate.
|
(2)
|
Represents a discrete item for excess tax benefits received upon the exercise of stock options or vesting of RSUs.
|
(3)
|
The 2017 amount represented the provisional estimate of the revaluation of deferred tax assets and liabilities as a result of the Tax Act which reduced the U.S. federal corporate tax rate. There were no adjustments to the revaluation recorded in 2018; the accounting for this item is complete.
|
(4)
|
The 2017 amount represented the provisional estimate of the one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017 as a result of the Tax Act. In 2018, we recognized
|
|
Year Ended December 31,
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Restructuring expenses
|
$
|
5,012
|
|
(1)
|
$
|
15,782
|
|
(2)
|
$
|
(10,770
|
)
|
Acquisition related expenses
|
14,660
|
|
(3)
|
21,980
|
|
(4)
|
(7,320
|
)
|
|||
Total restructuring and acquisition related expenses
|
$
|
19,672
|
|
|
$
|
37,762
|
|
|
$
|
(18,090
|
)
|
(1)
|
Restructuring expenses for the year ended December 31, 2017 included $2 million, $2 million, and $1 million related to the integration of acquired businesses in our North America, Specialty, and Europe segments. These integration activities included the closure of duplicate facilities and termination of employees.
|
(2)
|
Restructuring expenses for the year ended December 31, 2016 included $10 million, $3 million, $2 million related to the integration of acquired businesses in our Specialty, North America and Europe segments, respectively. These integration activities included the closure of duplicate facilities and termination of employees.
|
(3)
|
Acquisition related expenses for the year ended December 31, 2017 included $5 million of costs for our acquisition of Andrew Page, primarily related to legal and other professional fees associated with the CMA review. The remaining acquisition related costs for the year ended December 31, 2017 consisted of external costs for completed acquisitions; pending acquisitions as of December 31, 2017, including $4 million related to Stahlgruber; and potential acquisitions that were terminated.
|
(4)
|
Acquisition related expenses for the year ended December 31, 2016 reflect $11 million and $4 million related to the acquisitions of Rhiag and PGW autoglass, respectively. The remaining $7 million of expense was related to other completed acquisitions and acquisitions that were pending as of December 31, 2016.
|
|
Year Ended December 31,
|
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
|
||||||
Depreciation
|
$
|
117,859
|
|
|
$
|
107,945
|
|
|
$
|
9,914
|
|
(1)
|
Amortization
|
101,687
|
|
|
83,488
|
|
|
18,199
|
|
(2)
|
|||
Total depreciation and amortization
|
$
|
219,546
|
|
|
$
|
191,433
|
|
|
$
|
28,113
|
|
|
(1)
|
The increase in depreciation expense primarily reflected increases of $4 million and $2 million for property, plant and equipment recorded for our acquisitions of Andrew Page and Rhiag, respectively. Depreciation expense increased in 2017 for Andrew Page and Rhiag primarily due to both acquisitions having a full year of results in 2017 compared to a partial year in 2016 (from acquisition dates of October 4, 2016 and March 18, 2016, respectively, through December 31, 2016). The remaining change primarily reflected increased levels of property, plant and equipment to support our organic related growth.
|
(2)
|
The increase primarily reflected incremental amortization expense of (i) $14 million related to intangibles recorded for our acquisition of Rhiag and (ii) $3 million related to intangibles recorded for acquisitions within our Benelux operations during 2017.
|
(1)
|
Additional interest primarily related to borrowings used to fund our acquisitions of Rhiag and PGW.
|
(2)
|
During the first quarter of 2016, we incurred a $24 million loss on debt extinguishment as a result of our early payment of Rhiag debt assumed as part of the acquisition, and we incurred a $3 million loss on debt extinguishment as a result of our January 2016 amendment to our senior secured credit agreement. We incurred an immaterial loss on debt extinguishment as a result of our December 2017 amendment to our senior secured credit agreement.
|
(3)
|
In March 2016, we entered into foreign currency forward contracts to acquire a total of €588 million used to fund the purchase price of the Rhiag acquisition. The rates under the foreign currency forwards were favorable to the spot rate on the date the funds were drawn to complete the acquisition, and as a result, these derivatives contracts generated a gain of $18 million.
|
(4)
|
In October 2016, we acquired Andrew Page out of receivership. We recorded a gain on bargain purchase of $8 million in the fourth quarter of 2016, as the fair value of the net assets acquired exceeded the purchase price. During the year ended December 31, 2017, we increased the gain on bargain purchase for this acquisition by $2 million as a result of changes to our estimate of the fair value of net assets acquired. We also recorded a gain on bargain purchase for another acquisition in Europe completed in the second quarter of 2017.
|
(5)
|
Interest income and other income, net was higher in 2017 primarily due to the impact of foreign currency transaction gains and losses, which had a net $6 million favorable impact compared to the prior year period. This primarily included unrealized gains and losses on foreign currency transactions and unrealized mark-to-market gains and losses on foreign currency forward contracts used to hedge the purchases of inventory in our U.K. operations. Additionally, there was (i) a $4 million gain due to a decrease in the fair value of contingent consideration liabilities, and (ii) a $2 million curtailment gain in 2017 related to our pensions. The remaining change related to miscellaneous other income.
|
|
Year Ended December 31,
|
|
||||||
|
2017
|
|
2016
|
|
||||
Base provision for income taxes
|
$
|
266,403
|
|
|
$
|
235,355
|
|
(1)
|
Excess tax benefits from stock-based payments
|
(8,000
|
)
|
|
(11,441
|
)
|
(2)
|
||
U.S. tax reform deferred tax rate adjustment
|
(72,988
|
)
|
|
—
|
|
(3)
|
||
U.S. tax reform transition tax on foreign earnings
|
50,800
|
|
|
—
|
|
(4)
|
||
Other discrete items
|
(655
|
)
|
|
(3,348
|
)
|
|
||
Provision for income taxes
|
$
|
235,560
|
|
|
$
|
220,566
|
|
|
(1)
|
Excluding the impact of discrete items, our annual effective tax rate has been close to 35% over the prior two years. We were still evaluating the impact of the Tax Act on our future U.S. tax liability, but at the time, we expected that the overall impact of the Tax Act on our effective tax rate would be a decrease in the rate from previous years.
|
(2)
|
Represents a discrete item for excess tax benefits received upon the exercise of stock options or vesting of RSUs.
|
(3)
|
Represents the provisional estimate of the revaluation of deferred tax assets and liabilities as a result of the Tax Act which reduced the U.S. federal corporate tax rate.
|
(4)
|
Represents the provisional estimate of the one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017 as a result of the Tax Act.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
% of Total Segment Revenue
|
|
2017
|
|
% of Total Segment Revenue
|
|
2016
|
|
% of Total Segment Revenue
|
|||||||||
Third Party Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
North America
|
$
|
5,181,964
|
|
|
|
|
$
|
4,798,901
|
|
|
|
|
$
|
4,443,886
|
|
|
|
|||
Europe
|
5,221,754
|
|
|
|
|
3,636,811
|
|
|
|
|
2,920,470
|
|
|
|
||||||
Specialty
|
1,472,956
|
|
|
|
|
1,301,197
|
|
|
|
|
1,219,675
|
|
|
|
||||||
Total third party revenue
|
$
|
11,876,674
|
|
|
|
|
$
|
9,736,909
|
|
|
|
|
$
|
8,584,031
|
|
|
|
|||
Total Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
North America
|
$
|
5,182,609
|
|
|
|
|
$
|
4,799,651
|
|
|
|
|
$
|
4,444,625
|
|
|
|
|||
Europe
|
5,221,754
|
|
|
|
|
3,636,811
|
|
|
|
|
2,920,470
|
|
|
|
||||||
Specialty
|
1,477,680
|
|
|
|
|
1,305,516
|
|
|
|
|
1,223,723
|
|
|
|
||||||
Eliminations
|
(5,369
|
)
|
|
|
|
(5,069
|
)
|
|
|
|
(4,787
|
)
|
|
|
||||||
Total revenue
|
$
|
11,876,674
|
|
|
|
|
$
|
9,736,909
|
|
|
|
|
$
|
8,584,031
|
|
|
|
|||
Segment EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
North America
|
$
|
660,153
|
|
|
12.7
|
%
|
|
$
|
655,275
|
|
|
13.7
|
%
|
|
$
|
589,945
|
|
|
13.3
|
%
|
Europe
|
422,721
|
|
|
8.1
|
%
|
|
319,156
|
|
|
8.8
|
%
|
|
283,608
|
|
|
9.7
|
%
|
|||
Specialty
|
168,525
|
|
|
11.4
|
%
|
|
142,159
|
|
|
10.9
|
%
|
|
131,427
|
|
|
10.7
|
%
|
|
Year Ended December 31,
|
|
Percentage Change in Revenue
|
|||||||||||||||||
North America
|
2018
|
|
2017
|
|
Organic
|
|
Acquisition
(3)
|
|
Foreign Exchange
|
|
Total Change
|
|||||||||
Parts & services revenue
|
$
|
4,558,220
|
|
|
$
|
4,278,531
|
|
|
5.7
|
%
|
(1
|
)
|
0.8
|
%
|
|
0.0
|
%
|
|
6.5
|
%
|
Other revenue
|
623,744
|
|
|
520,370
|
|
|
19.6
|
%
|
(2
|
)
|
0.3
|
%
|
|
0.0
|
%
|
|
19.9
|
%
|
||
Total third party revenue
|
$
|
5,181,964
|
|
|
$
|
4,798,901
|
|
|
7.2
|
%
|
|
0.8
|
%
|
|
0.0
|
%
|
|
8.0
|
%
|
|
Note: In the table above, the sum of the individual percentages may not equal the total due to rounding.
|
(1)
|
Organic growth in parts and services revenue was attributable to roughly equal impacts of favorable pricing and increased sales volumes in our wholesale operations. The volume increases were primarily driven by (i) incremental sales related to an agreement signed in December 2017 for the distribution of batteries, and (ii) to a lesser extent,
|
(2)
|
The
$103 million
increase in other revenue primarily related to (i) a
$64 million
increase in revenue from scrap steel and other metals primarily related to higher prices and, to a lesser extent, increased volumes, year over year, (ii) a
$24 million
increase in revenue from metals found in catalytic converters (platinum, palladium, and rhodium) primarily due to higher prices and, to a lesser extent, increased volumes, year over year, and (iii) a
$7 million
increase in core revenue primarily related to increased volumes year over year.
|
(3)
|
Acquisition related growth in 2018 reflected revenue from our acquisition of ten wholesale businesses from the beginning of 2017 up to the one-year anniversary of the acquisition dates.
|
(1)
|
The decrease in gross margin reflected unfavorable impacts of 0.3% and 0.2% from our wholesale and self service operations, respectively. The decrease in wholesale gross margin is primarily attributable to (i) a shift in our sales toward lower margin products, including batteries, compared to the prior year period, and (ii) higher car costs in our salvage operations. The decrease in self service gross margin is primarily attributable to higher car costs as a result of increases in scrap prices in the first half of the year. While higher car costs can produce more gross margin dollars, these cars tend to have a dilutive effect on the gross margin percentage as parts revenue will typically increase at a lesser rate than the rise in average car cost. Self service gross margin was negatively impacted in the second half of 2018 due to declining scrap steel prices as the higher cost vehicles were scrapped.
|
(2)
|
The increase in segment operating expenses as a percentage of revenue primarily reflected (i) a 0.3% increase in vehicle expenses primarily due to increased vehicle rental leases to handle incremental volumes as well as increases in fuel prices, and (ii) a 0.2% increase in freight expenses due to a higher use of, and increased prices of, third party freight, partially offset by (iii) several individually immaterial factors that had a favorable impact of 0.1% in the aggregate.
|
(3)
|
The increase in other expense, net and net income (loss) attributable to noncontrolling interest was primarily due to several individually immaterial factors that had an unfavorable impact of 0.2% in the aggregate.
|
|
Year Ended December 31,
|
|
Percentage Change in Revenue
|
||||||||||||||||
Europe
|
2018
|
|
2017
|
|
Organic
(1)
|
|
Acquisition
(2)
|
|
Foreign Exchange
(3)
|
|
Total Change
|
||||||||
Parts & services revenue
|
$
|
5,202,231
|
|
|
$
|
3,628,906
|
|
|
2.9
|
%
|
|
36.7
|
%
|
|
3.8
|
%
|
|
43.4
|
%
|
Other revenue
|
19,523
|
|
|
7,905
|
|
|
74.2
|
%
|
|
72.8
|
%
|
|
(0.0
|
)%
|
|
147.0
|
%
|
||
Total third party revenue
|
$
|
5,221,754
|
|
|
$
|
3,636,811
|
|
|
3.1
|
%
|
|
36.7
|
%
|
|
3.8
|
%
|
|
43.6
|
%
|
Note: In the table above, the sum of the individual percentages may not equal the total due to rounding.
|
(1)
|
Parts and services revenue growth for the year varied by geography. In our Eastern European operations, revenue grew in the high single digits due to both existing and new branches (we added 68 since the beginning of 2017). Our Western European operations experienced slight declines to mid-single digit growth for the year due primarily to higher volumes in the second quarter of 2018 (partly attributable to the timing of the Easter holiday) offsetting softness in the remainder of the year. While we expect to achieve lower organic growth rates in these more mature markets than in Eastern Europe, our revenue growth in 2018 was negatively impacted by competitor actions, economic conditions in certain countries, such as Italy, and warmer than normal weather conditions. Organic growth in parts and services revenue for our Europe segment on a per day basis was 2.6% as there was one additional selling day in 2018 compared to 2017.
|
(2)
|
Acquisition related growth for the
year ended
December 31, 2018
included
$1.1 billion
, or
30.2%
,
$79 million
, or
2.2%
, and
$72 million
, or
2.0%
, from our acquisitions of Stahlgruber and aftermarket parts distribution businesses in Poland and Belgium, respectively. The remainder of our acquired revenue growth included revenue from our acquisitions of 20 wholesale businesses in our Europe segment since the beginning of 2017 through the one-year anniversary of the acquisitions.
|
(3)
|
Compared to the prior year, exchange rates increased our revenue growth by
$137 million
, or
3.8%
, primarily due to the weaker U.S. dollar against the pound sterling, euro and Czech koruna during 2018 relative to 2017.
|
(1)
|
The decline in gross margin was due to (i) a 0.6% decrease related to our U.K. operations primarily as a result of
incremental costs related to the national distribution facility, principally due to replenishment issues and related stock availability in the first quarter at our national distribution center and branches that led to some temporary service issues and increased labor costs to manually stock and receive product, and higher customer incentives, partially offset by increased supplier rebates, and
(ii) a 0.3% net decrease due to mix related to our acquisition of an aftermarket parts
|
(2)
|
The increase in segment operating expenses as a percentage of revenue was primarily due to a 0.4% increase in personnel expenses principally as a result of (i) negative leverage effect, as personnel costs grew at a greater rate than organic revenue, and (ii) increased headcount in our Eastern European operations as new branches were opened, as well as wage inflation due to low unemployment in the region. Additionally, a 0.2% increase in professional fees, primarily due to new information technology projects and other system enhancements, added to the unfavorable change in segment operating expenses. The unfavorable effects were partially offset by a 0.2% decrease in freight expenses due to a decreased use of third party freight in our U.K. operations.
|
|
Year Ended December 31,
|
|
Percentage Change in Revenue
|
||||||||||||||||
Specialty
|
2018
|
|
2017
|
|
Organic
(1)
|
|
Acquisition
(2)
|
|
Foreign Exchange
|
|
Total Change
|
||||||||
Parts & services revenue
|
$
|
1,472,956
|
|
|
$
|
1,301,197
|
|
|
4.6
|
%
|
|
8.6
|
%
|
|
0.0
|
%
|
|
13.2
|
%
|
Other revenue
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
||
Total third party revenue
|
$
|
1,472,956
|
|
|
$
|
1,301,197
|
|
|
4.6
|
%
|
|
8.6
|
%
|
|
0.0
|
%
|
|
13.2
|
%
|
Note: In the table above, the sum of the individual percentages may not equal the total due to rounding.
|
(1)
|
Organic growth in parts and services revenue was primarily due to higher volumes across both our automotive and RV businesses, largely due to expansion of our product line coverage, strong exclusive line performance, and year over year growth of new vehicle sales of pickups, sport utility vehicles and other highly accessorized vehicles. Organic growth in parts and services revenue for our Specialty segment on a per day basis was 4.2% as there was one additional selling day in 2018 compared to 2017.
|
(2)
|
Acquisition related growth in
2018
included
$110 million
, or
8.4%
, from our acquisition of Warn through the one-year anniversary of the acquisition date. The remainder of our acquired revenue growth reflected an immaterial amount of acquired revenue from our acquisitions of three wholesale businesses from the beginning of 2017 up to the one-year anniversary of the acquisition dates.
|
(1)
|
The increase in gross margin reflects favorable impacts of (i) 0.8% from our acquisition of Warn, which has a higher gross margin than our existing Specialty operations, and (ii) 0.6% from our initiatives to improve gross margin. The favorable effects were partially offset by 0.2% of increased inventory write-downs as damaged and defective product was identified during our warehouse expansion projects on the West Coast and in the Southeastern U.S.
|
(2)
|
The increase in segment operating expenses reflects unfavorable impacts of (i) 0.3% in personnel costs primarily due to wage inflation, increased distribution expenses driven by a decreased use of third party freight and increased delivery routes to improve service levels, as well as higher employee benefit costs, (ii) 0.2% in vehicle and fuel expenses primarily due to increased fuel prices, and (iii) by several individually immaterial factors that had an unfavorable impact of 0.1% in the aggregate.
|
(3)
|
The increase in other expense, net is due to several individually immaterial factors that had an unfavorable impact of 0.2% in the aggregate.
|
|
Year Ended December 31,
|
|
Percentage Change in Revenue
|
|||||||||||||||||
North America
|
2017
|
|
2016
|
|
Organic
|
|
Acquisition
(3)
|
|
Foreign Exchange
|
|
Total Change
|
|||||||||
Parts & services revenue
|
$
|
4,278,531
|
|
|
$
|
4,009,129
|
|
|
3.0
|
%
|
(1
|
)
|
3.6
|
%
|
|
0.1
|
%
|
|
6.7
|
%
|
Other revenue
|
520,370
|
|
|
434,757
|
|
|
19.3
|
%
|
(2
|
)
|
0.4
|
%
|
|
0.0
|
%
|
|
19.7
|
%
|
||
Total third party revenue
|
$
|
4,798,901
|
|
|
$
|
4,443,886
|
|
|
4.6
|
%
|
|
3.2
|
%
|
|
0.1
|
%
|
|
8.0
|
%
|
|
Note: In the table above, the sum of the individual percentages may not equal the total due to rounding.
|
(1)
|
Organic growth in parts and services revenue was largely attributable to increased sales volumes in our wholesale operations, primarily in our salvage operations and, to a lesser extent, our aftermarket operations. Within our salvage operations, the favorable volume impact, which was primarily related to mechanical parts, was a result of refinements to our buying algorithms. Also, an emphasis on inventorying more parts off of each car purchased contributed to the increase in the number of parts sold per vehicle. While we were able to increase parts and services revenue over the prior year, we believe the weather conditions in 2017 contributed to a lower growth rate than generated in prior years. Organic revenue growth for our North America segment was also negatively affected by one fewer selling day in 2017 compared to 2016; on a per day basis, organic revenue growth was 3.4%.
|
(2)
|
The $86 million increase in other revenue primarily related to (i) a $57 million increase in revenue from scrap steel and other metals primarily related to higher prices and, to a lesser extent, increased volumes, year over year and (ii) a $25 million increase in revenue from metals found in catalytic converters (platinum, palladium, and rhodium) primarily due to higher prices, year over year.
|
(3)
|
Acquisition related growth in 2017 included $92 million, or 2.1%, from our PGW autoglass acquisition. The remainder of our acquired revenue growth reflected revenue from our acquisition of 11 wholesale businesses from the beginning of 2016 up to the one-year anniversary of the acquisition dates.
|
(1)
|
The improvement in gross margin reflected a 1.1% favorable impact in our salvage operations, primarily attributable to raising revenue per car by a greater rate than car costs. Revenue per car improved due to higher volumes of parts sold per car, which was a result of refinements to our buying algorithms, an emphasis on inventorying more parts off of each car purchased, and an increase in the number of days we hold each car before it is scrapped. This improvement was partially offset by an unfavorable impact of 0.4% attributable to our aftermarket operations. Within our aftermarket operations, we experienced a 0.4% decline in gross margin primarily as a result of higher input costs from suppliers as well as decreases in net prices caused by higher customer discounts. The remaining change in gross margin was attributable to individually insignificant fluctuations in gross margin across our other North America operations.
|
(2)
|
The increase in segment operating expenses as a percentage of revenue reflected (i) a 0.3% increase in personnel costs, and (ii) a 0.2% increase in freight costs driven by higher use of third party freight to handle increased volumes, partially offset by (iii) a 0.2% decrease in segment operating costs attributable to shared PGW corporate expenses incurred during 2016; these costs ceased being incurred upon the closing of the sale of the glass manufacturing business on March 1, 2017.
|
|
Year Ended December 31,
|
|
Percentage Change in Revenue
|
||||||||||||||||
Europe
|
2017
|
|
2016
|
|
Organic
(1)
|
|
Acquisition
(2)
|
|
Foreign Exchange
(3)
|
|
Total Change
|
||||||||
Parts & services revenue
|
$
|
3,628,906
|
|
|
$
|
2,915,841
|
|
|
5.3
|
%
|
|
19.8
|
%
|
|
(0.6
|
)%
|
|
24.5
|
%
|
Other revenue
|
7,905
|
|
|
4,629
|
|
|
47.6
|
%
|
|
24.8
|
%
|
|
(1.6
|
)%
|
|
70.8
|
%
|
||
Total third party revenue
|
$
|
3,636,811
|
|
|
$
|
2,920,470
|
|
|
5.3
|
%
|
|
19.8
|
%
|
|
(0.6
|
)%
|
|
24.5
|
%
|
Note: In the table above, the sum of the individual percentages may not equal the total due to rounding.
|
(1)
|
Parts and services revenue grew organically across all of our aftermarket business units in Europe from both existing locations and new branches. In Eastern Europe and Western Europe, we added 65 and 23 branches, respectively, since the beginning of the prior year, and organic revenue growth includes revenue from those locations. Revenue at our existing locations grew primarily as a result of increased volumes and, to a lesser extent, increased prices. Organic revenue growth for our Europe segment on a per day basis was 5.7% as there was one fewer selling day in 2017 compared to 2016.
|
(2)
|
Acquisition related growth for the year ended December 31, 2017 included $216 million, or 7.4%, from our acquisition of Rhiag and $141 million, or 4.8%, from our acquisition of Andrew Page. The remainder of our acquired revenue growth included revenue from our acquisitions of 23 wholesale businesses in our Europe segment since the beginning of 2016 through the one-year anniversary of the acquisitions.
|
(3)
|
Compared to the prior year, exchange rates reduced our revenue growth by $18 million, or 0.6%, primarily due to the stronger U.S. dollar against the pound sterling during 2017 relative to 2016, partially offset by the weaker U.S. dollar against the euro during 2017 relative to 2016.
|
(1)
|
The decline in gross margin was due to (i) a 0.6% decrease due to our U.K. operations primarily as a result of an increase in inventory reserves and incremental costs related to the Tamworth distribution facility, which shifted from operating expenses to cost of goods sold when the facility went live, (ii) a 0.3% decrease due to an unfavorable mix impact as a result of generating a higher proportion of our revenue from our Rhiag operations, which have lower gross margins than our other Europe operations, (iii) a 0.3% decrease due to an acquisition in Eastern Europe during the year which has lower gross margins than our other Europe operations, partially offset by (iv) a 0.6% increase in gross margin in our Benelux operations primarily due to increased private label sales, which have higher gross margins, and (v) a 0.2% increase due to a favorable impact related to an increase in supplier rebates as a result of centralized procurement for our Europe segment. The remaining change in gross margin was attributable to individually insignificant fluctuations in gross margin across our other Europe operations.
|
(2)
|
The increase in segment operating expenses as a percentage of revenue reflected (i) an increase of 0.8% in operating expenses as a result of the acquisition of Andrew Page, which has higher operating expenses as a percentage of revenue than our other Europe operations and (ii) an increase of 0.4% in operating expenses in our Benelux operations, primarily due to increased personnel costs related to distribution, partially offset by (iii) a 0.2% favorable mix impact due to our acquisition of Rhiag, which has lower operating expenses as a percentage of revenue than our other Europe operations. The remaining decrease in segment operating expenses reflected a number of individually insignificant fluctuations in operating expenses as a percentage of revenue.
|
(3)
|
Approximately half of the decrease in other expense, net was due to the impact of foreign currency transaction gains and losses, primarily due to unrealized mark-to-market gains and losses on foreign currency forward contracts used to hedge the purchases of inventory in our U.K. operations, which were favorable in 2017 relative to the prior year. The remaining decrease in other expense, net reflected a number of individually insignificant fluctuations in other expense, net as a percentage of revenue.
|
|
Year Ended December 31,
|
|
Percentage Change in Revenue
|
||||||||||||||||
Specialty
|
2017
|
|
2016
|
|
Organic
(1)
|
|
Acquisition
(2)
|
|
Foreign Exchange
|
|
Total Change
|
||||||||
Parts & services revenue
|
$
|
1,301,197
|
|
|
$
|
1,219,675
|
|
|
4.7
|
%
|
|
1.9
|
%
|
|
0.1
|
%
|
|
6.7
|
%
|
Other revenue
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
||
Total third party revenue
|
$
|
1,301,197
|
|
|
$
|
1,219,675
|
|
|
4.7
|
%
|
|
1.9
|
%
|
|
0.1
|
%
|
|
6.7
|
%
|
Note: In the table above, the sum of the individual percentages may not equal the total due to rounding.
|
(1)
|
Organic growth in parts & services revenue was driven by increased sales volumes of Truck, Towing and RV parts sales. This organic growth was fueled by favorable economic conditions in most of our primary selling regions, as well as increased sales volumes of light trucks and RVs. Organic revenue growth for our Specialty segment on a per day basis was 5.1%, as there was one fewer selling day in 2017 compared to 2016.
|
(2)
|
Acquisition related growth in 2017 included $20 million, or 1.7%, from our acquisition of Warn. The remainder of our acquired revenue growth reflected revenue from our acquisition of 3 wholesale businesses from the beginning of 2016 up to the one-year anniversary of the acquisition dates.
|
(1)
|
The decline in gross margin primarily reflected a 0.5% decrease due to higher overhead costs in inventory, which was driven by warehouse costs for two new distribution centers that became fully functional in 2016.
|
(2)
|
The decrease in segment operating expenses reflected (i) favorable facility expenses of 0.7% primarily related to the integration of The Coast Distribution System, Inc. ("Coast") facilities and (ii) favorable personnel costs of 0.2% as a result of synergies realized on the integration of Coast facilities.
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Cash and cash equivalents
|
$
|
331,761
|
|
|
$
|
279,766
|
|
Total debt
(1)
|
4,347,697
|
|
|
3,428,280
|
|
||
Current maturities
(2)
|
122,117
|
|
|
129,184
|
|
||
Capacity under credit facilities
(3)
|
3,260,000
|
|
|
2,850,000
|
|
||
Availability under credit facilities
(3)
|
1,697,698
|
|
|
1,395,081
|
|
||
Total liquidity (cash and cash equivalents plus availability under credit facilities)
|
2,029,459
|
|
|
1,674,847
|
|
(1)
|
Debt amounts reflect the gross values to be repaid (excluding debt issuance costs of
$37 million
and
$24 million
as of
December 31, 2018
and
December 31, 2017
, respectively).
|
(2)
|
Debt amounts reflect the gross values to be repaid (excluding an immaterial amount of debt issuance costs as of December 31, 2018 and
$3 million
as of
December 31, 2017
).
|
(3)
|
Capacity under credit facilities includes our revolving credit facilities and our receivables securitization facility. Availability under credit facilities is reduced by our outstanding letters of credit.
|
•
|
Senior secured credit facilities maturing in January 2024, composed of term loans totaling
$350 million
(
$350 million
outstanding at
December 31, 2018
) and
$3.15 billion
in revolving credit (
$1.4 billion
outstanding at
December 31, 2018
), bearing interest at variable rates (although a portion of the outstanding debt is hedged through interest rate swap contracts), with availability reduced by
$65 million
of amounts outstanding under letters of credit
|
•
|
U.S. Notes (2023) totaling
$600 million
, maturing in May 2023 and bearing interest at a 4.75% fixed rate
|
•
|
Euro Notes (2024) totaling $
573 million
(
€500 million
), maturing in April 2024 and bearing interest at a 3.875% fixed rate
|
•
|
Euro Notes (2026/28) totaling
$1.1 billion
(
€1.0 billion
), consisting of (i)
€750 million
maturing in April 2026 and bearing interest at a 3.625% fixed rate, and (ii)
€250 million
maturing in April 2028 and bearing interest at a 4.125% fixed rate
|
•
|
Receivables securitization facility with availability up to
$110 million
(
$110 million
outstanding as of
December 31, 2018
), maturing in November 2021 and bearing interest at variable commercial paper rates
|
(1)
|
The total debt amounts presented above reflect the gross values to be repaid (excluding debt issuance costs of
$37 million
as of
December 31, 2018
).
|
|
Covenant Level
|
|
Ratio Achieved as of December 31, 2018
|
Maximum net leverage ratio
|
4.5:1.0
|
|
2.9
|
Minimum interest coverage ratio
|
3.0:1.0
|
|
9.0
|
|
|
Year Ended December 31,
|
|
||||||||||
|
|
2018
|
|
2017
|
|
Change
|
|
||||||
North America
|
|
$
|
1,393,700
|
|
|
$
|
1,367,600
|
|
|
$
|
26,100
|
|
(1)
|
Europe
|
|
3,635,400
|
|
|
2,355,300
|
|
|
1,280,100
|
|
(2)
|
|||
Specialty
|
|
1,087,600
|
|
|
1,006,600
|
|
|
81,000
|
|
(3)
|
|||
Total
|
|
$
|
6,116,700
|
|
|
$
|
4,729,500
|
|
|
$
|
1,387,200
|
|
|
(1)
|
In North America, aftermarket purchases during the
year ended
December 31, 2018
increased compared to the comparable prior year period to support growth across our operations.
|
(2)
|
In our Europe segment, the increase in purchases during the
year ended
December 31, 2018
was primarily driven by (i) an
$821 million
increase attributable to inventory purchases at Stahlgruber from the date of acquisition through
December 31, 2018
, (ii) a
$181 million
increase primarily attributable to our Eastern Europe operations, of which
$73 million
was due to incremental inventory purchases in the first seven months of 2018 as a result of our acquisition of an aftermarket parts distribution business in Poland in the third quarter of 2017; the remaining increase was primarily due to branch expansion in Eastern Europe, and (iii) a
$146 million
increase in purchases at our Benelux operations, of which
$41 million
was attributable to incremental inventory purchases in the first six months of 2018 as a result of our acquisitions of aftermarket parts distribution businesses in Belgium in the third quarter of 2017. There was also an increase of $88 million in inventory purchases driven by the increase in the value of the euro and pound sterling in 2018 compared to 2017.
|
(3)
|
In our Specialty segment, the acquisition of Warn in November 2017 added incremental purchases of
$71 million
during the
year ended
December 31, 2018
, which includes purchases of aftermarket inventory and raw materials used in the manufacturing of specialty products. Specialty inventory purchases also increased during the
year ended December 31, 2018
compared to the prior year to support growth in our operations.
|
|
Year Ended December 31,
|
|
|||||||
|
2018
|
|
2017
|
|
% Change
|
|
|||
North America wholesale salvage cars and trucks
|
310
|
|
|
310
|
|
|
—
|
%
|
|
Europe wholesale salvage cars and trucks
|
28
|
|
|
25
|
|
|
12.0
|
%
|
|
Self service and "crush only" cars
|
562
|
|
|
542
|
|
|
3.7
|
%
|
(1)
|
Net cash provided by operating activities for the year ended December 31, 2017
|
$
|
519
|
|
|
Increase (decrease) due to:
(1)
|
|
|
||
Operating income
|
37
|
|
(2)
|
|
Non-cash depreciation and amortization expense
|
64
|
|
(3)
|
|
Impairment of goodwill
|
33
|
|
(4)
|
|
Cash paid for taxes
|
73
|
|
|
|
Cash paid for interest
|
(42
|
)
|
|
|
Working capital accounts:
(5)
|
|
|
||
Accounts receivable
|
39
|
|
|
|
Inventory
|
72
|
|
|
|
Accounts payable
|
(103
|
)
|
(6)
|
|
Pension funding
|
(9
|
)
|
(7)
|
|
Other operating activities
|
28
|
|
(8)
|
|
Net cash provided by operating activities for the year ended December 31, 2018
|
$
|
711
|
|
|
(1)
|
Other than discontinued operations, the amounts presented represent increases (decreases) in operating cash flows attributable to our continuing operations only.
|
(2)
|
Refer to the Results of Operations - Consolidated section for further information on the increase in operating income.
|
(3)
|
Non-cash depreciation and amortization expense increased compared to the prior year period as discussed in the Results of Operations - Consolidated section.
|
(4)
|
In the fourth quarter of 2018, we recorded an impairment charge on the goodwill in our Aviation reporting unit. See Note 4, "Summary of Significant Accounting Policies" to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further information on the impairment charge.
|
(5)
|
Cash flows related to our primary working capital accounts can be volatile as the purchases, payments and collections can be timed differently from period to period and can be influenced by factors outside of our control.
|
(6)
|
Includes an outflow of
$116 million
related to Stahlgruber, primarily resulting from the timing of the acquisition. Due to the timing of processing invoice payments after the closing date, we assumed a larger payable balance but acquired more cash at closing. However, the cash acquired at closing is reflected in the Investing section of the cash flow statement on the Acquisitions, net of cash acquired line.
|
(7)
|
During the
year ended
December 31, 2018
, we made a special contribution of
$9 million
to one of our North America pension plans. See Note 14, "Employee Benefit Plans" to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further information on our pension plans.
|
(8)
|
Reflects a number of individually insignificant fluctuations in cash paid for other operating activities.
|
(1)
|
In North America, aftermarket purchases during the year ended December 31, 2017 increased compared to the prior year as we decided to expand our inventory as a result of procurement initiatives to support growth across our operations. The remaining increase is primarily as a result of our acquisition of PGW autoglass in April 2016, which added incremental purchases of $72 million in 2017.
|
(2)
|
In our Europe segment, the increase in purchases during the year ended December 31, 2017 is primarily related to our acquisition of Rhiag in March 2016, which added incremental purchases of $181 million in 2017. Purchases for our U.K. operations increased in 2017 compared to the prior year primarily as a result of our acquisition of Andrew Page in October 2016, which added incremental purchases of $107 million in 2017, partially offset by the devaluation of the pound sterling in 2017 compared to the prior year. Purchases for our Benelux operations increased by $71 million in 2017 compared to the prior year primarily as a result of our acquisition of the aftermarket parts distribution businesses in Belgium in July 2017, which had purchases of $46 million in 2017. The remaining increase in our Benelux operations was primarily due to incremental inventory purchases to achieve supplier purchase rebates.
|
(3)
|
The increase in Specialty inventory purchases during 2017 compared to the prior year is primarily due to increased sales volumes for Truck, Towing and RV parts. Additionally, the acquisition of Warn in November 2017 added incremental purchases of $11 million, which includes purchases of aftermarket inventory and raw materials used in the manufacturing of specialty products.
|
|
Year Ended December 31,
|
|
|||||||
|
2017
|
|
2016
|
|
% Change
|
|
|||
North America wholesale salvage cars and trucks
|
310
|
|
|
291
|
|
|
6.5
|
%
|
(1)
|
Europe wholesale salvage cars and trucks
|
25
|
|
|
23
|
|
|
8.7
|
%
|
|
Self service and "crush only" cars
|
542
|
|
|
524
|
|
|
3.4
|
%
|
(2)
|
(1)
|
The number of salvage cars and trucks purchased during the year ended December 31, 2017 increased primarily due to a decision to increase the number of salvage cars and trucks dismantled compared to the prior year.
|
Net cash provided by operating activities for the year ended December 31, 2016
|
$
|
635
|
|
|
Increase (decrease) due to:
(1)
|
|
|
||
Discontinued operations
|
(68
|
)
|
(2)
|
|
Operating income
|
82
|
|
(3)
|
|
Non-cash depreciation and amortization expense
|
32
|
|
(4)
|
|
Cash paid for taxes
|
(43
|
)
|
(5)
|
|
Cash paid for interest
|
(10
|
)
|
(6)
|
|
Working capital accounts:
(7)
|
|
|
||
Inventory
|
(133
|
)
|
(8)
|
|
Accounts payable
|
8
|
|
|
|
Accounts receivable
|
27
|
|
|
|
Other operating activities
|
(11
|
)
|
(9)
|
|
Net cash provided by operating activities for the year ended December 31, 2017
|
$
|
519
|
|
|
(1)
|
Other than discontinued operations, the amounts presented represent increases (decreases) in operating cash flows attributable to our continuing operations only.
|
(2)
|
Represents the change in cash flows for our glass manufacturing business, which was acquired in April 2016 and disposed of on March 1, 2017.
|
(3)
|
During 2017, our operating income increased compared to the prior year due to both acquisition related growth and organic growth.
|
(4)
|
Non-cash depreciation and amortization expense increased compared to the prior year as discussed in the Results of Operations - Consolidated section.
|
(5)
|
Cash paid for taxes increased during 2017 compared to the prior year as a result of growth in the business from both organic growth and acquisitions, and the timing of tax payments.
|
(6)
|
Cash paid for interest increased compared to the prior year primarily as a result of interest payments related to our Euro Notes (2024), which were issued in April 2016. In the prior year, we made one semi-annual interest payment related to these notes, whereas in 2017 we made two semi-annual interest payments.
|
(7)
|
Cash flows related to our primary working capital accounts can be volatile as the purchases, payments and collections can be timed differently from period to period and can be influenced by factors outside of our control. However, we expect that the net change in these working capital items will generally be a cash outflow as we expect to grow our business each year.
|
(8)
|
The period over period increase in cash outflows for inventory was primarily related to our North America segment as described in the procurement section above.
|
(9)
|
Reflects a number of individually insignificant fluctuations in cash paid for other operating activities.
|
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 Years
|
||||||||||
Contractual obligations
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
(1)
|
$
|
5,093.4
|
|
|
$
|
260.7
|
|
|
$
|
459.3
|
|
|
$
|
899.7
|
|
|
$
|
3,473.7
|
|
Capital lease obligations
(2)
|
53.7
|
|
|
10.7
|
|
|
16.6
|
|
|
8.3
|
|
|
18.1
|
|
|||||
Operating leases
(3)
|
1,828.5
|
|
|
294.3
|
|
|
466.8
|
|
|
290.2
|
|
|
777.2
|
|
|||||
Purchase obligations
(4)
|
645.6
|
|
|
530.3
|
|
|
115.3
|
|
|
—
|
|
|
—
|
|
|||||
Other long-term obligations
(5)
|
297.9
|
|
|
163.8
|
|
|
85.3
|
|
|
23.2
|
|
|
25.6
|
|
|||||
Total
|
$
|
7,919.1
|
|
|
$
|
1,259.8
|
|
|
$
|
1,143.3
|
|
|
$
|
1,221.4
|
|
|
$
|
4,294.6
|
|
(1)
|
Our long-term debt under contractual obligations above includes interest of $786 million on the balances outstanding as of December 31, 2018. The long-term debt balance excludes debt issuance costs, as these expenses have already been paid. Interest on our senior notes, notes payable, and other long-term debt is calculated based on the respective stated rates. Interest on our variable rate credit facilities is calculated based on the weighted average rates, including the impact of interest rate swaps through their respective expiration dates, in effect for each tranche of borrowings as of December 31, 2018. Future estimated interest expense for the next year, one to three years, and three to five years is $147 million, $288 million and $261 million, respectively. Estimated interest expense beyond five years is $90 million.
|
(2)
|
Interest on capital lease obligations of $14 million is included based on incremental borrowing or implied rates. Future estimated interest expense for the next year, one to three years, and three to five years is $2 million, $2 million and $1 million, respectively. Estimated interest expense beyond five years is $9 million.
|
(3)
|
The operating lease payments above do not include certain tax, insurance and maintenance costs, which are also required contractual obligations under our operating leases but are generally not fixed and can fluctuate from year to year.
|
(4)
|
Our purchase obligations include open purchase orders for aftermarket inventory.
|
(5)
|
Our other long-term obligations consist of estimated payments for our self-insurance reserves of $94 million, outstanding letters of credit of $65 million, and outstanding estimated payments of $33 million on the repatriation of earnings as a result of the Tax Act, with the remaining $106 million representing primarily other asset purchase commitments and payments for deferred compensation plans.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
•
|
foreign exchange rates;
|
•
|
interest rates; and
|
•
|
commodity prices.
|
|
Page
|
LKQ CORPORATION AND SUBSIDIARIES
|
|
/s/ DELOITTE & TOUCHE LLP
|
LKQ CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share data)
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue
|
$
|
11,876,674
|
|
|
$
|
9,736,909
|
|
|
$
|
8,584,031
|
|
Cost of goods sold
|
7,301,817
|
|
|
5,937,286
|
|
|
5,232,328
|
|
|||
Gross margin
|
4,574,857
|
|
|
3,799,623
|
|
|
3,351,703
|
|
|||
Selling, general and administrative expenses
(1), (2)
|
3,352,731
|
|
|
2,715,407
|
|
|
2,359,110
|
|
|||
Restructuring and acquisition related expenses
|
32,428
|
|
|
19,672
|
|
|
37,762
|
|
|||
Impairment of goodwill
|
33,244
|
|
|
—
|
|
|
—
|
|
|||
Depreciation and amortization
|
274,213
|
|
|
219,546
|
|
|
191,433
|
|
|||
Operating income
|
882,241
|
|
|
844,998
|
|
|
763,398
|
|
|||
Other expense (income):
|
|
|
|
|
|
||||||
Interest expense
|
146,377
|
|
|
101,640
|
|
|
88,263
|
|
|||
Loss on debt extinguishment
|
1,350
|
|
|
456
|
|
|
26,650
|
|
|||
Gains on foreign exchange contracts - acquisition related
|
—
|
|
|
—
|
|
|
(18,342
|
)
|
|||
Gains on bargain purchases
|
(2,418
|
)
|
|
(3,870
|
)
|
|
(8,207
|
)
|
|||
Interest income and other income, net
(2)
|
(6,499
|
)
|
|
(19,855
|
)
|
|
(2,247
|
)
|
|||
Total other expense, net
|
138,810
|
|
|
78,371
|
|
|
86,117
|
|
|||
Income from continuing operations before provision for income taxes
|
743,431
|
|
|
766,627
|
|
|
677,281
|
|
|||
Provision for income taxes
|
191,395
|
|
|
235,560
|
|
|
220,566
|
|
|||
Equity in (losses) earnings of unconsolidated subsidiaries
|
(64,471
|
)
|
|
5,907
|
|
|
(592
|
)
|
|||
Income from continuing operations
|
487,565
|
|
|
536,974
|
|
|
456,123
|
|
|||
Net (loss) income from discontinued operations
|
(4,397
|
)
|
|
(6,746
|
)
|
|
7,852
|
|
|||
Net income
|
483,168
|
|
|
530,228
|
|
|
463,975
|
|
|||
Less: net income (loss) attributable to noncontrolling interest
|
3,050
|
|
|
(3,516
|
)
|
|
—
|
|
|||
Net income attributable to LKQ stockholders
|
$
|
480,118
|
|
|
$
|
533,744
|
|
|
$
|
463,975
|
|
|
|
|
|
|
|
||||||
Basic earnings per share:
(3)
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
1.55
|
|
|
$
|
1.74
|
|
|
$
|
1.49
|
|
Net (loss) income from discontinued operations
|
(0.01
|
)
|
|
(0.02
|
)
|
|
0.03
|
|
|||
Net income
|
1.54
|
|
|
1.72
|
|
|
1.51
|
|
|||
Less: net income (loss) attributable to noncontrolling interest
|
0.01
|
|
|
(0.01
|
)
|
|
—
|
|
|||
Net income attributable to LKQ stockholders
|
$
|
1.53
|
|
|
$
|
1.73
|
|
|
$
|
1.51
|
|
|
|
|
|
|
|
||||||
Diluted earnings per share:
(3)
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
1.54
|
|
|
$
|
1.73
|
|
|
$
|
1.47
|
|
Net (loss) income from discontinued operations
|
(0.01
|
)
|
|
(0.02
|
)
|
|
0.03
|
|
|||
Net income
|
1.53
|
|
|
1.71
|
|
|
1.50
|
|
|||
Less: net income (loss) attributable to noncontrolling interest
|
0.01
|
|
|
(0.01
|
)
|
|
—
|
|
|||
Net income attributable to LKQ stockholders
|
$
|
1.52
|
|
|
$
|
1.72
|
|
|
$
|
1.50
|
|
LKQ CORPORATION AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
(In thousands)
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
483,168
|
|
|
$
|
530,228
|
|
|
$
|
463,975
|
|
Less: net income (loss) attributable to noncontrolling interest
|
3,050
|
|
|
(3,516
|
)
|
|
—
|
|
|||
Net income attributable to LKQ stockholders
|
480,118
|
|
|
533,744
|
|
|
463,975
|
|
|||
|
|
|
|
|
|
||||||
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation, net of tax
|
(108,523
|
)
|
|
200,596
|
|
|
(175,639
|
)
|
|||
Net change in unrealized gains/losses on cash flow hedges, net of tax
|
350
|
|
|
3,447
|
|
|
9,023
|
|
|||
Net change in unrealized gains/losses on pension plans, net of tax
|
697
|
|
|
(6,035
|
)
|
|
4,911
|
|
|||
Net change in other comprehensive loss from unconsolidated subsidiaries
|
(2,343
|
)
|
|
(1,309
|
)
|
|
—
|
|
|||
Other comprehensive (loss) income
|
(109,819
|
)
|
|
196,699
|
|
|
(161,705
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive income
|
373,349
|
|
|
726,927
|
|
|
302,270
|
|
|||
Less: comprehensive income (loss) attributable to noncontrolling interest
|
3,050
|
|
|
(3,516
|
)
|
|
—
|
|
|||
Comprehensive income attributable to LKQ stockholders
|
$
|
370,299
|
|
|
$
|
730,443
|
|
|
$
|
302,270
|
|
LKQ CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share and per share data)
|
|||||||
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
331,761
|
|
|
$
|
279,766
|
|
Receivables, net
|
1,154,083
|
|
|
1,027,106
|
|
||
Inventories
|
2,836,075
|
|
|
2,380,783
|
|
||
Prepaid expenses and other current assets
|
199,030
|
|
|
134,479
|
|
||
Total current assets
|
4,520,949
|
|
|
3,822,134
|
|
||
Property, plant and equipment, net
|
1,220,162
|
|
|
913,089
|
|
||
Intangible assets:
|
|
|
|
||||
Goodwill
|
4,381,458
|
|
|
3,536,511
|
|
||
Other intangibles, net
|
928,752
|
|
|
743,769
|
|
||
Equity method investments
|
179,169
|
|
|
208,404
|
|
||
Other assets
|
162,912
|
|
|
142,965
|
|
||
Total assets
|
$
|
11,393,402
|
|
|
$
|
9,366,872
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
942,398
|
|
|
$
|
788,613
|
|
Accrued expenses:
|
|
|
|
||||
Accrued payroll-related liabilities
|
172,005
|
|
|
143,424
|
|
||
Other accrued expenses
|
288,425
|
|
|
218,600
|
|
||
Refund liability
|
104,585
|
|
|
—
|
|
||
Other current liabilities
|
61,109
|
|
|
45,727
|
|
||
Current portion of long-term obligations
|
121,826
|
|
|
126,360
|
|
||
Total current liabilities
|
1,690,348
|
|
|
1,322,724
|
|
||
Long-term obligations, excluding current portion
|
4,188,674
|
|
|
3,277,620
|
|
||
Deferred income taxes
|
311,434
|
|
|
252,359
|
|
||
Other noncurrent liabilities
|
364,194
|
|
|
307,516
|
|
||
Commitments and contingencies
|
|
|
|
|
|||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 318,417,821
s
hares issued and 316,146,114 shares outstanding at December 31, 2018;
309,126,386 s
hares issued and outstanding at December 31, 2017
|
3,184
|
|
|
3,091
|
|
||
Additional paid-in capital
|
1,415,188
|
|
|
1,141,451
|
|
||
Retained earnings
|
3,598,876
|
|
|
3,124,103
|
|
||
Accumulated other comprehensive loss
|
(174,950
|
)
|
|
(70,476
|
)
|
||
Treasury stock, at cost; 2,271,707 shares at December 31, 2018
|
(60,000
|
)
|
|
—
|
|
||
Total Company stockholders' equity
|
4,782,298
|
|
|
4,198,169
|
|
||
Noncontrolling interest
|
56,454
|
|
|
8,484
|
|
||
Total stockholders' equity
|
4,838,752
|
|
|
4,206,653
|
|
||
Total liabilities and stockholders’ equity
|
$
|
11,393,402
|
|
|
$
|
9,366,872
|
|
LKQ CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
483,168
|
|
|
$
|
530,228
|
|
|
$
|
463,975
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
294,077
|
|
|
230,203
|
|
|
206,086
|
|
|||
Impairment on Mekonomen equity method investment
|
70,895
|
|
|
—
|
|
|
—
|
|
|||
Impairment of goodwill
|
33,244
|
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation expense
|
22,760
|
|
|
22,832
|
|
|
22,472
|
|
|||
Loss on debt extinguishment
|
1,350
|
|
|
456
|
|
|
26,650
|
|
|||
Loss on sale of business
|
—
|
|
|
10,796
|
|
|
—
|
|
|||
Impairment on net assets of discontinued operations
|
—
|
|
|
—
|
|
|
26,677
|
|
|||
Gains on foreign exchange contracts - acquisition related
|
—
|
|
|
—
|
|
|
(18,342
|
)
|
|||
Gains on bargain purchases
|
(2,418
|
)
|
|
(3,870
|
)
|
|
(8,207
|
)
|
|||
Deferred income taxes
|
(2,180
|
)
|
|
(46,537
|
)
|
|
(16,162
|
)
|
|||
Other
|
9,534
|
|
|
1,301
|
|
|
19,550
|
|
|||
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions:
|
|
|
|
|
|
||||||
Receivables, net
|
241
|
|
|
(55,979
|
)
|
|
(50,801
|
)
|
|||
Inventories
|
(127,153
|
)
|
|
(203,857
|
)
|
|
(64,114
|
)
|
|||
Prepaid income taxes/income taxes payable
|
(2,125
|
)
|
|
8,376
|
|
|
14,944
|
|
|||
Accounts payable
|
(77,621
|
)
|
|
45,136
|
|
|
18,577
|
|
|||
Other operating assets and liabilities
|
6,967
|
|
|
(20,185
|
)
|
|
(6,291
|
)
|
|||
Net cash provided by operating activities
|
710,739
|
|
|
518,900
|
|
|
635,014
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment
|
(250,027
|
)
|
|
(179,090
|
)
|
|
(207,074
|
)
|
|||
Proceeds from disposals of property, plant and equipment
|
27,659
|
|
|
8,707
|
|
|
3,510
|
|
|||
Acquisitions, net of cash and restricted cash acquired
|
(1,214,995
|
)
|
|
(513,088
|
)
|
|
(1,349,339
|
)
|
|||
Proceeds from disposals of business/investment
|
—
|
|
|
301,297
|
|
|
10,304
|
|
|||
Investments in unconsolidated subsidiaries
|
(60,300
|
)
|
|
(7,664
|
)
|
|
(185,671
|
)
|
|||
Proceeds from foreign exchange contracts
|
—
|
|
|
—
|
|
|
18,342
|
|
|||
Receipts of deferred purchase price on receivables under factoring arrangements
|
36,991
|
|
|
—
|
|
|
—
|
|
|||
Other investing activities, net
|
1,733
|
|
|
5,243
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(1,458,939
|
)
|
|
(384,595
|
)
|
|
(1,709,928
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Proceeds from exercise of stock options
|
5,303
|
|
|
7,470
|
|
|
7,963
|
|
|||
Taxes paid related to net share settlements of stock-based compensation awards
|
(5,567
|
)
|
|
(5,525
|
)
|
|
(4,438
|
)
|
|||
Debt issuance costs
|
(21,128
|
)
|
|
(4,267
|
)
|
|
(16,554
|
)
|
|||
Proceeds from issuance of Euro Notes (2024)
|
—
|
|
|
—
|
|
|
563,450
|
|
|||
Proceeds from issuance of Euro Notes (2026/28)
|
1,232,100
|
|
|
—
|
|
|
—
|
|
|||
Purchase of treasury stock
|
(60,000
|
)
|
|
—
|
|
|
—
|
|
|||
Borrowings under revolving credit facilities
|
1,667,325
|
|
|
839,171
|
|
|
2,636,596
|
|
|||
Repayments under revolving credit facilities
|
(1,528,970
|
)
|
|
(946,477
|
)
|
|
(1,748,664
|
)
|
|||
Borrowings under term loans
|
—
|
|
|
—
|
|
|
582,115
|
|
|||
Repayments under term loans
|
(354,800
|
)
|
|
(27,884
|
)
|
|
(255,792
|
)
|
|||
Borrowings under receivables securitization facility
|
10,120
|
|
|
11,245
|
|
|
106,400
|
|
|||
Repayments under receivables securitization facility
|
(120
|
)
|
|
(11,245
|
)
|
|
(69,400
|
)
|
|||
Payment of assumed debt and notes issued from acquisitions
|
(54,888
|
)
|
|
—
|
|
|
—
|
|
|||
(Repayments) borrowings of other debt, net
|
(11,730
|
)
|
|
19,706
|
|
|
(31,156
|
)
|
|||
Payments of Rhiag debt and related payments
|
—
|
|
|
—
|
|
|
(543,347
|
)
|
|||
Other financing activities, net
|
5,350
|
|
|
5,239
|
|
|
(1,436
|
)
|
|||
Net cash provided by (used in) financing activities
|
882,995
|
|
|
(112,567
|
)
|
|
1,225,737
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(77,311
|
)
|
|
23,512
|
|
|
(3,704
|
)
|
|||
Net increase in cash, cash equivalents and restricted cash
|
57,484
|
|
|
45,250
|
|
|
147,119
|
|
|||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
LKQ CORPORATION AND SUBSIDIARIES
Consolidated Statements of Stockholders’ Equity
(In thousands)
|
|||||||||||||||||||||||||||||||||
|
LKQ Stockholders
|
|
|
|
|
||||||||||||||||||||||||||||
|
Common Stock
|
|
Treasury Stock
|
|
Additional Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated
Other
Comprehensive (Loss) Income
|
|
Noncontrolling Interest
|
|
Total Stockholders' Equity
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
||||||||||||||||||||||||||
BALANCE, January 1, 2016
|
305,574
|
|
|
$
|
3,055
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
1,090,713
|
|
|
$
|
2,126,384
|
|
|
$
|
(105,470
|
)
|
|
$
|
—
|
|
|
$
|
3,114,682
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
463,975
|
|
|
—
|
|
|
—
|
|
|
463,975
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(161,705
|
)
|
|
—
|
|
|
(161,705
|
)
|
|||||||
Vesting of restricted stock units, net of shares withheld for employee tax
|
847
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
(4,447
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,438
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,472
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,472
|
|
|||||||
Exercise of stock options
|
1,124
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
7,952
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,963
|
|
|||||||
BALANCE, December 31, 2016
|
307,545
|
|
|
$
|
3,075
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
1,116,690
|
|
|
$
|
2,590,359
|
|
|
$
|
(267,175
|
)
|
|
$
|
—
|
|
|
$
|
3,442,949
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
533,744
|
|
|
—
|
|
|
(3,516
|
)
|
|
530,228
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
196,699
|
|
|
—
|
|
|
196,699
|
|
|||||||
Vesting of restricted stock units, net of shares withheld for employee tax
|
749
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
(4,332
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,325
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,832
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,832
|
|
|||||||
Exercise of stock options
|
867
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
7,461
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,470
|
|
|||||||
Tax withholdings related to net share settlements of stock-based compensation awards
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,200
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,200
|
)
|
|||||||
Sale of subsidiary shares to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,000
|
|
|
12,000
|
|
|||||||
BALANCE, December 31, 2017
|
309,127
|
|
|
$
|
3,091
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
1,141,451
|
|
|
$
|
3,124,103
|
|
|
$
|
(70,476
|
)
|
|
$
|
8,484
|
|
|
$
|
4,206,653
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
480,118
|
|
|
—
|
|
|
3,050
|
|
|
483,168
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(109,819
|
)
|
|
—
|
|
|
(109,819
|
)
|
|||||||
Stock issued in acquisitions
|
8,056
|
|
|
81
|
|
|
—
|
|
|
—
|
|
|
251,253
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
251,334
|
|
|||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(2,272
|
)
|
|
(60,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60,000
|
)
|
|||||||
Vesting of restricted stock units, net of shares withheld for employee tax
|
603
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
(3,802
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,796
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,760
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,760
|
|
|||||||
Exercise of stock options
|
686
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
5,296
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,303
|
|
|||||||
Tax withholdings related to net share settlements of stock-based compensation awards
|
(54
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1,770
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,771
|
)
|
|||||||
Adoption of ASU 2018-02 (see Note 4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,345
|
)
|
|
5,345
|
|
|
—
|
|
|
—
|
|
|||||||
Capital contributions from, net of dividends declared to, noncontrolling interest shareholder
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
810
|
|
|
810
|
|
|||||||
Noncontrolling interests of businesses acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,110
|
|
|
44,110
|
|
|||||||
BALANCE, December 31, 2018
|
318,418
|
|
|
$
|
3,184
|
|
|
(2,272
|
)
|
|
$
|
(60,000
|
)
|
|
$
|
1,415,188
|
|
|
$
|
3,598,876
|
|
|
$
|
(174,950
|
)
|
|
$
|
56,454
|
|
|
$
|
4,838,752
|
|
Note 1.
|
Business
|
|
Year Ended
|
|
Year Ended
|
||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Stahlgruber
|
|
Other Acquisitions
(1)
|
|
Total
|
|
All
Acquisitions (2) |
||||||||
Receivables
|
$
|
144,826
|
|
|
$
|
19,171
|
|
|
$
|
163,997
|
|
|
$
|
73,782
|
|
Receivable reserves
|
(2,818
|
)
|
|
(918
|
)
|
|
(3,736
|
)
|
|
(7,032
|
)
|
||||
Inventories
(3)
|
380,238
|
|
|
14,021
|
|
|
394,259
|
|
|
150,342
|
|
||||
Prepaid expenses and other current assets
|
10,970
|
|
|
1,851
|
|
|
12,821
|
|
|
(295
|
)
|
||||
Property
,
plant and equipment
|
271,292
|
|
|
5,711
|
|
|
277,003
|
|
|
41,039
|
|
||||
Goodwill
|
908,253
|
|
|
64,637
|
|
|
972,890
|
|
|
314,817
|
|
||||
Other intangibles
|
285,255
|
|
|
35,159
|
|
|
320,414
|
|
|
181,216
|
|
||||
Other assets
|
16,625
|
|
|
37
|
|
|
16,662
|
|
|
3,257
|
|
||||
Deferred income taxes
|
(78,130
|
)
|
|
(5,285
|
)
|
|
(83,415
|
)
|
|
(65,087
|
)
|
||||
Current liabilities assumed
|
(346,788
|
)
|
|
(20,116
|
)
|
|
(366,904
|
)
|
|
(111,484
|
)
|
||||
Debt assumed
|
(79,925
|
)
|
|
(4,875
|
)
|
|
(84,800
|
)
|
|
(33,586
|
)
|
||||
Other noncurrent liabilities assumed
(4)
|
(80,824
|
)
|
|
(10,306
|
)
|
|
(91,130
|
)
|
|
(1,917
|
)
|
||||
Noncontrolling interest
|
(44,110
|
)
|
|
—
|
|
|
(44,110
|
)
|
|
—
|
|
||||
Contingent consideration liabilities
|
—
|
|
|
(3,107
|
)
|
|
(3,107
|
)
|
|
(6,234
|
)
|
||||
Other purchase price obligations
|
(6,084
|
)
|
|
3,623
|
|
|
(2,461
|
)
|
|
(5,074
|
)
|
||||
Stock issued
|
(251,334
|
)
|
|
—
|
|
|
(251,334
|
)
|
|
—
|
|
||||
Notes issued
|
—
|
|
|
(11,347
|
)
|
|
(11,347
|
)
|
|
(20,187
|
)
|
||||
Settlement of pre-existing balances
|
—
|
|
|
—
|
|
|
—
|
|
|
242
|
|
||||
Gains on bargain purchases
(5)
|
—
|
|
|
(2,418
|
)
|
|
(2,418
|
)
|
|
(3,870
|
)
|
||||
Settlement of other purchase price obligations (non-interest bearing)
|
—
|
|
|
1,711
|
|
|
1,711
|
|
|
3,159
|
|
||||
Cash used in acquisitions, net of cash and restricted cash acquired
|
$
|
1,127,446
|
|
|
$
|
87,549
|
|
|
$
|
1,214,995
|
|
|
$
|
513,088
|
|
(1)
|
The amounts recorded during the year ended December 31, 2018 include a
$5 million
adjustment to increase other intangibles related to our Warn acquisition and
$4 million
of adjustments to reduce other purchase price obligations related to other 2017 acquisitions.
|
(2)
|
The amounts recorded during the year ended December 31, 2017 include
$6 million
and
$3 million
of adjustments to reduce property, plant and equipment and other assets for Rhiag and PGW, respectively.
|
(3)
|
The amounts for our 2017 acquisitions include a
$4 million
step-up adjustment related to our Warn acquisition.
|
(4)
|
The amount recorded for our acquisition of Stahlgruber includes a
$79 million
liability for certain pension obligations. See Note 14, "Employee Benefit Plans" for information related to our defined benefit plans.
|
(5)
|
The amounts recorded during the year ended December 31, 2018 are due to the gains on bargain purchases related to (i) an acquisition in Europe completed in the second quarter of 2017 as a result of changes in the acquisition date fair value of the consideration, and (ii) three acquisitions in Europe completed during 2018 as a result of changes to our estimates of the fair values of the net assets acquired. The amount recorded during the year ended December 31, 2017 includes a
$2 million
increase to the gain on bargain purchase recorded for our Andrew Page acquisition as a result of changes to our estimate of the fair value of the net assets acquired. The remainder of the gain on bargain purchase recorded during the year ended December 31, 2017 is an immaterial amount related to the previously mentioned acquisition in Europe completed in the second quarter of 2017.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue, as reported
|
$
|
11,876,674
|
|
|
$
|
9,736,909
|
|
|
$
|
8,584,031
|
|
Revenue of purchased businesses for the period prior to acquisition:
|
|
|
|
|
|
||||||
Stahlgruber
|
815,405
|
|
|
1,756,893
|
|
|
—
|
|
|||
Rhiag
|
—
|
|
|
—
|
|
|
213,376
|
|
|||
PGW
(1)
|
—
|
|
|
—
|
|
|
102,540
|
|
|||
Other acquisitions
|
72,301
|
|
|
448,721
|
|
|
854,601
|
|
|||
Pro forma revenue
|
$
|
12,764,380
|
|
|
$
|
11,942,523
|
|
|
$
|
9,754,548
|
|
|
|
|
|
|
|
||||||
Income from continuing operations, as reported
(2)
|
$
|
487,565
|
|
|
$
|
536,974
|
|
|
$
|
456,123
|
|
Income from continuing operations of purchased businesses for the period prior to acquisition, and pro forma purchase accounting adjustments:
|
|
|
|
|
|
||||||
Stahlgruber
|
17,309
|
|
|
4,796
|
|
|
—
|
|
|||
Rhiag
|
—
|
|
|
—
|
|
|
(84
|
)
|
|||
PGW
(1), (3)
|
—
|
|
|
—
|
|
|
7,574
|
|
|||
Other acquisitions
|
1,507
|
|
|
16,667
|
|
|
19,323
|
|
|||
Acquisition related expenses, net of tax
(4)
|
14,414
|
|
|
8,787
|
|
|
11,602
|
|
|||
Pro forma income from continuing operations
|
520,795
|
|
|
567,224
|
|
|
494,538
|
|
|||
Less: Pro forma net income attributable to noncontrolling interest
|
2,799
|
|
|
1,095
|
|
|
—
|
|
|||
Pro forma income from continuing operations attributable to LKQ stockholders
|
$
|
517,996
|
|
|
$
|
566,129
|
|
|
$
|
494,538
|
|
|
|
|
|
|
|
||||||
Earnings per share from continuing operations, basic - as reported
|
$
|
1.55
|
|
|
$
|
1.74
|
|
|
$
|
1.49
|
|
Effect of purchased businesses for the period prior to acquisition:
|
|
|
|
|
|
||||||
Stahlgruber
|
0.06
|
|
|
0.02
|
|
|
—
|
|
|||
Rhiag
|
—
|
|
|
—
|
|
|
(0.00
|
)
|
|||
PGW
(1), (3)
|
—
|
|
|
—
|
|
|
0.02
|
|
|||
Other acquisitions
|
0.00
|
|
|
0.05
|
|
|
0.06
|
|
|||
Acquisition related expenses, net of tax
(4)
|
0.05
|
|
|
0.03
|
|
|
0.04
|
|
|||
Impact of share issuance from acquisition of Stahlgruber
|
(0.02
|
)
|
|
(0.04
|
)
|
|
—
|
|
|||
Pro forma earnings per share from continuing operations, basic
(5)
|
1.64
|
|
|
1.79
|
|
|
1.61
|
|
|||
Less: Pro forma net income attributable to noncontrolling interest
|
0.01
|
|
|
0.00
|
|
|
—
|
|
|||
Pro forma income from continuing operations attributable to LKQ stockholders
|
$
|
1.63
|
|
|
$
|
1.79
|
|
|
$
|
1.61
|
|
|
|
|
|
|
|
||||||
Earnings per share from continuing operations, diluted - as reported
|
$
|
1.54
|
|
|
$
|
1.73
|
|
|
$
|
1.47
|
|
Effect of purchased businesses for the period prior to acquisition:
|
|
|
|
|
|
||||||
Stahlgruber
|
0.05
|
|
|
0.02
|
|
|
—
|
|
|||
Rhiag
|
—
|
|
|
—
|
|
|
(0.00
|
)
|
|||
PGW
(1), (3)
|
—
|
|
|
—
|
|
|
0.02
|
|
|||
Other acquisitions
|
0.00
|
|
|
0.05
|
|
|
0.06
|
|
|||
Acquisition related expenses, net of tax
(4)
|
0.05
|
|
|
0.03
|
|
|
0.04
|
|
|||
Impact of share issuance from acquisition of Stahlgruber
|
(0.02
|
)
|
|
(0.04
|
)
|
|
—
|
|
|||
Pro forma earnings per share from continuing operations, diluted
(5)
|
1.63
|
|
|
1.78
|
|
|
1.60
|
|
|||
Less: Pro forma net income attributable to noncontrolling interest
|
0.01
|
|
|
0.00
|
|
|
—
|
|
|||
Pro forma income from continuing operations attributable to LKQ stockholders
|
$
|
1.62
|
|
|
$
|
1.78
|
|
|
$
|
1.60
|
|
(1)
|
PGW reflects the results for the continuing aftermarket automotive glass distribution business only.
|
(2)
|
Includes interest expense for the period from April 9, 2018 through
December 31, 2018
recorded on the senior notes issued in connection with our acquisition of Stahlgruber.
|
(3)
|
Excludes
$5 million
of corporate costs for 2016 that did not reoccur after the sale of our glass manufacturing business.
|
(4)
|
Includes expenses related to acquisitions closed in the period and excludes expenses for acquisitions not yet completed.
|
(5)
|
The sum of the individual earnings per share amounts may not equal the total due to rounding.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue
|
$
|
—
|
|
|
$
|
111,130
|
|
|
$
|
498,233
|
|
Cost of goods sold
|
—
|
|
|
100,084
|
|
|
424,161
|
|
|||
Selling, general and administrative expenses
|
—
|
|
|
8,369
|
|
|
22,330
|
|
|||
Impairment on net assets of discontinued operations
(1)
|
—
|
|
|
—
|
|
|
26,677
|
|
|||
Operating income
|
—
|
|
|
2,677
|
|
|
25,065
|
|
|||
Interest income and other income (expense), net
(2)
|
—
|
|
|
1,204
|
|
|
(9,136
|
)
|
|||
Income from discontinued operations before taxes
|
—
|
|
|
3,881
|
|
|
15,929
|
|
|||
Provision for income taxes
|
—
|
|
|
3,598
|
|
|
8,252
|
|
|||
Equity in (loss) earnings of unconsolidated subsidiaries
|
—
|
|
|
(534
|
)
|
|
175
|
|
|||
(Loss) income from discontinued operations, net of tax
|
—
|
|
|
(251
|
)
|
|
7,852
|
|
|||
Loss on sale of discontinued operations, net of tax
(3)
|
(4,397
|
)
|
|
(6,495
|
)
|
|
—
|
|
|||
Net (loss) income from discontinued operations
|
$
|
(4,397
|
)
|
|
$
|
(6,746
|
)
|
|
$
|
7,852
|
|
(2)
|
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
and from April 21, 2016 to December 31, 2016 was
$6 million
. The other expenses, net were foreign currency gains and losses.
|
|
Period from January 1
|
|
Period from April 21
|
||||
|
to March 1,
|
|
to December 31,
|
||||
|
2017
|
|
2016
|
||||
Non-cash operating activities:
|
|
|
|
||||
Depreciation and amortization
|
$
|
—
|
|
|
$
|
7,752
|
|
Impairment of net assets of discontinued operations
|
—
|
|
|
26,677
|
|
||
Deferred income taxes
|
—
|
|
|
(4,516
|
)
|
||
Capital expenditures
|
(3,598
|
)
|
|
(24,156
|
)
|
||
Investments in unconsolidated subsidiaries
|
—
|
|
|
(4,400
|
)
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Aftermarket and refurbished products
|
$
|
2,309,458
|
|
|
$
|
1,877,653
|
|
Salvage and remanufactured products
|
503,199
|
|
|
487,108
|
|
||
Manufactured products
|
23,418
|
|
|
16,022
|
|
||
Total inventories
|
$
|
2,836,075
|
|
|
$
|
2,380,783
|
|
Land improvements
|
10-20 years
|
Buildings and improvements
|
20-40 years
|
Machinery and equipment
|
3-20 years
|
Computer equipment and software
|
3-10 years
|
Vehicles and trailers
|
3-10 years
|
Furniture and fixtures
|
5-7 years
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Land and improvements
|
$
|
177,998
|
|
|
$
|
137,790
|
|
Buildings and improvements
|
378,490
|
|
|
233,078
|
|
||
Machinery and equipment
|
626,615
|
|
|
521,526
|
|
||
Computer equipment and software
|
143,547
|
|
|
133,753
|
|
||
Vehicles and trailers
|
176,186
|
|
|
161,269
|
|
||
Furniture and fixtures
|
58,919
|
|
|
31,794
|
|
||
Leasehold improvements
|
278,687
|
|
|
257,506
|
|
||
|
1,840,442
|
|
|
1,476,716
|
|
||
Less—Accumulated depreciation
|
(685,751
|
)
|
|
(606,112
|
)
|
||
Construction in progress
|
65,471
|
|
|
42,485
|
|
||
Total property, plant and equipment, net
|
$
|
1,220,162
|
|
|
$
|
913,089
|
|
|
|
||
|
Gross Amount
|
||
Land and improvements
|
$
|
47,281
|
|
Buildings and improvements
|
135,628
|
|
|
Machinery and equipment
|
49,384
|
|
|
Computer equipment and software
|
3,760
|
|
|
Vehicles and trailers
|
643
|
|
|
Furniture and fixtures
|
30,426
|
|
|
Leasehold improvements
|
1,890
|
|
|
|
269,012
|
|
|
Construction in progress
|
2,280
|
|
|
Total property, plant and equipment
|
$
|
271,292
|
|
|
North America
|
|
Europe
|
|
Specialty
|
|
Total
|
||||||||
Balance as of January 1, 2016
|
$
|
1,433,499
|
|
|
$
|
594,482
|
|
|
$
|
291,265
|
|
|
$
|
2,319,246
|
|
Business acquisitions and adjustments to previously recorded goodwill
|
226,483
|
|
|
614,437
|
|
|
1,889
|
|
|
842,809
|
|
||||
Exchange rate effects
|
1,818
|
|
|
(108,943
|
)
|
|
(161
|
)
|
|
(107,286
|
)
|
||||
Balance as of December 31, 2016
|
$
|
1,661,800
|
|
|
$
|
1,099,976
|
|
|
$
|
292,993
|
|
|
$
|
3,054,769
|
|
Business acquisitions and adjustments to previously recorded goodwill
|
39,836
|
|
|
155,366
|
|
|
119,615
|
|
|
314,817
|
|
||||
Exchange rate effects
|
7,718
|
|
|
159,556
|
|
|
(349
|
)
|
|
166,925
|
|
||||
Balance as of December 31, 2017
|
$
|
1,709,354
|
|
|
$
|
1,414,898
|
|
|
$
|
412,259
|
|
|
$
|
3,536,511
|
|
Business acquisitions and adjustments to previously recorded goodwill
|
6,805
|
|
|
970,923
|
|
|
(4,838
|
)
|
|
972,890
|
|
||||
Impairment of goodwill
|
(33,244
|
)
|
|
—
|
|
|
—
|
|
|
(33,244
|
)
|
||||
Exchange rate effects
|
(9,383
|
)
|
|
(85,532
|
)
|
|
216
|
|
|
(94,699
|
)
|
||||
Balance as of December 31, 2018
|
$
|
1,673,532
|
|
|
$
|
2,300,289
|
|
|
$
|
407,637
|
|
|
$
|
4,381,458
|
|
Accumulated impairment losses as of December 31, 2018
|
$
|
(33,244
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(33,244
|
)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Intangible assets subject to amortization
|
$
|
847,452
|
|
|
$
|
664,969
|
|
Indefinite-lived intangible assets
|
|
|
|
||||
Trademarks
|
81,300
|
|
|
78,800
|
|
||
Total
|
$
|
928,752
|
|
|
$
|
743,769
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Trade names and trademarks
|
$
|
496,166
|
|
|
$
|
(94,451
|
)
|
|
$
|
401,715
|
|
|
$
|
327,332
|
|
|
$
|
(75,095
|
)
|
|
$
|
252,237
|
|
Customer and supplier relationships
|
593,517
|
|
|
(247,464
|
)
|
|
346,053
|
|
|
510,113
|
|
|
(167,532
|
)
|
|
342,581
|
|
||||||
Software and other technology related assets
|
176,118
|
|
|
(79,283
|
)
|
|
96,835
|
|
|
124,049
|
|
|
(59,081
|
)
|
|
64,968
|
|
||||||
Covenants not to compete
|
13,344
|
|
|
(10,495
|
)
|
|
2,849
|
|
|
14,981
|
|
|
(9,798
|
)
|
|
5,183
|
|
||||||
Total
|
$
|
1,279,145
|
|
|
$
|
(431,693
|
)
|
|
$
|
847,452
|
|
|
$
|
976,475
|
|
|
$
|
(311,506
|
)
|
|
$
|
664,969
|
|
|
Year Ended
|
|
Year Ended
|
||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Stahlgruber
|
|
Other Acquisitions
(1)
|
|
Total
|
|
All Acquisitions
|
||||||||
Trade names and trademarks
|
$
|
173,946
|
|
|
$
|
8,870
|
|
|
$
|
182,816
|
|
|
$
|
87,306
|
|
Customer and supplier relationships
|
77,980
|
|
|
20,779
|
|
|
98,759
|
|
|
75,450
|
|
||||
Software and other technology related assets
|
33,329
|
|
|
376
|
|
|
33,705
|
|
|
15,757
|
|
||||
Covenants not to compete
|
—
|
|
|
—
|
|
|
—
|
|
|
2,703
|
|
||||
Total
|
$
|
285,255
|
|
|
$
|
30,025
|
|
|
$
|
315,280
|
|
|
$
|
181,216
|
|
|
Year Ended
|
|
Year Ended
|
|||||||
|
December 31, 2018
|
|
December 31, 2017
|
|||||||
|
Stahlgruber
|
|
Other Acquisitions
|
|
Total
|
|
All Acquisitions
|
|||
Trade names and trademarks
|
18.0
|
|
|
10.0
|
|
|
17.6
|
|
|
11.2
|
Customer and supplier relationships
|
3.0
|
|
|
7.9
|
|
|
4.0
|
|
|
18.6
|
Software and other technology related assets
|
5.2
|
|
|
6.5
|
|
|
5.2
|
|
|
11.1
|
Covenants not to compete
|
—
|
|
|
—
|
|
|
—
|
|
|
4.4
|
Total acquired finite-lived intangible assets
|
12.4
|
|
|
8.5
|
|
|
12.0
|
|
|
16.5
|
|
Method of Amortization
|
|
Useful Life
|
Trade names and trademarks
|
Straight-line
|
|
4-30 years
|
Customer and supplier relationships
|
Accelerated
|
|
3-20 years
|
Software and other technology related assets
|
Straight-line
|
|
3-15 years
|
Covenants not to compete
|
Straight-line
|
|
2-5 years
|
Balance as of January 1, 2017
|
$
|
19,634
|
|
Warranty expense
|
38,608
|
|
|
Warranty claims
|
(35,091
|
)
|
|
Balance as of December 31, 2017
|
23,151
|
|
|
Warranty expense
|
43,682
|
|
|
Warranty claims
|
(43,571
|
)
|
|
Balance as of December 31, 2018
|
$
|
23,262
|
|
|
Balance as of December 31, 2017
|
|
Adjustments Due to ASC 606
|
|
Balance as of January 1, 2018
|
||||||
Balance Sheet
|
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
||||||
Accounts receivable
|
$
|
1,027,106
|
|
|
$
|
38,511
|
|
|
$
|
1,065,617
|
|
Prepaid expenses and other current assets
|
134,479
|
|
|
44,508
|
|
|
178,987
|
|
|||
Liabilities
|
|
|
|
|
|
||||||
Refund liability
|
—
|
|
|
83,019
|
|
|
83,019
|
|
|
Balance as of December 31, 2018
|
||||||||||
|
As Reported
|
|
Amounts Without Adoption of ASC 606
|
|
Effect of Change Higher/(Lower)
|
||||||
Balance Sheet
|
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
||||||
Accounts receivable
|
$
|
1,154,083
|
|
|
$
|
1,105,937
|
|
|
$
|
48,146
|
|
Prepaid expenses and other current assets
|
199,030
|
|
|
142,591
|
|
|
56,439
|
|
|||
Liabilities
|
|
|
|
|
|
||||||
Refund liability
|
104,585
|
|
|
—
|
|
|
104,585
|
|
|
Year ended December 31, 2018
|
||||||||||
|
As Reported
|
|
Amounts Without Adoption of ASC 606
|
|
Effect of Change Higher/(Lower)
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
11,876,674
|
|
|
$
|
11,884,651
|
|
|
$
|
(7,977
|
)
|
Cost of goods sold
|
7,301,817
|
|
|
7,306,885
|
|
|
(5,068
|
)
|
|||
Selling, general and administrative expenses
|
3,352,731
|
|
|
3,355,640
|
|
|
(2,909
|
)
|
1.
|
Identifying contracts with customers,
|
2.
|
Identifying performance obligations within those contracts,
|
3.
|
Determining the transaction price,
|
4.
|
Allocating the transaction price to the performance obligations in the contract, which may include an estimate of variable consideration, and
|
5.
|
Recognizing revenue when or as each performance obligation is satisfied.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
North America
|
$
|
4,558,220
|
|
|
$
|
4,278,531
|
|
|
$
|
4,009,129
|
|
Europe
|
5,202,231
|
|
|
3,628,906
|
|
|
2,915,841
|
|
|||
Specialty
|
1,472,956
|
|
|
1,301,197
|
|
|
1,219,675
|
|
|||
Parts and services
|
11,233,407
|
|
|
9,208,634
|
|
|
8,144,645
|
|
|||
Other
|
643,267
|
|
|
528,275
|
|
|
439,386
|
|
|||
Total revenue
|
$
|
11,876,674
|
|
|
$
|
9,736,909
|
|
|
$
|
8,584,031
|
|
Balance as of January 1, 2018
|
$
|
19,465
|
|
Additional warranty revenue deferred
|
38,736
|
|
|
Warranty revenue recognized
|
(34,195
|
)
|
|
Balance as of December 31, 2018
|
$
|
24,006
|
|
|
Number
Outstanding
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Weighted Average Remaining Contractual Term
(in years)
|
|
Aggregate Intrinsic Value
(in thousands)
(1)
|
|||||
Unvested as of January 1, 2018
|
1,624,390
|
|
|
$
|
29.94
|
|
|
|
|
|
||
Granted
(2)
|
601,802
|
|
|
$
|
42.58
|
|
|
|
|
|
||
Vested
|
(704,909
|
)
|
|
$
|
30.03
|
|
|
|
|
|
||
Forfeited / Canceled
|
(45,601
|
)
|
|
$
|
33.43
|
|
|
|
|
|
||
Unvested as of December 31, 2018
|
1,475,682
|
|
|
$
|
34.94
|
|
|
|
|
|
||
Expected to vest after December 31, 2018
|
1,351,169
|
|
|
$
|
34.89
|
|
|
2.3
|
|
$
|
32,063
|
|
(2)
|
The weighted average grant date fair value of RSUs granted during the years ended December 31, 2017 and 2016 was
$32.15
and
$29.05
, respectively.
|
|
Number
Outstanding
|
|
Weighted
Average Exercise Price
|
|
Weighted Average Remaining Contractual Term
(in years)
|
|
Aggregate Intrinsic Value
(in thousands)
(1)
|
|||||
Balance as of January 1, 2018
|
1,738,073
|
|
|
$
|
9.20
|
|
|
|
|
|
||
Exercised
|
(686,070
|
)
|
|
$
|
7.73
|
|
|
|
|
$
|
17,504
|
|
Canceled
|
(509
|
)
|
|
$
|
32.31
|
|
|
|
|
|
||
Balance as of December 31, 2018
|
1,051,494
|
|
|
$
|
10.15
|
|
|
0.9
|
|
$
|
14,570
|
|
Exercisable as of December 31, 2018
|
1,051,494
|
|
|
$
|
10.15
|
|
|
0.9
|
|
$
|
14,570
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
RSUs
|
$
|
22,760
|
|
|
$
|
22,826
|
|
|
$
|
22,183
|
|
Stock options and other
|
—
|
|
|
6
|
|
|
162
|
|
|||
Total stock-based compensation expense
|
$
|
22,760
|
|
|
$
|
22,832
|
|
|
$
|
22,345
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cost of goods sold
|
$
|
469
|
|
|
$
|
434
|
|
|
$
|
407
|
|
Selling, general and administrative expenses
|
22,291
|
|
|
22,398
|
|
|
21,938
|
|
|||
Total stock-based compensation expense
|
22,760
|
|
|
22,832
|
|
|
22,345
|
|
|||
Income tax benefit
|
(5,220
|
)
|
|
(5,459
|
)
|
|
(8,268
|
)
|
|||
Total stock-based compensation expense, net of tax
|
$
|
17,540
|
|
|
$
|
17,373
|
|
|
$
|
14,077
|
|
|
RSUs
|
||
2019
|
$
|
15,166
|
|
2020
|
9,715
|
|
|
2021
|
6,315
|
|
|
2022
|
3,458
|
|
|
2023
|
150
|
|
|
Total unrecognized compensation expense
|
$
|
34,804
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Income from continuing operations
|
$
|
487,565
|
|
|
$
|
536,974
|
|
|
$
|
456,123
|
|
Denominator for basic earnings per share—Weighted-average shares outstanding
|
314,428
|
|
|
308,607
|
|
|
306,897
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
RSUs
|
409
|
|
|
544
|
|
|
689
|
|
|||
Stock options
|
1,012
|
|
|
1,498
|
|
|
2,198
|
|
|||
Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding
|
315,849
|
|
|
310,649
|
|
|
309,784
|
|
|||
Basic earnings per share from continuing operations
|
$
|
1.55
|
|
|
$
|
1.74
|
|
|
$
|
1.49
|
|
Diluted earnings per share from continuing operations
|
$
|
1.54
|
|
|
$
|
1.73
|
|
|
$
|
1.47
|
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Antidilutive securities:
|
|
|
|
|
|
|||
RSUs
|
410
|
|
|
37
|
|
|
57
|
|
Stock options
|
8
|
|
|
39
|
|
|
63
|
|
|
|
Foreign
Currency Translation |
|
Unrealized (Loss) Gain
on Cash Flow Hedges |
|
Unrealized (Loss) Gain
on Pension Plans |
|
Other Comprehensive Loss from Unconsolidated Subsidiaries
|
|
Accumulated
Other Comprehensive (Loss) Income |
||||||||||
Balance at January 1, 2016
|
|
$
|
(96,890
|
)
|
|
$
|
(932
|
)
|
|
$
|
(7,648
|
)
|
|
$
|
—
|
|
|
$
|
(105,470
|
)
|
Pretax (loss) income
|
|
(175,639
|
)
|
|
12,382
|
|
|
7,175
|
|
|
—
|
|
|
(156,082
|
)
|
|||||
Income tax effect
|
|
—
|
|
|
(4,581
|
)
|
|
(2,636
|
)
|
|
—
|
|
|
(7,217
|
)
|
|||||
Reclassification of unrealized loss (gain)
|
|
—
|
|
|
1,789
|
|
|
496
|
|
|
—
|
|
|
2,285
|
|
|||||
Reclassification of deferred income taxes
|
|
—
|
|
|
(567
|
)
|
|
(124
|
)
|
|
—
|
|
|
(691
|
)
|
|||||
Balance at December 31, 2016
|
|
$
|
(272,529
|
)
|
|
$
|
8,091
|
|
|
$
|
(2,737
|
)
|
|
$
|
—
|
|
|
$
|
(267,175
|
)
|
Pretax income (loss)
|
|
206,451
|
|
|
(44,550
|
)
|
|
361
|
|
|
—
|
|
|
162,262
|
|
|||||
Income tax effect
|
|
(7,366
|
)
|
|
16,390
|
|
|
(100
|
)
|
|
—
|
|
|
8,924
|
|
|||||
Reclassification of unrealized loss (gain)
|
|
—
|
|
|
50,090
|
|
|
(3,519
|
)
|
|
—
|
|
|
46,571
|
|
|||||
Reclassification of deferred income taxes
|
|
—
|
|
|
(18,483
|
)
|
|
659
|
|
|
—
|
|
|
(17,824
|
)
|
|||||
Disposal of business, net
|
|
1,511
|
|
|
—
|
|
|
(3,436
|
)
|
|
—
|
|
|
(1,925
|
)
|
|||||
Other comprehensive loss from unconsolidated subsidiaries
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,309
|
)
|
|
(1,309
|
)
|
|||||
Balance at December 31, 2017
|
|
$
|
(71,933
|
)
|
|
$
|
11,538
|
|
|
$
|
(8,772
|
)
|
|
$
|
(1,309
|
)
|
|
$
|
(70,476
|
)
|
Pretax (loss) income
|
|
(113,030
|
)
|
|
37,552
|
|
|
1,132
|
|
|
—
|
|
|
(74,346
|
)
|
|||||
Income tax effect
|
|
4,507
|
|
|
(8,846
|
)
|
|
(403
|
)
|
|
—
|
|
|
(4,742
|
)
|
|||||
Reclassification of unrealized (gain) loss
|
|
—
|
|
|
(37,009
|
)
|
|
(54
|
)
|
|
—
|
|
|
(37,063
|
)
|
|||||
Reclassification of deferred income taxes
|
|
—
|
|
|
8,653
|
|
|
22
|
|
|
—
|
|
|
8,675
|
|
|||||
Other comprehensive loss from unconsolidated subsidiaries
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,343
|
)
|
|
(2,343
|
)
|
|||||
Adoption of ASU 2018-02
|
|
2,859
|
|
|
2,486
|
|
|
—
|
|
|
—
|
|
|
5,345
|
|
|||||
Balance at December 31, 2018
|
|
$
|
(177,597
|
)
|
|
$
|
14,374
|
|
|
$
|
(8,075
|
)
|
|
$
|
(3,652
|
)
|
|
$
|
(174,950
|
)
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Senior secured credit agreement:
|
|
|
|
||||
Term loans payable
|
$
|
350,000
|
|
|
$
|
704,800
|
|
Revolving credit facilities
|
1,387,177
|
|
|
1,283,551
|
|
||
U.S. Notes (2023)
|
600,000
|
|
|
600,000
|
|
||
Euro Notes (2024)
|
573,350
|
|
|
600,150
|
|
||
Euro Notes (2026/28)
|
1,146,700
|
|
|
—
|
|
||
Receivables securitization facility
|
110,000
|
|
|
100,000
|
|
||
Notes payable through May 2027 at weighted average interest rates of 2.0% and 1.4%, respectively
|
23,056
|
|
|
29,146
|
|
||
Other long-term debt at weighted average interest rates of 2.5% and 1.7%, respectively
|
157,414
|
|
|
110,633
|
|
||
Total debt
|
4,347,697
|
|
|
3,428,280
|
|
||
Less: long-term debt issuance costs
|
(36,906
|
)
|
|
(21,476
|
)
|
||
Less: current debt issuance costs
|
(291
|
)
|
|
(2,824
|
)
|
||
Total debt, net of debt issuance costs
|
4,310,500
|
|
|
3,403,980
|
|
||
Less: current maturities, net of debt issuance costs
|
(121,826
|
)
|
|
(126,360
|
)
|
||
Long term debt, net of debt issuance costs
|
$
|
4,188,674
|
|
|
$
|
3,277,620
|
|
|
|
Notional Amount
|
|
Fair Value at December 31, 2017 (USD)
|
||||||||
|
|
December 31, 2017
|
|
Other Assets
|
|
Other Noncurrent Liabilities
|
||||||
Interest rate swap agreements
|
|
|
|
|
||||||||
USD denominated
|
|
$
|
590,000
|
|
|
$
|
19,102
|
|
|
$
|
—
|
|
Cross currency swap agreements
|
|
|
|
|
||||||||
USD/euro
|
|
$
|
406,546
|
|
|
5,504
|
|
|
61,492
|
|
||
Total cash flow hedges
|
|
$
|
24,606
|
|
|
$
|
61,492
|
|
|
Balance as of December 31, 2018
|
|
Fair Value Measurements as of December 31, 2018
|
||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash surrender value of life insurance
|
$
|
47,649
|
|
|
$
|
—
|
|
|
$
|
47,649
|
|
|
$
|
—
|
|
Interest rate swaps
|
14,967
|
|
|
—
|
|
|
14,967
|
|
|
—
|
|
||||
Cross currency swap agreements
|
7,880
|
|
|
—
|
|
|
7,880
|
|
|
—
|
|
||||
Total Assets
|
$
|
70,496
|
|
|
$
|
—
|
|
|
$
|
70,496
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent consideration liabilities
|
$
|
5,209
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,209
|
|
Deferred compensation liabilities
|
48,984
|
|
|
—
|
|
|
48,984
|
|
|
—
|
|
||||
Cross currency swap agreements
|
40,997
|
|
|
—
|
|
|
40,997
|
|
|
—
|
|
||||
Total Liabilities
|
$
|
95,190
|
|
|
$
|
—
|
|
|
$
|
89,981
|
|
|
$
|
5,209
|
|
|
Balance as of December 31, 2017
|
|
Fair Value Measurements as of December 31, 2017
|
||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash surrender value of life insurance
|
$
|
45,984
|
|
|
$
|
—
|
|
|
$
|
45,984
|
|
|
$
|
—
|
|
Interest rate swaps
|
19,102
|
|
|
—
|
|
|
19,102
|
|
|
—
|
|
||||
Cross currency swap agreements
|
5,504
|
|
|
—
|
|
|
5,504
|
|
|
—
|
|
||||
Total Assets
|
$
|
70,590
|
|
|
$
|
—
|
|
|
$
|
70,590
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent consideration liabilities
|
$
|
2,636
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,636
|
|
Deferred compensation liabilities
|
47,199
|
|
|
—
|
|
|
47,199
|
|
|
—
|
|
||||
Cross currency swap agreements
|
61,492
|
|
|
—
|
|
|
61,492
|
|
|
—
|
|
||||
Total Liabilities
|
$
|
111,327
|
|
|
$
|
—
|
|
|
$
|
108,691
|
|
|
$
|
2,636
|
|
Years ending December 31:
|
|
||
2019
|
$
|
294,269
|
|
2020
|
256,172
|
|
|
2021
|
210,632
|
|
|
2022
|
158,763
|
|
|
2023
|
131,518
|
|
|
Thereafter
|
777,165
|
|
|
Future Minimum Lease Payments
|
$
|
1,828,519
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Change in projected benefit obligation:
|
|
|
|
||||
Projected benefit obligation - beginning of year
|
$
|
126,031
|
|
|
$
|
111,547
|
|
Acquisitions
(1)
|
79,211
|
|
|
938
|
|
||
Service cost
|
3,215
|
|
|
4,525
|
|
||
Interest cost
|
3,476
|
|
|
3,670
|
|
||
Participant contributions
|
415
|
|
|
573
|
|
||
Actuarial (gain) / loss
|
(989
|
)
|
|
4,539
|
|
||
Benefits paid
(2)
|
(4,447
|
)
|
|
(3,806
|
)
|
||
Curtailment
(3)
|
—
|
|
|
(4,064
|
)
|
||
Settlement
|
(756
|
)
|
|
(245
|
)
|
||
Currency impact
|
(4,664
|
)
|
|
8,354
|
|
||
Projected benefit obligation - end of year
|
$
|
201,492
|
|
|
$
|
126,031
|
|
Change in fair value of plan assets:
|
|
|
|
||||
Fair value - beginning of year
|
$
|
82,852
|
|
|
$
|
73,057
|
|
Acquisitions
(1)
|
251
|
|
|
—
|
|
||
Actual return on plan assets
|
3,018
|
|
|
3,307
|
|
||
Employer contributions
|
9,975
|
|
|
2,931
|
|
||
Participant contributions
|
415
|
|
|
573
|
|
||
Benefits paid
|
(2,788
|
)
|
|
(3,040
|
)
|
||
Currency impact
|
(2,051
|
)
|
|
6,024
|
|
||
Fair value - end of year
|
$
|
91,672
|
|
|
$
|
82,852
|
|
Funded status at end of year (liability)
|
$
|
(109,820
|
)
|
|
$
|
(43,179
|
)
|
|
|
|
|
||||
Accumulated benefit obligation
|
$
|
199,337
|
|
|
$
|
125,389
|
|
(1)
|
2018 amounts relate primarily to the addition of plans in connection with our acquisition of Stahlgruber.
|
(2)
|
Includes amounts paid from plan assets as well as amounts paid from Company assets.
|
(3)
|
In 2017, we froze one of our Europe pension plans, resulting in a curtailment. No additional participants may join this plan and as of December 31, 2017, participants no longer accrue future benefits under this plan.
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Non-current assets
|
$
|
377
|
|
|
$
|
—
|
|
Current liabilities
|
(3,280
|
)
|
|
—
|
|
||
Non-current liabilities
|
(106,917
|
)
|
|
(43,179
|
)
|
||
|
$
|
(109,820
|
)
|
|
$
|
(43,179
|
)
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Accumulated benefit obligation
|
$
|
169,097
|
|
|
$
|
125,389
|
|
Aggregate fair value of plan assets
|
60,988
|
|
|
82,852
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Projected benefit obligation
|
$
|
171,185
|
|
|
$
|
126,031
|
|
Aggregate fair value of plan assets
|
60,988
|
|
|
82,852
|
|
|
2018
|
|
2017
|
||
Discount rate used to determine benefit obligation
|
2.1
|
%
|
|
2.1
|
%
|
Rate of future compensation increase
|
0.9
|
%
|
|
1.3
|
%
|
|
Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Service cost
|
$
|
3,215
|
|
|
$
|
4,525
|
|
|
$
|
3,843
|
|
Interest cost
|
3,476
|
|
|
3,670
|
|
|
2,719
|
|
|||
Expected return on plan assets
(1)
|
(2,949
|
)
|
|
(2,467
|
)
|
|
(2,624
|
)
|
|||
Amortization of prior service credit
|
—
|
|
|
(181
|
)
|
|
(266
|
)
|
|||
Amortization of actuarial (gain) loss
(2)
|
(54
|
)
|
|
473
|
|
|
762
|
|
|||
Curtailment gain
|
—
|
|
|
(3,811
|
)
|
|
—
|
|
|||
Settlement (gain) / loss
|
74
|
|
|
(4
|
)
|
|
2
|
|
|||
Net periodic benefit cost
|
$
|
3,762
|
|
|
$
|
2,205
|
|
|
$
|
4,436
|
|
(1)
|
We use the fair value of our plan assets to calculate the expected return on plan assets.
|
(2)
|
Actuarial gains and losses are amortized using a corridor approach. Gains and losses are amortized if, as of the beginning of the year, the cumulative net gain or loss exceeds 10 percent of the greater of the projected benefit obligation or the fair value of the plan assets. Gains and losses in excess of the corridor are amortized over the average
|
|
2018
|
|
2017
|
|
2016
|
|||
Discount rate used to determine service cost
|
1.3
|
%
|
|
1.5
|
%
|
|
1.6
|
%
|
Discount rate used to determine interest cost
|
2.5
|
%
|
|
3.0
|
%
|
|
3.0
|
%
|
Rate of future compensation increase
|
1.9
|
%
|
|
1.3
|
%
|
|
2.0
|
%
|
Expected long-term return on plan assets
(1)
|
4.8
|
%
|
|
5.0
|
%
|
|
5.1
|
%
|
(1)
|
Our expected long-term return on plan assets is determined based on our asset allocation and estimate of future long-term returns by asset class.
|
|
December 31,
|
||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Cash and cash equivalents
(1)
|
$
|
30,684
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,684
|
|
|
$
|
369
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
369
|
|
Mutual funds
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,709
|
|
|
—
|
|
|
—
|
|
|
21,709
|
|
||||||||
Insurance contracts
|
—
|
|
|
—
|
|
|
60,988
|
|
|
60,988
|
|
|
—
|
|
|
—
|
|
|
60,774
|
|
|
60,774
|
|
||||||||
Total investments at fair value
|
$
|
30,684
|
|
|
$
|
—
|
|
|
$
|
60,988
|
|
|
$
|
91,672
|
|
|
$
|
22,078
|
|
|
$
|
—
|
|
|
$
|
60,774
|
|
|
$
|
82,852
|
|
(1)
|
Consists of institutional short-term investment funds.
|
(2)
|
Mutual funds consist of investments in equity securities, fixed-income securities, and real estate.
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Balance at beginning of year
|
$
|
60,774
|
|
|
$
|
53,803
|
|
Actual return on plan assets:
|
|
|
|
||||
Relating to assets held at the reporting date
|
2,556
|
|
|
464
|
|
||
Purchases, sales and settlements
|
(541
|
)
|
|
483
|
|
||
Transfers in and/or out of Level 3
|
255
|
|
|
—
|
|
||
Currency impact
|
(2,056
|
)
|
|
6,024
|
|
||
Balance at end of year
|
$
|
60,988
|
|
|
$
|
60,774
|
|
Year Ended December 31,
|
|
Amount
|
||
2019
|
|
$
|
5,818
|
|
2020
|
|
5,627
|
|
|
2021
|
|
6,263
|
|
|
2022
|
|
6,966
|
|
|
2023
|
|
6,948
|
|
|
2024 - 2028
|
|
39,823
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
90,216
|
|
|
$
|
196,825
|
|
|
$
|
159,547
|
|
State
|
25,851
|
|
|
27,149
|
|
|
27,120
|
|
|||
Foreign
|
77,508
|
|
|
58,123
|
|
|
45,545
|
|
|||
Total current provision for income taxes
|
$
|
193,575
|
|
|
$
|
282,097
|
|
|
$
|
232,212
|
|
Deferred:
|
|
|
|
|
|
||||||
Federal
|
$
|
14,977
|
|
|
$
|
(37,486
|
)
|
|
$
|
1,169
|
|
State
|
4,386
|
|
|
4,044
|
|
|
2,131
|
|
|||
Foreign
|
(21,543
|
)
|
|
(13,095
|
)
|
|
(14,946
|
)
|
|||
Total deferred benefit for income taxes
|
$
|
(2,180
|
)
|
|
$
|
(46,537
|
)
|
|
$
|
(11,646
|
)
|
Provision for income taxes
|
$
|
191,395
|
|
|
$
|
235,560
|
|
|
$
|
220,566
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Domestic
|
$
|
562,758
|
|
|
$
|
575,148
|
|
|
$
|
513,844
|
|
Foreign
|
180,673
|
|
|
191,479
|
|
|
163,437
|
|
|||
Income from continuing operations before provision for income taxes
|
$
|
743,431
|
|
|
$
|
766,627
|
|
|
$
|
677,281
|
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
U.S. federal statutory rate
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
U.S. federal tax reform - federal deferred tax rate change
|
—
|
%
|
|
(9.5
|
)%
|
|
—
|
%
|
U.S. federal tax reform - transition tax on foreign earnings
|
(1.3
|
)%
|
|
6.6
|
%
|
|
—
|
%
|
State income taxes, net of state credits and federal tax impact
|
3.5
|
%
|
|
2.8
|
%
|
|
2.7
|
%
|
Impact of rates on international operations
|
0.9
|
%
|
|
(3.2
|
)%
|
|
(3.2
|
)%
|
Notional interest deductions
|
(0.6
|
)%
|
|
(0.9
|
)%
|
|
(2.5
|
)%
|
Excess tax benefits from stock-based compensation
|
(0.6
|
)%
|
|
(1.0
|
)%
|
|
(1.6
|
)%
|
Non-deductible expenses
|
1.6
|
%
|
|
1.1
|
%
|
|
1.3
|
%
|
Other, net
|
1.2
|
%
|
|
(0.2
|
)%
|
|
0.9
|
%
|
Effective tax rate
|
25.7
|
%
|
|
30.7
|
%
|
|
32.6
|
%
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Deferred Tax Assets:
|
|
|
|
||||
Accrued expenses and reserves
|
$
|
60,337
|
|
|
$
|
40,317
|
|
Qualified and nonqualified retirement plans
|
20,525
|
|
|
19,074
|
|
||
Inventory
|
15,474
|
|
|
17,886
|
|
||
Accounts receivable
|
16,208
|
|
|
16,036
|
|
||
Interest deduction carryforwards
|
20,392
|
|
|
13,845
|
|
||
Stock-based compensation
|
4,859
|
|
|
4,963
|
|
||
Net operating loss carryforwards
|
13,222
|
|
|
11,734
|
|
||
Other
|
12,370
|
|
|
8,971
|
|
||
Total deferred tax assets, gross
|
163,387
|
|
|
132,826
|
|
||
Less: valuation allowance
|
(34,779
|
)
|
|
(21,527
|
)
|
||
Total deferred tax assets
|
$
|
128,608
|
|
|
$
|
111,299
|
|
Deferred Tax Liabilities:
|
|
|
|
||||
Goodwill and other intangible assets
|
$
|
216,699
|
|
|
$
|
192,688
|
|
Property, plant and equipment
|
87,839
|
|
|
67,467
|
|
||
Trade name
|
116,615
|
|
|
72,233
|
|
||
Other
|
15,511
|
|
|
16,165
|
|
||
Total deferred tax liabilities
|
$
|
436,664
|
|
|
$
|
348,553
|
|
Net deferred tax liability
|
$
|
(308,056
|
)
|
|
$
|
(237,254
|
)
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Noncurrent deferred tax assets
|
$
|
3,378
|
|
|
$
|
15,105
|
|
Noncurrent deferred tax liabilities
|
311,434
|
|
|
252,359
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at January 1
|
$
|
1,690
|
|
|
$
|
2,146
|
|
|
$
|
2,273
|
|
Additions for acquired tax positions
|
—
|
|
|
73
|
|
|
—
|
|
|||
Additions based on tax positions related to the current year
|
5
|
|
|
5
|
|
|
5
|
|
|||
Lapse of statutes of limitations
|
(458
|
)
|
|
(534
|
)
|
|
(132
|
)
|
|||
Balance at December 31
|
$
|
1,237
|
|
|
$
|
1,690
|
|
|
$
|
2,146
|
|
|
North America
|
|
Europe
|
|
Specialty
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Third Party
|
$
|
5,181,964
|
|
|
$
|
5,221,754
|
|
|
$
|
1,472,956
|
|
|
$
|
—
|
|
|
$
|
11,876,674
|
|
Intersegment
|
645
|
|
|
—
|
|
|
4,724
|
|
|
(5,369
|
)
|
|
—
|
|
|||||
Total segment revenue
|
$
|
5,182,609
|
|
|
$
|
5,221,754
|
|
|
$
|
1,477,680
|
|
|
$
|
(5,369
|
)
|
|
$
|
11,876,674
|
|
Segment EBITDA
|
$
|
660,153
|
|
|
$
|
422,721
|
|
|
$
|
168,525
|
|
|
$
|
—
|
|
|
$
|
1,251,399
|
|
Depreciation and amortization
(1)
|
87,348
|
|
|
178,473
|
|
|
28,256
|
|
|
—
|
|
|
294,077
|
|
|||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Third Party
|
$
|
4,798,901
|
|
|
$
|
3,636,811
|
|
|
$
|
1,301,197
|
|
|
$
|
—
|
|
|
$
|
9,736,909
|
|
Intersegment
|
750
|
|
|
—
|
|
|
4,319
|
|
|
(5,069
|
)
|
|
—
|
|
|||||
Total segment revenue
|
$
|
4,799,651
|
|
|
$
|
3,636,811
|
|
|
$
|
1,305,516
|
|
|
$
|
(5,069
|
)
|
|
$
|
9,736,909
|
|
Segment EBITDA
|
$
|
655,275
|
|
|
$
|
319,156
|
|
|
$
|
142,159
|
|
|
$
|
—
|
|
|
$
|
1,116,590
|
|
Depreciation and amortization
(1)
|
86,303
|
|
|
120,805
|
|
|
23,095
|
|
|
—
|
|
|
230,203
|
|
|||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Third Party
|
$
|
4,443,886
|
|
|
$
|
2,920,470
|
|
|
$
|
1,219,675
|
|
|
$
|
—
|
|
|
$
|
8,584,031
|
|
Intersegment
|
739
|
|
|
—
|
|
|
4,048
|
|
|
(4,787
|
)
|
|
—
|
|
|||||
Total segment revenue
|
$
|
4,444,625
|
|
|
$
|
2,920,470
|
|
|
$
|
1,223,723
|
|
|
$
|
(4,787
|
)
|
|
$
|
8,584,031
|
|
Segment EBITDA
|
$
|
589,945
|
|
|
$
|
283,608
|
|
|
$
|
131,427
|
|
|
$
|
—
|
|
|
$
|
1,004,980
|
|
Depreciation and amortization
(1)
|
80,923
|
|
|
94,979
|
|
|
22,432
|
|
|
—
|
|
|
198,334
|
|
|
Year Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
Net income
|
$
|
483,168
|
|
|
$
|
530,228
|
|
|
$
|
463,975
|
|
Less: net income (loss) attributable to noncontrolling interest
|
3,050
|
|
|
(3,516
|
)
|
|
—
|
|
|||
Net income attributable to LKQ stockholders
|
480,118
|
|
|
533,744
|
|
|
463,975
|
|
|||
Subtract:
|
|
|
|
|
|
||||||
Net (loss) income from discontinued operations
|
(4,397
|
)
|
|
(6,746
|
)
|
|
7,852
|
|
|||
Net income from continuing operations attributable to LKQ stockholders
|
484,515
|
|
|
540,490
|
|
|
456,123
|
|
|||
Add:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
274,213
|
|
|
219,546
|
|
|
191,433
|
|
|||
Depreciation and amortization - cost of goods sold
|
19,864
|
|
|
10,657
|
|
|
6,901
|
|
|||
Interest expense, net of interest income
|
144,536
|
|
|
100,620
|
|
|
87,682
|
|
|||
Loss on debt extinguishment
|
1,350
|
|
|
456
|
|
|
26,650
|
|
|||
Provision for income taxes
|
191,395
|
|
|
235,560
|
|
|
220,566
|
|
|||
EBITDA
|
1,115,873
|
|
|
1,107,329
|
|
|
989,355
|
|
|||
Subtract:
|
|
|
|
|
|
||||||
Equity in (losses) earnings of unconsolidated subsidiaries
(1)
|
(64,471
|
)
|
|
5,907
|
|
|
(592
|
)
|
|||
Fair value loss on Mekonomen derivative instrument
(1)
|
(5,168
|
)
|
|
—
|
|
|
—
|
|
|||
Gains on foreign exchange contracts - acquisition related
(2)
|
—
|
|
|
—
|
|
|
18,342
|
|
|||
Gains on bargain purchases
(3)
|
2,418
|
|
|
3,870
|
|
|
8,207
|
|
|||
Add:
|
|
|
|
|
|
||||||
Restructuring and acquisition related expenses
(4)
|
32,428
|
|
|
19,672
|
|
|
37,762
|
|
|||
Inventory step-up adjustment - acquisition related
|
403
|
|
|
3,584
|
|
|
3,614
|
|
|||
Impairment of goodwill
(1)
|
33,244
|
|
|
—
|
|
|
—
|
|
|||
Impairment of net assets held for sale
|
2,438
|
|
|
—
|
|
|
—
|
|
|||
Change in fair value of contingent consideration liabilities
|
(208
|
)
|
|
(4,218
|
)
|
|
206
|
|
|||
Segment EBITDA
|
$
|
1,251,399
|
|
|
$
|
1,116,590
|
|
|
$
|
1,004,980
|
|
(1)
|
See
Note 4, "Summary of Significant Accounting Policies
," for further information.
|
(3)
|
Reflects the gains on bargain purchases related to our acquisitions of wholesale businesses in Europe and Andrew Page. See
Note 2, "Business Combinations
," for further information.
|
(4)
|
See Note 6, "Restructuring and Acquisition Related Expenses," for further information.
|
|
Year Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
Capital Expenditures
|
|
|
|
|
|
||||||
North America
|
$
|
129,391
|
|
|
$
|
95,823
|
|
|
$
|
91,618
|
|
Europe
|
99,885
|
|
|
71,494
|
|
|
77,689
|
|
|||
Specialty
|
20,751
|
|
|
8,175
|
|
|
13,611
|
|
|||
Discontinued operations
|
—
|
|
|
3,598
|
|
|
24,156
|
|
|||
Total capital expenditures
|
$
|
250,027
|
|
|
$
|
179,090
|
|
|
$
|
207,074
|
|
|
December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
Receivables, net
|
|
|
|
|
|
||||||
North America
|
$
|
411,818
|
|
|
$
|
379,666
|
|
|
$
|
351,681
|
|
Europe
(1)
|
649,174
|
|
|
555,372
|
|
|
443,281
|
|
|||
Specialty
|
93,091
|
|
|
92,068
|
|
|
65,587
|
|
|||
Total receivables, net
(2)
|
1,154,083
|
|
|
1,027,106
|
|
|
860,549
|
|
|||
Inventories
|
|
|
|
|
|
||||||
North America
|
1,076,306
|
|
|
1,076,393
|
|
|
915,244
|
|
|||
Europe
(1)
|
1,410,264
|
|
|
964,068
|
|
|
718,729
|
|
|||
Specialty
|
349,505
|
|
|
340,322
|
|
|
301,264
|
|
|||
Total inventories
|
2,836,075
|
|
|
2,380,783
|
|
|
1,935,237
|
|
|||
Property, Plant and Equipment, net
|
|
|
|
|
|
||||||
North America
|
570,508
|
|
|
537,286
|
|
|
505,925
|
|
|||
Europe
(1)
|
562,600
|
|
|
293,539
|
|
|
247,910
|
|
|||
Specialty
|
87,054
|
|
|
82,264
|
|
|
57,741
|
|
|||
Total property, plant and equipment, net
|
1,220,162
|
|
|
913,089
|
|
|
811,576
|
|
|||
Equity Method Investments
|
|
|
|
|
|
||||||
North America
|
16,404
|
|
|
336
|
|
|
336
|
|
|||
Europe
(3)
|
162,765
|
|
|
208,068
|
|
|
183,131
|
|
|||
Total equity method investments
|
179,169
|
|
|
208,404
|
|
|
183,467
|
|
|||
Other unallocated assets
|
6,003,913
|
|
|
4,837,490
|
|
|
4,512,370
|
|
|||
Total assets
|
$
|
11,393,402
|
|
|
$
|
9,366,872
|
|
|
$
|
8,303,199
|
|
(2)
|
Refer to "Recent Accounting Pronouncements" in
Note 4, "Summary of Significant Accounting Policies
," for the increase in total receivables, net compared to December 31, 2017 as a result of the adoption of ASC 606.
|
(3)
|
Refer to "Investments in Unconsolidated Subsidiaries" in
Note 4, "Summary of Significant Accounting Policies
," for further information.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue
|
|
|
|
|
|
||||||
United States
|
$
|
6,192,636
|
|
|
$
|
5,662,016
|
|
|
$
|
5,226,918
|
|
United Kingdom
|
1,665,317
|
|
|
1,548,212
|
|
|
1,390,775
|
|
|||
Germany
|
974,514
|
|
|
1,744
|
|
|
1,227
|
|
|||
Other countries
|
3,044,207
|
|
|
2,524,937
|
|
|
1,965,111
|
|
|||
Total revenue
|
$
|
11,876,674
|
|
|
$
|
9,736,909
|
|
|
$
|
8,584,031
|
|
|
December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Long-lived Assets
|
|
|
|
|
|
||||||
United States
|
$
|
620,125
|
|
|
$
|
583,236
|
|
|
$
|
531,425
|
|
Germany
|
217,476
|
|
|
41
|
|
|
19
|
|
|||
United Kingdom
|
165,145
|
|
|
178,021
|
|
|
159,689
|
|
|||
Other countries
|
217,416
|
|
|
151,791
|
|
|
120,443
|
|
|||
Total long-lived assets
|
$
|
1,220,162
|
|
|
$
|
913,089
|
|
|
$
|
811,576
|
|
|
Quarter Ended
(1)
|
||||||||||||||
(In thousands, except per share data)
|
Dec. 31
(2) (3)
|
|
Sep. 30
(3)
|
|
Jun. 30
|
|
Mar. 31
|
||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
3,002,781
|
|
|
$
|
3,122,378
|
|
|
$
|
3,030,751
|
|
|
$
|
2,720,764
|
|
Gross margin
|
1,161,809
|
|
|
1,197,198
|
|
|
1,161,879
|
|
|
1,053,971
|
|
||||
Operating income
(2)
|
164,146
|
|
|
234,733
|
|
|
256,794
|
|
|
226,568
|
|
||||
Income from continuing operations
(3)
|
42,456
|
|
|
134,480
|
|
|
157,866
|
|
|
152,763
|
|
||||
Net loss from discontinued operations
(4)
|
(4,397
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income
|
38,059
|
|
|
134,480
|
|
|
157,866
|
|
|
152,763
|
|
||||
Net income (loss) attributable to noncontrolling interest
|
2,010
|
|
|
378
|
|
|
859
|
|
|
(197
|
)
|
||||
Net income attributable to LKQ stockholders
|
36,049
|
|
|
134,102
|
|
|
157,007
|
|
|
152,960
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share from continuing operations
(6)
|
$
|
0.13
|
|
|
$
|
0.42
|
|
|
$
|
0.51
|
|
|
$
|
0.49
|
|
Diluted earnings per share from continuing operations
(6)
|
$
|
0.13
|
|
|
$
|
0.42
|
|
|
$
|
0.50
|
|
|
$
|
0.49
|
|
|
Quarter Ended
|
||||||||||||||
(In thousands, except per share data)
|
Dec. 31
|
|
Sep. 30
|
|
Jun. 30
|
|
Mar. 31
|
||||||||
2017
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
2,469,855
|
|
|
$
|
2,465,800
|
|
|
$
|
2,458,411
|
|
|
$
|
2,342,843
|
|
Gross margin
|
947,645
|
|
|
956,876
|
|
|
965,009
|
|
|
930,093
|
|
||||
Operating income
(5)
|
165,634
|
|
|
199,099
|
|
|
244,573
|
|
|
235,692
|
|
||||
Income from continuing operations
|
122,870
|
|
|
122,381
|
|
|
150,914
|
|
|
140,809
|
|
||||
Net loss from discontinued operations
(4)
|
(2,215
|
)
|
|
—
|
|
|
—
|
|
|
(4,531
|
)
|
||||
Net income
|
120,655
|
|
|
122,381
|
|
|
150,914
|
|
|
136,278
|
|
||||
Net loss attributable to noncontrolling interest
|
(3,516
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income attributable to LKQ stockholders
|
124,171
|
|
|
122,381
|
|
|
150,914
|
|
|
136,278
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share from continuing operations
(6)
|
$
|
0.40
|
|
|
$
|
0.40
|
|
|
$
|
0.49
|
|
|
$
|
0.46
|
|
Diluted earnings per share from continuing operations
(6)
|
$
|
0.39
|
|
|
$
|
0.39
|
|
|
$
|
0.49
|
|
|
$
|
0.45
|
|
(1)
|
The 2018 amounts presented above include the results of operations of Stahlgruber, from its acquisition effective May 30, 2018.
|
(2)
|
Reflects a
$33 million
goodwill impairment charge on the Aviation reporting unit recorded in the fourth quarter of 2018.
See "Intangible Assets" in
Note 4, "Summary of Significant Accounting Policies
," for further information.
|
(3)
|
Reflects impairment charges of
$48 million
and
$23 million
recorded in the fourth and third quarters of 2018, respectively, related to the Mekonomen equity investment.
See "Investments in Unconsolidated Subsidiaries" in
Note 4, "Summary of Significant Accounting Policies
," for further information.
|
(4)
|
In the first quarter of 2017, LKQ completed the sale of the glass manufacturing business of its PGW subsidiary and recorded a loss on sale of
$4 million
and an immaterial loss from discontinued operations, net of tax. During the fourth quarter of 2017, we recorded an additional loss on sale of
$2 million
. During the fourth quarter of 2018, we recorded a final tax expense adjustment of
$4 million
to the loss on sale of the glass manufacturing business of PGW. See Note 3, "Discontinued Operations" for further information regarding the disposal of the glass manufacturing business.
|
(5)
|
Certain amounts in the fourth quarter of 2017 have been recast to reflect the 2018 adoption of ASU 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." See "Other Recently Adopted Accounting Pronouncements" within
Note 4, "Summary of Significant Accounting Policies
" for further information.
|
(6)
|
The sum of the quarters may not equal the total of the respective year's earnings per share on either a basic or diluted basis due to changes in weighted average shares outstanding throughout the year.
|
LKQ CORPORATION AND SUBSIDIARIES
Condensed Consolidating Statements of Income
(In thousands)
|
|||||||||||||||||||
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenue
|
$
|
—
|
|
|
$
|
6,276,951
|
|
|
$
|
5,766,958
|
|
|
$
|
(167,235
|
)
|
|
$
|
11,876,674
|
|
Cost of goods sold
|
—
|
|
|
3,783,376
|
|
|
3,685,676
|
|
|
(167,235
|
)
|
|
7,301,817
|
|
|||||
Gross margin
|
—
|
|
|
2,493,575
|
|
|
2,081,282
|
|
|
—
|
|
|
4,574,857
|
|
|||||
Selling, general and administrative expenses
|
27,394
|
|
|
1,713,118
|
|
|
1,612,219
|
|
|
—
|
|
|
3,352,731
|
|
|||||
Restructuring and acquisition related expenses
|
—
|
|
|
3,140
|
|
|
29,288
|
|
|
—
|
|
|
32,428
|
|
|||||
Impairment of goodwill
|
—
|
|
|
33,244
|
|
|
—
|
|
|
—
|
|
|
33,244
|
|
|||||
Depreciation and amortization
|
137
|
|
|
99,665
|
|
|
174,411
|
|
|
—
|
|
|
274,213
|
|
|||||
Operating (loss) income
|
(27,531
|
)
|
|
644,408
|
|
|
265,364
|
|
|
—
|
|
|
882,241
|
|
|||||
Other expense (income):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
66,794
|
|
|
640
|
|
|
78,943
|
|
|
—
|
|
|
146,377
|
|
|||||
Intercompany interest (income) expense, net
|
(65,072
|
)
|
|
40,756
|
|
|
24,316
|
|
|
—
|
|
|
—
|
|
|||||
Loss on debt extinguishment
|
1,350
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,350
|
|
|||||
Gains on bargain purchases
|
—
|
|
|
—
|
|
|
(2,418
|
)
|
|
—
|
|
|
(2,418
|
)
|
|||||
Interest income and other (income) expense, net
|
(1,082
|
)
|
|
(15,586
|
)
|
|
10,169
|
|
|
—
|
|
|
(6,499
|
)
|
|||||
Total other expense, net
|
1,990
|
|
|
25,810
|
|
|
111,010
|
|
|
—
|
|
|
138,810
|
|
|||||
(Loss) income before (benefit) provision for income taxes
|
(29,521
|
)
|
|
618,598
|
|
|
154,354
|
|
|
—
|
|
|
743,431
|
|
|||||
(Benefit) provision for income taxes
|
(18,600
|
)
|
|
163,937
|
|
|
46,058
|
|
|
—
|
|
|
191,395
|
|
|||||
Equity in earnings (losses) of unconsolidated subsidiaries
|
—
|
|
|
173
|
|
|
(64,644
|
)
|
|
—
|
|
|
(64,471
|
)
|
|||||
Equity in earnings of subsidiaries
|
495,436
|
|
|
16,598
|
|
|
—
|
|
|
(512,034
|
)
|
|
—
|
|
|||||
Income from continuing operations
|
484,515
|
|
|
471,432
|
|
|
43,652
|
|
|
(512,034
|
)
|
|
487,565
|
|
|||||
Net loss from discontinued operations
|
(4,397
|
)
|
|
(4,397
|
)
|
|
—
|
|
|
4,397
|
|
|
(4,397
|
)
|
|||||
Net income
|
480,118
|
|
|
467,035
|
|
|
43,652
|
|
|
(507,637
|
)
|
|
483,168
|
|
|||||
Less: net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
3,050
|
|
|
—
|
|
|
3,050
|
|
|||||
Net income attributable to LKQ stockholders
|
$
|
480,118
|
|
|
$
|
467,035
|
|
|
$
|
40,602
|
|
|
$
|
(507,637
|
)
|
|
$
|
480,118
|
|
LKQ CORPORATION AND SUBSIDIARIES
Condensed Consolidating Statements of Income
(In thousands)
|
|||||||||||||||||||
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenue
|
$
|
—
|
|
|
$
|
5,780,904
|
|
|
$
|
4,116,161
|
|
|
$
|
(160,156
|
)
|
|
$
|
9,736,909
|
|
Cost of goods sold
|
—
|
|
|
3,458,304
|
|
|
2,639,138
|
|
|
(160,156
|
)
|
|
5,937,286
|
|
|||||
Gross margin
|
—
|
|
|
2,322,600
|
|
|
1,477,023
|
|
|
—
|
|
|
3,799,623
|
|
|||||
Selling, general and administrative expenses
|
29,884
|
|
|
1,557,883
|
|
|
1,127,640
|
|
|
—
|
|
|
2,715,407
|
|
|||||
Restructuring and acquisition related expenses
|
—
|
|
|
7,352
|
|
|
12,320
|
|
|
—
|
|
|
19,672
|
|
|||||
Depreciation and amortization
|
118
|
|
|
96,717
|
|
|
122,711
|
|
|
—
|
|
|
219,546
|
|
|||||
Operating (loss) income
|
(30,002
|
)
|
|
660,648
|
|
|
214,352
|
|
|
—
|
|
|
844,998
|
|
|||||
Other expense (income):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
66,030
|
|
|
546
|
|
|
35,064
|
|
|
—
|
|
|
101,640
|
|
|||||
Intercompany interest (income) expense, net
|
(17,873
|
)
|
|
(2,383
|
)
|
|
20,256
|
|
|
—
|
|
|
—
|
|
|||||
Loss on debt extinguishment
|
456
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
456
|
|
|||||
Gains on bargain purchases
|
—
|
|
|
—
|
|
|
(3,870
|
)
|
|
—
|
|
|
(3,870
|
)
|
|||||
Interest income and other expense (income), net
|
242
|
|
|
(14,323
|
)
|
|
(5,774
|
)
|
|
—
|
|
|
(19,855
|
)
|
|||||
Total other expense (income), net
|
48,855
|
|
|
(16,160
|
)
|
|
45,676
|
|
|
—
|
|
|
78,371
|
|
|||||
(Loss) income from continuing operations before provision for income taxes
|
(78,857
|
)
|
|
676,808
|
|
|
168,676
|
|
|
—
|
|
|
766,627
|
|
|||||
Provision for income taxes
|
28,684
|
|
|
168,288
|
|
|
38,588
|
|
|
—
|
|
|
235,560
|
|
|||||
Equity in earnings of unconsolidated subsidiaries
|
—
|
|
|
—
|
|
|
5,907
|
|
|
—
|
|
|
5,907
|
|
|||||
Equity in earnings of subsidiaries
|
648,031
|
|
|
21,836
|
|
|
—
|
|
|
(669,867
|
)
|
|
—
|
|
|||||
Income from continuing operations
|
540,490
|
|
|
530,356
|
|
|
135,995
|
|
|
(669,867
|
)
|
|
536,974
|
|
|||||
Net (loss) income from discontinued operations
|
(6,746
|
)
|
|
(6,746
|
)
|
|
2,050
|
|
|
4,696
|
|
|
(6,746
|
)
|
|||||
Net income
|
533,744
|
|
|
523,610
|
|
|
138,045
|
|
|
(665,171
|
)
|
|
530,228
|
|
|||||
Less: net loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(3,516
|
)
|
|
—
|
|
|
(3,516
|
)
|
|||||
Net income attributable to LKQ stockholders
|
$
|
533,744
|
|
|
$
|
523,610
|
|
|
$
|
141,561
|
|
|
$
|
(665,171
|
)
|
|
$
|
533,744
|
|
LKQ CORPORATION AND SUBSIDIARIES
Condensed Consolidating Statements of Income
(In thousands)
|
|||||||||||||||||||
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenue
|
$
|
—
|
|
|
$
|
5,467,430
|
|
|
$
|
3,301,503
|
|
|
$
|
(184,902
|
)
|
|
$
|
8,584,031
|
|
Cost of goods sold
|
—
|
|
|
3,313,503
|
|
|
2,103,727
|
|
|
(184,902
|
)
|
|
5,232,328
|
|
|||||
Gross margin
|
—
|
|
|
2,153,927
|
|
|
1,197,776
|
|
|
—
|
|
|
3,351,703
|
|
|||||
Selling, general and administrative expenses
|
34,163
|
|
|
1,450,588
|
|
|
874,359
|
|
|
—
|
|
|
2,359,110
|
|
|||||
Restructuring and acquisition related expenses
|
—
|
|
|
21,162
|
|
|
16,600
|
|
|
—
|
|
|
37,762
|
|
|||||
Depreciation and amortization
|
132
|
|
|
94,165
|
|
|
97,136
|
|
|
—
|
|
|
191,433
|
|
|||||
Operating (loss) income
|
(34,295
|
)
|
|
588,012
|
|
|
209,681
|
|
|
—
|
|
|
763,398
|
|
|||||
Other expense (income):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
59,415
|
|
|
547
|
|
|
28,301
|
|
|
—
|
|
|
88,263
|
|
|||||
Intercompany interest (income) expense, net
|
(27,470
|
)
|
|
17,124
|
|
|
10,346
|
|
|
—
|
|
|
—
|
|
|||||
Loss on debt extinguishment
|
2,894
|
|
|
—
|
|
|
23,756
|
|
|
—
|
|
|
26,650
|
|
|||||
Gains on foreign exchange contracts - acquisition related
|
(18,342
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,342
|
)
|
|||||
Gains on bargain purchase
|
—
|
|
|
—
|
|
|
(8,207
|
)
|
|
—
|
|
|
(8,207
|
)
|
|||||
Interest income and other expense (income), net
|
470
|
|
|
(3,773
|
)
|
|
1,056
|
|
|
—
|
|
|
(2,247
|
)
|
|||||
Total other expense, net
|
16,967
|
|
|
13,898
|
|
|
55,252
|
|
|
—
|
|
|
86,117
|
|
|||||
(Loss) income from continuing operations before (benefit) provision for income taxes
|
(51,262
|
)
|
|
574,114
|
|
|
154,429
|
|
|
—
|
|
|
677,281
|
|
|||||
(Benefit) provision for income taxes
|
(20,498
|
)
|
|
213,794
|
|
|
27,270
|
|
|
—
|
|
|
220,566
|
|
|||||
Equity in (loss) earnings of unconsolidated subsidiaries
|
(795
|
)
|
|
—
|
|
|
203
|
|
|
—
|
|
|
(592
|
)
|
|||||
Equity in earnings of subsidiaries
|
487,682
|
|
|
22,314
|
|
|
—
|
|
|
(509,996
|
)
|
|
—
|
|
|||||
Income from continuing operations
|
456,123
|
|
|
382,634
|
|
|
127,362
|
|
|
(509,996
|
)
|
|
456,123
|
|
|||||
Net income from discontinued operations
|
7,852
|
|
|
7,852
|
|
|
3,285
|
|
|
(11,137
|
)
|
|
7,852
|
|
|||||
Net income
|
$
|
463,975
|
|
|
$
|
390,486
|
|
|
$
|
130,647
|
|
|
$
|
(521,133
|
)
|
|
$
|
463,975
|
|
LKQ CORPORATION AND SUBSIDIARIES
Condensed Consolidating Statements of Comprehensive Income
(In thousands)
|
|||||||||||||||||||
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
480,118
|
|
|
$
|
467,035
|
|
|
$
|
43,652
|
|
|
$
|
(507,637
|
)
|
|
$
|
483,168
|
|
Less: net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
3,050
|
|
|
—
|
|
|
3,050
|
|
|||||
Net income attributable to LKQ stockholders
|
480,118
|
|
|
467,035
|
|
|
40,602
|
|
|
(507,637
|
)
|
|
480,118
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation, net of tax
|
(108,523
|
)
|
|
(8,628
|
)
|
|
(75,462
|
)
|
|
84,090
|
|
|
(108,523
|
)
|
|||||
Net change in unrealized gains/losses on cash flow hedges, net of tax
|
350
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350
|
|
|||||
Net change in unrealized gains/losses on pension plans, net of tax
|
697
|
|
|
1,266
|
|
|
(569
|
)
|
|
(697
|
)
|
|
697
|
|
|||||
Net change in other comprehensive loss from unconsolidated subsidiaries
|
(2,343
|
)
|
|
—
|
|
|
(2,343
|
)
|
|
2,343
|
|
|
(2,343
|
)
|
|||||
Other comprehensive loss
|
(109,819
|
)
|
|
(7,362
|
)
|
|
(78,374
|
)
|
|
85,736
|
|
|
(109,819
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income (loss)
|
370,299
|
|
|
459,673
|
|
|
(34,722
|
)
|
|
(421,901
|
)
|
|
373,349
|
|
|||||
Less: comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
3,050
|
|
|
—
|
|
|
3,050
|
|
|||||
Comprehensive income (loss) attributable to LKQ stockholders
|
$
|
370,299
|
|
|
$
|
459,673
|
|
|
$
|
(37,772
|
)
|
|
$
|
(421,901
|
)
|
|
$
|
370,299
|
|
LKQ CORPORATION AND SUBSIDIARIES
Condensed Consolidating Statements of Comprehensive Income
(In thousands)
|
|||||||||||||||||||
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
533,744
|
|
|
$
|
523,610
|
|
|
$
|
138,045
|
|
|
$
|
(665,171
|
)
|
|
$
|
530,228
|
|
Less: net loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(3,516
|
)
|
|
—
|
|
|
(3,516
|
)
|
|||||
Net income attributable to LKQ stockholders
|
533,744
|
|
|
523,610
|
|
|
141,561
|
|
|
(665,171
|
)
|
|
533,744
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation, net of tax
|
200,596
|
|
|
16,743
|
|
|
206,049
|
|
|
(222,792
|
)
|
|
200,596
|
|
|||||
Net change in unrealized gains/losses on cash flow hedges, net of tax
|
3,447
|
|
|
(133
|
)
|
|
—
|
|
|
133
|
|
|
3,447
|
|
|||||
Net change in unrealized gains/losses on pension plans, net of tax
|
(6,035
|
)
|
|
(3,254
|
)
|
|
(2,781
|
)
|
|
6,035
|
|
|
(6,035
|
)
|
|||||
Net change in other comprehensive loss from unconsolidated subsidiaries
|
(1,309
|
)
|
|
—
|
|
|
(1,309
|
)
|
|
1,309
|
|
|
(1,309
|
)
|
|||||
Other comprehensive income
|
196,699
|
|
|
13,356
|
|
|
201,959
|
|
|
(215,315
|
)
|
|
196,699
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income
|
730,443
|
|
|
536,966
|
|
|
340,004
|
|
|
(880,486
|
)
|
|
726,927
|
|
|||||
Less: comprehensive loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(3,516
|
)
|
|
—
|
|
|
(3,516
|
)
|
|||||
Comprehensive income attributable to LKQ stockholders
|
$
|
730,443
|
|
|
$
|
536,966
|
|
|
$
|
343,520
|
|
|
$
|
(880,486
|
)
|
|
$
|
730,443
|
|
LKQ CORPORATION AND SUBSIDIARIES
Condensed Consolidating Statements of Comprehensive Income
(In thousands)
|
|||||||||||||||||||
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
463,975
|
|
|
$
|
390,486
|
|
|
$
|
130,647
|
|
|
$
|
(521,133
|
)
|
|
$
|
463,975
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation, net of tax
|
(175,639
|
)
|
|
(48,914
|
)
|
|
(177,911
|
)
|
|
226,825
|
|
|
(175,639
|
)
|
|||||
Net change in unrecognized gains/losses on cash flow hedges, net of tax
|
9,023
|
|
|
133
|
|
|
389
|
|
|
(522
|
)
|
|
9,023
|
|
|||||
Net change in unrealized gains/losses on pension plans, net of tax
|
4,911
|
|
|
3,962
|
|
|
1,061
|
|
|
(5,023
|
)
|
|
4,911
|
|
|||||
Total other comprehensive loss
|
(161,705
|
)
|
|
(44,819
|
)
|
|
(176,461
|
)
|
|
221,280
|
|
|
(161,705
|
)
|
|||||
Total comprehensive income (loss)
|
$
|
302,270
|
|
|
$
|
345,667
|
|
|
$
|
(45,814
|
)
|
|
$
|
(299,853
|
)
|
|
$
|
302,270
|
|
LKQ CORPORATION AND SUBSIDIARIES
Condensed Consolidating Balance Sheets
(In thousands)
|
|||||||||||||||||||
|
December 31, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
25,633
|
|
|
$
|
29,285
|
|
|
$
|
276,843
|
|
|
$
|
—
|
|
|
$
|
331,761
|
|
Receivables, net
|
310
|
|
|
316,726
|
|
|
837,047
|
|
|
—
|
|
|
1,154,083
|
|
|||||
Intercompany receivables, net
|
6,978
|
|
|
—
|
|
|
12,880
|
|
|
(19,858
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
1,343,612
|
|
|
1,492,463
|
|
|
—
|
|
|
2,836,075
|
|
|||||
Prepaid expenses and other current assets
|
18,611
|
|
|
99,356
|
|
|
81,063
|
|
|
—
|
|
|
199,030
|
|
|||||
Total current assets
|
51,532
|
|
|
1,788,979
|
|
|
2,700,296
|
|
|
(19,858
|
)
|
|
4,520,949
|
|
|||||
Property, plant and equipment, net
|
1,547
|
|
|
600,054
|
|
|
618,561
|
|
|
—
|
|
|
1,220,162
|
|
|||||
Intangible assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
—
|
|
|
1,973,364
|
|
|
2,408,094
|
|
|
—
|
|
|
4,381,458
|
|
|||||
Other intangibles, net
|
260
|
|
|
272,451
|
|
|
656,041
|
|
|
—
|
|
|
928,752
|
|
|||||
Investment in subsidiaries
|
5,224,006
|
|
|
111,826
|
|
|
—
|
|
|
(5,335,832
|
)
|
|
—
|
|
|||||
Intercompany notes receivable
|
1,220,582
|
|
|
10,515
|
|
|
—
|
|
|
(1,231,097
|
)
|
|
—
|
|
|||||
Equity method investments
|
—
|
|
|
16,404
|
|
|
162,765
|
|
|
—
|
|
|
179,169
|
|
|||||
Other assets
|
70,283
|
|
|
40,548
|
|
|
52,081
|
|
|
—
|
|
|
162,912
|
|
|||||
Total assets
|
$
|
6,568,210
|
|
|
$
|
4,814,141
|
|
|
$
|
6,597,838
|
|
|
$
|
(6,586,787
|
)
|
|
$
|
11,393,402
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
2,454
|
|
|
$
|
343,116
|
|
|
$
|
596,828
|
|
|
$
|
—
|
|
|
$
|
942,398
|
|
Intercompany payables, net
|
—
|
|
|
12,880
|
|
|
6,978
|
|
|
(19,858
|
)
|
|
—
|
|
|||||
Accrued expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accrued payroll-related liabilities
|
6,652
|
|
|
70,267
|
|
|
95,086
|
|
|
—
|
|
|
172,005
|
|
|||||
Other accrued expenses
|
5,454
|
|
|
105,672
|
|
|
177,299
|
|
|
—
|
|
|
288,425
|
|
|||||
Refund liability
|
—
|
|
|
50,899
|
|
|
53,686
|
|
|
—
|
|
|
104,585
|
|
|||||
Other current liabilities
|
283
|
|
|
17,860
|
|
|
42,966
|
|
|
—
|
|
|
61,109
|
|
|||||
Current portion of long-term obligations
|
8,459
|
|
|
2,932
|
|
|
110,435
|
|
|
—
|
|
|
121,826
|
|
|||||
Total current liabilities
|
23,302
|
|
|
603,626
|
|
|
1,083,278
|
|
|
(19,858
|
)
|
|
1,690,348
|
|
|||||
Long-term obligations, excluding current portion
|
1,628,677
|
|
|
13,532
|
|
|
2,546,465
|
|
|
—
|
|
|
4,188,674
|
|
|||||
Intercompany notes payable
|
—
|
|
|
597,283
|
|
|
633,814
|
|
|
(1,231,097
|
)
|
|
—
|
|
|||||
Deferred income taxes
|
8,045
|
|
|
135,355
|
|
|
168,034
|
|
|
—
|
|
|
311,434
|
|
|||||
Other noncurrent liabilities
|
125,888
|
|
|
99,147
|
|
|
139,159
|
|
|
—
|
|
|
364,194
|
|
|||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Company stockholders’ equity
|
4,782,298
|
|
|
3,365,198
|
|
|
1,970,634
|
|
|
(5,335,832
|
)
|
|
4,782,298
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
56,454
|
|
|
—
|
|
|
56,454
|
|
|||||
Total stockholders’ equity
|
4,782,298
|
|
|
3,365,198
|
|
|
2,027,088
|
|
|
(5,335,832
|
)
|
|
4,838,752
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
6,568,210
|
|
|
$
|
4,814,141
|
|
|
$
|
6,597,838
|
|
|
$
|
(6,586,787
|
)
|
|
$
|
11,393,402
|
|
LKQ CORPORATION AND SUBSIDIARIES
Condensed Consolidating Balance Sheets
(In thousands)
|
|||||||||||||||||||
|
December 31, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
34,360
|
|
|
$
|
35,131
|
|
|
$
|
210,275
|
|
|
$
|
—
|
|
|
$
|
279,766
|
|
Receivables, net
|
—
|
|
|
290,958
|
|
|
736,148
|
|
|
—
|
|
|
1,027,106
|
|
|||||
Intercompany receivables, net
|
2,669
|
|
|
3,010
|
|
|
230
|
|
|
(5,909
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
1,334,766
|
|
|
1,046,017
|
|
|
—
|
|
|
2,380,783
|
|
|||||
Prepaid expenses and other current assets
|
34,136
|
|
|
44,849
|
|
|
55,494
|
|
|
—
|
|
|
134,479
|
|
|||||
Total current assets
|
71,165
|
|
|
1,708,714
|
|
|
2,048,164
|
|
|
(5,909
|
)
|
|
3,822,134
|
|
|||||
Property, plant and equipment, net
|
910
|
|
|
563,262
|
|
|
348,917
|
|
|
—
|
|
|
913,089
|
|
|||||
Intangible assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
—
|
|
|
2,010,209
|
|
|
1,526,302
|
|
|
—
|
|
|
3,536,511
|
|
|||||
Other intangibles, net
|
—
|
|
|
291,036
|
|
|
452,733
|
|
|
—
|
|
|
743,769
|
|
|||||
Investment in subsidiaries
|
5,952,687
|
|
|
102,931
|
|
|
—
|
|
|
(6,055,618
|
)
|
|
—
|
|
|||||
Intercompany notes receivable
|
1,156,550
|
|
|
782,638
|
|
|
—
|
|
|
(1,939,188
|
)
|
|
—
|
|
|||||
Equity method investments
|
—
|
|
|
336
|
|
|
208,068
|
|
|
—
|
|
|
208,404
|
|
|||||
Other assets
|
70,590
|
|
|
33,597
|
|
|
38,778
|
|
|
—
|
|
|
142,965
|
|
|||||
Total assets
|
$
|
7,251,902
|
|
|
$
|
5,492,723
|
|
|
$
|
4,622,962
|
|
|
$
|
(8,000,715
|
)
|
|
$
|
9,366,872
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
5,742
|
|
|
$
|
340,951
|
|
|
$
|
441,920
|
|
|
$
|
—
|
|
|
$
|
788,613
|
|
Intercompany payables, net
|
—
|
|
|
230
|
|
|
5,679
|
|
|
(5,909
|
)
|
|
—
|
|
|||||
Accrued expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accrued payroll-related liabilities
|
9,448
|
|
|
65,811
|
|
|
68,165
|
|
|
—
|
|
|
143,424
|
|
|||||
Other accrued expenses
|
5,219
|
|
|
95,900
|
|
|
117,481
|
|
|
—
|
|
|
218,600
|
|
|||||
Other current liabilities
|
282
|
|
|
27,066
|
|
|
18,379
|
|
|
—
|
|
|
45,727
|
|
|||||
Current portion of long-term obligations
|
16,468
|
|
|
1,912
|
|
|
107,980
|
|
|
—
|
|
|
126,360
|
|
|||||
Total current liabilities
|
37,159
|
|
|
531,870
|
|
|
759,604
|
|
|
(5,909
|
)
|
|
1,322,724
|
|
|||||
Long-term obligations, excluding current portion
|
2,095,826
|
|
|
7,372
|
|
|
1,174,422
|
|
|
—
|
|
|
3,277,620
|
|
|||||
Intercompany notes payable
|
750,000
|
|
|
677,708
|
|
|
511,480
|
|
|
(1,939,188
|
)
|
|
—
|
|
|||||
Deferred income taxes
|
12,402
|
|
|
116,021
|
|
|
123,936
|
|
|
—
|
|
|
252,359
|
|
|||||
Other noncurrent liabilities
|
158,346
|
|
|
101,189
|
|
|
47,981
|
|
|
—
|
|
|
307,516
|
|
|||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Company stockholders’ equity
|
4,198,169
|
|
|
4,058,563
|
|
|
1,997,055
|
|
|
(6,055,618
|
)
|
|
4,198,169
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
8,484
|
|
|
—
|
|
|
8,484
|
|
|||||
Total stockholders’ equity
|
4,198,169
|
|
|
4,058,563
|
|
|
2,005,539
|
|
|
(6,055,618
|
)
|
|
4,206,653
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
7,251,902
|
|
|
$
|
5,492,723
|
|
|
$
|
4,622,962
|
|
|
$
|
(8,000,715
|
)
|
|
$
|
9,366,872
|
|
LKQ CORPORATION AND SUBSIDIARIES
Condensed Consolidating Statements of Cash Flows
(In thousands)
|
|||||||||||||||||||
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
(1)
|
|
Eliminations
|
|
Consolidated
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
481,138
|
|
|
$
|
277,595
|
|
|
$
|
111,213
|
|
|
$
|
(159,207
|
)
|
|
$
|
710,739
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property, plant and equipment
|
(848
|
)
|
|
(136,033
|
)
|
|
(113,146
|
)
|
|
—
|
|
|
(250,027
|
)
|
|||||
Proceeds from disposals of property, plant and equipment
|
—
|
|
|
22,393
|
|
|
5,266
|
|
|
—
|
|
|
27,659
|
|
|||||
Investment and intercompany note activity with subsidiaries
|
(97,261
|
)
|
|
—
|
|
|
—
|
|
|
97,261
|
|
|
—
|
|
|||||
Return of investment in subsidiaries
|
143,524
|
|
|
—
|
|
|
—
|
|
|
(143,524
|
)
|
|
—
|
|
|||||
Acquisitions, net of cash and restricted cash acquired
|
—
|
|
|
(8,217
|
)
|
|
(1,206,778
|
)
|
|
—
|
|
|
(1,214,995
|
)
|
|||||
Investments in unconsolidated subsidiaries
|
—
|
|
|
(12,216
|
)
|
|
(48,084
|
)
|
|
—
|
|
|
(60,300
|
)
|
|||||
Receipts of deferred purchase price on receivables under factoring arrangements
|
—
|
|
|
317,091
|
|
|
36,991
|
|
|
(317,091
|
)
|
|
36,991
|
|
|||||
Other investing activities, net
|
887
|
|
|
180
|
|
|
666
|
|
|
—
|
|
|
1,733
|
|
|||||
Net cash provided by (used in) investing activities
|
46,302
|
|
|
183,198
|
|
|
(1,325,085
|
)
|
|
(363,354
|
)
|
|
(1,458,939
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from exercise of stock options
|
5,303
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,303
|
|
|||||
Taxes paid related to net share settlements of stock-based compensation awards
|
(5,567
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,567
|
)
|
|||||
Debt issuance costs
|
(5,434
|
)
|
|
—
|
|
|
(15,694
|
)
|
|
—
|
|
|
(21,128
|
)
|
|||||
Proceeds from issuance of Euro Notes (2026/28)
|
—
|
|
|
—
|
|
|
1,232,100
|
|
|
—
|
|
|
1,232,100
|
|
|||||
Purchase of treasury stock
|
(60,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60,000
|
)
|
|||||
Borrowings under revolving credit facilities
|
765,632
|
|
|
—
|
|
|
901,693
|
|
|
—
|
|
|
1,667,325
|
|
|||||
Repayments under revolving credit facilities
|
(884,863
|
)
|
|
—
|
|
|
(644,107
|
)
|
|
—
|
|
|
(1,528,970
|
)
|
|||||
Repayments under term loans
|
(354,800
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(354,800
|
)
|
|||||
Borrowings under receivables securitization facility
|
—
|
|
|
—
|
|
|
10,120
|
|
|
—
|
|
|
10,120
|
|
|||||
Repayments under receivables securitization facility
|
—
|
|
|
—
|
|
|
(120
|
)
|
|
—
|
|
|
(120
|
)
|
|||||
Payment of assumed debt and notes issued from acquisitions
|
—
|
|
|
—
|
|
|
(54,888
|
)
|
|
—
|
|
|
(54,888
|
)
|
|||||
Repayments of other debt, net
|
(385
|
)
|
|
(3,636
|
)
|
|
(7,709
|
)
|
|
—
|
|
|
(11,730
|
)
|
|||||
Other financing activities, net
|
3,947
|
|
|
—
|
|
|
1,403
|
|
|
—
|
|
|
5,350
|
|
|||||
Investment and intercompany note activity with parent
|
—
|
|
|
(68,435
|
)
|
|
165,696
|
|
|
(97,261
|
)
|
|
—
|
|
|||||
Dividends
|
—
|
|
|
(392,883
|
)
|
|
(226,939
|
)
|
|
619,822
|
|
|
—
|
|
|||||
Net cash (used in) provided by financing activities
|
(536,167
|
)
|
|
(464,954
|
)
|
|
1,361,555
|
|
|
522,561
|
|
|
882,995
|
|
|||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
—
|
|
|
(1,685
|
)
|
|
(75,626
|
)
|
|
—
|
|
|
(77,311
|
)
|
|||||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(8,727
|
)
|
|
(5,846
|
)
|
|
72,057
|
|
|
—
|
|
|
57,484
|
|
|||||
Cash, cash equivalents and restricted cash, beginning of period
|
34,360
|
|
|
35,131
|
|
|
210,275
|
|
|
—
|
|
|
279,766
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
25,633
|
|
|
$
|
29,285
|
|
|
$
|
282,332
|
|
|
$
|
—
|
|
|
$
|
337,250
|
|
LKQ CORPORATION AND SUBSIDIARIES
Condensed Consolidating Statements of Cash Flows
(In thousands)
|
|||||||||||||||||||
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
243,011
|
|
|
$
|
186,459
|
|
|
$
|
95,617
|
|
|
$
|
(6,187
|
)
|
|
$
|
518,900
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property, plant and equipment
|
(648
|
)
|
|
(87,102
|
)
|
|
(91,340
|
)
|
|
—
|
|
|
(179,090
|
)
|
|||||
Proceeds from disposals of property, plant and equipment
|
—
|
|
|
6,490
|
|
|
2,217
|
|
|
—
|
|
|
8,707
|
|
|||||
Investment and intercompany note activity with subsidiaries
|
57,735
|
|
|
—
|
|
|
—
|
|
|
(57,735
|
)
|
|
—
|
|
|||||
Acquisitions, net of cash acquired
|
—
|
|
|
(335,582
|
)
|
|
(177,506
|
)
|
|
—
|
|
|
(513,088
|
)
|
|||||
Proceeds from disposals of business/investment
|
—
|
|
|
305,740
|
|
|
(4,443
|
)
|
|
—
|
|
|
301,297
|
|
|||||
Investments in unconsolidated subsidiaries
|
—
|
|
|
(2,750
|
)
|
|
(4,914
|
)
|
|
—
|
|
|
(7,664
|
)
|
|||||
Receipts of deferred purchase price on receivables under factoring arrangements
(1)
|
—
|
|
|
294,925
|
|
|
—
|
|
|
(294,925
|
)
|
|
—
|
|
|||||
Other investing activities, net
|
—
|
|
|
—
|
|
|
5,243
|
|
|
—
|
|
|
5,243
|
|
|||||
Net cash provided by (used in) investing activities
|
57,087
|
|
|
181,721
|
|
|
(270,743
|
)
|
|
(352,660
|
)
|
|
(384,595
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from exercise of stock options
|
7,470
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,470
|
|
|||||
Taxes paid related to net share settlements of stock-based compensation awards
|
(5,525
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,525
|
)
|
|||||
Debt issuance costs
|
(4,267
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,267
|
)
|
|||||
Borrowings under revolving credit facilities
|
558,000
|
|
|
—
|
|
|
281,171
|
|
|
—
|
|
|
839,171
|
|
|||||
Repayments under revolving credit facilities
|
(824,862
|
)
|
|
—
|
|
|
(121,615
|
)
|
|
—
|
|
|
(946,477
|
)
|
|||||
Repayments under term loans
|
(27,884
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,884
|
)
|
|||||
Borrowings under receivables securitization facility
|
—
|
|
|
—
|
|
|
11,245
|
|
|
—
|
|
|
11,245
|
|
|||||
Repayments under receivables securitization facility
|
—
|
|
|
—
|
|
|
(11,245
|
)
|
|
—
|
|
|
(11,245
|
)
|
|||||
(Repayments) borrowings of other debt, net
|
(1,700
|
)
|
|
(1,318
|
)
|
|
22,724
|
|
|
—
|
|
|
19,706
|
|
|||||
Other financing activities, net
|
—
|
|
|
(1,336
|
)
|
|
6,575
|
|
|
—
|
|
|
5,239
|
|
|||||
Investment and intercompany note activity with parent
|
—
|
|
|
(65,498
|
)
|
|
7,763
|
|
|
57,735
|
|
|
—
|
|
|||||
Dividends
|
—
|
|
|
(301,112
|
)
|
|
—
|
|
|
301,112
|
|
|
—
|
|
|||||
Net cash (used in) provided by financing activities
|
(298,768
|
)
|
|
(369,264
|
)
|
|
196,618
|
|
|
358,847
|
|
|
(112,567
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
706
|
|
|
22,806
|
|
|
—
|
|
|
23,512
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
1,330
|
|
|
(378
|
)
|
|
44,298
|
|
|
—
|
|
|
45,250
|
|
|||||
Cash and cash equivalents of continuing operations, beginning of period
|
33,030
|
|
|
35,360
|
|
|
159,010
|
|
|
—
|
|
|
227,400
|
|
|||||
Add: Cash and cash equivalents of discontinued operations, beginning of period
|
—
|
|
|
149
|
|
|
6,967
|
|
|
—
|
|
|
7,116
|
|
|||||
Cash and cash equivalents of continuing and discontinued operations, beginning of period
|
33,030
|
|
|
35,509
|
|
|
165,977
|
|
|
—
|
|
|
234,516
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
34,360
|
|
|
$
|
35,131
|
|
|
$
|
210,275
|
|
|
$
|
—
|
|
|
$
|
279,766
|
|
LKQ CORPORATION AND SUBSIDIARIES
Condensed Consolidating Statements of Cash Flows
(In thousands)
|
|||||||||||||||||||
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
308,299
|
|
|
$
|
149,785
|
|
|
$
|
99,894
|
|
|
$
|
77,036
|
|
|
$
|
635,014
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property, plant and equipment
|
(36
|
)
|
|
(120,761
|
)
|
|
(86,277
|
)
|
|
—
|
|
|
(207,074
|
)
|
|||||
Proceeds from disposals of property, plant and equipment
|
3
|
|
|
1,953
|
|
|
1,554
|
|
|
—
|
|
|
3,510
|
|
|||||
Investment and intercompany note activity with subsidiaries
|
(1,720,732
|
)
|
|
—
|
|
|
—
|
|
|
1,720,732
|
|
|
—
|
|
|||||
Acquisitions, net of cash acquired
|
—
|
|
|
(685,278
|
)
|
|
(664,061
|
)
|
|
—
|
|
|
(1,349,339
|
)
|
|||||
Proceeds from disposal of business/investment
|
—
|
|
|
—
|
|
|
10,304
|
|
|
—
|
|
|
10,304
|
|
|||||
Investments in unconsolidated subsidiaries
|
—
|
|
|
(4,400
|
)
|
|
(181,271
|
)
|
|
—
|
|
|
(185,671
|
)
|
|||||
Receipts of deferred purchase price on receivables under factoring arrangements
(1)
|
—
|
|
|
389,533
|
|
|
—
|
|
|
(389,533
|
)
|
|
—
|
|
|||||
Proceeds from foreign exchange contracts
|
18,342
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,342
|
|
|||||
Net cash used in investing activities
|
(1,702,423
|
)
|
|
(418,953
|
)
|
|
(919,751
|
)
|
|
1,331,199
|
|
|
(1,709,928
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from exercise of stock options
|
7,963
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,963
|
|
|||||
Taxes paid related to net share settlements of stock-based compensation awards
|
(4,438
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,438
|
)
|
|||||
Debt issuance costs
|
(7,104
|
)
|
|
—
|
|
|
(9,450
|
)
|
|
—
|
|
|
(16,554
|
)
|
|||||
Proceeds from issuance of Euro Notes (2024)
|
—
|
|
|
—
|
|
|
563,450
|
|
|
—
|
|
|
563,450
|
|
|||||
Borrowings under revolving credit facilities
|
1,744,408
|
|
|
—
|
|
|
892,188
|
|
|
—
|
|
|
2,636,596
|
|
|||||
Repayments under revolving credit facilities
|
(654,000
|
)
|
|
—
|
|
|
(1,094,664
|
)
|
|
—
|
|
|
(1,748,664
|
)
|
|||||
Borrowings under term loans
|
332,954
|
|
|
—
|
|
|
249,161
|
|
|
—
|
|
|
582,115
|
|
|||||
Repayments under term loans
|
(10,898
|
)
|
|
—
|
|
|
(244,894
|
)
|
|
—
|
|
|
(255,792
|
)
|
|||||
Borrowings under receivables securitization facility
|
—
|
|
|
—
|
|
|
106,400
|
|
|
—
|
|
|
106,400
|
|
|||||
Repayments under receivables securitization facility
|
—
|
|
|
—
|
|
|
(69,400
|
)
|
|
—
|
|
|
(69,400
|
)
|
|||||
Borrowings (repayments) of other debt, net
|
653
|
|
|
(2,935
|
)
|
|
(28,874
|
)
|
|
—
|
|
|
(31,156
|
)
|
|||||
Payments of Rhiag debt and related payments
|
—
|
|
|
—
|
|
|
(543,347
|
)
|
|
—
|
|
|
(543,347
|
)
|
|||||
Other financing activities, net
|
—
|
|
|
(1,436
|
)
|
|
—
|
|
|
—
|
|
|
(1,436
|
)
|
|||||
Investment and intercompany note activity with parent
|
—
|
|
|
608,270
|
|
|
1,112,462
|
|
|
(1,720,732
|
)
|
|
—
|
|
|||||
Dividends
|
—
|
|
|
(312,497
|
)
|
|
—
|
|
|
312,497
|
|
|
—
|
|
|||||
Net cash provided by financing activities
|
1,409,538
|
|
|
291,402
|
|
|
933,032
|
|
|
(1,408,235
|
)
|
|
1,225,737
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
(157
|
)
|
|
(3,547
|
)
|
|
—
|
|
|
(3,704
|
)
|
|||||
Net increase in cash and cash equivalents
|
15,414
|
|
|
22,077
|
|
|
109,628
|
|
|
—
|
|
|
147,119
|
|
|||||
Cash and cash equivalents of continuing operations, beginning of period
|
17,616
|
|
|
13,432
|
|
|
56,349
|
|
|
—
|
|
|
87,397
|
|
|||||
Cash and cash equivalents of continuing and discontinued operations, end of period
|
33,030
|
|
|
35,509
|
|
|
165,977
|
|
|
—
|
|
|
234,516
|
|
|||||
Less: Cash and cash equivalents of discontinued operations, end of period
|
—
|
|
|
(149
|
)
|
|
(6,967
|
)
|
|
—
|
|
|
(7,116
|
)
|
|||||
Cash and cash equivalents, end of period
|
$
|
33,030
|
|
|
$
|
35,360
|
|
|
$
|
159,010
|
|
|
$
|
—
|
|
|
$
|
227,400
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
/s/ DELOITTE & TOUCHE LLP
|
Name
|
|
Age
|
|
Position
|
Dominick Zarcone
|
|
60
|
|
President, Chief Executive Officer and Director
|
Varun Laroyia
|
|
47
|
|
Executive Vice President and Chief Financial Officer
|
John S. Quinn
|
|
60
|
|
Chief Executive Officer and Managing Director, LKQ Europe
|
Victor M. Casini
|
|
56
|
|
Senior Vice President, General Counsel and Corporate Secretary
|
Walter P. Hanley
|
|
52
|
|
Senior Vice President - Development
|
Justin L. Jude
|
|
42
|
|
Senior Vice President of Operations - Wholesale Parts Division
|
Ashley T. Brooks
|
|
55
|
|
Senior Vice President and Chief Information Officer
|
Matthew J. McKay
|
|
41
|
|
Senior Vice President - Human Resources
|
Michael S. Clark
|
|
44
|
|
Vice President - Finance and Controller
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Plan Category
|
|
Number of
securities to be issued
upon exercise of
outstanding options,
warrants, and rights
(a)
|
|
Weighted-average
exercise price of
outstanding options,
warrants, and rights
(b)
|
|
Number of securities remaining
available for future
issuance under equity
compensation plans (excluding securities reflected in column (a)) (c) |
||||
Equity compensation plans approved by stockholders
|
|
|
|
|
|
|
||||
Stock options
|
|
1,051,494
|
|
|
$
|
10.15
|
|
|
|
|
Restricted stock units
|
|
1,475,682
|
|
|
$
|
—
|
|
|
|
|
Total equity compensation plans approved by stockholders
|
|
2,527,176
|
|
|
|
|
11,271,832
|
|
||
Equity compensation plans not approved by stockholders
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Total
|
|
2,527,176
|
|
|
|
|
11,271,832
|
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
(1)
|
Subsequent to our adoption of ASC 606 in 2018, we present a refund liability and a returns asset within the 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. See Note 4, "Summary of Significant Accounting Policies," to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information related to our adoption of ASC 606.
|
Restated Certificate of Incorporation of LKQ Corporation (incorporated herein by reference to Exhibit 3.1 to the Company’s report on Form 10-Q filed with the SEC on October 31, 2014).
|
|
Amended and Restated Bylaws of LKQ Corporation, as amended as of March 8, 2017 (incorporated herein by reference to Exhibit 3.1 to the Company's report on Form 8-K filed with the SEC on March 10, 2017).
|
|
Specimen of common stock certificate (incorporated herein by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1/A, Registration No. 333-107417 filed with the SEC on September 12, 2003).
|
Change of Control Agreement between LKQ Corporation and Walter P. Hanley dated as of July 24, 2014 (incorporated herein by reference to Exhibit 10.4 to the Company’s report on Form 8-K filed with the SEC on July 28, 2014).
|
|
Change of Control Agreement between LKQ Corporation and Victor M. Casini dated as of July 24, 2014 (incorporated herein by reference to Exhibit 10.5 to the Company’s report on Form 8-K filed with the SEC on July 28, 2014).
|
|
Change of Control Agreement between LKQ Corporation and Michael S. Clark dated as of July 24, 2014 (incorporated herein by reference to Exhibit 10.8 to the Company’s report on Form 8-K filed with the SEC on July 28, 2014).
|
|
Change of Control Agreement between LKQ Corporation and Dominick P. Zarcone dated as of March 30, 2015 (incorporated herein by reference to Exhibit 10.7 to the Company’s report on Form 10-Q filed with the SEC on May 1, 2015).
|
|
Change of Control Agreement between LKQ Corporation and Justin L. Jude dated as of May 13, 2015 (incorporated herein by reference to Exhibit 10.32 to the Company’s report on Form 10-K filed with the SEC on February 25, 2016).
|
|
Change of Control Agreement between LKQ Corporation and Ashley T. Brooks dated as of May 2, 2016 (incorporated herein by reference to Exhibit 10.1 to the Company’s report on Form 10-Q filed with the SEC on August 2, 2016).
|
|
Change of Control Agreement between LKQ Corporation and Matthew J. McKay dated as of June 1, 2016 (incorporated herein by reference to Exhibit 10.34 to the Company's report on Form 10-K filed with the SEC on February 27, 2017).
|
|
Change of Control Agreement between LKQ Corporation and Varun Laroyia dated as of October 1, 2017 (incorporated herein by reference to Exhibit 10.26 to the Company's report on Form 10-K filed with the SEC on February 28, 2018).
|
|
LKQ Severance Policy for Key Executives (incorporated herein by reference to Exhibit 10.1 to the Company’s report on Form 8-K filed with the SEC on July 28, 2014).
|
|
Receivables Sale Agreement dated as of September 28, 2012 among Keystone Automotive Industries, Inc., as an Originator, Greenleaf Auto Recyclers, LLC, as an Originator, and LKQ Receivables Finance Company, LLC, as Buyer (incorporated herein by reference to Exhibit 10.1 to the Company’s report on Form 8-K filed with the SEC on October 4, 2012).
|
|
Receivables Purchase Agreement dated as of September 28, 2012 among LKQ Receivables Finance Company, LLC, as Seller, LKQ Corporation, as Servicer, Victory Receivables Corporation, as a Conduit and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as a Financial Institution, as Administrative Agent and as a Managing Agent (incorporated herein by reference to Exhibit 10.2 to the Company’s report on Form 8-K filed with the SEC on October 4, 2012).
|
|
Amendment No. 1 to Receivables Purchase Agreement dated as of September 29, 2014 among LKQ Receivables Finance Company, LLC, as Seller, LKQ Corporation, as Servicer, Victory Receivables Corporation, as a Conduit and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as a Financial Institution, as Administrative Agent and as a Managing Agent (incorporated herein by reference to Exhibit 10.1 to the Company’s report on Form 8-K filed with the SEC on October 3, 2014).
|
|
Performance Undertaking, dated as of September 28, 2012 by LKQ Corporation in favor of LKQ Receivables Finance Company, LLC (incorporated herein by reference to Exhibit 10.3 to the Company’s report on Form 8-K filed with the SEC on October 4, 2012).
|
|
Amendment No. 2 to Receivables Purchase Agreement dated as of November 28, 2016 among LKQ Receivables Finance Company, LLC, as Seller, LKQ Corporation, as Servicer, the Conduits, the Purchasers, the Managing Agents and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Administrative Agent (incorporated herein by reference to Exhibit 10.40 to the Company's report on Form 10-K filed with the SEC on February 27, 2017).
|
|
Amendment No. 3 to Receivables Purchase Agreement dated as of December 20, 2018 among LKQ Receivables Finance Company, LLC, as Seller, LKQ Corporation, as Servicer, the Conduits, the Purchasers, the Managing Agents and MUFG Bank, as Administrative Agent.
|
|
Offer Letter to John S. Quinn dated February 12, 2015, as amended (incorporated herein by reference to Exhibit 10.41 to the Company’s report on Form 10-K filed with the SEC on February 25, 2016).
|
|
Services Agreement dated as of February 26, 2015 between LKQ Corporation and John S. Quinn (incorporated herein by reference to Exhibit 10.3 to the Company’s report on Form 8-K filed with the SEC on March 3, 2015).
|
|
Offer Letter to Dominick P. Zarcone dated February 12, 2015 (incorporated herein by reference to Exhibit 10.4 to the Company’s report on Form 8-K filed with the SEC on March 3, 2015).
|
|
Memorandum dated as of May 25, 2017 from Joseph M. Holsten to Dominick P. Zarcone (incorporated herein by reference to Exhibit 10.1 to the Company's report on Form 8-K filed with the SEC on June 5, 2017).
|
|
LKQ CORPORATION
|
|
|
By:
|
/s/ DOMINICK ZARCONE
|
|
Dominick Zarcone
|
|
President and Chief Executive Officer
|
Signature
|
Title
|
Principal Executive Officer:
|
|
/s/ DOMINICK ZARCONE
|
President and Chief Executive Officer
|
Dominick Zarcone
|
|
Principal Financial Officer:
|
|
/s/ VARUN LAROYIA
|
Executive Vice President and Chief Financial Officer
|
Varun Laroyia
|
|
Principal Accounting Officer:
|
|
/s/ MICHAEL S. CLARK
|
Vice President—Finance and Controller
|
Michael S. Clark
|
|
A Majority of the Directors:
|
|
/s/ A. CLINTON ALLEN
|
Director
|
A. Clinton Allen
|
|
/s/ MEG ANN DIVITTO
|
Director
|
Meg Ann Divitto
|
|
/s/ ROBERT M. HANSER
|
Director
|
Robert M. Hanser
|
|
/s/ JOSEPH M. HOLSTEN
|
Director
|
Joseph M. Holsten
|
|
/s/ BLYTHE J. MCGARVIE
|
Director
|
Blythe J. McGarvie
|
|
/s/ JOHN W. MENDEL
|
Director
|
John W. Mendel
|
|
/s/ JODY G. MILLER
|
Director
|
Jody G. Miller
|
|
/s/ JOHN F. O'BRIEN
|
Director
|
John F. O'Brien
|
|
/s/ GUHAN SUBRAMANIAN
|
Director
|
Guhan Subramanian
|
|
/s/ WILLIAM M. WEBSTER, IV
|
Director
|
William M. Webster, IV
|
|
/s/ DOMINICK ZARCONE
|
Director
|
Dominick Zarcone
|
|
1.
|
Fifth Third Bank
|
2.
|
Goldman Sachs Bank USA
|
3.
|
Associated Bank, National Association
|
4.
|
MB Financial, N.A., as successor in interest to Cole Taylor Bank
|
5.
|
First Hawaiian Bank
|
6.
|
First Midwest Bank
|
7.
|
The Huntington National Bank
|
8.
|
E.Sun Commercial Bank, LTD., Los Angeles Branch
|
1.
|
UniCredit Bank AG, New York Branch
|
ARTICLE
|
I
|
Definitions
|
|
1
|
|
|
|
|
|
SECTION
|
1.01.
|
Defined Terms
|
|
1
|
SECTION
|
1.02.
|
Classification of Loans and Borrowings
|
|
53
|
SECTION
|
1.03.
|
Terms Generally; Québec Interpretation; Jersey Interpretation
|
|
53
|
SECTION
|
1.04.
|
Accounting Terms; GAAP
|
|
55
|
SECTION
|
1.05.
|
Status of Obligations
|
|
56
|
SECTION
|
1.06.
|
Amendment and Restatement of Existing Agreement
|
|
56
|
SECTION
|
1.07.
|
Rates
|
|
56
|
|
|
|
|
|
ARTICLE
|
II
|
The Credits
|
|
57
|
|
|
|
|
|
SECTION
|
2.01.
|
Commitments and Loans
|
|
57
|
SECTION
|
2.02.
|
Loans and Borrowings
|
|
57
|
SECTION
|
2.03.
|
Requests for Borrowings
|
|
58
|
SECTION
|
2.04.
|
Determination of Dollar Amounts
|
|
60
|
SECTION
|
2.05.
|
Swingline Loans
|
|
60
|
SECTION
|
2.06.
|
Letters of Credit
|
|
61
|
SECTION
|
2.07.
|
Funding of Borrowings
|
|
66
|
SECTION
|
2.08.
|
Interest Elections
|
|
67
|
SECTION
|
2.09.
|
Termination and Reduction of Commitments
|
|
69
|
SECTION
|
2.10.
|
Repayment and Amortization of Loans; Evidence of Debt
|
|
69
|
SECTION
|
2.11.
|
Prepayment of Loans
|
|
70
|
SECTION
|
2.12.
|
Fees
|
|
71
|
SECTION
|
2.13.
|
Interest
|
|
72
|
SECTION
|
2.14.
|
Alternate Rate of Interest; Laws Affecting Availability
|
|
73
|
SECTION
|
2.15.
|
Increased Costs
|
|
75
|
SECTION
|
2.16.
|
Break Funding Payments
|
|
77
|
SECTION
|
2.17.
|
Taxes
|
|
77
|
SECTION
|
2.17A.
|
UK Tax
|
|
80
|
SECTION
|
2.17B.
|
VAT
|
|
83
|
SECTION
|
2.18.
|
Payments Generally; Allocations of Proceeds; Pro Rata Treatment; Sharing of Set-offs
|
|
84
|
SECTION
|
2.19.
|
Mitigation Obligations; Replacement of Lenders
|
|
86
|
SECTION
|
2.20.
|
Expansion Option
|
|
87
|
SECTION
|
2.21.
|
Incremental Equivalent Debt
|
|
88
|
SECTION
|
2.22.
|
Interest Act (Canada), Etc.
|
|
89
|
SECTION
|
2.23.
|
Judgment Currency
|
|
89
|
SECTION
|
2.24.
|
Designation of Subsidiary Borrowers
|
|
90
|
SECTION
|
2.25.
|
Defaulting Lenders
|
|
91
|
|
|
|
|
|
ARTICLE
|
III
|
Representations and Warranties
|
|
93
|
|
|
|
|
|
SECTION
|
3.01.
|
Financial Condition
|
|
93
|
SECTION
|
3.02.
|
No Change
|
|
93
|
SECTION
|
3.03.
|
Corporate Existence; Compliance with Law
|
|
93
|
SECTION
|
3.04.
|
Corporate Power; Authorization; Enforceable Obligations
|
|
93
|
SECTION
|
3.05.
|
No Legal Bar
|
|
94
|
SECTION
|
3.06.
|
No Material Litigation
|
|
94
|
SECTION
|
3.07.
|
No Default
|
|
94
|
SECTION
|
3.08.
|
Ownership of Property; Liens
|
|
94
|
SECTION
|
3.09.
|
Intellectual Property
|
|
94
|
SECTION
|
3.10.
|
Taxes
|
|
95
|
SECTION
|
3.11.
|
Federal Regulations
|
|
95
|
SECTION
|
3.12.
|
Labor Matters
|
|
95
|
SECTION
|
3.13.
|
ERISA
|
|
95
|
SECTION
|
3.14.
|
Investment Company Act; Other Regulations
|
|
97
|
SECTION
|
3.15.
|
Subsidiaries
|
|
97
|
SECTION
|
3.16.
|
Use of Proceeds
|
|
97
|
SECTION
|
3.17.
|
Environmental Matters
|
|
97
|
SECTION
|
3.18.
|
Accuracy of Information, Etc.
|
|
98
|
SECTION
|
3.19.
|
Collateral Documents
|
|
98
|
SECTION
|
3.20.
|
Solvency
|
|
99
|
SECTION
|
3.21.
|
Insurance
|
|
99
|
SECTION
|
3.22.
|
Patriot Act, Sanctions, Etc
|
|
99
|
SECTION
|
3.23.
|
EEA Financial Institutions
|
|
99
|
SECTION
|
3.24.
|
Jersey Incorporated Borrowers
|
|
99
|
SECTION
|
3.25.
|
Subsidiary Borrowers
|
|
100
|
|
|
|
|
|
ARTICLE
|
IV
|
Conditions
|
|
101
|
|
|
|
|
|
SECTION
|
4.01.
|
Restatement Effective Date
|
|
101
|
SECTION
|
4.02.
|
Each Credit Event
|
|
101
|
SECTION
|
4.03.
|
Designation of a Subsidiary Borrower
|
|
101
|
|
|
|
|
|
ARTICLE
|
V
|
Affirmative Covenants
|
|
102
|
|
|
|
|
|
SECTION
|
5.01.
|
Financial Statements
|
|
102
|
SECTION
|
5.02.
|
Certificates; Other Information
|
|
103
|
SECTION
|
5.03.
|
Payment of Obligations
|
|
104
|
SECTION
|
5.04.
|
Conduct of Business and Maintenance of Existence, Etc.
|
|
105
|
SECTION
|
5.05.
|
Maintenance of Property; Insurance
|
|
105
|
SECTION
|
5.06.
|
Inspection of Property; Books and Records; Discussions
|
|
105
|
SECTION
|
5.07.
|
Notices
|
|
105
|
SECTION
|
5.08.
|
Environmental Laws
|
|
106
|
SECTION
|
5.09.
|
Additional Collateral, etc.
|
|
106
|
SECTION
|
5.10.
|
Use of Proceeds
|
|
109
|
SECTION
|
5.11.
|
ERISA Documents
|
|
110
|
SECTION
|
5.12.
|
Further Assurances
|
|
110
|
|
|
|
|
|
ARTICLE
|
VI
|
Negative Covenants
|
|
110
|
|
|
|
|
|
SECTION
|
6.01.
|
Limitation on Indebtedness
|
|
111
|
SECTION
|
6.02.
|
Limitation on Liens
|
|
114
|
SECTION
|
6.03.
|
Limitation on Fundamental Changes
|
|
117
|
SECTION
|
6.04.
|
Limitation on Disposition of Property
|
|
118
|
SECTION
|
6.05.
|
Limitation on Restricted Payments
|
|
119
|
SECTION
|
6.06.
|
Limitation on Capital Expenditures
|
|
121
|
SECTION
|
6.07.
|
Limitation on Investments
|
|
121
|
SECTION
|
6.08.
|
Limitation on Optional Payments and Modifications of Debt Instruments Governing Documents
|
|
123
|
SECTION
|
6.09.
|
Limitation on Transactions with Affiliates
|
|
124
|
SECTION
|
6.10.
|
Limitation on Sales and Leasebacks
|
|
124
|
SECTION
|
6.11.
|
[Reserved]
|
|
124
|
SECTION
|
6.12.
|
Limitation on Negative Pledge Clauses
|
|
124
|
SECTION
|
6.13.
|
Limitation on Restrictions on Subsidiary Distributions
|
|
125
|
SECTION
|
6.14.
|
Limitation on Lines of Business
|
|
126
|
SECTION
|
6.15.
|
Limitation on Issuance of Capital Stock
|
|
126
|
SECTION
|
6.16.
|
Limitation on Activities of Canadian Holding Companies and Dormant Subsidiaries
|
|
126
|
SECTION
|
6.17.
|
Limitation on Hedge Agreements
|
|
127
|
SECTION
|
6.18.
|
Financial Covenants
|
|
127
|
|
|
|
|
|
ARTICLE
|
VII
|
Events of Default
|
|
128
|
|
|
|
|
|
ARTICLE
|
VIII
|
The Administrative Agent
|
|
131
|
|
|
|
|
|
ARTICLE
|
IX
|
Miscellaneous
|
|
135
|
|
|
|
|
|
SECTION
|
9.01.
|
Notices
|
|
136
|
SECTION
|
9.02.
|
Waivers; Amendments
|
|
137
|
SECTION
|
9.03.
|
Expenses; Indemnity; Damage Waiver
|
|
139
|
SECTION
|
9.04.
|
Successors and Assigns
|
|
141
|
SECTION
|
9.05.
|
Survival
|
|
145
|
SECTION
|
9.06.
|
Counterparts; Integration; Effectiveness; Electronic Execution; Dutch Power of Attorney
|
|
145
|
SECTION
|
9.07.
|
Severability
|
|
145
|
SECTION
|
9.08.
|
Right of Setoff
|
|
146
|
SECTION
|
9.09.
|
Governing Law; Jurisdiction; Consent to Service of Process
|
|
146
|
SECTION
|
9.10.
|
WAIVER OF JURY TRIAL
|
|
147
|
SECTION
|
9.11.
|
Headings
|
|
147
|
SECTION
|
9.12.
|
Confidentiality
|
|
147
|
SECTION
|
9.13.
|
USA PATRIOT Act; AML Legislation
|
|
148
|
SECTION
|
9.14.
|
Appointment for Perfection
|
|
149
|
SECTION
|
9.15.
|
Releases of Subsidiary Guarantors
|
|
149
|
SECTION
|
9.16.
|
Interest Rate Limitation
|
|
150
|
SECTION
|
9.17.
|
No Advisory or Fiduciary Responsibility
|
|
150
|
SECTION
|
9.18.
|
Acknowledgement and Consent to Bail-In of EEA Financial Institutions
|
|
150
|
SECTION
|
9.19.
|
Certain ERISA Matters
|
|
151
|
SECTION
|
9.20.
|
. 151
|
|
151
|
|
|
|
|
|
ARTICLE
|
X
|
Cross-Guarantee
|
|
152
|
|
|
|
|
|
ARTICLE
|
XI
|
Collection Allocation Mechanism
|
|
155
|
EXHIBITS:
|
|
|
Exhibit A
|
–
|
Form of Assignment and Assumption
|
Exhibit B-1
|
–
|
Form of Opinion of Loan Parties’ U.S. Counsel
|
Exhibit B-2
|
–
|
Form of Opinion of Loan Parties’ Internal Counsel
|
Exhibit C
|
–
|
Form of Increasing Lender Supplement
|
Exhibit D
|
–
|
Form of Augmenting Lender Supplement
|
Exhibit E
|
–
|
[Intentionally omitted]
|
Exhibit F-1
|
–
|
Form of Borrowing Subsidiary Agreement
|
Exhibit F-2
|
–
|
Form of Borrowing Subsidiary Termination
|
Exhibit G-1
|
–
|
Form of U.S. Tax Certificate (Non-U.S. Lenders That Are Not Partnerships)
|
Exhibit G-2
|
–
|
Form of U.S. Tax Certificate (Non-U.S. Lenders That Are Partnerships)
|
Exhibit G-3
|
–
|
Form of U.S. Tax Certificate (Non-U.S. Participants That Are Not Partnerships)
|
Exhibit G-4
|
–
|
Form of U.S. Tax Certificate (Non-U.S. Participants That Are Partnerships)
|
Exhibit H
|
–
|
Compliance Certificate
|
|
Net Leverage
Ratio: |
Eurocurrency / LIBOR Market Rate /
BA Equivalent Spread |
ABR / Canadian Base Rate Spread
|
Commitment Fee
|
Category 1:
|
<
2.00 to 1.00
|
1%
|
—%
|
0.125%
|
Category 2:
|
> 2.00 to 1.00 but
< 3.00 to 1.00 |
1.25%
|
0.25%
|
0.175%
|
Category 3:
|
> 3.00 to 1.00 but
< 4.00 to 1.00 |
1.5%
|
0.5%
|
0.225%
|
Category 4:
|
> 4.00 to 1:00
|
1.75%
|
0.75%
|
0.275%
|
(1)
|
in respect of an advance made under a Loan Document by a person that was a bank (as defined for the purpose of section 879 of the ITA) at the time that the advance was made and which is a bank (as defined for the purpose of section 879 of the ITA) and would be within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance apart from section 18A of the Corporation Tax Act 2009; or
|
(2)
|
in respect of an advance made under a Loan Document by a person that was a bank (as defined for the purpose of section 879 of the ITA) at the time that the advance was made and which is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance; or
|
(x)
|
a company so resident in the United Kingdom; or
|
(y)
|
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (for the purposes of section 19 of the Corporation Tax Act 2009) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the Corporation Tax Act 2009; or
|
(3)
|
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing its chargeable profits (within the meaning given by section 19 of the Corporation Tax Act 2009); or
|
(i)
|
first, by reducing the amount or rate of interest; and
|
(ii)
|
thereafter, by reducing any fees, commissions, costs, expenses, premiums and other amounts required to be paid which would constitute interest for purposes of section 347 of the
Criminal Code
(Canada).
|
(i)
|
shall be deemed to have done so as an agent for each Lender, and this Agreement shall constitute a “written agreement” in such regard between each Lender and the Administrative Agent within the meaning of applicable AML Legislation; and
|
(ii)
|
shall provide to each Lender copies of all information obtained in such regard without any representation or warranty as to its accuracy or completeness.
|
LENDER
|
DOLLAR TRANCHE
COMMITMENT |
MULTICURRENCY TRANCHE COMMITMENT
|
OUTSTANDING TERM LOANS
|
||||||
|
|
|
|
||||||
WELLS FARGO BANK, NATIONAL ASSOCIATION
|
---
|
|
|
$279,000,000.00
|
|
|
$31,000,000.00
|
|
|
BANK OF AMERICA, N.A.
|
---
|
|
|
$279,000,000.00
|
|
|
$31,000,000.00
|
|
|
MUFG BANK, LTD.
|
---
|
|
|
$252,000,000.00
|
|
|
$28,000,000.00
|
|
|
HSBC BANK USA, NATIONAL ASSOCIATION
|
---
|
|
|
$162,000,000.00
|
|
|
$18,000,000.00
|
|
|
HSBC BANK PLC (AS TRUSTEE FOR HSBC UK BANK PLC)
|
---
|
|
|
$90,000,000.00
|
|
|
$10,000,000.00
|
|
|
CITIZENS BANK, N.A.
|
---
|
|
|
$213,300,000.00
|
|
|
$23,700,000.00
|
|
|
SUNTRUST BANK
|
---
|
|
|
$213,300,000.00
|
|
|
$23,700,000.00
|
|
|
PNC BANK, NATIONAL ASSOCATION
|
---
|
|
|
$213,300,000.00
|
|
|
$23,700,000.00
|
|
|
TD BANK, N.A.
|
---
|
|
|
$213,300,000.00
|
|
|
$23,700,000.00
|
|
|
CAPITAL ONE, NATIONAL ASSOCIATION
|
---
|
|
|
$213,300,000.00
|
|
|
$23,700,000.00
|
|
|
COMPASS BANK d/b/a BBVA COMPASS
|
---
|
|
|
$193,500,000.00
|
|
|
$21,500,000.00
|
|
|
BRANCH BANKING AND TRUST COMPANY
|
---
|
|
|
$162,000,000.00
|
|
|
$18,000,000.00
|
|
|
BNP PARIBAS
|
---
|
|
|
$162,000,000.00
|
|
|
$18,000,000.00
|
|
|
UNICREDIT BANK AG, NEW YORK BRANCH
|
---
|
|
|
$162,000,000.00
|
|
|
$18,000,000.00
|
|
|
U.S. BANK NATIONAL ASSOCIATION
|
---
|
|
|
$139,500,000.00
|
|
|
$15,500,000.00
|
|
|
ROYAL BNAK OF CANADA
|
---
|
|
|
$135,000,000.00
|
|
|
$15,000,000.00
|
|
|
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
|
---
|
|
|
$67,500,000.00
|
|
|
$7,500,000.00
|
|
|
AGGREGATE COMMITMENT
|
|
$0
|
|
|
$3,150,000,000.00
|
|
|
$350,000,000.00
|
|
ISSUING BANK
|
LETTER OF CREDIT COMMITMENT
|
||
WELLS FARGO BANK, NATIONAL ASSOCIATION
|
|
$75,000,000
|
|
BANK OF AMERICA, N.A.
|
|
$75,000,000
|
|
1. Assignor:
|
___________________________
|
|
|
2. Assignee:
|
___________________________
[and is an Affiliate/Approved Fund of [identify Lender]] |
|
|
3. Borrowers:
|
LKQ Corporation, LKQ Delaware LLP and certain other Subsidiary Borrowers
|
|
|
4. Administrative Agent:
|
Wells Fargo Bank, National Association, as the administrative agent under the Credit Agreement
|
|
|
5. Credit Agreement:
|
The Fourth Amended and Restated Credit Agreement dated as of March 25, 2011, as amended and restated as of September 30, 2011, as further amended and restated as of May 3, 2013, as amended and restated as of March 27, 2014, as further amended and restated as of January 29, 2016 among LKQ Corporation, LKQ Delaware LLP, the Subsidiary Borrowers from time to time parties thereto, the Lenders parties thereto, Wells Fargo Bank, National Association, as Administrative Agent, and the other agents parties thereto
|
|
|
6. Assigned Interest:
|
|
Facility Assigned
|
Aggregate Amount of Commitment/Loans for all Lenders
|
Amount of Commitment/ Loans Assigned
|
Percentage Assigned of Commitment/Loans
|
|
$
|
$
|
%
|
|
$
|
$
|
%
|
|
$
|
$
|
%
|
ASSIGNOR
|
[NAME OF ASSIGNOR]
|
By:
|
Title:
|
ASSIGNEE
|
[NAME OF ASSIGNEE]
|
By:
|
Title:
|
|
|
Page
|
|
1.
|
INTRODUCTION
|
1
|
|
1.1.
|
Amendment and Restatement of the Plan
|
1
|
|
1.2.
|
Purposes of Plan
|
1
|
|
1.3.
|
“Top Hat” Pension Benefit Plan
|
1
|
|
1.4.
|
Plan Unfunded
|
1
|
|
1.5.
|
Effective Date
|
1
|
|
1.6.
|
Administration
|
1
|
|
2.
|
DEFINITIONS AND CONSTRUCTION
|
1
|
|
2.1.
|
Definitions
|
1
|
|
2.2.
|
Number and Gender
|
5
|
|
2.3.
|
Headings
|
5
|
|
3.
|
PARTICIPATION AND ELIGIBILITY
|
5
|
|
3.1.
|
Participation
|
5
|
|
3.2.
|
Commencement of Participation
|
6
|
|
3.3.
|
Cessation of Active Participation
|
6
|
|
4.
|
DEFERRALS, MATCHING AND COMPANY CONTRIBUTIONS
|
6
|
|
4.1.
|
Deferrals by Participants
|
7
|
|
4.2.
|
Effective Date of Participation Agreement.
|
7
|
|
4.3.
|
Modification or Revocation of Election by Participant
|
9
|
|
4.4.
|
Matching Contributions
|
9
|
|
4.5.
|
Company Profit Sharing Contribution
|
9
|
|
4.6.
|
Other Company Contributions
|
9
|
|
5.
|
VESTING, DEFERRAL PERIODS AND INVESTMENT ELECTIONS
|
9
|
|
5.1.
|
Vesting
|
9
|
|
5.2.
|
Election of In-Service Distribution
|
10
|
|
5.3.
|
Investment Elections
|
10
|
|
6.
|
ACCOUNTS
|
11
|
|
6.1.
|
Establishment of Bookkeeping Accounts
|
11
|
|
6.2.
|
Subaccounts
|
11
|
|
6.3.
|
Hypothetical Nature of Accounts
|
11
|
|
7.
|
PAYMENT OF ACCOUNT
|
12
|
|
7.1.
|
Length of Deferral Period (i.e., Timing of Distributions)
|
12
|
|
7.2.
|
Form of Payment
|
12
|
|
7.3.
|
No Acceleration Of Benefits
|
14
|
|
7.4.
|
Small Account
|
14
|
|
7.5.
|
Designation of Beneficiaries
|
14
|
|
7.6.
|
Unclaimed Benefits
|
16
|
|
7.7.
|
Unforeseeable Emergency Withdrawals
|
16
|
|
7.8.
|
Withholding
|
16
|
|
8.
|
ADMINISTRATION
|
16
|
|
8.1.
|
Committee
|
16
|
|
8.2.
|
General Powers of Administration
|
16
|
|
8.3.
|
Indemnification of Committee
|
17
|
|
9.
|
DETERMINATION OF BENEFITS, CLAIMS PROCEDURE AND ADMINISTRATION
|
|
|
9.1.
|
Claims
|
17
|
|
9.2.
|
Non-Disability Claims.
|
17
|
|
9.3.
|
Disability Claims.
|
19
|
|
10.
|
MISCELLANEOUS
|
23
|
|
10.1.
|
Plan Not a Contract of Employment
|
23
|
|
10.2.
|
Non-Assignability of Benefits
|
23
|
|
10.3.
|
Amendment and Termination
|
23
|
|
10.4.
|
Unsecured General Creditor Status Of Employee
|
23
|
|
10.5.
|
Severability
|
24
|
|
10.6.
|
Governing Laws
|
24
|
|
10.7.
|
Binding Effect
|
24
|
|
10.8.
|
Entire Agreement
|
24
|
|
10.9.
|
No Guarantee of Tax Consequences
|
24
|
|
10.10.
|
Sole Obligor
|
24
|
|
10.11.
|
Compliance with Section 409A
|
24
|
|
1.
|
INTRODUCTION
|
2.
|
DEFINITIONS AND CONSTRUCTION
|
3.
|
PARTICIPATION AND ELIGIBILITY
|
4.
|
DEFERRALS, MATCHING AND COMPANY CONTRIBUTIONS
|
5.
|
VESTING, DEFERRAL PERIODS AND INVESTMENT ELECTIONS
|
6.
|
ACCOUNTS
|
7.
|
PAYMENT OF ACCOUNT
|
8.
|
ADMINISTRATION
|
9.
|
DETERMINATION OF BENEFITS, CLAIMS PROCEDURE AND ADMINISTRATION
|
10.
|
MISCELLANEOUS
|
Performance Goals:
|
The diluted earnings per share from continuing operations attributable to LKQ stockholders ("EPS") for the Performance Period; provided, however, that EPS shall be increased to the extent that EPS was reduced in accordance with GAAP by objectively determinable amounts in each case due to:
|
6.
|
Board approved restructuring, acquisition or similar charges including but not limited to charges in conjunction with
|
7.
|
Losses (and related fees and expenses) related to extra-ordinary environmental, legal, product liability
|
10.
|
Changes in contingent consideration liabilities;
|
11.
|
The imposition of tariffs or taxes on the importation of inventory;
|
12.
|
Amortization expense related to acquired intangibles; and
|
13.
|
Other extraordinary, unusual or infrequently occurring
|
|
items.
|
|
|
1.
|
A change in accounting policy or GAAP;
|
2.
|
Dispositions of assets or businesses;
|
3.
|
Asset impairments;
|
4.
|
Amounts incurred in connection with any ଁnancing;
|
5.
|
Losses on interest rate swaps resulting from mark to market adjustments or discontinuing hedges;
|
6.
|
Board approved restructuring, acquisition or similar charges including but not limited to charges in conjunction with or in anticipation of an acquisition;
|
7.
|
Losses (and related fees and expenses) related to extra-ordinary environmental, legal, product liability or other contingencies;
|
8.
|
Changes in tax laws or regulations or interpretations of such laws or regulations;
|
9.
|
A Board approved divestiture of a material business (i.e. the performance goals will be adjusted to account for the divestiture, including, if appropriate, the pro-rata effect of targeted improvements);
|
10.
|
Changes in contingent consideration liabilities;
|
11.
|
The imposition of tariffs or taxes on the importation of inventory; and
|
12.
|
Other extraordinary, unusual or infrequently occurring items.
|
By:
|
/s/ Varun Laroyia
|
By:
|
____
/s/ Walter P. Hanley
_____________
Name: Walter P. Hanley |
By:
|
____
/s/ Kevin J. Corrigan
_______
Name: Kevin J. Corrigan Title: Vice President |
By:
|
_________________________________
|
By:
|
___________________________
|
Address:
|
Victory Receivables Corporation
|
Attention:
|
Frank B. Bilotta
Kevin Corrigan
|
Telephone:
|
(212) 295-
2777
2757
|
Facsimile:
|
(212) 302-8767
|
Email:
|
kcorrigan@gssnyc.com
|
Attention:
|
Nicolas Mounier / Eric Williams
/ Devang Sodha
|
Telephone:
|
(212)
782
405
-
5980
6776
/ (212)
782-4910 / (212) 782-4253
405-6654
|
Facsimile:
|
(212) 782-6448
|
E-mail:
|
securitization_reporting@us.mufg.jp
|
Address:
|
1251
1221
Avenue of the Americas
|
Attention:
|
Nicolas Mounier / Eric Williams
/ Devang Sodha
|
Telephone:
|
(212)
782
405
-
5980
6776
/ (212)
782-4910 / (212) 782-4253
405-6654
|
Facsimile:
|
(212) 782-6448
|
E-mail:
|
securitization_reporting@us.mufg.jp
|
Address:
|
The
MUFG
Bank
of Tokyo-Mitsubishi UFJ, Ltd.
, LTD.
|
Attention:
|
John Donoghue
|
Facsimile No.:
|
(201) 369-2149
|
Email:
|
securitization_reporting@us.mufg.jp
|
Attention:
|
Nicolas Mounier / Eric Williams
/ Devang Sodha
|
Telephone:
|
(212)
782
405
-
5980
6776
/ (212)
782-4910 / (212) 782-4253
405-6654
|
Facsimile:
|
(212) 782-6448
|
E-mail:
|
securitization_reporting@us.mufg.jp
|
Short-Term Debt Ratings
|
Concentration Percentage
|
At least A-1 by S&P
and
at least P-1 by Moody’s
|
14.00%
|
At least A-2 by S&P
and
at least P-2 by Moody’s
|
7.00%
|
At least A-3 by S&P
and
at least P-3 by Moody’s
|
4.67%
|
Any other Short-Term Debt Rating or Unrated by either S&P
or
Moody’s
|
3.50%
|
C
|
NRB - AR
|
AR
|
=
the Aggregate Reserves.
|
C
|
=
the Capital of such Purchaser Interest.
|
NRB
|
=
the Net Receivables Balance.
|
|
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
|
|
ARTICLE I
|
Page
|
|
PURCHASE ARRANGEMENTS
|
1
|
|
Section 1.1
|
Purchase Facility
|
1
|
Section 1.2
|
Increases
|
2
|
Section 1.3
|
Decreases
|
3
|
Section 1.4
|
Payment Requirements
|
3
|
ARTICLE II
|
|
|
PAYMENTS AND COLLECTIONS
|
3
|
|
Section 2.1
|
Payments
|
3
|
Section 2.2
|
Collections Prior to Amortization
|
4
|
Section 2.3
|
Non-Renewing Financial Institutions
|
5
|
Section 2.4
|
Collections Following Amortization
|
5
|
Section 2.5
|
Application of Collections
|
5
|
Section 2.6
|
Payment Rescission
|
6
|
Section 2.7
|
Maximum Purchaser Interests
|
6
|
Section 2.8
|
Clean Up Call
|
6
|
ARTICLE III
|
|
|
CONDUIT FUNDING
|
7
|
|
Section 3.1
|
Yield
|
7
|
Section 3.2
|
Yield Payments
|
7
|
Section 3.3
|
Calculation of Yield
|
7
|
ARTICLE IV
|
|
|
FINANCIAL INSTITUTION FUNDING
|
7
|
|
Section 4.1
|
Financial Institution Funding
|
7
|
Section 4.2
|
Yield Payments
|
7
|
Section 4.3
|
Financial Institution Discount Rates
|
7
|
Section 4.4
|
Suspension of the LIBO Rate
|
7
|
Section 4.5
|
Liquidity Agreement Fundings
|
8
|
ARTICLE V
|
|
|
REPRESENTATIONS AND WARRANTIES
|
8
|
|
Section 5.1
|
Representations and Warranties of the Seller
|
8
|
Section 5.2
|
Representations and Warranties of the Servicer
|
13
|
ARTICLE VI
|
|
|
CONDITIONS OF PURCHASES
|
15
|
|
Section 6.1
|
Conditions Precedent to Effectiveness of this Agreement
|
15
|
Section 6.2
|
Conditions Precedent to All Purchases and Reinvestments
|
15
|
ARTICLE VII
|
|
|
COVENANTS
|
|
16
|
Section 7.1
|
Affirmative Covenants of the Seller Parties
|
16
|
Section 7.2
|
Negative Covenants of the Seller Parties
|
24
|
ARTICLE VIII
|
|
|
|
TABLE OF CONTENTS
|
|
ADMINISTRATION AND COLLECTION
|
|
26
|
Section 8.1
|
Designation of the Servicer
|
26
|
Section 8.2
|
Duties of Servicer
|
26
|
Section 8.3
|
Collection Notices
|
28
|
Section 8.4
|
Responsibilities of the Seller
|
28
|
Section 8.5
|
Reports
|
28
|
|
(CONTINUED)
|
Page
|
|
|
|
Section 8.6
|
Servicing Fees
|
29
|
ARTICLE IX
|
|
|
AMORTIZATION EVENTS
|
|
29
|
Section 9.1
|
Amortization Events
|
29
|
Section 9.2
|
Remedies
|
31
|
ARTICLE X
|
|
|
INDEMNIFICATION
|
31
|
|
Section 10.1
|
Indemnities by The Seller Parties
|
31
|
Section 10.2
|
Increased Cost and Reduced Return
|
34
|
Section 10.3
|
Other Costs and Expenses
|
35
|
ARTICLE XI
|
|
|
THE MANAGING AGENTS AND THE ADMINISTRATIVE AGENT
|
35
|
|
Section 11.1
|
Authorization and Action
|
35
|
Section 11.2
|
Delegation of Duties
|
36
|
Section 11.3
|
Exculpatory Provisions
|
36
|
Section 11.4
|
Reliance by the Administrative Agent and the Managing Agents
|
37
|
Section 11.5
|
Non-Reliance on the Administrative Agent, the Managing Agents and Other Purchasers
|
37
|
Section 11.6
|
Reimbursement and Indemnification
|
37
|
Section 11.7
|
Administrative Agent and Managing Agents in their Individual Capacity
|
38
|
Section 11.8
|
Successor Administrative Agent
|
38
|
Section 11.9
|
Successor Managing Agent
|
39
|
ARTICLE XII
|
|
|
ASSIGNMENTS; PARTICIPATIONS
|
39
|
|
Section 12.1
|
Assignments
|
39
|
Section 12.2
|
Participations
|
40
|
Section 12.3
|
Additional Purchaser Groups
|
40
|
Section 12.4
|
Non-Renewing Financial Institutions
|
40
|
Section 12.5
|
Federal Reserve
|
41
|
ARTICLE XIII
|
|
|
MISCELLANEOUS
|
41
|
|
Section 13.1
|
Waivers and Amendments
|
41
|
Section 13.2
|
Notices
|
43
|
Section 13.3
|
Ratable Payments
|
43
|
Section 13.4
|
Protection of Ownership Interests of the Purchasers
|
43
|
Section 13.5
|
Confidentiality
|
44
|
|
TABLE OF CONTENTS
|
|
Section 13.6
|
Bankruptcy Petition
|
45
|
Section 13.7
|
Limitation of Liability
|
45
|
Section 13.8
|
CHOICE OF LAW
|
46
|
Section 13.9
|
CONSENT TO JURISDICTION
|
46
|
Section 13.10
|
WAIVER OF JURY TRIAL
|
46
|
Section 13.11
|
Integration; Binding Effect; Survival of Terms
|
46
|
Section 13.12
|
Counterparts; Severability; Section References
|
47
|
Section 13.13
|
Agent Roles
|
47
|
Section 13.14
|
Characterization
|
47
|
Section 13.15
|
USA PATRIOT Act
|
49
|
Section 13.16
|
Investor Information
|
49
|
|
(continued)
|
Page
|
|
|
|
Section 13.17
|
Accounting Terms; GAAP
|
49
|
|
|
|
Exhibits and Schedules
|
|
|
|
|
|
Exhibit I
|
Definitions
|
|
Exhibit II
|
Form of Purchase Notice
|
|
Exhibit III
|
Places of Business of the Seller Parties; Locations of Records; Federal Employer Identification Numbers (s)
|
|
Exhibit IV
|
Names of Collection Banks; Collection Accounts
|
|
Exhibit V
|
Form of Compliance Certificate
|
|
Exhibit VI
|
Form of Collection Account Agreement
|
|
Exhibit VII
|
Form of Assignment Agreement
|
|
Exhibit VIII
|
Credit and Collection Policy
|
|
Exhibit IX
|
Form of Invoice(s)
|
|
Exhibit X
|
Form of Monthly Report
|
|
Exhibit XI
|
Reserved
|
|
Exhibit XII
|
Reserved
|
|
Exhibit XIII
|
Reserved
|
|
Exhibit XIV
|
Reserved
|
|
Exhibit XV
|
Form of Joinder Agreement
|
|
Exhibit XVI
|
Reserved
|
|
Exhibit XVII
|
Form of Reduction Notice
|
|
Exhibit XVIII
|
Form of Weekly Report
|
|
|
|
|
Schedule A
|
Commitments of Financial Institutions
|
|
Schedule B
|
Closing Documents
|
|
Schedule C
|
Pending Litigation
|
|
Schedule D
|
Excluded Receivables
|
|
Summary report:
Litéra® Change-Pro TDC 10.1.0.300 Document comparison done on 3/1/2019 9:45:42 AM
|
|
Style name:
Sidley Default
|
|
Intelligent Table Comparison:
Active
|
|
Original DMS:
iw://SIDLEYDMS/ACTIVE/218055894/3
|
|
Description:
LKQ - Conformed Copy of Receivables Purchase Agreement to include Amendment No. 2
|
|
Modified DMS:
iw://SIDLEYDMS/ACTIVE/236567777/7
|
|
Description:
LKQ - Conformed Copy of Receivables Purchase Agreement to include Amendment No. 3
|
|
Changes:
|
|
Add
|
84
|
Delete
|
73
|
Move From
|
14
|
Move To
|
14
|
Table Insert
|
0
|
Table Delete
|
0
|
Table moves to
|
0
|
Table moves from
|
0
|
Embedded Graphics (Visio, ChemDraw, Images etc.)
|
0
|
Embedded Excel
|
0
|
Format changes
|
0
|
Total Changes:
|
185
|
SETTLEMENT AGREEMENT
without prejudice and subject to contract
|
(1)
|
Euro Car Parts Limited
, company number 02680212, whose registered office is at T2, Birch Coppice Business Park, Danny Morson Way, Dordon, Tamworth, England, B78 1SE (the
"Company"
);
|
(2)
|
LKQ Corporation,
a company incorporated in the state of Delaware, USA, whose principal place of business is 500 West Madison Street, Suite 2800, Chicago, Illinois 60661, USA (“
LKQ
”); and
|
(3)
|
Sukhpal Singh Ahluwalia
of 89 Winnington Road, London N2 0TT (the
"Employee"
)
|
(A)
|
The Employee is employed by the Company pursuant to the terms of the Contract of Employment.
|
(C)
|
The Company, LKQ and the Employee have agreed the terms set out in this Agreement in settlement of the Claims and all and any other claims which the Employee has or may have against the Company or any Associated Companies or against any employees or officers of any such company arising out of or in connection with or as a consequence of the Employee's employment or its termination (save in relation to any claims for personal injury and accrued pension rights).
|
(D)
|
The Company is entering into this Agreement on its own behalf and as agent for any Associated Company.
|
(a)
|
any Holding Company of the Company; or
|
(i)
|
of which any one or more of the Company and any bodies corporate within paragraph (a), (b) or (c) of this definition beneficially owns (directly or indirectly) at least 25% in
|
(ii)
|
which is directly or indirectly controlled by the Company; or
|
(iii)
|
which directly or indirectly controls the Company; or
|
(iv)
|
which is directly or indirectly controlled by a third party who also directly or indirectly controls the Company; or
|
(v)
|
of which the Company or an Associated Company is a partner
|
1.1.
|
The Employee's employment will terminate on the Termination Date. The Company shall pay the Termination Payment in equal monthly instalments of £41,666.67 from the Termination Date up to and including 31 August 2020, with a further payment of £9,722.22 to be paid in respect of the period 1 September 2020 to 7 September 2020, with payment to be made on the Company’s usual payroll dates,
|
1.2.
|
The Company shall make a further payment of £100 (less deductions for income tax and national insurance contributions) to the Employee in consideration of the Employee’s agreement to a variation to clause 17 of the Contract of Employment such that the Restrictive Covenants specified therein shall continue to apply to the Employee up to and including 7 September 2020 (but not thereafter), such variation to take effect on the date of this Agreement.
|
1.3.
|
The Employee will receive his salary and other contractual benefits up to the Termination Date on the usual basis, subject to the normal deductions for income tax and national insurance. The Employee shall also be paid his 2018 guaranteed bonus in February 2019, subject to the usual deductions for income tax and national insurance contributions.
|
1.4.
|
The Company will pay to the Employee, on the next usual payroll date following the Termination Date, the sum of £7,615.38 less deductions for income tax and national insurance in respect of the Employee's accrued but untaken holiday as at the Termination Date (6 days).
|
1.5.
|
The Company shall promptly reimburse the Employee for all business expenses properly and reasonably incurred by him up to the Termination Date, subject to his compliance with the Company's rules and procedures relating to expenses and the production of satisfactory VAT receipts.
|
1.6.
|
Subject to Clause 5.9, the Company will, without any admission of liability whatsoever and on behalf of the Associated Companies, pay to the Employee the Termination Payment as compensation for the termination of his employment and for loss of office and in full and final settlement of the Claims and all other claims which the Employee has or may have (whether now or at any time in the future) against the Company or any Associated Company arising out of his employment or the termination thereof.
|
1.7.
|
The Company and the Employee agree to use reasonable endeavours in good faith to agree a valuation of Digraph Transport Supplies Limited (“Digraph”) and to effect a sale of one party’s shares in Digraph to the other party by no later than 31 March 2019.
|
4.1.
|
The Employee, LKQ and the Company agree to keep the existence and terms of this Agreement and the circumstances concerning the termination of the Employee's employment and those giving rise to, connected with or concerning the Claims confidential, save where such disclosure is to HMRC, required by law, to give effect to the terms of this Agreement or (where necessary or appropriate) to:
|
a.
|
the Employee’s spouse, civil partner or partner, immediate family or legal or professional advisers, provided that they agree to keep the information confidential; or
|
b.
|
the Employee’s insurer for the purposes of processing a claim for loss of employment; or
|
c.
|
the Employee’s recruitment consultant or prospective employer to the extent necessary to discuss his employment history; or
|
d.
|
the Company's insurers, legal or professional advisers.
|
4.2.
|
The Employee undertakes not to make or cause to be made (directly or indirectly):
|
a.
|
any derogatory or disparaging statement about the Company, any Associated Company or any of its or their officers, employees or shareholders; or
|
b.
|
any comment to the press or other media or any other public statement concerning his employment with the Company, or its termination, save where such comment is consistent with the provisions of Schedule 1, without the prior written consent of the Company such consent not to be unreasonably refused.
|
4.3.
|
The Company and LKQ shall use their reasonable endeavours to procure that none of their senior management teams makes or causes to be made (directly or indirectly):
|
a.
|
any derogatory or disparaging statement about the Employee; or
|
b.
|
any comment to the press or other media or any other public statement concerning his employment with the Company, or its termination, save where such comment is consistent with the provisions of Schedule 1, without the prior written consent of the Employee such consent not to be unreasonably refused.
|
4.4.
|
The Employee acknowledges that he continues to be bound by clause 13 (Confidentiality), clause 14 (Intellectual Property), clause 17 (Restrictive Covenants) (as varied by this Agreement) and clause 24 (Litigation Assistance) of the Contract of Employment both before and after the Termination Date.
|
5.1.
|
The parties acknowledge that as a consequence of the circumstances leading up to the termination of the Employee’s employment, in a letter from the Qualified Lawyer to the Company, dated 19 December 2018, the Employee alleged that he could potentially be entitled to claim constructive and/or unfair dismissal pursuant to section 111 of the Employment Rights Act 1996
.
However, the Company denies all liability in connection with the same.
|
5.2.
|
The terms contained in this Agreement are in full and final settlement of the Claims and the Employee represents to the Company that he accepts and he does hereby accept the terms of this Agreement in full and final settlement of the Claims.
|
5.3.
|
Without prejudice to Clauses 5.1 and 5.2, the Employee further represents to the Company that he accepts and he does hereby accept the terms of this Agreement in full and final settlement of any other claims that he has or may have against the Company or any Associated Company relating to his employment, the termination of his employment or any other matter associated with his employment or the termination of his employment including (without limitation) any action that might be commenced before an Employment Tribunal or Court of law in respect of any and all of the following claims:
|
a.
|
any common law claims, including any claim for breach of contract or tort;
|
b.
|
unfair or constructive dismissal under the Employment Rights Act 1996;
|
c.
|
unlawful deductions from wages under the Employment Rights Act 1996;
|
d.
|
a statutory redundancy payment under the Employment Rights Act 1996;
|
e.
|
any other claim under the Employment Rights Act 1996;
|
f.
|
any claim which arises under the:
|
i.
|
Equal Pay Act 1970;
|
ii.
|
Sex Discrimination Act 1975;
|
iii.
|
Race Relations Act 1976;
|
iv.
|
Trade Union & Labour Relations (Consolidation) Act 1992 (as amended);
|
v.
|
Disability Discrimination Act 1995;
|
vi.
|
Protection from Harassment Act 1997;
|
vii.
|
Working Time Regulations 1998;
|
viii.
|
National Minimum Wage Act 1998;
|
ix.
|
Public Interest Disclosure Act 1998;
|
x.
|
Human Rights Act 1998;
|
xi.
|
Data Protection Act 1998;
|
xii.
|
Employment Relations Act 1999;
|
xiii.
|
Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000;
|
xiv.
|
Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002;
|
xv.
|
Employment Act 2002;
|
xvi.
|
Employment Equality (Religion or Belief) Regulations 2003;
|
xvii.
|
Employment Equality (Sexual Orientation) Regulations 2003;
|
xviii.
|
Employment Act 2002 (Dispute Resolution) Regulations 2004;
|
xix.
|
Transfer of Undertakings (Protection of Employment) Regulations 2006;
|
xx.
|
Work and Families Act 2006 (and any regulations made thereunder);
|
xxi.
|
Employment Equality (Age) Regulations 2006;
|
xxii.
|
Equality Act 2010; and
|
g.
|
any other statutory claims or for breach of statutory duties.
|
5.4.
|
The Employee warrants and further represents that the claims referred to at Clause 5.3 are all of the claims that have been contemplated by the Employee. The Employee further warrants that he has raised with the Qualified Lawyer all facts and issues relevant to his employment and its termination which could give rise to a statutory complaint.
|
5.5.
|
For the purposes of Clause 5.3, "claims" shall include any claim or right of action arising from a subsequent retrospective change or clarification of the law. The Employee acknowledges that he agrees to the terms of Clause 5.3 notwithstanding that he acknowledges that he may be mistaken as to the facts and/or the law concerning any potential claim or right of action.
|
5.6.
|
Any claims in respect of any pension rights or pension benefits which have accrued to the Employee up to the Termination Date and any future claims for personal injury of which the Employee is currently unaware are excluded from this Agreement. The Employee warrants that as at the date of this Agreement, he is not aware of any such pension or personal injury claim against the Company or any Associated Company or of any claim which would fall outside of the scope of Clause 5.3.
|
5.7.
|
The Employee hereby agrees that, except for sums and benefits referred to in this Agreement, no other sums or benefits are due to him from the Company or any Associated Company and without limitation to the generality of the foregoing, he expressly waives any right or claim that he has or may have to any benefit or award programme or grant of equity interest, or to any other benefit, payment or award he may have received had his employment not terminated including, without limitation, any bonus, commission, notice or payment in lieu of notice.
|
5.8.
|
The Employee acknowledges that the settlement of each of the claims set out in Clauses 5.1 and 5.3 is and shall be construed as separate and severable (including in relation to each of the types of claim covered by the definition of "claims" in Clause 5.5) and in the event of the settlement of any such claim being determined as being void for any reason, such invalidity shall not affect or impair the validity of the settlement of the other claims.
|
5.9.
|
As a condition of payment of the Termination Payment, the Employee warrants that he has not at any time committed a breach of the Contract of Employment which would entitle the Company to terminate his employment without notice.
|
5.10.
|
The Employee warrants that there has been no "improper behaviour" within the meaning of section 111A of the Employment Rights Act 1996 by the Company or any Associated Companies or any of its/their respective independent consultants, contractors, officers or employees in relation to any settlement offer or this Agreement and in particular but without limitation that there has been no undue pressure placed on the Employee to sign this Agreement.
|
5.11.
|
The Employee confirms that he enters into the warranties in Clauses 5.4, 5.6, 5.9 and 5.10 above having taken advice from the Qualified Lawyer on the statutory claims and prospective entitlement to bring statutory proceedings which he has or may have against the Company, or any Associated Company, its or their employees, officers or shareholders.
|
5.12.
|
The Employee acknowledges that the Company has agreed these terms in reliance on the warranties and representations set out above. In the event that, notwithstanding the provisions of this Agreement, the Employee brings any claims or proceedings, (whether statutory or otherwise), relating to his employment with the Company or any Associated Company, or the termination thereof, against the Company, any Associated Company, its or their employees, officers or shareholders, (whether in an Employment Tribunal, the High Court, a County Court or otherwise), (excluding claims to enforce the provisions of this Agreement or relating to any claim for personal injury or pension rights or pension benefits which have accrued to the Employee up to the Termination Date), the Employee agrees that he will forfeit any unpaid instalments of the Termination Payment and that he will repay to the Company on demand and in full by way of liquidated damages an amount equal to the lesser of:
|
a.
|
the amount claimed by the Employee in the proceedings (or the maximum amount of compensation which could be awarded in respect of those proceedings); and
|
b.
|
any paid instalments of the Termination Payment.
|
5.13.
|
The Employee agrees that any grievance or appeal that may have been raised by him to the Company shall be deemed to have been withdrawn by the Employee on the date of this Agreement. The Employee agrees not to submit any grievances or appeal to the Company in relation to his employment or its termination. The Employee further agrees that any grievances or appeals he may have in relation to his employment or its termination and all claims that may arise from or in relation to such grievances and/or appeal shall be settled conclusively by the terms of this Agreement.
|
5.14.
|
The Employee agrees that he will not make any subject access requests to the Company or any Associated Company other than in respect of any matters which he is not aware of at the date of signing this Agreement. The Employee agrees that he relinquishes and agrees not to pursue any current subject access request(s) outstanding at the date he signs this Agreement and that all such requests shall be deemed to have been withdrawn by him at the date he signs this Agreement.
|
5.15.
|
To the extent permitted by the Act, the Company hereby waives any claims against the Employee of which it is aware or ought reasonably to be aware as at the date of this Agreement, arising out of or relating to his employment or the termination of his employment.
|
5.16.
|
The Employee shall continue to be eligible for cover under the Company’s Directors & Officers insurance policy (providing cover in respect of the Employee’s directorships of the Company and any Associated Company), subject to the terms of the relevant policy from time to time in force, for a period of six years from the Termination Date when such cover, and the Employee’s entitlement to it, shall cease.
|
6.1.
|
The Employee represents and warrants that he:
|
a.
|
has received independent legal advice from the Qualified Lawyer as to the terms and effect of this Agreement and, in particular, its effect on the Employee's ability to pursue his rights before an Employment Tribunal; and
|
b.
|
is advised by the Qualified Lawyer that there is, and was in force at the time the Employee received the advice referred to above, insurance under a policy of professional indemnity insurance covering the risk of a claim by the Employee in respect of loss arising in consequence of that advice.
|
6.2.
|
The Employee agrees to provide a copy of the Solicitor's Certificate attached to this Agreement, signed by the Qualified Lawyer, to the Company on the date of this Agreement.
|
6.3.
|
The Company and the Employee agree and acknowledge that this Agreement satisfies the conditions for regulating compromise agreements and settlement agreements under Section 203(3) Employment Rights Act 1996 (as amended), Section 77(4A) Sex Discrimination Act 1975 (as amended), Section 72(4A) Race Relations Act 1976, Section 17C(2) Disability Discrimination Act 1995, Section 288 Trade Union & Labour Relations (Consolidation) Act 1992 (as amended), Section 49(4) National Minimum Wage Act 1998, Regulation 35(2) Working Time Regulations 1998, Regulation 9 Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000, Regulation 10 Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, Schedule 4 paragraph 2(2) Employment Equality (Religion or Belief) Regulations 2003, Schedule 4 paragraph 2(2) Employment Equality (Sexual Orientation) Regulations 2003, regulation 40(4) of the Information and Consultation of Employees Regulations 2004, Schedule 5 paragraph 2(2) Employment Equality (Age) Regulations 2006, Regulation 18 Transfer of Undertakings (Protection of Employment) Regulations 2006, paragraph 13 of the Schedule to the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006, regulation 62 of the Companies (Cross-Border Mergers) Regulations 2007 and section 58 of the Pensions Act 2008, and Section 147 Equality Act 2010.
|
7.1.
|
The Company shall make an internal announcement on the date of this Agreement in the form attached at Schedule 1 to this Agreement.
|
7.2.
|
LKQ shall make an external announcement on the date of this Agreement in the form attached at Schedule 2 to this Agreement.
|
10.1.
|
This deed may be executed in any number of counterparts, each of which when executed and delivered shall constitute a duplicate original, but all the counterparts shall together constitute the one agreement.
|
10.2.
|
Transmission of the executed signature page of a counterpart of this deed email (in PDF, JPEG or other agreed format) shall take effect as delivery of an executed counterpart of this agreement. If either method of delivery is adopted, without prejudice to the validity of the agreement thus made, each party shall provide the others with the original of such counterpart as soon as reasonably possible thereafter.
|
11.1.
|
This Agreement shall be governed by and construed in accordance with the laws of England and the English courts shall have exclusive jurisdiction for all purposes connected with this Agreement.
|
11.2.
|
This Agreement is "without prejudice" until it is signed by all the signatories indicated below at which point it will become open and binding.
|
Subsidiary
|
|
Jurisdiction
|
|
Assumed Names
|
|
|
|
|
|
U.S. Enitites
|
|
|
|
|
A&A Auto Parts Stores, Inc.
|
|
Pennsylvania
|
|
|
AeroVision Aircraft Services, LLC
|
|
Michigan
|
|
|
AeroVision Engine Services, LLC
|
|
Michigan
|
|
|
AeroVision International, LLC
|
|
Michigan
|
|
|
AIM Recycling Florida, LLC (50.01% stake)
|
|
Delaware
|
|
AIM Recycling West Palm; AIM Recycling Medley; AIM Recycling Davie
|
Akron Airport Properties, Inc.
|
|
Ohio
|
|
|
American Recycling International, Inc.
|
|
California
|
|
Pick A Part Auto Dismantling
|
A-Reliable Auto Parts & Wreckers, Inc.
|
|
Illinois
|
|
LKQ Self Service Auto Parts-Rockford; LKQ Heavy Duty Truck ARSCO; LKQ Heavy Duty Truck Core; LKQ Pick Your Part Rockford
|
Arrow Speed Acquisition LLC
|
|
Delaware
|
|
|
Automotive Calibration & Technology Services, LLC
|
|
Delaware
|
|
|
AutoTech Fund I L.P. (8.25% stake)
|
|
Delaware
|
|
|
AVI Sales and Leasing Services, LLC
|
|
Michigan
|
|
|
AVI Inventory Services, LLC
|
|
Michigan
|
|
AeroVision Component Services
|
Ecology Recycling Services, LLC (33.33% stake)
|
|
California
|
|
|
DriverFx.com, Inc.
|
|
Delaware
|
|
|
Global Powertrain Systems, LLC
|
|
Delaware
|
|
|
KAIR IL, LLC
|
|
Illinois
|
|
|
KAO Logistics, Inc
|
|
Pennsylvania
|
|
|
KAO Warehouse, Inc.
|
|
Delaware
|
|
|
Keystone Automotive Industries, Inc.
|
|
California
|
|
Transwheel, Coast to Coast International; LKQ of Cleveland; Keystone Automotive-San Francisco Bay Area; Chrome Enhancements
|
Keystone Automotive Operations, Inc.
|
|
Pennsylvania
|
|
|
Keystone Automotive Operations of Canada, Inc.
|
|
Delaware
|
|
|
KPGW Canadian Holdco, LLC
|
|
Delaware
|
|
|
Lakefront Capital Holdings, LLC
|
|
California
|
|
|
LKQ 1st Choice Auto Parts, LLC
|
|
Oklahoma
|
|
|
LKQ 250 Auto, Inc.
|
|
Ohio
|
|
|
LKQ All Models Corp.
|
|
Arizona
|
|
Wholesale Auto Recyclers; Cars ‘n More; LKQ of Arizona
|
LKQ Apex Auto Parts, Inc.
|
|
Oklahoma
|
|
LKQ Self Service Auto Parts - Oklahoma City
|
LKQ Auto Parts of Central California, Inc.
|
|
California
|
|
LKQ Valley Truck Parts; LKQ Specialized Auto Parts; LKQ ACME Truck Parts; All Engine Distributing
|
LKQ Auto Parts of Memphis, Inc.
|
|
Arkansas
|
|
LKQ of Tennessee; LKQ Preferred
|
LKQ Auto Parts of North Texas, Inc.
|
|
Delaware
|
|
|
LKQ Auto Parts of North Texas, L.P.
|
|
Delaware
|
|
LKQ Auto Parts of Central Texas; LKQ Self Service Auto Parts-Austin
|
LKQ Auto Parts of Utah, LLC
|
|
Utah
|
|
|
LKQ Best Automotive Corp.
|
|
Delaware
|
|
LKQ Auto Parts of South Texas; A-1 Auto Salvage Pick & Pull; The Engine & Transmission Store; LKQ Automotive Core Services; LKQ International Sales; LKQ of El Paso
|
Subsidiary
|
|
Jurisdiction
|
|
Assumed Names
|
LKQ Brad’s Auto & Truck Parts, Inc.
|
|
Oregon
|
|
|
LKQ Broadway Auto Parts, Inc.
|
|
New York
|
|
LKQ Buffalo; LKQ Self Service Auto Parts-Buffalo
|
LKQ Corporation
|
|
Delaware
|
|
|
LKQ Delaware LLP
|
|
Delaware
|
|
|
LKQ Foster Auto Parts Salem, Inc.
|
|
Oregon
|
|
Foster Auto Parts Salem
|
LKQ Foster Auto Parts, Inc.
|
|
Oregon
|
|
LKQ U-Pull-It Auto Wrecking; U-Pull-It Auto Wrecking; LKQ Barger Auto Parts; LKQ KC Truck Parts-Inland Empire; LKQ KC Truck Parts-Western Washington; LKQ KC Truck Parts-Montana; LKQ Wholesale Truck Parts; LKQ of Eastern Idaho
|
LKQ Great Lakes Corp.
|
|
Indiana
|
|
LKQ Star Auto Parts; LKQ Chicago; LKQ Self Service Auto Parts-Milwaukee
|
LKQ Heavy Truck-Texas Best Diesel, L.P.
|
|
Texas
|
|
LKQ Fleet Solutions
|
LKQ Hunts Point Auto Parts Corp.
|
|
New York
|
|
Partsland USA; LKQ Auto Parts of Eastern Pennsylvania; LKQ Auto Parts
|
LKQ Investments, Inc.
|
|
Delaware
|
|
|
LKQ Lakenor Auto & Truck Salvage, Inc.
|
|
California
|
|
LKQ of Southern California; LKQ of Las Vegas; LKQ Parts Outlet-Los Angeles
|
LKQ Metro, Inc.
|
|
Illinois
|
|
|
LKQ Mid-America Auto Parts, Inc.
|
|
Kansas
|
|
Mabry Auto Salvage; LKQ of Oklahoma City; LKQ of NW Arkansas; LKQ Heavy Duty Truck-Kansas; LKQ Four States
|
LKQ Midwest Auto Parts Corp.
|
|
Nebraska
|
|
Midwest Foreign Auto; LKQ Midwest Auto; LKQ Auto Parts of Lincoln
|
LKQ Minnesota, Inc.
|
|
Minnesota
|
|
LKQ Albert Lea
|
LKQ of Indiana, Inc.
|
|
Indiana
|
|
LKQ Self Service Auto Parts-South Bend; LKQ Kentuckiana
|
LKQ of Michigan, Inc.
|
|
Michigan
|
|
|
LKQ of Nevada, Inc.
|
|
Nevada
|
|
|
LKQ Northeast, Inc.
|
|
Delaware
|
|
LKQ Thruway Auto Parts; LKQ Venice Auto Parts; LKQ Triple Nickel Trucks
|
LKQ Pick Your Part Southeast, LLC
|
|
Delaware
|
|
LKQ Self Service Auto Parts-Orlando; LKQ Pick Your Part
|
LKQ Receivables Finance Company, LLC
|
|
Delaware
|
|
|
LKQ Self Service Auto Parts-Holland, Inc.
|
|
Michigan
|
|
LKQ Pick Your Part
|
LKQ Self Service Auto Parts-Kalamazoo, Inc.
|
|
Michigan
|
|
LKQ Self Service Auto Parts-Grand Rapids; LKQ Pick Your Part
|
LKQ Self Service Auto Parts-Tulsa, Inc.
|
|
Oklahoma
|
|
LKQ Pick Your Part
|
LKQ Smart Parts, Inc.
|
|
Delaware
|
|
LKQ Viking Auto Salvage
|
LKQ Southeast, Inc.
|
|
Delaware
|
|
LKQ Fort Myers; LKQ Heavy Truck-Tampa; LKQ Pick Your Part; LKQ Gulf Coast; LKQ Plunks Truck Parts & Equipment - West Monroe; LKQ of Carolina; LKQ Richmond; LKQ East Carolina; LKQ Self Service East NC ; LKQ Self Service Auto Parts-Charlotte; LKQ Pick Your Part; LKQ Heavy Duty Truck Charlotte
|
LKQ Southwick LLC
|
|
Massachusetts
|
|
|
LKQ Taiwan Holding Company
|
|
Illinois
|
|
|
LKQ Tire & Recycling, Inc.
|
|
Delaware
|
|
|
LKQ Trading Company
|
|
Delaware
|
|
|
LKQ TriplettASAP, Inc.
|
|
Ohio
|
|
LKQ Heavy Truck-Goody's; LKQ Pittsburgh; LKQ Pick Your Part; Cockrell's Auto Parts
|
Subsidiary
|
|
Jurisdiction
|
|
Assumed Names
|
LKQ West Michigan Auto Parts, Inc.
|
|
Michigan
|
|
|
MSN145056, LLC
|
|
Michigan
|
|
|
North American ATK Corporation
|
|
California
|
|
|
PGW Auto Glass, LLC
|
|
Delaware
|
|
|
Pick-Your-Part Auto Wrecking
|
|
California
|
|
LKQ Pick A Part-San Bernardino; LKQ Midnight Auto & Truck Recyclers; LKQ Pick A Part-Hesperia; LKQ Desert High Truck & Auto Recyclers; LKQ Pick A Part-Riverside; LKQ Hillside Truck & Auto Recyclers; LKQ Pick Your Part Chicago Heights
|
Potomac German Auto, Inc.
|
|
Maryland
|
|
LKQ Norfolk; LKQ Heavy Truck-Maryland
|
Pull-N-Save Auto Parts, LLC
|
|
Colorado
|
|
LKQ Pull-N-Save Auto Parts of Aurora LLC; LKQ of Colorado; LKQ Self Service Auto Parts-Denver; LKQ Western Truck Parts
|
Redding Auto Center, Inc.
|
|
California
|
|
LKQ Auto Parts of Northern California; LKQ Reno; LKQ Specialized Parts Planet; LKQ ACME Truck Parts; LKQ Auto Sales of Rancho Cordova
|
Rydell Motor Company, LLC (1% stake)
|
|
Iowa
|
|
|
Scrap Processors, LLC
|
|
Illinois
|
|
|
U-Pull-It, Inc.
|
|
Illinois
|
|
LKQ PickYour Part Blue Island
|
U-Pull-It, North, LLC
|
|
Illinois
|
|
LKQ Pick Your Part
|
Warn Industries, Inc.
|
|
Delaware
|
|
|
Subsidiary
|
|
Jurisdiction
|
|
Assumed Names
|
|
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Foreign Entities
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1323352 Alberta ULC
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Alberta
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1323410 Alberta ULC
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Alberta
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2015 Automaterialen B.V.
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Netherlands
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Abbiussi BVBA
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Belgium
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Ageres B.V.
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Netherlands
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Alconed B.V. (subsidary of Intermotor B.V.)
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Netherlands
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Alfa Paints BVBA
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Belgium
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Alfa Paints B.V. (subsidiary of Alfa Paints BVBA)
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Netherlands
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Andrew Page 1917 Limited
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England & Wales
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Annex-Technik GmbH (subsidary of PV Automotive GmbH)
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Germany
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AP Logistics Belgie NV
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Belgium
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AP Logistics B.V.
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Netherlands
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Aquafax Limited
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England & Wales
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Arleigh Group Limited
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England & Wales
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Arleigh International Limited
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England & Wales
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A.S.A.P. Supplies Limited
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England & Wales
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Asia Aftermarket Holding GmbH (50% stake)
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Germany
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ATR International AG (2% stake; 26% subsidary of Auto-Teile-Ring)
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Germany
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Autoteileland AL GmbH (subsidary of PV Automotive GmbH)
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Germany
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Auto-Teile-Ring-GmbH (47.5% stake)
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Germany
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Atracco AB
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Sweden
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Atracco AS
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Norway
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Atracco Auto AB
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Sweden
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Atracco Group AB
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Sweden
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Auto Electra Naaldwijk B.V.
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Netherlands
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Auto Kelly a.s.
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Czech Republic
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Auto Kelly Bulgaria EOOD
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Bulgaria
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Auto Kelly Slovakia s.r.o.
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Slovakia
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Automotive Academy B.V.
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Netherlands
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Automotive Data Services Limited
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England & Wales
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Auto-Onderdelen Centrale Middelburg B.V.
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Netherlands
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Auto-Sport Willy SA
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Belgium
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Autostop Leuven NV
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Belgium
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Autoparts Prosec BV
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Netherlands
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Autoparts Prosec NV
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Belgium
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Autoteile Supermarkt GmbH (59% subsidiary of Neimke Holding)
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Germany
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Auto Wessel B.V.
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Netherlands
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Subsidiary
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Jurisdiction
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Assumed Names
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Auto Wessel Naarden B.V.
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Netherlands
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AVC Tyre Recycling Ltd. (33.33% stake)
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England & Wales
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Belgian Carparts Corporation CVBA
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Belgium
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Bildemontering i Helsingborg AB
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Sweden
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Blue Moose Holdings Ltd.
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England & Wales
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BRUNN GmbH (subsidary of PV Automotive GmbH)
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Germany
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B.S.F. Distribution SPRL
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Belgium
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BVG Hold SPRL
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Belgium
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Car Parts 4 Less Limited
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England & Wales
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Car Systems B.V.
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Netherlands
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Cartal Rijsbergen Automotive B.V.
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Netherlands
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Centrauto-Pieces SPRL
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Belgium
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Centro Ricambi Rhiag S.r.l.
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Italy
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Commercial Parts UK Holdco Limited (25% stake)
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England & Wales
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Cruiser B.V.
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Netherlands
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DCM Tools NV
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Belgium
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De Bruyn Professional Coatings NV
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Belgium
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De Maesschalck H N.V.
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Belgium
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Digraph Transport Supplies Limited (subsidiary of Commercial Parts UK Holdco Limited)
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England & Wales
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Distribuidora Hermanos Copher Internacional, SA
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Guatemala
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ECP France SAS
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France
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ELIT CZ, Spol s.r.o.
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Czech Republic
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Elit Group Ltd.
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Switzerland
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ELIT Polska sp.z.o.o.
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Poland
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ELIT Slovakia s.r.o.
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Slovakia
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ELIT Ukraine LLC
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Ukraine
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Era S.r.l.
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Italy
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Euro Car Parts Ireland Limited
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Ireland
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Euro Car Parts Limited
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England & Wales
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Euro Car Parts Nordic AB
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Sweden
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Euro Car Parts (Northern Ireland) Limited
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Northern Ireland
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Euro Garage Solutions Ltd
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England & Wales
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Fastighetsaktiebolaget Pistolvagen 4
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Sweden
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GDR NV
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Belgium
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GHS Automotive B.V.
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Netherlands
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Harrems Tools B.V.
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Netherlands
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Harrems Tools N.V.
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Belgium
|
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Hartsant Crash Repair Bvba
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Belgium
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Havam Automotive B.V.
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Netherlands
|
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Heijl Automotive B.V.
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Netherlands
|
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Subsidiary
|
|
Jurisdiction
|
|
Assumed Names
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Henrard SA
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Belgium
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Heuts Beheer B.V.
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Netherlands
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Heuts DHZ B.V.
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Netherlands
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Heuts Handel B.V.
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Netherlands
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Heuts Tilburg B.V.
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Netherlands
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HF Services B.V.
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Netherlands
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HF Services BVBA
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Belgium
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I4B Sp.z.o.o. (51.2% subsidary of Optimal AG & Co. KG)
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Poland
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In2-Connect Platform Limited
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England & Wales
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In2 Developments Limited
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England & Wales
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In2 Management Group Limited
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England & Wales
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International Engines Ltd. (subsidary of Intermotor B.V.)
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England & Wales
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Intermotor B.V. (50% stake)
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Netherlands
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IPAR Industrial Partners B.V.
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Netherlands
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inSiamo Scarl (24.54% stake)
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Italy
|
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J. Elmer s.r.o.
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Czech Republic
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Karstorp Bildemontering AB
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Sweden
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Keystone Automotive de Mexico, Sociedad de Responsabilidad Limitada de Capital Variable
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Mexico
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|
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Keystone Automotive Industries ON, Inc.
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Canada (Federal)
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Klaus Autozubehor Grosshandel GmbH (30% stake)
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Germany
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Kuhne Nederland B.V.
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Netherlands
|
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Láng Kft.
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Hungary
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LKQ Belgium BVBA
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Belgium
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LKQ Canada Auto Parts Inc.
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Canada (Federal)
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LKQ Euro Limited
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Ireland
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LKQ Euro Limited
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England & Wales
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LKQ European Holdings B.V.
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Netherlands
|
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LKQ European Services B.V.
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Netherlands
|
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LKQ German Holdings GmbH
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Germany
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LKQ India Private Limited
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India
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LKQ Italia S.r.l.
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Italy
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LKQ Italia Bondco S.p.A.
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Italy
|
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LKQ Netherlands B.V.
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Netherlands
|
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LKQ Ontario LP
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Ontario
|
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Lubus GmbH (subsidary of PV Automotive GmbH)
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Germany
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Marine Mart Limited
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England & Wales
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Markesdemo AB (7.04% stake)
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Sweden
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Matorit Data AB
|
|
Sweden
|
|
|
Mekonomen AB (26.5% stake)
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Sweden
|
|
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Subsidiary
|
|
Jurisdiction
|
|
Assumed Names
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Messmer GmbH
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Germany
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Midland Chandlers Limited
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England & Wales
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Mirela Investments, S.L.U.
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Spain
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Milano Distribuzione 2 S.r.l.
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Italy
|
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Motorparts S.r.l.
|
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Italy
|
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MotorXchange S.A.R.L. (subsidary of Intermotor B.V.)
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France
|
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M.P.M. Export B.V.
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Netherlands
|
|
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M.P.M. International Oil Company B.V.
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Netherlands
|
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MTS Marken Technik Service GmbH & Co. KG (2.57% subsidary of PV Automotive GmbH)
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Germany
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MTS Marken Technik Service Verwaltungs GmbH (subsidary of MTS Marken Technik Service GmbH & Co. KG)
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Germany
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Neimke AT GmbH & Co. KG (subsidiary of Neimke GmbH & Co. KG)
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Austria
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Neimke AT Verwaltungs GmbH (subsidiary of Neimke GmbH & Co. KG)
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Austria
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Neimke Geschaftsfuhrungs-und Verwaltungs GmbH (74% stake)
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Germany
|
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Neimke GmbH & Co. KG (74% stake)
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Germany
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Neimke Holding GmbH (subsidiary of Neimke GmbH & Co. KG)
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Germany
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Nipparts B.V.
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Netherlands
|
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Nipparts Deutschland GmbH
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Germany
|
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Nova Leisure Limited
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England & Wales
|
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NPR Auto Trading Limited
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Ireland
|
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NTP/Stag Canada Inc.
|
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Canada (Federal)
|
|
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Obdo Forvaltning AB
|
|
Sweden
|
|
|
Orebro Bildemontering AB
|
|
Sweden
|
|
|
Optimal AG & Co. KG (57.5% stake)
|
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Germany
|
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Optimal Asia Ltd. (60% subsidary of Optimal AG & Co. KG)
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Hong Kong
|
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Optimal Benelux Bvba (60.75% subsidary of Optimal AG & Co. KG)
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Belgium
|
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Optimal France S.a.r.l. (subsidary of Optimal AG & Co. KG)
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France
|
|
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Optimal Istanbul Yedek Parca Otomotiv Sanayi Ve Ticaret A.S. (76% subsidary of Optimal AG & Co. KG)
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Turkey
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Optimal Otomotiv Dis Ticaret A.S. (subsidary of Optimal AG & Co. KG)
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Turkey
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Optimal Polska Sp.z.o.o. (51% subsidary of Optimal AG & Co. KG)
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Poland
|
|
|
Optimalrecambio Cia Ltda. (51% subsidary of Optimal Recambios S.L)
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Ecuador
|
|
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Optimal Recambios S.L. (26.4% subsidary of Optimal AG & Co. KG)
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Spain
|
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Optimal UK Distribution Limited (80% subsidary of Optimal AG & Co. KG)
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England & Wales
|
|
|
Optimal Verwaltungs AG (subsidary of Optimal AG & Co. KG)
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Germany
|
|
|
Pala Holding, B.V.
|
|
Netherlands
|
|
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Partslife GmbH (2.27% subsidary of PV Automotive GmbH)
|
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Germany
|
|
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PGW Auto Glass, ULC
|
|
Nova Scotia
|
|
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Pika Autoteile GmbH
|
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Germany
|
|
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Primaparts Automaterialen B.V.
|
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Netherlands
|
|
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Prosec Carparts BVBA
|
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Belgium
|
|
|
PV Automotive GmbH (66.67% stake)
|
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Germany
|
|
|
Subsidiary
|
|
Jurisdiction
|
|
Assumed Names
|
PVG Hold SPRL
|
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Belgium
|
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PV Technik GmbH (subsidary of PV Automotive GmbH)
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Germany
|
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Q-Parts24 GmbH & Co. KG (51% subsidary of Optimal AG & Co. KG)
|
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Germany
|
|
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Q-Parts24 Verwaltstungs GmbH (subsidary of Q-Parts24 GmbH & Co. KG)
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Germany
|
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Recopart AB
|
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Sweden
|
|
|
Rhiag Group Ltd.
|
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Switzerland
|
|
|
Rhiag-Inter Auto Parts Italia S.r.l.
|
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Italy
|
|
|
Rhiag Services Slovakia s.r.o.
|
|
Slovakia
|
|
|
Rhino BidCo S.r.l.
|
|
Italy
|
|
|
Rijsbergen CarTAL Beheer B.V.
|
|
Netherlands
|
|
|
Rox Auto SA
|
|
Belgium
|
|
|
Sator Central Services B.V.
|
|
Netherlands
|
|
|
Sator Holding B.V.
|
|
Netherlands
|
|
|
Sator Project B.V.
|
|
Netherlands
|
|
|
S.C. ELIT Romania S.r.l.
|
|
Romania
|
|
|
Schaftenaar B.V.
|
|
Netherlands
|
|
|
Signalen AB
|
|
Sweden
|
|
|
SiM Impex d.o.o.
|
|
Bosnia and Herzegovina
|
|
|
Spectrum Verf B.V.
|
|
Netherlands
|
|
|
Stahlgruber Beteilligungsgesellschaft mbH
|
|
Germany
|
|
|
Stahlgruber Communication Center GmbH (80% stake)
|
|
Germany
|
|
|
Stahlgruber d.o.o.
|
|
Croatia
|
|
|
Stahlgruber S.r.l.
|
|
Italy
|
|
|
Stahlgruber Gesellschaft m.b.H.
|
|
Austria
|
|
|
Stahlgruber GmbH
|
|
Germany
|
|
|
Stahlgruber Holding GmbH
|
|
Germany
|
|
|
Stahlgruber Immobilien Verwaltungs GmbH
|
|
Germany
|
|
|
Stahlgruber Immobilien GmbH & Co. KG
|
|
Germany
|
|
|
Subsidiary
|
|
Jurisdiction
|
|
Assumed Names
|
Stahlgruber Logistikzentrum Grundstucks-Verwaltungs GmbH
|
|
Germany
|
|
|
Stahlgruber Logistikzentrum Grundstucks-Verwaltungs GmbH & Co. oHG
|
|
Germany
|
|
|
Stahlgruber trgovina d.o.o. (51% stake)
|
|
Croatia
|
|
|
Stahlgruber trgovina d.o.o.
|
|
Slovenia
|
|
|
Starmann Sp.z.o.o. Kolobrzeg (51% subsidary of Optimal AG & Co. KG)
|
|
Poland
|
|
|
Sztarman Ukraine Sp.z.o.o. (67% subsidary of Starmann Sp.z.o.o. Kolobrzeg)
|
|
Ukraine
|
|
|
Thomassons.nu Grupp AB
|
|
Sweden
|
|
|
Tielman Automaterialen B.V.
|
|
Netherlands
|
|
|
Topocar SPRL
|
|
Belgium
|
|
|
Troms Bildelsenter AS
|
|
Norway
|
|
|
Upplands Bildemontering AB
|
|
Sweden
|
|
|
Valla Bildemontering AB
|
|
Sweden
|
|
|
Vanesch Verf Belgie B.V.
|
|
Belgium
|
|
|
Vanesch Verf Groep B.V.
|
|
Netherlands
|
|
|
Vanesch Verf Nederland B.V.
|
|
Netherlands
|
|
|
Van Heck & Co. B.V.
|
|
Netherlands
|
|
|
Van Heck Interpieces N.V.
|
|
Belgium
|
|
|
Van Heck Interpieces France S.A.S.
|
|
France
|
|
|
Van Heck Vastgoed B.V.
|
|
Netherlands
|
|
|
Vaxjo Lackcenter AB
|
|
Sweden
|
|
|
VEAM B.V.
|
|
Netherlands
|
|
|
VEGE Benelux B.V. (subsidary of Intermotor B.V.)
|
|
Netherlands
|
|
|
VEGECOM S.A.R.L. (subsidary of Intermotor B.V.)
|
|
Tunisia
|
|
|
Vége de Mexico S.A. de C.V.
|
|
Mexico
|
|
|
VEGE France S.a.S. (subsidary of Intermotor B.V.)
|
|
France
|
|
|
VEGE Italia S.r.l. (subsidary of Intermotor B.V.)
|
|
Italy
|
|
|
VEGE Moteurs S.A. (subsidary of Intermotor B.V.)
|
|
Tunisia
|
|
|
Subsidiary
|
|
Jurisdiction
|
|
Assumed Names
|
Vege-Motodis S.A. de C.V.
|
|
Mexico
|
|
|
VEGE-Motoren GmbH (subsidary of Intermotor B.V.)
|
|
Germany
|
|
|
Vege-Motoren Iberica S.L. (subsidary of Intermotor B.V.)
|
|
Spain
|
|
|
VEGE Motorer Norden AB (subsidary of Intermotor B.V.)
|
|
Sweden
|
|
|
Verfhandel Willy Pijnenborg B.V.
|
|
Netherlands
|
|
|
Widells Bilplat Eftr AB
|
|
Sweden
|
|
|
WJCM de Mexico, Sociedad de Responsabilidad Limitada de Capital Variable
|
|
Mexico
|
|
|
|
/s/ DELOITTE & TOUCHE LLP
|
/s/ DOMINICK ZARCONE
|
|
Dominick Zarcone
|
|
President and Chief Executive Officer
|
|
/
S
/ VARUN LAROYIA
|
|
Varun Laroyia
|
|
Executive Vice President and Chief Financial Officer
|
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/
S
/ DOMINICK ZARCONE
|
|
Dominick Zarcone
|
|
President and Chief Executive Officer
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/
S
/ VARUN LAROYIA
|
|
Varun Laroyia
|
|
Executive Vice President and Chief Financial Officer
|