Condensed Consolidating Financial Information (Tables)

6 Months Ended

Jun. 30, 2019

Condensed Consolidating Financial Information [Abstract]

Consolidated Condensed Statements of Income

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Six Months Ended June 30, 2019
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	3,180,605		$	3,243,194		$	(75,323	)	$	6,348,476
Cost of goods sold	—			1,895,645			2,072,703			(75,323		)	3,893,025
Gross margin	—			1,284,960			1,170,491			—			2,455,451
Selling, general and administrative expenses	21,729			859,273			913,898			—			1,794,900
Restructuring and acquisition related expenses	—			4,637			7,047			—			11,684
Impairment of net assets held for sale	—			41,694			6,826			—			48,520
Depreciation and amortization	92			50,249			91,495			—			141,836
Operating (loss) income	(21,821		)	329,107			151,225			—			458,511
Other expense (income):
Interest expense, net of interest income	26,622			(119		)	45,470			—			71,973
Intercompany interest (income) expense, net	(29,849		)	17,660			12,189			—			—
Other expense (income), net	15			(12,173		)	2,574			—			(9,584		)
Total other (income) expense, net	(3,212		)	5,368			60,233			—			62,389
(Loss) income before (benefit) provision for income taxes	(18,609		)	323,739			90,992			—			396,122
(Benefit) provision for income taxes	(5,038		)	86,421			25,992			—			107,375
Equity in earnings (losses) of unconsolidated subsidiaries	—			478			(38,455		)	—			(37,977		)
Equity in earnings of subsidiaries	261,782			9,112			—			(270,894		)	—
Income from continuing operations	248,211			246,908			26,545			(270,894		)	250,770
Net income from discontinued operations	398			—			398			(398		)	398
Net income	248,609			246,908			26,943			(271,292		)	251,168
Less: net income attributable to continuing noncontrolling interest	—			—			2,367			—			2,367
Less: net income attributable to discontinued noncontrolling interest	—			—			192			—			192
Net income attributable to LKQ stockholders	$	248,609		$	246,908		$	24,384		$	(271,292	)	$	248,609

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Three Months Ended June 30, 2018
	Parent			Guarantors			Non-Guarantors		Eliminations			Consolidated
Revenue	$	—		$	1,640,396		$	1,426,650	$	(36,295	)	$	3,030,751
Cost of goods sold	—			988,671			916,496		(36,295		)	1,868,872
Gross margin	—			651,725			510,154		—			1,161,879
Selling, general and administrative expenses	9,683			430,693			385,668		—			826,044
Restructuring and acquisition related expenses	—			—			15,878		—			15,878
Depreciation and amortization	21			24,526			38,616		—			63,163
Operating (loss) income	(9,704		)	196,506			69,992		—			256,794
Other expense (income):
Interest expense, net of interest income	17,805			(113		)	20,580		—			38,272
Intercompany interest (income) expense, net	(15,406		)	9,865			5,541		—			—
Other expense (income), net	117			(4,397		)	4,707		—			427
Total other expense, net	2,516			5,355			30,828		—			38,699
(Loss) income before (benefit) provision for income taxes	(12,220		)	191,151			39,164		—			218,095
(Benefit) provision for income taxes	(3,744		)	53,543			10,976		—			60,775
Equity in earnings of unconsolidated subsidiaries	—			—			546		—			546
Equity in earnings of subsidiaries	165,483			4,451			—		(169,934		)	—
Net income	157,007			142,059			28,734		(169,934		)	157,866
Less: net income attributable to continuing noncontrolling interest	—			—			859		—			859
Net income attributable to LKQ stockholders	$	157,007		$	142,059		$	27,875	$	(169,934	)	$	157,007

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Three Months Ended June 30, 2019
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	1,629,925		$	1,656,317		$	(38,069	)	$	3,248,173
Cost of goods sold	—			974,156			1,064,899			(38,069		)	2,000,986
Gross margin	—			655,769			591,418			—			1,247,187
Selling, general and administrative expenses	12,691			426,886			458,791			—			898,368
Restructuring and acquisition related expenses	—			4,031			4,346			—			8,377
Impairment of net assets held for sale	—			33,233			264			—			33,497
Depreciation and amortization	38			25,176			45,620			—			70,834
Operating (loss) income	(12,729		)	166,443			82,397			—			236,111
Other expense (income):
Interest expense, net of interest income	12,786			217			22,881			—			35,884
Intercompany interest (income) expense, net	(14,763		)	8,471			6,292			—			—
Other income, net	(4		)	(4,342		)	(1,387		)	—			(5,733		)
Total other (income) expense, net	(1,981		)	4,346			27,786			—			30,151
(Loss) income before (benefit) provision for income taxes	(10,748		)	162,097			54,611			—			205,960
(Benefit) provision for income taxes	(2,992		)	43,118			15,699			—			55,825
Equity in (losses) earnings of unconsolidated subsidiaries	—			(669		)	2,241			—			1,572
Equity in earnings (losses) of subsidiaries	157,919			(600		)	—			(157,319		)	—
Income from continuing operations	150,163			117,710			41,153			(157,319		)	151,707
Net income from discontinued operations	398			—			398			(398		)	398
Net income	150,561			117,710			41,551			(157,717		)	152,105
Less: net income attributable to continuing noncontrolling interest	—			—			1,352			—			1,352
Less: net income attributable to discontinued noncontrolling interest	—			—			192			—			192
Net income attributable to LKQ stockholders	$	150,561		$	117,710		$	40,007		$	(157,717	)	$	150,561

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Six Months Ended June 30, 2018
	Parent			Guarantors			Non-Guarantors		Eliminations			Consolidated
Revenue	$	—		$	3,217,991		$	2,606,892	$	(73,368	)	$	5,751,515
Cost of goods sold	—			1,934,586			1,674,447		(73,368		)	3,535,665
Gross margin	—			1,283,405			932,445		—			2,215,850
Selling, general and administrative expenses	18,813			857,490			716,632		—			1,592,935
Restructuring and acquisition related expenses	—			330			19,602		—			19,932
Depreciation and amortization	50			48,864			70,707		—			119,621
Operating (loss) income	(18,863		)	376,721			125,504		—			483,362
Other expense (income):												—
Interest expense, net of interest income	35,813			99			30,875		—			66,787
Intercompany interest (income) expense, net	(30,806		)	19,545			11,261		—			—
Other (income) expense, net	(898		)	(10,279		)	8,722		—			(2,455		)
Total other expense, net	4,109			9,365			50,858		—			64,332
(Loss) income before (benefit) provision for income taxes	(22,972		)	367,356			74,646		—			419,030
(Benefit) provision for income taxes	(7,648		)	99,420			18,587		—			110,359
Equity in earnings of unconsolidated subsidiaries	—			—			1,958		—			1,958
Equity in earnings of subsidiaries	325,291			9,561			—		(334,852		)	—
Net income	309,967			277,497			58,017		(334,852		)	310,629
Less: net income attributable to continuing noncontrolling interest	—			—			662		—			662
Net income attributable to LKQ stockholders	$	309,967		$	277,497		$	57,355	$	(334,852	)	$	309,967

Consolidated Condensed Statements of Comprehensive Income (Loss)

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands)
	For the Three Months Ended June 30, 2019
	Parent			Guarantors			Non-Guarantors		Eliminations			Consolidated
Net income	$	150,561		$	117,710		$	41,551	$	(157,717	)	$	152,105
Less: net income attributable to continuing noncontrolling interest	—			—			1,352		—			1,352
Less: net income attributable to discontinued noncontrolling interest	—			—			192		—			192
Net income attributable to LKQ stockholders	150,561			117,710			40,007		(157,717		)	150,561
Other comprehensive income (loss):
Foreign currency translation, net of tax	5,602			2,342			5,086		(7,428		)	5,602
Net change in unrealized gains/losses on cash flow hedges, net of tax	(5,650		)	—			—		—			(5,650		)
Net change in unrealized gains/losses on pension plans, net of tax	28			(10		)	38		(28		)	28
Net change in other comprehensive income from unconsolidated subsidiaries	2,321			—			2,321		(2,321		)	2,321
Other comprehensive income	2,301			2,332			7,445		(9,777		)	2,301
Comprehensive income	152,862			120,042			48,996		(167,494		)	154,406
Less: comprehensive income attributable to continuing noncontrolling interest	—			—			1,352		—			1,352
Less: comprehensive income attributable to discontinued noncontrolling interest	—			—			192		—			192
Comprehensive income attributable to LKQ stockholders	$	152,862		$	120,042		$	47,452	$	(167,494	)	$	152,862

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands)
	For the Six Months Ended June 30, 2019
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net income	$	248,609		$	246,908		$	26,943		$	(271,292	)	$	251,168
Less: net income attributable to continuing noncontrolling interest	—			—			2,367			—			2,367
Less: net income attributable to discontinued noncontrolling interest	—			—			192			—			192
Net income attributable to LKQ stockholders	248,609			246,908			24,384			(271,292		)	248,609
Other comprehensive (loss) income:
Foreign currency translation, net of tax	(4,293		)	4,536			(5,380		)	844			(4,293		)
Net change in unrealized gains/losses on cash flow hedges, net of tax	(8,387		)	—			—			—			(8,387		)
Net change in unrealized gains/losses on pension plans, net of tax	219			(14		)	233			(219		)	219
Net change in other comprehensive loss from unconsolidated subsidiaries	(1,142		)	—			(1,142		)	1,142			(1,142		)
Other comprehensive (loss) income	(13,603		)	4,522			(6,289		)	1,767			(13,603		)
Comprehensive income	235,006			251,430			20,654			(269,525		)	237,565
Less: comprehensive income attributable to continuing noncontrolling interest	—			—			2,367			—			2,367
Less: comprehensive income attributable to discontinued noncontrolling interest	—			—			192			—			192
Comprehensive income attributable to LKQ stockholders	$	235,006		$	251,430		$	18,095		$	(269,525	)	$	235,006

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands)
	For the Six Months Ended June 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net income	$	309,967		$	277,497		$	58,017		$	(334,852	)	$	310,629
Less: net income attributable to continuing noncontrolling interest	—			—			662			—			662
Net income attributable to LKQ stockholders	309,967			277,497			57,355			(334,852		)	309,967
Other comprehensive (loss) income:
Foreign currency translation, net of tax	(56,679		)	(4,486		)	(57,555		)	62,041			(56,679		)
Net change in unrealized gains/losses on cash flow hedges, net of tax	5,660			—			—			—			5,660
Net change in unrealized gains/losses on pension plans, net of tax	(1,428		)	(1,485		)	57			1,428			(1,428		)
Net change in other comprehensive income from unconsolidated subsidiaries	1,517			—			1,517			(1,517		)	1,517
Other comprehensive loss	(50,930		)	(5,971		)	(55,981		)	61,952			(50,930		)
Comprehensive income	259,037			271,526			2,036			(272,900		)	259,699
Less: comprehensive income attributable to continuing noncontrolling interest	—			—			662			—			662
Comprehensive income attributable to LKQ stockholders	$	259,037		$	271,526		$	1,374		$	(272,900	)	$	259,037

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands)
	For the Three Months Ended June 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net income	$	157,007		$	142,059		$	28,734		$	(169,934	)	$	157,866
Less: net income attributable to continuing noncontrolling interest	—			—			859			—			859
Net income attributable to LKQ stockholders	157,007			142,059			27,875			(169,934		)	157,007
Other comprehensive (loss) income:
Foreign currency translation, net of tax	(105,164		)	(2,303		)	(106,610		)	108,913			(105,164		)
Net change in unrealized gains/losses on cash flow hedges, net of tax	2,406			—			—			—			2,406
Net change in unrealized gains/losses on pension plans, net of tax	(807		)	(864		)	57			807			(807		)
Net change in other comprehensive income from unconsolidated subsidiaries	2,122			—			2,122			(2,122		)	2,122
Other comprehensive loss	(101,443		)	(3,167		)	(104,431		)	107,598			(101,443		)
Comprehensive income (loss)	55,564			138,892			(75,697		)	(62,336		)	56,423
Less: comprehensive income attributable to continuing noncontrolling interest	—			—			859			—			859
Comprehensive income (loss) attributable to LKQ stockholders	$	55,564		$	138,892		$	(76,556	)	$	(62,336	)	$	55,564

Consolidated Condensed Balance Sheets

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Balance Sheets (In thousands)
	June 30, 2019
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	59,244	$	42,654	$	274,069	$	—		$	375,967
Receivables, net	562		362,043		923,197		—			1,285,802
Intercompany receivables, net	8,116		—		28,079		(36,195		)	—
Inventories	—		1,239,102		1,411,036		—			2,650,138
Prepaid expenses and other current assets	13,563		134,382		171,997		—			319,942
Total current assets	81,485		1,778,181		2,808,378		(36,195		)	4,631,849
Property, plant and equipment, net	1,067		605,005		600,618		—			1,206,690
Operating lease assets, net	3,806		818,994		471,741		—			1,294,541
Intangible assets:
Goodwill	—		2,004,702		2,405,223		—			4,409,925
Other intangibles, net	208		257,517		622,398		—			880,123
Investment in subsidiaries	5,323,410		125,028		—		(5,448,438		)	—
Intercompany notes receivable	1,167,714		117,962		—		(1,285,676		)	—
Equity method investments	—		16,882		116,272		—			133,154
Other noncurrent assets	64,026		40,146		43,782		—			147,954
Total assets	$	6,641,716	$	5,764,417	$	7,068,412	$	(6,770,309	)	$	12,704,236
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	2,120	$	386,282	$	643,550	$	—		$	1,031,952
Intercompany payables, net	—		28,079		8,116		(36,195		)	—
Accrued expenses:
Accrued payroll-related liabilities	6,405		60,151		105,094		—			171,650
Refund liability	—		51,875		54,737		—			106,612
Other accrued expenses	5,167		113,832		190,735		—			309,734
Other current liabilities	282		27,576		106,997		—			134,855
Current portion of operating lease liabilities	210		119,744		99,548		—			219,502
Current portion of long-term obligations	14,510		3,311		114,820		—			132,641
Total current liabilities	28,694		790,850		1,323,597		(36,195		)	2,106,946
Long-term operating lease liabilities, excluding current portion	4,000		727,838		390,438		—			1,122,276
Long-term obligations, excluding current portion	1,636,839		16,242		2,266,821		—			3,919,902
Intercompany notes payable	—		557,324		728,352		(1,285,676		)	—
Deferred income taxes	5,432		135,283		162,464		—			303,179
Other noncurrent liabilities	126,262		79,658		136,265		—			342,185
Stockholders' equity:
Total Company stockholders' equity	4,840,489		3,457,222		1,991,216		(5,448,438		)	4,840,489
Noncontrolling interest	—		—		69,259		—			69,259
Total stockholders' equity	4,840,489		3,457,222		2,060,475		(5,448,438		)	4,909,748
Total liabilities and stockholders' equity	$	6,641,716	$	5,764,417	$	7,068,412	$	(6,770,309	)	$	12,704,236

LKQ CORPORATION AND SUBSIDIARIES Unaudited 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 noncurrent 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
Refund liability	—		50,899		53,686		—			104,585
Other accrued expenses	5,454		105,672		177,299		—			288,425
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

Consolidated Condensed Statements of Cash Flows

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Cash Flows (In thousands)
	For the Six Months Ended June 30, 2019
	Parent			Guarantors			Non-Guarantors (1)			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities	$	221,964		$	95,544		$	329,868		$	(8,972	)	$	638,404
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(465		)	(54,687		)	(46,116		)	—			(101,268		)
Investment and intercompany note activity with subsidiaries	10,199			—			—			(10,199		)	—
Acquisitions, net of cash acquired	—			(10,118		)	(4,649		)	—			(14,767		)
Receipts of deferred purchase price on receivables under factoring arrangements	—			186,479			—			(186,479		)	—
Other investing activities, net	—			(495		)	(240		)	—			(735		)
Net cash provided by (used in) investing activities	9,734			121,179			(51,005		)	(196,678		)	(116,770		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt issuance costs	(35		)	—			—			—			(35		)
Purchase of treasury stock	(190,762		)	—			—			—			(190,762		)
Borrowings under revolving credit facilities	196,000			—			116,880			—			312,880
Repayments under revolving credit facilities	(198,931		)	—			(272,508		)	—			(471,439		)
Repayments under term loans	(4,375		)	—			—			—			(4,375		)
Borrowings under receivables securitization facility	—			—			36,600			—			36,600
Repayments under receivables securitization facility	—			—			(146,600		)	—			(146,600		)
(Repayments) borrowings of other debt, net	(272		)	176			(8,271		)	—			(8,367		)
Other financing activities, net	288			—			(178		)	—			110
Investment and intercompany note activity with parent	—			(8,928		)	(1,271		)	10,199			—
Dividends	—			(195,451		)	—			195,451			—
Net cash used in financing activities	(198,087		)	(204,203		)	(275,348		)	205,650			(471,988		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			849			(951		)	—			(102		)
Net increase in cash, cash equivalents and restricted cash	33,611			13,369			2,564			—			49,544
Cash, cash equivalents and restricted cash of continuing operations, beginning of period	25,633			29,285			282,332			—			337,250
Cash, cash equivalents and restricted cash of continuing and discontinued operations, end of period	59,244			42,654			284,896			—			386,794
Less: Cash and cash equivalents of discontinued operations, end of period	—			—			5,372			—			5,372
Cash, cash equivalents and restricted cash, end of period	$	59,244		$	42,654		$	279,524		$	—		$	381,422

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Cash Flows (In thousands)
	For the Six Months Ended June 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities	$	149,253		$	115,247		$	68,285		$	(4,116	)	$	328,669
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(260		)	(62,744		)	(52,417		)	—			(115,421		)
Investment and intercompany note activity with subsidiaries	48,339			—			—			(48,339		)	—
Acquisitions, net of cash acquired	—			(2,527		)	(1,133,443		)	—			(1,135,970		)
Receipts of deferred purchase price on receivables under factoring arrangements (1)	—			143,983			—			(143,983		)	—
Other investing activities, net	887			423			864			—			2,174
Net cash provided by (used in) investing activities	48,966			79,135			(1,184,996		)	(192,322		)	(1,249,217		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt issuance costs	(682		)	—			(16,077		)	—			(16,759		)
Proceeds from issuance of Euro Notes (2026/28)	—			—			1,232,100			—			1,232,100
Borrowings under revolving credit facilities	264,000			—			349,658			—			613,658
Repayments under revolving credit facilities	(451,931		)	—			(314,666		)	—			(766,597		)
Repayments under term loans	(8,810		)	—			—			—			(8,810		)
(Repayments) borrowings of other debt, net	(385		)	289			(2,348		)	—			(2,444		)
Other financing activities, net	(912		)	—			4,107			—			3,195
Investment and intercompany note activity with parent	—			(42,596		)	(5,743		)	48,339			—
Dividends	—			(148,099		)	—			148,099			—
Net cash (used in) provided by financing activities	(198,720		)	(190,406		)	1,247,031			196,438			1,054,343
Effect of exchange rate changes on cash and cash equivalents	—			(805		)	(67,554		)	—			(68,359		)
Net (decrease) increase in cash and cash equivalents	(501		)	3,171			62,766			—			65,436
Cash and cash equivalents, beginning of period	34,360			35,131			210,275			—			279,766
Cash and cash equivalents, end of period	$	33,859		$	38,302		$	273,041		$	—		$	345,202