Delaware | 000-50404 | 36-4215970 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS Employer Identification No.) | ||
500 West Madison Street, Suite 2800 Chicago, IL | 60661 | |||
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit Number | Description of Exhibit | |
LKQ Corporation Press Release dated October 26, 2017. |
LKQ CORPORATION | |
By: | /s/ VARUN LAROYIA |
Varun Laroyia | |
Executive Vice President and Chief Financial Officer |
• | Revenue growth of 11.7% to $2.47 billion |
• | Organic revenue growth for parts and services of 3.2%; 4.7% on a per day basis |
• | Income from continuing operations growth of 11.4% to $122 million |
• | Third quarter 2017 diluted EPS from continuing operations of $0.39; adjusted diluted EPS of $0.45 |
• | Annual guidance updated |
Updated Guidance | Prior Guidance | |
Organic revenue growth for parts & services | 4.0% to 4.5% | 4.0% to 5.25% |
Income from continuing operations | $517 million to $537 million | $515 million to $540 million |
Adjusted income from continuing operations* | $575 million to $595 million | $570 million to $595 million |
Diluted EPS from continuing operations | $1.67 to $1.73 | $1.66 to $1.74 |
Adjusted diluted EPS from continuing operations* | $1.86 to $1.92 | $1.84 to $1.92 |
Cash flow from operations | $600 million to $625 million | $620 million to $650 million |
Capital expenditures | $175 million to $200 million | $200 million to $225 million |
• | 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, 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 OEMs with “connected car” technology); |
• | 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 auto 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 to the extent OEMs seek and obtain more design patents than they have in the past and are successful in asserting infringement of these patents and defending their validity; |
• | 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; |
• | fluctuations in the prices of fuel, scrap metal and other commodities; |
• | changes in laws or regulations affecting our business; |
• | higher costs and the resulting potential inability to service our customers to the extent that our suppliers decide to discontinue business relationships with us; |
• | price increases, interruptions or disruptions to the supply of vehicles or vehicle parts from aftermarket suppliers and 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; |
• | 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; |
• | 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; |
• | 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; and |
• | other risks that are described in our Form 10-K filed February 27, 2017 and in other reports filed by us from time to time with the Securities and Exchange Commission. |
Three Months Ended September 30, | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
% of Revenue (1) | % of Revenue (1) | $ Change | % Change | |||||||||||||||||
Revenue | $ | 2,465,800 | 100.0 | % | $ | 2,207,343 | 100.0 | % | $ | 258,457 | 11.7 | % | ||||||||
Cost of goods sold | 1,508,924 | 61.2 | % | 1,351,899 | 61.2 | % | 157,025 | 11.6 | % | |||||||||||
Gross margin | 956,876 | 38.8 | % | 855,444 | 38.8 | % | 101,432 | 11.9 | % | |||||||||||
Facility and warehouse expenses | 202,514 | 8.2 | % | 181,244 | 8.2 | % | 21,270 | 11.7 | % | |||||||||||
Distribution expenses | 202,829 | 8.2 | % | 172,565 | 7.8 | % | 30,264 | 17.5 | % | |||||||||||
Selling, general and administrative expenses | 290,635 | 11.8 | % | 258,332 | 11.7 | % | 32,303 | 12.5 | % | |||||||||||
Restructuring and acquisition related expenses | 4,922 | 0.2 | % | 6,923 | 0.3 | % | (2,001 | ) | (28.9 | %) | ||||||||||
Depreciation and amortization | 56,877 | 2.3 | % | 52,979 | 2.4 | % | 3,898 | 7.4 | % | |||||||||||
Operating income | 199,099 | 8.1 | % | 183,401 | 8.3 | % | 15,698 | 8.6 | % | |||||||||||
Other expense (income): | ||||||||||||||||||||
Interest expense, net | 25,222 | 1.0 | % | 24,761 | 1.1 | % | 461 | 1.9 | % | |||||||||||
Gains on bargain purchases | (913 | ) | (0.0 | %) | — | 0.0 | % | (913 | ) | n/m | ||||||||||
Other income, net | (3,107 | ) | (0.1 | %) | (1,010 | ) | (0.0 | %) | (2,097 | ) | n/m | |||||||||
Total other expense, net | 21,202 | 0.9 | % | 23,751 | 1.1 | % | (2,549 | ) | (10.7 | %) | ||||||||||
Income from continuing operations before provision for income taxes | 177,897 | 7.2 | % | 159,650 | 7.2 | % | 18,247 | 11.4 | % | |||||||||||
Provision for income taxes | 58,189 | 2.4 | % | 49,835 | 2.3 | % | 8,354 | 16.8 | % | |||||||||||
Equity in earnings of unconsolidated subsidiaries | 2,673 | 0.1 | % | 29 | 0.0 | % | 2,644 | n/m | ||||||||||||
Income from continuing operations | 122,381 | 5.0 | % | 109,844 | 5.0 | % | 12,537 | 11.4 | % | |||||||||||
Income from discontinued operations, net of tax | — | 0.0 | % | 12,844 | 0.6 | % | (12,844 | ) | (100.0 | %) | ||||||||||
Net income | $ | 122,381 | 5.0 | % | $ | 122,688 | 5.6 | % | $ | (307 | ) | (0.3 | %) | |||||||
Basic earnings per share(2): | ||||||||||||||||||||
Income from continuing operations | $ | 0.40 | $ | 0.36 | $ | 0.04 | 11.1 | % | ||||||||||||
Income from discontinued operations | — | 0.04 | (0.04 | ) | (100.0 | %) | ||||||||||||||
Net income | $ | 0.40 | $ | 0.40 | $ | — | 0.0 | % | ||||||||||||
Diluted earnings per share(2): | ||||||||||||||||||||
Income from continuing operations | $ | 0.39 | $ | 0.35 | $ | 0.04 | 11.4 | % | ||||||||||||
Income from discontinued operations | — | 0.04 | (0.04 | ) | (100.0 | %) | ||||||||||||||
Net income | $ | 0.39 | $ | 0.40 | $ | (0.01 | ) | (2.5 | %) | |||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 308,909 | 307,190 | 1,719 | 0.6 | % | |||||||||||||||
Diluted | 310,779 | 310,036 | 743 | 0.2 | % | |||||||||||||||
(1) The sum of the individual percentage of revenue components may not equal the total due to rounding. | ||||||||||||||||||||
(2) The sum of the individual earnings per share amounts may not equal the total due to rounding. |
Nine Months Ended September 30, | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
% of Revenue (1) | % of Revenue (1) | $ Change | % Change | |||||||||||||||||
Revenue | $ | 7,267,054 | 100.0 | % | $ | 6,433,625 | 100.0 | % | $ | 833,429 | 13.0 | % | ||||||||
Cost of goods sold | 4,415,076 | 60.8 | % | 3,911,928 | 60.8 | % | 503,148 | 12.9 | % | |||||||||||
Gross margin | 2,851,978 | 39.2 | % | 2,521,697 | 39.2 | % | 330,281 | 13.1 | % | |||||||||||
Facility and warehouse expenses | 583,230 | 8.0 | % | 516,227 | 8.0 | % | 67,003 | 13.0 | % | |||||||||||
Distribution expenses | 583,031 | 8.0 | % | 509,234 | 7.9 | % | 73,797 | 14.5 | % | |||||||||||
Selling, general and administrative expenses | 836,804 | 11.5 | % | 726,736 | 11.3 | % | 110,068 | 15.1 | % | |||||||||||
Restructuring and acquisition related expenses | 10,371 | 0.1 | % | 30,814 | 0.5 | % | (20,443 | ) | (66.3 | %) | ||||||||||
Depreciation and amortization | 159,178 | 2.2 | % | 137,168 | 2.1 | % | 22,010 | 16.0 | % | |||||||||||
Operating income | 679,364 | 9.3 | % | 601,518 | 9.3 | % | 77,846 | 12.9 | % | |||||||||||
Other expense (income): | ||||||||||||||||||||
Interest expense, net | 73,806 | 1.0 | % | 64,002 | 1.0 | % | 9,804 | 15.3 | % | |||||||||||
Loss on debt extinguishment | — | 0.0 | % | 26,650 | 0.4 | % | (26,650 | ) | (100.0 | %) | ||||||||||
Gains on foreign exchange contracts - acquisition related | — | 0.0 | % | (18,342 | ) | (0.3 | %) | 18,342 | (100.0 | %) | ||||||||||
Gains on bargain purchases | (3,990 | ) | (0.1 | %) | — | 0.0 | % | (3,990 | ) | n/m | ||||||||||
Other income, net | (6,884 | ) | (0.1 | %) | (4,361 | ) | (0.1 | %) | (2,523 | ) | 57.9 | % | ||||||||
Total other expense, net | 62,932 | 0.9 | % | 67,949 | 1.1 | % | (5,017 | ) | (7.4 | %) | ||||||||||
Income from continuing operations before provision for income taxes | 616,432 | 8.5 | % | 533,569 | 8.3 | % | 82,863 | 15.5 | % | |||||||||||
Provision for income taxes | 206,206 | 2.8 | % | 173,225 | 2.7 | % | 32,981 | 19.0 | % | |||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | 3,878 | 0.1 | % | (519 | ) | (0.0 | %) | 4,397 | n/m | |||||||||||
Income from continuing operations | 414,104 | 5.7 | % | 359,825 | 5.6 | % | 54,279 | 15.1 | % | |||||||||||
Loss (income) from discontinued operations, net of tax | (4,531 | ) | (0.1 | %) | 17,819 | 0.3 | % | (22,350 | ) | n/m | ||||||||||
Net income | $ | 409,573 | 5.6 | % | $ | 377,644 | 5.9 | % | $ | 31,929 | 8.5 | % | ||||||||
Basic earnings per share(2): | ||||||||||||||||||||
Income from continuing operations | $ | 1.34 | $ | 1.17 | $ | 0.17 | 14.5 | % | ||||||||||||
(Loss) income from discontinued operations | (0.01 | ) | 0.06 | (0.07 | ) | n/m | ||||||||||||||
Net income | $ | 1.33 | $ | 1.23 | $ | 0.10 | 8.1 | % | ||||||||||||
Diluted earnings per share(2): | ||||||||||||||||||||
Income from continuing operations | $ | 1.33 | $ | 1.16 | $ | 0.17 | 14.7 | % | ||||||||||||
(Loss) income from discontinued operations | (0.01 | ) | 0.06 | (0.07 | ) | n/m | ||||||||||||||
Net income | $ | 1.32 | $ | 1.22 | $ | 0.10 | 8.2 | % | ||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 308,451 | 306,690 | 1,761 | 0.6 | % | |||||||||||||||
Diluted | 310,495 | 309,671 | 824 | 0.3 | % | |||||||||||||||
(1) The sum of the individual percentage of revenue components may not equal the total due to rounding. | ||||||||||||||||||||
(2) The sum of the individual earnings per share amounts may not equal the total due to rounding. |
September 30, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 275,077 | $ | 227,400 | |||
Receivables, net | 1,021,728 | 860,549 | |||||
Inventories | 2,236,376 | 1,935,237 | |||||
Prepaid expenses and other current assets | 135,192 | 87,768 | |||||
Assets of discontinued operations | — | 456,640 | |||||
Total current assets | 3,668,373 | 3,567,594 | |||||
Property and equipment, net | 867,972 | 811,576 | |||||
Intangible assets: | |||||||
Goodwill | 3,392,363 | 3,054,769 | |||||
Other intangibles, net | 602,424 | 584,231 | |||||
Equity method investments | 199,246 | 183,467 | |||||
Other assets | 133,560 | 101,562 | |||||
Total assets | $ | 8,863,938 | $ | 8,303,199 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 749,852 | $ | 633,773 | |||
Accrued expenses: | |||||||
Accrued payroll-related liabilities | 120,575 | 118,755 | |||||
Other accrued expenses | 253,241 | 209,101 | |||||
Other current liabilities | 51,783 | 37,943 | |||||
Current portion of long-term obligations | 126,887 | 66,109 | |||||
Liabilities of discontinued operations | — | 145,104 | |||||
Total current liabilities | 1,302,338 | 1,210,785 | |||||
Long-term obligations, excluding current portion | 3,021,717 | 3,275,662 | |||||
Deferred income taxes | 241,544 | 199,657 | |||||
Other noncurrent liabilities | 257,302 | 174,146 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 309,018,211 and 307,544,759 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 3,090 | 3,075 | |||||
Additional paid-in capital | 1,135,627 | 1,116,690 | |||||
Retained earnings | 2,999,932 | 2,590,359 | |||||
Accumulated other comprehensive loss | (97,612 | ) | (267,175 | ) | |||
Total stockholders’ equity | 4,041,037 | 3,442,949 | |||||
Total liabilities and stockholders’ equity | $ | 8,863,938 | $ | 8,303,199 |
Nine Months Ended | |||||||
September 30, | |||||||
2017 | 2016 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 409,573 | $ | 377,644 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 166,508 | 150,370 | |||||
Stock-based compensation expense | 17,582 | 17,062 | |||||
Loss on debt extinguishment | — | 26,650 | |||||
Loss on sale of business | 8,580 | — | |||||
Gains on foreign exchange contracts - acquisition related | — | (18,342 | ) | ||||
Other | (11,982 | ) | 6,711 | ||||
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions: | |||||||
Receivables, net | (75,444 | ) | (46,376 | ) | |||
Inventories | (97,584 | ) | 27,070 | ||||
Prepaid income taxes/income taxes payable | (928 | ) | 4,134 | ||||
Accounts payable | 42,175 | (12,412 | ) | ||||
Other operating assets and liabilities | (9,237 | ) | (8,360 | ) | |||
Net cash provided by operating activities | 449,243 | 524,151 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of property and equipment | (135,537 | ) | (152,746 | ) | |||
Acquisitions, net of cash acquired | (252,667 | ) | (1,301,127 | ) | |||
Proceeds from disposal of business/investment | 301,297 | 10,304 | |||||
Proceeds from foreign exchange contracts | — | 18,342 | |||||
Other investing activities, net | 2,750 | 537 | |||||
Net cash used in investing activities | (84,157 | ) | (1,424,690 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from exercise of stock options | 6,465 | 7,525 | |||||
Taxes paid related to net share settlements of stock-based compensation awards | (5,095 | ) | (4,440 | ) | |||
Debt issuance costs | — | (16,404 | ) | ||||
Proceeds from issuance of Euro notes | — | 563,450 | |||||
Borrowings under revolving credit facilities | 424,976 | 1,961,702 | |||||
Repayments under revolving credit facilities | (770,884 | ) | (1,239,234 | ) | |||
Borrowing under term loans | — | 338,478 | |||||
Repayments under term loans | (27,884 | ) | (9,461 | ) | |||
Borrowings under receivables securitization facility | 8,525 | 100,480 | |||||
Repayments under receivables securitization facility | (9,925 | ) | (66,500 | ) | |||
Borrowings (repayments) of other debt, net | 24,522 | (2,362 | ) | ||||
Payments of Rhiag debt and related payments | — | (543,347 | ) | ||||
Payments of other obligations | (2,079 | ) | (1,405 | ) | |||
Other financing activities, net | 4,316 | — | |||||
Net cash (used in) provided by financing activities | (347,063 | ) | 1,088,482 | ||||
Effect of exchange rate changes on cash and cash equivalents | 22,538 | (3,489 | ) | ||||
Net increase in cash and cash equivalents | 40,561 | 184,454 | |||||
Cash and cash equivalents of continuing operations, beginning of period | 227,400 | 87,397 | |||||
Add: Cash and cash equivalents of discontinued operations, beginning of period | 7,116 | — | |||||
Cash and cash equivalents of continuing and discontinued operations, beginning of period | 234,516 | 87,397 | |||||
Cash and cash equivalents of continuing and discontinued operations, end of period | 275,077 | 271,851 | |||||
Less: Cash and cash equivalents of discontinued operations, end of period | — | 13,826 | |||||
Cash and cash equivalents, end of period | $ | 275,077 | $ | 258,025 |
Three Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2017 | 2016 | $ Change | % Change | |||||||||||
(In thousands) | ||||||||||||||
Included in Unaudited Condensed Consolidated | ||||||||||||||
Statements of Income of LKQ Corporation | ||||||||||||||
North America | $ | 1,051,470 | $ | 1,007,801 | $ | 43,669 | 4.3 | % | ||||||
Europe | 952,765 | 769,332 | 183,433 | 23.8 | % | |||||||||
Specialty | 329,522 | 318,703 | 10,819 | 3.4 | % | |||||||||
Parts and services | 2,333,757 | 2,095,836 | 237,921 | 11.4 | % | |||||||||
Other | 132,043 | 111,507 | 20,536 | 18.4 | % | |||||||||
Total | $ | 2,465,800 | $ | 2,207,343 | $ | 258,457 | 11.7 | % |
Revenue Change Attributable to: | |||||||||||
Organic | Acquisition | Foreign Exchange | Total Change (1) | ||||||||
North America | 2.5 | % | 1.6 | % | 0.2 | % | 4.3 | % | |||
Europe | 4.4 | % | 16.5 | % | 3.0 | % | 23.8 | % | |||
Specialty | 2.7 | % | 0.2 | % | 0.5 | % | 3.4 | % | |||
Parts and services | 3.2 | % | 6.8 | % | 1.3 | % | 11.4 | % | |||
Other | 17.5 | % | 0.9 | % | 0.1 | % | 18.4 | % | |||
Total | 4.0 | % | 6.5 | % | 1.2 | % | 11.7 | % |
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2017 | 2016 | $ Change | % Change | |||||||||||
(In thousands) | ||||||||||||||
Included in Unaudited Condensed Consolidated | ||||||||||||||
Statements of Income of LKQ Corporation | ||||||||||||||
North America | $ | 3,207,001 | $ | 3,006,066 | $ | 200,935 | 6.7 | % | ||||||
Europe | 2,659,804 | 2,137,998 | 521,806 | 24.4 | % | |||||||||
Specialty | 1,005,776 | 956,199 | 49,577 | 5.2 | % | |||||||||
Parts and services | 6,872,581 | 6,100,263 | 772,318 | 12.7 | % | |||||||||
Other | 394,473 | 333,362 | 61,111 | 18.3 | % | |||||||||
Total | $ | 7,267,054 | $ | 6,433,625 | $ | 833,429 | 13.0 | % |
Revenue Change Attributable to: | |||||||||||
Organic | Acquisition | Foreign Exchange | Total Change (1) | ||||||||
North America | 2.4 | % | 4.2 | % | 0.1% | 6.7 | % | ||||
Europe | 5.3 | % | 22.9 | % | (3.8 | %) | 24.4 | % | |||
Specialty | 5.0 | % | 0.1 | % | 0.1 | % | 5.2 | % | |||
Parts and services | 3.8 | % | 10.1 | % | (1.3 | %) | 12.7 | % | |||
Other | 17.9 | % | 0.5 | % | (0.1 | %) | 18.3 | % | |||
Total | 4.5 | % | 9.6 | % | (1.2 | %) | 13.0 | % |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, 2017 | September 30, 2017 | |||||||||||
Consolidated | Europe | Consolidated | Europe | |||||||||
Parts & Services | ||||||||||||
Revenue growth as reported | 11.4 | % | 23.8 | % | 12.7 | % | 24.4 | % | ||||
Less: Currency impact | 1.3 | % | 3.0 | % | (1.3 | )% | (3.8 | )% | ||||
Revenue growth at constant currency | 10.1 | % | 20.8 | % | 14.0 | % | 28.2 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
(In thousands) | % of Revenue | % of Revenue | % of Revenue | % of Revenue | |||||||||||||||||||
Revenue | |||||||||||||||||||||||
North America | $ | 1,181,943 | $ | 1,118,621 | $ | 3,596,697 | $ | 3,336,847 | |||||||||||||||
Europe | 954,522 | 770,219 | 2,665,170 | 2,141,186 | |||||||||||||||||||
Specialty | 330,594 | 319,672 | 1,008,998 | 959,213 | |||||||||||||||||||
Eliminations | (1,259 | ) | (1,169 | ) | (3,811 | ) | (3,621 | ) | |||||||||||||||
Total revenue | $ | 2,465,800 | $ | 2,207,343 | $ | 7,267,054 | $ | 6,433,625 | |||||||||||||||
Segment EBITDA | |||||||||||||||||||||||
North America | $ | 152,627 | 12.9 | % | $ | 139,738 | 12.5 | % | $ | 502,494 | 14.0 | % | $ | 451,504 | 13.5 | % | |||||||
Europe | 79,294 | 8.3 | % | 72,586 | 9.4 | % | 241,537 | 9.1 | % | 220,066 | 10.3 | % | |||||||||||
Specialty | 35,114 | 10.6 | % | 34,115 | 10.7 | % | 119,133 | 11.8 | % | 111,083 | 11.6 | % | |||||||||||
Total Segment EBITDA | $ | 267,035 | 10.8 | % | $ | 246,439 | 11.2 | % | $ | 863,164 | 11.9 | % | $ | 782,653 | 12.2 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(In thousands) | |||||||||||||||
Net income | $ | 122,381 | $ | 122,688 | $ | 409,573 | $ | 377,644 | |||||||
Subtract: | |||||||||||||||
Income (loss) from discontinued operations, net of tax | — | 12,844 | (4,531 | ) | 17,819 | ||||||||||
Income from continuing operations | 122,381 | 109,844 | 414,104 | 359,825 | |||||||||||
Add: | |||||||||||||||
Depreciation and amortization | 59,902 | 55,036 | 166,508 | 142,170 | |||||||||||
Interest expense, net | 25,222 | 24,761 | 73,806 | 64,002 | |||||||||||
Loss on debt extinguishment (1) | — | — | — | 26,650 | |||||||||||
Provision for income taxes | 58,189 | 49,835 | 206,206 | 173,225 | |||||||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) | 265,694 | 239,476 | 860,624 | 765,872 | |||||||||||
Subtract: | |||||||||||||||
Equity in earnings (loss) of unconsolidated subsidiaries | 2,673 | 29 | 3,878 | (519 | ) | ||||||||||
Gains on foreign exchange contracts - acquisition related | — | — | — | 18,342 | |||||||||||
Gains on bargain purchases | 913 | — | 3,990 | — | |||||||||||
Add: | |||||||||||||||
Restructuring and acquisition related expenses | 4,922 | 6,923 | 10,371 | 30,814 | |||||||||||
Inventory step-up adjustment - acquisition related | — | 12 | — | 3,614 | |||||||||||
Change in fair value of contingent consideration liabilities | 5 | 57 | 37 | 176 | |||||||||||
Segment EBITDA | $ | 267,035 | $ | 246,439 | $ | 863,164 | $ | 782,653 | |||||||
EBITDA as a percentage of revenue | 10.8 | % | 10.8 | % | 11.8 | % | 11.9 | % | |||||||
Segment EBITDA as a percentage of revenue | 10.8 | % | 11.2 | % | 11.9 | % | 12.2 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Net income | $ | 122,381 | $ | 122,688 | $ | 409,573 | $ | 377,644 | |||||||
Subtract: | |||||||||||||||
Income (loss) from discontinued operations, net of tax | — | 12,844 | (4,531 | ) | 17,819 | ||||||||||
Income from continuing operations | 122,381 | 109,844 | 414,104 | 359,825 | |||||||||||
Adjustments - continuing operations: | |||||||||||||||
Amortization of acquired intangibles | 25,084 | 25,040 | 71,163 | 58,191 | |||||||||||
Restructuring and acquisition related expenses | 4,922 | 6,923 | 10,371 | 30,814 | |||||||||||
Loss on debt extinguishment | — | — | — | 26,650 | |||||||||||
Inventory step-up adjustment – acquisition related | — | 12 | — | 3,614 | |||||||||||
Change in fair value of contingent consideration liabilities | 5 | 57 | 37 | 176 | |||||||||||
Gains on foreign exchange contracts - acquisition related | — | — | — | (18,342 | ) | ||||||||||
Gains on bargain purchases | (913 | ) | — | (3,990 | ) | — | |||||||||
Excess tax benefit from stock-based payments | (1,513 | ) | (4,984 | ) | (7,058 | ) | (11,471 | ) | |||||||
Tax effect of adjustments | (10,221 | ) | (11,111 | ) | (28,333 | ) | (35,072 | ) | |||||||
Adjusted income from continuing operations | $ | 139,745 | $ | 125,781 | $ | 456,294 | $ | 414,385 | |||||||
Weighted average diluted common shares outstanding | 310,779 | 310,036 | 310,495 | 309,671 | |||||||||||
Diluted earnings per share - continuing operations | $ | 0.39 | $ | 0.35 | $ | 1.33 | $ | 1.16 | |||||||
Adjusted diluted earnings per share - continuing operations | $ | 0.45 | $ | 0.41 | $ | 1.47 | $ | 1.34 |
Forecasted | |||||||
Fiscal Year 2017 | |||||||
Minimum Guidance | Maximum Guidance | ||||||
(In millions, except per share data) | |||||||
Income from continuing operations | $ | 517 | $ | 537 | |||
Adjustments: | |||||||
Amortization of acquired intangibles | 95 | 95 | |||||
Restructuring and acquisition related expenses | 10 | 10 | |||||
Gains on bargain purchases | (4 | ) | (4 | ) | |||
Excess tax benefit from stock-based payments | (7 | ) | (7 | ) | |||
Tax effect of adjustments | (36 | ) | (36 | ) | |||
Adjusted income from continuing operations | $ | 575 | $ | 595 | |||
Weighted average diluted common shares outstanding | 311 | 311 | |||||
Diluted earnings per share - continuing operations | $ | 1.67 | $ | 1.73 | |||
Adjusted diluted earnings per share - continuing operations | $ | 1.86 | $ | 1.92 |
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