10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________________ 

FORM 10-Q

____________________________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2018

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from              to

Commission File Number: 000-50404

____________________________ 

LKQ CORPORATION

(Exact name of registrant as specified in its charter)

____________________________ 

DELAWARE	36-4215970
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
500 WEST MADISON STREET, SUITE 2800, CHICAGO, IL	60661
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (312) 621-1950

____________________________ 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes x   No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨
Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ¨  No x

At October 24, 2018, the registrant had issued and outstanding an aggregate of 318,202,654 shares of Common Stock.

PART I

FINANCIAL INFORMATION

Item 1.     Financial Statements

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Income (In thousands, except per share data)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Revenue	$	3,122,378		$	2,465,800		$	8,873,893		$	7,267,054
Cost of goods sold	1,925,180			1,508,924			5,460,845			4,415,076
Gross margin	1,197,198			956,876			3,413,048			2,851,978
Selling, general and administrative expenses (1)	879,150			695,978			2,472,085			2,003,065
Restructuring and acquisition related expenses	6,614			4,922			26,546			10,371
Depreciation and amortization	76,701			56,877			196,322			159,178
Operating income	234,733			199,099			718,095			679,364
Other expense (income):
Interest expense, net	40,860			25,222			107,647			73,806
Gains on bargain purchases	—			(913		)	(328		)	(3,990		)
Other income, net	(6,959		)	(3,107		)	(9,086		)	(6,884		)
Total other expense, net	33,901			21,202			98,233			62,932
Income from continuing operations before provision for income taxes	200,832			177,897			619,862			616,432
Provision for income taxes	46,068			58,189			156,427			206,206
Equity in (losses) earnings of unconsolidated subsidiaries	(20,284		)	2,673			(18,326		)	3,878
Income from continuing operations	134,480			122,381			445,109			414,104
Net loss from discontinued operations	—			—			—			(4,531		)
Net income	134,480			122,381			445,109			409,573
Less: net income attributable to noncontrolling interest	378			—			1,040			—
Net income attributable to LKQ stockholders	$	134,102		$	122,381		$	444,069		$	409,573
Basic earnings per share: (2)
Income from continuing operations	$	0.42		$	0.40		$	1.42		$	1.34
Net loss from discontinued operations	—			—			—			(0.01		)
Net income	0.42			0.40			1.42			1.33
Less: net income attributable to noncontrolling interest	0.00			—			0.00			—
Net income attributable to LKQ stockholders	$	0.42		$	0.40		$	1.42		$	1.33
Diluted earnings per share: (2)
Income from continuing operations	$	0.42		$	0.39		$	1.41		$	1.33
Net loss from discontinued operations	—			—			—			(0.01		)
Net income	0.42			0.39			1.41			1.32
Less: net income attributable to noncontrolling interest	0.00			—			0.00			—
Net income attributable to LKQ stockholders	$	0.42		$	0.39		$	1.41		$	1.32

⁽¹⁾ Selling, general and administrative expenses contain facility and warehouses expenses and distribution expenses that

were previously shown separately.

⁽²⁾ The sum of the individual earnings per share amounts may not equal the total due to rounding.

The accompanying notes are an integral part of the condensed consolidated financial statements.

2

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Comprehensive Income (In thousands)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Net income	$	134,480		$	122,381		$	445,109		$	409,573
Less: net income attributable to noncontrolling interest	378			—			1,040			—
Net income attributable to LKQ stockholders	134,102			122,381			444,069			409,573
Other comprehensive income (loss):
Foreign currency translation, net of tax	(20,951		)	59,618			(77,630		)	174,794
Net change in unrealized gains/losses on cash flow hedges, net of tax	304			(1,776		)	5,964			457
Net change in unrealized gains/losses on pension plans, net of tax	1,274			(150		)	(154		)	(4,053		)
Net change in other comprehensive income (loss) from unconsolidated subsidiaries	643			(1,034		)	2,160			(1,635		)
Other comprehensive (loss) income	(18,730		)	56,658			(69,660		)	169,563
Comprehensive income	115,750			179,039			375,449			579,136
Less: comprehensive income attributable to noncontrolling interest	378			—			1,040			—
Comprehensive income attributable to LKQ stockholders	$	115,372		$	179,039		$	374,409		$	579,136

The accompanying notes are an integral part of the condensed consolidated financial statements.

3

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidated Balance Sheets (In thousands, except share and per share data)
	September 30,			December 31,
	2018			2017
Assets
Current assets:
Cash and cash equivalents	$	341,346		$	279,766
Receivables, net	1,255,876			1,027,106
Inventories	2,794,894			2,380,783
Prepaid expenses and other current assets	200,944			134,479
Total current assets	4,593,060			3,822,134
Property, plant and equipment, net	1,201,003			913,089
Intangible assets:
Goodwill	4,475,266			3,536,511
Other intangibles, net	953,372			743,769
Equity method investments	157,409			208,404
Other assets	205,226			142,965
Total assets	$	11,585,336		$	9,366,872
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	941,747		$	788,613
Accrued expenses:
Accrued payroll-related liabilities	153,536			143,424
Other accrued expenses	358,212			218,600
Refund liability	106,732			—
Other current liabilities	57,088			45,727
Current portion of long-term obligations	118,365			126,360
Total current liabilities	1,735,680			1,322,724
Long-term obligations, excluding current portion	4,250,137			3,277,620
Deferred income taxes	325,537			252,359
Other noncurrent liabilities	376,566			307,516
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 318,197,309 and 309,126,386 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively	3,182			3,091
Additional paid-in capital	1,409,242			1,141,451
Retained earnings	3,562,827			3,124,103
Accumulated other comprehensive loss	(134,791		)	(70,476		)
Total Company stockholders' equity	4,840,460			4,198,169
Noncontrolling interest	56,956			8,484
Total stockholders' equity	4,897,416			4,206,653
Total liabilities and stockholders’ equity	$	11,585,336		$	9,366,872

The accompanying notes are an integral part of the condensed consolidated financial statements.

4

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Cash Flows (In thousands)
	Nine Months Ended
	September 30,
	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	445,109		$	409,573
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	210,977			166,508
Impairment on Mekonomen equity method investment	22,715			—
Stock-based compensation expense	17,544			17,582
Loss on sale of business	—			8,580
Other	(7,187		)	(11,982		)
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions:
Receivables, net	(70,797		)	(75,444		)
Inventories	(71,058		)	(97,584		)
Prepaid income taxes/income taxes payable	7,262			(928		)
Accounts payable	(71,997		)	42,175
Other operating assets and liabilities	38,599			(9,237		)
Net cash provided by operating activities	521,167			449,243
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(171,763		)	(135,537		)
Acquisitions, net of cash acquired	(1,206,067		)	(252,667		)
Proceeds from disposals of business/investment	—			301,297
Investments in unconsolidated subsidiaries	(11,066		)	(7,114		)
Receipts of deferred purchase price on receivables under factoring arrangements	9,410			—
Other investing activities, net	7,970			9,864
Net cash used in investing activities	(1,371,516		)	(84,157		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	3,772			6,465
Taxes paid related to net share settlements of stock-based compensation awards	(4,768		)	(5,095		)
Debt issuance costs	(16,938		)	—
Proceeds from issuance of Euro Notes (2026/28)	1,232,100			—
Borrowings under revolving credit facilities	1,025,496			424,976
Repayments under revolving credit facilities	(1,110,035		)	(770,884		)
Repayments under term loans	(114,800		)	(27,884		)
Borrowings under receivables securitization facility	—			8,525
Repayments under receivables securitization facility	—			(9,925		)
(Repayments) borrowings of other debt, net	(38,695		)	24,522
Payments of other obligations	—			(2,079		)
Other financing activities, net	3,182			4,316
Net cash provided by (used in) financing activities	979,314			(347,063		)
Effect of exchange rate changes on cash and cash equivalents	(67,385		)	22,538
Net increase in cash and cash equivalents	61,580			40,561
Cash and cash equivalents of continuing operations, beginning of period	279,766			227,400
Add: Cash and cash equivalents of discontinued operations, beginning of period	—			7,116
Cash and cash equivalents of continuing and discontinued operations, beginning of period	279,766			234,516
Cash and cash equivalents, end of period	$	341,346		$	275,077
Supplemental disclosure of cash paid for:
Income taxes, net of refunds	$	158,740		$	218,332
Interest	74,417			57,519
Supplemental disclosure of noncash investing and financing activities:
Stock issued in acquisitions	$	251,334		$	—
Contingent consideration liabilities	3,107			6,234
Notes payable and other financing obligations, including notes issued and debt assumed in connection with business acquisitions/investment	82,664			52,576
Noncash property, plant and equipment additions	11,010			4,918
Notes and other financing receivables in connection with disposals of business/investment	—			5,848

The accompanying notes are an integral part of the condensed consolidated financial statements.

5

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Stockholders’ Equity (In thousands)
				LKQ Stockholders
	Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive (Loss) Income			Noncontrolling Interest			Total Stockholders' Equity
	Shares Issued	Amount
BALANCE, July 1, 2018	317,821	$	3,178	$	1,403,630		$	3,428,725	$	(116,061	)	$	57,503		$	4,776,975
Net income	—	—		—			134,102		—			378			134,480
Other comprehensive loss	—	—		—			—		(18,730		)	—			(18,730		)
Vesting of restricted stock units, net of shares withheld for employee tax	256	3		(937		)	—		—			—			(934		)
Stock-based compensation expense	—	—		5,700			—		—			—			5,700
Exercise of stock options	120	1		849			—		—			—			850
Capital contributions from, net of dividends to, noncontrolling interest shareholder	—	—		—			—		—			(925		)	(925		)
BALANCE, September 30, 2018	318,197	$	3,182	$	1,409,242		$	3,562,827	$	(134,791	)	$	56,956		$	4,897,416

					LKQ Stockholders
	Common Stock				Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Noncontrolling Interest		Total Stockholders' Equity
	Shares Issued		Amount
BALANCE, January 1, 2018	309,127		$	3,091	$	1,141,451		$	3,124,103		$	(70,476	)	$	8,484	$	4,206,653
Net income	—		—		—			444,069			—			1,040		445,109
Other comprehensive loss	—		—		—			—			(69,660		)	—		(69,660		)
Stock issued in acquisitions	8,056		81		251,253			—			—			—		251,334
Vesting of restricted stock units, net of shares withheld for employee tax	600		6		(3,717		)	—			—			—		(3,711		)
Stock-based compensation expense	—		—		17,544			—			—			—		17,544
Exercise of stock options	441		4		3,768			—			—			—		3,772
Shares withheld for net share settlement of stock option awards	(27	)	—		(1,057		)	—			—			—		(1,057		)
Adoption of ASU 2018-02 (see Note 4)	—		—		—			(5,345		)	5,345			—		—
Capital contributions from, net of dividends to, noncontrolling interest shareholder	—		—		—			—			—			3,182		3,182
Acquired noncontrolling interest	—		—		—			—			—			44,250		44,250
BALANCE, September 30, 2018	318,197		$	3,182	$	1,409,242		$	3,562,827		$	(134,791	)	$	56,956	$	4,897,416

The accompanying notes are an integral part of the condensed consolidated financial statements.

6

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Stockholders’ Equity (In thousands)
					LKQ Stockholders
	Common Stock				Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive (Loss) Income			Total Stockholders' Equity
	Shares Issued		Amount
BALANCE, July 1, 2017	308,621		$	3,086	$	1,130,318		$	2,877,551	$	(154,270	)	$	3,856,685
Net income	—		—		—			122,381		—			122,381
Other comprehensive income	—		—		—			—		56,658			56,658
Vesting of restricted stock units, net of shares withheld for employee tax	259		2		(1,142		)	—		—			(1,140		)
Stock-based compensation expense	—		—		5,139			—		—			5,139
Exercise of stock options	139		2		1,312			—		—			1,314
Shares withheld for net share settlement of stock option awards	(1	)	—		—			—		—			—
BALANCE, September 30, 2017	309,018		$	3,090	$	1,135,627		$	2,999,932	$	(97,612	)	$	4,041,037

					LKQ Stockholders
	Common Stock				Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive (Loss) Income			Total Stockholders' Equity
	Shares Issued		Amount
BALANCE, January 1, 2017	307,545		$	3,075	$	1,116,690		$	2,590,359	$	(267,175	)	$	3,442,949
Net income	—		—		—			409,573		—			409,573
Other comprehensive income	—		—		—			—		169,563			169,563
Vesting of restricted stock units, net of shares withheld for employee tax	736		7		(3,902		)	—		—			(3,895		)
Stock-based compensation expense	—		—		17,582			—		—			17,582
Exercise of stock options	772		8		6,457			—		—			6,465
Shares withheld for net share settlement of stock option awards	(35	)	—		(1,200		)	—		—			(1,200		)
BALANCE, September 30, 2017	309,018		$	3,090	$	1,135,627		$	2,999,932	$	(97,612	)	$	4,041,037

The accompanying notes are an integral part of the condensed consolidated financial statements.

7

LKQ CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1. Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements represent the consolidation of LKQ Corporation, a Delaware corporation, and its subsidiaries. LKQ Corporation is a holding company and all operations are conducted by subsidiaries. When the terms "LKQ," "the Company," "we," "us," or "our" are used in this document, those terms refer to LKQ Corporation and its consolidated subsidiaries.

We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to interim financial statements. Accordingly, certain information related to our significant accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted. These unaudited condensed consolidated financial statements reflect, in the opinion of management, all material adjustments (which include only normally recurring adjustments) necessary to fairly state, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Operating results for interim periods are not necessarily indicative of the results that can be expected for any subsequent interim period or for a full year. These interim financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 28, 2018 ("2017 Form 10-K").

Note 2. Business Combinations

On May 30, 2018, we acquired Stahlgruber GmbH ("Stahlgruber"), a leading European wholesale distributor of aftermarket spare parts for passenger cars, tools, capital equipment and accessories with operations in Germany, Austria, Slovenia, Croatia, and with further sales to Switzerland. Total acquisition date fair value of the consideration for our Stahlgruber acquisition was €1.2 billion ($1.4 billion), composed of €1.0 billion ($1.1 billion) of cash paid (net of cash acquired), and €215 million ($251 million) of newly issued shares of LKQ common stock. We financed the acquisition with the proceeds from €1.0 billion ($1.2 billion) of senior notes, the direct issuance to Stahlgruber's owner of 8,055,569 newly issued shares of LKQ common stock, and borrowings under our existing revolving credit facility.

On May 3, 2018, the European Commission cleared the acquisition for the entire European Union, except with respect to the wholesale automotive parts business in the Czech Republic. The acquisition of the Czech Republic wholesale business has been referred to the Czech Republic competition authority for review. The Czech Republic wholesale business represents an immaterial portion of Stahlgruber's revenue and profitability.

We recorded $929 million of goodwill related to our acquisition of Stahlgruber, of which we expect $292 million to be deductible for income tax purposes. In the period between the acquisition date and September 30, 2018, Stahlgruber, which is reported in our Europe reportable segment, generated revenue of $637 million and operating income of $34 million.

In addition to our acquisition of Stahlgruber, during the nine months ended September 30, 2018, we completed acquisitions of one wholesale business in North America and seven wholesale businesses in Europe. Total acquisition date fair value of the consideration for these acquisitions was $86 million, composed of $76 million of cash paid (net of cash acquired), $7 million of notes payable, and $3 million for the estimated value of contingent payments to former owners (with maximum potential payments totaling $5 million). During the nine months ended September 30, 2018, we recorded $72 million of goodwill related to these acquisitions, of which we expect an immaterial amount to be deductible for income tax purposes. In the period between the acquisition dates and September 30, 2018, these acquisitions generated revenue of $19 million and operating income of $2 million.

During the year ended December 31, 2017, we completed 26 acquisitions including 6 wholesale businesses in North America, 16 wholesale businesses in Europe and 4 Specialty businesses. Our acquisitions in Europe included the acquisition of four aftermarket parts distribution businesses in Belgium in July 2017. Our Specialty acquisitions included the acquisition of the aftermarket business of Warn Industries, Inc. ("Warn"), a leading designer, manufacturer and marketer of high performance vehicle equipment and accessories, in November 2017.

8

Total acquisition date fair value of the consideration for our 2017 acquisitions was $542 million, composed of $510 million of cash paid (net of cash acquired), $6 million for the estimated value of contingent payments to former owners (with maximum potential payments totaling $19 million), $5 million of other purchase price obligations (non-interest bearing) and $20 million of notes payable. We typically fund our acquisitions using borrowings under our credit facilities or other financing arrangements. During the year ended December 31, 2017, we recorded $307 million of goodwill related to these acquisitions, of which we expect $21 million to be deductible for income tax purposes.

Our acquisitions are accounted for under the purchase method of accounting and are included in our consolidated financial statements from the dates of acquisition. The purchase prices were allocated to the net assets acquired based upon estimated fair values at the dates of acquisition. The purchase price allocations for the acquisitions made during the nine months ended September 30, 2018 and the last three months of the year ended December 31, 2017 are preliminary as we are in the process of determining the following: 1) valuation amounts for certain receivables, inventories and fixed assets acquired; 2) valuation amounts for certain intangible assets acquired; 3) the acquisition date fair value of certain liabilities assumed; and 4) the tax basis of the entities acquired. We have recorded preliminary estimates for certain of the items noted above and will record adjustments, if any, to the preliminary amounts upon finalization of the valuations.

From the date of our preliminary allocation for Stahlgruber in the second quarter of 2018 through September 30, 2018, we recorded adjustments based on our valuation procedures, primarily related to inventory and current liabilities that resulted in the allocation of $1 million of goodwill to acquired net assets. From the date of our preliminary allocations for our other acquisitions completed in the first half of 2018, the measurement period adjustments recorded for acquisitions completed in prior periods were not material. The income statement effect of these measurement period adjustments for our Stahlgruber acquisition and our other acquisitions completed in the first half of 2018 that would have been recorded in previous reporting periods if the adjustments had been recognized as of the acquisition dates was immaterial. The balance sheet impact and income statement effect of other measurement-period adjustments recorded for acquisitions completed in prior periods were immaterial.

The purchase price allocations for the acquisitions completed during the nine months ended September 30, 2018 and the year ended December 31, 2017 are as follows (in thousands):

	Nine Months Ended									Year Ended
	September 30, 2018									December, 31, 2017
	Stahlgruber			Other Acquisitions (2)			Total			All Acquisitions (1)
Receivables	$	140,979		$	15,369		$	156,348		$	73,782
Receivable reserves	(2,818		)	(875		)	(3,693		)	(7,032		)
Inventories (3)	374,056			12,240			386,296			150,342
Prepaid expenses and other current assets	9,537			1,806			11,343			(295		)
Property, plant and equipment	260,661			6,089			266,750			41,039
Goodwill	929,376			68,254			997,630			314,817
Other intangibles	285,529			16,315			301,844			181,216
Other assets	16,625			37			16,662			3,257
Deferred income taxes	(97,805		)	(716		)	(98,521		)	(65,087		)
Current liabilities assumed	(343,221		)	(20,662		)	(363,883		)	(111,484		)
Debt assumed	(65,852		)	(4,410		)	(70,262		)	(33,586		)
Other noncurrent liabilities assumed (4)	(81,689		)	(9,993		)	(91,682		)	(1,917		)
Noncontrolling interest	(44,250		)	—			(44,250		)	—
Contingent consideration liabilities	—			(3,107		)	(3,107		)	(6,234		)
Other purchase price obligations	(2,349		)	3,853			1,504			(5,074		)
Stock issued	(251,334		)	—			(251,334		)	—
Notes issued	—			(6,948		)	(6,948		)	(20,187		)
Settlement of pre-existing balances	—			—			—			242
Gains on bargain purchases (5)	—			(328		)	(328		)	(3,870		)
Settlement of other purchase price obligations (non-interest bearing)	—			1,698			1,698			3,159
Cash used in acquisitions, net of cash acquired	$	1,127,445		$	78,622		$	1,206,067		$	513,088

9

(1) The amounts recorded during the year ended December 31, 2017 include $6 million and $3 million of adjustments to reduce property, plant and equipment and other assets for Rhiag-Inter Auto Parts Italia S.r.l. (“Rhiag”) and Pittsburgh Glass Works LLC (“PGW”), respectively.

(2) The amounts recorded during the nine months ended September 30, 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.

(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 $75 million liability for certain pension obligations. See Note 13, "Employee Benefit Plans" for information related to our defined benefit plans.

(5) The amount recorded during the nine months ended September 30, 2018 is due to the gain on bargain purchase related to an acquisition in Europe completed in the second quarter of 2017 as a result of a change in the acquisition date fair value of the consideration. 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 Limited ("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.

The fair value of our intangible assets is based on a number of inputs, including projections of future cash flows, assumed royalty rates and customer attrition rates, all of which are Level 3 inputs. The fair value of our property, plant and equipment is determined using inputs such as market comparables and current replacement or reproduction costs of the asset, adjusted for physical, functional and economic factors; these adjustments to arrive at fair value use unobservable inputs in which little or no market data exists, and therefore, these inputs are considered to be Level 3 inputs. See Note 12, "Fair Value Measurements" for further information regarding the tiers in the fair value hierarchy.

The acquisition of Stahlgruber expands LKQ's geographic presence in continental Europe and serves as an additional strategic hub for our European operations. In addition, we believe the acquisition of Stahlgruber will allow for continued improvement in procurement, logistics and infrastructure optimization. The primary objectives of our other acquisitions made during the nine months ended September 30, 2018 and the year ended December 31, 2017 were to create economic value for our stockholders by enhancing our position as a leading source for alternative collision and mechanical repair products and to expand into other product lines and businesses that may benefit from our operating strengths. Certain 2017 acquisitions were completed to enable us to align our distribution model in the Benelux region.

When we identify potential acquisitions, we attempt to target companies with a leading market presence, an experienced management team and workforce that provides a fit with our existing operations, and strong cash flows. For certain of our acquisitions, we have identified cost savings and synergies as a result of integrating the company with our existing business that provide additional value to the combined entity. In many cases, acquiring companies with these characteristics will result in purchase prices that include a significant amount of goodwill.

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The following pro forma summary presents the effect of the businesses acquired during the nine months ended September 30, 2018 as though the businesses had been acquired as of January 1, 2017, and the businesses acquired during the year ended December 31, 2017 as though they had been acquired as of January 1, 2016. The pro forma adjustments are based upon unaudited financial information of the acquired entities (in thousands, except per share data):

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2018		2017			2018			2017
Revenue, as reported	$	3,122,378	$	2,465,800		$	8,873,893		$	7,267,054
Revenue of purchased businesses for the period prior to acquisition:
Stahlgruber	—		473,326			815,405			1,289,083
Other acquisitions	6,641		83,893			51,132			387,844
Pro forma revenue	$	3,129,019	$	3,023,019		$	9,740,430		$	8,943,981
Income from continuing operations, as reported (1)	$	134,480	$	122,381		$	445,109		$	414,104
Income from continuing operations of purchased businesses for the period prior to acquisition, and pro forma purchase accounting adjustments:
Stahlgruber	5,054		6,061			14,114			5,298
Other acquisitions	161		3,478			1,588			17,014
Acquisition related expenses, net of tax (2)	681		2,301			13,986			5,010
Pro forma income from continuing operations	140,376		134,221			474,797			441,426
Less: Pro forma net income attributable to noncontrolling interest	—		888			2,799			2,157
Pro forma income from continuing operations attributable to LKQ stockholders	$	140,376	$	133,333		$	471,998		$	439,269
Earnings per share from continuing operations, basic - as reported	$	0.42	$	0.40		$	1.42		$	1.34
Effect of purchased businesses for the period prior to acquisition:
Stahlgruber	0.02		0.02			0.05			0.02
Other acquisitions	0.00		0.01			0.01			0.06
Acquisition related expenses, net of tax (2)	0.00		0.01			0.04			0.02
Impact of share issuance from acquisition of Stahlgruber	—		(0.01		)	(0.02		)	(0.03		)
Pro forma earnings per share from continuing operations, basic (3)	0.44		0.42			1.49			1.39
Less: Pro forma net income attributable to noncontrolling interest	—		0.00			0.01			0.01
Pro forma income from continuing operations attributable to LKQ stockholders	$	0.44	$	0.42		$	1.49		$	1.39
Earnings per share from continuing operations, diluted - as reported	$	0.42	$	0.39		$	1.41		$	1.33
Effect of purchased businesses for the period prior to acquisition:
Stahlgruber	0.02		0.02			0.04			0.02
Other acquisitions	0.00		0.01			0.01			0.05
Acquisition related expenses, net of tax (2)	0.00		0.01			0.04			0.02
Impact of share issuance from acquisition of Stahlgruber	—		(0.01		)	(0.02		)	(0.03		)
Pro forma earnings per share from continuing operations, diluted (3)	0.44		0.42			1.49			1.39
Less: Pro forma net income attributable to noncontrolling interest	—		0.00			0.01			0.01
Pro forma income from continuing operations attributable to LKQ stockholders	$	0.44	$	0.42		$	1.48		$	1.38

(1) Includes interest expense for the period from April 9, 2018 through September 30, 2018 recorded on the senior notes issued in connection with our acquisition of Stahlgruber.

(2) Includes expenses related to acquisitions closed in the period and excludes expenses for acquisitions not yet completed.

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(3) The sum of the individual earnings per share amounts may not equal the total due to rounding.

Unaudited pro forma supplemental information is based upon accounting estimates and judgments that we believe are reasonable. The unaudited pro forma supplemental information includes the effect of purchase accounting adjustments, such as the adjustment of inventory acquired to fair value, adjustments to depreciation on acquired property, plant and equipment, adjustments to rent expense for above or below market leases, adjustments to amortization on acquired intangible assets, adjustments to interest expense, and the related tax effects. The pro forma impact of our acquisitions also reflects the elimination of acquisition related expenses, net of tax. Refer to Note 6, "Restructuring and Acquisition Related Expenses," for further information regarding our acquisition related expenses. The pro forma information also includes the impact of the common stock issued to Stahlgruber as if it were issued on January 1, 2017. These pro forma results are not necessarily indicative of what would have occurred if the acquisitions had been in effect for the periods presented or of future results.

Note 3. Discontinued Operations

On March 1, 2017, LKQ completed the sale of the glass manufacturing business of its PGW subsidiary to a subsidiary of Vitro S.A.B. de C.V. ("Vitro") for a sales price of $301 million, including cash received of $316 million, net of cash disposed of $15 million. Related to this transaction, the remaining portion of the Glass operating segment was combined with our Wholesale - North America operating segment, which is part of our North America reportable segment, in the first quarter of 2017. See Note 16, "Segment and Geographic Information" for further information regarding our segments.

In connection with the Stock and Asset Purchase Agreement, the Company and Vitro entered into a twelve-month Transition Services Agreement commencing on the transaction date with two six-month renewal periods, a three-year Purchase and Supply Agreement, and an Intellectual Property Agreement.

The following table summarizes the operating results of the Company’s discontinued operations related to the sale described above for the nine months ended September 30, 2017, as presented in Net loss from discontinued operations on the Unaudited Condensed Consolidated Statements of Income (in thousands):

	Nine Months Ended
	September 30, 2017
Revenue	$	111,130
Cost of goods sold	100,084
Selling, general and administrative expenses	8,369
Operating income	2,677
Interest and other income, net (1)	1,204
Income from discontinued operations before taxes	3,881
Provision for income taxes	3,598
Equity in loss of unconsolidated subsidiaries	(534		)
Loss from discontinued operations, net of tax	(251		)
Loss on sale of discontinued operations, net of tax (2)	(4,280		)
Net loss from discontinued operations	$	(4,531	)

(1) The Company elected to allocate interest expense to discontinued operations based on the expected debt to be repaid. Under this approach, allocated interest from January 1, 2017 through the date of sale was $2 million. This expense was offset by foreign currency gains.

(2) In the first quarter of 2017, upon closing of the sale and write-off of the net assets of the glass manufacturing business, we recorded a pre-tax loss on sale of $9 million, and a $4 million tax benefit. The incremental loss primarily reflects a $6 million payable for intercompany sales from the glass manufacturing business to the aftermarket automotive glass distribution business incurred prior to closing, which was paid by LKQ during the second quarter of 2017, and capital expenditures in 2017 that were not reimbursed by the buyer.

The glass manufacturing business had $4 million of operating cash outflows, $4 million of investing cash outflows mainly consisting of capital expenditures, and $15 million of financing cash inflows made up of parent financing for the period from January 1, 2017 through March 1, 2017.

Pursuant to the Purchase and Supply Agreement, our aftermarket automotive glass distribution business will source various products from Vitro's glass manufacturing business annually for a three-year period beginning on March 1, 2017. Between January 1, 2017 and the sale date of March 1, 2017, intercompany sales between the glass manufacturing business and the continuing aftermarket automotive glass distribution business of PGW, which were eliminated in consolidation, were $8

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million. All purchases from Vitro, including those outside of the Purchase and Supply Agreement, were $4 million and $22 million for the three and nine months ended September 30, 2018, respectively, and were $10 million and $27 million for the three months ended September 30, 2017 and the period between the sale date of March 1, 2017 and September 30, 2017, respectively.

Note 4. Financial Statement Information

Allowance for Doubtful Accounts

We have a reserve for uncollectible accounts, which was approximately $63 million and $58 million at September 30, 2018 and December 31, 2017, respectively. Our May 2018 acquisition of Stahlgruber contributed $3 million to our reserve for uncollectible accounts. See Note 2, "Business Combinations" for further information on our acquisitions.

Inventories

Inventories consist of the following (in thousands):

	September 30,		December 31,
	2018		2017
Aftermarket and refurbished products	$	2,287,776	$	1,877,653
Salvage and remanufactured products	484,761		487,108
Manufactured products	22,357		16,022
Total inventories	$	2,794,894	$	2,380,783

    Aftermarket and refurbished products and salvage and remanufactured products are primarily composed of finished goods. As of September 30, 2018, manufactured products inventory was composed of $16 million of raw materials, $2 million of work in process, and $4 million of finished goods. As of December 31, 2017, manufactured products inventory was composed of $10 million of raw materials, $2 million of work in process, and $4 million of finished goods.

Our May 2018 acquisition of Stahlgruber contributed $374 million to our aftermarket and refurbished products inventory. See Note 2, "Business Combinations" for further information on our acquisitions.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized. Construction in progress consists primarily of building and land improvements at our existing facilities. Depreciation is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term of the related lease and reasonably assured renewal periods, if shorter.

Our estimated useful lives are as follows:

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

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Property, plant and equipment consists of the following (in thousands):

	September 30,			December 31,
	2018			2017
Land and improvements	$	189,404		$	137,790
Buildings and improvements	373,607			233,078
Machinery and equipment	618,209			521,526
Computer equipment and software	142,719			133,753
Vehicles and trailers	177,778			161,269
Furniture and fixtures	52,595			31,794
Leasehold improvements	283,603			257,506
	1,837,915			1,476,716
Less—Accumulated depreciation	(691,086		)	(606,112		)
Construction in progress	54,174			42,485
Total property, plant and equipment, net	$	1,201,003		$	913,089

The components of opening property, plant and equipment acquired as part of our acquisition of Stahlgruber in May 2018 are as follows (in thousands):

	Gross Amount
Land and improvements	$	47,281
Buildings and improvements	125,649
Machinery and equipment	49,384
Computer equipment and software	3,760
Vehicles and trailers	643
Furniture and fixtures	28,535
Leasehold improvements	1,890
	257,142
Construction in progress	3,519
Total property, plant and equipment	$	260,661

We record depreciation expense associated with our refurbishing, remanufacturing, manufacturing and furnace operations as well as our distribution centers in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. All other depreciation expense is reported in Depreciation and amortization. Total depreciation expense for the three and nine months ended September 30, 2018 was $39 million and $115 million, respectively, and $34 million and $93 million during the three and nine months ended September 30, 2017, respectively.

Intangible Assets

Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer and supplier relationships, software and other technology related assets, and covenants not to compete.

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The changes in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2018 are as follows (in thousands):

	North America			Europe			Specialty			Total
Balance as of January 1, 2018	$	1,709,354		$	1,414,898		$	412,259		$	3,536,511
Business acquisitions and adjustments to previously recorded goodwill	1,073			1,002,277			(5,720		)	997,630
Exchange rate effects	(3,049		)	(55,901		)	75			(58,875		)
Balance as of September 30, 2018	$	1,707,378		$	2,361,274		$	406,614		$	4,475,266

During the nine months ended September 30, 2018, we recorded $929 million of goodwill related to our acquisition of Stahlgruber. See Note 2, "Business Combinations" for further information on our acquisitions.

The components of other intangibles, net are as follows (in thousands):

	September 30, 2018		December 31, 2017
Intangible assets subject to amortization	$	872,072	$	664,969
Indefinite-lived intangible assets
Trademarks	81,300		78,800
Total	$	953,372	$	743,769

The components of intangible assets subject to amortization are as follows (in thousands):

	September 30, 2018							December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Trade names and trademarks	$	495,839	$	(88,805	)	$	407,034	$	327,332	$	(75,095	)	$	252,237
Customer and supplier relationships	586,221		(223,085		)	363,136		510,113		(167,532		)	342,581
Software and other technology related assets	172,391		(73,760		)	98,631		124,049		(59,081		)	64,968
Covenants not to compete	13,488		(10,217		)	3,271		14,981		(9,798		)	5,183
Total	$	1,267,939	$	(395,867	)	$	872,072	$	976,475	$	(311,506	)	$	664,969

The components of intangible assets acquired as part of our acquisitions in 2018 are as follows (in thousands):

	Nine Months Ended
	September 30, 2018
	Stahlgruber		Other Acquisitions		Total
Trade names and trademarks	$	173,946	$	2,895	$	176,841
Customer and supplier relationships	78,239		8,194		86,433
Software and other technology related assets	33,344		92		33,436
Total	$	285,529	$	11,181	$	296,710

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The weighted-average amortization periods for our intangible assets acquired during the nine months ended September 30, 2018 and the year ended December 31, 2017 are as follows (in years):

	Nine Months Ended			Year Ended
	September 30, 2018			December 31, 2017
	Stahlgruber	Other Acquisitions	Total	All Acquisitions
Trade names and trademarks	19.9	20.0	19.9	11.2
Customer and supplier relationships	3.0	9.6	3.6	18.6
Software and other technology related assets	6.8	6.0	6.8	11.1
Covenants not to compete	-	-	-	4.4
Total acquired finite-lived intangible assets	13.7	12.2	13.7	16.5

Our estimated useful lives for our finite-lived intangible assets are as follows:

	Method of Amortization	Useful Life
Trade names and trademarks	Straight-line	4-30 years
Customer and supplier relationships	Accelerated	3-20 years
Software and other technology related assets	Straight-line	3-15 years
Covenants not to compete	Straight-line	2-5 years

Amortization expense for intangibles was $42 million and $96 million during the three and nine months ended September 30, 2018, respectively, and $26 million and $74 million during the three and nine months ended September 30, 2017, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2022 is $40 million (for the remaining three months of 2018), $136 million, $104 million, $75 million and $62 million, respectively.

Investments in Unconsolidated Subsidiaries

Our investment in unconsolidated subsidiaries was $157 million and $208 million as of September 30, 2018 and December 31, 2017, respectively. On December 1, 2016, we acquired a 26.5% equity interest in Mekonomen AB ("Mekonomen") for an aggregate purchase price of $181 million. Headquartered in Stockholm, Sweden, Mekonomen is the leading independent car parts and service chain in the Nordic region of Europe, offering a range of products including spare parts and accessories for cars, and workshop services for consumers and businesses. As a result of the investment, we nominated two representatives for election to Mekonomen's board of directors; both representatives were subsequently elected to and continue to serve on the board of directors, including one as the chairman of the board. We are accounting for our interest in Mekonomen using the equity method of accounting, as our investment gives us the ability to exercise significant influence, but not control, over the investee. As of September 30, 2018, the book value of our investment in Mekonomen exceeded our share of the book value of Mekonomen's net assets by $64 million; this difference is primarily related to goodwill and the fair value of other intangible assets. We are recording our equity in the net earnings of Mekonomen on a one quarter lag. We recorded equity losses of $20 million and $18 million during the three and nine months ended September 30, 2018, respectively, and equity in earnings of $3 million and $5 million during the three and nine months ended September 30, 2017 related to our investment in Mekonomen, including adjustments to convert the results to GAAP and to recognize the impact of our purchase accounting adjustments. In May 2018 and May 2017, we received cash dividends of $8 million (SEK 67 million) and $7 million (SEK 67 million), respectively, related to our investment in Mekonomen.

On July 6, 2018, Mekonomen announced the acquisition of two automotive spare parts distributors in Denmark and Poland. The objective of the acquisition is to strengthen Mekonomen's position in the sale of automotive spare parts in northern Europe and to establish a strong market position in Denmark and Poland, where Mekonomen has no current operations. The acquisition is partially being financed by a rights issue with preferential rights for Mekonomen's existing shareholders, who were given the right to subscribe for four new Mekonomen shares per seven existing owned shares at a discounted share price. On October 5, 2018, we subscribed for our pro rata share in the rights issue giving us the right to acquire an additional $48 million of equity in Mekonomen at a discounted share price, retaining our 26.5% equity interest. We recorded a derivative instrument of $29 million in Other assets on our Unaudited Condensed Consolidated Balance Sheets, which represents our right to acquire Mekonomen shares at a discount. We are measuring the derivative instrument at fair value, and we recorded a $3 million gain on our fair value remeasurement during the three months ended September 30, 2018; the gain is recorded in Other income, net on the Unaudited Condensed Consolidated Statements of Income. In the fourth quarter, we will record an $8

16

million loss related to the settlement of the derivative instrument in October 2018 due to a decrease in the Mekonomen share price from the last day of the third quarter to the settlement date.

We evaluated our investment in Mekonomen for other-than-temporary impairment as of September 30, 2018, and concluded the decline in fair value was other-than-temporary due to a prolonged and significant stock price decrease. Therefore, we recognized an other-than-temporary impairment of $23 million, which represents the difference in the carrying value and the fair value of our investment in Mekonomen. The fair value of our investment in Mekonomen was determined using the Mekonomen share price as of September 30, 2018. The impairment charge is recorded in Equity in (losses) earnings of unconsolidated subsidiaries in our Unaudited Condensed Consolidated Statements of Income. Equity in losses and earnings from our investment in Mekonomen are reported in the Europe segment. As a result of the impairment charge, the Level 1 fair value of our equity investment in the publicly traded Mekonomen common stock at September 30, 2018 approximated the carrying value of $134 million.

Warranty Reserve

Some of our salvage mechanical products are sold with a standard six month warranty against defects. Additionally, some of our remanufactured engines are sold with a standard three year warranty against defects. We also provide a limited lifetime warranty for certain of our aftermarket products. These assurance-type warranties are not considered a separate performance obligation, and thus no transaction price is allocated to them. We record the warranty costs in Cost of goods sold on our Unaudited Condensed Consolidated Statements of Income. Our warranty reserve is calculated using historical claim information to project future warranty claims activity and is recorded within Other accrued expenses and Other noncurrent liabilities on our Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments.

The changes in the warranty reserve are as follows (in thousands):

Balance as of December 31, 2017	$	23,151
Warranty expense	33,670
Warranty claims	(31,980		)
Balance as of September 30, 2018	$	24,841

Recent Accounting Pronouncements

Adoption of New Revenue Standard

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). This update outlines a new comprehensive revenue recognition model that supersedes the prior revenue recognition guidance and requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB has issued several updates to ASU 2014-09, which collectively with ASU 2014-09, represent the FASB Accounting Standards Codification Topic 606 (“ASC 606”). On January 1, 2018, we adopted ASC 606 for all contracts using the modified retrospective method, which means the historical periods are presented under the previous revenue standards with the cumulative net income effect being adjusted through retained earnings.

Most of the changes resulting from our adoption of ASC 606 were changes in presentation within the Unaudited Condensed Consolidated Balance Sheets and the Unaudited Condensed Consolidated Statements of Income. Therefore, while we made adjustments to certain opening balances on our January 1, 2018 balance sheet, we made no adjustments to opening retained earnings. We expect the impact of the adoption of ASC 606 to be immaterial to our net income on an ongoing basis. See Note 5, "Revenue Recognition" for the required disclosures under ASC 606.

With the adoption of ASC 606, we reclassified certain amounts related to variable consideration. Under ASC 606, we are required to present a refund liability and a returns asset within the Unaudited Condensed Consolidated Balance Sheet, whereas in periods prior to adoption, we presented the estimated margin impact of expected returns as a contra-asset within accounts receivable. Additionally, under ASC 606, the changes in the refund liability are reported in revenue, and the changes in the returns assets are reported in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. Prior to adoption, the change in the reserve for returns was generally reported as a net amount within revenue. As a result, the income statement presentation was adjusted concurrently with the balance sheet change beginning in 2018.

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The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 was as follows (in thousands):

	Balance as of December 31, 2017		Adjustments Due to ASC 606		Balance as of January 1, 2018
Balance Sheet
Assets
Accounts receivable	$	1,027,106	$	38,511	$	1,065,617
Prepaid expenses and other current assets	134,479		44,508		178,987
Liabilities
Refund liability	—		83,019		83,019

The impact of the adoption of ASC 606 on our Unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 and our Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2018 was as follows (in thousands):

	Balance as of September 30, 2018
	As Reported		Amounts Without Adoption of ASC 606		Effect of Change Higher/(Lower)
Balance Sheet
Assets
Accounts receivable	$	1,255,876	$	1,205,833	$	50,043
Prepaid expenses and other current assets	200,944		144,255		56,689
Liabilities
Refund liability	106,732		—		106,732

	For the three months ended September 30, 2018
	As Reported		Amounts Without Adoption of ASC 606		Effect of Change Higher/(Lower)
Income Statement
Revenue	$	3,122,378	$	3,123,468	$	(1,090	)
Cost of goods sold	1,925,180		1,925,107		73
Selling, general and administrative expenses	879,150		880,313		(1,163		)

	For the nine months ended September 30, 2018
	As Reported		Amounts Without Adoption of ASC 606		Effect of Change Higher/(Lower)
Income Statement
Revenue	$	8,873,893	$	8,882,558	$	(8,665	)
Cost of goods sold	5,460,845		5,467,061		(6,216		)
Selling, general and administrative expenses	2,472,085		2,474,534		(2,449		)

We have not included a table of the impact of the balance sheet adjustments on the Unaudited Condensed Consolidated Statement of Cash Flows as the adjustment will net to zero within the operating activities section of this statement.

Under ASC 606, we have elected not to adjust consideration for the effect of a significant financing component at contract inception if the period between the transfer of goods to the customer and payment received from the customer is one year or less. Generally, our payment terms are short term in nature, but in some instances we may offer extended terms to customers exceeding one year such that interest would be accrued with respect to those contracts. The interest that would be accrued related to these contracts is immaterial at September 30, 2018.

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Under ASC 340, "Other Assets and Deferred Costs," we have elected to recognize incremental costs of obtaining a contract (commissions earned by our sales representatives on product sales) as an expense when incurred, as we believe the amortization period of the asset would be one year or less due to the short-term nature of our contracts.

Other Recently Adopted Accounting Pronouncements

During the first quarter of 2018, we adopted ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which changes how entities will recognize, measure, present and make disclosures about certain financial assets and financial liabilities. The adoption of ASU 2016-01 did not have a significant impact on our financial position, results of operations, cash flows or disclosures.

During the first quarter of 2018, we adopted ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"), which includes guidance on classification for the following items: debt prepayment or debt extinguishment costs, settlement of zero coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and corporate-owned or bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and other separately identifiable cash flows where application of the predominance principle is prescribed. No adjustments were required in our Unaudited Condensed Consolidated Statement of Cash Flows upon adoption. Within our Unaudited Condensed Consolidating Statements of Cash Flows in Note 18, "Condensed Consolidating Financial Information," we now present a new line item, Payments of deferred purchase price on receivables securitization, as a result of adopting ASU 2016-15; prior year cash flow information within this footnote has been recast to reflect the impact of adopting this accounting standard. Other than the addition of this new line item, there was no impact to our Unaudited Condensed Consolidating Statements of Cash Flows upon adoption.

During the first quarter of 2018, we adopted ASU No. 2017-01, "Clarifying the Definition of a Business" (“ASU 2017-01”), which requires an evaluation of whether substantially all of the fair value of assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the transaction does not qualify as a business. The guidance also requires an acquired business to include at least one substantive process and narrows the definition of outputs.  The adoption of ASU 2017-01 did not have a material impact on our unaudited condensed consolidated financial statements.

During the first quarter of 2018, we adopted ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02"), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the reduction of the U.S. federal statutory income tax rate to 21% from 35% due to the enactment of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). In addition, under ASU 2018-02, an entity is required to provide certain disclosures regarding stranded tax effects. ASU 2018-02 is effective for fiscal years and interim periods beginning after December 15, 2018; early adoption is permitted. As a result of the adoption of ASU 2018-02, we recorded a $5 million reclassification to increase Accumulated Other Comprehensive (Loss) Income and decrease Retained Earnings.

During the first quarter of 2018, we adopted ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" ("ASU 2017-07"), which requires presentation of the current service cost component of net periodic benefit expense with other current compensation expenses for the related employees, and requires presentation of the remaining components of net periodic benefit expense, such as interest, expected return on plan assets, and amortization of actuarial gains and losses, outside of operating income. ASU 2017-07 also specifies that, on a prospective basis, only the service cost component is eligible for capitalization into inventory or other assets. While the income statement classification provisions of ASU 2017-07 are applicable on a retrospective basis, due to the immaterial impact to our Unaudited Condensed Consolidated Statements of Income in prior periods, we did not recast prior period income statement information and adopted the classification provisions on a prospective basis. The change in the capitalization provisions under ASU 2017-07 did not have a material impact on our unaudited condensed consolidated financial statements. See Note 13, "Employee Benefit Plans," for further disclosure on the components of net periodic benefit expense and classification of the components within our Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2018 and 2017.

During the third quarter of 2018, the FASB issued ASU No. 2018-15, "Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" ("ASU 2018-15"). This update requires an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. ASU 2018-15 is effective for fiscal years and interim periods beginning after December 15, 2019; early adoption is permitted. We have adopted ASU 2018-15 in the third quarter of 2018 as we believe that our existing policy is consistent with the new guidance and thus no adjustments were required to be in compliance with this standard update.

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Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, "Leases" ("ASU 2016-02"), to increase transparency and comparability by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between current GAAP and ASU 2016-02 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current GAAP. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The standard requires that entities apply the effects of these changes using a modified retrospective approach, which includes a number of optional practical expedients. While we are still in the process of quantifying the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements and related disclosures, we anticipate the adoption will materially affect our consolidated balance sheet and disclosures, as the majority of our operating leases will be recorded on the balance sheet under ASU 2016-02. While we do not anticipate the adoption of this accounting standard to have a material impact on our consolidated statements of income at this time, this conclusion may change as we finalize our assessment. In order to assist in our timely implementation of the new standard, we have purchased new software to track our leases. We have engaged a third party to assist with the implementation of the new software with an expectation to complete the implementation by the end of 2018. During the second quarter, we completed phase one of the software roll-out for our North America and Specialty operations. We are nearing completion of the phase one roll-out in our Europe operations as of the filing date of this Quarterly Report on Form 10-Q.

In August 2017, the FASB issued ASU No. 2017-12, "Targeted Improvements to Accounting for Hedging Activities" ("ASU 2017-12"), which amends the hedge accounting recognition and presentation requirements in ASC 815 ("Derivatives and Hedging"). ASU 2017-12 significantly alters the hedge accounting model by making it easier for an entity to achieve and maintain hedge accounting and provides for accounting that better reflects an entity's risk management activities. ASU 2017-12 is effective for fiscal years and interim periods beginning after December 15, 2018; early adoption is permitted. Entities will adopt the provisions of ASU 2017-12 by applying a modified retrospective approach to existing hedging relationships as of the adoption date. At this time, we are still evaluating the impact of this standard on our financial statements.

In August 2018, the FASB issued ASU No. 2018-13, "Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement" ("ASU 2018-13"), which removes, modifies, and adds certain disclosure requirements in ASC 820. ASU 2018-13 is effective for fiscal years and interim periods beginning after December 15, 2019; early adoption is permitted. We are in the process of evaluating the impact of this standard on our disclosures but do not believe that it will have a material impact.

In August 2018, the FASB issued ASU No. 2018-14, "Disclosure Framework- Changes to the Disclosure Requirements for Defined Benefit Plans" ("ASU 2018-14"), which removes, modifies, and adds certain disclosure requirements to ASC 715-20. ASU 2018-14 is effective for fiscal years and interim periods beginning after December 15, 2020; early adoption is permitted. We are in the process of evaluating the impact of this standard on our disclosures.

Note 5. Revenue Recognition

The core principle of ASC 606is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASC 606 defines a five-step process to achieve this core principle, which includes:

1. Identifying contracts with customers,

2. Identifying performance obligations within those contracts,

3. Determining the transaction price,

4. Allocating the transaction price to the performance obligations in the contract, which may include an estimate of variable consideration, and

5. Recognizing revenue when or as each performance obligation is satisfied.

The majority of our revenue is derived from the sale of vehicle parts. Under both the previous revenue standards and ASC 606, we recognize revenue when the products are shipped to, delivered to or picked up by customers and title has transferred.

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Sources of Revenue

We report our revenue in two categories: (i) parts and services and (ii) other. The following table sets forth our revenue by category, with our parts and services revenue further disaggregated by reportable segment (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
North America	$	1,109,067	$	1,051,470	$	3,447,074	$	3,207,001
Europe	1,464,049		952,765		3,781,091		2,659,804
Specialty	388,865		329,522		1,151,172		1,005,776
Parts and services	2,961,981		2,333,757		8,379,337		6,872,581
Other	160,397		132,043		494,556		394,473
Total revenue	$	3,122,378	$	2,465,800	$	8,873,893	$	7,267,054

Parts and Services

Our parts revenue is generated from the sale of vehicle products including replacement parts, components and systems used in the repair and maintenance of vehicles and specialty products and accessories to improve the performance, functionality and appearance of vehicles. Services revenue includes additional services that are generally billed concurrently with the related product sales, such as the sale of service-type warranties and fees for admission to our self service yards.

In North America, our vehicle replacement products include sheet metal collision parts such as doors, hoods, and fenders; bumper covers; head and tail lamps; automotive glass products such as windshields; mirrors and grilles; wheels; and large mechanical items such as engines and transmissions. In Europe, our products include a wide variety of small mechanical products such as brake pads, discs and sensors; clutches; electrical products such as spark plugs and batteries; steering and suspension products; filters; and oil and automotive fluids. In our Specialty operations, we serve six product segments: truck and off-road; speed and performance; RV; towing; wheels, tires and performance handling; and miscellaneous accessories. 

Our service-type warranties typically have service periods ranging from 6 months to 36 months. Under ASC 606, proceeds from these service-type warranties are deferred at contract inception and amortized on a straight-line basis to revenue over the contract period. The changes in deferred service-type warranty revenue are as follows (in thousands):

Balance as of January 1, 2018	$	19,465
Additional warranty revenue deferred	28,889
Warranty revenue recognized	(25,200		)
Balance as of September 30, 2018	$	23,154

Other Revenue

Revenue from other sources includes scrap sales, bulk sales to mechanical manufacturers (including cores) and sales of aluminum ingots and sows from our furnace operations. We derive scrap metal from several sources, including vehicles that have been used in both our wholesale and self service recycling operations and from OEMs and other entities that contract with us for secure disposal of "crush only" vehicles. The sale of hulks in our wholesale and self service recycling operations represents one performance obligation, and revenue is recognized based on a price per weight when the customer (processor) collects the scrap. Some adjustments may occur when the customer weighs the scrap at their location, and revenue is adjusted accordingly. We constrain our estimate of consideration to be received to the extent that we believe there will be a significant reversal in revenue.

Revenue by Geographic Area

See Note 16, "Segment and Geographic Information" for information related to our revenue by geographic region.

Variable Consideration

The amount of revenue ultimately received from the customer can vary due to variable consideration which includes returns, discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, or other similar items. The previous revenue guidance required us to estimate the transaction price using a best estimate approach. Under ASC 606we are required to select the “expected value method” or the “most likely amount” method in order to estimate variable consideration. We utilize both methods in practice depending on the type of variable consideration. In addition, our estimates of variable

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consideration are constrained to the extent that a significant reversal in revenue is expected. We recorded a refund liability and return asset for expected returns of $107 million and $57 million, respectively, as of September 30, 2018 and a net reserve of $38 million as of December 31, 2017. The refund liability is presented separately on the balance sheet within current liabilities while the return asset is presented within prepaid expenses and other current assets. Other types of variable consideration consist primarily of discounts, volume rebates, and other customer sales incentives which are recorded in Receivables, net on the Unaudited Condensed Consolidated Balance Sheets. We recorded a reserve for our variable consideration of $114 million and $78 million as of September 30, 2018 and December 31, 2017, respectively. While other customer incentive programs exist, we characterize them as material rights in the context of our sales transactions. We consider these programs to be immaterial to our consolidated financial statements.

Note 6. Restructuring and Acquisition Related Expenses

Acquisition Related Expenses

Acquisition related expenses, which include external costs such as legal, accounting and advisory fees, totaled $1 million and $17 million for the three and nine months ended September 30, 2018, respectively. Our 2018 expenses primarily consisted of external costs related to our acquisition of Stahlgruber totaling $1 million and $15 million for the three and nine months ended September 30, 2018, respectively. The remaining acquisition related costs related to (i) completed acquisitions, (ii) pending acquisitions as of September 30, 2018, and (iii) potential acquisitions that were terminated.     

Acquisition related expenses for the three and nine months ended September 30, 2017 totaled $3 million and $8 million, respectively. Our 2017 expenses related to completed acquisitions and acquisitions that were pending as of September 30, 2017.

Acquisition Integration Plans and Restructuring

During the three and nine months endedSeptember 30, 2018, we incurred $5 million and $10 million of restructuring expenses, respectively. Restructuring expenses for the three months ended September 30, 2018 primarily consisted of $4 million related to the integration of our acquisition of Andrew Page and $1 million related to our Specialty segment; restructuring expenses for the nine months ended September 30, 2018 primarily consisted of $8 million related to the integration of our acquisition of Andrew Page and $2 million related to our Specialty segment. These integration activities included the closure of duplicate facilities and termination of employees.

During each of the three and nine months endedSeptember 30, 2017, we incurred $2 million of restructuring expenses, primarily related to the ongoing integration activities in our Specialty segment. Expenses incurred were primarily related to facility closures and the merger of existing facilities into larger distribution centers.

We expect to incur additional expenses related to the integration of certain of our acquisitions into our existing operations in 2018 and 2019. These integration activities are expected to include the closure of duplicate facilities, rationalization of personnel in connection with the consolidation of overlapping facilities with our existing business, and moving expenses. Future expenses to complete these integration plans are expected to be less than $10 million.

Note 7. Stock-Based Compensation

In order to attract and retain employees, non-employee directors, consultants, and other persons associated with us, we may grant qualified and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares and performance units under the LKQ Corporation 1998 Equity Incentive Plan (the “Equity Incentive Plan”). We have granted RSUs, stock options, and restricted stock under the Equity Incentive Plan. We expect to issue new or treasury shares of common stock to cover past and future equity grants.

RSUs

RSUs vest over periods of up to five years, subject to a continued service condition. Currently outstanding RSUs contain either a time-based vesting condition or a combination of a performance-based vesting condition and a time-based vesting condition, in which case both conditions must be met before any RSUs vest. For most of the RSUs containing a performance-based vesting condition, the Company must report positive diluted earnings per share, subject to certain adjustments, during any fiscal year period within five years following the grant date; we have an immaterial amount of RSUs containing other performance-based vesting conditions. Each RSU converts into one share of LKQ common stock on the applicable vesting date. The grant date fair value of RSUs is based on the market price of LKQ stock on the grant date.

The fair value of RSUs that vested during the nine months ended September 30, 2018 was $27 million.

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The following table summarizes activity related to our RSUs under the Equity Incentive Plan for the nine months ended September 30, 2018:

	Number Outstanding		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value    (in thousands) (1)
Unvested as of January 1, 2018	1,624,390		$	29.94
Granted	601,802		$	42.58
Vested	(698,903	)	$	30.07
Forfeited / Canceled	(33,767	)	$	33.28
Unvested as of September 30, 2018	1,493,522		$	34.89
Expected to vest after September 30, 2018	1,344,519		$	34.88	2.6	$	42,581

(1)The aggregate intrinsic value of expected to vest RSUs represents the total pretax intrinsic value (the fair value of the Company's stock on the last day of each period multiplied by the number of units) that would have been received by the holders had all RSUs vested. This amount changes based on the market price of the Company’s common stock.

Stock Options

Stock options vest over periods of up to five years, subject to a continued service condition. Stock options expire either six or ten years from the date they are granted. No options were granted during the nine months ended September 30, 2018. No options vested during the nine months ended September 30, 2018; all of our outstanding options are fully vested.

The following table summarizes activity related to our stock options under the Equity Incentive Plan for the nine months ended September 30, 2018:

	Number Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value    (in thousands) (1)
Balance as of January 1, 2018	1,738,073		$	9.20
Exercised	(441,495	)	$	8.54		$	12,678
Canceled	(509	)	$	32.31
Balance as of September 30, 2018	1,296,069		$	9.42	1.0	$	28,862
Exercisable as of September 30, 2018	1,296,069		$	9.42	1.0	$	28,862

(1) The aggregate intrinsic value of outstanding and exercisable options represents the total pretax intrinsic value (the difference between the fair value of the Company's stock on the last day of each period and the exercise price, multiplied by the number of options where the fair value exceeds the exercise price) that would have been received by the option holders had all option holders exercised their options as of the last day of the period indicated. This amount changes based on the market price of the Company’s common stock.

Stock-Based Compensation Expense

Pre-tax stock-based compensation expense for RSUs totaled $6 million and $18 million for the three and nine months ended September 30, 2018, respectively, and $5 million and $18 million for the three and nine months ended September 30, 2017, respectively. As of September 30, 2018, unrecognized compensation expense related to unvested RSUs is $40 million. Stock-based compensation expense related to these awards will be different to the extent that forfeitures are realized.

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Note 8. Earnings Per Share

The following chart sets forth the computation of earnings per share (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Income from continuing operations	$	134,480	$	122,381	$	445,109	$	414,104
Denominator for basic earnings per share—Weighted-average shares outstanding	318,082		308,909		313,417		308,451
Effect of dilutive securities:
RSUs	333		485		452		501
Stock options	987		1,385		1,082		1,543
Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding	319,402		310,779		314,951		310,495
Basic earnings per share from continuing operations	$	0.42	$	0.40	$	1.42	$	1.34
Diluted earnings per share from continuing operations	$	0.42	$	0.39	$	1.41	$	1.33

The following table sets forth the number of employee stock-based compensation awards outstanding but not included in the computation of diluted earnings per share because their effect would have been antidilutive for the three and nine months ended September 30, 2018 and 2017 (in thousands):

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2018	2017	2018	2017
Antidilutive securities:
RSUs	375	—	317	50
Stock options	—	—	—	51

Note 9. Accumulated Other Comprehensive Income (Loss)

The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):

	Three Months Ended
	September 30, 2018
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive Income from Unconsolidated Subsidiaries		Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(125,753	)	$	19,684		$	(10,200	)	$	208	$	(116,061	)
Pretax (loss) income	(23,405		)	7,681			1,217			—		(14,507		)
Income tax effect	2,454			(1,796		)	41			—		699
Reclassification of unrealized (gain) loss	—			(7,284		)	21			—		(7,263		)
Reclassification of deferred income taxes	—			1,703			(5		)	—		1,698
Other comprehensive income from unconsolidated subsidiaries	—			—			—			643		643
Ending balance	$	(146,704	)	$	19,988		$	(8,926	)	$	851	$	(134,791	)

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	Three Months Ended
	September 30, 2017
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive Loss from Unconsolidated Subsidiaries			Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(157,353	)	$	10,324		$	(6,640	)	$	(601	)	$	(154,270	)
Pretax income (loss)	63,769			(15,402		)	—			—			48,367
Income tax effect	(4,151		)	5,683			—			—			1,532
Reclassification of unrealized loss (gain)	—			12,591			(200		)	—			12,391
Reclassification of deferred income taxes	—			(4,648		)	50			—			(4,598		)
Other comprehensive loss from unconsolidated subsidiaries	—			—			—			(1,034		)	(1,034		)
Ending balance	$	(97,735	)	$	8,548		$	(6,790	)	$	(1,635	)	$	(97,612	)

	Nine Months Ended
	September 30, 2018
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive (Loss) Income from Unconsolidated Subsidiaries			Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(71,933	)	$	11,538		$	(8,772	)	$	(1,309	)	$	(70,476	)
Pretax (loss) income	(82,137		)	33,901			(102		)	—			(48,338		)
Income tax effect	4,507			(7,926		)	(125		)	—			(3,544		)
Reclassification of unrealized (gain) loss	—			(26,117		)	97			—			(26,020		)
Reclassification of deferred income taxes	—			6,106			(24		)	—			6,082
Other comprehensive income from unconsolidated subsidiaries	—			—			—			2,160			2,160
Adoption of ASU 2018-02	2,859			2,486			—			—			5,345
Ending balance	$	(146,704	)	$	19,988		$	(8,926	)	$	851		$	(134,791	)

	Nine Months Ended
	September 30, 2017
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive Loss from Unconsolidated Subsidiaries			Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(272,529	)	$	8,091		$	(2,737	)	$	—		$	(267,175	)
Pretax income (loss)	177,434			(44,749		)	112			—			132,797
Income tax effect	(4,151		)	16,463			(43		)	—			12,269
Reclassification of unrealized loss (gain)	—			45,551			(921		)	—			44,630
Reclassification of deferred income taxes	—			(16,808		)	235			—			(16,573		)
Disposal of business, net	1,511			—			(3,436		)	—			(1,925		)
Other comprehensive loss from unconsolidated subsidiaries	—			—			—			(1,635		)	(1,635		)
Ending balance	$	(97,735	)	$	8,548		$	(6,790	)	$	(1,635	)	$	(97,612	)

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Net unrealized gains on our interest rate swaps totaling $2 million and $5 million were reclassified to Interest expense, net in our Unaudited Condensed Consolidated Statements of Income during the three and nine months ended September 30, 2018, respectively, compared to a loss of $1 million during the nine months ended September 30, 2017; the amount reclassified to Interest expense, net during the three months ended September 30, 2017 was immaterial. We also reclassified gains of $2 million to Interest expense, net related to the foreign currency forward component of our cross currency swaps during each of the three months ended September 30, 2018 and 2017, and gains of $6 million during each of the nine months ended September 30, 2018 and 2017. Also related to our cross currency swaps, we reclassified gains of $3 million and $15 million to Other income, net in our Unaudited Condensed Consolidated Statements of Income during the three and nine months ended September 30, 2018, respectively, compared to losses of $15 million and $50 million during the three and nine months ended September 30, 2017; these gains and losses offset the impact of the remeasurement of the underlying contracts. The deferred income taxes related to our cash flow hedges were reclassified from Accumulated other comprehensive income (loss) to provision for income taxes.

As a result of the adoption of ASU 2018-02 in the first quarter of 2018, we recorded a $5 million reclassification to increase Accumulated Other Comprehensive (Loss) Income and decrease Retained Earnings. See Note 4, "Financial Statement Information" for further information regarding the adoption of ASU 2018-02.

Note 10. Long-Term Obligations

Long-term obligations consist of the following (in thousands):

	September 30,			December 31,
	2018			2017
Senior secured credit agreement:
Term loans payable	$	590,000		$	704,800
Revolving credit facilities	1,183,626			1,283,551
U.S. Notes (2023)	600,000			600,000
Euro Notes (2024)	580,200			600,150
Euro Notes (2026/28)	1,160,400			—
Receivables securitization facility	100,000			100,000
Notes payable through May 2027 at weighted average interest rates of 1.5% and 1.4%, respectively	38,641			29,146
Other long-term debt at weighted average interest rates of 2.2% and 1.7%, respectively	151,502			110,633
Total debt	4,404,369			3,428,280
Less: long-term debt issuance costs	(31,251		)	(21,476		)
Less: current debt issuance costs	(4,616		)	(2,824		)
Total debt, net of debt issuance costs	4,368,502			3,403,980
Less: current maturities, net of debt issuance costs	(118,365		)	(126,360		)
Long term debt, net of debt issuance costs	$	4,250,137		$	3,277,620

Senior Secured Credit Agreement

On December 1, 2017, LKQ Corporation, LKQ Delaware LLP, and certain other subsidiaries (collectively, the "Borrowers") entered into Amendment No. 2 to the Fourth Amended and Restated Credit Agreement ("Credit Agreement"), which amended the Fourth Amended and Restated Credit Agreement dated January 29, 2016 by modifying certain terms to (1) extend the maturity date by approximately two years to January 29, 2023; (2) increase the total availability under the revolving credit facility's multicurrency component from $2.45 billion to $2.75 billion; (3) increase the permitted net leverage ratio thresholds, including a temporary step-up in the allowable net leverage ratio in the case of permitted acquisitions; (4) modify the applicable margins and fees in the pricing grid; (5) increase the ability of LKQ and its subsidiaries to incur additional indebtedness; and (6) make other immaterial or clarifying modifications and amendments. The increase in the revolving credit facility's multicurrency component of $300 million will be used for general corporate purposes.

Amounts under the revolving credit facility are due and payable upon maturity of the Credit Agreement on January 29, 2023. Term loan borrowings, which totaled $590 million as of September 30, 2018, are due and payable in quarterly installments equal to $9 million on the last day of each fiscal quarter ending on or after December 31, 2021, with the remaining balance due and payable on January 29, 2023. During the three months ended September 30, 2018, we prepaid our required quarterly installments through September 30, 2021.

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We are required to prepay the term loan by amounts equal to proceeds from the sale or disposition of certain assets if the proceeds are not reinvested within twelve months. We also have the option to prepay outstanding amounts under the Credit Agreement without penalty.

The Credit Agreement contains customary representations and warranties and customary covenants that provide limitations and conditions on our ability to enter into certain transactions. The Credit Agreement also contains financial and affirmative covenants, including limitations on our net leverage ratio and a minimum interest coverage ratio.

Borrowings under the Credit Agreement bear interest at variable rates, which depend on the currency and duration of the borrowing elected, plus an applicable margin. The applicable margin is subject to change in increments of 0.25% depending on our net leverage ratio. Interest payments are due on the last day of the selected interest period or quarterly in arrears depending on the type of borrowing. Including the effect of the interest rate swap agreements described in Note 11, "Derivative Instruments and Hedging Activities," the weighted average interest rates on borrowings outstanding under the Credit Agreement at both September 30, 2018 and December 31, 2017 was 2.2%. We also pay a commitment fee based on the average daily unused amount of the revolving credit facilities. The commitment fee is subject to change in increments of 0.025% and 0.05% depending on our net leverage ratio. In addition, we pay a participation commission on outstanding letters of credit at an applicable rate based on our net leverage ratio, and a fronting fee of 0.125% to the issuing bank, which are due quarterly in arrears.

Of the total borrowings outstanding under the Credit Agreement, there were no borrowings classified as current maturities at September 30, 2018 compared to $18 million at December 31, 2017. As of September 30, 2018, there were letters of credit outstanding in the aggregate amount of $65 million. The amounts available under the revolving credit facilities are reduced by the amounts outstanding under letters of credit, and thus availability under the revolving credit facilities at September 30, 2018 was $1.5 billion.

Related to the execution of Amendment No. 2 to the Fourth Amended and Restated Credit Agreement in December 2017, we incurred $5 million of fees, the majority of which were capitalized as an offset to Long-Term Obligations and are amortized over the term of the agreement.

U.S. Notes (2023)

In 2013, we issued $600 million aggregate principal amount of 4.75% senior notes due 2023 (the "U.S. Notes (2023)"). The U.S. Notes (2023) are governed by the Indenture dated as of May 9, 2013 (the "U.S. Notes (2023) Indenture") among LKQ Corporation, certain of our subsidiaries (the "Guarantors"), the trustee, paying agent, transfer agent and registrar. The U.S. Notes (2023) are registered under the Securities Act of 1933.

The U.S. Notes (2023) bear interest at a rate of 4.75% per year from the most recent payment date on which interest has been paid or provided for. Interest on the U.S. Notes (2023) is payable in arrears on May 15 and November 15 of each year. The U.S. Notes (2023) are fully and unconditionally guaranteed, jointly and severally, by the Guarantors.

The U.S. Notes (2023) and the related guarantees are, respectively, LKQ Corporation's and each Guarantor's senior unsecured obligations and are subordinated to all of the Guarantors' existing and future secured debt to the extent of the assets securing that secured debt. In addition, the U.S. Notes (2023) are effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the U.S. Notes (2023) to the extent of the assets of those subsidiaries.

Euro Notes (2024)

On April 14, 2016, LKQ Italia Bondco S.p.A. (“LKQ Italia”), an indirect, wholly-owned subsidiary of LKQ Corporation, completed an offering of €500 million aggregate principal amount of senior notes due April 1, 2024 (the “Euro Notes (2024)”) in a private placement conducted pursuant to Regulation S and Rule 144A under the Securities Act of 1933. The proceeds from the offering were used to repay a portion of the revolver borrowings under the Credit Agreement and to pay related fees and expenses. The Euro Notes (2024) are governed by the Indenture dated as of April 14, 2016 (the “Euro Notes (2024) Indenture”) among LKQ Italia, LKQ Corporation and certain of our subsidiaries (the “Euro Notes (2024) Subsidiaries”), the trustee, and the paying agent, transfer agent, and registrar.

The Euro Notes (2024) bear interest at a rate of 3.875% per year from the date of original issuance or from the most recent payment date on which interest has been paid or provided for. Interest on the Euro Notes (2024) is payable in arrears on April 1 and October 1 of each year. The Euro Notes (2024) are fully and unconditionally guaranteed by LKQ Corporation and the Euro Notes (2024) Subsidiaries (the "Euro Notes (2024) Guarantors").

The Euro Notes (2024) and the related guarantees are, respectively, LKQ Italia’s and each Euro Notes (2024) Guarantor’s senior unsecured obligations and are subordinated to all of LKQ Italia's and the Euro Notes (2024) Guarantors’ existing and future secured debt to the extent of the assets securing that secured debt. In addition, the Euro Notes (2024) are

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effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the Euro Notes (2024) to the extent of the assets of those subsidiaries. The Euro Notes (2024) have been listed on the ExtraMOT, Professional Segment of the Borsa Italia S.p.A. securities exchange and the Global Exchange Market of Euronext Dublin.

Euro Notes (2026/28)

On April 9, 2018, LKQ European Holdings B.V. ("LKQ Euro Holdings"), a wholly-owned subsidiary of LKQ Corporation, completed an offering of €1.0 billion aggregate principal amount of senior notes. The offering consisted of €750 million senior notes due 2026 (the "2026 notes") and €250 million senior notes due 2028 (the "2028 notes" and, together with the 2026 notes, the "Euro Notes (2026/28)") in a private placement conducted pursuant to Regulation S and Rule 144A under the Securities Act of 1933. The proceeds from the offering, together with borrowings under our senior secured credit facility, were or will be used to (i) finance a portion of the consideration paid for the Stahlgruber acquisition, (ii) for general corporate purposes and (iii) to pay related fees and expenses, including the refinancing of net financial debt. The Euro Notes (2026/28) are governed by the Indenture dated as of April 9, 2018 (the “Euro Notes (2026/28) Indenture”) among LKQ Euro Holdings, LKQ Corporation and certain of our subsidiaries (the “Euro Notes (2026/28) Subsidiaries”), the trustee, paying agent, transfer agent, and registrar.

The 2026 notes and 2028 notes bear interest at a rate of 3.625% and 4.125%, respectively, per year from the date of original issuance or from the most recent payment date on which interest has been paid or provided for. Interest on the Euro Notes (2026/28) is payable in arrears on April 1 and October 1 of each year, beginning on October 1, 2018. The Euro Notes (2026/28) are fully and unconditionally guaranteed by LKQ Corporation and the Euro Notes (2026/28) Subsidiaries (the "Euro Notes (2026/28) Guarantors").

The Euro Notes (2026/28) and the related guarantees are, respectively, LKQ Euro Holdings' and each Euro Notes (2026/28) Guarantor’s senior unsecured obligations and will be subordinated to all of LKQ Euro Holdings' and the Euro Notes (2026/28) Guarantors’ existing and future secured debt to the extent of the assets securing that secured debt. In addition, the Euro Notes (2026/28) are effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the Euro Notes (2026/28) to the extent of the assets of those subsidiaries. The Euro Notes (2026/28) have been listed on the Global Exchange Market of Euronext Dublin.

Related to the execution of the Euro Notes (2026/28) in April 2018, we incurred $16 million of fees, which were capitalized as an offset to Long-Term Obligations and are amortized over the term of the Euro Notes (2026/28).

Receivables Securitization Facility

On November 29, 2016, we amended the terms of our receivables securitization facility with The Bank of Tokyo-Mitsubishi UFJ, LTD. ("BTMU") to: (i) extend the term of the facility to November 8, 2019; (ii) increase the maximum amount available to $100 million; and (iii) make other clarifying and updating changes. Under the facility, LKQ sells an ownership interest in certain receivables, related collections and security interests to BTMU for the benefit of conduit investors and/or financial institutions for cash proceeds. Upon payment of the receivables by customers, rather than remitting to BTMU the amounts collected, LKQ retains such collections as proceeds for the sale of new receivables generated by certain of the ongoing operations of the Company.

The sale of the ownership interest in the receivables is accounted for as a secured borrowing in our Consolidated Balance Sheets, under which the receivables included in the program collateralize the amounts invested by BTMU, the conduit investors and/or financial institutions (the "Purchasers"). The receivables are held by LKQ Receivables Finance Company, LLC ("LRFC"), a wholly owned bankruptcy-remote special purpose subsidiary of LKQ, and therefore, the receivables are available first to satisfy the creditors of LRFC, including the Purchasers. Net receivables totaling $127 million and $144 million were collateral for the investment under the receivables facility as of September 30, 2018 and December 31, 2017, respectively.

Under the receivables facility, we pay variable interest rates plus a margin on the outstanding amounts invested by the Purchasers. The variable rates are based on (i) commercial paper rates, (ii) the London InterBank Offered Rate ("LIBOR"), or (iii) base rates, and are payable monthly in arrears. The commercial paper rate is the applicable variable rate unless conduit investors are not available to invest in the receivables at commercial paper rates. In such case, financial institutions will invest at the LIBOR rate or at base rates. We also pay a commitment fee on the excess of the investment maximum over the average daily outstanding investment, payable monthly in arrears. As of September 30, 2018, the interest rate under the receivables facility was based on commercial paper rates and was 3.1%. The outstanding balances of $100 million as of both September 30, 2018 and December 31, 2017 were classified as long-term on the Unaudited Condensed Consolidated Balance Sheets because we have the ability and intent to refinance these borrowings on a long-term basis.

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Note 11. Derivative Instruments and Hedging Activities

We are exposed to market risks, including the effect of changes in interest rates, foreign currency exchange rates and commodity prices. Under our current policies, we use derivatives to manage our exposure to variable interest rates on our senior secured debt and changing foreign exchange rates for certain foreign currency denominated transactions. We do not hold or issue derivatives for trading purposes.

Cash Flow Hedges

We hold interest rate swap agreements to hedge a portion of the variable interest rate risk on our variable rate borrowings under our Credit Agreement, with the objective of minimizing the impact of interest rate fluctuations and stabilizing cash flows. Under the terms of the interest rate swap agreements, we pay the fixed interest rate and receive payment at a variable rate of interest based on LIBOR for the respective currency of each interest rate swap agreement’s notional amount. The effective portion of changes in the fair value of the interest rate swap agreements is recorded in Accumulated Other Comprehensive Income (Loss) and is reclassified to interest expense when the underlying interest payment has an impact on earnings. The ineffective portion of changes in the fair value of the interest rate swap agreements is reported in interest expense. Our interest rate swap contracts have maturity dates ranging from January to June 2021. As of September 30, 2018, we held interest rate swap contracts representing $590 million of U.S. dollar-denominated debt.

From time to time, we may hold foreign currency forward contracts related to certain foreign currency denominated intercompany transactions, with the objective of minimizing the impact of fluctuating exchange rates on these future cash flows. Under the terms of the foreign currency forward contracts, we will sell the foreign currency in exchange for U.S. dollars at a fixed rate on the maturity dates of the contracts. The effective portion of the changes in fair value of the foreign currency forward contracts is recorded in Accumulated Other Comprehensive Income (Loss) and reclassified to other income, net when the underlying transaction has an impact on earnings.

In 2016, we entered into three cross currency swap agreements for a total notional amount of $422 million (€400 million). The notional amount steps down by €15 million annually through 2020 with the remainder maturing in January 2021. These cross currency swaps contain an interest rate swap component and a foreign currency forward contract component that, combined with related intercompany financing arrangements, effectively convert variable rate U.S. dollar-denominated borrowings into fixed rate euro-denominated borrowings. The swaps are intended to minimize the impact of fluctuating exchange rates and interest rates on the cash flows resulting from the related intercompany financing arrangements. The effective portion of the changes in the fair value of the derivative instruments is recorded in Accumulated Other Comprehensive Income (Loss) and is reclassified to interest expense, net when the underlying transactions have an impact on earnings.

In October 2018, we entered into two cross currency swap agreements for a total notional amount of $184 million (€160 million). Half of the notional amount matures in October 2019 with the remainder in October 2020. The purpose and accounting of the swaps are similar to those described in the previous paragraph.

The activity related to our cash flow hedges is presented in operating activities in our Unaudited Condensed Consolidated Statements of Cash Flows.

The following table summarizes the notional amounts and fair values of our designated cash flow hedges as of September 30, 2018 and December 31, 2017 (in thousands):

	Notional Amount				Fair Value at September 30, 2018 (USD)				Fair Value at December 31, 2017 (USD)
	September 30, 2018		December 31, 2017		Other Assets		Other Noncurrent Liabilities		Other Assets		Other Noncurrent Liabilities
Interest rate swap agreements
USD denominated	$	590,000	$	590,000	$	25,719	$	—	$	19,102	$	—
Cross currency swap agreements
USD/euro	$	394,649	$	406,546	10,881		49,212		5,504		61,492
Total cash flow hedges					$	36,600	$	49,212	$	24,606	$	61,492

While certain derivative instruments executed with the same counterparty are subject to master netting arrangements, we present our cash flow hedge derivative instruments on a gross basis in our Unaudited Condensed Consolidated Balance Sheets. The impact of netting the fair values of these contracts would result in a decrease to Other Assets and Other Noncurrent Liabilities on our Unaudited Condensed Consolidated Balance Sheets of $19 million and $12 million at September 30, 2018 and December 31, 2017, respectively.

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The activity related to our cash flow hedges is included in Note 9, "Accumulated Other Comprehensive Income (Loss)." Ineffectiveness related to our cash flow hedges was immaterial to our results of operations during each of the three and nine months endedSeptember 30, 2018 and 2017. We do not expect future ineffectiveness related to our cash flow hedges to have a material effect on our results of operations.

As of September 30, 2018, we estimate that $4 million of derivative gains (net of tax) included in Accumulated Other Comprehensive Income (Loss) will be reclassified into our Unaudited Condensed Consolidated Statements of Income within the next 12 months.

Other Derivative Instruments

During the third quarter of 2018, we recorded the fair value of a derivative instrument of $29 million in Other assets on our Unaudited Condensed Consolidated Balance Sheets related to our right to acquire Mekonomen shares at a discount. We are measuring the derivative instrument at fair value, and we recorded a $3 million gain on our fair value remeasurement during the three months ended September 30, 2018; the gain is recorded in Other income, net on the Unaudited Condensed Consolidated Statements of Income. In the fourth quarter, we will record an $8 million loss related to the settlement of the derivative instrument in October 2018 due to a decrease in the Mekonomen share price from the last day of the third quarter to the settlement date. Refer to Note 4, "Financial Statement Information," for more information on the derivative instrument.

We hold other short-term derivative instruments, including foreign currency forward contracts, to manage our exposure to variability related to inventory purchases and intercompany financing transactions denominated in a non-functional currency. We have elected not to apply hedge accounting for these transactions, and therefore the contracts are adjusted to fair value through our results of operations as of each balance sheet date, which could result in volatility in our earnings. The notional amount and fair value of these contracts at September 30, 2018 and December 31, 2017, along with the effect on our results of operations during each of the three and nine months endedSeptember 30, 2018 and 2017, were immaterial.

Note 12. Fair Value Measurements

Financial Assets and Liabilities Measured at Fair Value

We use the market and income approaches to estimate the fair value of our financial assets and liabilities, and during the three and nine months ended September 30, 2018, there were no significant changes in valuation techniques or inputs related to the financial assets or liabilities that we have historically recorded at fair value. The tiers in the fair value hierarchy include: Level 1, defined as observable inputs such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as significant unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation inputs we utilized to determine such fair value as of September 30, 2018 and December 31, 2017 (in thousands):

	Balance as of September 30, 2018		Fair Value Measurements as of September 30, 2018
			Level 1		Level 2		Level 3
Assets:
Cash surrender value of life insurance	$	53,691	$	—	$	53,691	$	—
Rights to acquire Mekonomen shares	28,683		—		28,683		—
Interest rate swaps	25,719		—		25,719		—
Cross currency swap agreements	10,881		—		10,881		—
Total Assets	$	118,974	$	—	$	118,974	$	—
Liabilities:
Contingent consideration liabilities	$	5,243	$	—	$	—	$	5,243
Deferred compensation liabilities	54,419		—		54,419		—
Cross currency swap agreements	49,212		—		49,212		—
Total Liabilities	$	108,874	$	—	$	103,631	$	5,243

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	Balance as of December 31, 2017		Fair Value Measurements as of December 31, 2017
			Level 1		Level 2		Level 3
Assets:
Cash surrender value of life insurance	$	45,984	$	—	$	45,984	$	—
Interest rate swaps	19,102		—		19,102		—
Cross currency swap agreements	5,504		—		5,504		—
Total Assets	$	70,590	$	—	$	70,590	$	—
Liabilities:
Contingent consideration liabilities	$	2,636	$	—	$	—	$	2,636
Deferred compensation liabilities	47,199		—		47,199		—
Cross currency swap agreements	61,492		—		61,492		—
Total Liabilities	$	111,327	$	—	$	108,691	$	2,636

The cash surrender value of life insurance and the derivative instrument related to Mekonomen are both included in Other assets on our Unaudited Condensed Consolidated Balance Sheets. The current portion of deferred compensation is included in Accrued payroll-related liabilities and the current portion of contingent consideration liabilities is included in Other current liabilities on our Unaudited Condensed Consolidated Balance Sheets; the noncurrent portion of these amounts is included in Other noncurrent liabilities on our Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments. The balance sheet classification of the interest rate swaps and cross currency swap agreements is presented in Note 11, "Derivative Instruments and Hedging Activities."

Our Level 2 assets and liabilities are valued using inputs from third parties and market observable data. We obtain valuation data for the cash surrender value of life insurance and deferred compensation liabilities from third party sources, which determine the net asset values for our accounts using quoted market prices, investment allocations and reportable trades. We valued the rights to acquire Mekonomen shares using the Mekonomen share price as of the last day of the period and the discounted share price under the rights issue. We value our other derivative instruments using a third party valuation model that performs a discounted cash flow analysis based on the terms of the contracts and market observable inputs such as current and forward interest rates and current and forward foreign exchange rates.

Our contingent consideration liabilities are related to our business acquisitions. Under the terms of the contingent consideration agreements, payments may be made at specified future dates depending on the performance of the acquired business subsequent to the acquisition. The liabilities for these payments are classified as Level 3 liabilities because the related fair value measurement, which is determined using an income approach, includes significant inputs not observable in the market.

Financial Assets and Liabilities Not Measured at Fair Value

Our debt is reflected on the Unaudited Condensed Consolidated Balance Sheets at cost. Based on market conditions as of September 30, 2018 and December 31, 2017, the fair value of our credit agreement borrowings reasonably approximated the carrying values of $1.8 billion and $2.0 billion, respectively. In addition, based on market conditions, the fair values of the outstanding borrowings under the receivables facility reasonably approximated the carrying values of $100 million at both September 30, 2018 and December 31, 2017. As of September 30, 2018 and December 31, 2017, the fair values of the U.S. Notes (2023) were approximately $601 million and $615 million, respectively, compared to a carrying value of $600 million. As of September 30, 2018 and December 31, 2017, the fair values of the Euro Notes (2024) were approximately $615 million and $658 million compared to carrying values of $580 million and $600 million, respectively. As of September 30, 2018, the fair value of the Euro Notes (2026/28) approximated the carrying value of $1.2 billion.

The fair value measurements of the borrowings under our credit agreement and receivables facility are classified as Level 2 within the fair value hierarchy since they are determined based upon significant inputs observable in the market, including interest rates on recent financing transactions with similar terms and maturities. We estimated the fair value by calculating the upfront cash payment a market participant would require at September 30, 2018 to assume these obligations. The fair value of our U.S. Notes (2023) is classified as Level 1 within the fair value hierarchy since it is determined based upon observable market inputs including quoted market prices in an active market. The fair values of our Euro Notes (2024) and Euro Notes (2026/28) are determined based upon observable market inputs including quoted market prices in markets that are not active, and therefore are classified as Level 2 within the fair value hierarchy.

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Note 13. Employee Benefit Plans

We have funded and unfunded defined benefit plans covering certain employee groups in the U.S. and various European countries. The defined benefit plans are generally frozen to new participants and, in some cases, existing participants no longer accrue benefits. As of September 30, 2018 and December 31, 2017, the aggregate funded status of the defined benefit plans was a liability of $111 million and $46 million, respectively, and is reported in Other noncurrent liabilities and Accrued payroll-related liabilities on our Unaudited Condensed Consolidated Balance Sheets. Of the liability at September 30, 2018, $75 million was related to our acquisition of Stahlgruber on May 30, 2018.

Net periodic benefit expense for our defined benefit plans included the following components for the three and nine months endedSeptember 30, 2018 and 2017 (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Service cost	$	628		$	1,126		$	1,612		$	2,902
Interest cost	996			750			2,442			2,091
Expected return on plan assets	(720		)	(507		)	(2,220		)	(1,059		)
Amortization of prior service credit	—			(71		)	—			(201		)
Amortization of actuarial (gain) loss	21			(129		)	97			(720		)
Net periodic benefit expense	$	925		$	1,169		$	1,931		$	3,013

For the three and nine months ended September 30, 2018, the service cost component of net periodic benefit expense was classified in Selling, general and administrative expenses, while the other components of net periodic benefit expense were classified in Other income, net in our Unaudited Condensed Consolidated Statements of Income. For the three and nine months ended September 30, 2017, all components of net periodic benefit expense were included in Selling, general, and administrative expenses in our Unaudited Condensed Consolidated Statements of Income.

During the nine months endedSeptember 30, 2018, we contributed $12 million to our pension plans. We estimate that contributions to our pension plans during the last three months of 2018 will be $1 million.

Note 14. Commitments and Contingencies

Operating Leases

We are obligated under noncancelable operating leases for corporate office space, warehouse and distribution facilities, trucks and certain equipment.

The future minimum lease commitments under these leases at September 30, 2018 are as follows (in thousands):

Three months ending December 31, 2018	$	72,780
Years ending December 31:
2019	271,642
2020	226,936
2021	179,921
2022	144,700
2023	122,149
Thereafter	689,583
Future Minimum Lease Payments	$	1,707,711

Litigation and Related Contingencies

We have certain contingencies resulting from litigation, claims and other commitments and are subject to a variety of environmental and pollution control laws and regulations incident to the ordinary course of business. We currently expect that the resolution of such contingencies will not materially affect our financial position, results of operations or cash flows.

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Note 15. Income Taxes

At the end of each interim period, we estimate our annual effective tax rate and apply that rate to our interim earnings. We also record the tax impact of certain unusual or infrequently occurring items, including changes in judgment about valuation allowances and the effects of changes in tax laws or rates, in the interim period in which they occur.

The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in state and foreign jurisdictions, permanent and temporary differences between book and taxable income, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the tax environment changes.    

Our effective income tax rate for the nine months ended September 30, 2018 was 25.2%, compared to 33.5% for the comparable prior year period. The decrease was primarily attributable to the reduction of the U.S. federal statutory income tax rate from 35% to 21% as a result of the enactment of the Tax Act in December 2017. Partially offsetting this decrease was a 1.0% increase in the effective income tax rate as a result of the Stahlgruber acquisition, including non-deductible interest and acquisition related expenses, as well as the higher effective tax rate in Germany. The effective tax rate also reflects the impact of net favorable discrete items of approximately $12 million and $8 million for the nine months ended September 30, 2018 and 2017, respectively. The net favorable discrete items are primarily composed of a $10 million favorable adjustment to the Tax Act transition tax for the nine months ended September 30, 2018, as well as $4 million and $7 million for the nine months ended September 30, 2018 and 2017, respectively, for excess tax benefits from stock-based payments. The year over year change in discrete items decreased the effective tax rate by 0.6% compared to the prior year.

Our acquisition of Stahlgruber in May 2018 contributed $98 million of deferred tax liabilities relating to intangible assets; property, plant and equipment; and reserves, including pension and other post-retirement benefit obligations.

The Tax Act introduced broad and complex changes to the U.S. tax code, including the aforementioned reduction in the U.S. corporate tax rate, a one-time transition tax on the historical unremitted earnings of foreign subsidiaries, and a new minimum tax on foreign earnings (Global Intangible Low-Taxed Income, “GILTI”). On December 22, 2017, the SEC staff issued Staff Accounting Bulletin 118 ("SAB 118"), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the related accounting for provisional amounts under ASC 740, "Accounting for Income Taxes."

As a result of the Tax Act, in 2017, we recognized a provisional tax liability of $51 million related to the one-time transition tax on historical foreign earnings, payable over a period of eight years. We also recorded a provisional decrease to net U.S. deferred tax liabilities of $73 million. For a description of the impact of the Tax Act for the year ended December 31, 2017, refer to Note 13, "Income Taxes" of our financial statements as of and for the year ended December 31, 2017 included in the 2017 Form 10-K. During the nine-month period ended September 30, 2018, we recorded a $10 million favorable adjustment to the provisional amount recognized in 2017 related to the transition tax. We continue to gather the information necessary to finalize the provisional amounts. Our estimates could be affected as we gain a more thorough understanding of the Tax Act from additional guidance issued by the U.S. tax authorities. Changes to the provisional estimates of the tax effect of the Tax Act will be recorded as a discrete item in the interim period the amounts are considered complete.

The Company has included the estimated 2018 impact of the GILTI Tax as a period cost and included it as part of the estimated annual effective tax rate. The 2018 estimated annual effective tax rate also includes the impact of all other U.S. tax reform provisions that were effective on January 1, 2018. These estimates are subject to change as additional guidance on the tax reform provisions is issued.

Note 16. Segment and Geographic Information

We have four operating segments: Wholesale – North America, Europe, Specialty and Self Service. Our Wholesale – North America and Self Service operating segments are aggregated into one reportable segment, North America, because they possess similar economic characteristics and have common products and services, customers, and methods of distribution. Our reportable segments are organized based on a combination of geographic areas served and type of product lines offered. The reportable segments are managed separately as each business serves different customers (i.e. geographic in the case of North America and Europe and product type in the case of Specialty) and is affected by different economic conditions. Therefore, we present three reportable segments: North America, Europe and Specialty.

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The following tables present our financial performance by reportable segment for the periods indicated (in thousands):

	North America		Europe		Specialty		Eliminations			Consolidated
Three Months Ended September 30, 2018
Revenue:
Third Party	$	1,262,657	$	1,470,856	$	388,865	$	—		$	3,122,378
Intersegment	142		—		1,196		(1,338		)	—
Total segment revenue	$	1,262,799	$	1,470,856	$	390,061	$	(1,338	)	$	3,122,378
Segment EBITDA	$	154,049	$	129,358	$	42,937	$	—		$	326,344
Depreciation and amortization (1)	22,151		52,139		7,183		—			81,473
Three Months Ended September 30, 2017
Revenue:
Third Party	$	1,181,756	$	954,522	$	329,522	$	—		$	2,465,800
Intersegment	187		—		1,072		(1,259		)	—
Total segment revenue	$	1,181,943	$	954,522	$	330,594	$	(1,259	)	$	2,465,800
Segment EBITDA	$	152,627	$	79,294	$	35,114	$	—		$	267,035
Depreciation and amortization (1)	22,104		32,326		5,472		—			59,902

	North America		Europe		Specialty		Eliminations			Consolidated
Nine Months Ended September 30, 2018
Revenue:
Third Party	$	3,927,282	$	3,795,439	$	1,151,172	$	—		$	8,873,893
Intersegment	526		—		3,554		(4,080		)	—
Total segment revenue	$	3,927,808	$	3,795,439	$	1,154,726	$	(4,080	)	$	8,873,893
Segment EBITDA	$	506,772	$	315,785	$	140,974	$	—		$	963,531
Depreciation and amortization (1)	64,985		124,697		21,295		—			210,977
Nine Months Ended September 30, 2017
Revenue:
Third Party	$	3,596,108	$	2,665,170	$	1,005,776	$	—		$	7,267,054
Intersegment	589		—		3,222		(3,811		)	—
Total segment revenue	$	3,596,697	$	2,665,170	$	1,008,998	$	(3,811	)	$	7,267,054
Segment EBITDA	$	502,494	$	241,537	$	119,133	$	—		$	863,164
Depreciation and amortization (1)	64,305		85,809		16,394		—			166,508

(1) Amounts presented include depreciation and amortization expense recorded within cost of goods sold.

The key measure of segment profit or loss reviewed by our chief operating decision maker, who is our Chief Executive Officer, is Segment EBITDA. Segment EBITDA includes revenue and expenses that are controllable by the segment. Corporate general and administrative expenses are allocated to the segments based on usage, with shared expenses apportioned based on the segment's percentage of consolidated revenue. We calculate Segment EBITDA as EBITDA excluding restructuring and acquisition related expenses, change in fair value of contingent consideration liabilities, other gains and losses related to acquisitions, equity method investments, or divestitures and equity in losses and earnings of unconsolidated subsidiaries. EBITDA, which is the basis for Segment EBITDA, is calculated as net income excluding noncontrolling interest, discontinued operations, depreciation, amortization, interest and income tax expense.

The table below provides a reconciliation of Net Income to Segment EBITDA (in thousands):

34

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2018			2017		2018			2017
Net income	$	134,480		$	122,381	$	445,109		$	409,573
Less: net income attributable to noncontrolling interest	378			—		1,040			—
Net income attributable to LKQ stockholders	134,102			122,381		444,069			409,573
Subtract:
Net loss from discontinued operations	—			—		—			(4,531		)
Net income from continuing operations attributable to LKQ stockholders	134,102			122,381		444,069			414,104
Add:
Depreciation and amortization	76,701			56,877		196,322			159,178
Depreciation and amortization - cost of goods sold	4,772			3,025		14,655			7,330
Interest expense, net	40,860			25,222		107,647			73,806
Provision for income taxes	46,068			58,189		156,427			206,206
EBITDA	302,503			265,694		919,120			860,624
Subtract:
Equity in (losses) earnings of unconsolidated subsidiaries (1)	(20,284		)	2,673		(18,326		)	3,878
Fair value gain on Mekonomen derivative instrument (1)	2,509			—		2,509			—
Gains on bargain purchases (2)	—			913		328			3,990
Add:
Restructuring and acquisition related expenses (3)	6,614			4,922		26,546			10,371
Inventory step-up adjustment - acquisition related	—			—		403			—
Impairment of net assets held for sale	—			—		2,438			—
Change in fair value of contingent consideration liabilities	(548		)	5		(465		)	37
Segment EBITDA	$	326,344		$	267,035	$	963,531		$	863,164

(1) See Note 4, "Financial Statement Information," for further information.

(2) Reflects the gains on bargain purchases related to our acquisitions of a wholesale business in Europe and Andrew Page. See Note 2, "Business Combinations," for further information.

(3) See Note 6, "Restructuring and Acquisition Related Expenses," for further information.

The following table presents capital expenditures by reportable segment (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Capital Expenditures
North America	$	27,996	$	31,021	$	86,864	$	69,934
Europe	23,904		12,119		69,582		55,253
Specialty	4,442		852		15,317		6,752
Discontinued operations	—		—		—		3,598
Total capital expenditures	$	56,342	$	43,992	$	171,763	$	135,537

35

The following table presents assets by reportable segment (in thousands):

	September 30,		December 31,
	2018		2017
Receivables, net
North America	$	437,429	$	379,666
Europe (1)	696,106		555,372
Specialty	122,341		92,068
Total receivables, net (2)	1,255,876		1,027,106
Inventories
North America	1,058,310		1,076,393
Europe (1)	1,391,578		964,068
Specialty	345,006		340,322
Total inventories	2,794,894		2,380,783
Property, Plant and Equipment, net
North America	560,918		537,286
Europe (1)	554,550		293,539
Specialty	85,535		82,264
Total property, plant and equipment, net	1,201,003		913,089
Equity Method Investments
North America	16,075		336
Europe (3)	141,334		208,068
Total equity method investments	157,409		208,404
Other unallocated assets	6,176,154		4,837,490
Total assets	$	11,585,336	$	9,366,872

(1) The increase in assets for the Europe segment is primarily attributable to the Stahlgruber acquisition. Refer to Note 2, “Business Combinations,” for further detail on the opening balance sheet amounts.

(2) Refer to Note 4, "Financial Statement Information," for the increase in total receivables, net compared to December 31, 2017 as a result of the adoption of ASC 606.

(3) Refer to Note 4, "Financial Statement Information," for further information.

We report net receivables; inventories; net property, plant and equipment; and equity method investments by segment as that information is used by the chief operating decision maker in assessing segment performance. These assets provide a measure for the operating capital employed in each segment. Unallocated assets include cash and cash equivalents, prepaid and other current and noncurrent assets, goodwill and other intangibles.

Our largest countries of operation are the U.S., followed by the U.K. and Germany. Our other European operations are located in the Netherlands, Belgium, Italy, Czech Republic, Austria, Poland, Slovakia and other European countries. Our operations in other countries include operations in Canada, engine remanufacturing and bumper refurbishing operations in Mexico, an aftermarket parts freight consolidation warehouse in Taiwan, and administrative support functions in India. Our net sales are attributed to geographic area based on the location of the selling operation.

36

The following table sets forth our revenue by geographic area (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Revenue
United States	$	1,535,557	$	1,395,495	$	4,716,927	$	4,268,600
United Kingdom	408,474		399,155		1,294,155		1,171,829
Germany	415,748		549		564,698		862
Other countries	762,599		670,601		2,298,113		1,825,763
Total revenue	$	3,122,378	$	2,465,800	$	8,873,893	$	7,267,054

The following table sets forth our tangible long-lived assets by geographic area (in thousands):

	September 30,		December 31,
	2018		2017
Long-lived Assets
United States	$	609,562	$	583,236
Germany	210,344		41
United Kingdom	170,940		178,021
Other countries	210,157		151,791
Total long-lived assets	$	1,201,003	$	913,089

Note 17. Subsequent Event

On October 25, 2018, we announced that our Board of Directors authorized a stock repurchase program under which we may purchase up to $500 million of our common stock from time to time through October 25, 2021. Repurchases under the program may be made in the open market or in privately negotiated transactions, with the amount and timing of repurchases depending on market conditions and corporate needs. The repurchase program does not obligate us to acquire any specific number of shares and may be suspended or discontinued at any time.

Note 18. Condensed Consolidating Financial Information

LKQ Corporation (the "Parent") issued, and the Guarantors have fully and unconditionally guaranteed, jointly and severally, the U.S. Notes (2023) due on May 15, 2023. A Guarantor's guarantee will be unconditionally and automatically released and discharged upon the occurrence of any of the following events: (i) a transfer (including as a result of consolidation or merger) by the Guarantor to any person that is not a Guarantor of all or substantially all assets and properties of such Guarantor, provided the Guarantor is also released from its obligations with respect to indebtedness under the Credit Agreement or other indebtedness of ours, which obligation gave rise to the guarantee of the U.S. Notes (2023); (ii) a transfer (including as a result of consolidation or merger) to any person that is not a Guarantor of the equity interests of a Guarantor or issuance by a Guarantor of its equity interests such that the Guarantor ceases to be a subsidiary, as defined in the U.S. Notes (2023) Indenture, provided the Guarantor is also released from its obligations with respect to indebtedness under the Credit Agreement or other indebtedness of ours, which obligation gave rise to the guarantee of the U.S. Notes (2023); (iii) the release of the Guarantor from its obligations with respect to indebtedness under the Credit Agreement or other indebtedness of ours, which obligation gave rise to the guarantee of the U.S. Notes (2023); and (iv) upon legal defeasance, covenant defeasance or satisfaction and discharge of the U.S. Notes (2023) Indenture, as defined in the U.S. Notes (2023) Indenture.

Presented below are the unaudited condensed consolidating financial statements of the Parent, the Guarantors, the non-guarantor subsidiaries (the "Non-Guarantors"), and the elimination entries necessary to present our financial statements on a consolidated basis as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934 resulting from the guarantees of the U.S. Notes (2023). Investments in consolidated subsidiaries have been presented under the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries, intercompany balances, and intercompany revenue and expenses. The unaudited condensed consolidating financial statements below have been prepared from our financial information on the same basis of accounting as the unaudited condensed consolidated financial statements, and may not necessarily be indicative of the financial position, results of operations or cash flows had the Parent, Guarantors and Non-Guarantors operated as independent entities.

37

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Three Months Ended September 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	1,550,301		$	1,609,525		$	(37,448	)	$	3,122,378
Cost of goods sold	—			934,913			1,027,715			(37,448		)	1,925,180
Gross margin	—			615,388			581,810			—			1,197,198
Selling, general and administrative expenses	6,725			434,965			437,460			—			879,150
Restructuring and acquisition related expenses	—			1,638			4,976			—			6,614
Depreciation and amortization	34			25,238			51,429			—			76,701
Operating (loss) income	(6,759		)	153,547			87,945			—			234,733
Other expense (income):
Interest expense (income), net	16,191			(193		)	24,862			—			40,860
Intercompany interest (income) expense, net	(15,121		)	10,014			5,107			—			—
Other income, net	(178		)	(3,514		)	(3,267		)	—			(6,959		)
Total other expense, net	892			6,307			26,702			—			33,901
(Loss) income before (benefit) provision for income taxes	(7,651		)	147,240			61,243			—			200,832
(Benefit) provision for income taxes	(12,008		)	41,875			16,201			—			46,068
Equity in losses of unconsolidated subsidiaries	—			(156		)	(20,128		)	—			(20,284		)
Equity in earnings of subsidiaries	129,745			4,467			—			(134,212		)	—
Net income	134,102			109,676			24,914			(134,212		)	134,480
Less: net income attributable to noncontrolling interest	—			—			378			—			378
Net income attributable to LKQ stockholders	$	134,102		$	109,676		$	24,536		$	(134,212	)	$	134,102

38

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Three Months Ended September 30, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	1,433,742		$	1,069,682		$	(37,624	)	$	2,465,800
Cost of goods sold	—			861,078			685,470			(37,624		)	1,508,924
Gross margin	—			572,664			384,212			—			956,876
Selling, general and administrative expenses	7,861			394,926			293,191			—			695,978
Restructuring and acquisition related expenses	—			1,473			3,449			—			4,922
Depreciation and amortization	29			25,005			31,843			—			56,877
Operating (loss) income	(7,890		)	151,260			55,729			—			199,099
Other expense (income):
Interest expense, net	16,232			57			8,933			—			25,222
Intercompany interest (income) expense, net	(2,389		)	(2,814		)	5,203			—			—
Gain on bargain purchase	—			—			(913		)	—			(913		)
Other expense (income), net	32			(4,011		)	872			—			(3,107		)
Total other expense (income), net	13,875			(6,768		)	14,095			—			21,202
(Loss) income before (benefit) provision for income taxes	(21,765		)	158,028			41,634			—			177,897
(Benefit) provision for income taxes	(8,436		)	56,920			9,705			—			58,189
Equity in earnings of unconsolidated subsidiaries	—			—			2,673			—			2,673
Equity in earnings of subsidiaries	135,710			6,674			—			(142,384		)	—
Net income	$	122,381		$	107,782		$	34,602		$	(142,384	)	$	122,381

39

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Nine Months Ended September 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	4,768,292		$	4,216,417		$	(110,816	)	$	8,873,893
Cost of goods sold	—			2,869,499			2,702,162			(110,816		)	5,460,845
Gross margin	—			1,898,793			1,514,255			—			3,413,048
Selling, general and administrative expenses	25,538			1,292,455			1,154,092			—			2,472,085
Restructuring and acquisition related expenses	—			1,968			24,578			—			26,546
Depreciation and amortization	84			74,102			122,136			—			196,322
Operating (loss) income	(25,622		)	530,268			213,449			—			718,095
Other expense (income):
Interest expense (income), net	52,004			(94		)	55,737			—			107,647
Intercompany interest (income) expense, net	(45,927		)	29,559			16,368			—			—
Gains on bargain purchases	—			—			(328		)	—			(328		)
Other (income) expense, net	(1,076		)	(13,793		)	5,783			—			(9,086		)
Total other expense, net	5,001			15,672			77,560			—			98,233
(Loss) income before (benefit) provision for income taxes	(30,623		)	514,596			135,889			—			619,862
(Benefit) provision for income taxes	(19,656		)	141,295			34,788			—			156,427
Equity in losses of unconsolidated subsidiaries	—			(156		)	(18,170		)	—			(18,326		)
Equity in earnings of subsidiaries	455,036			14,028			—			(469,064		)	—
Net income	444,069			387,173			82,931			(469,064		)	445,109
Less: net income attributable to noncontrolling interest	—			—			1,040			—			1,040
Net income attributable to LKQ stockholders	$	444,069		$	387,173		$	81,891		$	(469,064	)	$	444,069

40

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Nine Months Ended September 30, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	4,374,693		$	3,001,386		$	(109,025	)	$	7,267,054
Cost of goods sold	—			2,613,540			1,910,561			(109,025		)	4,415,076
Gross margin	—			1,761,153			1,090,825			—			2,851,978
Selling, general and administrative expenses	26,209			1,165,897			810,959			—			2,003,065
Restructuring and acquisition related expenses	—			4,010			6,361			—			10,371
Depreciation and amortization	89			73,072			86,017			—			159,178
Operating (loss) income	(26,298		)	518,174			187,488			—			679,364
Other expense (income):
Interest expense, net	48,904			281			24,621			—			73,806
Intercompany interest (income) expense, net	(10,221		)	(4,530		)	14,751			—			—
Gains on bargain purchases	—			—			(3,990		)	—			(3,990		)
Other expense (income), net	286			(8,247		)	1,077			—			(6,884		)
Total other expense (income), net	38,969			(12,496		)	36,459			—			62,932
(Loss) income from continuing operations before (benefit) provision for income taxes	(65,267		)	530,670			151,029			—			616,432
(Benefit) provision for income taxes	(27,034		)	200,321			32,919			—			206,206
Equity in earnings of unconsolidated subsidiaries	—			—			3,878			—			3,878
Equity in earnings of subsidiaries	452,337			17,282			—			(469,619		)	—
Income from continuing operations	414,104			347,631			121,988			(469,619		)	414,104
Net (loss) income from discontinued operations	(4,531		)	(4,531		)	2,050			2,481			(4,531		)
Net income	$	409,573		$	343,100		$	124,038		$	(467,138	)	$	409,573

41

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands)
	For the Three Months Ended September 30, 2018
	Parent			Guarantors		Non-Guarantors			Eliminations			Consolidated
Net income	$	134,102		$	109,676	$	24,914		$	(134,212	)	$	134,480
Less: net income attributable to noncontrolling interest	—			—		378			—			378
Net income attributable to LKQ stockholders	134,102			109,676		24,536			(134,212		)	134,102
Other comprehensive (loss) income:
Foreign currency translation, net of tax	(20,951		)	1,686		(23,901		)	22,215			(20,951		)
Net change in unrealized gains/losses on cash flow hedges, net of tax	304			—		—			—			304
Net change in unrealized gains/losses on pension plans, net of tax	1,274			1,246		28			(1,274		)	1,274
Net change in other comprehensive income from unconsolidated subsidiaries	643			—		643			(643		)	643
Other comprehensive (loss) income	(18,730		)	2,932		(23,230		)	20,298			(18,730		)
Comprehensive income	115,372			112,608		1,684			(113,914		)	115,750
Less: comprehensive income attributable to noncontrolling interest	—			—		378			—			378
Comprehensive income attributable to LKQ stockholders	$	115,372		$	112,608	$	1,306		$	(113,914	)	$	115,372

	For the Three Months Ended September 30, 2017
	Parent			Guarantors		Non-Guarantors			Eliminations			Consolidated
Net income	$	122,381		$	107,782	$	34,602		$	(142,384	)	$	122,381
Other comprehensive income (loss):
Foreign currency translation, net of tax	59,618			3,590		62,734			(66,324		)	59,618
Net change in unrecognized gains/losses on cash flow hedges, net of tax	(1,776		)	—		—			—			(1,776		)
Net change in unrealized gains/losses on pension plans, net of tax	(150		)	—		(150		)	150			(150		)
Net change in other comprehensive loss from unconsolidated subsidiaries	(1,034		)	—		(1,034		)	1,034			(1,034		)
Total other comprehensive income	56,658			3,590		61,550			(65,140		)	56,658
Total comprehensive income	$	179,039		$	111,372	$	96,152		$	(207,524	)	$	179,039

42

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands)
	For the Nine Months Ended September 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net income	$	444,069		$	387,173		$	82,931		$	(469,064	)	$	445,109
Less: net income attributable to noncontrolling interest	—			—			1,040			—			1,040
Net income attributable to LKQ stockholders	444,069			387,173			81,891			(469,064		)	444,069
Other comprehensive (loss) income:
Foreign currency translation, net of tax	(77,630		)	(2,800		)	(81,456		)	84,256			(77,630		)
Net change in unrealized gains/losses on cash flow hedges, net of tax	5,964			—			—			—			5,964
Net change in unrealized gains/losses on pension plans, net of tax	(154		)	(239		)	85			154			(154		)
Net change in other comprehensive income from unconsolidated subsidiaries	2,160			—			2,160			(2,160		)	2,160
Other comprehensive loss	(69,660		)	(3,039		)	(79,211		)	82,250			(69,660		)
Comprehensive income	374,409			384,134			3,720			(386,814		)	375,449
Less: comprehensive income attributable to noncontrolling interest	—			—			1,040			—			1,040
Comprehensive income attributable to LKQ stockholders	$	374,409		$	384,134		$	2,680		$	(386,814	)	$	374,409

	For the Nine Months Ended September 30, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net income	$	409,573		$	343,100		$	124,038		$	(467,138	)	$	409,573
Other comprehensive income (loss):
Foreign currency translation, net of tax	174,794			17,565			176,769			(194,334		)	174,794
Net change in unrecognized gains/losses on cash flow hedges, net of tax	457			(133		)	—			133			457
Net change in unrealized gains/losses on pension plans, net of tax	(4,053		)	(3,253		)	(800		)	4,053			(4,053		)
Net change in other comprehensive loss from unconsolidated subsidiaries	(1,635		)	—			(1,635		)	1,635			(1,635		)
Total other comprehensive income	169,563			14,179			174,334			(188,513		)	169,563
Total comprehensive income	$	579,136		$	357,279		$	298,372		$	(655,651	)	$	579,136

43

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Balance Sheets (In thousands)
	September 30, 2018
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	48,265	$	31,082	$	261,999	$	—		$	341,346
Receivables, net	341		366,781		888,754		—			1,255,876
Intercompany receivables, net	7,173		—		20,573		(27,746		)	—
Inventories	—		1,323,201		1,471,693		—			2,794,894
Prepaid expenses and other current assets	15,452		94,787		90,705		—			200,944
Total current assets	71,231		1,815,851		2,733,724		(27,746		)	4,593,060
Property, plant and equipment, net	845		589,898		610,260		—			1,201,003
Intangible assets:
Goodwill	—		2,005,560		2,469,706		—			4,475,266
Other intangibles, net	286		280,229		672,857		—			953,372
Investment in subsidiaries	5,351,986		114,721		—		(5,466,707		)	—
Intercompany notes receivable	1,067,356		14,958		—		(1,082,314		)	—
Equity method investments	—		16,075		141,334		—			157,409
Other assets	90,293		38,434		76,499		—			205,226
Total assets	$	6,581,997	$	4,875,726	$	6,704,380	$	(6,576,767	)	$	11,585,336
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,615	$	345,660	$	593,472	$	—		$	941,747
Intercompany payables, net	—		20,573		7,173		(27,746		)	—
Accrued expenses:
Accrued payroll-related liabilities	7,169		48,463		97,904		—			153,536
Other accrued expenses	12,656		106,543		239,013		—			358,212
Refund liability	—		54,554		52,178		—			106,732
Other current liabilities	283		18,210		38,595		—			57,088
Current portion of long-term obligations	—		2,317		116,048		—			118,365
Total current liabilities	22,723		596,320		1,144,383		(27,746		)	1,735,680
Long-term obligations, excluding current portion	1,569,387		14,027		2,666,723		—			4,250,137
Intercompany notes payable	—		617,389		464,925		(1,082,314		)	—
Deferred income taxes	9,715		115,924		199,898		—			325,537
Other noncurrent liabilities	139,712		98,133		138,721		—			376,566
Stockholders' equity:
Total Company stockholders’ equity	4,840,460		3,433,933		2,032,774		(5,466,707		)	4,840,460
Noncontrolling interest	—		—		56,956		—			56,956
Total stockholders’ equity	4,840,460		3,433,933		2,089,730		(5,466,707		)	4,897,416
Total liabilities and stockholders' equity	$	6,581,997	$	4,875,726	$	6,704,380	$	(6,576,767	)	$	11,585,336

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LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Balance Sheets (In thousands)
	December 31, 2017
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	34,360	$	35,131	$	210,275	$	—		$	279,766
Receivables, net	—		290,958		736,148		—			1,027,106
Intercompany receivables, net	2,669		3,010		230		(5,909		)	—
Inventories	—		1,334,766		1,046,017		—			2,380,783
Prepaid expenses and other current assets	34,136		44,849		55,494		—			134,479
Total current assets	71,165		1,708,714		2,048,164		(5,909		)	3,822,134
Property, plant and equipment, net	910		563,262		348,917		—			913,089
Intangible assets:
Goodwill	—		2,010,209		1,526,302		—			3,536,511
Other intangibles, net	—		291,036		452,733		—			743,769
Investment in subsidiaries	5,952,687		102,931		—		(6,055,618		)	—
Intercompany notes receivable	1,156,550		782,638		—		(1,939,188		)	—
Equity method investments	—		336		208,068		—			208,404
Other assets	70,590		33,597		38,778		—			142,965
Total assets	$	7,251,902	$	5,492,723	$	4,622,962	$	(8,000,715	)	$	9,366,872
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	5,742	$	340,951	$	441,920	$	—		$	788,613
Intercompany payables, net	—		230		5,679		(5,909		)	—
Accrued expenses:
Accrued payroll-related liabilities	9,448		65,811		68,165		—			143,424
Other accrued expenses	5,219		95,900		117,481		—			218,600
Other current liabilities	282		27,066		18,379		—			45,727
Current portion of long-term obligations	16,468		1,912		107,980		—			126,360
Total current liabilities	37,159		531,870		759,604		(5,909		)	1,322,724
Long-term obligations, excluding current portion	2,095,826		7,372		1,174,422		—			3,277,620
Intercompany notes payable	750,000		677,708		511,480		(1,939,188		)	—
Deferred income taxes	12,402		116,021		123,936		—			252,359
Other noncurrent liabilities	158,346		101,189		47,981		—			307,516
Stockholders' equity:
Total Company stockholders’ equity	4,198,169		4,058,563		1,997,055		(6,055,618		)	4,198,169
Noncontrolling interest	—		—		8,484		—			8,484
Total stockholders’ equity	4,198,169		4,058,563		2,005,539		(6,055,618		)	4,206,653
Total liabilities and stockholders' equity	$	7,251,902	$	5,492,723	$	4,622,962	$	(8,000,715	)	$	9,366,872

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LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Cash Flows (In thousands)
	For the Nine Months Ended September 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities	$	334,226		$	142,626		$	97,506		$	(53,191	)	$	521,167
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(315		)	(93,063		)	(78,385		)	—			(171,763		)
Investment and intercompany note activity with subsidiaries	73,096			—			—			(73,096		)	—
Return of investment in subsidiaries	152,443			—			—			(152,443		)	—
Acquisitions, net of cash acquired	—			(2,888		)	(1,203,179		)	—			(1,206,067		)
Investments in unconsolidated subsidiaries	—			(11,066		)	—			—			(11,066		)
Receipts of deferred purchase price on receivables under factoring arrangements	—			224,753			9,410			(224,753		)	9,410
Other investing activities, net	887			2,162			4,921			—			7,970
Net cash provided by (used in) investing activities	226,111			119,898			(1,267,233		)	(450,292		)	(1,371,516		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	3,772			—			—			—			3,772
Taxes paid related to net share settlements of stock-based compensation awards	(4,768		)	—			—			—			(4,768		)
Debt issuance costs	(1,354		)	—			(15,584		)	—			(16,938		)
Proceeds from issuance of Euro Notes (2026/28)	—			—			1,232,100			—			1,232,100
Borrowings under revolving credit facilities	304,000			—			721,496			—			1,025,496
Repayments under revolving credit facilities	(732,897		)	—			(377,138		)	—			(1,110,035		)
Repayments under term loans	(114,800		)	—			—			—			(114,800		)
(Repayments) borrowings of other debt, net	(385		)	101			(38,411		)	—			(38,695		)
Other financing activities, net	—			—			3,182			—			3,182
Investment and intercompany note activity with parent	—			(62,763		)	(10,333		)	73,096			—
Dividends	—			(203,448		)	(226,939		)	430,387			—
Net cash (used in) provided by financing activities	(546,432		)	(266,110		)	1,288,373			503,483			979,314
Effect of exchange rate changes on cash and cash equivalents	—			(463		)	(66,922		)	—			(67,385		)
Net increase (decrease) in cash and cash equivalents	13,905			(4,049		)	51,724			—			61,580
Cash and cash equivalents, beginning of period	34,360			35,131			210,275			—			279,766
Cash and cash equivalents, end of period	$	48,265		$	31,082		$	261,999		$	—		$	341,346

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LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Cash Flows (In thousands)
	For the Nine Months Ended September 30, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities	$	227,314		$	162,114		$	108,095		$	(48,280	)	$	449,243
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(509		)	(70,292		)	(64,736		)	—			(135,537		)
Investment and intercompany note activity with subsidiaries	296,561			—			—			(296,561		)	—
Acquisitions, net of cash acquired	—			(79,496		)	(173,171		)	—			(252,667		)
Proceeds from disposals of business/investment	—			305,740			(4,443		)	—			301,297
Investments in unconsolidated subsidiaries	—			(2,200		)	(4,914		)	—			(7,114		)
Receipts of deferred purchase price on receivables under factoring arrangements (1)	—			226,395			—			(226,395		)	—
Other investing activities, net	—			3,100			6,764			—			9,864
Net cash provided by (used in) investing activities	296,052			383,247			(240,500		)	(522,956		)	(84,157		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	6,465			—			—			—			6,465
Taxes paid related to net share settlements of stock-based compensation awards	(5,095		)	—			—			—			(5,095		)
Borrowings under revolving credit facilities	187,000			—			237,976			—			424,976
Repayments under revolving credit facilities	(694,896		)	—			(75,988		)	—			(770,884		)
Repayments under term loans	(27,884		)	—			—			—			(27,884		)
Borrowings under receivables securitization facility	—			—			8,525			—			8,525
Repayments under receivables securitization facility	—			—			(9,925		)	—			(9,925		)
(Repayments) borrowings of other debt, net	(1,700		)	(1,238		)	27,460			—			24,522
Payments of other obligations	—			(1,336		)	(743		)	—			(2,079		)
Other financing activities, net	—			5,000			(684		)	—			4,316
Investment and intercompany note activity with parent	—			(286,530		)	(10,031		)	296,561			—
Dividends	—			(274,675		)	—			274,675			—
Net cash (used in) provided by financing activities	(536,110		)	(558,779		)	176,590			571,236			(347,063		)
Effect of exchange rate changes on cash and cash equivalents	—			322			22,216			—			22,538
Net (decrease) increase in cash and cash equivalents	(12,744		)	(13,096		)	66,401			—			40,561
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	$	20,286		$	22,413		$	232,378		$	—		$	275,077

⁽¹⁾ Reflects the impact of adopting ASU 2016-15

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Forward-Looking Statements

Statements and information in this Quarterly Report on Form 10-Q that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are made pursuant to the "safe harbor" provisions of such Act.

Forward-looking statements include, but are not limited to, statements regarding our outlook, guidance, expectations, beliefs, hopes, intentions and strategies. Words such as “may,” “will,” “plan,” “should,” “expect,” “anticipate,” “believe,” “if,” “estimate,” “intend,” “project” and similar words or expressions are used to identify these forward-looking statements. These statements are subject to a number of risks, uncertainties, assumptions and other factors that may cause our actual results, performance or achievements to be materially different. All forward-looking statements are based on information available to us at the time the statements are made. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

You should not place undue reliance on our forward-looking statements. Actual events or results may differ materially from those expressed or implied in the forward-looking statements. The risks, uncertainties, assumptions and other factors that could cause actual results to differ from the results predicted or implied by our forward-looking statements include factors discussed in our filings with the SEC, including those disclosed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2017 Form 10-K and in our subsequent Quarterly Reports on Form 10-Q (including this Quarterly Report).

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

We are a global distributor of vehicle products, including replacement parts, components and systems used in the repair and maintenance of vehicles and specialty products and accessories to improve the performance, functionality and appearance of vehicles.

Buyers of vehicle replacement products have the option to purchase from primarily five sources: new products produced by original equipment manufacturers ("OEMs"); new products produced by companies other than the OEMs, which are referred to as aftermarket products; recycled products obtained from salvage and total loss vehicles; recycled products that have been refurbished; and recycled products that have been remanufactured. We distribute a variety of products to collision and mechanical repair shops, including aftermarket collision and mechanical products; recycled collision and mechanical products; refurbished collision products such as wheels, bumper covers and lights; and remanufactured engines and transmissions. Collectively, we refer to the four sources that are not new OEM products as alternative parts.

We are a leading provider of alternative vehicle collision replacement products and alternative vehicle mechanical replacement products, with our sales, processing, and distribution facilities reaching most major markets in the United States and Canada. We are also a leading provider of alternative vehicle replacement and maintenance products in Europe. In addition to our wholesale operations, we operate self service retail facilities across the U.S. that sell recycled automotive products from end-of-life-vehicles. We are also a leading distributor of specialty vehicle aftermarket equipment and accessories reaching most major markets in the U.S. and Canada.

We are organized into four operating segments: Wholesale – North America; Europe; Specialty and Self Service. We aggregate our Wholesale – North America and Self Service operating segments into one reportable segment, North America, resulting in three reportable segments: North America, Europe and Specialty.

Our operating results have fluctuated on a quarterly and annual basis in the past and can be expected to continue to fluctuate in the future as a result of a number of factors, some of which are beyond our control. Please refer to the factors referred to in Forward-Looking Statements above. Due to these factors and others, which may be unknown to us at this time, our operating results in future periods can be expected to fluctuate. Accordingly, our historical results of operations may not be indicative of future performance.

Acquisitions and Investments

Since our inception in 1998, we have pursued a growth strategy through both organic growth and acquisitions. We have pursued acquisitions that we believe will help drive profitability, cash flow and stockholder value. We target companies that are market leaders, will expand our geographic presence and will enhance our ability to provide a wide array of vehicle products to our customers through our distribution network.

During the three months ended September 30, 2018, we acquired three wholesale businesses in Europe.

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On May 30, 2018, we acquired Stahlgruber, a leading European wholesale distributor of aftermarket spare parts for passenger cars, tools, capital equipment and accessories with operations in Germany, Eastern Europe, Italy, and with further sales to Switzerland. This acquisition expands LKQ's geographic presence in continental Europe and serves as an additional strategic hub for our European operations. In addition, we believe this acquisition will allow for continued improvement in procurement, logistics and infrastructure optimization. On May 3, 2018, the European Commission cleared the acquisition for the entire European Union, except with respect to the wholesale automotive parts business in the Czech Republic. The acquisition of the Czech Republic wholesale business has been referred to the Czech Republic competition authority for review. The Czech Republic wholesale business represents an immaterial portion of Stahlgruber's revenue and profitability.

On July 3, 2017, we acquired four parts distribution businesses in Belgium. The objective of these acquisitions was to transform the existing three-step distribution model in Belgium to a two-step distribution model to align with our Netherlands operations.

On November 1, 2017, we acquired the aftermarket business of Warn, a leading designer, manufacturer and marketer of high performance vehicle equipment and accessories. We expect the acquisition of Warn to expand LKQ's presence in the specialty market and create viable points of entry into related markets.

In addition to the parts distribution businesses acquired in Belgium and the acquisition of Warn, during the year ended December 31, 2017, we completed 21 acquisitions, including 6 wholesale businesses in North America, 12 wholesale businesses in Europe and 3 Specialty aftermarket businesses.

See Note 2, "Business Combinations" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information related to our acquisitions.

Sources of Revenue

We report our revenue in two categories: (i) parts and services and (ii) other. Our parts revenue is generated from the sale of vehicle products including replacement parts, components and systems used in the repair and maintenance of vehicles and specialty products and accessories to improve the performance, functionality and appearance of vehicles. Our service revenue is generated primarily from the sale of service-type warranties, fees for admission to our self service yards, and processing fees related to the secure disposal of vehicles. Revenue from other sources includes scrap sales, bulk sales to mechanical manufacturers (including cores) and sales of aluminum ingots and sows from our furnace operations. Other revenue will vary from period to period based on fluctuations in commodity prices and the volume of materials sold. See Note 5, "Revenue Recognition" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information related to our sources of revenue.

Selling, General and Administrative Expenses

In our 2017 Form 10-K, we reported the following categories of operating expenses: (i) facility and warehouse expenses; (ii) distribution expenses; and (iii) selling, general and administrative expenses. To better reflect the changing profile of our business, and to align our financial statement presentation with other automotive parts and distribution companies, beginning with our Quarterly Report on Form 10-Q for the three months ended March 31, 2018, these three categories have been consolidated into one line item: selling, general and administrative expenses.

Other than the consolidation of these financial statement line items and the change due to the adoption of ASU 2014-09 as discussed in Note 4, "Financial Statement Information" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, there have been no changes to the classification of revenue or expenses on our Unaudited Condensed Consolidated Statements of Income. Our selling, general and administrative expenses continue to include: personnel costs for employees in selling, general and administrative functions; costs to operate our selling locations, corporate offices and back office support centers; costs to transport our products from our facilities to our customers; and other selling, general and administrative expenses, such as professional fees, supplies, and advertising expenses.

Seasonality

Our operating results are subject to quarterly variations based on a variety of factors, influenced primarily by seasonal changes in weather patterns. During the winter months, we tend to have higher demand for our vehicle replacement products because there are more weather related repairs. Our specialty vehicle operations typically generate greater revenue and earnings in the first half of the year, when vehicle owners tend to install this equipment. Our aftermarket glass operations typically generate greater revenue and earnings in the second and third quarters, when the demand for automotive replacement glass increases after the winter weather.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally

49

accepted in the United States of America ("GAAP"). The preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Our 2017 Form 10-K includes a summary of the critical accounting policies and estimates we believe are the most important to aid in understanding our financial results. There have been no changes to those critical accounting policies or estimates that have had a material impact on our reported amounts of assets, liabilities, revenue or expenses during the nine months endedSeptember 30, 2018.

Recently Issued Accounting Pronouncements

See "Recent Accounting Pronouncements" in Note 4, "Financial Statement Information" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for information related to new accounting standards.

Financial Information by Geographic Area

See Note 16, "Segment and Geographic Information" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for information related to our revenue and long-lived assets by geographic region.

Results of Operations—Consolidated

The following table sets forth statements of income data as a percentage of total revenue for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Revenue	100.0	%	100.0	%	100.0	%	100.0	%
Cost of goods sold	61.7	%	61.2	%	61.5	%	60.8	%
Gross margin	38.3	%	38.8	%	38.5	%	39.2	%
Selling, general and administrative expenses	28.2	%	28.2	%	27.9	%	27.6	%
Restructuring and acquisition related expenses	0.2	%	0.2	%	0.3	%	0.1	%
Depreciation and amortization	2.5	%	2.3	%	2.2	%	2.2	%
Operating income	7.5	%	8.1	%	8.1	%	9.3	%
Other expense, net	1.1	%	0.9	%	1.1	%	0.9	%
Income from continuing operations before provision for income taxes	6.4	%	7.2	%	7.0	%	8.5	%
Provision for income taxes	1.5	%	2.4	%	1.8	%	2.8	%
Equity in (losses) earnings of unconsolidated subsidiaries	(0.6	)%	0.1	%	(0.2	)%	0.1	%
Income from continuing operations	4.3	%	5.0	%	5.0	%	5.7	%
Net loss from discontinued operations	—	%	—	%	—	%	(0.1	)%
Net income	4.3	%	5.0	%	5.0	%	5.6	%
Less: net income attributable to noncontrolling interest	0.0	%	—	%	0.0	%	—	%
Net income attributable to LKQ stockholders	4.3	%	5.0	%	5.0	%	5.6	%
Note: In the table above, the sum of the individual percentages may not equal the total due to rounding.

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Three Months EndedSeptember 30, 2018 Compared to Three Months EndedSeptember 30, 2017

Revenue. The following table summarizes the changes in revenue by category (in thousands):

	Three Months Ended
	September 30,				Percentage Change in Revenue
	2018		2017		Organic		Acquisition		Foreign Exchange		Total Change
Parts & services revenue	$	2,961,981	$	2,333,757	4.3	%	23.2	%	(0.6	)%	26.9	%
Other revenue	160,397		132,043		18.9	%	2.7	%	(0.1	)%	21.5	%
Total revenue	$	3,122,378	$	2,465,800	5.1	%	22.1	%	(0.6	)%	26.6	%
Note: In the table above, the sum of the individual percentages may not equal the total due to rounding.

The change in parts and services revenue of 26.9% represented increases in segment revenue of 5.5% in North America, 53.7% in Europe and 18.0% in Specialty. The increase in other revenue of 21.5% was primarily driven by a $25 million organic increase, largely attributable to our North America segment. Refer to the discussion of our segment results of operations for factors contributing to the change in revenue by segment during the third quarter of 2018 compared to the prior year period.

Cost of Goods Sold. Cost of goods sold increased to 61.7% of revenue in the three months ended September 30, 2018 from 61.2% of revenue in the comparable prior year quarter. The increase in cost of goods sold as a percentage of revenue was primarily related to (i) a 0.2% increase from our North America segment and (ii) a 0.2% increase attributable to mix. With our Stahlgruber acquisition, the lower margin Europe segment makes up a larger percentage of the consolidated results and has a dilutive effect on the gross margin percentage. Refer to the discussion of our segment results of operations for factors contributing to the changes in cost of goods sold as a percentage of revenue by segment for the three months ended September 30, 2018 compared to the three months endedSeptember 30, 2017.

Selling, General and Administrative Expenses. Our selling, general and administrative ("SG&A") expenses as a percentage of revenue remained at 28.2% for the three months ended September 30, 2018, the same as the prior year period, as a result of a 0.2% increase in SG&A expenses attributable our North America segment offset by a 0.2% decrease attributable to our Europe segment, which was primarily related to our acquisition of Stahlgruber. Refer to the discussion of our segment results of operations for factors contributing to the changes in SG&A expenses as a percentage of revenue by segment for the three months ended September 30, 2018 compared to the three months endedSeptember 30, 2017.

Restructuring and Acquisition Related Expenses. The following table summarizes restructuring and acquisition related expenses for the periods indicated (in thousands):

	Three Months Ended
	September 30,
	2018			2017			Change
Restructuring expenses	$	5,445	(1)	$	1,545	(2)	$	3,900
Acquisition related expenses	1,169		(3)	3,377		(4)	(2,208		)
Total restructuring and acquisition related expenses	$	6,614		$	4,922		$	1,692

(1) Restructuring expenses for the three months ended September 30, 2018 primarily consisted of $4 million related to the integration of our acquisition of Andrew Page and $1 million related to our Specialty segment. These integration activities included the closure of duplicate facilities and termination of employees.

(2) Restructuring expenses for the three months ended September 30, 2017 consisted of $1 million for each of our Europe and Specialty segments, primarily related to the integration of acquired businesses in these segments. These integration activities included the closure of duplicate facilities and termination of employees.

(3) Acquisition related expenses for the quarter ended September 30, 2018 included $1 million of costs related to our acquisition of Stahlgruber.

(4) Acquisition related expenses for the quarter ended September 30, 2017 included $2 million of costs for our acquisition of Andrew Page, primarily related to legal and other professional fees associated with the U.K. Competition and Markets Authority ("CMA") review. The remaining acquisition related costs for the quarter ended September 30, 2017 consisted of external costs for completed acquisitions and acquisitions that were pending as of September 30, 2017.

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See Note 6, "Restructuring and Acquisition Related Expenses" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on our restructuring and integration plans.

Depreciation and Amortization. The following table summarizes depreciation and amortization for the periods indicated (in thousands):

	Three Months Ended
	September 30,
	2018		2017		Change
Depreciation	$	34,775	$	31,179	$	3,596	(1)
Amortization	41,926		25,698		16,228		(2)
Total depreciation and amortization	$	76,701	$	56,877	$	19,824

(1) The increase in depreciation expense primarily reflected an increase of $3 million from our acquisition of Stahlgruber.

(2) The increase in amortization expense primarily reflected an increase of $16 million from our acquisition of Stahlgruber.

Other Expense, Net. The following table summarizes the components of the quarter-over-quarter increase in other expense, net (in thousands):

Other expense, net for the three months ended September 30, 2017	$	21,202
Increase (decrease) due to:
Interest expense, net	15,638			(1)
Gains on bargain purchases	913			(2)
Other expense (income), net	(3,852		)	(3)
Net increase	12,699
Other expense, net for the three months ended September 30, 2018	$	33,901

(1) Additional interest primarily related to higher outstanding debt during the third quarter of 2018 compared to the prior year period (including the borrowings under our Euro Notes (2026/28)).

(2) 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 third quarter of 2017, we increased the gain on bargain purchase for this acquisition by $1 million as a result of changes to our estimate of the fair value of net assets acquired.

(3) The increase in other income primarily consisted of a $3 million fair value gain recorded during the third quarter of 2018 related to a preferential rights issue to subscribe for new shares in Mekonomen at a discounted share price. See Note 4, "Financial Statement Information" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information. The remaining increase in other income was related to a number of individually insignificant fluctuations.

Provision for Income Taxes. Our effective income tax rate was 22.9% for the three months endedSeptember 30, 2018, compared to 32.7% for the three months ended September 30, 2017. The decrease was primarily attributable to the reduction of the U.S. federal statutory income tax rate from 35% to 21% as a result of the enactment of the Tax Act in December 2017. Partially offsetting this decrease was a 1.0% increase in the effective income tax rate as a result of the Stahlgruber acquisition, including non-deductible interest and acquisition related expenses, as well as the higher effective tax rate in Germany. We expect 0.6% of the increase to our effective tax rate to be non-recurring, as it relates to one-time financing and acquisition related costs for Stahlgruber. The effective tax rate also reflects the impact of favorable discrete items including (i) a $10 million favorable adjustment to the Tax Act transition tax for the three months ended September 30, 2018 and (ii) approximately $1 million and $2 million for the three months ended September 30, 2018 and 2017, respectively, for excess tax benefits from stock-based payments. The quarter over quarter change in these discrete items decreased the effective tax rate by 4.3% compared to the prior year. 

Equity in (Losses) Earnings of Unconsolidated Subsidiaries. Equity in (losses) earnings of unconsolidated subsidiaries for the three months ended September 30, 2018 and 2017 primarily related to our investment in Mekonomen. During the three

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months ended September 30, 2018, we recorded a $23 million other-than-temporary impairment related to our investment in Mekonomen. See Note 4, "Financial Statement Information" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on the impairment charge. The impairment charge is excluded from our calculation of Segment EBITDA. See Note 16, "Segment and Geographic Information" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for our reconciliation of Net Income to Segment EBITDA.

Foreign Currency Impact. We translate our statements of income at the average exchange rates in effect for the period. Relative to the rates used during the three months ended September 30, 2017, the Canadian dollar, euro, and pound sterling rates used to translate the 2018 statements of income decreased by 4.1%, 1.0%, and 0.5%, respectively, and the Czech koruna rate increased by 0.3%, compared to the prior year period. The translation effect of the change in foreign currencies against the U.S. dollar and realized and unrealized currency losses for the three months ended September 30, 2018 resulted in a negative effect of less than half a penny on diluted earnings per share from continuing operations relative to the prior year third quarter.

Net Income Attributable to Noncontrolling Interest. Net income attributable to noncontrolling interest for the three months ended September 30, 2018 primarily related to the noncontrolling interest of subsidiaries acquired in connection with the Stahlgruber acquisition. We reported no income or loss attributable to the noncontrolling interest in the prior year period.

Nine Months EndedSeptember 30, 2018 Compared to Nine Months EndedSeptember 30, 2017

Revenue. The following table summarizes the changes in revenue by category (in thousands):

	Nine Months Ended
	September 30,				Percentage Change in Revenue
	2018		2017		Organic		Acquisition		Foreign Exchange		Total Change
Parts & services revenue	$	8,379,337	$	6,872,581	5.1	%	14.3	%	2.5	%	21.9	%
Other revenue	494,556		394,473		23.9	%	1.5	%	0.1	%	25.4	%
Total revenue	$	8,873,893	$	7,267,054	6.1	%	13.6	%	2.4	%	22.1	%
Note: In the table above, the sum of the individual percentages may not equal the total due to rounding.

The change in parts and services revenue of 21.9% represented increases in segment revenue of 7.5% in North America, 42.2% in Europe and 14.5% in Specialty. The increase in other revenue of 25.4% was primarily driven by a $94 million organic increase, largely attributable to our North America segment. Refer to the discussion of our segment results of operations for factors contributing to the change in revenue by segment during the nine months ended September 30, 2018 compared to the prior year period.

Cost of Goods Sold. Cost of goods sold increased to 61.5% of revenue in the nine months ended September 30, 2018 from 60.8% of revenue in the comparable prior year period. Cost of goods sold increased 0.5% and 0.4% as a result of our Europe and North America segments, respectively. Refer to the discussion of our segment results of operations for factors contributing to the changes in cost of goods sold as a percentage of revenue by segment for the nine months ended September 30, 2018 compared to the nine months endedSeptember 30, 2017.

Selling, General and Administrative Expenses. Our SG&A expenses as a percentage of revenue increased to 27.9% in the nine months ended September 30, 2018 from 27.6% in the nine months endedSeptember 30, 2017, primarily as a result of a 0.2% increase from our North America segment. Refer to the discussion of our segment results of operations for factors contributing to the changes in SG&A expenses as a percentage of revenue by segment for the nine months ended September 30, 2018 compared to the nine months endedSeptember 30, 2017.

Restructuring and Acquisition Related Expenses. The following table summarizes restructuring and acquisition related expenses for the periods indicated (in thousands):

	Nine Months Ended
	September 30,
	2018			2017			Change
Restructuring expenses	$	9,577	(1)	$	2,241	(2)	$	7,336
Acquisition related expenses	16,969		(3)	8,130		(4)	8,839
Total restructuring and acquisition related expenses	$	26,546		$	10,371		$	16,175

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(1) Restructuring expenses for the nine months ended September 30, 2018 primarily consisted of $8 million related to the integration of our acquisition of Andrew Page and $2 million related to our Specialty segment. These integration activities included the closure of duplicate facilities and termination of employees.

(2) Restructuring expenses of $1 million in each of our Specialty and Europe segments for the nine months ended September 30, 2017 were primarily related to the integration of acquired businesses in these segments. These integration activities included the closure of duplicate facilities and termination of employees.

(3) Acquisition related expenses for the nine months ended September 30, 2018 primarily consisted of $15 million of costs for our acquisition of Stahlgruber. The remaining costs related to other completed acquisitions and acquisitions that were pending as of September 30, 2018.

(4) Acquisition related expenses for the nine months ended September 30, 2017 included $4 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 nine months ended September 30, 2017 consisted of external costs for completed acquisitions and acquisitions that were pending as of September 30, 2017.

See Note 6, "Restructuring and Acquisition Related Expenses" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on our restructuring and integration plans.

Depreciation and Amortization. The following table summarizes depreciation and amortization for the periods indicated (in thousands):

	Nine Months Ended
	September 30,
	2018		2017		Change
Depreciation	$	100,576	$	85,547	$	15,029	(1)
Amortization	95,746		73,631		22,115		(2)
Total depreciation and amortization	$	196,322	$	159,178	$	37,144

(1) The increase in depreciation expense primarily reflected an increase of $13 million in our Europe segment, composed of (i) $5 million of incremental depreciation expense from our acquisition of Stahlgruber, (ii) a $3 million increase due to a measurement period adjustment recorded in the first nine months of 2017 related to our valuation procedures for our acquisition of Rhiag that reduced depreciation expense, (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, and (iv) a $2 million increase related to the impact of foreign currency translation, primarily due to increases in the pound sterling, euro, and Czech koruna exchange rates during the first nine months of 2018 compared to the prior year period.

(2) The increase in amortization expense primarily reflected (i) an increase of $22 million from our acquisition of Stahlgruber, and (ii) an increase of $3 million from our acquisition of Warn, partially offset by (iii) individually insignificant fluctuations in amortization expense across our other businesses that netted to a $3 million decrease.

Other Expense, Net. The following table summarizes the components of the year-over-year increase in other expense, net (in thousands):

Other expense, net for the nine months ended September 30, 2017	$	62,932
Increase (decrease) due to:
Interest expense, net	33,841			(1)
Gains on bargain purchases	3,662			(2)
Other expense (income), net	(2,202		)	(3)
Net increase	35,301
Other expense, net for the nine months ended September 30, 2018	$	98,233

(1) Additional interest primarily related to (i) an $26 million increase resulting from higher outstanding debt during the first nine months of 2018 compared to the prior year period (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

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agreement compared to the prior year, and (iii) a $3 million increase from foreign currency translation, primarily related to an increase in the euro exchange rate during the first nine months of 2018 compared to the prior year period.

(2) 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 2017, we increased the gain on bargain purchase for this acquisition by $3 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, as the fair value of the net assets acquired exceeded the purchase price. In the second quarter of 2018, we increased the gain on bargain purchase for this acquisition by an immaterial amount.

(3) The increase in other income primarily consisted of (i) a $3 million fair value gain recorded during the third quarter of 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, "Financial Statement Information" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information, and (ii) a $2 million increase in other miscellaneous income, partially offset by (iii) a $3 million increase in foreign currency losses.

Provision for Income Taxes. Our effective income tax rate was 25.2% for the nine months ended September 30, 2018, compared to 33.5% for the nine months ended September 30, 2017. The decrease was primarily attributable to the reduction of the U.S. federal statutory income tax rate from 35% to 21% as a result of the enactment of the Tax Act in December 2017. Partially offsetting this decrease was a 1.0% increase in the effective income tax rate as a result of the Stahlgruber acquisition, including non-deductible interest and acquisition related expenses, as well as the higher effective tax rate in Germany. The effective tax rate also reflects the impact of net favorable discrete items of approximately $12 million and $8 million for the nine months ended September 30, 2018 and 2017, respectively. The net favorable discrete items are primarily composed of a $10 million favorable adjustment to the Tax Act transition tax for the nine months ended September 30, 2018, as well as $4 million and $7 million for the nine months ended September 30, 2018 and 2017, respectively, for excess tax benefits from stock-based payments. The year over year change in discrete items decreased the effective tax rate by 0.6% compared to the prior year.

Equity in (Losses) Earnings of Unconsolidated Subsidiaries. Equity in (losses) earnings of unconsolidated subsidiaries for the nine months ended September 30, 2018 and 2017 primarily related to our investment in Mekonomen. During the nine months ended September 30, 2018, we recorded a $23 million other-than-temporary impairment related to our investment in Mekonomen. See Note 4, "Financial Statement Information" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on the impairment charge. The impairment charge is excluded from our calculation of Segment EBITDA. See Note 16, "Segment and Geographic Information" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for our reconciliation of Net Income to Segment EBITDA.

Foreign Currency Impact. We translate our statements of income at the average exchange rates in effect for the period. Relative to the rates used during the nine months ended September 30, 2017, the Czech koruna, euro, pound sterling and Canadian dollar rates used to translate the 2018 statements of income increased by 11.2%, 7.2%, 5.9% and 1.4%, respectively. The translation effect of the change in foreign currencies against the U.S. dollar and realized and unrealized currency losses for the nine months ended September 30, 2018 resulted in a $0.02 positive effect on diluted earnings per share from continuing operations relative to the first nine months of the prior year.

Net Loss from Discontinued Operations. During the nine months ended September 30, 2017, we recorded a net loss from discontinued operations totaling $5 million; we had no discontinued operations in the current year period. Discontinued operations for 2017 represents the automotive glass manufacturing business of PGW, which we sold on March 1, 2017.

Net Income Attributable to Noncontrolling Interest. Net income attributable to noncontrolling interest for the nine months ended September 30, 2018 primarily related to the noncontrolling interest of subsidiaries acquired in connection with the Stahlgruber acquisition. We reported no income or loss attributable to the noncontrolling interest in the prior year period.

Results of Operations—Segment Reporting

We have four operating segments: Wholesale – North America, Europe, Specialty and Self Service. Our Wholesale – North America and Self Service operating segments are aggregated into one reportable segment, North America, because they possess similar economic characteristics and have common products and services, customers, and methods of distribution. Therefore, we present three reportable segments: North America, Europe and Specialty.

We have presented the growth of our revenue and profitability in our operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in

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foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our growth and profitability, consistent with how we evaluate our performance, as this statistic removes the translation impact of exchange rate fluctuations, which are outside of our control and do not reflect our operational performance. Constant currency revenue and Segment EBITDA results are calculated by translating prior year revenue and Segment EBITDA in local currency using the current year's currency conversion rate. This non-GAAP financial measure has important limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP. Our use of this term may vary from the use of similarly-titled measures by other issuers due to potential inconsistencies in the method of calculation and differences due to items subject to interpretation. In addition, not all companies that report revenue or profitability on a constant currency basis calculate such measures in the same manner as we do, and accordingly, our calculations are not necessarily comparable to similarly-named measures of other companies and may not be appropriate measures for performance relative to other companies.

The following table presents our financial performance, including third party revenue, total revenue and Segment EBITDA, by reportable segment for the periods indicated (in thousands):

	Three Months Ended September 30,										Nine Months Ended September 30,
	2018			% of Total Segment Revenue		2017			% of Total Segment Revenue		2018			% of Total Segment Revenue		2017			% of Total Segment Revenue
Third Party Revenue
North America	$	1,262,657				$	1,181,756				$	3,927,282				$	3,596,108
Europe	1,470,856					954,522					3,795,439					2,665,170
Specialty	388,865					329,522					1,151,172					1,005,776
Total third party revenue	$	3,122,378				$	2,465,800				$	8,873,893				$	7,267,054
Total Revenue
North America	$	1,262,799				$	1,181,943				$	3,927,808				$	3,596,697
Europe	1,470,856					954,522					3,795,439					2,665,170
Specialty	390,061					330,594					1,154,726					1,008,998
Eliminations	(1,338		)			(1,259		)			(4,080		)			(3,811		)
Total revenue	$	3,122,378				$	2,465,800				$	8,873,893				$	7,267,054
Segment EBITDA
North America	$	154,049		12.2	%	$	152,627		12.9	%	$	506,772		12.9	%	$	502,494		14.0	%
Europe	129,358			8.8	%	79,294			8.3	%	315,785			8.3	%	241,537			9.1	%
Specialty	42,937			11.0	%	35,114			10.6	%	140,974			12.2	%	119,133			11.8	%

The key measure of segment profit or loss reviewed by our chief operating decision maker, who is our Chief Executive Officer, is Segment EBITDA. Segment EBITDA includes revenue and expenses that are controllable by the segment. Corporate general and administrative expenses are allocated to the segments based on usage, with shared expenses apportioned based on the segment's percentage of consolidated revenue. We calculate Segment EBITDA as EBITDA excluding restructuring and acquisition related expenses, change in fair value of contingent consideration liabilities, other gains and losses related to acquisitions, equity method investments, or divestitures and equity in losses and earnings of unconsolidated subsidiaries. EBITDA, which is the basis for Segment EBITDA, is calculated as net income excluding noncontrolling interest, discontinued operations, depreciation, amortization, interest and income tax expense. See Note 16, "Segment and Geographic Information" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for a reconciliation of total Segment EBITDA to net income.

Three Months EndedSeptember 30, 2018 Compared to Three Months EndedSeptember 30, 2017

North America

Third Party Revenue. The following table summarizes the changes in third party revenue by category in our North America segment (in thousands):

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	Three Months Ended September 30,				Percentage Change in Revenue
North America	2018		2017		Organic				Acquisition (3)		Foreign Exchange		Total Change
Parts & services revenue	$	1,109,067	$	1,051,470	5.2	%	(1	)	0.5	%	(0.3	)%	5.5	%
Other revenue	153,590		130,286		18.0	%	(2	)	0.0	%	(0.1	)%	17.9	%
Total third party revenue	$	1,262,657	$	1,181,756	6.6	%			0.5	%	(0.3	)%	6.8	%
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 favorable pricing and, to a lesser extent, increased sales volumes in our wholesale operations. The volume increases were primarily driven by incremental sales related to an agreement signed in December 2017 for the distribution of batteries.

(2) The $23 million increase in other revenue primarily related to (i) a $12 million increase in revenue from scrap steel and other metals related to approximately equal impacts from higher prices and increased volumes year over year, (ii) a $4 million increase in core revenue primarily related to increased volumes year over year, and (iii) a $4 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.

(3) Acquisition related growth in the third quarter of 2018 reflected revenue from our acquisition of four wholesale businesses from the beginning of the third quarter of 2017 up to the one-year anniversary of the acquisition dates.

Segment EBITDA. Segment EBITDA increased $1 million, or 0.9%, in the third quarter of 2018 compared to the prior year third quarter. Sequential decreases in scrap steel prices in our salvage and self service operations had an unfavorable impact of $7 million on North America Segment EBITDA during the third quarter of 2018, compared to a $2 million positive impact on the third quarter of 2017. This unfavorable impact resulted from the decrease in scrap steel prices between the date we purchased a vehicle, which influences the price we pay for a vehicle, and the date we scrapped a vehicle, which influences the price we receive for scrapping a vehicle.

The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our North America segment:

North America	Percentage of Total Segment Revenue
Segment EBITDA for the three months ended September 30, 2017	12.9	%
Decrease due to:
Change in gross margin	(0.4	)%	(1)
Change in segment operating expenses	(0.5	)%	(2)
Change in other expense, net and net income attributable to noncontrolling interest	0.2	%	(3)
Segment EBITDA for the three months ended September 30, 2018	12.2	%
Note: In the table above, the sum of the individual percentages may not equal the total due to rounding.

(1) The decrease in gross margin primarily reflected an unfavorable impact of 0.6% from our self service operations, partially offset by a favorable impact of 0.4% from our wholesale operations. The decrease in self service gross margin is primarily attributable to declining scrap steel prices (as described in the introduction above). The increase in wholesale gross margin is primarily due to pricing changes as discussed in the revenue section above. The remaining change in gross margin was attributable to a number of individually insignificant factors that had an unfavorable impact of 0.2% in the aggregate.

(2) The increase in segment operating expenses as a percentage of revenue primarily reflected a 0.5% increase in distribution related vehicle expenses and higher use of third party freight. The increase in distribution related vehicle expenses was primarily due to increases in fuel prices, other vehicle related costs and increased vehicle rental leases to handle incremental volumes.

(3) The decrease in other expense, net was primarily due to net income attributable to noncontrolling interest and other miscellaneous non-operating expenses.

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Europe

Third Party Revenue. The following table summarizes the changes in third party revenue by category in our Europe segment (in thousands):

	Three Months Ended September 30,				Percentage Change in Revenue
Europe	2018		2017		Organic (1)		Acquisition (2)		Foreign Exchange (3)		Total Change
Parts & services revenue	$	1,464,049	$	952,765	2.0	%	52.6	%	(0.9	)%	53.7	%
Other revenue	6,807		1,757		88.3	%	204.9	%	(5.8	)%	287.4	%
Total third party revenue	$	1,470,856	$	954,522	2.2	%	52.9	%	(1.0	)%	54.1	%
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 quarter varied by geography. In our Eastern European operations, revenue grew in the mid-single digits due to both existing and new branches (we added 39 since the beginning of the third quarter of 2017). Favorable market conditions in the region, including the expanding car parc and population of older model year vehicles, have contributed to the growth. Our Western European operations experienced flat to low single digit growth in the quarter. While we expect to achieve lower organic growth rates in these more mature markets than in Eastern Europe, our revenue growth in the quarter was negatively impacted by competitor actions, economic conditions in certain countries and warmer than normal weather conditions.

(2) Acquisition related growth for the three months endedSeptember 30, 2018 included $469 million, or 49.1%, from our acquisition of Stahlgruber. The remainder of our acquired revenue growth included revenue from our acquisitions of 14 wholesale businesses in our Europe segment since the beginning of the third quarter of 2017 through the one-year anniversary of the acquisitions.

(3) Compared to the prior year, exchange rates decreased our revenue growth by $9 million, or 1.0%, primarily due to the stronger U.S. dollar against the euro and pound sterling during the third quarter of 2018 relative to the comparable period of 2017.

Segment EBITDA. Segment EBITDA increased $50 million, or 63.1%, in the third quarter of 2018 compared to the third quarter of 2017. Our Europe Segment EBITDA included an immaterial year over year impact related to the translation of local currency results into U.S. dollars at higher exchange rates than those experienced during 2017.

The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our Europe segment:

Europe	Percentage of Total Segment Revenue
Segment EBITDA for the three months ended September 30, 2017	8.3	%
Increase (decrease) due to:
Change in gross margin	0.2	%	(1)
Change in segment operating expenses	0.4	%	(2)
Change in other expense, net and net income attributable to noncontrolling interest	(0.1	)%
Segment EBITDA for the three months ended September 30, 2018	8.8	%
Note: In the table above, the sum of the individual percentages may not equal the total due to rounding.

(1) The increase in gross margin was due to (i) a 0.4% increase in our Benelux operations primarily due to the ongoing move from a three-step to a two-step distribution model as well as an increase in supplier rebates, (ii) a 0.3% favorable impact related to an increase in supplier rebates as a result of centralized procurement for our Europe segment, and (iii) a 0.3% net increase due to mix related to our acquisition of Stahlgruber. The favorable effects were partially offset by (i) a 0.4% decrease in our U.K. operations primarily as a result of incremental costs related to the national distribution facility as well as higher inventory write-offs, partially offset by increased supplier rebates, (ii) a 0.3% decrease due to a mix shift to our Central and Eastern European operations, and (iii) several individually immaterial factors that had an unfavorable impact of 0.1% in the aggregate.

(2) The decrease in segment operating expenses as a percentage of revenue was due to (i) a 0.4% decrease in personnel

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expenses primarily due to a reduction in incentive benefits in our U.K. operations, and (ii) a 0.3% decrease related to our acquisition of Stahlgruber. These favorable effects were partially offset by (i) a 0.2% increase in professional fees primarily due to new information technology projects and other system enhancements, and (ii) several individually immaterial factors that had an unfavorable impact of 0.1% in the aggregate.

Specialty

Third Party Revenue. The following table summarizes the changes in third party revenue by category in our Specialty segment (in thousands):

	Three Months Ended September 30,				Percentage Change in Revenue
Specialty	2018		2017		Organic (1)		Acquisition (2)		Foreign Exchange		Total Change
Parts & services revenue	$	388,865	$	329,522	8.0	%	10.5	%	(0.5	)%	18.0	%
Other revenue	—		—		—	%	—	%	—	%	—	%
Total third party revenue	$	388,865	$	329,522	8.0	%	10.5	%	(0.5	)%	18.0	%
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 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.

(2) Acquisition related growth in the third quarter of 2018 included $34 million, or 10.3%, from our acquisition of Warn. The remainder of our acquired revenue growth reflected an immaterial amount of acquired revenue from our acquisitions of two wholesale businesses from the beginning of the third quarter of 2017 up to the one-year anniversary of the acquisition dates.

Segment EBITDA. Segment EBITDA increased $8 million, or 22.3%, in the third quarter of 2018 compared to the prior year third quarter.

The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our Specialty segment:

Specialty	Percentage of Total Segment Revenue
Segment EBITDA for the three months ended September 30, 2017	10.6	%
Increase (decrease) due to:
Change in gross margin	0.6	%	(1)
Change in segment operating expenses	(0.3	)%	(2)
Change in other expense, net	0.1	%
Segment EBITDA for the three months ended September 30, 2018	11.0	%
Note: In the table above, the sum of the individual percentages may not equal the total due to rounding.

(1) The increase in gross margin reflects favorable impacts of (i) 0.9% from our acquisition of Warn, which has a higher gross margin than our other Specialty operations, and (ii) several individually immaterial factors that had a favorable impact of 0.2% in the aggregate, partially offset by (iii) 0.5% of increased inventory write-downs as damaged and defective product was identified during our warehouse expansion projects on the West Coast and Southeastern U.S.

(2) The increase in segment operating expenses primarily reflects (i) an unfavorable impact of 0.2% in vehicle and fuel expenses principally due to increased fuel prices, and (ii) several individually immaterial factors that had an unfavorable impact of 0.1% in the aggregate.

Nine Months EndedSeptember 30, 2018 Compared to Nine Months EndedSeptember 30, 2017

North America

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Third Party Revenue. The following table summarizes the changes in third party revenue by category in our North America segment (in thousands):

	Nine Months Ended September 30,				Percentage Change in Revenue
North America	2018		2017		Organic				Acquisition (3)		Foreign Exchange		Total Change
Parts & services revenue	$	3,447,074	$	3,207,001	6.4	%	(1	)	1.0	%	0.1	%	7.5	%
Other revenue	480,208		389,107		23.0	%	(2	)	0.4	%	—	%	23.4	%
Total third party revenue	$	3,927,282	$	3,596,108	8.2	%			0.9	%	0.1	%	9.2	%
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 largely attributable to increased sales volumes and, to a lesser extent, favorable pricing in our wholesale operations. The volume increases were primarily driven by (i) severe winter weather conditions in the first quarter of 2018 compared to mild winter weather conditions in the prior year period, and (ii) to a lesser extent, incremental sales related to an agreement signed in December 2017 for the distribution of batteries.

(2) The $91 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, (ii) a $19 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 $6 million increase in core revenue primarily related to increased volumes year over year.

(3) Acquisition related growth in the first nine months of 2018 reflected revenue from our acquisition of seven wholesale businesses from the beginning of 2017 up to the one-year anniversary of the acquisition dates.

Segment EBITDA. Segment EBITDA increased $4 million, or 0.9%, in the first nine months of 2018 compared to the prior year period. Sequential increases in scrap steel prices in our salvage and self service operations had a favorable impact of $10 million on North America Segment EBITDA during the first nine months of 2018, compared to a $12 million positive impact on the first nine months of 2017. This favorable impact resulted from the increase in scrap steel prices between the date we purchased a vehicle, which influences the price we pay for a vehicle, and the date we scrapped a vehicle, which influences the price we receive for scrapping a vehicle.

The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our North America segment:

North America	Percentage of Total Segment Revenue
Segment EBITDA for the nine months ended September 30, 2017	14.0	%
Decrease due to:
Change in gross margin	(0.7	)%	(1)
Change in segment operating expenses	(0.4	)%	(2)
Segment EBITDA for the nine months ended September 30, 2018	12.9	%
Note: In the table above, the sum of the individual percentages may not equal the total due to rounding.

(1) The decrease in gross margin reflected unfavorable impacts of 0.4% and 0.3% 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 third quarter 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 reflected (i) a 0.3% and 0.2% increase in freight and vehicle expenses, respectively, primarily due to higher use of third party freight and increased vehicle

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rental leases to handle incremental volumes as well as increases in fuel prices.

Europe

Third Party Revenue. The following table summarizes the changes in third party revenue by category in our Europe segment (in thousands):

	Nine Months Ended September 30,				Percentage Change in Revenue
Europe	2018		2017		Organic (1)		Acquisition (2)		Foreign Exchange (3)		Total Change
Parts & services revenue	$	3,781,091	$	2,659,804	3.8	%	31.9	%	6.4	%	42.2	%
Other revenue	14,348		5,366		84.4	%	80.1	%	2.9	%	167.4	%
Total third party revenue	$	3,795,439	$	2,665,170	4.0	%	32.0	%	6.4	%	42.4	%
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 quarter varied by geography. In our Eastern European operations, revenue grew in the high single digits due to both existing and new branches (we added 63 since the beginning of 2017), reflecting favorable market conditions in the region. Our Western European operations experienced flat to mid-single digit growth in the year to date period due primarily to higher volumes in the second quarter (partly attributable to the timing of the Easter holiday) offsetting softness in the first and third quarters. See the quarterly discussion for further detail on the third quarter variance.

(2) Acquisition related growth for the nine months endedSeptember 30, 2018 included $637 million, or 23.9%, $79 million, or 3.0%, and $72 million, or 2.7%, 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 18 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 $170 million, or 6.4%, primarily due to the weaker U.S. dollar against the pound sterling, euro and Czech koruna during the first nine months of 2018 relative to the comparable period of 2017.

Segment EBITDA. Segment EBITDA increased $74 million, or 30.7% in the first nine months of 2018 compared to the first nine months of 2017. Our Europe Segment EBITDA included a positive year over year impact of $17 million related to the translation of local currency results into U.S. dollars at higher exchange rates than those experienced during 2017. On a constant currency basis (i.e. excluding the translation impact), Segment EBITDA increased by $57 million, or 23.7%, compared to the prior year. Refer to the Foreign Currency Impact discussion within the Results of Operations - Consolidated section above for further detail regarding foreign currency impact on our results for the nine months endedSeptember 30, 2018.

The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our Europe segment:

Europe	Percentage of Total Segment Revenue
Segment EBITDA for the nine months ended September 30, 2017	9.1	%
Decrease due to:
Change in gross margin	(0.6	)%	(1)
Change in segment operating expenses	(0.1	)%	(2)
Change in other expense, net and net income attributable to noncontrolling interest	(0.1	)%
Segment EBITDA for the nine months ended September 30, 2018	8.3	%
Note: In the table above, the sum of the individual percentages may not equal the total due to rounding.

(1) The decline in gross margin was due to (i) a 0.9% decrease related to our U.K. operations primarily as a result of incremental costs related to the national distribution facility, primarily as a result of replenishment issues and related stock availability in the first quarter at our national distribution center and branches that led to some temporary service

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issues and increased labor costs to manually stock and receive product, and higher customer incentives, and(ii) a 0.4% net decrease due to mix related to our acquisition of an aftermarket parts distribution business in Poland during the third quarter of 2017. The unfavorable effects were partially offset by (i) a 0.4% increase in gross margin in our Benelux operations primarily due to the ongoing move from a three-step to a two-step distribution model, increased private label sales, which have higher gross margins, and increased supplier rebates, and (ii) a 0.3% favorable impact related to an increase in supplier rebates as a result of centralized procurement for our Europe segment.

(2) The increase in segment operating expenses as a percentage of revenue was due to a 0.2% increase in professional fees primarily due to new information technology projects and other system enhancements, partially offset by several individually immaterial factors that had a favorable impact of 0.1% in the aggregate.

Specialty

Third Party Revenue. The following table summarizes the changes in third party revenue by category in our Specialty segment (in thousands):

	Nine Months Ended September 30,				Percentage Change in Revenue
Specialty	2018		2017		Organic (1)		Acquisition (2)		Foreign Exchange		Total Change
Parts & services revenue	$	1,151,172	$	1,005,776	4.2	%	10.1	%	0.1	%	14.5	%
Other revenue	—		—		—	%	—	%	—	%	—	%
Total third party revenue	$	1,151,172	$	1,005,776	4.2	%	10.1	%	0.1	%	14.5	%
Note: In the table above, the sum of the individual percentages may not equal the total due to rounding.

(1) The organic revenue growth rate was higher in the second and third quarters than the first quarter due to the factors discussed in the Specialty revenue section of the three months results discussion above.

(2) Acquisition related growth in the nine months ended September 30, 2018 included $100 million, or 9.9%, from our acquisition of Warn. 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 the third quarter of 2017 up to the one-year anniversary of the acquisition dates.

Segment EBITDA. Segment EBITDA increased $22 million, or 18.3%, in the first nine months of 2018 compared to the prior year period.

The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our Specialty segment:

Specialty	Percentage of Total Segment Revenue
Segment EBITDA for the nine months ended September 30, 2017	11.8	%
Increase (decrease) due to:
Change in gross margin	1.2	%	(1)
Change in segment operating expenses	(0.8	)%	(2)
Segment EBITDA for the nine months ended September 30, 2018	12.2	%
Note: In the table above, the sum of the individual percentages may not equal the total due to rounding.

(1) The increase in gross margin reflects favorable impacts of (i) 0.9% from our acquisition of Warn, which has a higher gross margin than our existing Specialty operations, and (ii) 0.4% from our initiatives to improve gross margin, including a decreased focus on selling to lower margin customers. The favorable effects were partially offset by (i) 0.2% of increased inventory write-downs as damaged and defective product was identified during our warehouse expansion projects on the West Coast and Southeastern U.S.

(2) The increase in segment operating expenses reflects unfavorable impacts of (i) 0.4% in personnel costs primarily as a result of a negative leverage effect, as personnel costs in our sales and marketing and distribution functions grew at a greater rate than organic revenue, (ii) 0.2% from our acquisition of Warn, which has higher operating expenses as a

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percentage of revenue than our existing Specialty operations, and (iii) 0.2% in vehicle and fuel expenses primarily due to increased fuel prices.

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Liquidity and Capital Resources

The following table summarizes liquidity data as of the dates indicated (in thousands):

	September 30, 2018		December 31, 2017		September 30, 2017
Cash and cash equivalents	$	341,346	$	279,766	$	275,077
Total debt (1)	4,404,369		3,428,280		3,170,100
Current maturities (2)	122,981		129,184		129,320
Capacity under credit facilities (3)	2,850,000		2,850,000		2,550,000
Availability under credit facilities (3)	1,501,226		1,395,081		1,338,264
Total liquidity (cash and cash equivalents plus availability under credit facilities)	1,842,572		1,674,847		1,613,341

(1) Debt amounts reflect the gross values to be repaid (excluding debt issuance costs of $36 million, $24 million and $21 million as of September 30, 2018, December 31, 2017 and September 30, 2017, respectively).

(2) Debt amounts reflect the gross values to be repaid (excluding debt issuance costs of $5 million, $3 million and $2 million as of September 30, 2018, December 31, 2017 and September 30, 2017, respectively).

(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.

We assess our liquidity in terms of our ability to fund our operations and provide for expansion through both internal development and acquisitions. Our primary sources of liquidity are cash flows from operations and our credit facilities. We utilize our cash flows from operations to fund working capital and capital expenditures, with the excess amounts going towards funding acquisitions or paying down outstanding debt. As we have pursued acquisitions as part of our growth strategy, our cash flows from operations have not always been sufficient to cover our investing activities. To fund our acquisitions, we have accessed various forms of debt financing, including revolving credit facilities, senior notes and our receivables securitization facility.

As of September 30, 2018, we had debt outstanding and additional available sources of financing as follows:

• Senior secured credit facilities maturing in January 2023, composed of term loans totaling $750 million ($590 million outstanding at September 30, 2018) and $2.75 billion in revolving credit ($1.2 billion outstanding at September 30, 2018), bearing interest at variable rates (although a portion of this debt is hedged through interest rate swap contracts), 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 $580 million (€500 million), maturing in April 2024 and bearing interest at a 3.875% fixed rate

• Euro Notes (2026/28) totaling $1.2 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 $100 million ($100 million outstanding as of September 30, 2018), maturing in November 2019 and bearing interest at variable commercial paper rates

From time to time, we may undertake financing transactions to increase our available liquidity, such as the issuance of the Euro Notes (2026/28) in April 2018 related to the Stahlgruber acquisition and our December 2017 amendment to our senior secured credit facilities. Given the long-term nature of our investment in Stahlgruber, combined with favorable interest rates, we decided to fund the acquisition primarily through long-term, fixed rate notes. We believe this approach provides financial flexibility to execute our long-term growth strategy while maintaining availability under our revolver. If we see an attractive acquisition opportunity, we have the ability to use our revolver to move quickly and have certainty of funding up to the amount of our then-available liquidity.

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The enterprise value for the Stahlgruber acquisition was €1.5 billion, which was financed with the proceeds from the €1.0 billion of Euro Notes (2026/28), the direct issuance to Stahlgruber's owner of 8,055,569 newly issued shares of LKQ common stock, and borrowings under our existing revolving credit facility.

As of September 30, 2018, we had approximately $1.5 billion available under our credit facilities. Combined with approximately $341 million of cash and cash equivalents at September 30, 2018, we had approximately $1.8 billion in available liquidity, an increase of $168 million over our available liquidity as of December 31, 2017.

We believe that our current liquidity and cash expected to be generated by operating activities in future periods will be sufficient to meet our current operating and capital requirements, although such sources may not be sufficient for future acquisitions depending on their size. While we believe that we have adequate capacity, from time to time we may need to raise additional funds through public or private financing, strategic relationships or other arrangements, as noted above regarding the Stahlgruber transaction. There can be no assurance that additional funding, or refinancing of our credit facilities, if needed, will be available on terms attractive to us, or at all. Furthermore, any additional equity financing may be dilutive to stockholders, and debt financing, if available, may involve restrictive covenants or higher interest costs. Our failure to raise capital if and when needed could have a material adverse impact on our business, operating results, and financial condition.

Borrowings under the credit agreement accrue interest at variable rates which are tied to LIBOR or the Canadian Dollar Offered Rate ("CDOR"), depending on the currency and the duration of the borrowing, plus an applicable margin rate which is subject to change quarterly based on our reported leverage ratio. We hold interest rate swaps to hedge the variable rates on a portion of our credit agreement borrowings, with the effect of fixing the interest rates on the respective notional amounts. In addition, in 2016, we entered into cross currency swaps that contain an interest rate swap component and a foreign currency forward contract component that, when combined with related intercompany financing arrangements, effectively convert variable rate U.S. dollar-denominated borrowings into fixed rate euro-denominated borrowings. These derivative transactions are described in Note 11, "Derivative Instruments and Hedging Activities" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q. After giving effect to these contracts, the weighted average interest rate on borrowings outstanding under our credit agreement at September 30, 2018 was 2.2%. Including our senior notes and the borrowings under our receivables securitization program, our overall weighted average interest rate on borrowings was 3.2% at September 30, 2018.

Cash interest payments were $74 million for the nine months ended September 30, 2018, including $26 million in semi-annual interest payments on our U.S. Notes (2023) and our Euro Notes (2024). Interest payments on our U.S. Notes (2023) are made in May and November, and interest payments on our Euro Notes (2024) are scheduled for April and October. Beginning in the fourth quarter of 2018, we will also make semi-annual interest payments of $22 million on our Euro Notes (2026/28). Interest payments on our Euro Notes (2026/28) are made in April and October.

We had outstanding credit agreement borrowings of $1.8 billion and $2.0 billion at September 30, 2018 and December 31, 2017, respectively. Of these amounts, there were no borrowings classified as current maturities at September 30, 2018 compared to $18 million at December 31, 2017.

The scheduled maturities of long-term obligations outstanding at September 30, 2018 are as follows (in thousands):

Three months ending December 31, 2018	$	93,675
Years ending December 31:
2019	141,522
2020	27,679
2021	16,184
2022	40,881
2023	2,332,702
Thereafter	1,751,726
Total debt (1)	$	4,404,369

(1) The total debt amounts presented above reflect the gross values to be repaid (excluding debt issuance costs of $36 million as of September 30, 2018).

Our credit agreement contains customary covenants that provide limitations and conditions on our ability to enter into certain transactions. The credit agreement also contains financial and affirmative covenants, including limitations on our net leverage ratio and a minimum interest coverage ratio. We were in compliance with all restrictive covenants under our credit agreement as of September 30, 2018.

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As of September 30, 2018, the Company had cash and cash equivalents of $341 million, of which $260 million was held by foreign subsidiaries. In general it has been our practice and intention to permanently reinvest the undistributed earnings of our foreign subsidiaries, and that position has not changed following the enactment of the Tax Act and the related imposition of the transition tax, except as described below. Distributions of dividends from our foreign subsidiaries will be generally exempt from further U.S. taxation, either as a result of the new 100% participation exemption under the Tax Act, or due to the previous taxation of foreign earnings under the transition tax. In July 2018, to lower our average borrowing cost, we elected to unwind several financing entities in Europe, restructure and increase related Europe borrowings and repatriate cash to reduce U.S. borrowings. However, we are still evaluating whether the Tax Act will affect the Company’s prior general existing policy to indefinitely reinvest unremitted foreign earnings.

     We believe that we have sufficient cash flow and liquidity to meet our financial obligations in the U.S. without resorting to repatriation of foreign earnings. As noted, we may, from time to time, choose to selectively repatriate foreign earnings if doing so supports our financing or liquidity objectives. As a result of the Tax Act, we have had significantly lower income tax payments in 2018 due to the lower tax rate and the immediate deduction of capital expenditures, partially offset by the first payment with respect to the transition tax.

The procurement of inventory is the largest operating use of our funds. We normally pay for aftermarket product purchases at the time of shipment or on standard payment terms, depending on the manufacturer and the negotiated payment terms. We normally pay for salvage vehicles acquired at salvage auctions and under direct procurement arrangements at the time that we take possession of the vehicles.

The following table sets forth a summary of our aftermarket and manufactured inventory procurement for the three and nine months endedSeptember 30, 2018 and 2017 (in thousands):

	Three Months Ended							Nine Months Ended
	September 30,							September 30,
	2018		2017		Change			2018		2017		Change
North America	$	333,100	$	338,600	$	(5,500	)	$	1,054,900	$	997,700	$	57,200	(1)
Europe	1,096,800		637,700		459,100			2,591,000		1,701,200		889,800		(2)
Specialty	271,400		244,800		26,600			842,000		739,800		102,200		(3)
Total	$	1,701,300	$	1,221,100	$	480,200		$	4,487,900	$	3,438,700	$	1,049,200

(1) In North America, aftermarket purchases during the nine months ended September 30, 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 nine months ended September 30, 2018 was primarily driven by (i) a $491 million increase attributable to inventory purchases at Stahlgruber from the date of acquisition through September 30, 2018, (ii) a $167 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 $138 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. The increase in inventory purchases was also driven by the increase in the value of the euro and pound sterling in the first nine months of 2018 compared to the first nine months of 2017.

(3) In our Specialty segment, the acquisition of Warn in November 2017 added incremental purchases of $55 million during the nine months ended September 30, 2018, which includes purchases of aftermarket inventory and raw materials used in the manufacturing of specialty products. Specialty inventory purchases also increased during the nine months ended September 30, 2018 compared to the prior year period to support growth in our operations.

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The following table sets forth a summary of our global wholesale salvage and self service procurement for the three and nine months ended September 30, 2018 and 2017 (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018	2017	% Change		2018	2017	% Change
North America wholesale salvage cars and trucks	73	74	(1.4	)%	229	226	1.3	%
Europe wholesale salvage cars and trucks	6	6	—	%	21	18	16.7	%
Self service and "crush only" cars	136	138	(1.4	)%	427	412	3.6	%	(1)

(1) Compared to the prior year period, we have increased the number of self service and "crush only" vehicles purchased in the first nine months of 2018 to support growth in our operations.

The following table summarizes the components of the year-over-year increase in cash provided by operating activities (in millions):

Net cash provided by operating activities for the nine months ended September 30, 2017	$	449
Increase (decrease) due to: (1)
Discontinued operations	4			(2)
Operating income	39			(3)
Non-cash depreciation and amortization expense	44			(4)
Non-cash impairment on Mekonomen investment	23			(5)
Cash paid for taxes	60
Cash paid for interest	(17		)
Working capital accounts: (6)
Accounts receivable	(12		)
Inventory	22
Accounts payable	(94		)	(7)
Pension funding	(9		)	(8)
Other operating activities	12			(9)
Net cash provided by operating activities for the nine months ended September 30, 2018	$	521

(1) Other than discontinued operations, the amounts presented represent increases (decreases) in operating cash flows attributable to our continuing operations only.

(2) In the first quarter of 2017, our glass manufacturing business generated operating cash outflows of $4 million. We disposed of this business on March 1, 2017, and therefore, the discontinued operations had no impact on our current year operating cash flows.

(3) Refer to the Results of Operations - Consolidated section for further information on the increase in operating income.

(4) Non-cash depreciation and amortization expense increased compared to the prior year period as discussed in the Results of Operations - Consolidated section.

(5) In the third quarter of 2018, we recorded an other-than-temporary impairment on our investment in Mekonomen. See Note 4, "Financial Statement Information" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on the impairment charge.

(6) 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.

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(7) Includes an outflow of $52 million related to Stahlgruber 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.

(8) During the nine months endedSeptember 30, 2018, we made a special contribution of $9 million to one of our North America pension plans. See Note 13, "Employee Benefit Plans" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on our pension plans.

(9) Reflects a number of individually insignificant fluctuations in cash paid for other operating activities.

Net cash used in investing activities totaled $1.4 billion for the nine months ended September 30, 2018, compared to $84 million of cash used in investing activities during the nine months ended September 30, 2017. We invested $1.2 billion of cash, net of cash acquired, in business acquisitions during the nine months ended September 30, 2018 compared to $253 million during the nine months ended September 30, 2017. We received net proceeds from the sale of our glass manufacturing business totaling $301 million during the nine months ended September 30, 2017; no such proceeds were received in 2018. Property, plant and equipment purchases were $172 million in the first nine months of 2018 compared to $136 million in the prior year. The period over period increase in cash outflows for purchases of property, plant and equipment was primarily related to our North America and Europe segments.

Net cash provided by financing activities totaled $1.0 billion for the nine months ended September 30, 2018, compared to net cash used in financing activities of $347 million during the nine months ended September 30, 2017. We received proceeds of $1.23 billion from our issuance of the Euro Notes (2026/28) during the nine months ended September 30, 2018; no such proceeds were received in the prior year. We also paid $17 million of debt issuance costs during the first nine months of 2018, primarily related to the issuance of the Euro Notes (2026/28); no such costs were incurred in the prior year. During the nine months ended September 30, 2018, net repayments under our credit facilities totaled $199 million compared to $375 million during the nine months ended September 30, 2017. There were $39 million of cash repayments of other debt in the first nine months of 2018, compared to $25 million of cash proceeds from other debt in the first nine months of 2017.

During the first nine months of 2018, foreign exchange rates decreased cash and cash equivalents by $67 million, compared to an increase of $23 million in the first nine months of the prior year. The current year impact was primarily related to a $66 million decrease resulting from the decline in the euro exchange rate between April 9, 2018, the date we received the proceeds from the Euro Notes (2026/28), and May 30, 2018, the date we paid the cash proceeds for the Stahlgruber acquisition.

We intend to continue to evaluate markets for potential growth through the internal development of distribution centers, processing and sales facilities, and warehouses, through further integration of our facilities, and through selected business acquisitions. Our future liquidity and capital requirements will depend upon numerous factors, including the costs and timing of our internal development efforts and the success of those efforts, the costs and timing of expansion of our sales and marketing activities, and the costs and timing of future business acquisitions.

Off-Balance Sheet Arrangements and Future Commitments

We do not have any off-balance sheet arrangements or undisclosed borrowings or debt that would be required to be disclosed pursuant to Item 303 of Regulation S-K under the Securities Exchange Act of 1934. Additionally, we do not have any synthetic leases.

In the Management's Discussion and Analysis section of our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018 filed with the SEC on August 6, 2018, we disclosed our contractual obligations as of June 30, 2018 due to the material changes to those obligations resulting from the completed offering of €1.0 billion of Euro Notes (2026/28) in April 2018 and the acquisition of Stahlgruber in May 2018. There have been no material changes to the information contained in those disclosures as of September 30, 2018.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks arising from adverse changes in:

• foreign exchange rates;

• interest rates; and

• commodity prices.

Foreign Exchange Rates

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Foreign currency fluctuations may impact the financial results we report for the portions of our business that operate in functional currencies other than the U.S. dollar. Our operations outside of the U.S. represented 46.8% and 41.8% of our revenue during the nine months ended September 30, 2018 and the year ended December 31, 2017, respectively. An increase or decrease in the strength of the U.S. dollar against these currencies by 10% would result in a 4.7% change in our consolidated revenue and a 2.9% change in our operating income for the nine months ended September 30, 2018. See our Results of Operations discussion in Part I, Item 2 of this Quarterly Report on Form 10-Q for additional information regarding the impact of fluctuations in exchange rates on our year over year results.

Additionally, we are exposed to foreign currency fluctuations with respect to the purchase of aftermarket products from foreign countries, primarily in Europe and Asia. To the extent that our inventory purchases are not denominated in the functional currency of the purchasing location, we are exposed to exchange rate fluctuations. In several of our operations, we purchase inventory from manufacturers in Taiwan in U.S. dollars, which exposes us to fluctuations in the relationship between the local functional currency and the U.S. dollar, as well as fluctuations between the U.S. dollar and the Taiwan dollar. We hedge our exposure to foreign currency fluctuations related to a portion of inventory purchases in our Europe operations, but the notional amount and fair value of these foreign currency forward contracts at September 30, 2018 were immaterial. We do not currently attempt to hedge foreign currency exposure related to our foreign currency denominated inventory purchases in our North America operations, and we may not be able to pass on any resulting price increases to our customers.

Other than with respect to a portion of our foreign currency denominated inventory purchases, we do not hold derivative contracts to hedge foreign currency risk. Our net investment in foreign operations is partially hedged by the foreign currency denominated borrowings we use to fund foreign acquisitions; however, our ability to use foreign currency denominated borrowings to finance our foreign operations may be limited based on local tax laws. We have elected not to hedge the foreign currency risk related to the interest payments on foreign borrowings as we generate cash flows in the local currencies that can be used to fund debt payments. As of September 30, 2018, we had outstanding borrowings of €500 million under our Euro Notes (2024), €1.0 billion under our Euro Notes (2026/28), and £293 million, €238 million, CAD $130 million, and SEK 265 million under our revolving credit facilities. As of December 31, 2017, we had outstanding borrowings of €500 million under our Euro Notes (2024), and £124 million, CAD $130 million, SEK 250 million, and €132 million under our revolving credit facilities. The interest payments on our €1.0 billion Euro Notes (2026/28) will be funded primarily by cash flows generated by Stahlgruber.

Interest Rates

Our results of operations are exposed to changes in interest rates primarily with respect to borrowings under our credit facilities, where interest rates are tied to the prime rate, LIBOR or CDOR. Therefore, we implemented a policy to manage our exposure to variable interest rates on a portion of our outstanding variable rate debt instruments through the use of interest rate swap contracts. These contracts convert a portion of our variable rate debt to fixed rate debt, matching the currency, effective dates and maturity dates to specific debt instruments. Net interest payments or receipts from interest rate swap contracts are included as adjustments to interest expense. All of our interest rate swap contracts have been executed with banks that we believe are creditworthy (Wells Fargo Bank, N.A.; Bank of America, N.A.; Citizens, N.A.; Fifth Third Bank; HSBC Bank USA, N.A.; and Banco Bilbao Vizcaya Argentaria, S.A.).

As of September 30, 2018, we held ten interest rate swap contracts representing a total of $590 million of U.S. dollar-denominated notional amount debt. Our interest rate swap contracts are designated as cash flow hedges and modify the variable rate nature of that portion of our variable rate debt. These swaps have maturity dates ranging from January 2021 through June 2021. As of September 30, 2018, the fair value of the interest rate swap contracts was an asset of $26 million. The values of such contracts are subject to changes in interest rates.

In addition to these interest rate swaps, as of September 30, 2018 we held three cross currency swap agreements for a total notional amount of $395 million (€374 million) with maturity dates in January 2021. These cross currency swaps contain an interest rate swap component and a foreign currency forward contract component that, combined with related intercompany financing arrangements, effectively convert variable rate U.S. dollar-denominated borrowings into fixed rate euro-denominated borrowings. The swaps are intended to reduce uncertainty in cash flows in U.S. dollars and euros in connection with intercompany financing arrangements. The cross currency swaps were also executed with banks we believe are creditworthy (Wells Fargo Bank, N.A.; Bank of America, N.A.; and The Bank of Tokyo-Mitsubishi UFJ, Ltd.). As of September 30, 2018, the fair value of the interest rate swap components of the cross currency swaps was an asset of $11 million, and the fair value of the foreign currency forward components was a liability of $49 million. The values of these contracts are subject to changes in interest rates and foreign currency exchange rates.

In total, we had 53% of our variable rate debt under our credit facilities at fixed rates at September 30, 2018 compared to 48% at December 31, 2017. See Note 10, "Long-Term Obligations" and Note 11, "Derivative Instruments and Hedging Activities" to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

69

At September 30, 2018, we had approximately $889 million of variable rate debt that was not hedged. Using sensitivity analysis, a 100 basis point movement in interest rates would change interest expense by $9 million over the next twelve months.

Commodity Prices

We are exposed to market risk related to price fluctuations in scrap metal and other metals. Market prices of these metals affect the amount that we pay for our inventory and the revenue that we generate from sales of these metals. As both our revenue and costs are affected by the price fluctuations, we have a natural hedge against the changes. However, there is typically a lag between the effect on our revenue from metal price fluctuations and inventory cost changes, and there is no guarantee that the vehicle costs will decrease or increase at the same rate as the metals prices. Therefore, we can experience positive or negative gross margin effects in periods of rising or falling metals prices, particularly when such prices move rapidly. Additionally, if market prices were to change at a greater rate than our vehicle acquisition costs, we could experience a positive or negative effect on our operating margin. The average of scrap metal prices for the three months ended September 30, 2018 decreased 16% over the average for the second quarter of 2018.

70

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of September 30, 2018, the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of LKQ Corporation's management, including our Chief Executive Officer and our Chief Financial Officer, of our "disclosure controls and procedures" (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective in providing reasonable assurance that information we are required to disclose in this Quarterly Report on Form 10-Q has been recorded, processed, summarized and reported as of the end of the period covered by this Quarterly Report on Form 10-Q. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file under the Securities Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

71

PART II

OTHER INFORMATION

Item 1.     Legal Proceedings

We are from time to time subject to various claims and lawsuits incidental to our business. In the opinion of management, currently outstanding claims and suits will not, individually or in the aggregate, have a material adverse effect on our financial position, results of operations or cash flows.

Item 1A. Risk Factors

Our operations and financial results are subject to various risks and uncertainties that could adversely affect our business, financial condition and results of operations, and the trading price of our common stock. Please refer to our 2017 Annual Report on Form 10-K, filed with the SEC on February 28, 2018, and our Quarterly Reports on Form 10-Q filed subsequent to the Annual Report on Form 10-K, for information concerning risks and uncertainties that could negatively impact us.

Item 6. Exhibits

Exhibits

(b) Exhibits

31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

72

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November 6, 2018.

LKQ CORPORATION

/s/ Varun Laroyia

Varun Laroyia

Executive Vice President and Chief Financial Officer

(As duly authorized officer and Principal Financial Officer)

/s/ Michael S. Clark

Michael S. Clark

Vice President - Finance and Controller

(As duly authorized officer and Principal Accounting Officer)

73

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Dominick Zarcone, certify that:

1.I have reviewed this quarterly report on Form 10-Q of LKQ Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 6, 2018

/s/ DOMINICK ZARCONE

Dominick Zarcone

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Varun Laroyia, certify that:

1.I have reviewed this quarterly report on Form 10-Q of LKQ Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 6, 2018

/S/ VARUN LAROYIA

Varun Laroyia

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of LKQ Corporation (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, as President and Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(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.

Dated: November 6, 2018

/S/ DOMINICK ZARCONE

Dominick Zarcone

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of LKQ Corporation (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, as Executive Vice President and Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(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.

Dated: November 6, 2018

/S/ VARUN LAROYIA

Varun Laroyia

Executive Vice President and Chief Financial Officer

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Oct. 24, 2018
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Trading Symbol	LKQ
Entity Registrant Name	LKQ CORP
Entity Central Index Key	0001065696
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		318,202,654

XML

Unaudited Condensed Consolidated Statements of Income - USD ($) $ in Thousands		3 Months Ended			9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017		Sep. 30, 2018		Sep. 30, 2017
Income Statement [Abstract]
Revenue		$ 3,122,378	$ 2,465,800		$ 8,873,893		$ 7,267,054
Cost of goods sold		1,925,180	1,508,924		5,460,845		4,415,076
Gross margin		1,197,198	956,876		3,413,048		2,851,978
Selling, general and administrative expenses (1)		879,150	695,978	[1]	2,472,085	[1]	2,003,065	[1]
Restructuring and acquisition related expenses		6,614	4,922		26,546		10,371
Depreciation and amortization		76,701	56,877		196,322		159,178
Operating income		234,733	199,099		718,095		679,364
Other expense (income):
Interest expense, net		40,860	25,222		107,647		73,806
Gains on bargain purchases			(913)		(328)		(3,990)
Other income, net		(6,959)	(3,107)		(9,086)		(6,884)
Total other expense, net		33,901	21,202		98,233		62,932
Income from continuing operations before provision for income taxes		200,832	177,897		619,862		616,432
Provision for income taxes		46,068	58,189		156,427		206,206
Equity in (losses) earnings of unconsolidated subsidiaries		(20,284)	2,673		(18,326)		3,878
Income from continuing operations		134,480	122,381		445,109		414,104
Net loss from discontinued operations							(4,531)
Net income		134,480	122,381		445,109		409,573
Less: net income attributable to noncontrolling interest		378			1,040
Net income attributable to LKQ stockholders		$ 134,102	$ 122,381		$ 444,069		$ 409,573
Basic earnings per share: (2)
Income from continuing operations		$ 0.42	$ 0.40		$ 1.42		$ 1.34
Net loss from discontinued operations							(0.01)
Net income		0.42	0.40		1.42		1.33
Less: net income attributable to noncontrolling interest		0.00			0.00
Net income attributable to LKQ stockholders	[2]	0.42	0.40		1.42		1.33
Diluted earnings per share: (2)
Income from continuing operations		0.42	0.39		1.41		1.33
Net loss from discontinued operations							(0.01)
Net income		0.42	0.39		1.41		1.32
Net income attributable to Noncontrolling Interest Per Share, Diluted		0.00			0.00
Net income attributable to LKQ stockholders	[2]	$ 0.42	$ 0.39		$ 1.41		$ 1.32

[1] (1) Selling, general and administrative expenses contain facility and warehouses expenses and distribution expenses that were previously shown separately.

[2] (2) The sum of the individual earnings per share amounts may not equal the total due to rounding.

XML

Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income	$ 134,480	$ 122,381	$ 445,109	$ 409,573
Less: net income attributable to noncontrolling interest	378		1,040
Net income attributable to LKQ stockholders	134,102	122,381	444,069	409,573
Other comprehensive income (loss):
Foreign currency translation, net of tax	(20,951)	59,618	(77,630)	174,794
Net change in unrealized gains/losses on cash flow hedges, net of tax	304	(1,776)	5,964	457
Net change in unrealized gains/losses on pension plans, net of tax	(1,274)	(150)	154	4,053
Net change in other comprehensive income (loss) from unconsolidated subsidiaries	643	(1,034)	2,160	(1,635)
Other comprehensive (loss) income	(18,730)	56,658	(69,660)	169,563
Comprehensive income	115,750	179,039	375,449	579,136
Less: comprehensive income attributable to noncontrolling interest	378		1,040
Comprehensive income attributable to LKQ stockholders	$ 115,372	$ 179,039	$ 374,409	$ 579,136

XML

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 341,346	$ 279,766
Receivables, net	1,255,876	1,027,106
Inventories	2,794,894	2,380,783
Prepaid expenses and other current assets	200,944	134,479
Total current assets	4,593,060	3,822,134
Property, plant and equipment, net	1,201,003	913,089
Intangible assets:
Goodwill	4,475,266	3,536,511
Other intangibles, net	953,372	743,769
Equity method investments	157,409	208,404
Other assets	205,226	142,965
Total assets	11,585,336	9,366,872
Current liabilities:
Accounts payable	941,747	788,613
Accrued expenses:
Accrued payroll-related liabilities	153,536	143,424
Other accrued expenses	358,212	218,600
Refund liability	106,732
Other current liabilities	57,088	45,727
Current portion of long-term obligations	118,365	126,360
Total current liabilities	1,735,680	1,322,724
Long-term obligations, excluding current portion	4,250,137	3,277,620
Deferred income taxes	325,537	252,359
Other noncurrent liabilities	376,566	307,516
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 318,197,309 and 309,126,386 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively	3,182	3,091
Additional paid-in capital	1,409,242	1,141,451
Retained earnings	3,562,827	3,124,103
Accumulated other comprehensive loss	(134,791)	(70,476)
Total Company stockholders' equity	4,840,460	4,198,169
Noncontrolling interest	56,956	8,484
Total stockholders' equity	4,897,416	4,206,653
Total liabilities and stockholders’ equity	$ 11,585,336	$ 9,366,872

XML

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	318,197,309	309,126,386
Common stock, shares outstanding	318,197,309	309,126,386

XML

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 445,109	$ 409,573
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	210,977	166,508
Impairment on Mekonomen equity method investment	22,715
Stock-based compensation expense	17,544	17,582
Loss on sale of business		8,580
Other	(7,187)	(11,982)
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions:
Receivables, net	(70,797)	(75,444)
Inventories	(71,058)	(97,584)
Prepaid income taxes/income taxes payable	7,262	(928)
Accounts payable	(71,997)	42,175
Other operating assets and liabilities	38,599	(9,237)
Net cash provided by operating activities	521,167	449,243
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(171,763)	(135,537)
Acquisitions, net of cash acquired	(1,206,067)	(252,667)
Proceeds from disposals of business/investment	0	301,297
Investments in unconsolidated subsidiaries	(11,066)	(7,114)
Receipts of deferred purchase price on receivables under factoring arrangements	9,410	0
Other investing activities, net	7,970	9,864
Net cash used in investing activities	(1,371,516)	(84,157)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	3,772	6,465
Taxes paid related to net share settlements of stock-based compensation awards	(4,768)	(5,095)
Debt issuance costs	(16,938)
Proceeds from issuance of Euro Notes (2026/28)	1,232,100
Borrowings under revolving credit facilities	1,025,496	424,976
Repayments under revolving credit facilities	(1,110,035)	(770,884)
Repayments under term loans	(114,800)	(27,884)
Borrowings under receivables securitization facility		8,525
Repayments under receivables securitization facility		(9,925)
(Repayments) borrowings of other debt, net	(38,695)	24,522
Payments of other obligations		(2,079)
Other financing activities, net	3,182	4,316
Net cash provided by (used in) financing activities	979,314	(347,063)
Effect of exchange rate changes on cash and cash equivalents	(67,385)	22,538
Net increase in cash and cash equivalents	61,580	40,561
Cash and cash equivalents of continuing operations, beginning of period	279,766	227,400
Add: Cash and cash equivalents of discontinued operations, beginning of period		7,116
Cash and cash equivalents of continuing and discontinued operations, beginning of period	279,766	234,516
Cash and cash equivalents, end of period	341,346	275,077
Supplemental disclosure of cash paid for:
Income taxes, net of refunds	158,740	218,332
Interest	74,417	57,519
Supplemental disclosure of noncash investing and financing activities:
Stock issued in acquisitions	251,334
Contingent consideration liabilities	3,107	6,234
Notes payable and other financing obligations, including notes issued and debt assumed in connection with business acquisitions/investment	82,664	52,576
Noncash property, plant and equipment additions	$ 11,010	4,918
Notes and other financing receivables in connection with disposals of business/investment		$ 5,848

XML

Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interest
July 1, 2018 at Dec. 31, 2016		307,545
July 1, 2018 at Dec. 31, 2016	$ 3,442,949	$ 3,075	$ 1,116,690	$ 2,590,359	$ (267,175)
Net income	409,573
Net income attributable to LKQ stockholders	409,573			409,573
Other comprehensive income	169,563				169,563
Vesting of restricted stock units, net of shares withheld for employee tax		736
Vesting of restricted stock units, net of shares withheld for employee tax	(3,895)	$ 7	(3,902)
Stock-based compensation expense	17,582		17,582
Exercise of stock options		772
Exercise of stock options	6,465	$ 8	6,457
Shares withheld for net share settlement of stock option awards		(35)
Shares withheld for net share settlement of stock option awards	(1,200)		(1,200)
September 30, 2018 at Sep. 30, 2017		309,018
September 30, 2018 at Sep. 30, 2017	4,041,037	$ 3,090	1,135,627	2,999,932	(97,612)
July 1, 2018 at Jun. 30, 2017		308,621
July 1, 2018 at Jun. 30, 2017	3,856,685	$ 3,086	1,130,318	2,877,551	(154,270)
Net income	122,381
Net income attributable to LKQ stockholders	122,381			122,381
Other comprehensive income	56,658				56,658
Vesting of restricted stock units, net of shares withheld for employee tax		259
Vesting of restricted stock units, net of shares withheld for employee tax	(1,140)	$ 2	(1,142)
Stock-based compensation expense	5,139		5,139
Exercise of stock options		139
Exercise of stock options	1,314	$ 2	1,312
Shares withheld for net share settlement of stock option awards		(1)
September 30, 2018 at Sep. 30, 2017		309,018
September 30, 2018 at Sep. 30, 2017	4,041,037	$ 3,090	1,135,627	2,999,932	(97,612)
Noncontrolling interest	8,484					$ 8,484
July 1, 2018 at Dec. 31, 2017		309,127
July 1, 2018 at Dec. 31, 2017	4,206,653	$ 3,091	1,141,451	3,124,103	(70,476)
Net income	445,109
Less: net income attributable to noncontrolling interest	1,040					1,040
Net income attributable to LKQ stockholders	444,069			444,069
Other comprehensive income	(69,660)				(69,660)
Stock issued in acquisitions		8,056
Stock issued in acquisitions	251,334	$ 81	251,253
Vesting of restricted stock units, net of shares withheld for employee tax		600
Vesting of restricted stock units, net of shares withheld for employee tax	(3,711)	$ 6	(3,717)
Stock-based compensation expense	17,544		17,544
Exercise of stock options		441
Exercise of stock options	3,772	$ 4	3,768
Shares withheld for net share settlement of stock option awards		(27)
Shares withheld for net share settlement of stock option awards	(1,057)		(1,057)
Adoption of ASU 2018-02 (see Note 4)	5,345			(5,345)	5,345
Capital contributions from, net of dividends to, noncontrolling interest shareholder	3,182					3,182
Acquired noncontrolling interest	44,250					44,250
September 30, 2018 at Sep. 30, 2018		318,197
September 30, 2018 at Sep. 30, 2018	4,897,416	$ 3,182	1,409,242	3,562,827	(134,791)	56,956
Noncontrolling interest						57,503
July 1, 2018 at Jun. 30, 2018		317,821
July 1, 2018 at Jun. 30, 2018	4,776,975	$ 3,178	1,403,630	3,428,725	(116,061)
Net income	134,480
Less: net income attributable to noncontrolling interest	378					378
Net income attributable to LKQ stockholders	134,102			134,102
Other comprehensive income	(18,730)				(18,730)
Vesting of restricted stock units, net of shares withheld for employee tax		256
Vesting of restricted stock units, net of shares withheld for employee tax	(934)	$ 3	(937)
Stock-based compensation expense	5,700		5,700
Exercise of stock options		120
Exercise of stock options	850	$ 1	849
Capital contributions from, net of dividends to, noncontrolling interest shareholder	(925)					(925)
September 30, 2018 at Sep. 30, 2018		318,197
September 30, 2018 at Sep. 30, 2018	4,897,416	$ 3,182	$ 1,409,242	$ 3,562,827	$ (134,791)	$ 56,956
Noncontrolling interest	$ 56,956

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Interim Financial Statements (Notes)

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Interim Financial Statements

Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements represent the consolidation of LKQ Corporation, a Delaware corporation, and its subsidiaries. LKQ Corporation is a holding company and all operations are conducted by subsidiaries. When the terms "LKQ," "the Company," "we," "us," or "our" are used in this document, those terms refer to LKQ Corporation and its consolidated subsidiaries.

We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to interim financial statements. Accordingly, certain information related to our significant accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted. These unaudited condensed consolidated financial statements reflect, in the opinion of management, all material adjustments (which include only normally recurring adjustments) necessary to fairly state, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Operating results for interim periods are not necessarily indicative of the results that can be expected for any subsequent interim period or for a full year. These interim financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 28, 2018 ("2017 Form 10-K").

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Business Combinations (Notes)

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Business Combinations

Business Combinations

On May 30, 2018, we acquired Stahlgruber GmbH ("Stahlgruber"), a leading European wholesale distributor of aftermarket spare parts for passenger cars, tools, capital equipment and accessories with operations in Germany, Austria, Slovenia, Croatia, and with further sales to Switzerland. Total acquisition date fair value of the consideration for our Stahlgruber acquisition was €1.2 billion ($1.4 billion), composed of €1.0 billion ($1.1 billion) of cash paid (net of cash acquired), and €215 million ($251 million) of newly issued shares of LKQ common stock. We financed the acquisition with the proceeds from €1.0 billion ($1.2 billion) of senior notes, the direct issuance to Stahlgruber's owner of 8,055,569 newly issued shares of LKQ common stock, and borrowings under our existing revolving credit facility.

On May 3, 2018, the European Commission cleared the acquisition for the entire European Union, except with respect to the wholesale automotive parts business in the Czech Republic. The acquisition of the Czech Republic wholesale business has been referred to the Czech Republic competition authority for review. The Czech Republic wholesale business represents an immaterial portion of Stahlgruber's revenue and profitability.

We recorded $929 million of goodwill related to our acquisition of Stahlgruber, of which we expect $292 million to be deductible for income tax purposes. In the period between the acquisition date and September 30, 2018, Stahlgruber, which is reported in our Europe reportable segment, generated revenue of $637 million and operating income of $34 million.

In addition to our acquisition of Stahlgruber, during the nine months ended September 30, 2018, we completed acquisitions of one wholesale business in North America and seven wholesale businesses in Europe. Total acquisition date fair value of the consideration for these acquisitions was $86 million, composed of $76 million of cash paid (net of cash acquired), $7 million of notes payable, and $3 million for the estimated value of contingent payments to former owners (with maximum potential payments totaling $5 million). During the nine months ended September 30, 2018, we recorded $72 million of goodwill related to these acquisitions, of which we expect an immaterial amount to be deductible for income tax purposes. In the period between the acquisition dates and September 30, 2018, these acquisitions generated revenue of $19 million and operating income of $2 million.

During the year ended December 31, 2017, we completed 26 acquisitions including 6 wholesale businesses in North America, 16 wholesale businesses in Europe and 4 Specialty businesses. Our acquisitions in Europe included the acquisition of four aftermarket parts distribution businesses in Belgium in July 2017. Our Specialty acquisitions included the acquisition of the aftermarket business of Warn Industries, Inc. ("Warn"), a leading designer, manufacturer and marketer of high performance vehicle equipment and accessories, in November 2017.

Total acquisition date fair value of the consideration for our 2017 acquisitions was $542 million, composed of $510 million of cash paid (net of cash acquired), $6 million for the estimated value of contingent payments to former owners (with maximum potential payments totaling $19 million), $5 million of other purchase price obligations (non-interest bearing) and $20 million of notes payable. We typically fund our acquisitions using borrowings under our credit facilities or other financing arrangements. During the year ended December 31, 2017, we recorded $307 million of goodwill related to these acquisitions, of which we expect $21 million to be deductible for income tax purposes.

Our acquisitions are accounted for under the purchase method of accounting and are included in our consolidated financial statements from the dates of acquisition. The purchase prices were allocated to the net assets acquired based upon estimated fair values at the dates of acquisition. The purchase price allocations for the acquisitions made during the nine months ended September 30, 2018 and the last three months of the year ended December 31, 2017 are preliminary as we are in the process of determining the following: 1) valuation amounts for certain receivables, inventories and fixed assets acquired; 2) valuation amounts for certain intangible assets acquired; 3) the acquisition date fair value of certain liabilities assumed; and 4) the tax basis of the entities acquired. We have recorded preliminary estimates for certain of the items noted above and will record adjustments, if any, to the preliminary amounts upon finalization of the valuations.

From the date of our preliminary allocation for Stahlgruber in the second quarter of 2018 through September 30, 2018, we recorded adjustments based on our valuation procedures, primarily related to inventory and current liabilities that resulted in the allocation of $1 million of goodwill to acquired net assets. From the date of our preliminary allocations for our other acquisitions completed in the first half of 2018, the measurement period adjustments recorded for acquisitions completed in prior periods were not material. The income statement effect of these measurement period adjustments for our Stahlgruber acquisition and our other acquisitions completed in the first half of 2018 that would have been recorded in previous reporting periods if the adjustments had been recognized as of the acquisition dates was immaterial. The balance sheet impact and income statement effect of other measurement-period adjustments recorded for acquisitions completed in prior periods were immaterial.

The purchase price allocations for the acquisitions completed during the nine months ended September 30, 2018 and the year ended December 31, 2017 are as follows (in thousands):

	Nine Months Ended									Year Ended
	September 30, 2018									December, 31, 2017
	Stahlgruber			Other Acquisitions (2)			Total			All Acquisitions (1)
Receivables	$	140,979		$	15,369		$	156,348		$	73,782
Receivable reserves	(2,818		)	(875		)	(3,693		)	(7,032		)
Inventories (3)	374,056			12,240			386,296			150,342
Prepaid expenses and other current assets	9,537			1,806			11,343			(295		)
Property, plant and equipment	260,661			6,089			266,750			41,039
Goodwill	929,376			68,254			997,630			314,817
Other intangibles	285,529			16,315			301,844			181,216
Other assets	16,625			37			16,662			3,257
Deferred income taxes	(97,805		)	(716		)	(98,521		)	(65,087		)
Current liabilities assumed	(343,221		)	(20,662		)	(363,883		)	(111,484		)
Debt assumed	(65,852		)	(4,410		)	(70,262		)	(33,586		)
Other noncurrent liabilities assumed (4)	(81,689		)	(9,993		)	(91,682		)	(1,917		)
Noncontrolling interest	(44,250		)	—			(44,250		)	—
Contingent consideration liabilities	—			(3,107		)	(3,107		)	(6,234		)
Other purchase price obligations	(2,349		)	3,853			1,504			(5,074		)
Stock issued	(251,334		)	—			(251,334		)	—
Notes issued	—			(6,948		)	(6,948		)	(20,187		)
Settlement of pre-existing balances	—			—			—			242
Gains on bargain purchases (5)	—			(328		)	(328		)	(3,870		)
Settlement of other purchase price obligations (non-interest bearing)	—			1,698			1,698			3,159
Cash used in acquisitions, net of cash acquired	$	1,127,445		$	78,622		$	1,206,067		$	513,088

(1) The amounts recorded during the year ended December 31, 2017 include $6 million and $3 million of adjustments to reduce property, plant and equipment and other assets for Rhiag-Inter Auto Parts Italia S.r.l. (“Rhiag”) and Pittsburgh Glass Works LLC (“PGW”), respectively.

(2) The amounts recorded during the nine months ended September 30, 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.

(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 $75 million liability for certain pension obligations. See Note 13, "Employee Benefit Plans" for information related to our defined benefit plans.

(5) The amount recorded during the nine months ended September 30, 2018 is due to the gain on bargain purchase related to an acquisition in Europe completed in the second quarter of 2017 as a result of a change in the acquisition date fair value of the consideration. 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 Limited ("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.

The fair value of our intangible assets is based on a number of inputs, including projections of future cash flows, assumed royalty rates and customer attrition rates, all of which are Level 3 inputs. The fair value of our property, plant and equipment is determined using inputs such as market comparables and current replacement or reproduction costs of the asset, adjusted for physical, functional and economic factors; these adjustments to arrive at fair value use unobservable inputs in which little or no market data exists, and therefore, these inputs are considered to be Level 3 inputs. See Note 12, "Fair Value Measurements" for further information regarding the tiers in the fair value hierarchy.

The acquisition of Stahlgruber expands LKQ's geographic presence in continental Europe and serves as an additional strategic hub for our European operations. In addition, we believe the acquisition of Stahlgruber will allow for continued improvement in procurement, logistics and infrastructure optimization. The primary objectives of our other acquisitions made during the nine months ended September 30, 2018 and the year ended December 31, 2017 were to create economic value for our stockholders by enhancing our position as a leading source for alternative collision and mechanical repair products and to expand into other product lines and businesses that may benefit from our operating strengths. Certain 2017 acquisitions were completed to enable us to align our distribution model in the Benelux region.

When we identify potential acquisitions, we attempt to target companies with a leading market presence, an experienced management team and workforce that provides a fit with our existing operations, and strong cash flows. For certain of our acquisitions, we have identified cost savings and synergies as a result of integrating the company with our existing business that provide additional value to the combined entity. In many cases, acquiring companies with these characteristics will result in purchase prices that include a significant amount of goodwill.

The following pro forma summary presents the effect of the businesses acquired during the nine months ended September 30, 2018 as though the businesses had been acquired as of January 1, 2017, and the businesses acquired during the year ended December 31, 2017 as though they had been acquired as of January 1, 2016. The pro forma adjustments are based upon unaudited financial information of the acquired entities (in thousands, except per share data):

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2018		2017			2018			2017
Revenue, as reported	$	3,122,378	$	2,465,800		$	8,873,893		$	7,267,054
Revenue of purchased businesses for the period prior to acquisition:
Stahlgruber	—		473,326			815,405			1,289,083
Other acquisitions	6,641		83,893			51,132			387,844
Pro forma revenue	$	3,129,019	$	3,023,019		$	9,740,430		$	8,943,981
Income from continuing operations, as reported (1)	$	134,480	$	122,381		$	445,109		$	414,104
Income from continuing operations of purchased businesses for the period prior to acquisition, and pro forma purchase accounting adjustments:
Stahlgruber	5,054		6,061			14,114			5,298
Other acquisitions	161		3,478			1,588			17,014
Acquisition related expenses, net of tax (2)	681		2,301			13,986			5,010
Pro forma income from continuing operations	140,376		134,221			474,797			441,426
Less: Pro forma net income attributable to noncontrolling interest	—		888			2,799			2,157
Pro forma income from continuing operations attributable to LKQ stockholders	$	140,376	$	133,333		$	471,998		$	439,269
Earnings per share from continuing operations, basic - as reported	$	0.42	$	0.40		$	1.42		$	1.34
Effect of purchased businesses for the period prior to acquisition:
Stahlgruber	0.02		0.02			0.05			0.02
Other acquisitions	0.00		0.01			0.01			0.06
Acquisition related expenses, net of tax (2)	0.00		0.01			0.04			0.02
Impact of share issuance from acquisition of Stahlgruber	—		(0.01		)	(0.02		)	(0.03		)
Pro forma earnings per share from continuing operations, basic (3)	0.44		0.42			1.49			1.39
Less: Pro forma net income attributable to noncontrolling interest	—		0.00			0.01			0.01
Pro forma income from continuing operations attributable to LKQ stockholders	$	0.44	$	0.42		$	1.49		$	1.39
Earnings per share from continuing operations, diluted - as reported	$	0.42	$	0.39		$	1.41		$	1.33
Effect of purchased businesses for the period prior to acquisition:
Stahlgruber	0.02		0.02			0.04			0.02
Other acquisitions	0.00		0.01			0.01			0.05
Acquisition related expenses, net of tax (2)	0.00		0.01			0.04			0.02
Impact of share issuance from acquisition of Stahlgruber	—		(0.01		)	(0.02		)	(0.03		)
Pro forma earnings per share from continuing operations, diluted (3)	0.44		0.42			1.49			1.39
Less: Pro forma net income attributable to noncontrolling interest	—		0.00			0.01			0.01
Pro forma income from continuing operations attributable to LKQ stockholders	$	0.44	$	0.42		$	1.48		$	1.38

(1) Includes interest expense for the period from April 9, 2018 through September 30, 2018 recorded on the senior notes issued in connection with our acquisition of Stahlgruber.

(2) Includes expenses related to acquisitions closed in the period and excludes expenses for acquisitions not yet completed.

(3) The sum of the individual earnings per share amounts may not equal the total due to rounding.

Unaudited pro forma supplemental information is based upon accounting estimates and judgments that we believe are reasonable. The unaudited pro forma supplemental information includes the effect of purchase accounting adjustments, such as the adjustment of inventory acquired to fair value, adjustments to depreciation on acquired property, plant and equipment, adjustments to rent expense for above or below market leases, adjustments to amortization on acquired intangible assets, adjustments to interest expense, and the related tax effects. The pro forma impact of our acquisitions also reflects the elimination of acquisition related expenses, net of tax. Refer to Note 6, "Restructuring and Acquisition Related Expenses," for further information regarding our acquisition related expenses. The pro forma information also includes the impact of the common stock issued to Stahlgruber as if it were issued on January 1, 2017. These pro forma results are not necessarily indicative of what would have occurred if the acquisitions had been in effect for the periods presented or of future results.

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Discontinued Operations (Notes)

9 Months Ended

Sep. 30, 2018

Discontinued Operations [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Discontinued Operations

On March 1, 2017, LKQ completed the sale of the glass manufacturing business of its PGW subsidiary to a subsidiary of Vitro S.A.B. de C.V. ("Vitro") for a sales price of $301 million, including cash received of $316 million, net of cash disposed of $15 million. Related to this transaction, the remaining portion of the Glass operating segment was combined with our Wholesale - North America operating segment, which is part of our North America reportable segment, in the first quarter of 2017. See Note 16, "Segment and Geographic Information" for further information regarding our segments.

In connection with the Stock and Asset Purchase Agreement, the Company and Vitro entered into a twelve-month Transition Services Agreement commencing on the transaction date with two six-month renewal periods, a three-year Purchase and Supply Agreement, and an Intellectual Property Agreement.

The following table summarizes the operating results of the Company’s discontinued operations related to the sale described above for the nine months ended September 30, 2017, as presented in Net loss from discontinued operations on the Unaudited Condensed Consolidated Statements of Income (in thousands):

	Nine Months Ended
	September 30, 2017
Revenue	$	111,130
Cost of goods sold	100,084
Selling, general and administrative expenses	8,369
Operating income	2,677
Interest and other income, net (1)	1,204
Income from discontinued operations before taxes	3,881
Provision for income taxes	3,598
Equity in loss of unconsolidated subsidiaries	(534		)
Loss from discontinued operations, net of tax	(251		)
Loss on sale of discontinued operations, net of tax (2)	(4,280		)
Net loss from discontinued operations	$	(4,531	)

(1) The Company elected to allocate interest expense to discontinued operations based on the expected debt to be repaid. Under this approach, allocated interest from January 1, 2017 through the date of sale was $2 million. This expense was offset by foreign currency gains.

(2) In the first quarter of 2017, upon closing of the sale and write-off of the net assets of the glass manufacturing business, we recorded a pre-tax loss on sale of $9 million, and a $4 million tax benefit. The incremental loss primarily reflects a $6 million payable for intercompany sales from the glass manufacturing business to the aftermarket automotive glass distribution business incurred prior to closing, which was paid by LKQ during the second quarter of 2017, and capital expenditures in 2017 that were not reimbursed by the buyer.

The glass manufacturing business had $4 million of operating cash outflows, $4 million of investing cash outflows mainly consisting of capital expenditures, and $15 million of financing cash inflows made up of parent financing for the period from January 1, 2017 through March 1, 2017.

Pursuant to the Purchase and Supply Agreement, our aftermarket automotive glass distribution business will source various products from Vitro's glass manufacturing business annually for a three-year period beginning on March 1, 2017. Between January 1, 2017 and the sale date of March 1, 2017, intercompany sales between the glass manufacturing business and the continuing aftermarket automotive glass distribution business of PGW, which were eliminated in consolidation, were $8 million. All purchases from Vitro, including those outside of the Purchase and Supply Agreement, were $4 million and $22 million for the three and nine months ended September 30, 2018, respectively, and were $10 million and $27 million for the three months ended September 30, 2017 and the period between the sale date of March 1, 2017 and September 30, 2017, respectively.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Inventory

Inventories consist of the following (in thousands):

	September 30,		December 31,
	2018		2017
Aftermarket and refurbished products	$	2,287,776	$	1,877,653
Salvage and remanufactured products	484,761		487,108
Manufactured products	22,357		16,022
Total inventories	$	2,794,894	$	2,380,783

    Aftermarket and refurbished products and salvage and remanufactured products are primarily composed of finished goods. As of September 30, 2018, manufactured products inventory was composed of $16 million of raw materials, $2 million of work in process, and $4 million of finished goods. As of December 31, 2017, manufactured products inventory was composed of $10 million of raw materials, $2 million of work in process, and $4 million of finished goods.

Our May 2018 acquisition of Stahlgruber contributed $374 million to our aftermarket and refurbished products inventory. See Note 2, "Business Combinations" for further information on our acquisitions.

Receivables, Policy [Policy Text Block]

We have a reserve for uncollectible accounts, which was approximately $63 million and $58 million at September 30, 2018 and December 31, 2017, respectively. Our May 2018 acquisition of Stahlgruber contributed $3 million to our reserve for uncollectible accounts. See Note 2, "Business Combinations" for further information on our acquisitions.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Adoption of New Revenue Standard

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). This update outlines a new comprehensive revenue recognition model that supersedes the prior revenue recognition guidance and requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB has issued several updates to ASU 2014-09, which collectively with ASU 2014-09, represent the FASB Accounting Standards Codification Topic 606 (“ASC 606”). On January 1, 2018, we adopted ASC 606 for all contracts using the modified retrospective method, which means the historical periods are presented under the previous revenue standards with the cumulative net income effect being adjusted through retained earnings.

Most of the changes resulting from our adoption of ASC 606 were changes in presentation within the Unaudited Condensed Consolidated Balance Sheets and the Unaudited Condensed Consolidated Statements of Income. Therefore, while we made adjustments to certain opening balances on our January 1, 2018 balance sheet, we made no adjustments to opening retained earnings. We expect the impact of the adoption of ASC 606 to be immaterial to our net income on an ongoing basis. See Note 5, "Revenue Recognition" for the required disclosures under ASC 606.

With the adoption of ASC 606, we reclassified certain amounts related to variable consideration. Under ASC 606, we are required to present a refund liability and a returns asset within the Unaudited Condensed Consolidated Balance Sheet, whereas in periods prior to adoption, we presented the estimated margin impact of expected returns as a contra-asset within accounts receivable. Additionally, under ASC 606, the changes in the refund liability are reported in revenue, and the changes in the returns assets are reported in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. Prior to adoption, the change in the reserve for returns was generally reported as a net amount within revenue. As a result, the income statement presentation was adjusted concurrently with the balance sheet change beginning in 2018.

The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 was as follows (in thousands):

	Balance as of December 31, 2017		Adjustments Due to ASC 606		Balance as of January 1, 2018
Balance Sheet
Assets
Accounts receivable	$	1,027,106	$	38,511	$	1,065,617
Prepaid expenses and other current assets	134,479		44,508		178,987
Liabilities
Refund liability	—		83,019		83,019

The impact of the adoption of ASC 606 on our Unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 and our Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2018 was as follows (in thousands):

	Balance as of September 30, 2018
	As Reported		Amounts Without Adoption of ASC 606		Effect of Change Higher/(Lower)
Balance Sheet
Assets
Accounts receivable	$	1,255,876	$	1,205,833	$	50,043
Prepaid expenses and other current assets	200,944		144,255		56,689
Liabilities
Refund liability	106,732		—		106,732

	For the three months ended September 30, 2018
	As Reported		Amounts Without Adoption of ASC 606		Effect of Change Higher/(Lower)
Income Statement
Revenue	$	3,122,378	$	3,123,468	$	(1,090	)
Cost of goods sold	1,925,180		1,925,107		73
Selling, general and administrative expenses	879,150		880,313		(1,163		)

	For the nine months ended September 30, 2018
	As Reported		Amounts Without Adoption of ASC 606		Effect of Change Higher/(Lower)
Income Statement
Revenue	$	8,873,893	$	8,882,558	$	(8,665	)
Cost of goods sold	5,460,845		5,467,061		(6,216		)
Selling, general and administrative expenses	2,472,085		2,474,534		(2,449		)

We have not included a table of the impact of the balance sheet adjustments on the Unaudited Condensed Consolidated Statement of Cash Flows as the adjustment will net to zero within the operating activities section of this statement.

Under ASC 606, we have elected not to adjust consideration for the effect of a significant financing component at contract inception if the period between the transfer of goods to the customer and payment received from the customer is one year or less. Generally, our payment terms are short term in nature, but in some instances we may offer extended terms to customers exceeding one year such that interest would be accrued with respect to those contracts. The interest that would be accrued related to these contracts is immaterial at September 30, 2018.

Under ASC 340, "Other Assets and Deferred Costs," we have elected to recognize incremental costs of obtaining a contract (commissions earned by our sales representatives on product sales) as an expense when incurred, as we believe the amortization period of the asset would be one year or less due to the short-term nature of our contracts.

Other Recently Adopted Accounting Pronouncements

During the first quarter of 2018, we adopted ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which changes how entities will recognize, measure, present and make disclosures about certain financial assets and financial liabilities. The adoption of ASU 2016-01 did not have a significant impact on our financial position, results of operations, cash flows or disclosures.

During the first quarter of 2018, we adopted ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"), which includes guidance on classification for the following items: debt prepayment or debt extinguishment costs, settlement of zero coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and corporate-owned or bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and other separately identifiable cash flows where application of the predominance principle is prescribed. No adjustments were required in our Unaudited Condensed Consolidated Statement of Cash Flows upon adoption. Within our Unaudited Condensed Consolidating Statements of Cash Flows in Note 18, "Condensed Consolidating Financial Information," we now present a new line item, Payments of deferred purchase price on receivables securitization, as a result of adopting ASU 2016-15; prior year cash flow information within this footnote has been recast to reflect the impact of adopting this accounting standard. Other than the addition of this new line item, there was no impact to our Unaudited Condensed Consolidating Statements of Cash Flows upon adoption.

During the first quarter of 2018, we adopted ASU No. 2017-01, "Clarifying the Definition of a Business" (“ASU 2017-01”), which requires an evaluation of whether substantially all of the fair value of assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the transaction does not qualify as a business. The guidance also requires an acquired business to include at least one substantive process and narrows the definition of outputs.  The adoption of ASU 2017-01 did not have a material impact on our unaudited condensed consolidated financial statements.

During the first quarter of 2018, we adopted ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02"), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the reduction of the U.S. federal statutory income tax rate to 21% from 35% due to the enactment of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). In addition, under ASU 2018-02, an entity is required to provide certain disclosures regarding stranded tax effects. ASU 2018-02 is effective for fiscal years and interim periods beginning after December 15, 2018; early adoption is permitted. As a result of the adoption of ASU 2018-02, we recorded a $5 million reclassification to increase Accumulated Other Comprehensive (Loss) Income and decrease Retained Earnings.

During the first quarter of 2018, we adopted ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" ("ASU 2017-07"), which requires presentation of the current service cost component of net periodic benefit expense with other current compensation expenses for the related employees, and requires presentation of the remaining components of net periodic benefit expense, such as interest, expected return on plan assets, and amortization of actuarial gains and losses, outside of operating income. ASU 2017-07 also specifies that, on a prospective basis, only the service cost component is eligible for capitalization into inventory or other assets. While the income statement classification provisions of ASU 2017-07 are applicable on a retrospective basis, due to the immaterial impact to our Unaudited Condensed Consolidated Statements of Income in prior periods, we did not recast prior period income statement information and adopted the classification provisions on a prospective basis. The change in the capitalization provisions under ASU 2017-07 did not have a material impact on our unaudited condensed consolidated financial statements. See Note 13, "Employee Benefit Plans," for further disclosure on the components of net periodic benefit expense and classification of the components within our Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2018 and 2017.

During the third quarter of 2018, the FASB issued ASU No. 2018-15, "Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" ("ASU 2018-15"). This update requires an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. ASU 2018-15 is effective for fiscal years and interim periods beginning after December 15, 2019; early adoption is permitted. We have adopted ASU 2018-15 in the third quarter of 2018 as we believe that our existing policy is consistent with the new guidance and thus no adjustments were required to be in compliance with this standard update.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, "Leases" ("ASU 2016-02"), to increase transparency and comparability by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between current GAAP and ASU 2016-02 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current GAAP. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The standard requires that entities apply the effects of these changes using a modified retrospective approach, which includes a number of optional practical expedients. While we are still in the process of quantifying the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements and related disclosures, we anticipate the adoption will materially affect our consolidated balance sheet and disclosures, as the majority of our operating leases will be recorded on the balance sheet under ASU 2016-02. While we do not anticipate the adoption of this accounting standard to have a material impact on our consolidated statements of income at this time, this conclusion may change as we finalize our assessment. In order to assist in our timely implementation of the new standard, we have purchased new software to track our leases. We have engaged a third party to assist with the implementation of the new software with an expectation to complete the implementation by the end of 2018. During the second quarter, we completed phase one of the software roll-out for our North America and Specialty operations. We are nearing completion of the phase one roll-out in our Europe operations as of the filing date of this Quarterly Report on Form 10-Q.

In August 2017, the FASB issued ASU No. 2017-12, "Targeted Improvements to Accounting for Hedging Activities" ("ASU 2017-12"), which amends the hedge accounting recognition and presentation requirements in ASC 815 ("Derivatives and Hedging"). ASU 2017-12 significantly alters the hedge accounting model by making it easier for an entity to achieve and maintain hedge accounting and provides for accounting that better reflects an entity's risk management activities. ASU 2017-12 is effective for fiscal years and interim periods beginning after December 15, 2018; early adoption is permitted. Entities will adopt the provisions of ASU 2017-12 by applying a modified retrospective approach to existing hedging relationships as of the adoption date. At this time, we are still evaluating the impact of this standard on our financial statements.

In August 2018, the FASB issued ASU No. 2018-13, "Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement" ("ASU 2018-13"), which removes, modifies, and adds certain disclosure requirements in ASC 820. ASU 2018-13 is effective for fiscal years and interim periods beginning after December 15, 2019; early adoption is permitted. We are in the process of evaluating the impact of this standard on our disclosures but do not believe that it will have a material impact.

In August 2018, the FASB issued ASU No. 2018-14, "Disclosure Framework- Changes to the Disclosure Requirements for Defined Benefit Plans" ("ASU 2018-14"), which removes, modifies, and adds certain disclosure requirements to ASC 715-20. ASU 2018-14 is effective for fiscal years and interim periods beginning after December 15, 2020; early adoption is permitted. We are in the process of evaluating the impact of this standard on our disclosures.

Financial Statement Information [Line Items]

Financial Statement Information

Allowance for Doubtful Accounts

We have a reserve for uncollectible accounts, which was approximately $63 million and $58 million at September 30, 2018 and December 31, 2017, respectively. Our May 2018 acquisition of Stahlgruber contributed $3 million to our reserve for uncollectible accounts. See Note 2, "Business Combinations" for further information on our acquisitions.

Inventories

Inventories consist of the following (in thousands):

	September 30,		December 31,
	2018		2017
Aftermarket and refurbished products	$	2,287,776	$	1,877,653
Salvage and remanufactured products	484,761		487,108
Manufactured products	22,357		16,022
Total inventories	$	2,794,894	$	2,380,783

    Aftermarket and refurbished products and salvage and remanufactured products are primarily composed of finished goods. As of September 30, 2018, manufactured products inventory was composed of $16 million of raw materials, $2 million of work in process, and $4 million of finished goods. As of December 31, 2017, manufactured products inventory was composed of $10 million of raw materials, $2 million of work in process, and $4 million of finished goods.

Our May 2018 acquisition of Stahlgruber contributed $374 million to our aftermarket and refurbished products inventory. See Note 2, "Business Combinations" for further information on our acquisitions.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized. Construction in progress consists primarily of building and land improvements at our existing facilities. Depreciation is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term of the related lease and reasonably assured renewal periods, if shorter.

Our estimated useful lives are as follows:

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

Property, plant and equipment consists of the following (in thousands):

	September 30,			December 31,
	2018			2017
Land and improvements	$	189,404		$	137,790
Buildings and improvements	373,607			233,078
Machinery and equipment	618,209			521,526
Computer equipment and software	142,719			133,753
Vehicles and trailers	177,778			161,269
Furniture and fixtures	52,595			31,794
Leasehold improvements	283,603			257,506
	1,837,915			1,476,716
Less—Accumulated depreciation	(691,086		)	(606,112		)
Construction in progress	54,174			42,485
Total property, plant and equipment, net	$	1,201,003		$	913,089

The components of opening property, plant and equipment acquired as part of our acquisition of Stahlgruber in May 2018 are as follows (in thousands):

	Gross Amount
Land and improvements	$	47,281
Buildings and improvements	125,649
Machinery and equipment	49,384
Computer equipment and software	3,760
Vehicles and trailers	643
Furniture and fixtures	28,535
Leasehold improvements	1,890
	257,142
Construction in progress	3,519
Total property, plant and equipment	$	260,661

We record depreciation expense associated with our refurbishing, remanufacturing, manufacturing and furnace operations as well as our distribution centers in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. All other depreciation expense is reported in Depreciation and amortization. Total depreciation expense for the three and nine months ended September 30, 2018 was $39 million and $115 million, respectively, and $34 million and $93 million during the three and nine months ended September 30, 2017, respectively.

Intangible Assets

Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer and supplier relationships, software and other technology related assets, and covenants not to compete.

The changes in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2018 are as follows (in thousands):

	North America			Europe			Specialty			Total
Balance as of January 1, 2018	$	1,709,354		$	1,414,898		$	412,259		$	3,536,511
Business acquisitions and adjustments to previously recorded goodwill	1,073			1,002,277			(5,720		)	997,630
Exchange rate effects	(3,049		)	(55,901		)	75			(58,875		)
Balance as of September 30, 2018	$	1,707,378		$	2,361,274		$	406,614		$	4,475,266

During the nine months ended September 30, 2018, we recorded $929 million of goodwill related to our acquisition of Stahlgruber. See Note 2, "Business Combinations" for further information on our acquisitions.

The components of other intangibles, net are as follows (in thousands):

	September 30, 2018		December 31, 2017
Intangible assets subject to amortization	$	872,072	$	664,969
Indefinite-lived intangible assets
Trademarks	81,300		78,800
Total	$	953,372	$	743,769

The components of intangible assets subject to amortization are as follows (in thousands):

	September 30, 2018							December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Trade names and trademarks	$	495,839	$	(88,805	)	$	407,034	$	327,332	$	(75,095	)	$	252,237
Customer and supplier relationships	586,221		(223,085		)	363,136		510,113		(167,532		)	342,581
Software and other technology related assets	172,391		(73,760		)	98,631		124,049		(59,081		)	64,968
Covenants not to compete	13,488		(10,217		)	3,271		14,981		(9,798		)	5,183
Total	$	1,267,939	$	(395,867	)	$	872,072	$	976,475	$	(311,506	)	$	664,969

The components of intangible assets acquired as part of our acquisitions in 2018 are as follows (in thousands):

	Nine Months Ended
	September 30, 2018
	Stahlgruber		Other Acquisitions		Total
Trade names and trademarks	$	173,946	$	2,895	$	176,841
Customer and supplier relationships	78,239		8,194		86,433
Software and other technology related assets	33,344		92		33,436
Total	$	285,529	$	11,181	$	296,710

The weighted-average amortization periods for our intangible assets acquired during the nine months ended September 30, 2018 and the year ended December 31, 2017 are as follows (in years):

	Nine Months Ended			Year Ended
	September 30, 2018			December 31, 2017
	Stahlgruber	Other Acquisitions	Total	All Acquisitions
Trade names and trademarks	19.9	20.0	19.9	11.2
Customer and supplier relationships	3.0	9.6	3.6	18.6
Software and other technology related assets	6.8	6.0	6.8	11.1
Covenants not to compete	-	-	-	4.4
Total acquired finite-lived intangible assets	13.7	12.2	13.7	16.5

Our estimated useful lives for our finite-lived intangible assets are as follows:

	Method of Amortization	Useful Life
Trade names and trademarks	Straight-line	4-30 years
Customer and supplier relationships	Accelerated	3-20 years
Software and other technology related assets	Straight-line	3-15 years
Covenants not to compete	Straight-line	2-5 years

Amortization expense for intangibles was $42 million and $96 million during the three and nine months ended September 30, 2018, respectively, and $26 million and $74 million during the three and nine months ended September 30, 2017, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2022 is $40 million (for the remaining three months of 2018), $136 million, $104 million, $75 million and $62 million, respectively.

Investments in Unconsolidated Subsidiaries

Our investment in unconsolidated subsidiaries was $157 million and $208 million as of September 30, 2018 and December 31, 2017, respectively. On December 1, 2016, we acquired a 26.5% equity interest in Mekonomen AB ("Mekonomen") for an aggregate purchase price of $181 million. Headquartered in Stockholm, Sweden, Mekonomen is the leading independent car parts and service chain in the Nordic region of Europe, offering a range of products including spare parts and accessories for cars, and workshop services for consumers and businesses. As a result of the investment, we nominated two representatives for election to Mekonomen's board of directors; both representatives were subsequently elected to and continue to serve on the board of directors, including one as the chairman of the board. We are accounting for our interest in Mekonomen using the equity method of accounting, as our investment gives us the ability to exercise significant influence, but not control, over the investee. As of September 30, 2018, the book value of our investment in Mekonomen exceeded our share of the book value of Mekonomen's net assets by $64 million; this difference is primarily related to goodwill and the fair value of other intangible assets. We are recording our equity in the net earnings of Mekonomen on a one quarter lag. We recorded equity losses of $20 million and $18 million during the three and nine months ended September 30, 2018, respectively, and equity in earnings of $3 million and $5 million during the three and nine months ended September 30, 2017 related to our investment in Mekonomen, including adjustments to convert the results to GAAP and to recognize the impact of our purchase accounting adjustments. In May 2018 and May 2017, we received cash dividends of $8 million (SEK 67 million) and $7 million (SEK 67 million), respectively, related to our investment in Mekonomen.

On July 6, 2018, Mekonomen announced the acquisition of two automotive spare parts distributors in Denmark and Poland. The objective of the acquisition is to strengthen Mekonomen's position in the sale of automotive spare parts in northern Europe and to establish a strong market position in Denmark and Poland, where Mekonomen has no current operations. The acquisition is partially being financed by a rights issue with preferential rights for Mekonomen's existing shareholders, who were given the right to subscribe for four new Mekonomen shares per seven existing owned shares at a discounted share price. On October 5, 2018, we subscribed for our pro rata share in the rights issue giving us the right to acquire an additional $48 million of equity in Mekonomen at a discounted share price, retaining our 26.5% equity interest. We recorded a derivative instrument of $29 million in Other assets on our Unaudited Condensed Consolidated Balance Sheets, which represents our right to acquire Mekonomen shares at a discount. We are measuring the derivative instrument at fair value, and we recorded a $3 million gain on our fair value remeasurement during the three months ended September 30, 2018; the gain is recorded in Other income, net on the Unaudited Condensed Consolidated Statements of Income. In the fourth quarter, we will record an $8 million loss related to the settlement of the derivative instrument in October 2018 due to a decrease in the Mekonomen share price from the last day of the third quarter to the settlement date.

We evaluated our investment in Mekonomen for other-than-temporary impairment as of September 30, 2018, and concluded the decline in fair value was other-than-temporary due to a prolonged and significant stock price decrease. Therefore, we recognized an other-than-temporary impairment of $23 million, which represents the difference in the carrying value and the fair value of our investment in Mekonomen. The fair value of our investment in Mekonomen was determined using the Mekonomen share price as of September 30, 2018. The impairment charge is recorded in Equity in (losses) earnings of unconsolidated subsidiaries in our Unaudited Condensed Consolidated Statements of Income. Equity in losses and earnings from our investment in Mekonomen are reported in the Europe segment. As a result of the impairment charge, the Level 1 fair value of our equity investment in the publicly traded Mekonomen common stock at September 30, 2018 approximated the carrying value of $134 million.

Warranty Reserve

Some of our salvage mechanical products are sold with a standard six month warranty against defects. Additionally, some of our remanufactured engines are sold with a standard three year warranty against defects. We also provide a limited lifetime warranty for certain of our aftermarket products. These assurance-type warranties are not considered a separate performance obligation, and thus no transaction price is allocated to them. We record the warranty costs in Cost of goods sold on our Unaudited Condensed Consolidated Statements of Income. Our warranty reserve is calculated using historical claim information to project future warranty claims activity and is recorded within Other accrued expenses and Other noncurrent liabilities on our Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments.

The changes in the warranty reserve are as follows (in thousands):

Balance as of December 31, 2017	$	23,151
Warranty expense	33,670
Warranty claims	(31,980		)
Balance as of September 30, 2018	$	24,841

Recent Accounting Pronouncements

Adoption of New Revenue Standard

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). This update outlines a new comprehensive revenue recognition model that supersedes the prior revenue recognition guidance and requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB has issued several updates to ASU 2014-09, which collectively with ASU 2014-09, represent the FASB Accounting Standards Codification Topic 606 (“ASC 606”). On January 1, 2018, we adopted ASC 606 for all contracts using the modified retrospective method, which means the historical periods are presented under the previous revenue standards with the cumulative net income effect being adjusted through retained earnings.

Most of the changes resulting from our adoption of ASC 606 were changes in presentation within the Unaudited Condensed Consolidated Balance Sheets and the Unaudited Condensed Consolidated Statements of Income. Therefore, while we made adjustments to certain opening balances on our January 1, 2018 balance sheet, we made no adjustments to opening retained earnings. We expect the impact of the adoption of ASC 606 to be immaterial to our net income on an ongoing basis. See Note 5, "Revenue Recognition" for the required disclosures under ASC 606.

With the adoption of ASC 606, we reclassified certain amounts related to variable consideration. Under ASC 606, we are required to present a refund liability and a returns asset within the Unaudited Condensed Consolidated Balance Sheet, whereas in periods prior to adoption, we presented the estimated margin impact of expected returns as a contra-asset within accounts receivable. Additionally, under ASC 606, the changes in the refund liability are reported in revenue, and the changes in the returns assets are reported in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. Prior to adoption, the change in the reserve for returns was generally reported as a net amount within revenue. As a result, the income statement presentation was adjusted concurrently with the balance sheet change beginning in 2018.

The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 was as follows (in thousands):

	Balance as of December 31, 2017		Adjustments Due to ASC 606		Balance as of January 1, 2018
Balance Sheet
Assets
Accounts receivable	$	1,027,106	$	38,511	$	1,065,617
Prepaid expenses and other current assets	134,479		44,508		178,987
Liabilities
Refund liability	—		83,019		83,019

The impact of the adoption of ASC 606 on our Unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 and our Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2018 was as follows (in thousands):

	Balance as of September 30, 2018
	As Reported		Amounts Without Adoption of ASC 606		Effect of Change Higher/(Lower)
Balance Sheet
Assets
Accounts receivable	$	1,255,876	$	1,205,833	$	50,043
Prepaid expenses and other current assets	200,944		144,255		56,689
Liabilities
Refund liability	106,732		—		106,732

	For the three months ended September 30, 2018
	As Reported		Amounts Without Adoption of ASC 606		Effect of Change Higher/(Lower)
Income Statement
Revenue	$	3,122,378	$	3,123,468	$	(1,090	)
Cost of goods sold	1,925,180		1,925,107		73
Selling, general and administrative expenses	879,150		880,313		(1,163		)

	For the nine months ended September 30, 2018
	As Reported		Amounts Without Adoption of ASC 606		Effect of Change Higher/(Lower)
Income Statement
Revenue	$	8,873,893	$	8,882,558	$	(8,665	)
Cost of goods sold	5,460,845		5,467,061		(6,216		)
Selling, general and administrative expenses	2,472,085		2,474,534		(2,449		)

We have not included a table of the impact of the balance sheet adjustments on the Unaudited Condensed Consolidated Statement of Cash Flows as the adjustment will net to zero within the operating activities section of this statement.

Under ASC 606, we have elected not to adjust consideration for the effect of a significant financing component at contract inception if the period between the transfer of goods to the customer and payment received from the customer is one year or less. Generally, our payment terms are short term in nature, but in some instances we may offer extended terms to customers exceeding one year such that interest would be accrued with respect to those contracts. The interest that would be accrued related to these contracts is immaterial at September 30, 2018.

Under ASC 340, "Other Assets and Deferred Costs," we have elected to recognize incremental costs of obtaining a contract (commissions earned by our sales representatives on product sales) as an expense when incurred, as we believe the amortization period of the asset would be one year or less due to the short-term nature of our contracts.

Other Recently Adopted Accounting Pronouncements

During the first quarter of 2018, we adopted ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which changes how entities will recognize, measure, present and make disclosures about certain financial assets and financial liabilities. The adoption of ASU 2016-01 did not have a significant impact on our financial position, results of operations, cash flows or disclosures.

During the first quarter of 2018, we adopted ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"), which includes guidance on classification for the following items: debt prepayment or debt extinguishment costs, settlement of zero coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and corporate-owned or bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and other separately identifiable cash flows where application of the predominance principle is prescribed. No adjustments were required in our Unaudited Condensed Consolidated Statement of Cash Flows upon adoption. Within our Unaudited Condensed Consolidating Statements of Cash Flows in Note 18, "Condensed Consolidating Financial Information," we now present a new line item, Payments of deferred purchase price on receivables securitization, as a result of adopting ASU 2016-15; prior year cash flow information within this footnote has been recast to reflect the impact of adopting this accounting standard. Other than the addition of this new line item, there was no impact to our Unaudited Condensed Consolidating Statements of Cash Flows upon adoption.

During the first quarter of 2018, we adopted ASU No. 2017-01, "Clarifying the Definition of a Business" (“ASU 2017-01”), which requires an evaluation of whether substantially all of the fair value of assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the transaction does not qualify as a business. The guidance also requires an acquired business to include at least one substantive process and narrows the definition of outputs.  The adoption of ASU 2017-01 did not have a material impact on our unaudited condensed consolidated financial statements.

During the first quarter of 2018, we adopted ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02"), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the reduction of the U.S. federal statutory income tax rate to 21% from 35% due to the enactment of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). In addition, under ASU 2018-02, an entity is required to provide certain disclosures regarding stranded tax effects. ASU 2018-02 is effective for fiscal years and interim periods beginning after December 15, 2018; early adoption is permitted. As a result of the adoption of ASU 2018-02, we recorded a $5 million reclassification to increase Accumulated Other Comprehensive (Loss) Income and decrease Retained Earnings.

During the first quarter of 2018, we adopted ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" ("ASU 2017-07"), which requires presentation of the current service cost component of net periodic benefit expense with other current compensation expenses for the related employees, and requires presentation of the remaining components of net periodic benefit expense, such as interest, expected return on plan assets, and amortization of actuarial gains and losses, outside of operating income. ASU 2017-07 also specifies that, on a prospective basis, only the service cost component is eligible for capitalization into inventory or other assets. While the income statement classification provisions of ASU 2017-07 are applicable on a retrospective basis, due to the immaterial impact to our Unaudited Condensed Consolidated Statements of Income in prior periods, we did not recast prior period income statement information and adopted the classification provisions on a prospective basis. The change in the capitalization provisions under ASU 2017-07 did not have a material impact on our unaudited condensed consolidated financial statements. See Note 13, "Employee Benefit Plans," for further disclosure on the components of net periodic benefit expense and classification of the components within our Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2018 and 2017.

During the third quarter of 2018, the FASB issued ASU No. 2018-15, "Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" ("ASU 2018-15"). This update requires an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. ASU 2018-15 is effective for fiscal years and interim periods beginning after December 15, 2019; early adoption is permitted. We have adopted ASU 2018-15 in the third quarter of 2018 as we believe that our existing policy is consistent with the new guidance and thus no adjustments were required to be in compliance with this standard update.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, "Leases" ("ASU 2016-02"), to increase transparency and comparability by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between current GAAP and ASU 2016-02 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current GAAP. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The standard requires that entities apply the effects of these changes using a modified retrospective approach, which includes a number of optional practical expedients. While we are still in the process of quantifying the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements and related disclosures, we anticipate the adoption will materially affect our consolidated balance sheet and disclosures, as the majority of our operating leases will be recorded on the balance sheet under ASU 2016-02. While we do not anticipate the adoption of this accounting standard to have a material impact on our consolidated statements of income at this time, this conclusion may change as we finalize our assessment. In order to assist in our timely implementation of the new standard, we have purchased new software to track our leases. We have engaged a third party to assist with the implementation of the new software with an expectation to complete the implementation by the end of 2018. During the second quarter, we completed phase one of the software roll-out for our North America and Specialty operations. We are nearing completion of the phase one roll-out in our Europe operations as of the filing date of this Quarterly Report on Form 10-Q.

In August 2017, the FASB issued ASU No. 2017-12, "Targeted Improvements to Accounting for Hedging Activities" ("ASU 2017-12"), which amends the hedge accounting recognition and presentation requirements in ASC 815 ("Derivatives and Hedging"). ASU 2017-12 significantly alters the hedge accounting model by making it easier for an entity to achieve and maintain hedge accounting and provides for accounting that better reflects an entity's risk management activities. ASU 2017-12 is effective for fiscal years and interim periods beginning after December 15, 2018; early adoption is permitted. Entities will adopt the provisions of ASU 2017-12 by applying a modified retrospective approach to existing hedging relationships as of the adoption date. At this time, we are still evaluating the impact of this standard on our financial statements.

In August 2018, the FASB issued ASU No. 2018-13, "Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement" ("ASU 2018-13"), which removes, modifies, and adds certain disclosure requirements in ASC 820. ASU 2018-13 is effective for fiscal years and interim periods beginning after December 15, 2019; early adoption is permitted. We are in the process of evaluating the impact of this standard on our disclosures but do not believe that it will have a material impact.

In August 2018, the FASB issued ASU No. 2018-14, "Disclosure Framework- Changes to the Disclosure Requirements for Defined Benefit Plans" ("ASU 2018-14"), which removes, modifies, and adds certain disclosure requirements to ASC 715-20. ASU 2018-14 is effective for fiscal years and interim periods beginning after December 15, 2020; early adoption is permitted. We are in the process of evaluating the impact of this standard on our disclosures.

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Revenue Recognition Revenue Reconition (Notes)

9 Months Ended

Sep. 30, 2018

Revenue Recognition [Abstract]

Revenue From Contract With Customer

Revenue Recognition

The core principle of ASC 606is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASC 606 defines a five-step process to achieve this core principle, which includes:

1. Identifying contracts with customers,

2. Identifying performance obligations within those contracts,

3. Determining the transaction price,

4. Allocating the transaction price to the performance obligations in the contract, which may include an estimate of variable consideration, and

5. Recognizing revenue when or as each performance obligation is satisfied.

The majority of our revenue is derived from the sale of vehicle parts. Under both the previous revenue standards and ASC 606, we recognize revenue when the products are shipped to, delivered to or picked up by customers and title has transferred.

Sources of Revenue

We report our revenue in two categories: (i) parts and services and (ii) other. The following table sets forth our revenue by category, with our parts and services revenue further disaggregated by reportable segment (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
North America	$	1,109,067	$	1,051,470	$	3,447,074	$	3,207,001
Europe	1,464,049		952,765		3,781,091		2,659,804
Specialty	388,865		329,522		1,151,172		1,005,776
Parts and services	2,961,981		2,333,757		8,379,337		6,872,581
Other	160,397		132,043		494,556		394,473
Total revenue	$	3,122,378	$	2,465,800	$	8,873,893	$	7,267,054

Parts and Services

Our parts revenue is generated from the sale of vehicle products including replacement parts, components and systems used in the repair and maintenance of vehicles and specialty products and accessories to improve the performance, functionality and appearance of vehicles. Services revenue includes additional services that are generally billed concurrently with the related product sales, such as the sale of service-type warranties and fees for admission to our self service yards.

In North America, our vehicle replacement products include sheet metal collision parts such as doors, hoods, and fenders; bumper covers; head and tail lamps; automotive glass products such as windshields; mirrors and grilles; wheels; and large mechanical items such as engines and transmissions. In Europe, our products include a wide variety of small mechanical products such as brake pads, discs and sensors; clutches; electrical products such as spark plugs and batteries; steering and suspension products; filters; and oil and automotive fluids. In our Specialty operations, we serve six product segments: truck and off-road; speed and performance; RV; towing; wheels, tires and performance handling; and miscellaneous accessories. 

Our service-type warranties typically have service periods ranging from 6 months to 36 months. Under ASC 606, proceeds from these service-type warranties are deferred at contract inception and amortized on a straight-line basis to revenue over the contract period. The changes in deferred service-type warranty revenue are as follows (in thousands):

Balance as of January 1, 2018	$	19,465
Additional warranty revenue deferred	28,889
Warranty revenue recognized	(25,200		)
Balance as of September 30, 2018	$	23,154

Other Revenue

Revenue from other sources includes scrap sales, bulk sales to mechanical manufacturers (including cores) and sales of aluminum ingots and sows from our furnace operations. We derive scrap metal from several sources, including vehicles that have been used in both our wholesale and self service recycling operations and from OEMs and other entities that contract with us for secure disposal of "crush only" vehicles. The sale of hulks in our wholesale and self service recycling operations represents one performance obligation, and revenue is recognized based on a price per weight when the customer (processor) collects the scrap. Some adjustments may occur when the customer weighs the scrap at their location, and revenue is adjusted accordingly. We constrain our estimate of consideration to be received to the extent that we believe there will be a significant reversal in revenue.

Revenue by Geographic Area

See Note 16, "Segment and Geographic Information" for information related to our revenue by geographic region.

Variable Consideration

The amount of revenue ultimately received from the customer can vary due to variable consideration which includes returns, discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, or other similar items. The previous revenue guidance required us to estimate the transaction price using a best estimate approach. Under ASC 606we are required to select the “expected value method” or the “most likely amount” method in order to estimate variable consideration. We utilize both methods in practice depending on the type of variable consideration. In addition, our estimates of variable consideration are constrained to the extent that a significant reversal in revenue is expected. We recorded a refund liability and return asset for expected returns of $107 million and $57 million, respectively, as of September 30, 2018 and a net reserve of $38 million as of December 31, 2017. The refund liability is presented separately on the balance sheet within current liabilities while the return asset is presented within prepaid expenses and other current assets. Other types of variable consideration consist primarily of discounts, volume rebates, and other customer sales incentives which are recorded in Receivables, net on the Unaudited Condensed Consolidated Balance Sheets. We recorded a reserve for our variable consideration of $114 million and $78 million as of September 30, 2018 and December 31, 2017, respectively. While other customer incentive programs exist, we characterize them as material rights in the context of our sales transactions. We consider these programs to be immaterial to our consolidated financial statements.

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Restructuring and Acquisition Related Expenses (Notes)

9 Months Ended

Sep. 30, 2018

Restructuring and Related Activities [Abstract]

Restructuring and Acquisition Related Expenses

Restructuring and Acquisition Related Expenses

Acquisition Related Expenses

Acquisition related expenses, which include external costs such as legal, accounting and advisory fees, totaled $1 million and $17 million for the three and nine months ended September 30, 2018, respectively. Our 2018 expenses primarily consisted of external costs related to our acquisition of Stahlgruber totaling $1 million and $15 million for the three and nine months ended September 30, 2018, respectively. The remaining acquisition related costs related to (i) completed acquisitions, (ii) pending acquisitions as of September 30, 2018, and (iii) potential acquisitions that were terminated.     

Acquisition related expenses for the three and nine months ended September 30, 2017 totaled $3 million and $8 million, respectively. Our 2017 expenses related to completed acquisitions and acquisitions that were pending as of September 30, 2017.

Acquisition Integration Plans and Restructuring

During the three and nine months endedSeptember 30, 2018, we incurred $5 million and $10 million of restructuring expenses, respectively. Restructuring expenses for the three months ended September 30, 2018 primarily consisted of $4 million related to the integration of our acquisition of Andrew Page and $1 million related to our Specialty segment; restructuring expenses for the nine months ended September 30, 2018 primarily consisted of $8 million related to the integration of our acquisition of Andrew Page and $2 million related to our Specialty segment. These integration activities included the closure of duplicate facilities and termination of employees.

During each of the three and nine months endedSeptember 30, 2017, we incurred $2 million of restructuring expenses, primarily related to the ongoing integration activities in our Specialty segment. Expenses incurred were primarily related to facility closures and the merger of existing facilities into larger distribution centers.

We expect to incur additional expenses related to the integration of certain of our acquisitions into our existing operations in 2018 and 2019. These integration activities are expected to include the closure of duplicate facilities, rationalization of personnel in connection with the consolidation of overlapping facilities with our existing business, and moving expenses. Future expenses to complete these integration plans are expected to be less than $10 million.

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Equity Incentive Plans

9 Months Ended

Sep. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity Incentive Plans

In order to attract and retain employees, non-employee directors, consultants, and other persons associated with us, we may grant qualified and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares and performance units under the LKQ Corporation 1998 Equity Incentive Plan (the “Equity Incentive Plan”). We have granted RSUs, stock options, and restricted stock under the Equity Incentive Plan. We expect to issue new or treasury shares of common stock to cover past and future equity grants.

RSUs

RSUs vest over periods of up to five years, subject to a continued service condition. Currently outstanding RSUs contain either a time-based vesting condition or a combination of a performance-based vesting condition and a time-based vesting condition, in which case both conditions must be met before any RSUs vest. For most of the RSUs containing a performance-based vesting condition, the Company must report positive diluted earnings per share, subject to certain adjustments, during any fiscal year period within five years following the grant date; we have an immaterial amount of RSUs containing other performance-based vesting conditions. Each RSU converts into one share of LKQ common stock on the applicable vesting date. The grant date fair value of RSUs is based on the market price of LKQ stock on the grant date.

The fair value of RSUs that vested during the nine months ended September 30, 2018 was $27 million.

The following table summarizes activity related to our RSUs under the Equity Incentive Plan for the nine months ended September 30, 2018:

	Number Outstanding		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value    (in thousands) (1)
Unvested as of January 1, 2018	1,624,390		$	29.94
Granted	601,802		$	42.58
Vested	(698,903	)	$	30.07
Forfeited / Canceled	(33,767	)	$	33.28
Unvested as of September 30, 2018	1,493,522		$	34.89
Expected to vest after September 30, 2018	1,344,519		$	34.88	2.6	$	42,581

(1)The aggregate intrinsic value of expected to vest RSUs represents the total pretax intrinsic value (the fair value of the Company's stock on the last day of each period multiplied by the number of units) that would have been received by the holders had all RSUs vested. This amount changes based on the market price of the Company’s common stock.

Stock Options

Stock options vest over periods of up to five years, subject to a continued service condition. Stock options expire either six or ten years from the date they are granted. No options were granted during the nine months ended September 30, 2018. No options vested during the nine months ended September 30, 2018; all of our outstanding options are fully vested.

The following table summarizes activity related to our stock options under the Equity Incentive Plan for the nine months ended September 30, 2018:

	Number Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value    (in thousands) (1)
Balance as of January 1, 2018	1,738,073		$	9.20
Exercised	(441,495	)	$	8.54		$	12,678
Canceled	(509	)	$	32.31
Balance as of September 30, 2018	1,296,069		$	9.42	1.0	$	28,862
Exercisable as of September 30, 2018	1,296,069		$	9.42	1.0	$	28,862

(1) The aggregate intrinsic value of outstanding and exercisable options represents the total pretax intrinsic value (the difference between the fair value of the Company's stock on the last day of each period and the exercise price, multiplied by the number of options where the fair value exceeds the exercise price) that would have been received by the option holders had all option holders exercised their options as of the last day of the period indicated. This amount changes based on the market price of the Company’s common stock.

Stock-Based Compensation Expense

Pre-tax stock-based compensation expense for RSUs totaled $6 million and $18 million for the three and nine months ended September 30, 2018, respectively, and $5 million and $18 million for the three and nine months ended September 30, 2017, respectively. As of September 30, 2018, unrecognized compensation expense related to unvested RSUs is $40 million. Stock-based compensation expense related to these awards will be different to the extent that forfeitures are realized.

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Earnings Per Share Earnings Per Share (Notes)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Earnings Per Share

The following chart sets forth the computation of earnings per share (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Income from continuing operations	$	134,480	$	122,381	$	445,109	$	414,104
Denominator for basic earnings per share—Weighted-average shares outstanding	318,082		308,909		313,417		308,451
Effect of dilutive securities:
RSUs	333		485		452		501
Stock options	987		1,385		1,082		1,543
Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding	319,402		310,779		314,951		310,495
Basic earnings per share from continuing operations	$	0.42	$	0.40	$	1.42	$	1.34
Diluted earnings per share from continuing operations	$	0.42	$	0.39	$	1.41	$	1.33

The following table sets forth the number of employee stock-based compensation awards outstanding but not included in the computation of diluted earnings per share because their effect would have been antidilutive for the three and nine months ended September 30, 2018 and 2017 (in thousands):

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2018	2017	2018	2017
Antidilutive securities:
RSUs	375	—	317	50
Stock options	—	—	—	51

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Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):

	Three Months Ended
	September 30, 2018
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive Income from Unconsolidated Subsidiaries		Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(125,753	)	$	19,684		$	(10,200	)	$	208	$	(116,061	)
Pretax (loss) income	(23,405		)	7,681			1,217			—		(14,507		)
Income tax effect	2,454			(1,796		)	41			—		699
Reclassification of unrealized (gain) loss	—			(7,284		)	21			—		(7,263		)
Reclassification of deferred income taxes	—			1,703			(5		)	—		1,698
Other comprehensive income from unconsolidated subsidiaries	—			—			—			643		643
Ending balance	$	(146,704	)	$	19,988		$	(8,926	)	$	851	$	(134,791	)

	Three Months Ended
	September 30, 2017
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive Loss from Unconsolidated Subsidiaries			Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(157,353	)	$	10,324		$	(6,640	)	$	(601	)	$	(154,270	)
Pretax income (loss)	63,769			(15,402		)	—			—			48,367
Income tax effect	(4,151		)	5,683			—			—			1,532
Reclassification of unrealized loss (gain)	—			12,591			(200		)	—			12,391
Reclassification of deferred income taxes	—			(4,648		)	50			—			(4,598		)
Other comprehensive loss from unconsolidated subsidiaries	—			—			—			(1,034		)	(1,034		)
Ending balance	$	(97,735	)	$	8,548		$	(6,790	)	$	(1,635	)	$	(97,612	)

	Nine Months Ended
	September 30, 2018
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive (Loss) Income from Unconsolidated Subsidiaries			Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(71,933	)	$	11,538		$	(8,772	)	$	(1,309	)	$	(70,476	)
Pretax (loss) income	(82,137		)	33,901			(102		)	—			(48,338		)
Income tax effect	4,507			(7,926		)	(125		)	—			(3,544		)
Reclassification of unrealized (gain) loss	—			(26,117		)	97			—			(26,020		)
Reclassification of deferred income taxes	—			6,106			(24		)	—			6,082
Other comprehensive income from unconsolidated subsidiaries	—			—			—			2,160			2,160
Adoption of ASU 2018-02	2,859			2,486			—			—			5,345
Ending balance	$	(146,704	)	$	19,988		$	(8,926	)	$	851		$	(134,791	)

	Nine Months Ended
	September 30, 2017
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive Loss from Unconsolidated Subsidiaries			Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(272,529	)	$	8,091		$	(2,737	)	$	—		$	(267,175	)
Pretax income (loss)	177,434			(44,749		)	112			—			132,797
Income tax effect	(4,151		)	16,463			(43		)	—			12,269
Reclassification of unrealized loss (gain)	—			45,551			(921		)	—			44,630
Reclassification of deferred income taxes	—			(16,808		)	235			—			(16,573		)
Disposal of business, net	1,511			—			(3,436		)	—			(1,925		)
Other comprehensive loss from unconsolidated subsidiaries	—			—			—			(1,635		)	(1,635		)
Ending balance	$	(97,735	)	$	8,548		$	(6,790	)	$	(1,635	)	$	(97,612	)

Net unrealized gains on our interest rate swaps totaling $2 million and $5 million were reclassified to Interest expense, net in our Unaudited Condensed Consolidated Statements of Income during the three and nine months ended September 30, 2018, respectively, compared to a loss of $1 million during the nine months ended September 30, 2017; the amount reclassified to Interest expense, net during the three months ended September 30, 2017 was immaterial. We also reclassified gains of $2 million to Interest expense, net related to the foreign currency forward component of our cross currency swaps during each of the three months ended September 30, 2018 and 2017, and gains of $6 million during each of the nine months ended September 30, 2018 and 2017. Also related to our cross currency swaps, we reclassified gains of $3 million and $15 million to Other income, net in our Unaudited Condensed Consolidated Statements of Income during the three and nine months ended September 30, 2018, respectively, compared to losses of $15 million and $50 million during the three and nine months ended September 30, 2017; these gains and losses offset the impact of the remeasurement of the underlying contracts. The deferred income taxes related to our cash flow hedges were reclassified from Accumulated other comprehensive income (loss) to provision for income taxes.

As a result of the adoption of ASU 2018-02 in the first quarter of 2018, we recorded a $5 million reclassification to increase Accumulated Other Comprehensive (Loss) Income and decrease Retained Earnings. See Note 4, "Financial Statement Information" for further information regarding the adoption of ASU 2018-02.

The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):

	Three Months Ended
	September 30, 2018
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive Income from Unconsolidated Subsidiaries		Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(125,753	)	$	19,684		$	(10,200	)	$	208	$	(116,061	)
Pretax (loss) income	(23,405		)	7,681			1,217			—		(14,507		)
Income tax effect	2,454			(1,796		)	41			—		699
Reclassification of unrealized (gain) loss	—			(7,284		)	21			—		(7,263		)
Reclassification of deferred income taxes	—			1,703			(5		)	—		1,698
Other comprehensive income from unconsolidated subsidiaries	—			—			—			643		643
Ending balance	$	(146,704	)	$	19,988		$	(8,926	)	$	851	$	(134,791	)

	Three Months Ended
	September 30, 2017
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive Loss from Unconsolidated Subsidiaries			Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(157,353	)	$	10,324		$	(6,640	)	$	(601	)	$	(154,270	)
Pretax income (loss)	63,769			(15,402		)	—			—			48,367
Income tax effect	(4,151		)	5,683			—			—			1,532
Reclassification of unrealized loss (gain)	—			12,591			(200		)	—			12,391
Reclassification of deferred income taxes	—			(4,648		)	50			—			(4,598		)
Other comprehensive loss from unconsolidated subsidiaries	—			—			—			(1,034		)	(1,034		)
Ending balance	$	(97,735	)	$	8,548		$	(6,790	)	$	(1,635	)	$	(97,612	)

	Nine Months Ended
	September 30, 2018
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive (Loss) Income from Unconsolidated Subsidiaries			Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(71,933	)	$	11,538		$	(8,772	)	$	(1,309	)	$	(70,476	)
Pretax (loss) income	(82,137		)	33,901			(102		)	—			(48,338		)
Income tax effect	4,507			(7,926		)	(125		)	—			(3,544		)
Reclassification of unrealized (gain) loss	—			(26,117		)	97			—			(26,020		)
Reclassification of deferred income taxes	—			6,106			(24		)	—			6,082
Other comprehensive income from unconsolidated subsidiaries	—			—			—			2,160			2,160
Adoption of ASU 2018-02	2,859			2,486			—			—			5,345
Ending balance	$	(146,704	)	$	19,988		$	(8,926	)	$	851		$	(134,791	)

	Nine Months Ended
	September 30, 2017
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive Loss from Unconsolidated Subsidiaries			Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(272,529	)	$	8,091		$	(2,737	)	$	—		$	(267,175	)
Pretax income (loss)	177,434			(44,749		)	112			—			132,797
Income tax effect	(4,151		)	16,463			(43		)	—			12,269
Reclassification of unrealized loss (gain)	—			45,551			(921		)	—			44,630
Reclassification of deferred income taxes	—			(16,808		)	235			—			(16,573		)
Disposal of business, net	1,511			—			(3,436		)	—			(1,925		)
Other comprehensive loss from unconsolidated subsidiaries	—			—			—			(1,635		)	(1,635		)
Ending balance	$	(97,735	)	$	8,548		$	(6,790	)	$	(1,635	)	$	(97,612	)

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Long-Term Obligations

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Long-Term Obligations

Long-Term Obligations

Long-term obligations consist of the following (in thousands):

	September 30,			December 31,
	2018			2017
Senior secured credit agreement:
Term loans payable	$	590,000		$	704,800
Revolving credit facilities	1,183,626			1,283,551
U.S. Notes (2023)	600,000			600,000
Euro Notes (2024)	580,200			600,150
Euro Notes (2026/28)	1,160,400			—
Receivables securitization facility	100,000			100,000
Notes payable through May 2027 at weighted average interest rates of 1.5% and 1.4%, respectively	38,641			29,146
Other long-term debt at weighted average interest rates of 2.2% and 1.7%, respectively	151,502			110,633
Total debt	4,404,369			3,428,280
Less: long-term debt issuance costs	(31,251		)	(21,476		)
Less: current debt issuance costs	(4,616		)	(2,824		)
Total debt, net of debt issuance costs	4,368,502			3,403,980
Less: current maturities, net of debt issuance costs	(118,365		)	(126,360		)
Long term debt, net of debt issuance costs	$	4,250,137		$	3,277,620

Senior Secured Credit Agreement

On December 1, 2017, LKQ Corporation, LKQ Delaware LLP, and certain other subsidiaries (collectively, the "Borrowers") entered into Amendment No. 2 to the Fourth Amended and Restated Credit Agreement ("Credit Agreement"), which amended the Fourth Amended and Restated Credit Agreement dated January 29, 2016 by modifying certain terms to (1) extend the maturity date by approximately two years to January 29, 2023; (2) increase the total availability under the revolving credit facility's multicurrency component from $2.45 billion to $2.75 billion; (3) increase the permitted net leverage ratio thresholds, including a temporary step-up in the allowable net leverage ratio in the case of permitted acquisitions; (4) modify the applicable margins and fees in the pricing grid; (5) increase the ability of LKQ and its subsidiaries to incur additional indebtedness; and (6) make other immaterial or clarifying modifications and amendments. The increase in the revolving credit facility's multicurrency component of $300 million will be used for general corporate purposes.

Amounts under the revolving credit facility are due and payable upon maturity of the Credit Agreement on January 29, 2023. Term loan borrowings, which totaled $590 million as of September 30, 2018, are due and payable in quarterly installments equal to $9 million on the last day of each fiscal quarter ending on or after December 31, 2021, with the remaining balance due and payable on January 29, 2023. During the three months ended September 30, 2018, we prepaid our required quarterly installments through September 30, 2021.

We are required to prepay the term loan by amounts equal to proceeds from the sale or disposition of certain assets if the proceeds are not reinvested within twelve months. We also have the option to prepay outstanding amounts under the Credit Agreement without penalty.

The Credit Agreement contains customary representations and warranties and customary covenants that provide limitations and conditions on our ability to enter into certain transactions. The Credit Agreement also contains financial and affirmative covenants, including limitations on our net leverage ratio and a minimum interest coverage ratio.

Borrowings under the Credit Agreement bear interest at variable rates, which depend on the currency and duration of the borrowing elected, plus an applicable margin. The applicable margin is subject to change in increments of 0.25% depending on our net leverage ratio. Interest payments are due on the last day of the selected interest period or quarterly in arrears depending on the type of borrowing. Including the effect of the interest rate swap agreements described in Note 11, "Derivative Instruments and Hedging Activities," the weighted average interest rates on borrowings outstanding under the Credit Agreement at both September 30, 2018 and December 31, 2017 was 2.2%. We also pay a commitment fee based on the average daily unused amount of the revolving credit facilities. The commitment fee is subject to change in increments of 0.025% and 0.05% depending on our net leverage ratio. In addition, we pay a participation commission on outstanding letters of credit at an applicable rate based on our net leverage ratio, and a fronting fee of 0.125% to the issuing bank, which are due quarterly in arrears.

Of the total borrowings outstanding under the Credit Agreement, there were no borrowings classified as current maturities at September 30, 2018 compared to $18 million at December 31, 2017. As of September 30, 2018, there were letters of credit outstanding in the aggregate amount of $65 million. The amounts available under the revolving credit facilities are reduced by the amounts outstanding under letters of credit, and thus availability under the revolving credit facilities at September 30, 2018 was $1.5 billion.

Related to the execution of Amendment No. 2 to the Fourth Amended and Restated Credit Agreement in December 2017, we incurred $5 million of fees, the majority of which were capitalized as an offset to Long-Term Obligations and are amortized over the term of the agreement.

U.S. Notes (2023)

In 2013, we issued $600 million aggregate principal amount of 4.75% senior notes due 2023 (the "U.S. Notes (2023)"). The U.S. Notes (2023) are governed by the Indenture dated as of May 9, 2013 (the "U.S. Notes (2023) Indenture") among LKQ Corporation, certain of our subsidiaries (the "Guarantors"), the trustee, paying agent, transfer agent and registrar. The U.S. Notes (2023) are registered under the Securities Act of 1933.

The U.S. Notes (2023) bear interest at a rate of 4.75% per year from the most recent payment date on which interest has been paid or provided for. Interest on the U.S. Notes (2023) is payable in arrears on May 15 and November 15 of each year. The U.S. Notes (2023) are fully and unconditionally guaranteed, jointly and severally, by the Guarantors.

The U.S. Notes (2023) and the related guarantees are, respectively, LKQ Corporation's and each Guarantor's senior unsecured obligations and are subordinated to all of the Guarantors' existing and future secured debt to the extent of the assets securing that secured debt. In addition, the U.S. Notes (2023) are effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the U.S. Notes (2023) to the extent of the assets of those subsidiaries.

Euro Notes (2024)

On April 14, 2016, LKQ Italia Bondco S.p.A. (“LKQ Italia”), an indirect, wholly-owned subsidiary of LKQ Corporation, completed an offering of €500 million aggregate principal amount of senior notes due April 1, 2024 (the “Euro Notes (2024)”) in a private placement conducted pursuant to Regulation S and Rule 144A under the Securities Act of 1933. The proceeds from the offering were used to repay a portion of the revolver borrowings under the Credit Agreement and to pay related fees and expenses. The Euro Notes (2024) are governed by the Indenture dated as of April 14, 2016 (the “Euro Notes (2024) Indenture”) among LKQ Italia, LKQ Corporation and certain of our subsidiaries (the “Euro Notes (2024) Subsidiaries”), the trustee, and the paying agent, transfer agent, and registrar.

The Euro Notes (2024) bear interest at a rate of 3.875% per year from the date of original issuance or from the most recent payment date on which interest has been paid or provided for. Interest on the Euro Notes (2024) is payable in arrears on April 1 and October 1 of each year. The Euro Notes (2024) are fully and unconditionally guaranteed by LKQ Corporation and the Euro Notes (2024) Subsidiaries (the "Euro Notes (2024) Guarantors").

The Euro Notes (2024) and the related guarantees are, respectively, LKQ Italia’s and each Euro Notes (2024) Guarantor’s senior unsecured obligations and are subordinated to all of LKQ Italia's and the Euro Notes (2024) Guarantors’ existing and future secured debt to the extent of the assets securing that secured debt. In addition, the Euro Notes (2024) are effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the Euro Notes (2024) to the extent of the assets of those subsidiaries. The Euro Notes (2024) have been listed on the ExtraMOT, Professional Segment of the Borsa Italia S.p.A. securities exchange and the Global Exchange Market of Euronext Dublin.

Euro Notes (2026/28)

On April 9, 2018, LKQ European Holdings B.V. ("LKQ Euro Holdings"), a wholly-owned subsidiary of LKQ Corporation, completed an offering of €1.0 billion aggregate principal amount of senior notes. The offering consisted of €750 million senior notes due 2026 (the "2026 notes") and €250 million senior notes due 2028 (the "2028 notes" and, together with the 2026 notes, the "Euro Notes (2026/28)") in a private placement conducted pursuant to Regulation S and Rule 144A under the Securities Act of 1933. The proceeds from the offering, together with borrowings under our senior secured credit facility, were or will be used to (i) finance a portion of the consideration paid for the Stahlgruber acquisition, (ii) for general corporate purposes and (iii) to pay related fees and expenses, including the refinancing of net financial debt. The Euro Notes (2026/28) are governed by the Indenture dated as of April 9, 2018 (the “Euro Notes (2026/28) Indenture”) among LKQ Euro Holdings, LKQ Corporation and certain of our subsidiaries (the “Euro Notes (2026/28) Subsidiaries”), the trustee, paying agent, transfer agent, and registrar.

The 2026 notes and 2028 notes bear interest at a rate of 3.625% and 4.125%, respectively, per year from the date of original issuance or from the most recent payment date on which interest has been paid or provided for. Interest on the Euro Notes (2026/28) is payable in arrears on April 1 and October 1 of each year, beginning on October 1, 2018. The Euro Notes (2026/28) are fully and unconditionally guaranteed by LKQ Corporation and the Euro Notes (2026/28) Subsidiaries (the "Euro Notes (2026/28) Guarantors").

The Euro Notes (2026/28) and the related guarantees are, respectively, LKQ Euro Holdings' and each Euro Notes (2026/28) Guarantor’s senior unsecured obligations and will be subordinated to all of LKQ Euro Holdings' and the Euro Notes (2026/28) Guarantors’ existing and future secured debt to the extent of the assets securing that secured debt. In addition, the Euro Notes (2026/28) are effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the Euro Notes (2026/28) to the extent of the assets of those subsidiaries. The Euro Notes (2026/28) have been listed on the Global Exchange Market of Euronext Dublin.

Related to the execution of the Euro Notes (2026/28) in April 2018, we incurred $16 million of fees, which were capitalized as an offset to Long-Term Obligations and are amortized over the term of the Euro Notes (2026/28).

Receivables Securitization Facility

On November 29, 2016, we amended the terms of our receivables securitization facility with The Bank of Tokyo-Mitsubishi UFJ, LTD. ("BTMU") to: (i) extend the term of the facility to November 8, 2019; (ii) increase the maximum amount available to $100 million; and (iii) make other clarifying and updating changes. Under the facility, LKQ sells an ownership interest in certain receivables, related collections and security interests to BTMU for the benefit of conduit investors and/or financial institutions for cash proceeds. Upon payment of the receivables by customers, rather than remitting to BTMU the amounts collected, LKQ retains such collections as proceeds for the sale of new receivables generated by certain of the ongoing operations of the Company.

The sale of the ownership interest in the receivables is accounted for as a secured borrowing in our Consolidated Balance Sheets, under which the receivables included in the program collateralize the amounts invested by BTMU, the conduit investors and/or financial institutions (the "Purchasers"). The receivables are held by LKQ Receivables Finance Company, LLC ("LRFC"), a wholly owned bankruptcy-remote special purpose subsidiary of LKQ, and therefore, the receivables are available first to satisfy the creditors of LRFC, including the Purchasers. Net receivables totaling $127 million and $144 million were collateral for the investment under the receivables facility as of September 30, 2018 and December 31, 2017, respectively.

Under the receivables facility, we pay variable interest rates plus a margin on the outstanding amounts invested by the Purchasers. The variable rates are based on (i) commercial paper rates, (ii) the London InterBank Offered Rate ("LIBOR"), or (iii) base rates, and are payable monthly in arrears. The commercial paper rate is the applicable variable rate unless conduit investors are not available to invest in the receivables at commercial paper rates. In such case, financial institutions will invest at the LIBOR rate or at base rates. We also pay a commitment fee on the excess of the investment maximum over the average daily outstanding investment, payable monthly in arrears. As of September 30, 2018, the interest rate under the receivables facility was based on commercial paper rates and was 3.1%. The outstanding balances of $100 million as of both September 30, 2018 and December 31, 2017 were classified as long-term on the Unaudited Condensed Consolidated Balance Sheets because we have the ability and intent to refinance these borrowings on a long-term basis.

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Derivative Instruments and Hedging Activities (Notes)

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Derivative Instruments and Hedging Activities

We are exposed to market risks, including the effect of changes in interest rates, foreign currency exchange rates and commodity prices. Under our current policies, we use derivatives to manage our exposure to variable interest rates on our senior secured debt and changing foreign exchange rates for certain foreign currency denominated transactions. We do not hold or issue derivatives for trading purposes.

Cash Flow Hedges

We hold interest rate swap agreements to hedge a portion of the variable interest rate risk on our variable rate borrowings under our Credit Agreement, with the objective of minimizing the impact of interest rate fluctuations and stabilizing cash flows. Under the terms of the interest rate swap agreements, we pay the fixed interest rate and receive payment at a variable rate of interest based on LIBOR for the respective currency of each interest rate swap agreement’s notional amount. The effective portion of changes in the fair value of the interest rate swap agreements is recorded in Accumulated Other Comprehensive Income (Loss) and is reclassified to interest expense when the underlying interest payment has an impact on earnings. The ineffective portion of changes in the fair value of the interest rate swap agreements is reported in interest expense. Our interest rate swap contracts have maturity dates ranging from January to June 2021. As of September 30, 2018, we held interest rate swap contracts representing $590 million of U.S. dollar-denominated debt.

From time to time, we may hold foreign currency forward contracts related to certain foreign currency denominated intercompany transactions, with the objective of minimizing the impact of fluctuating exchange rates on these future cash flows. Under the terms of the foreign currency forward contracts, we will sell the foreign currency in exchange for U.S. dollars at a fixed rate on the maturity dates of the contracts. The effective portion of the changes in fair value of the foreign currency forward contracts is recorded in Accumulated Other Comprehensive Income (Loss) and reclassified to other income, net when the underlying transaction has an impact on earnings.

In 2016, we entered into three cross currency swap agreements for a total notional amount of $422 million (€400 million). The notional amount steps down by €15 million annually through 2020 with the remainder maturing in January 2021. These cross currency swaps contain an interest rate swap component and a foreign currency forward contract component that, combined with related intercompany financing arrangements, effectively convert variable rate U.S. dollar-denominated borrowings into fixed rate euro-denominated borrowings. The swaps are intended to minimize the impact of fluctuating exchange rates and interest rates on the cash flows resulting from the related intercompany financing arrangements. The effective portion of the changes in the fair value of the derivative instruments is recorded in Accumulated Other Comprehensive Income (Loss) and is reclassified to interest expense, net when the underlying transactions have an impact on earnings.

In October 2018, we entered into two cross currency swap agreements for a total notional amount of $184 million (€160 million). Half of the notional amount matures in October 2019 with the remainder in October 2020. The purpose and accounting of the swaps are similar to those described in the previous paragraph.

The activity related to our cash flow hedges is presented in operating activities in our Unaudited Condensed Consolidated Statements of Cash Flows.

The following table summarizes the notional amounts and fair values of our designated cash flow hedges as of September 30, 2018 and December 31, 2017 (in thousands):

	Notional Amount				Fair Value at September 30, 2018 (USD)				Fair Value at December 31, 2017 (USD)
	September 30, 2018		December 31, 2017		Other Assets		Other Noncurrent Liabilities		Other Assets		Other Noncurrent Liabilities
Interest rate swap agreements
USD denominated	$	590,000	$	590,000	$	25,719	$	—	$	19,102	$	—
Cross currency swap agreements
USD/euro	$	394,649	$	406,546	10,881		49,212		5,504		61,492
Total cash flow hedges					$	36,600	$	49,212	$	24,606	$	61,492

While certain derivative instruments executed with the same counterparty are subject to master netting arrangements, we present our cash flow hedge derivative instruments on a gross basis in our Unaudited Condensed Consolidated Balance Sheets. The impact of netting the fair values of these contracts would result in a decrease to Other Assets and Other Noncurrent Liabilities on our Unaudited Condensed Consolidated Balance Sheets of $19 million and $12 million at September 30, 2018 and December 31, 2017, respectively.

The activity related to our cash flow hedges is included in Note 9, "Accumulated Other Comprehensive Income (Loss)." Ineffectiveness related to our cash flow hedges was immaterial to our results of operations during each of the three and nine months endedSeptember 30, 2018 and 2017. We do not expect future ineffectiveness related to our cash flow hedges to have a material effect on our results of operations.

As of September 30, 2018, we estimate that $4 million of derivative gains (net of tax) included in Accumulated Other Comprehensive Income (Loss) will be reclassified into our Unaudited Condensed Consolidated Statements of Income within the next 12 months.

Other Derivative Instruments

During the third quarter of 2018, we recorded the fair value of a derivative instrument of $29 million in Other assets on our Unaudited Condensed Consolidated Balance Sheets related to our right to acquire Mekonomen shares at a discount. We are measuring the derivative instrument at fair value, and we recorded a $3 million gain on our fair value remeasurement during the three months ended September 30, 2018; the gain is recorded in Other income, net on the Unaudited Condensed Consolidated Statements of Income. In the fourth quarter, we will record an $8 million loss related to the settlement of the derivative instrument in October 2018 due to a decrease in the Mekonomen share price from the last day of the third quarter to the settlement date. Refer to Note 4, "Financial Statement Information," for more information on the derivative instrument.

We hold other short-term derivative instruments, including foreign currency forward contracts, to manage our exposure to variability related to inventory purchases and intercompany financing transactions denominated in a non-functional currency. We have elected not to apply hedge accounting for these transactions, and therefore the contracts are adjusted to fair value through our results of operations as of each balance sheet date, which could result in volatility in our earnings. The notional amount and fair value of these contracts at September 30, 2018 and December 31, 2017, along with the effect on our results of operations during each of the three and nine months endedSeptember 30, 2018 and 2017, were immaterial.

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Fair Value Disclosures (Notes)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Fair Value Measurements

Financial Assets and Liabilities Measured at Fair Value

We use the market and income approaches to estimate the fair value of our financial assets and liabilities, and during the three and nine months ended September 30, 2018, there were no significant changes in valuation techniques or inputs related to the financial assets or liabilities that we have historically recorded at fair value. The tiers in the fair value hierarchy include: Level 1, defined as observable inputs such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as significant unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation inputs we utilized to determine such fair value as of September 30, 2018 and December 31, 2017 (in thousands):

	Balance as of September 30, 2018		Fair Value Measurements as of September 30, 2018
			Level 1		Level 2		Level 3
Assets:
Cash surrender value of life insurance	$	53,691	$	—	$	53,691	$	—
Rights to acquire Mekonomen shares	28,683		—		28,683		—
Interest rate swaps	25,719		—		25,719		—
Cross currency swap agreements	10,881		—		10,881		—
Total Assets	$	118,974	$	—	$	118,974	$	—
Liabilities:
Contingent consideration liabilities	$	5,243	$	—	$	—	$	5,243
Deferred compensation liabilities	54,419		—		54,419		—
Cross currency swap agreements	49,212		—		49,212		—
Total Liabilities	$	108,874	$	—	$	103,631	$	5,243

	Balance as of December 31, 2017		Fair Value Measurements as of December 31, 2017
			Level 1		Level 2		Level 3
Assets:
Cash surrender value of life insurance	$	45,984	$	—	$	45,984	$	—
Interest rate swaps	19,102		—		19,102		—
Cross currency swap agreements	5,504		—		5,504		—
Total Assets	$	70,590	$	—	$	70,590	$	—
Liabilities:
Contingent consideration liabilities	$	2,636	$	—	$	—	$	2,636
Deferred compensation liabilities	47,199		—		47,199		—
Cross currency swap agreements	61,492		—		61,492		—
Total Liabilities	$	111,327	$	—	$	108,691	$	2,636

The cash surrender value of life insurance and the derivative instrument related to Mekonomen are both included in Other assets on our Unaudited Condensed Consolidated Balance Sheets. The current portion of deferred compensation is included in Accrued payroll-related liabilities and the current portion of contingent consideration liabilities is included in Other current liabilities on our Unaudited Condensed Consolidated Balance Sheets; the noncurrent portion of these amounts is included in Other noncurrent liabilities on our Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments. The balance sheet classification of the interest rate swaps and cross currency swap agreements is presented in Note 11, "Derivative Instruments and Hedging Activities."

Our Level 2 assets and liabilities are valued using inputs from third parties and market observable data. We obtain valuation data for the cash surrender value of life insurance and deferred compensation liabilities from third party sources, which determine the net asset values for our accounts using quoted market prices, investment allocations and reportable trades. We valued the rights to acquire Mekonomen shares using the Mekonomen share price as of the last day of the period and the discounted share price under the rights issue. We value our other derivative instruments using a third party valuation model that performs a discounted cash flow analysis based on the terms of the contracts and market observable inputs such as current and forward interest rates and current and forward foreign exchange rates.

Our contingent consideration liabilities are related to our business acquisitions. Under the terms of the contingent consideration agreements, payments may be made at specified future dates depending on the performance of the acquired business subsequent to the acquisition. The liabilities for these payments are classified as Level 3 liabilities because the related fair value measurement, which is determined using an income approach, includes significant inputs not observable in the market.

Financial Assets and Liabilities Not Measured at Fair Value

Our debt is reflected on the Unaudited Condensed Consolidated Balance Sheets at cost. Based on market conditions as of September 30, 2018 and December 31, 2017, the fair value of our credit agreement borrowings reasonably approximated the carrying values of $1.8 billion and $2.0 billion, respectively. In addition, based on market conditions, the fair values of the outstanding borrowings under the receivables facility reasonably approximated the carrying values of $100 million at both September 30, 2018 and December 31, 2017. As of September 30, 2018 and December 31, 2017, the fair values of the U.S. Notes (2023) were approximately $601 million and $615 million, respectively, compared to a carrying value of $600 million. As of September 30, 2018 and December 31, 2017, the fair values of the Euro Notes (2024) were approximately $615 million and $658 million compared to carrying values of $580 million and $600 million, respectively. As of September 30, 2018, the fair value of the Euro Notes (2026/28) approximated the carrying value of $1.2 billion.

The fair value measurements of the borrowings under our credit agreement and receivables facility are classified as Level 2 within the fair value hierarchy since they are determined based upon significant inputs observable in the market, including interest rates on recent financing transactions with similar terms and maturities. We estimated the fair value by calculating the upfront cash payment a market participant would require at September 30, 2018 to assume these obligations. The fair value of our U.S. Notes (2023) is classified as Level 1 within the fair value hierarchy since it is determined based upon observable market inputs including quoted market prices in an active market. The fair values of our Euro Notes (2024) and Euro Notes (2026/28) are determined based upon observable market inputs including quoted market prices in markets that are not active, and therefore are classified as Level 2 within the fair value hierarchy.

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Income Taxes (Notes)

9 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Income Taxes

At the end of each interim period, we estimate our annual effective tax rate and apply that rate to our interim earnings. We also record the tax impact of certain unusual or infrequently occurring items, including changes in judgment about valuation allowances and the effects of changes in tax laws or rates, in the interim period in which they occur.

The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in state and foreign jurisdictions, permanent and temporary differences between book and taxable income, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the tax environment changes.    

Our effective income tax rate for the nine months ended September 30, 2018 was 25.2%, compared to 33.5% for the comparable prior year period. The decrease was primarily attributable to the reduction of the U.S. federal statutory income tax rate from 35% to 21% as a result of the enactment of the Tax Act in December 2017. Partially offsetting this decrease was a 1.0% increase in the effective income tax rate as a result of the Stahlgruber acquisition, including non-deductible interest and acquisition related expenses, as well as the higher effective tax rate in Germany. The effective tax rate also reflects the impact of net favorable discrete items of approximately $12 million and $8 million for the nine months ended September 30, 2018 and 2017, respectively. The net favorable discrete items are primarily composed of a $10 million favorable adjustment to the Tax Act transition tax for the nine months ended September 30, 2018, as well as $4 million and $7 million for the nine months ended September 30, 2018 and 2017, respectively, for excess tax benefits from stock-based payments. The year over year change in discrete items decreased the effective tax rate by 0.6% compared to the prior year.

Our acquisition of Stahlgruber in May 2018 contributed $98 million of deferred tax liabilities relating to intangible assets; property, plant and equipment; and reserves, including pension and other post-retirement benefit obligations.

The Tax Act introduced broad and complex changes to the U.S. tax code, including the aforementioned reduction in the U.S. corporate tax rate, a one-time transition tax on the historical unremitted earnings of foreign subsidiaries, and a new minimum tax on foreign earnings (Global Intangible Low-Taxed Income, “GILTI”). On December 22, 2017, the SEC staff issued Staff Accounting Bulletin 118 ("SAB 118"), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the related accounting for provisional amounts under ASC 740, "Accounting for Income Taxes."

As a result of the Tax Act, in 2017, we recognized a provisional tax liability of $51 million related to the one-time transition tax on historical foreign earnings, payable over a period of eight years. We also recorded a provisional decrease to net U.S. deferred tax liabilities of $73 million. For a description of the impact of the Tax Act for the year ended December 31, 2017, refer to Note 13, "Income Taxes" of our financial statements as of and for the year ended December 31, 2017 included in the 2017 Form 10-K. During the nine-month period ended September 30, 2018, we recorded a $10 million favorable adjustment to the provisional amount recognized in 2017 related to the transition tax. We continue to gather the information necessary to finalize the provisional amounts. Our estimates could be affected as we gain a more thorough understanding of the Tax Act from additional guidance issued by the U.S. tax authorities. Changes to the provisional estimates of the tax effect of the Tax Act will be recorded as a discrete item in the interim period the amounts are considered complete.

The Company has included the estimated 2018 impact of the GILTI Tax as a period cost and included it as part of the estimated annual effective tax rate. The 2018 estimated annual effective tax rate also includes the impact of all other U.S. tax reform provisions that were effective on January 1, 2018. These estimates are subject to change as additional guidance on the tax reform provisions is issued.

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Employee Benefit Plans (Notes)

9 Months Ended

Sep. 30, 2018

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

Employee Benefit Plans

We have funded and unfunded defined benefit plans covering certain employee groups in the U.S. and various European countries. The defined benefit plans are generally frozen to new participants and, in some cases, existing participants no longer accrue benefits. As of September 30, 2018 and December 31, 2017, the aggregate funded status of the defined benefit plans was a liability of $111 million and $46 million, respectively, and is reported in Other noncurrent liabilities and Accrued payroll-related liabilities on our Unaudited Condensed Consolidated Balance Sheets. Of the liability at September 30, 2018, $75 million was related to our acquisition of Stahlgruber on May 30, 2018.

Net periodic benefit expense for our defined benefit plans included the following components for the three and nine months endedSeptember 30, 2018 and 2017 (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Service cost	$	628		$	1,126		$	1,612		$	2,902
Interest cost	996			750			2,442			2,091
Expected return on plan assets	(720		)	(507		)	(2,220		)	(1,059		)
Amortization of prior service credit	—			(71		)	—			(201		)
Amortization of actuarial (gain) loss	21			(129		)	97			(720		)
Net periodic benefit expense	$	925		$	1,169		$	1,931		$	3,013

For the three and nine months ended September 30, 2018, the service cost component of net periodic benefit expense was classified in Selling, general and administrative expenses, while the other components of net periodic benefit expense were classified in Other income, net in our Unaudited Condensed Consolidated Statements of Income. For the three and nine months ended September 30, 2017, all components of net periodic benefit expense were included in Selling, general, and administrative expenses in our Unaudited Condensed Consolidated Statements of Income.

During the nine months endedSeptember 30, 2018, we contributed $12 million to our pension plans. We estimate that contributions to our pension plans during the last three months of 2018 will be $1 million.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Operating Leases

We are obligated under noncancelable operating leases for corporate office space, warehouse and distribution facilities, trucks and certain equipment.

The future minimum lease commitments under these leases at September 30, 2018 are as follows (in thousands):

Three months ending December 31, 2018	$	72,780
Years ending December 31:
2019	271,642
2020	226,936
2021	179,921
2022	144,700
2023	122,149
Thereafter	689,583
Future Minimum Lease Payments	$	1,707,711

Litigation and Related Contingencies

We have certain contingencies resulting from litigation, claims and other commitments and are subject to a variety of environmental and pollution control laws and regulations incident to the ordinary course of business. We currently expect that the resolution of such contingencies will not materially affect our financial position, results of operations or cash flows.

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Segment and Geographic Information

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Segment and Geographic Information

Segment and Geographic Information

We have four operating segments: Wholesale – North America, Europe, Specialty and Self Service. Our Wholesale – North America and Self Service operating segments are aggregated into one reportable segment, North America, because they possess similar economic characteristics and have common products and services, customers, and methods of distribution. Our reportable segments are organized based on a combination of geographic areas served and type of product lines offered. The reportable segments are managed separately as each business serves different customers (i.e. geographic in the case of North America and Europe and product type in the case of Specialty) and is affected by different economic conditions. Therefore, we present three reportable segments: North America, Europe and Specialty.

The following tables present our financial performance by reportable segment for the periods indicated (in thousands):

	North America		Europe		Specialty		Eliminations			Consolidated
Three Months Ended September 30, 2018
Revenue:
Third Party	$	1,262,657	$	1,470,856	$	388,865	$	—		$	3,122,378
Intersegment	142		—		1,196		(1,338		)	—
Total segment revenue	$	1,262,799	$	1,470,856	$	390,061	$	(1,338	)	$	3,122,378
Segment EBITDA	$	154,049	$	129,358	$	42,937	$	—		$	326,344
Depreciation and amortization (1)	22,151		52,139		7,183		—			81,473
Three Months Ended September 30, 2017
Revenue:
Third Party	$	1,181,756	$	954,522	$	329,522	$	—		$	2,465,800
Intersegment	187		—		1,072		(1,259		)	—
Total segment revenue	$	1,181,943	$	954,522	$	330,594	$	(1,259	)	$	2,465,800
Segment EBITDA	$	152,627	$	79,294	$	35,114	$	—		$	267,035
Depreciation and amortization (1)	22,104		32,326		5,472		—			59,902

	North America		Europe		Specialty		Eliminations			Consolidated
Nine Months Ended September 30, 2018
Revenue:
Third Party	$	3,927,282	$	3,795,439	$	1,151,172	$	—		$	8,873,893
Intersegment	526		—		3,554		(4,080		)	—
Total segment revenue	$	3,927,808	$	3,795,439	$	1,154,726	$	(4,080	)	$	8,873,893
Segment EBITDA	$	506,772	$	315,785	$	140,974	$	—		$	963,531
Depreciation and amortization (1)	64,985		124,697		21,295		—			210,977
Nine Months Ended September 30, 2017
Revenue:
Third Party	$	3,596,108	$	2,665,170	$	1,005,776	$	—		$	7,267,054
Intersegment	589		—		3,222		(3,811		)	—
Total segment revenue	$	3,596,697	$	2,665,170	$	1,008,998	$	(3,811	)	$	7,267,054
Segment EBITDA	$	502,494	$	241,537	$	119,133	$	—		$	863,164
Depreciation and amortization (1)	64,305		85,809		16,394		—			166,508

(1) Amounts presented include depreciation and amortization expense recorded within cost of goods sold.

The key measure of segment profit or loss reviewed by our chief operating decision maker, who is our Chief Executive Officer, is Segment EBITDA. Segment EBITDA includes revenue and expenses that are controllable by the segment. Corporate general and administrative expenses are allocated to the segments based on usage, with shared expenses apportioned based on the segment's percentage of consolidated revenue. We calculate Segment EBITDA as EBITDA excluding restructuring and acquisition related expenses, change in fair value of contingent consideration liabilities, other gains and losses related to acquisitions, equity method investments, or divestitures and equity in losses and earnings of unconsolidated subsidiaries. EBITDA, which is the basis for Segment EBITDA, is calculated as net income excluding noncontrolling interest, discontinued operations, depreciation, amortization, interest and income tax expense.

The table below provides a reconciliation of Net Income to Segment EBITDA (in thousands):

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2018			2017		2018			2017
Net income	$	134,480		$	122,381	$	445,109		$	409,573
Less: net income attributable to noncontrolling interest	378			—		1,040			—
Net income attributable to LKQ stockholders	134,102			122,381		444,069			409,573
Subtract:
Net loss from discontinued operations	—			—		—			(4,531		)
Net income from continuing operations attributable to LKQ stockholders	134,102			122,381		444,069			414,104
Add:
Depreciation and amortization	76,701			56,877		196,322			159,178
Depreciation and amortization - cost of goods sold	4,772			3,025		14,655			7,330
Interest expense, net	40,860			25,222		107,647			73,806
Provision for income taxes	46,068			58,189		156,427			206,206
EBITDA	302,503			265,694		919,120			860,624
Subtract:
Equity in (losses) earnings of unconsolidated subsidiaries (1)	(20,284		)	2,673		(18,326		)	3,878
Fair value gain on Mekonomen derivative instrument (1)	2,509			—		2,509			—
Gains on bargain purchases (2)	—			913		328			3,990
Add:
Restructuring and acquisition related expenses (3)	6,614			4,922		26,546			10,371
Inventory step-up adjustment - acquisition related	—			—		403			—
Impairment of net assets held for sale	—			—		2,438			—
Change in fair value of contingent consideration liabilities	(548		)	5		(465		)	37
Segment EBITDA	$	326,344		$	267,035	$	963,531		$	863,164

(1) See Note 4, "Financial Statement Information," for further information.

(2) Reflects the gains on bargain purchases related to our acquisitions of a wholesale business in Europe and Andrew Page. See Note 2, "Business Combinations," for further information.

(3) See Note 6, "Restructuring and Acquisition Related Expenses," for further information.

The following table presents capital expenditures by reportable segment (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Capital Expenditures
North America	$	27,996	$	31,021	$	86,864	$	69,934
Europe	23,904		12,119		69,582		55,253
Specialty	4,442		852		15,317		6,752
Discontinued operations	—		—		—		3,598
Total capital expenditures	$	56,342	$	43,992	$	171,763	$	135,537

The following table presents assets by reportable segment (in thousands):

	September 30,		December 31,
	2018		2017
Receivables, net
North America	$	437,429	$	379,666
Europe (1)	696,106		555,372
Specialty	122,341		92,068
Total receivables, net (2)	1,255,876		1,027,106
Inventories
North America	1,058,310		1,076,393
Europe (1)	1,391,578		964,068
Specialty	345,006		340,322
Total inventories	2,794,894		2,380,783
Property, Plant and Equipment, net
North America	560,918		537,286
Europe (1)	554,550		293,539
Specialty	85,535		82,264
Total property, plant and equipment, net	1,201,003		913,089
Equity Method Investments
North America	16,075		336
Europe (3)	141,334		208,068
Total equity method investments	157,409		208,404
Other unallocated assets	6,176,154		4,837,490
Total assets	$	11,585,336	$	9,366,872

(1) The increase in assets for the Europe segment is primarily attributable to the Stahlgruber acquisition. Refer to Note 2, “Business Combinations,” for further detail on the opening balance sheet amounts.

(2) Refer to Note 4, "Financial Statement Information," for the increase in total receivables, net compared to December 31, 2017 as a result of the adoption of ASC 606.

(3) Refer to Note 4, "Financial Statement Information," for further information.

We report net receivables; inventories; net property, plant and equipment; and equity method investments by segment as that information is used by the chief operating decision maker in assessing segment performance. These assets provide a measure for the operating capital employed in each segment. Unallocated assets include cash and cash equivalents, prepaid and other current and noncurrent assets, goodwill and other intangibles.

Our largest countries of operation are the U.S., followed by the U.K. and Germany. Our other European operations are located in the Netherlands, Belgium, Italy, Czech Republic, Austria, Poland, Slovakia and other European countries. Our operations in other countries include operations in Canada, engine remanufacturing and bumper refurbishing operations in Mexico, an aftermarket parts freight consolidation warehouse in Taiwan, and administrative support functions in India. Our net sales are attributed to geographic area based on the location of the selling operation.

The following table sets forth our revenue by geographic area (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Revenue
United States	$	1,535,557	$	1,395,495	$	4,716,927	$	4,268,600
United Kingdom	408,474		399,155		1,294,155		1,171,829
Germany	415,748		549		564,698		862
Other countries	762,599		670,601		2,298,113		1,825,763
Total revenue	$	3,122,378	$	2,465,800	$	8,873,893	$	7,267,054

The following table sets forth our tangible long-lived assets by geographic area (in thousands):

	September 30,		December 31,
	2018		2017
Long-lived Assets
United States	$	609,562	$	583,236
Germany	210,344		41
United Kingdom	170,940		178,021
Other countries	210,157		151,791
Total long-lived assets	$	1,201,003	$	913,089

XML

Subsequent Events (Notes)

3 Months Ended

Dec. 31, 2018

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Event

On October 25, 2018, we announced that our Board of Directors authorized a stock repurchase program under which we may purchase up to $500 million of our common stock from time to time through October 25, 2021. Repurchases under the program may be made in the open market or in privately negotiated transactions, with the amount and timing of repurchases depending on market conditions and corporate needs. The repurchase program does not obligate us to acquire any specific number of shares and may be suspended or discontinued at any time.

XML

Condensed Consolidating Financial Information

9 Months Ended

Sep. 30, 2018

Condensed Consolidating Financial Information [Abstract]

Condensed Consolidating Financial Information

Condensed Consolidating Financial Information

LKQ Corporation (the "Parent") issued, and the Guarantors have fully and unconditionally guaranteed, jointly and severally, the U.S. Notes (2023) due on May 15, 2023. A Guarantor's guarantee will be unconditionally and automatically released and discharged upon the occurrence of any of the following events: (i) a transfer (including as a result of consolidation or merger) by the Guarantor to any person that is not a Guarantor of all or substantially all assets and properties of such Guarantor, provided the Guarantor is also released from its obligations with respect to indebtedness under the Credit Agreement or other indebtedness of ours, which obligation gave rise to the guarantee of the U.S. Notes (2023); (ii) a transfer (including as a result of consolidation or merger) to any person that is not a Guarantor of the equity interests of a Guarantor or issuance by a Guarantor of its equity interests such that the Guarantor ceases to be a subsidiary, as defined in the U.S. Notes (2023) Indenture, provided the Guarantor is also released from its obligations with respect to indebtedness under the Credit Agreement or other indebtedness of ours, which obligation gave rise to the guarantee of the U.S. Notes (2023); (iii) the release of the Guarantor from its obligations with respect to indebtedness under the Credit Agreement or other indebtedness of ours, which obligation gave rise to the guarantee of the U.S. Notes (2023); and (iv) upon legal defeasance, covenant defeasance or satisfaction and discharge of the U.S. Notes (2023) Indenture, as defined in the U.S. Notes (2023) Indenture.

Presented below are the unaudited condensed consolidating financial statements of the Parent, the Guarantors, the non-guarantor subsidiaries (the "Non-Guarantors"), and the elimination entries necessary to present our financial statements on a consolidated basis as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934 resulting from the guarantees of the U.S. Notes (2023). Investments in consolidated subsidiaries have been presented under the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries, intercompany balances, and intercompany revenue and expenses. The unaudited condensed consolidating financial statements below have been prepared from our financial information on the same basis of accounting as the unaudited condensed consolidated financial statements, and may not necessarily be indicative of the financial position, results of operations or cash flows had the Parent, Guarantors and Non-Guarantors operated as independent entities.

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Three Months Ended September 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	1,550,301		$	1,609,525		$	(37,448	)	$	3,122,378
Cost of goods sold	—			934,913			1,027,715			(37,448		)	1,925,180
Gross margin	—			615,388			581,810			—			1,197,198
Selling, general and administrative expenses	6,725			434,965			437,460			—			879,150
Restructuring and acquisition related expenses	—			1,638			4,976			—			6,614
Depreciation and amortization	34			25,238			51,429			—			76,701
Operating (loss) income	(6,759		)	153,547			87,945			—			234,733
Other expense (income):
Interest expense (income), net	16,191			(193		)	24,862			—			40,860
Intercompany interest (income) expense, net	(15,121		)	10,014			5,107			—			—
Other income, net	(178		)	(3,514		)	(3,267		)	—			(6,959		)
Total other expense, net	892			6,307			26,702			—			33,901
(Loss) income before (benefit) provision for income taxes	(7,651		)	147,240			61,243			—			200,832
(Benefit) provision for income taxes	(12,008		)	41,875			16,201			—			46,068
Equity in losses of unconsolidated subsidiaries	—			(156		)	(20,128		)	—			(20,284		)
Equity in earnings of subsidiaries	129,745			4,467			—			(134,212		)	—
Net income	134,102			109,676			24,914			(134,212		)	134,480
Less: net income attributable to noncontrolling interest	—			—			378			—			378
Net income attributable to LKQ stockholders	$	134,102		$	109,676		$	24,536		$	(134,212	)	$	134,102

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Three Months Ended September 30, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	1,433,742		$	1,069,682		$	(37,624	)	$	2,465,800
Cost of goods sold	—			861,078			685,470			(37,624		)	1,508,924
Gross margin	—			572,664			384,212			—			956,876
Selling, general and administrative expenses	7,861			394,926			293,191			—			695,978
Restructuring and acquisition related expenses	—			1,473			3,449			—			4,922
Depreciation and amortization	29			25,005			31,843			—			56,877
Operating (loss) income	(7,890		)	151,260			55,729			—			199,099
Other expense (income):
Interest expense, net	16,232			57			8,933			—			25,222
Intercompany interest (income) expense, net	(2,389		)	(2,814		)	5,203			—			—
Gain on bargain purchase	—			—			(913		)	—			(913		)
Other expense (income), net	32			(4,011		)	872			—			(3,107		)
Total other expense (income), net	13,875			(6,768		)	14,095			—			21,202
(Loss) income before (benefit) provision for income taxes	(21,765		)	158,028			41,634			—			177,897
(Benefit) provision for income taxes	(8,436		)	56,920			9,705			—			58,189
Equity in earnings of unconsolidated subsidiaries	—			—			2,673			—			2,673
Equity in earnings of subsidiaries	135,710			6,674			—			(142,384		)	—
Net income	$	122,381		$	107,782		$	34,602		$	(142,384	)	$	122,381

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Nine Months Ended September 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	4,768,292		$	4,216,417		$	(110,816	)	$	8,873,893
Cost of goods sold	—			2,869,499			2,702,162			(110,816		)	5,460,845
Gross margin	—			1,898,793			1,514,255			—			3,413,048
Selling, general and administrative expenses	25,538			1,292,455			1,154,092			—			2,472,085
Restructuring and acquisition related expenses	—			1,968			24,578			—			26,546
Depreciation and amortization	84			74,102			122,136			—			196,322
Operating (loss) income	(25,622		)	530,268			213,449			—			718,095
Other expense (income):
Interest expense (income), net	52,004			(94		)	55,737			—			107,647
Intercompany interest (income) expense, net	(45,927		)	29,559			16,368			—			—
Gains on bargain purchases	—			—			(328		)	—			(328		)
Other (income) expense, net	(1,076		)	(13,793		)	5,783			—			(9,086		)
Total other expense, net	5,001			15,672			77,560			—			98,233
(Loss) income before (benefit) provision for income taxes	(30,623		)	514,596			135,889			—			619,862
(Benefit) provision for income taxes	(19,656		)	141,295			34,788			—			156,427
Equity in losses of unconsolidated subsidiaries	—			(156		)	(18,170		)	—			(18,326		)
Equity in earnings of subsidiaries	455,036			14,028			—			(469,064		)	—
Net income	444,069			387,173			82,931			(469,064		)	445,109
Less: net income attributable to noncontrolling interest	—			—			1,040			—			1,040
Net income attributable to LKQ stockholders	$	444,069		$	387,173		$	81,891		$	(469,064	)	$	444,069

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Nine Months Ended September 30, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	4,374,693		$	3,001,386		$	(109,025	)	$	7,267,054
Cost of goods sold	—			2,613,540			1,910,561			(109,025		)	4,415,076
Gross margin	—			1,761,153			1,090,825			—			2,851,978
Selling, general and administrative expenses	26,209			1,165,897			810,959			—			2,003,065
Restructuring and acquisition related expenses	—			4,010			6,361			—			10,371
Depreciation and amortization	89			73,072			86,017			—			159,178
Operating (loss) income	(26,298		)	518,174			187,488			—			679,364
Other expense (income):
Interest expense, net	48,904			281			24,621			—			73,806
Intercompany interest (income) expense, net	(10,221		)	(4,530		)	14,751			—			—
Gains on bargain purchases	—			—			(3,990		)	—			(3,990		)
Other expense (income), net	286			(8,247		)	1,077			—			(6,884		)
Total other expense (income), net	38,969			(12,496		)	36,459			—			62,932
(Loss) income from continuing operations before (benefit) provision for income taxes	(65,267		)	530,670			151,029			—			616,432
(Benefit) provision for income taxes	(27,034		)	200,321			32,919			—			206,206
Equity in earnings of unconsolidated subsidiaries	—			—			3,878			—			3,878
Equity in earnings of subsidiaries	452,337			17,282			—			(469,619		)	—
Income from continuing operations	414,104			347,631			121,988			(469,619		)	414,104
Net (loss) income from discontinued operations	(4,531		)	(4,531		)	2,050			2,481			(4,531		)
Net income	$	409,573		$	343,100		$	124,038		$	(467,138	)	$	409,573

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands)
	For the Three Months Ended September 30, 2018
	Parent			Guarantors		Non-Guarantors			Eliminations			Consolidated
Net income	$	134,102		$	109,676	$	24,914		$	(134,212	)	$	134,480
Less: net income attributable to noncontrolling interest	—			—		378			—			378
Net income attributable to LKQ stockholders	134,102			109,676		24,536			(134,212		)	134,102
Other comprehensive (loss) income:
Foreign currency translation, net of tax	(20,951		)	1,686		(23,901		)	22,215			(20,951		)
Net change in unrealized gains/losses on cash flow hedges, net of tax	304			—		—			—			304
Net change in unrealized gains/losses on pension plans, net of tax	1,274			1,246		28			(1,274		)	1,274
Net change in other comprehensive income from unconsolidated subsidiaries	643			—		643			(643		)	643
Other comprehensive (loss) income	(18,730		)	2,932		(23,230		)	20,298			(18,730		)
Comprehensive income	115,372			112,608		1,684			(113,914		)	115,750
Less: comprehensive income attributable to noncontrolling interest	—			—		378			—			378
Comprehensive income attributable to LKQ stockholders	$	115,372		$	112,608	$	1,306		$	(113,914	)	$	115,372

	For the Three Months Ended September 30, 2017
	Parent			Guarantors		Non-Guarantors			Eliminations			Consolidated
Net income	$	122,381		$	107,782	$	34,602		$	(142,384	)	$	122,381
Other comprehensive income (loss):
Foreign currency translation, net of tax	59,618			3,590		62,734			(66,324		)	59,618
Net change in unrecognized gains/losses on cash flow hedges, net of tax	(1,776		)	—		—			—			(1,776		)
Net change in unrealized gains/losses on pension plans, net of tax	(150		)	—		(150		)	150			(150		)
Net change in other comprehensive loss from unconsolidated subsidiaries	(1,034		)	—		(1,034		)	1,034			(1,034		)
Total other comprehensive income	56,658			3,590		61,550			(65,140		)	56,658
Total comprehensive income	$	179,039		$	111,372	$	96,152		$	(207,524	)	$	179,039

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands)
	For the Nine Months Ended September 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net income	$	444,069		$	387,173		$	82,931		$	(469,064	)	$	445,109
Less: net income attributable to noncontrolling interest	—			—			1,040			—			1,040
Net income attributable to LKQ stockholders	444,069			387,173			81,891			(469,064		)	444,069
Other comprehensive (loss) income:
Foreign currency translation, net of tax	(77,630		)	(2,800		)	(81,456		)	84,256			(77,630		)
Net change in unrealized gains/losses on cash flow hedges, net of tax	5,964			—			—			—			5,964
Net change in unrealized gains/losses on pension plans, net of tax	(154		)	(239		)	85			154			(154		)
Net change in other comprehensive income from unconsolidated subsidiaries	2,160			—			2,160			(2,160		)	2,160
Other comprehensive loss	(69,660		)	(3,039		)	(79,211		)	82,250			(69,660		)
Comprehensive income	374,409			384,134			3,720			(386,814		)	375,449
Less: comprehensive income attributable to noncontrolling interest	—			—			1,040			—			1,040
Comprehensive income attributable to LKQ stockholders	$	374,409		$	384,134		$	2,680		$	(386,814	)	$	374,409

	For the Nine Months Ended September 30, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net income	$	409,573		$	343,100		$	124,038		$	(467,138	)	$	409,573
Other comprehensive income (loss):
Foreign currency translation, net of tax	174,794			17,565			176,769			(194,334		)	174,794
Net change in unrecognized gains/losses on cash flow hedges, net of tax	457			(133		)	—			133			457
Net change in unrealized gains/losses on pension plans, net of tax	(4,053		)	(3,253		)	(800		)	4,053			(4,053		)
Net change in other comprehensive loss from unconsolidated subsidiaries	(1,635		)	—			(1,635		)	1,635			(1,635		)
Total other comprehensive income	169,563			14,179			174,334			(188,513		)	169,563
Total comprehensive income	$	579,136		$	357,279		$	298,372		$	(655,651	)	$	579,136

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Balance Sheets (In thousands)
	September 30, 2018
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	48,265	$	31,082	$	261,999	$	—		$	341,346
Receivables, net	341		366,781		888,754		—			1,255,876
Intercompany receivables, net	7,173		—		20,573		(27,746		)	—
Inventories	—		1,323,201		1,471,693		—			2,794,894
Prepaid expenses and other current assets	15,452		94,787		90,705		—			200,944
Total current assets	71,231		1,815,851		2,733,724		(27,746		)	4,593,060
Property, plant and equipment, net	845		589,898		610,260		—			1,201,003
Intangible assets:
Goodwill	—		2,005,560		2,469,706		—			4,475,266
Other intangibles, net	286		280,229		672,857		—			953,372
Investment in subsidiaries	5,351,986		114,721		—		(5,466,707		)	—
Intercompany notes receivable	1,067,356		14,958		—		(1,082,314		)	—
Equity method investments	—		16,075		141,334		—			157,409
Other assets	90,293		38,434		76,499		—			205,226
Total assets	$	6,581,997	$	4,875,726	$	6,704,380	$	(6,576,767	)	$	11,585,336
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,615	$	345,660	$	593,472	$	—		$	941,747
Intercompany payables, net	—		20,573		7,173		(27,746		)	—
Accrued expenses:
Accrued payroll-related liabilities	7,169		48,463		97,904		—			153,536
Other accrued expenses	12,656		106,543		239,013		—			358,212
Refund liability	—		54,554		52,178		—			106,732
Other current liabilities	283		18,210		38,595		—			57,088
Current portion of long-term obligations	—		2,317		116,048		—			118,365
Total current liabilities	22,723		596,320		1,144,383		(27,746		)	1,735,680
Long-term obligations, excluding current portion	1,569,387		14,027		2,666,723		—			4,250,137
Intercompany notes payable	—		617,389		464,925		(1,082,314		)	—
Deferred income taxes	9,715		115,924		199,898		—			325,537
Other noncurrent liabilities	139,712		98,133		138,721		—			376,566
Stockholders' equity:
Total Company stockholders’ equity	4,840,460		3,433,933		2,032,774		(5,466,707		)	4,840,460
Noncontrolling interest	—		—		56,956		—			56,956
Total stockholders’ equity	4,840,460		3,433,933		2,089,730		(5,466,707		)	4,897,416
Total liabilities and stockholders' equity	$	6,581,997	$	4,875,726	$	6,704,380	$	(6,576,767	)	$	11,585,336

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Balance Sheets (In thousands)
	December 31, 2017
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	34,360	$	35,131	$	210,275	$	—		$	279,766
Receivables, net	—		290,958		736,148		—			1,027,106
Intercompany receivables, net	2,669		3,010		230		(5,909		)	—
Inventories	—		1,334,766		1,046,017		—			2,380,783
Prepaid expenses and other current assets	34,136		44,849		55,494		—			134,479
Total current assets	71,165		1,708,714		2,048,164		(5,909		)	3,822,134
Property, plant and equipment, net	910		563,262		348,917		—			913,089
Intangible assets:
Goodwill	—		2,010,209		1,526,302		—			3,536,511
Other intangibles, net	—		291,036		452,733		—			743,769
Investment in subsidiaries	5,952,687		102,931		—		(6,055,618		)	—
Intercompany notes receivable	1,156,550		782,638		—		(1,939,188		)	—
Equity method investments	—		336		208,068		—			208,404
Other assets	70,590		33,597		38,778		—			142,965
Total assets	$	7,251,902	$	5,492,723	$	4,622,962	$	(8,000,715	)	$	9,366,872
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	5,742	$	340,951	$	441,920	$	—		$	788,613
Intercompany payables, net	—		230		5,679		(5,909		)	—
Accrued expenses:
Accrued payroll-related liabilities	9,448		65,811		68,165		—			143,424
Other accrued expenses	5,219		95,900		117,481		—			218,600
Other current liabilities	282		27,066		18,379		—			45,727
Current portion of long-term obligations	16,468		1,912		107,980		—			126,360
Total current liabilities	37,159		531,870		759,604		(5,909		)	1,322,724
Long-term obligations, excluding current portion	2,095,826		7,372		1,174,422		—			3,277,620
Intercompany notes payable	750,000		677,708		511,480		(1,939,188		)	—
Deferred income taxes	12,402		116,021		123,936		—			252,359
Other noncurrent liabilities	158,346		101,189		47,981		—			307,516
Stockholders' equity:
Total Company stockholders’ equity	4,198,169		4,058,563		1,997,055		(6,055,618		)	4,198,169
Noncontrolling interest	—		—		8,484		—			8,484
Total stockholders’ equity	4,198,169		4,058,563		2,005,539		(6,055,618		)	4,206,653
Total liabilities and stockholders' equity	$	7,251,902	$	5,492,723	$	4,622,962	$	(8,000,715	)	$	9,366,872

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Cash Flows (In thousands)
	For the Nine Months Ended September 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities	$	334,226		$	142,626		$	97,506		$	(53,191	)	$	521,167
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(315		)	(93,063		)	(78,385		)	—			(171,763		)
Investment and intercompany note activity with subsidiaries	73,096			—			—			(73,096		)	—
Return of investment in subsidiaries	152,443			—			—			(152,443		)	—
Acquisitions, net of cash acquired	—			(2,888		)	(1,203,179		)	—			(1,206,067		)
Investments in unconsolidated subsidiaries	—			(11,066		)	—			—			(11,066		)
Receipts of deferred purchase price on receivables under factoring arrangements	—			224,753			9,410			(224,753		)	9,410
Other investing activities, net	887			2,162			4,921			—			7,970
Net cash provided by (used in) investing activities	226,111			119,898			(1,267,233		)	(450,292		)	(1,371,516		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	3,772			—			—			—			3,772
Taxes paid related to net share settlements of stock-based compensation awards	(4,768		)	—			—			—			(4,768		)
Debt issuance costs	(1,354		)	—			(15,584		)	—			(16,938		)
Proceeds from issuance of Euro Notes (2026/28)	—			—			1,232,100			—			1,232,100
Borrowings under revolving credit facilities	304,000			—			721,496			—			1,025,496
Repayments under revolving credit facilities	(732,897		)	—			(377,138		)	—			(1,110,035		)
Repayments under term loans	(114,800		)	—			—			—			(114,800		)
(Repayments) borrowings of other debt, net	(385		)	101			(38,411		)	—			(38,695		)
Other financing activities, net	—			—			3,182			—			3,182
Investment and intercompany note activity with parent	—			(62,763		)	(10,333		)	73,096			—
Dividends	—			(203,448		)	(226,939		)	430,387			—
Net cash (used in) provided by financing activities	(546,432		)	(266,110		)	1,288,373			503,483			979,314
Effect of exchange rate changes on cash and cash equivalents	—			(463		)	(66,922		)	—			(67,385		)
Net increase (decrease) in cash and cash equivalents	13,905			(4,049		)	51,724			—			61,580
Cash and cash equivalents, beginning of period	34,360			35,131			210,275			—			279,766
Cash and cash equivalents, end of period	$	48,265		$	31,082		$	261,999		$	—		$	341,346

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Cash Flows (In thousands)
	For the Nine Months Ended September 30, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities	$	227,314		$	162,114		$	108,095		$	(48,280	)	$	449,243
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(509		)	(70,292		)	(64,736		)	—			(135,537		)
Investment and intercompany note activity with subsidiaries	296,561			—			—			(296,561		)	—
Acquisitions, net of cash acquired	—			(79,496		)	(173,171		)	—			(252,667		)
Proceeds from disposals of business/investment	—			305,740			(4,443		)	—			301,297
Investments in unconsolidated subsidiaries	—			(2,200		)	(4,914		)	—			(7,114		)
Receipts of deferred purchase price on receivables under factoring arrangements (1)	—			226,395			—			(226,395		)	—
Other investing activities, net	—			3,100			6,764			—			9,864
Net cash provided by (used in) investing activities	296,052			383,247			(240,500		)	(522,956		)	(84,157		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	6,465			—			—			—			6,465
Taxes paid related to net share settlements of stock-based compensation awards	(5,095		)	—			—			—			(5,095		)
Borrowings under revolving credit facilities	187,000			—			237,976			—			424,976
Repayments under revolving credit facilities	(694,896		)	—			(75,988		)	—			(770,884		)
Repayments under term loans	(27,884		)	—			—			—			(27,884		)
Borrowings under receivables securitization facility	—			—			8,525			—			8,525
Repayments under receivables securitization facility	—			—			(9,925		)	—			(9,925		)
(Repayments) borrowings of other debt, net	(1,700		)	(1,238		)	27,460			—			24,522
Payments of other obligations	—			(1,336		)	(743		)	—			(2,079		)
Other financing activities, net	—			5,000			(684		)	—			4,316
Investment and intercompany note activity with parent	—			(286,530		)	(10,031		)	296,561			—
Dividends	—			(274,675		)	—			274,675			—
Net cash (used in) provided by financing activities	(536,110		)	(558,779		)	176,590			571,236			(347,063		)
Effect of exchange rate changes on cash and cash equivalents	—			322			22,216			—			22,538
Net (decrease) increase in cash and cash equivalents	(12,744		)	(13,096		)	66,401			—			40,561
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	$	20,286		$	22,413		$	232,378		$	—		$	275,077

⁽¹⁾ Reflects the impact of adopting ASU 2016-15

XML

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Receivables and Allowance for Doubtful Accounts

We have a reserve for uncollectible accounts, which was approximately $63 million and $58 million at September 30, 2018 and December 31, 2017, respectively. Our May 2018 acquisition of Stahlgruber contributed $3 million to our reserve for uncollectible accounts. See Note 2, "Business Combinations" for further information on our acquisitions.

Inventory

Inventories consist of the following (in thousands):

	September 30,		December 31,
	2018		2017
Aftermarket and refurbished products	$	2,287,776	$	1,877,653
Salvage and remanufactured products	484,761		487,108
Manufactured products	22,357		16,022
Total inventories	$	2,794,894	$	2,380,783

    Aftermarket and refurbished products and salvage and remanufactured products are primarily composed of finished goods. As of September 30, 2018, manufactured products inventory was composed of $16 million of raw materials, $2 million of work in process, and $4 million of finished goods. As of December 31, 2017, manufactured products inventory was composed of $10 million of raw materials, $2 million of work in process, and $4 million of finished goods.

Our May 2018 acquisition of Stahlgruber contributed $374 million to our aftermarket and refurbished products inventory. See Note 2, "Business Combinations" for further information on our acquisitions.

Property and Equipment

Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized. Construction in progress consists primarily of building and land improvements at our existing facilities. Depreciation is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term of the related lease and reasonably assured renewal periods, if shorter.

Our estimated useful lives are as follows:

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

Property, plant and equipment consists of the following (in thousands):

	September 30,			December 31,
	2018			2017
Land and improvements	$	189,404		$	137,790
Buildings and improvements	373,607			233,078
Machinery and equipment	618,209			521,526
Computer equipment and software	142,719			133,753
Vehicles and trailers	177,778			161,269
Furniture and fixtures	52,595			31,794
Leasehold improvements	283,603			257,506
	1,837,915			1,476,716
Less—Accumulated depreciation	(691,086		)	(606,112		)
Construction in progress	54,174			42,485
Total property, plant and equipment, net	$	1,201,003		$	913,089

Property, Plant and Equipment

Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized. Construction in progress consists primarily of building and land improvements at our existing facilities. Depreciation is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term of the related lease and reasonably assured renewal periods, if shorter.

Our estimated useful lives are as follows:

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

Property, plant and equipment consists of the following (in thousands):

	September 30,			December 31,
	2018			2017
Land and improvements	$	189,404		$	137,790
Buildings and improvements	373,607			233,078
Machinery and equipment	618,209			521,526
Computer equipment and software	142,719			133,753
Vehicles and trailers	177,778			161,269
Furniture and fixtures	52,595			31,794
Leasehold improvements	283,603			257,506
	1,837,915			1,476,716
Less—Accumulated depreciation	(691,086		)	(606,112		)
Construction in progress	54,174			42,485
Total property, plant and equipment, net	$	1,201,003		$	913,089

The components of opening property, plant and equipment acquired as part of our acquisition of Stahlgruber in May 2018 are as follows (in thousands):

	Gross Amount
Land and improvements	$	47,281
Buildings and improvements	125,649
Machinery and equipment	49,384
Computer equipment and software	3,760
Vehicles and trailers	643
Furniture and fixtures	28,535
Leasehold improvements	1,890
	257,142
Construction in progress	3,519
Total property, plant and equipment	$	260,661

We record depreciation expense associated with our refurbishing, remanufacturing, manufacturing and furnace operations as well as our distribution centers in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. All other depreciation expense is reported in Depreciation and amortization. Total depreciation expense for the three and nine months ended September 30, 2018 was $39 million and $115 million, respectively, and $34 million and $93 million during the three and nine months ended September 30, 2017, respectively.

Intangible Assets

Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer and supplier relationships, software and other technology related assets, and covenants not to compete.

The changes in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2018 are as follows (in thousands):

	North America			Europe			Specialty			Total
Balance as of January 1, 2018	$	1,709,354		$	1,414,898		$	412,259		$	3,536,511
Business acquisitions and adjustments to previously recorded goodwill	1,073			1,002,277			(5,720		)	997,630
Exchange rate effects	(3,049		)	(55,901		)	75			(58,875		)
Balance as of September 30, 2018	$	1,707,378		$	2,361,274		$	406,614		$	4,475,266

During the nine months ended September 30, 2018, we recorded $929 million of goodwill related to our acquisition of Stahlgruber. See Note 2, "Business Combinations" for further information on our acquisitions.

The components of other intangibles, net are as follows (in thousands):

	September 30, 2018		December 31, 2017
Intangible assets subject to amortization	$	872,072	$	664,969
Indefinite-lived intangible assets
Trademarks	81,300		78,800
Total	$	953,372	$	743,769

The components of intangible assets subject to amortization are as follows (in thousands):

	September 30, 2018							December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Trade names and trademarks	$	495,839	$	(88,805	)	$	407,034	$	327,332	$	(75,095	)	$	252,237
Customer and supplier relationships	586,221		(223,085		)	363,136		510,113		(167,532		)	342,581
Software and other technology related assets	172,391		(73,760		)	98,631		124,049		(59,081		)	64,968
Covenants not to compete	13,488		(10,217		)	3,271		14,981		(9,798		)	5,183
Total	$	1,267,939	$	(395,867	)	$	872,072	$	976,475	$	(311,506	)	$	664,969

The components of intangible assets acquired as part of our acquisitions in 2018 are as follows (in thousands):

	Nine Months Ended
	September 30, 2018
	Stahlgruber		Other Acquisitions		Total
Trade names and trademarks	$	173,946	$	2,895	$	176,841
Customer and supplier relationships	78,239		8,194		86,433
Software and other technology related assets	33,344		92		33,436
Total	$	285,529	$	11,181	$	296,710

The weighted-average amortization periods for our intangible assets acquired during the nine months ended September 30, 2018 and the year ended December 31, 2017 are as follows (in years):

	Nine Months Ended			Year Ended
	September 30, 2018			December 31, 2017
	Stahlgruber	Other Acquisitions	Total	All Acquisitions
Trade names and trademarks	19.9	20.0	19.9	11.2
Customer and supplier relationships	3.0	9.6	3.6	18.6
Software and other technology related assets	6.8	6.0	6.8	11.1
Covenants not to compete	-	-	-	4.4
Total acquired finite-lived intangible assets	13.7	12.2	13.7	16.5

Our estimated useful lives for our finite-lived intangible assets are as follows:

	Method of Amortization	Useful Life
Trade names and trademarks	Straight-line	4-30 years
Customer and supplier relationships	Accelerated	3-20 years
Software and other technology related assets	Straight-line	3-15 years
Covenants not to compete	Straight-line	2-5 years

Amortization expense for intangibles was $42 million and $96 million during the three and nine months ended September 30, 2018, respectively, and $26 million and $74 million during the three and nine months ended September 30, 2017, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2022 is $40 million (for the remaining three months of 2018), $136 million, $104 million, $75 million and $62 million, respectively.

Equity Method Investments [Policy Text Block]

Our investment in unconsolidated subsidiaries was $157 million and $208 million as of September 30, 2018 and December 31, 2017, respectively. On December 1, 2016, we acquired a 26.5% equity interest in Mekonomen AB ("Mekonomen") for an aggregate purchase price of $181 million. Headquartered in Stockholm, Sweden, Mekonomen is the leading independent car parts and service chain in the Nordic region of Europe, offering a range of products including spare parts and accessories for cars, and workshop services for consumers and businesses. As a result of the investment, we nominated two representatives for election to Mekonomen's board of directors; both representatives were subsequently elected to and continue to serve on the board of directors, including one as the chairman of the board. We are accounting for our interest in Mekonomen using the equity method of accounting, as our investment gives us the ability to exercise significant influence, but not control, over the investee. As of September 30, 2018, the book value of our investment in Mekonomen exceeded our share of the book value of Mekonomen's net assets by $64 million; this difference is primarily related to goodwill and the fair value of other intangible assets. We are recording our equity in the net earnings of Mekonomen on a one quarter lag. We recorded equity losses of $20 million and $18 million during the three and nine months ended September 30, 2018, respectively, and equity in earnings of $3 million and $5 million during the three and nine months ended September 30, 2017 related to our investment in Mekonomen, including adjustments to convert the results to GAAP and to recognize the impact of our purchase accounting adjustments. In May 2018 and May 2017, we received cash dividends of $8 million (SEK 67 million) and $7 million (SEK 67 million), respectively, related to our investment in Mekonomen.

On July 6, 2018, Mekonomen announced the acquisition of two automotive spare parts distributors in Denmark and Poland. The objective of the acquisition is to strengthen Mekonomen's position in the sale of automotive spare parts in northern Europe and to establish a strong market position in Denmark and Poland, where Mekonomen has no current operations. The acquisition is partially being financed by a rights issue with preferential rights for Mekonomen's existing shareholders, who were given the right to subscribe for four new Mekonomen shares per seven existing owned shares at a discounted share price. On October 5, 2018, we subscribed for our pro rata share in the rights issue giving us the right to acquire an additional $48 million of equity in Mekonomen at a discounted share price, retaining our 26.5% equity interest. We recorded a derivative instrument of $29 million in Other assets on our Unaudited Condensed Consolidated Balance Sheets, which represents our right to acquire Mekonomen shares at a discount. We are measuring the derivative instrument at fair value, and we recorded a $3 million gain on our fair value remeasurement during the three months ended September 30, 2018; the gain is recorded in Other income, net on the Unaudited Condensed Consolidated Statements of Income. In the fourth quarter, we will record an $8 million loss related to the settlement of the derivative instrument in October 2018 due to a decrease in the Mekonomen share price from the last day of the third quarter to the settlement date.

We evaluated our investment in Mekonomen for other-than-temporary impairment as of September 30, 2018, and concluded the decline in fair value was other-than-temporary due to a prolonged and significant stock price decrease. Therefore, we recognized an other-than-temporary impairment of $23 million, which represents the difference in the carrying value and the fair value of our investment in Mekonomen. The fair value of our investment in Mekonomen was determined using the Mekonomen share price as of September 30, 2018. The impairment charge is recorded in Equity in (losses) earnings of unconsolidated subsidiaries in our Unaudited Condensed Consolidated Statements of Income. Equity in losses and earnings from our investment in Mekonomen are reported in the Europe segment. As a result of the impairment charge, the Level 1 fair value of our equity investment in the publicly traded Mekonomen common stock at September 30, 2018 approximated the carrying value of $134 million.

Warranty Reserve

Some of our salvage mechanical products are sold with a standard six month warranty against defects. Additionally, some of our remanufactured engines are sold with a standard three year warranty against defects. We also provide a limited lifetime warranty for certain of our aftermarket products. These assurance-type warranties are not considered a separate performance obligation, and thus no transaction price is allocated to them. We record the warranty costs in Cost of goods sold on our Unaudited Condensed Consolidated Statements of Income. Our warranty reserve is calculated using historical claim information to project future warranty claims activity and is recorded within Other accrued expenses and Other noncurrent liabilities on our Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments.

The changes in the warranty reserve are as follows (in thousands):

Balance as of December 31, 2017	$	23,151
Warranty expense	33,670
Warranty claims	(31,980		)
Balance as of September 30, 2018	$	24,841

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Adoption of New Revenue Standard

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). This update outlines a new comprehensive revenue recognition model that supersedes the prior revenue recognition guidance and requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB has issued several updates to ASU 2014-09, which collectively with ASU 2014-09, represent the FASB Accounting Standards Codification Topic 606 (“ASC 606”). On January 1, 2018, we adopted ASC 606 for all contracts using the modified retrospective method, which means the historical periods are presented under the previous revenue standards with the cumulative net income effect being adjusted through retained earnings.

Most of the changes resulting from our adoption of ASC 606 were changes in presentation within the Unaudited Condensed Consolidated Balance Sheets and the Unaudited Condensed Consolidated Statements of Income. Therefore, while we made adjustments to certain opening balances on our January 1, 2018 balance sheet, we made no adjustments to opening retained earnings. We expect the impact of the adoption of ASC 606 to be immaterial to our net income on an ongoing basis. See Note 5, "Revenue Recognition" for the required disclosures under ASC 606.

With the adoption of ASC 606, we reclassified certain amounts related to variable consideration. Under ASC 606, we are required to present a refund liability and a returns asset within the Unaudited Condensed Consolidated Balance Sheet, whereas in periods prior to adoption, we presented the estimated margin impact of expected returns as a contra-asset within accounts receivable. Additionally, under ASC 606, the changes in the refund liability are reported in revenue, and the changes in the returns assets are reported in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. Prior to adoption, the change in the reserve for returns was generally reported as a net amount within revenue. As a result, the income statement presentation was adjusted concurrently with the balance sheet change beginning in 2018.

The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 was as follows (in thousands):

	Balance as of December 31, 2017		Adjustments Due to ASC 606		Balance as of January 1, 2018
Balance Sheet
Assets
Accounts receivable	$	1,027,106	$	38,511	$	1,065,617
Prepaid expenses and other current assets	134,479		44,508		178,987
Liabilities
Refund liability	—		83,019		83,019

The impact of the adoption of ASC 606 on our Unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 and our Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2018 was as follows (in thousands):

	Balance as of September 30, 2018
	As Reported		Amounts Without Adoption of ASC 606		Effect of Change Higher/(Lower)
Balance Sheet
Assets
Accounts receivable	$	1,255,876	$	1,205,833	$	50,043
Prepaid expenses and other current assets	200,944		144,255		56,689
Liabilities
Refund liability	106,732		—		106,732

	For the three months ended September 30, 2018
	As Reported		Amounts Without Adoption of ASC 606		Effect of Change Higher/(Lower)
Income Statement
Revenue	$	3,122,378	$	3,123,468	$	(1,090	)
Cost of goods sold	1,925,180		1,925,107		73
Selling, general and administrative expenses	879,150		880,313		(1,163		)

	For the nine months ended September 30, 2018
	As Reported		Amounts Without Adoption of ASC 606		Effect of Change Higher/(Lower)
Income Statement
Revenue	$	8,873,893	$	8,882,558	$	(8,665	)
Cost of goods sold	5,460,845		5,467,061		(6,216		)
Selling, general and administrative expenses	2,472,085		2,474,534		(2,449		)

We have not included a table of the impact of the balance sheet adjustments on the Unaudited Condensed Consolidated Statement of Cash Flows as the adjustment will net to zero within the operating activities section of this statement.

Under ASC 606, we have elected not to adjust consideration for the effect of a significant financing component at contract inception if the period between the transfer of goods to the customer and payment received from the customer is one year or less. Generally, our payment terms are short term in nature, but in some instances we may offer extended terms to customers exceeding one year such that interest would be accrued with respect to those contracts. The interest that would be accrued related to these contracts is immaterial at September 30, 2018.

Under ASC 340, "Other Assets and Deferred Costs," we have elected to recognize incremental costs of obtaining a contract (commissions earned by our sales representatives on product sales) as an expense when incurred, as we believe the amortization period of the asset would be one year or less due to the short-term nature of our contracts.

Other Recently Adopted Accounting Pronouncements

During the first quarter of 2018, we adopted ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which changes how entities will recognize, measure, present and make disclosures about certain financial assets and financial liabilities. The adoption of ASU 2016-01 did not have a significant impact on our financial position, results of operations, cash flows or disclosures.

During the first quarter of 2018, we adopted ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"), which includes guidance on classification for the following items: debt prepayment or debt extinguishment costs, settlement of zero coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and corporate-owned or bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and other separately identifiable cash flows where application of the predominance principle is prescribed. No adjustments were required in our Unaudited Condensed Consolidated Statement of Cash Flows upon adoption. Within our Unaudited Condensed Consolidating Statements of Cash Flows in Note 18, "Condensed Consolidating Financial Information," we now present a new line item, Payments of deferred purchase price on receivables securitization, as a result of adopting ASU 2016-15; prior year cash flow information within this footnote has been recast to reflect the impact of adopting this accounting standard. Other than the addition of this new line item, there was no impact to our Unaudited Condensed Consolidating Statements of Cash Flows upon adoption.

During the first quarter of 2018, we adopted ASU No. 2017-01, "Clarifying the Definition of a Business" (“ASU 2017-01”), which requires an evaluation of whether substantially all of the fair value of assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the transaction does not qualify as a business. The guidance also requires an acquired business to include at least one substantive process and narrows the definition of outputs.  The adoption of ASU 2017-01 did not have a material impact on our unaudited condensed consolidated financial statements.

During the first quarter of 2018, we adopted ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02"), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the reduction of the U.S. federal statutory income tax rate to 21% from 35% due to the enactment of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). In addition, under ASU 2018-02, an entity is required to provide certain disclosures regarding stranded tax effects. ASU 2018-02 is effective for fiscal years and interim periods beginning after December 15, 2018; early adoption is permitted. As a result of the adoption of ASU 2018-02, we recorded a $5 million reclassification to increase Accumulated Other Comprehensive (Loss) Income and decrease Retained Earnings.

During the first quarter of 2018, we adopted ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" ("ASU 2017-07"), which requires presentation of the current service cost component of net periodic benefit expense with other current compensation expenses for the related employees, and requires presentation of the remaining components of net periodic benefit expense, such as interest, expected return on plan assets, and amortization of actuarial gains and losses, outside of operating income. ASU 2017-07 also specifies that, on a prospective basis, only the service cost component is eligible for capitalization into inventory or other assets. While the income statement classification provisions of ASU 2017-07 are applicable on a retrospective basis, due to the immaterial impact to our Unaudited Condensed Consolidated Statements of Income in prior periods, we did not recast prior period income statement information and adopted the classification provisions on a prospective basis. The change in the capitalization provisions under ASU 2017-07 did not have a material impact on our unaudited condensed consolidated financial statements. See Note 13, "Employee Benefit Plans," for further disclosure on the components of net periodic benefit expense and classification of the components within our Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2018 and 2017.

During the third quarter of 2018, the FASB issued ASU No. 2018-15, "Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" ("ASU 2018-15"). This update requires an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. ASU 2018-15 is effective for fiscal years and interim periods beginning after December 15, 2019; early adoption is permitted. We have adopted ASU 2018-15 in the third quarter of 2018 as we believe that our existing policy is consistent with the new guidance and thus no adjustments were required to be in compliance with this standard update.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, "Leases" ("ASU 2016-02"), to increase transparency and comparability by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between current GAAP and ASU 2016-02 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current GAAP. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The standard requires that entities apply the effects of these changes using a modified retrospective approach, which includes a number of optional practical expedients. While we are still in the process of quantifying the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements and related disclosures, we anticipate the adoption will materially affect our consolidated balance sheet and disclosures, as the majority of our operating leases will be recorded on the balance sheet under ASU 2016-02. While we do not anticipate the adoption of this accounting standard to have a material impact on our consolidated statements of income at this time, this conclusion may change as we finalize our assessment. In order to assist in our timely implementation of the new standard, we have purchased new software to track our leases. We have engaged a third party to assist with the implementation of the new software with an expectation to complete the implementation by the end of 2018. During the second quarter, we completed phase one of the software roll-out for our North America and Specialty operations. We are nearing completion of the phase one roll-out in our Europe operations as of the filing date of this Quarterly Report on Form 10-Q.

In August 2017, the FASB issued ASU No. 2017-12, "Targeted Improvements to Accounting for Hedging Activities" ("ASU 2017-12"), which amends the hedge accounting recognition and presentation requirements in ASC 815 ("Derivatives and Hedging"). ASU 2017-12 significantly alters the hedge accounting model by making it easier for an entity to achieve and maintain hedge accounting and provides for accounting that better reflects an entity's risk management activities. ASU 2017-12 is effective for fiscal years and interim periods beginning after December 15, 2018; early adoption is permitted. Entities will adopt the provisions of ASU 2017-12 by applying a modified retrospective approach to existing hedging relationships as of the adoption date. At this time, we are still evaluating the impact of this standard on our financial statements.

In August 2018, the FASB issued ASU No. 2018-13, "Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement" ("ASU 2018-13"), which removes, modifies, and adds certain disclosure requirements in ASC 820. ASU 2018-13 is effective for fiscal years and interim periods beginning after December 15, 2019; early adoption is permitted. We are in the process of evaluating the impact of this standard on our disclosures but do not believe that it will have a material impact.

In August 2018, the FASB issued ASU No. 2018-14, "Disclosure Framework- Changes to the Disclosure Requirements for Defined Benefit Plans" ("ASU 2018-14"), which removes, modifies, and adds certain disclosure requirements to ASC 715-20. ASU 2018-14 is effective for fiscal years and interim periods beginning after December 15, 2020; early adoption is permitted. We are in the process of evaluating the impact of this standard on our disclosures.

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Business Combinations (Tables)

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Purchase Price Allocations For Acquisitions

The purchase price allocations for the acquisitions completed during the nine months ended September 30, 2018 and the year ended December 31, 2017 are as follows (in thousands):

	Nine Months Ended									Year Ended
	September 30, 2018									December, 31, 2017
	Stahlgruber			Other Acquisitions (2)			Total			All Acquisitions (1)
Receivables	$	140,979		$	15,369		$	156,348		$	73,782
Receivable reserves	(2,818		)	(875		)	(3,693		)	(7,032		)
Inventories (3)	374,056			12,240			386,296			150,342
Prepaid expenses and other current assets	9,537			1,806			11,343			(295		)
Property, plant and equipment	260,661			6,089			266,750			41,039
Goodwill	929,376			68,254			997,630			314,817
Other intangibles	285,529			16,315			301,844			181,216
Other assets	16,625			37			16,662			3,257
Deferred income taxes	(97,805		)	(716		)	(98,521		)	(65,087		)
Current liabilities assumed	(343,221		)	(20,662		)	(363,883		)	(111,484		)
Debt assumed	(65,852		)	(4,410		)	(70,262		)	(33,586		)
Other noncurrent liabilities assumed (4)	(81,689		)	(9,993		)	(91,682		)	(1,917		)
Noncontrolling interest	(44,250		)	—			(44,250		)	—
Contingent consideration liabilities	—			(3,107		)	(3,107		)	(6,234		)
Other purchase price obligations	(2,349		)	3,853			1,504			(5,074		)
Stock issued	(251,334		)	—			(251,334		)	—
Notes issued	—			(6,948		)	(6,948		)	(20,187		)
Settlement of pre-existing balances	—			—			—			242
Gains on bargain purchases (5)	—			(328		)	(328		)	(3,870		)
Settlement of other purchase price obligations (non-interest bearing)	—			1,698			1,698			3,159
Cash used in acquisitions, net of cash acquired	$	1,127,445		$	78,622		$	1,206,067		$	513,088

Pro Forma Effect Of Businesses Acquired

The following pro forma summary presents the effect of the businesses acquired during the nine months ended September 30, 2018 as though the businesses had been acquired as of January 1, 2017, and the businesses acquired during the year ended December 31, 2017 as though they had been acquired as of January 1, 2016. The pro forma adjustments are based upon unaudited financial information of the acquired entities (in thousands, except per share data):

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2018		2017			2018			2017
Revenue, as reported	$	3,122,378	$	2,465,800		$	8,873,893		$	7,267,054
Revenue of purchased businesses for the period prior to acquisition:
Stahlgruber	—		473,326			815,405			1,289,083
Other acquisitions	6,641		83,893			51,132			387,844
Pro forma revenue	$	3,129,019	$	3,023,019		$	9,740,430		$	8,943,981
Income from continuing operations, as reported (1)	$	134,480	$	122,381		$	445,109		$	414,104
Income from continuing operations of purchased businesses for the period prior to acquisition, and pro forma purchase accounting adjustments:
Stahlgruber	5,054		6,061			14,114			5,298
Other acquisitions	161		3,478			1,588			17,014
Acquisition related expenses, net of tax (2)	681		2,301			13,986			5,010
Pro forma income from continuing operations	140,376		134,221			474,797			441,426
Less: Pro forma net income attributable to noncontrolling interest	—		888			2,799			2,157
Pro forma income from continuing operations attributable to LKQ stockholders	$	140,376	$	133,333		$	471,998		$	439,269
Earnings per share from continuing operations, basic - as reported	$	0.42	$	0.40		$	1.42		$	1.34
Effect of purchased businesses for the period prior to acquisition:
Stahlgruber	0.02		0.02			0.05			0.02
Other acquisitions	0.00		0.01			0.01			0.06
Acquisition related expenses, net of tax (2)	0.00		0.01			0.04			0.02
Impact of share issuance from acquisition of Stahlgruber	—		(0.01		)	(0.02		)	(0.03		)
Pro forma earnings per share from continuing operations, basic (3)	0.44		0.42			1.49			1.39
Less: Pro forma net income attributable to noncontrolling interest	—		0.00			0.01			0.01
Pro forma income from continuing operations attributable to LKQ stockholders	$	0.44	$	0.42		$	1.49		$	1.39
Earnings per share from continuing operations, diluted - as reported	$	0.42	$	0.39		$	1.41		$	1.33
Effect of purchased businesses for the period prior to acquisition:
Stahlgruber	0.02		0.02			0.04			0.02
Other acquisitions	0.00		0.01			0.01			0.05
Acquisition related expenses, net of tax (2)	0.00		0.01			0.04			0.02
Impact of share issuance from acquisition of Stahlgruber	—		(0.01		)	(0.02		)	(0.03		)
Pro forma earnings per share from continuing operations, diluted (3)	0.44		0.42			1.49			1.39
Less: Pro forma net income attributable to noncontrolling interest	—		0.00			0.01			0.01
Pro forma income from continuing operations attributable to LKQ stockholders	$	0.44	$	0.42		$	1.48		$	1.38

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Discontinued Operations Discontinued Operations Income statement (Tables)

9 Months Ended

Sep. 30, 2017

Disposal Groups, Including Discontinued Operations [Table Text Block]

The following table summarizes the operating results of the Company’s discontinued operations related to the sale described above for the nine months ended September 30, 2017, as presented in Net loss from discontinued operations on the Unaudited Condensed Consolidated Statements of Income (in thousands):

	Nine Months Ended
	September 30, 2017
Revenue	$	111,130
Cost of goods sold	100,084
Selling, general and administrative expenses	8,369
Operating income	2,677
Interest and other income, net (1)	1,204
Income from discontinued operations before taxes	3,881
Provision for income taxes	3,598
Equity in loss of unconsolidated subsidiaries	(534		)
Loss from discontinued operations, net of tax	(251		)
Loss on sale of discontinued operations, net of tax (2)	(4,280		)
Net loss from discontinued operations	$	(4,531	)

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Line Items]

Warranty Reserve

Some of our salvage mechanical products are sold with a standard six month warranty against defects. Additionally, some of our remanufactured engines are sold with a standard three year warranty against defects. We also provide a limited lifetime warranty for certain of our aftermarket products. These assurance-type warranties are not considered a separate performance obligation, and thus no transaction price is allocated to them. We record the warranty costs in Cost of goods sold on our Unaudited Condensed Consolidated Statements of Income. Our warranty reserve is calculated using historical claim information to project future warranty claims activity and is recorded within Other accrued expenses and Other noncurrent liabilities on our Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments.

The changes in the warranty reserve are as follows (in thousands):

Balance as of December 31, 2017	$	23,151
Warranty expense	33,670
Warranty claims	(31,980		)
Balance as of September 30, 2018	$	24,841

Equity Method Investments [Policy Text Block]

Our investment in unconsolidated subsidiaries was $157 million and $208 million as of September 30, 2018 and December 31, 2017, respectively. On December 1, 2016, we acquired a 26.5% equity interest in Mekonomen AB ("Mekonomen") for an aggregate purchase price of $181 million. Headquartered in Stockholm, Sweden, Mekonomen is the leading independent car parts and service chain in the Nordic region of Europe, offering a range of products including spare parts and accessories for cars, and workshop services for consumers and businesses. As a result of the investment, we nominated two representatives for election to Mekonomen's board of directors; both representatives were subsequently elected to and continue to serve on the board of directors, including one as the chairman of the board. We are accounting for our interest in Mekonomen using the equity method of accounting, as our investment gives us the ability to exercise significant influence, but not control, over the investee. As of September 30, 2018, the book value of our investment in Mekonomen exceeded our share of the book value of Mekonomen's net assets by $64 million; this difference is primarily related to goodwill and the fair value of other intangible assets. We are recording our equity in the net earnings of Mekonomen on a one quarter lag. We recorded equity losses of $20 million and $18 million during the three and nine months ended September 30, 2018, respectively, and equity in earnings of $3 million and $5 million during the three and nine months ended September 30, 2017 related to our investment in Mekonomen, including adjustments to convert the results to GAAP and to recognize the impact of our purchase accounting adjustments. In May 2018 and May 2017, we received cash dividends of $8 million (SEK 67 million) and $7 million (SEK 67 million), respectively, related to our investment in Mekonomen.

On July 6, 2018, Mekonomen announced the acquisition of two automotive spare parts distributors in Denmark and Poland. The objective of the acquisition is to strengthen Mekonomen's position in the sale of automotive spare parts in northern Europe and to establish a strong market position in Denmark and Poland, where Mekonomen has no current operations. The acquisition is partially being financed by a rights issue with preferential rights for Mekonomen's existing shareholders, who were given the right to subscribe for four new Mekonomen shares per seven existing owned shares at a discounted share price. On October 5, 2018, we subscribed for our pro rata share in the rights issue giving us the right to acquire an additional $48 million of equity in Mekonomen at a discounted share price, retaining our 26.5% equity interest. We recorded a derivative instrument of $29 million in Other assets on our Unaudited Condensed Consolidated Balance Sheets, which represents our right to acquire Mekonomen shares at a discount. We are measuring the derivative instrument at fair value, and we recorded a $3 million gain on our fair value remeasurement during the three months ended September 30, 2018; the gain is recorded in Other income, net on the Unaudited Condensed Consolidated Statements of Income. In the fourth quarter, we will record an $8 million loss related to the settlement of the derivative instrument in October 2018 due to a decrease in the Mekonomen share price from the last day of the third quarter to the settlement date.

We evaluated our investment in Mekonomen for other-than-temporary impairment as of September 30, 2018, and concluded the decline in fair value was other-than-temporary due to a prolonged and significant stock price decrease. Therefore, we recognized an other-than-temporary impairment of $23 million, which represents the difference in the carrying value and the fair value of our investment in Mekonomen. The fair value of our investment in Mekonomen was determined using the Mekonomen share price as of September 30, 2018. The impairment charge is recorded in Equity in (losses) earnings of unconsolidated subsidiaries in our Unaudited Condensed Consolidated Statements of Income. Equity in losses and earnings from our investment in Mekonomen are reported in the Europe segment. As a result of the impairment charge, the Level 1 fair value of our equity investment in the publicly traded Mekonomen common stock at September 30, 2018 approximated the carrying value of $134 million.

Property and Equipment

Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized. Construction in progress consists primarily of building and land improvements at our existing facilities. Depreciation is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term of the related lease and reasonably assured renewal periods, if shorter.

Our estimated useful lives are as follows:

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

Property, plant and equipment consists of the following (in thousands):

	September 30,			December 31,
	2018			2017
Land and improvements	$	189,404		$	137,790
Buildings and improvements	373,607			233,078
Machinery and equipment	618,209			521,526
Computer equipment and software	142,719			133,753
Vehicles and trailers	177,778			161,269
Furniture and fixtures	52,595			31,794
Leasehold improvements	283,603			257,506
	1,837,915			1,476,716
Less—Accumulated depreciation	(691,086		)	(606,112		)
Construction in progress	54,174			42,485
Total property, plant and equipment, net	$	1,201,003		$	913,089

Property, Plant and Equipment

Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized. Construction in progress consists primarily of building and land improvements at our existing facilities. Depreciation is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term of the related lease and reasonably assured renewal periods, if shorter.

Our estimated useful lives are as follows:

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

Property, plant and equipment consists of the following (in thousands):

	September 30,			December 31,
	2018			2017
Land and improvements	$	189,404		$	137,790
Buildings and improvements	373,607			233,078
Machinery and equipment	618,209			521,526
Computer equipment and software	142,719			133,753
Vehicles and trailers	177,778			161,269
Furniture and fixtures	52,595			31,794
Leasehold improvements	283,603			257,506
	1,837,915			1,476,716
Less—Accumulated depreciation	(691,086		)	(606,112		)
Construction in progress	54,174			42,485
Total property, plant and equipment, net	$	1,201,003		$	913,089

The components of opening property, plant and equipment acquired as part of our acquisition of Stahlgruber in May 2018 are as follows (in thousands):

	Gross Amount
Land and improvements	$	47,281
Buildings and improvements	125,649
Machinery and equipment	49,384
Computer equipment and software	3,760
Vehicles and trailers	643
Furniture and fixtures	28,535
Leasehold improvements	1,890
	257,142
Construction in progress	3,519
Total property, plant and equipment	$	260,661

We record depreciation expense associated with our refurbishing, remanufacturing, manufacturing and furnace operations as well as our distribution centers in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. All other depreciation expense is reported in Depreciation and amortization. Total depreciation expense for the three and nine months ended September 30, 2018 was $39 million and $115 million, respectively, and $34 million and $93 million during the three and nine months ended September 30, 2017, respectively.

Schedule Of Inventory

Inventories consist of the following (in thousands):

	September 30,		December 31,
	2018		2017
Aftermarket and refurbished products	$	2,287,776	$	1,877,653
Salvage and remanufactured products	484,761		487,108
Manufactured products	22,357		16,022
Total inventories	$	2,794,894	$	2,380,783

Changes In Carrying Amount Of Goodwill

Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer and supplier relationships, software and other technology related assets, and covenants not to compete.

The changes in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2018 are as follows (in thousands):

	North America			Europe			Specialty			Total
Balance as of January 1, 2018	$	1,709,354		$	1,414,898		$	412,259		$	3,536,511
Business acquisitions and adjustments to previously recorded goodwill	1,073			1,002,277			(5,720		)	997,630
Exchange rate effects	(3,049		)	(55,901		)	75			(58,875		)
Balance as of September 30, 2018	$	1,707,378		$	2,361,274		$	406,614		$	4,475,266

During the nine months ended September 30, 2018, we recorded $929 million of goodwill related to our acquisition of Stahlgruber. See Note 2, "Business Combinations" for further information on our acquisitions.

Schedule of Finite-Lived and Indefinite-Lived Intangibles [Table Text Block]

The components of other intangibles, net are as follows (in thousands):

	September 30, 2018		December 31, 2017
Intangible assets subject to amortization	$	872,072	$	664,969
Indefinite-lived intangible assets
Trademarks	81,300		78,800
Total	$	953,372	$	743,769

Cumulative Impact of ASC 606 on Balance Sheet as of the Beginning of Fiscal Year

The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 was as follows (in thousands):

	Balance as of December 31, 2017		Adjustments Due to ASC 606		Balance as of January 1, 2018
Balance Sheet
Assets
Accounts receivable	$	1,027,106	$	38,511	$	1,065,617
Prepaid expenses and other current assets	134,479		44,508		178,987
Liabilities
Refund liability	—		83,019		83,019

Schedule of Estimated Useful Lives, Finite Lived Intangible Assets [Table Text Block]

Our estimated useful lives for our finite-lived intangible assets are as follows:

	Method of Amortization	Useful Life
Trade names and trademarks	Straight-line	4-30 years
Customer and supplier relationships	Accelerated	3-20 years
Software and other technology related assets	Straight-line	3-15 years
Covenants not to compete	Straight-line	2-5 years

Components Of Other Intangibles

The components of intangible assets subject to amortization are as follows (in thousands):

	September 30, 2018							December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Trade names and trademarks	$	495,839	$	(88,805	)	$	407,034	$	327,332	$	(75,095	)	$	252,237
Customer and supplier relationships	586,221		(223,085		)	363,136		510,113		(167,532		)	342,581
Software and other technology related assets	172,391		(73,760		)	98,631		124,049		(59,081		)	64,968
Covenants not to compete	13,488		(10,217		)	3,271		14,981		(9,798		)	5,183
Total	$	1,267,939	$	(395,867	)	$	872,072	$	976,475	$	(311,506	)	$	664,969

Useful Life - Intangible Assets	Method of Amortization	Useful Life Min	Useful Life Max
Trade names and trademarks	Straight-line	4 years	30 years
Customer and supplier relationships	Accelerated	3 years	20 years
Software and other technology related assets	Straight-line	3 years	15 years
Covenants not to compete	Straight-line	2 years	5 years

Cumulative Effect of Adoption of ASC 606 on Consolidated Financial Statements

The impact of the adoption of ASC 606 on our Unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 and our Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2018 was as follows (in thousands):

	Balance as of September 30, 2018
	As Reported		Amounts Without Adoption of ASC 606		Effect of Change Higher/(Lower)
Balance Sheet
Assets
Accounts receivable	$	1,255,876	$	1,205,833	$	50,043
Prepaid expenses and other current assets	200,944		144,255		56,689
Liabilities
Refund liability	106,732		—		106,732

	For the three months ended September 30, 2018
	As Reported		Amounts Without Adoption of ASC 606		Effect of Change Higher/(Lower)
Income Statement
Revenue	$	3,122,378	$	3,123,468	$	(1,090	)
Cost of goods sold	1,925,180		1,925,107		73
Selling, general and administrative expenses	879,150		880,313		(1,163		)

	For the nine months ended September 30, 2018
	As Reported		Amounts Without Adoption of ASC 606		Effect of Change Higher/(Lower)
Income Statement
Revenue	$	8,873,893	$	8,882,558	$	(8,665	)
Cost of goods sold	5,460,845		5,467,061		(6,216		)
Selling, general and administrative expenses	2,472,085		2,474,534		(2,449		)

Schedule of Product Warranty Liability [Table Text Block]

The changes in the warranty reserve are as follows (in thousands):

Balance as of December 31, 2017	$	23,151
Warranty expense	33,670
Warranty claims	(31,980		)
Balance as of September 30, 2018	$	24,841

The changes in deferred service-type warranty revenue are as follows (in thousands):

Balance as of January 1, 2018	$	19,465
Additional warranty revenue deferred	28,889
Warranty revenue recognized	(25,200		)
Balance as of September 30, 2018	$	23,154

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

The components of intangible assets acquired as part of our acquisitions in 2018 are as follows (in thousands):

	Nine Months Ended
	September 30, 2018
	Stahlgruber		Other Acquisitions		Total
Trade names and trademarks	$	173,946	$	2,895	$	176,841
Customer and supplier relationships	78,239		8,194		86,433
Software and other technology related assets	33,344		92		33,436
Total	$	285,529	$	11,181	$	296,710

Acquired Finite-lived Intangible Assets, Weighted Average Useful Life [Table Text Block]

The weighted-average amortization periods for our intangible assets acquired during the nine months ended September 30, 2018 and the year ended December 31, 2017 are as follows (in years):

	Nine Months Ended			Year Ended
	September 30, 2018			December 31, 2017
	Stahlgruber	Other Acquisitions	Total	All Acquisitions
Trade names and trademarks	19.9	20.0	19.9	11.2
Customer and supplier relationships	3.0	9.6	3.6	18.6
Software and other technology related assets	6.8	6.0	6.8	11.1
Covenants not to compete	-	-	-	4.4
Total acquired finite-lived intangible assets	13.7	12.2	13.7	16.5

Intangible Assets

Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer and supplier relationships, software and other technology related assets, and covenants not to compete.

The changes in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2018 are as follows (in thousands):

	North America			Europe			Specialty			Total
Balance as of January 1, 2018	$	1,709,354		$	1,414,898		$	412,259		$	3,536,511
Business acquisitions and adjustments to previously recorded goodwill	1,073			1,002,277			(5,720		)	997,630
Exchange rate effects	(3,049		)	(55,901		)	75			(58,875		)
Balance as of September 30, 2018	$	1,707,378		$	2,361,274		$	406,614		$	4,475,266

During the nine months ended September 30, 2018, we recorded $929 million of goodwill related to our acquisition of Stahlgruber. See Note 2, "Business Combinations" for further information on our acquisitions.

The components of other intangibles, net are as follows (in thousands):

	September 30, 2018		December 31, 2017
Intangible assets subject to amortization	$	872,072	$	664,969
Indefinite-lived intangible assets
Trademarks	81,300		78,800
Total	$	953,372	$	743,769

The components of intangible assets subject to amortization are as follows (in thousands):

	September 30, 2018							December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Trade names and trademarks	$	495,839	$	(88,805	)	$	407,034	$	327,332	$	(75,095	)	$	252,237
Customer and supplier relationships	586,221		(223,085		)	363,136		510,113		(167,532		)	342,581
Software and other technology related assets	172,391		(73,760		)	98,631		124,049		(59,081		)	64,968
Covenants not to compete	13,488		(10,217		)	3,271		14,981		(9,798		)	5,183
Total	$	1,267,939	$	(395,867	)	$	872,072	$	976,475	$	(311,506	)	$	664,969

The components of intangible assets acquired as part of our acquisitions in 2018 are as follows (in thousands):

	Nine Months Ended
	September 30, 2018
	Stahlgruber		Other Acquisitions		Total
Trade names and trademarks	$	173,946	$	2,895	$	176,841
Customer and supplier relationships	78,239		8,194		86,433
Software and other technology related assets	33,344		92		33,436
Total	$	285,529	$	11,181	$	296,710

The weighted-average amortization periods for our intangible assets acquired during the nine months ended September 30, 2018 and the year ended December 31, 2017 are as follows (in years):

	Nine Months Ended			Year Ended
	September 30, 2018			December 31, 2017
	Stahlgruber	Other Acquisitions	Total	All Acquisitions
Trade names and trademarks	19.9	20.0	19.9	11.2
Customer and supplier relationships	3.0	9.6	3.6	18.6
Software and other technology related assets	6.8	6.0	6.8	11.1
Covenants not to compete	-	-	-	4.4
Total acquired finite-lived intangible assets	13.7	12.2	13.7	16.5

Our estimated useful lives for our finite-lived intangible assets are as follows:

	Method of Amortization	Useful Life
Trade names and trademarks	Straight-line	4-30 years
Customer and supplier relationships	Accelerated	3-20 years
Software and other technology related assets	Straight-line	3-15 years
Covenants not to compete	Straight-line	2-5 years

Amortization expense for intangibles was $42 million and $96 million during the three and nine months ended September 30, 2018, respectively, and $26 million and $74 million during the three and nine months ended September 30, 2017, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2022 is $40 million (for the remaining three months of 2018), $136 million, $104 million, $75 million and $62 million, respectively.

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Financial Statement Information Property, Plant and Equipment [Table Text Block] (Tables)

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Line Items]

Property, Plant and Equipment, Policy [Policy Text Block]

Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized. Construction in progress consists primarily of building and land improvements at our existing facilities. Depreciation is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term of the related lease and reasonably assured renewal periods, if shorter.

Our estimated useful lives are as follows:

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

Property, plant and equipment consists of the following (in thousands):

	September 30,			December 31,
	2018			2017
Land and improvements	$	189,404		$	137,790
Buildings and improvements	373,607			233,078
Machinery and equipment	618,209			521,526
Computer equipment and software	142,719			133,753
Vehicles and trailers	177,778			161,269
Furniture and fixtures	52,595			31,794
Leasehold improvements	283,603			257,506
	1,837,915			1,476,716
Less—Accumulated depreciation	(691,086		)	(606,112		)
Construction in progress	54,174			42,485
Total property, plant and equipment, net	$	1,201,003		$	913,089

Property, Plant and Equipment

Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements that extend the useful life of the related asset are capitalized. As property, plant and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized. Construction in progress consists primarily of building and land improvements at our existing facilities. Depreciation is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term of the related lease and reasonably assured renewal periods, if shorter.

Our estimated useful lives are as follows:

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

Property, plant and equipment consists of the following (in thousands):

	September 30,			December 31,
	2018			2017
Land and improvements	$	189,404		$	137,790
Buildings and improvements	373,607			233,078
Machinery and equipment	618,209			521,526
Computer equipment and software	142,719			133,753
Vehicles and trailers	177,778			161,269
Furniture and fixtures	52,595			31,794
Leasehold improvements	283,603			257,506
	1,837,915			1,476,716
Less—Accumulated depreciation	(691,086		)	(606,112		)
Construction in progress	54,174			42,485
Total property, plant and equipment, net	$	1,201,003		$	913,089

The components of opening property, plant and equipment acquired as part of our acquisition of Stahlgruber in May 2018 are as follows (in thousands):

	Gross Amount
Land and improvements	$	47,281
Buildings and improvements	125,649
Machinery and equipment	49,384
Computer equipment and software	3,760
Vehicles and trailers	643
Furniture and fixtures	28,535
Leasehold improvements	1,890
	257,142
Construction in progress	3,519
Total property, plant and equipment	$	260,661

We record depreciation expense associated with our refurbishing, remanufacturing, manufacturing and furnace operations as well as our distribution centers in Cost of goods sold on the Unaudited Condensed Consolidated Statements of Income. All other depreciation expense is reported in Depreciation and amortization. Total depreciation expense for the three and nine months ended September 30, 2018 was $39 million and $115 million, respectively, and $34 million and $93 million during the three and nine months ended September 30, 2017, respectively.

Property, Plant and Equipment [Table Text Block]

Useful Life - Property Plant & Equipment	Useful Life Min	Useful Life Max
Land improvements	10 years	20 years
Buildings and improvements	20 years	40 years
Machinery and equipment	3 years	20 years
Computer equipment and software	3 years	10 years
Vehicles and trailers	3 years	10 years
Furniture and fixtures	5 years	7 years

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Financial Statement Information Finite-Lived Intangible Assets Acquired as Part of Business Combination (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Acquired Finite-Lived Intangible Assets [Line Items]

Schedule of Goodwill [Table Text Block]

Intangible assets consist primarily of goodwill (the cost of purchased businesses in excess of the fair value of the identifiable net assets acquired) and other specifically identifiable intangible assets, such as trade names, trademarks, customer and supplier relationships, software and other technology related assets, and covenants not to compete.

The changes in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2018 are as follows (in thousands):

	North America			Europe			Specialty			Total
Balance as of January 1, 2018	$	1,709,354		$	1,414,898		$	412,259		$	3,536,511
Business acquisitions and adjustments to previously recorded goodwill	1,073			1,002,277			(5,720		)	997,630
Exchange rate effects	(3,049		)	(55,901		)	75			(58,875		)
Balance as of September 30, 2018	$	1,707,378		$	2,361,274		$	406,614		$	4,475,266

During the nine months ended September 30, 2018, we recorded $929 million of goodwill related to our acquisition of Stahlgruber. See Note 2, "Business Combinations" for further information on our acquisitions.

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

The components of intangible assets acquired as part of our acquisitions in 2018 are as follows (in thousands):

	Nine Months Ended
	September 30, 2018
	Stahlgruber		Other Acquisitions		Total
Trade names and trademarks	$	173,946	$	2,895	$	176,841
Customer and supplier relationships	78,239		8,194		86,433
Software and other technology related assets	33,344		92		33,436
Total	$	285,529	$	11,181	$	296,710

Acquired Finite-lived Intangible Assets, Weighted Average Useful Life

16 years 6 months

Acquired Finite-lived Intangible Assets, Weighted Average Useful Life [Table Text Block]

The weighted-average amortization periods for our intangible assets acquired during the nine months ended September 30, 2018 and the year ended December 31, 2017 are as follows (in years):

	Nine Months Ended			Year Ended
	September 30, 2018			December 31, 2017
	Stahlgruber	Other Acquisitions	Total	All Acquisitions
Trade names and trademarks	19.9	20.0	19.9	11.2
Customer and supplier relationships	3.0	9.6	3.6	18.6
Software and other technology related assets	6.8	6.0	6.8	11.1
Covenants not to compete	-	-	-	4.4
Total acquired finite-lived intangible assets	13.7	12.2	13.7	16.5

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Revenue Recognition Disaggregation of Revenue (Tables)

9 Months Ended

Sep. 30, 2018

Disaggregation of Revenue [Line Items]

Disaggregation of Revenue [Table Text Block]

The following table sets forth our revenue by category, with our parts and services revenue further disaggregated by reportable segment (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
North America	$	1,109,067	$	1,051,470	$	3,447,074	$	3,207,001
Europe	1,464,049		952,765		3,781,091		2,659,804
Specialty	388,865		329,522		1,151,172		1,005,776
Parts and services	2,961,981		2,333,757		8,379,337		6,872,581
Other	160,397		132,043		494,556		394,473
Total revenue	$	3,122,378	$	2,465,800	$	8,873,893	$	7,267,054

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Revenue Recognition Product Warranty Liability (Tables)

9 Months Ended

Sep. 30, 2018

Product Warranties Disclosures [Abstract]

Schedule of Product Warranty Liability [Table Text Block]

The changes in the warranty reserve are as follows (in thousands):

Balance as of December 31, 2017	$	23,151
Warranty expense	33,670
Warranty claims	(31,980		)
Balance as of September 30, 2018	$	24,841

The changes in deferred service-type warranty revenue are as follows (in thousands):

Balance as of January 1, 2018	$	19,465
Additional warranty revenue deferred	28,889
Warranty revenue recognized	(25,200		)
Balance as of September 30, 2018	$	23,154

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Equity Incentive Plans (Tables)

9 Months Ended

Sep. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Nonvested Restricted Stock Units Activity

The following table summarizes activity related to our RSUs under the Equity Incentive Plan for the nine months ended September 30, 2018:

	Number Outstanding		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value    (in thousands) (1)
Unvested as of January 1, 2018	1,624,390		$	29.94
Granted	601,802		$	42.58
Vested	(698,903	)	$	30.07
Forfeited / Canceled	(33,767	)	$	33.28
Unvested as of September 30, 2018	1,493,522		$	34.89
Expected to vest after September 30, 2018	1,344,519		$	34.88	2.6	$	42,581

Schedule of Share-based Compensation, Stock Options, Activity

The following table summarizes activity related to our stock options under the Equity Incentive Plan for the nine months ended September 30, 2018:

	Number Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value    (in thousands) (1)
Balance as of January 1, 2018	1,738,073		$	9.20
Exercised	(441,495	)	$	8.54		$	12,678
Canceled	(509	)	$	32.31
Balance as of September 30, 2018	1,296,069		$	9.42	1.0	$	28,862
Exercisable as of September 30, 2018	1,296,069		$	9.42	1.0	$	28,862

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Earnings Per Share Schedule of Earnings Per Share, Basic and Diluted (Tables)

9 Months Ended

Sep. 30, 2018

Schedule of Earnings Per Share, Basic and Diluted [Line Items]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The following chart sets forth the computation of earnings per share (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Income from continuing operations	$	134,480	$	122,381	$	445,109	$	414,104
Denominator for basic earnings per share—Weighted-average shares outstanding	318,082		308,909		313,417		308,451
Effect of dilutive securities:
RSUs	333		485		452		501
Stock options	987		1,385		1,082		1,543
Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding	319,402		310,779		314,951		310,495
Basic earnings per share from continuing operations	$	0.42	$	0.40	$	1.42	$	1.34
Diluted earnings per share from continuing operations	$	0.42	$	0.39	$	1.41	$	1.33

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Earnings Per Share Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2018

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

The following table sets forth the number of employee stock-based compensation awards outstanding but not included in the computation of diluted earnings per share because their effect would have been antidilutive for the three and nine months ended September 30, 2018 and 2017 (in thousands):

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2018	2017	2018	2017
Antidilutive securities:
RSUs	375	—	317	50
Stock options	—	—	—	51

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Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):

	Three Months Ended
	September 30, 2018
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive Income from Unconsolidated Subsidiaries		Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(125,753	)	$	19,684		$	(10,200	)	$	208	$	(116,061	)
Pretax (loss) income	(23,405		)	7,681			1,217			—		(14,507		)
Income tax effect	2,454			(1,796		)	41			—		699
Reclassification of unrealized (gain) loss	—			(7,284		)	21			—		(7,263		)
Reclassification of deferred income taxes	—			1,703			(5		)	—		1,698
Other comprehensive income from unconsolidated subsidiaries	—			—			—			643		643
Ending balance	$	(146,704	)	$	19,988		$	(8,926	)	$	851	$	(134,791	)

	Three Months Ended
	September 30, 2017
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive Loss from Unconsolidated Subsidiaries			Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(157,353	)	$	10,324		$	(6,640	)	$	(601	)	$	(154,270	)
Pretax income (loss)	63,769			(15,402		)	—			—			48,367
Income tax effect	(4,151		)	5,683			—			—			1,532
Reclassification of unrealized loss (gain)	—			12,591			(200		)	—			12,391
Reclassification of deferred income taxes	—			(4,648		)	50			—			(4,598		)
Other comprehensive loss from unconsolidated subsidiaries	—			—			—			(1,034		)	(1,034		)
Ending balance	$	(97,735	)	$	8,548		$	(6,790	)	$	(1,635	)	$	(97,612	)

	Nine Months Ended
	September 30, 2018
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive (Loss) Income from Unconsolidated Subsidiaries			Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(71,933	)	$	11,538		$	(8,772	)	$	(1,309	)	$	(70,476	)
Pretax (loss) income	(82,137		)	33,901			(102		)	—			(48,338		)
Income tax effect	4,507			(7,926		)	(125		)	—			(3,544		)
Reclassification of unrealized (gain) loss	—			(26,117		)	97			—			(26,020		)
Reclassification of deferred income taxes	—			6,106			(24		)	—			6,082
Other comprehensive income from unconsolidated subsidiaries	—			—			—			2,160			2,160
Adoption of ASU 2018-02	2,859			2,486			—			—			5,345
Ending balance	$	(146,704	)	$	19,988		$	(8,926	)	$	851		$	(134,791	)

	Nine Months Ended
	September 30, 2017
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive Loss from Unconsolidated Subsidiaries			Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(272,529	)	$	8,091		$	(2,737	)	$	—		$	(267,175	)
Pretax income (loss)	177,434			(44,749		)	112			—			132,797
Income tax effect	(4,151		)	16,463			(43		)	—			12,269
Reclassification of unrealized loss (gain)	—			45,551			(921		)	—			44,630
Reclassification of deferred income taxes	—			(16,808		)	235			—			(16,573		)
Disposal of business, net	1,511			—			(3,436		)	—			(1,925		)
Other comprehensive loss from unconsolidated subsidiaries	—			—			—			(1,635		)	(1,635		)
Ending balance	$	(97,735	)	$	8,548		$	(6,790	)	$	(1,635	)	$	(97,612	)

Net unrealized gains on our interest rate swaps totaling $2 million and $5 million were reclassified to Interest expense, net in our Unaudited Condensed Consolidated Statements of Income during the three and nine months ended September 30, 2018, respectively, compared to a loss of $1 million during the nine months ended September 30, 2017; the amount reclassified to Interest expense, net during the three months ended September 30, 2017 was immaterial. We also reclassified gains of $2 million to Interest expense, net related to the foreign currency forward component of our cross currency swaps during each of the three months ended September 30, 2018 and 2017, and gains of $6 million during each of the nine months ended September 30, 2018 and 2017. Also related to our cross currency swaps, we reclassified gains of $3 million and $15 million to Other income, net in our Unaudited Condensed Consolidated Statements of Income during the three and nine months ended September 30, 2018, respectively, compared to losses of $15 million and $50 million during the three and nine months ended September 30, 2017; these gains and losses offset the impact of the remeasurement of the underlying contracts. The deferred income taxes related to our cash flow hedges were reclassified from Accumulated other comprehensive income (loss) to provision for income taxes.

As a result of the adoption of ASU 2018-02 in the first quarter of 2018, we recorded a $5 million reclassification to increase Accumulated Other Comprehensive (Loss) Income and decrease Retained Earnings. See Note 4, "Financial Statement Information" for further information regarding the adoption of ASU 2018-02.

The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):

	Three Months Ended
	September 30, 2018
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive Income from Unconsolidated Subsidiaries		Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(125,753	)	$	19,684		$	(10,200	)	$	208	$	(116,061	)
Pretax (loss) income	(23,405		)	7,681			1,217			—		(14,507		)
Income tax effect	2,454			(1,796		)	41			—		699
Reclassification of unrealized (gain) loss	—			(7,284		)	21			—		(7,263		)
Reclassification of deferred income taxes	—			1,703			(5		)	—		1,698
Other comprehensive income from unconsolidated subsidiaries	—			—			—			643		643
Ending balance	$	(146,704	)	$	19,988		$	(8,926	)	$	851	$	(134,791	)

	Three Months Ended
	September 30, 2017
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive Loss from Unconsolidated Subsidiaries			Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(157,353	)	$	10,324		$	(6,640	)	$	(601	)	$	(154,270	)
Pretax income (loss)	63,769			(15,402		)	—			—			48,367
Income tax effect	(4,151		)	5,683			—			—			1,532
Reclassification of unrealized loss (gain)	—			12,591			(200		)	—			12,391
Reclassification of deferred income taxes	—			(4,648		)	50			—			(4,598		)
Other comprehensive loss from unconsolidated subsidiaries	—			—			—			(1,034		)	(1,034		)
Ending balance	$	(97,735	)	$	8,548		$	(6,790	)	$	(1,635	)	$	(97,612	)

	Nine Months Ended
	September 30, 2018
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive (Loss) Income from Unconsolidated Subsidiaries			Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(71,933	)	$	11,538		$	(8,772	)	$	(1,309	)	$	(70,476	)
Pretax (loss) income	(82,137		)	33,901			(102		)	—			(48,338		)
Income tax effect	4,507			(7,926		)	(125		)	—			(3,544		)
Reclassification of unrealized (gain) loss	—			(26,117		)	97			—			(26,020		)
Reclassification of deferred income taxes	—			6,106			(24		)	—			6,082
Other comprehensive income from unconsolidated subsidiaries	—			—			—			2,160			2,160
Adoption of ASU 2018-02	2,859			2,486			—			—			5,345
Ending balance	$	(146,704	)	$	19,988		$	(8,926	)	$	851		$	(134,791	)

	Nine Months Ended
	September 30, 2017
	Foreign Currency Translation			Unrealized Gain (Loss) on Cash Flow Hedges			Unrealized (Loss) Gain on Pension Plans			Other Comprehensive Loss from Unconsolidated Subsidiaries			Accumulated Other Comprehensive (Loss) Income
Beginning balance	$	(272,529	)	$	8,091		$	(2,737	)	$	—		$	(267,175	)
Pretax income (loss)	177,434			(44,749		)	112			—			132,797
Income tax effect	(4,151		)	16,463			(43		)	—			12,269
Reclassification of unrealized loss (gain)	—			45,551			(921		)	—			44,630
Reclassification of deferred income taxes	—			(16,808		)	235			—			(16,573		)
Disposal of business, net	1,511			—			(3,436		)	—			(1,925		)
Other comprehensive loss from unconsolidated subsidiaries	—			—			—			(1,635		)	(1,635		)
Ending balance	$	(97,735	)	$	8,548		$	(6,790	)	$	(1,635	)	$	(97,612	)

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Long-Term Obligations (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule Of Long-Term Obligations

Long-term obligations consist of the following (in thousands):

	September 30,			December 31,
	2018			2017
Senior secured credit agreement:
Term loans payable	$	590,000		$	704,800
Revolving credit facilities	1,183,626			1,283,551
U.S. Notes (2023)	600,000			600,000
Euro Notes (2024)	580,200			600,150
Euro Notes (2026/28)	1,160,400			—
Receivables securitization facility	100,000			100,000
Notes payable through May 2027 at weighted average interest rates of 1.5% and 1.4%, respectively	38,641			29,146
Other long-term debt at weighted average interest rates of 2.2% and 1.7%, respectively	151,502			110,633
Total debt	4,404,369			3,428,280
Less: long-term debt issuance costs	(31,251		)	(21,476		)
Less: current debt issuance costs	(4,616		)	(2,824		)
Total debt, net of debt issuance costs	4,368,502			3,403,980
Less: current maturities, net of debt issuance costs	(118,365		)	(126,360		)
Long term debt, net of debt issuance costs	$	4,250,137		$	3,277,620

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Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosures [Line Items]

Schedule of Derivative Instruments [Table Text Block]

The following table summarizes the notional amounts and fair values of our designated cash flow hedges as of September 30, 2018 and December 31, 2017 (in thousands):

	Notional Amount				Fair Value at September 30, 2018 (USD)				Fair Value at December 31, 2017 (USD)
	September 30, 2018		December 31, 2017		Other Assets		Other Noncurrent Liabilities		Other Assets		Other Noncurrent Liabilities
Interest rate swap agreements
USD denominated	$	590,000	$	590,000	$	25,719	$	—	$	19,102	$	—
Cross currency swap agreements
USD/euro	$	394,649	$	406,546	10,881		49,212		5,504		61,492
Total cash flow hedges					$	36,600	$	49,212	$	24,606	$	61,492

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Fair Value Disclosures (Tables)

9 Months Ended

Sep. 30, 2018

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation inputs we utilized to determine such fair value as of September 30, 2018 and December 31, 2017 (in thousands):

	Balance as of September 30, 2018		Fair Value Measurements as of September 30, 2018
			Level 1		Level 2		Level 3
Assets:
Cash surrender value of life insurance	$	53,691	$	—	$	53,691	$	—
Rights to acquire Mekonomen shares	28,683		—		28,683		—
Interest rate swaps	25,719		—		25,719		—
Cross currency swap agreements	10,881		—		10,881		—
Total Assets	$	118,974	$	—	$	118,974	$	—
Liabilities:
Contingent consideration liabilities	$	5,243	$	—	$	—	$	5,243
Deferred compensation liabilities	54,419		—		54,419		—
Cross currency swap agreements	49,212		—		49,212		—
Total Liabilities	$	108,874	$	—	$	103,631	$	5,243

	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

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Income Taxes Income Taxes (Tables) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended		12 Months Ended
	Mar. 31, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Effective Income Tax Rate Reconciliation, Percent		25.20%	33.50%
U.S. federal statutory rate	35.00%	21.00%	35.00%
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities		$ (98,521)		$ (65,087)
Tax Cuts and Jobs Act of 2017, transition tax for accumulated foreign earnings, provisional amount				51,000
Tax Cuts and Jobs Act of 2017, tax benefit from decrease to net deferred tax liabilities, provisional amount				$ 73,000
Stahlgruber [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities		$ (97,805)

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Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2018

Defined Benefit Plan Disclosure [Line Items]

Schedule of Defined Benefit Plans Disclosures [Table Text Block]

Net periodic benefit expense for our defined benefit plans included the following components for the three and nine months endedSeptember 30, 2018 and 2017 (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Service cost	$	628		$	1,126		$	1,612		$	2,902
Interest cost	996			750			2,442			2,091
Expected return on plan assets	(720		)	(507		)	(2,220		)	(1,059		)
Amortization of prior service credit	—			(71		)	—			(201		)
Amortization of actuarial (gain) loss	21			(129		)	97			(720		)
Net periodic benefit expense	$	925		$	1,169		$	1,931		$	3,013

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Future Minimum Lease Commitments

The future minimum lease commitments under these leases at September 30, 2018 are as follows (in thousands):

Three months ending December 31, 2018	$	72,780
Years ending December 31:
2019	271,642
2020	226,936
2021	179,921
2022	144,700
2023	122,149
Thereafter	689,583
Future Minimum Lease Payments	$	1,707,711

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Segment and Geographic Information (Tables)

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Schedule Of Financial Performance By Reportable Segment

The following tables present our financial performance by reportable segment for the periods indicated (in thousands):

	North America		Europe		Specialty		Eliminations			Consolidated
Three Months Ended September 30, 2018
Revenue:
Third Party	$	1,262,657	$	1,470,856	$	388,865	$	—		$	3,122,378
Intersegment	142		—		1,196		(1,338		)	—
Total segment revenue	$	1,262,799	$	1,470,856	$	390,061	$	(1,338	)	$	3,122,378
Segment EBITDA	$	154,049	$	129,358	$	42,937	$	—		$	326,344
Depreciation and amortization (1)	22,151		52,139		7,183		—			81,473
Three Months Ended September 30, 2017
Revenue:
Third Party	$	1,181,756	$	954,522	$	329,522	$	—		$	2,465,800
Intersegment	187		—		1,072		(1,259		)	—
Total segment revenue	$	1,181,943	$	954,522	$	330,594	$	(1,259	)	$	2,465,800
Segment EBITDA	$	152,627	$	79,294	$	35,114	$	—		$	267,035
Depreciation and amortization (1)	22,104		32,326		5,472		—			59,902

	North America		Europe		Specialty		Eliminations			Consolidated
Nine Months Ended September 30, 2018
Revenue:
Third Party	$	3,927,282	$	3,795,439	$	1,151,172	$	—		$	8,873,893
Intersegment	526		—		3,554		(4,080		)	—
Total segment revenue	$	3,927,808	$	3,795,439	$	1,154,726	$	(4,080	)	$	8,873,893
Segment EBITDA	$	506,772	$	315,785	$	140,974	$	—		$	963,531
Depreciation and amortization (1)	64,985		124,697		21,295		—			210,977
Nine Months Ended September 30, 2017
Revenue:
Third Party	$	3,596,108	$	2,665,170	$	1,005,776	$	—		$	7,267,054
Intersegment	589		—		3,222		(3,811		)	—
Total segment revenue	$	3,596,697	$	2,665,170	$	1,008,998	$	(3,811	)	$	7,267,054
Segment EBITDA	$	502,494	$	241,537	$	119,133	$	—		$	863,164
Depreciation and amortization (1)	64,305		85,809		16,394		—			166,508

(1) Amounts presented include depreciation and amortization expense recorded within cost of goods sold.

Reconciliation Of Segment EBITDA To Net Income Table

The table below provides a reconciliation of Net Income to Segment EBITDA (in thousands):

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2018			2017		2018			2017
Net income	$	134,480		$	122,381	$	445,109		$	409,573
Less: net income attributable to noncontrolling interest	378			—		1,040			—
Net income attributable to LKQ stockholders	134,102			122,381		444,069			409,573
Subtract:
Net loss from discontinued operations	—			—		—			(4,531		)
Net income from continuing operations attributable to LKQ stockholders	134,102			122,381		444,069			414,104
Add:
Depreciation and amortization	76,701			56,877		196,322			159,178
Depreciation and amortization - cost of goods sold	4,772			3,025		14,655			7,330
Interest expense, net	40,860			25,222		107,647			73,806
Provision for income taxes	46,068			58,189		156,427			206,206
EBITDA	302,503			265,694		919,120			860,624
Subtract:
Equity in (losses) earnings of unconsolidated subsidiaries (1)	(20,284		)	2,673		(18,326		)	3,878
Fair value gain on Mekonomen derivative instrument (1)	2,509			—		2,509			—
Gains on bargain purchases (2)	—			913		328			3,990
Add:
Restructuring and acquisition related expenses (3)	6,614			4,922		26,546			10,371
Inventory step-up adjustment - acquisition related	—			—		403			—
Impairment of net assets held for sale	—			—		2,438			—
Change in fair value of contingent consideration liabilities	(548		)	5		(465		)	37
Segment EBITDA	$	326,344		$	267,035	$	963,531		$	863,164

(1) See Note 4, "Financial Statement Information," for further information.

(2) Reflects the gains on bargain purchases related to our acquisitions of a wholesale business in Europe and Andrew Page. See Note 2, "Business Combinations," for further information.

(3) See Note 6, "Restructuring and Acquisition Related Expenses," for further information.

Schedule Of Capital Expenditures By Reportable Segment

The following table presents capital expenditures by reportable segment (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Capital Expenditures
North America	$	27,996	$	31,021	$	86,864	$	69,934
Europe	23,904		12,119		69,582		55,253
Specialty	4,442		852		15,317		6,752
Discontinued operations	—		—		—		3,598
Total capital expenditures	$	56,342	$	43,992	$	171,763	$	135,537

Schedule Of Assets By Reportable Segment

The following table presents assets by reportable segment (in thousands):

	September 30,		December 31,
	2018		2017
Receivables, net
North America	$	437,429	$	379,666
Europe (1)	696,106		555,372
Specialty	122,341		92,068
Total receivables, net (2)	1,255,876		1,027,106
Inventories
North America	1,058,310		1,076,393
Europe (1)	1,391,578		964,068
Specialty	345,006		340,322
Total inventories	2,794,894		2,380,783
Property, Plant and Equipment, net
North America	560,918		537,286
Europe (1)	554,550		293,539
Specialty	85,535		82,264
Total property, plant and equipment, net	1,201,003		913,089
Equity Method Investments
North America	16,075		336
Europe (3)	141,334		208,068
Total equity method investments	157,409		208,404
Other unallocated assets	6,176,154		4,837,490
Total assets	$	11,585,336	$	9,366,872

Revenue from External Customers by Geographic Area

The following table sets forth our revenue by geographic area (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Revenue
United States	$	1,535,557	$	1,395,495	$	4,716,927	$	4,268,600
United Kingdom	408,474		399,155		1,294,155		1,171,829
Germany	415,748		549		564,698		862
Other countries	762,599		670,601		2,298,113		1,825,763
Total revenue	$	3,122,378	$	2,465,800	$	8,873,893	$	7,267,054

Schedule Of Tangible Long-Lived Assets By Geographic Area

The following table sets forth our tangible long-lived assets by geographic area (in thousands):

	September 30,		December 31,
	2018		2017
Long-lived Assets
United States	$	609,562	$	583,236
Germany	210,344		41
United Kingdom	170,940		178,021
Other countries	210,157		151,791
Total long-lived assets	$	1,201,003	$	913,089

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Condensed Consolidating Financial Information (Tables)

3 Months Ended

9 Months Ended

Sep. 30, 2018

Sep. 30, 2018

Sep. 30, 2017

Condensed Consolidating Financial Information [Abstract]

Consolidated Condensed Statements of Income

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Three Months Ended September 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	1,550,301		$	1,609,525		$	(37,448	)	$	3,122,378
Cost of goods sold	—			934,913			1,027,715			(37,448		)	1,925,180
Gross margin	—			615,388			581,810			—			1,197,198
Selling, general and administrative expenses	6,725			434,965			437,460			—			879,150
Restructuring and acquisition related expenses	—			1,638			4,976			—			6,614
Depreciation and amortization	34			25,238			51,429			—			76,701
Operating (loss) income	(6,759		)	153,547			87,945			—			234,733
Other expense (income):
Interest expense (income), net	16,191			(193		)	24,862			—			40,860
Intercompany interest (income) expense, net	(15,121		)	10,014			5,107			—			—
Other income, net	(178		)	(3,514		)	(3,267		)	—			(6,959		)
Total other expense, net	892			6,307			26,702			—			33,901
(Loss) income before (benefit) provision for income taxes	(7,651		)	147,240			61,243			—			200,832
(Benefit) provision for income taxes	(12,008		)	41,875			16,201			—			46,068
Equity in losses of unconsolidated subsidiaries	—			(156		)	(20,128		)	—			(20,284		)
Equity in earnings of subsidiaries	129,745			4,467			—			(134,212		)	—
Net income	134,102			109,676			24,914			(134,212		)	134,480
Less: net income attributable to noncontrolling interest	—			—			378			—			378
Net income attributable to LKQ stockholders	$	134,102		$	109,676		$	24,536		$	(134,212	)	$	134,102

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Three Months Ended September 30, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	1,433,742		$	1,069,682		$	(37,624	)	$	2,465,800
Cost of goods sold	—			861,078			685,470			(37,624		)	1,508,924
Gross margin	—			572,664			384,212			—			956,876
Selling, general and administrative expenses	7,861			394,926			293,191			—			695,978
Restructuring and acquisition related expenses	—			1,473			3,449			—			4,922
Depreciation and amortization	29			25,005			31,843			—			56,877
Operating (loss) income	(7,890		)	151,260			55,729			—			199,099
Other expense (income):
Interest expense, net	16,232			57			8,933			—			25,222
Intercompany interest (income) expense, net	(2,389		)	(2,814		)	5,203			—			—
Gain on bargain purchase	—			—			(913		)	—			(913		)
Other expense (income), net	32			(4,011		)	872			—			(3,107		)
Total other expense (income), net	13,875			(6,768		)	14,095			—			21,202
(Loss) income before (benefit) provision for income taxes	(21,765		)	158,028			41,634			—			177,897
(Benefit) provision for income taxes	(8,436		)	56,920			9,705			—			58,189
Equity in earnings of unconsolidated subsidiaries	—			—			2,673			—			2,673
Equity in earnings of subsidiaries	135,710			6,674			—			(142,384		)	—
Net income	$	122,381		$	107,782		$	34,602		$	(142,384	)	$	122,381

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Nine Months Ended September 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	4,768,292		$	4,216,417		$	(110,816	)	$	8,873,893
Cost of goods sold	—			2,869,499			2,702,162			(110,816		)	5,460,845
Gross margin	—			1,898,793			1,514,255			—			3,413,048
Selling, general and administrative expenses	25,538			1,292,455			1,154,092			—			2,472,085
Restructuring and acquisition related expenses	—			1,968			24,578			—			26,546
Depreciation and amortization	84			74,102			122,136			—			196,322
Operating (loss) income	(25,622		)	530,268			213,449			—			718,095
Other expense (income):
Interest expense (income), net	52,004			(94		)	55,737			—			107,647
Intercompany interest (income) expense, net	(45,927		)	29,559			16,368			—			—
Gains on bargain purchases	—			—			(328		)	—			(328		)
Other (income) expense, net	(1,076		)	(13,793		)	5,783			—			(9,086		)
Total other expense, net	5,001			15,672			77,560			—			98,233
(Loss) income before (benefit) provision for income taxes	(30,623		)	514,596			135,889			—			619,862
(Benefit) provision for income taxes	(19,656		)	141,295			34,788			—			156,427
Equity in losses of unconsolidated subsidiaries	—			(156		)	(18,170		)	—			(18,326		)
Equity in earnings of subsidiaries	455,036			14,028			—			(469,064		)	—
Net income	444,069			387,173			82,931			(469,064		)	445,109
Less: net income attributable to noncontrolling interest	—			—			1,040			—			1,040
Net income attributable to LKQ stockholders	$	444,069		$	387,173		$	81,891		$	(469,064	)	$	444,069

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Nine Months Ended September 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	4,768,292		$	4,216,417		$	(110,816	)	$	8,873,893
Cost of goods sold	—			2,869,499			2,702,162			(110,816		)	5,460,845
Gross margin	—			1,898,793			1,514,255			—			3,413,048
Selling, general and administrative expenses	25,538			1,292,455			1,154,092			—			2,472,085
Restructuring and acquisition related expenses	—			1,968			24,578			—			26,546
Depreciation and amortization	84			74,102			122,136			—			196,322
Operating (loss) income	(25,622		)	530,268			213,449			—			718,095
Other expense (income):
Interest expense (income), net	52,004			(94		)	55,737			—			107,647
Intercompany interest (income) expense, net	(45,927		)	29,559			16,368			—			—
Gains on bargain purchases	—			—			(328		)	—			(328		)
Other (income) expense, net	(1,076		)	(13,793		)	5,783			—			(9,086		)
Total other expense, net	5,001			15,672			77,560			—			98,233
(Loss) income before (benefit) provision for income taxes	(30,623		)	514,596			135,889			—			619,862
(Benefit) provision for income taxes	(19,656		)	141,295			34,788			—			156,427
Equity in losses of unconsolidated subsidiaries	—			(156		)	(18,170		)	—			(18,326		)
Equity in earnings of subsidiaries	455,036			14,028			—			(469,064		)	—
Net income	444,069			387,173			82,931			(469,064		)	445,109
Less: net income attributable to noncontrolling interest	—			—			1,040			—			1,040
Net income attributable to LKQ stockholders	$	444,069		$	387,173		$	81,891		$	(469,064	)	$	444,069

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Income (In thousands)
	For the Nine Months Ended September 30, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	—		$	4,374,693		$	3,001,386		$	(109,025	)	$	7,267,054
Cost of goods sold	—			2,613,540			1,910,561			(109,025		)	4,415,076
Gross margin	—			1,761,153			1,090,825			—			2,851,978
Selling, general and administrative expenses	26,209			1,165,897			810,959			—			2,003,065
Restructuring and acquisition related expenses	—			4,010			6,361			—			10,371
Depreciation and amortization	89			73,072			86,017			—			159,178
Operating (loss) income	(26,298		)	518,174			187,488			—			679,364
Other expense (income):
Interest expense, net	48,904			281			24,621			—			73,806
Intercompany interest (income) expense, net	(10,221		)	(4,530		)	14,751			—			—
Gains on bargain purchases	—			—			(3,990		)	—			(3,990		)
Other expense (income), net	286			(8,247		)	1,077			—			(6,884		)
Total other expense (income), net	38,969			(12,496		)	36,459			—			62,932
(Loss) income from continuing operations before (benefit) provision for income taxes	(65,267		)	530,670			151,029			—			616,432
(Benefit) provision for income taxes	(27,034		)	200,321			32,919			—			206,206
Equity in earnings of unconsolidated subsidiaries	—			—			3,878			—			3,878
Equity in earnings of subsidiaries	452,337			17,282			—			(469,619		)	—
Income from continuing operations	414,104			347,631			121,988			(469,619		)	414,104
Net (loss) income from discontinued operations	(4,531		)	(4,531		)	2,050			2,481			(4,531		)
Net income	$	409,573		$	343,100		$	124,038		$	(467,138	)	$	409,573

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 September 30, 2018
	Parent			Guarantors		Non-Guarantors			Eliminations			Consolidated
Net income	$	134,102		$	109,676	$	24,914		$	(134,212	)	$	134,480
Less: net income attributable to noncontrolling interest	—			—		378			—			378
Net income attributable to LKQ stockholders	134,102			109,676		24,536			(134,212		)	134,102
Other comprehensive (loss) income:
Foreign currency translation, net of tax	(20,951		)	1,686		(23,901		)	22,215			(20,951		)
Net change in unrealized gains/losses on cash flow hedges, net of tax	304			—		—			—			304
Net change in unrealized gains/losses on pension plans, net of tax	1,274			1,246		28			(1,274		)	1,274
Net change in other comprehensive income from unconsolidated subsidiaries	643			—		643			(643		)	643
Other comprehensive (loss) income	(18,730		)	2,932		(23,230		)	20,298			(18,730		)
Comprehensive income	115,372			112,608		1,684			(113,914		)	115,750
Less: comprehensive income attributable to noncontrolling interest	—			—		378			—			378
Comprehensive income attributable to LKQ stockholders	$	115,372		$	112,608	$	1,306		$	(113,914	)	$	115,372

	For the Three Months Ended September 30, 2017
	Parent			Guarantors		Non-Guarantors			Eliminations			Consolidated
Net income	$	122,381		$	107,782	$	34,602		$	(142,384	)	$	122,381
Other comprehensive income (loss):
Foreign currency translation, net of tax	59,618			3,590		62,734			(66,324		)	59,618
Net change in unrecognized gains/losses on cash flow hedges, net of tax	(1,776		)	—		—			—			(1,776		)
Net change in unrealized gains/losses on pension plans, net of tax	(150		)	—		(150		)	150			(150		)
Net change in other comprehensive loss from unconsolidated subsidiaries	(1,034		)	—		(1,034		)	1,034			(1,034		)
Total other comprehensive income	56,658			3,590		61,550			(65,140		)	56,658
Total comprehensive income	$	179,039		$	111,372	$	96,152		$	(207,524	)	$	179,039

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands)
	For the Nine Months Ended September 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net income	$	444,069		$	387,173		$	82,931		$	(469,064	)	$	445,109
Less: net income attributable to noncontrolling interest	—			—			1,040			—			1,040
Net income attributable to LKQ stockholders	444,069			387,173			81,891			(469,064		)	444,069
Other comprehensive (loss) income:
Foreign currency translation, net of tax	(77,630		)	(2,800		)	(81,456		)	84,256			(77,630		)
Net change in unrealized gains/losses on cash flow hedges, net of tax	5,964			—			—			—			5,964
Net change in unrealized gains/losses on pension plans, net of tax	(154		)	(239		)	85			154			(154		)
Net change in other comprehensive income from unconsolidated subsidiaries	2,160			—			2,160			(2,160		)	2,160
Other comprehensive loss	(69,660		)	(3,039		)	(79,211		)	82,250			(69,660		)
Comprehensive income	374,409			384,134			3,720			(386,814		)	375,449
Less: comprehensive income attributable to noncontrolling interest	—			—			1,040			—			1,040
Comprehensive income attributable to LKQ stockholders	$	374,409		$	384,134		$	2,680		$	(386,814	)	$	374,409

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Comprehensive Income (In thousands)
	For the Nine Months Ended September 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net income	$	444,069		$	387,173		$	82,931		$	(469,064	)	$	445,109
Less: net income attributable to noncontrolling interest	—			—			1,040			—			1,040
Net income attributable to LKQ stockholders	444,069			387,173			81,891			(469,064		)	444,069
Other comprehensive (loss) income:
Foreign currency translation, net of tax	(77,630		)	(2,800		)	(81,456		)	84,256			(77,630		)
Net change in unrealized gains/losses on cash flow hedges, net of tax	5,964			—			—			—			5,964
Net change in unrealized gains/losses on pension plans, net of tax	(154		)	(239		)	85			154			(154		)
Net change in other comprehensive income from unconsolidated subsidiaries	2,160			—			2,160			(2,160		)	2,160
Other comprehensive loss	(69,660		)	(3,039		)	(79,211		)	82,250			(69,660		)
Comprehensive income	374,409			384,134			3,720			(386,814		)	375,449
Less: comprehensive income attributable to noncontrolling interest	—			—			1,040			—			1,040
Comprehensive income attributable to LKQ stockholders	$	374,409		$	384,134		$	2,680		$	(386,814	)	$	374,409

	For the Nine Months Ended September 30, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net income	$	409,573		$	343,100		$	124,038		$	(467,138	)	$	409,573
Other comprehensive income (loss):
Foreign currency translation, net of tax	174,794			17,565			176,769			(194,334		)	174,794
Net change in unrecognized gains/losses on cash flow hedges, net of tax	457			(133		)	—			133			457
Net change in unrealized gains/losses on pension plans, net of tax	(4,053		)	(3,253		)	(800		)	4,053			(4,053		)
Net change in other comprehensive loss from unconsolidated subsidiaries	(1,635		)	—			(1,635		)	1,635			(1,635		)
Total other comprehensive income	169,563			14,179			174,334			(188,513		)	169,563
Total comprehensive income	$	579,136		$	357,279		$	298,372		$	(655,651	)	$	579,136

Consolidated Condensed Balance Sheets

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Balance Sheets (In thousands)
	September 30, 2018
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	48,265	$	31,082	$	261,999	$	—		$	341,346
Receivables, net	341		366,781		888,754		—			1,255,876
Intercompany receivables, net	7,173		—		20,573		(27,746		)	—
Inventories	—		1,323,201		1,471,693		—			2,794,894
Prepaid expenses and other current assets	15,452		94,787		90,705		—			200,944
Total current assets	71,231		1,815,851		2,733,724		(27,746		)	4,593,060
Property, plant and equipment, net	845		589,898		610,260		—			1,201,003
Intangible assets:
Goodwill	—		2,005,560		2,469,706		—			4,475,266
Other intangibles, net	286		280,229		672,857		—			953,372
Investment in subsidiaries	5,351,986		114,721		—		(5,466,707		)	—
Intercompany notes receivable	1,067,356		14,958		—		(1,082,314		)	—
Equity method investments	—		16,075		141,334		—			157,409
Other assets	90,293		38,434		76,499		—			205,226
Total assets	$	6,581,997	$	4,875,726	$	6,704,380	$	(6,576,767	)	$	11,585,336
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,615	$	345,660	$	593,472	$	—		$	941,747
Intercompany payables, net	—		20,573		7,173		(27,746		)	—
Accrued expenses:
Accrued payroll-related liabilities	7,169		48,463		97,904		—			153,536
Other accrued expenses	12,656		106,543		239,013		—			358,212
Refund liability	—		54,554		52,178		—			106,732
Other current liabilities	283		18,210		38,595		—			57,088
Current portion of long-term obligations	—		2,317		116,048		—			118,365
Total current liabilities	22,723		596,320		1,144,383		(27,746		)	1,735,680
Long-term obligations, excluding current portion	1,569,387		14,027		2,666,723		—			4,250,137
Intercompany notes payable	—		617,389		464,925		(1,082,314		)	—
Deferred income taxes	9,715		115,924		199,898		—			325,537
Other noncurrent liabilities	139,712		98,133		138,721		—			376,566
Stockholders' equity:
Total Company stockholders’ equity	4,840,460		3,433,933		2,032,774		(5,466,707		)	4,840,460
Noncontrolling interest	—		—		56,956		—			56,956
Total stockholders’ equity	4,840,460		3,433,933		2,089,730		(5,466,707		)	4,897,416
Total liabilities and stockholders' equity	$	6,581,997	$	4,875,726	$	6,704,380	$	(6,576,767	)	$	11,585,336

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Balance Sheets (In thousands)
	December 31, 2017
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	34,360	$	35,131	$	210,275	$	—		$	279,766
Receivables, net	—		290,958		736,148		—			1,027,106
Intercompany receivables, net	2,669		3,010		230		(5,909		)	—
Inventories	—		1,334,766		1,046,017		—			2,380,783
Prepaid expenses and other current assets	34,136		44,849		55,494		—			134,479
Total current assets	71,165		1,708,714		2,048,164		(5,909		)	3,822,134
Property, plant and equipment, net	910		563,262		348,917		—			913,089
Intangible assets:
Goodwill	—		2,010,209		1,526,302		—			3,536,511
Other intangibles, net	—		291,036		452,733		—			743,769
Investment in subsidiaries	5,952,687		102,931		—		(6,055,618		)	—
Intercompany notes receivable	1,156,550		782,638		—		(1,939,188		)	—
Equity method investments	—		336		208,068		—			208,404
Other assets	70,590		33,597		38,778		—			142,965
Total assets	$	7,251,902	$	5,492,723	$	4,622,962	$	(8,000,715	)	$	9,366,872
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	5,742	$	340,951	$	441,920	$	—		$	788,613
Intercompany payables, net	—		230		5,679		(5,909		)	—
Accrued expenses:
Accrued payroll-related liabilities	9,448		65,811		68,165		—			143,424
Other accrued expenses	5,219		95,900		117,481		—			218,600
Other current liabilities	282		27,066		18,379		—			45,727
Current portion of long-term obligations	16,468		1,912		107,980		—			126,360
Total current liabilities	37,159		531,870		759,604		(5,909		)	1,322,724
Long-term obligations, excluding current portion	2,095,826		7,372		1,174,422		—			3,277,620
Intercompany notes payable	750,000		677,708		511,480		(1,939,188		)	—
Deferred income taxes	12,402		116,021		123,936		—			252,359
Other noncurrent liabilities	158,346		101,189		47,981		—			307,516
Stockholders' equity:
Total Company stockholders’ equity	4,198,169		4,058,563		1,997,055		(6,055,618		)	4,198,169
Noncontrolling interest	—		—		8,484		—			8,484
Total stockholders’ equity	4,198,169		4,058,563		2,005,539		(6,055,618		)	4,206,653
Total liabilities and stockholders' equity	$	7,251,902	$	5,492,723	$	4,622,962	$	(8,000,715	)	$	9,366,872

Consolidated Condensed Statements of Cash Flows

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Cash Flows (In thousands)
	For the Nine Months Ended September 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities	$	334,226		$	142,626		$	97,506		$	(53,191	)	$	521,167
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(315		)	(93,063		)	(78,385		)	—			(171,763		)
Investment and intercompany note activity with subsidiaries	73,096			—			—			(73,096		)	—
Return of investment in subsidiaries	152,443			—			—			(152,443		)	—
Acquisitions, net of cash acquired	—			(2,888		)	(1,203,179		)	—			(1,206,067		)
Investments in unconsolidated subsidiaries	—			(11,066		)	—			—			(11,066		)
Receipts of deferred purchase price on receivables under factoring arrangements	—			224,753			9,410			(224,753		)	9,410
Other investing activities, net	887			2,162			4,921			—			7,970
Net cash provided by (used in) investing activities	226,111			119,898			(1,267,233		)	(450,292		)	(1,371,516		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	3,772			—			—			—			3,772
Taxes paid related to net share settlements of stock-based compensation awards	(4,768		)	—			—			—			(4,768		)
Debt issuance costs	(1,354		)	—			(15,584		)	—			(16,938		)
Proceeds from issuance of Euro Notes (2026/28)	—			—			1,232,100			—			1,232,100
Borrowings under revolving credit facilities	304,000			—			721,496			—			1,025,496
Repayments under revolving credit facilities	(732,897		)	—			(377,138		)	—			(1,110,035		)
Repayments under term loans	(114,800		)	—			—			—			(114,800		)
(Repayments) borrowings of other debt, net	(385		)	101			(38,411		)	—			(38,695		)
Other financing activities, net	—			—			3,182			—			3,182
Investment and intercompany note activity with parent	—			(62,763		)	(10,333		)	73,096			—
Dividends	—			(203,448		)	(226,939		)	430,387			—
Net cash (used in) provided by financing activities	(546,432		)	(266,110		)	1,288,373			503,483			979,314
Effect of exchange rate changes on cash and cash equivalents	—			(463		)	(66,922		)	—			(67,385		)
Net increase (decrease) in cash and cash equivalents	13,905			(4,049		)	51,724			—			61,580
Cash and cash equivalents, beginning of period	34,360			35,131			210,275			—			279,766
Cash and cash equivalents, end of period	$	48,265		$	31,082		$	261,999		$	—		$	341,346

LKQ CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidating Statements of Cash Flows (In thousands)
	For the Nine Months Ended September 30, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities	$	227,314		$	162,114		$	108,095		$	(48,280	)	$	449,243
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(509		)	(70,292		)	(64,736		)	—			(135,537		)
Investment and intercompany note activity with subsidiaries	296,561			—			—			(296,561		)	—
Acquisitions, net of cash acquired	—			(79,496		)	(173,171		)	—			(252,667		)
Proceeds from disposals of business/investment	—			305,740			(4,443		)	—			301,297
Investments in unconsolidated subsidiaries	—			(2,200		)	(4,914		)	—			(7,114		)
Receipts of deferred purchase price on receivables under factoring arrangements (1)	—			226,395			—			(226,395		)	—
Other investing activities, net	—			3,100			6,764			—			9,864
Net cash provided by (used in) investing activities	296,052			383,247			(240,500		)	(522,956		)	(84,157		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	6,465			—			—			—			6,465
Taxes paid related to net share settlements of stock-based compensation awards	(5,095		)	—			—			—			(5,095		)
Borrowings under revolving credit facilities	187,000			—			237,976			—			424,976
Repayments under revolving credit facilities	(694,896		)	—			(75,988		)	—			(770,884		)
Repayments under term loans	(27,884		)	—			—			—			(27,884		)
Borrowings under receivables securitization facility	—			—			8,525			—			8,525
Repayments under receivables securitization facility	—			—			(9,925		)	—			(9,925		)
(Repayments) borrowings of other debt, net	(1,700		)	(1,238		)	27,460			—			24,522
Payments of other obligations	—			(1,336		)	(743		)	—			(2,079		)
Other financing activities, net	—			5,000			(684		)	—			4,316
Investment and intercompany note activity with parent	—			(286,530		)	(10,031		)	296,561			—
Dividends	—			(274,675		)	—			274,675			—
Net cash (used in) provided by financing activities	(536,110		)	(558,779		)	176,590			571,236			(347,063		)
Effect of exchange rate changes on cash and cash equivalents	—			322			22,216			—			22,538
Net (decrease) increase in cash and cash equivalents	(12,744		)	(13,096		)	66,401			—			40,561
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	$	20,286		$	22,413		$	232,378		$	—		$	275,077

XML

Business Combinations - Additional Information (Details) $ in Thousands, € in Millions	1 Months Ended		3 Months Ended			4 Months Ended	6 Months Ended		9 Months Ended		12 Months Ended
	Nov. 30, 2017	Jul. 30, 2017	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($) shares	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 EUR (€)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Jun. 30, 2018 EUR (€)	Apr. 09, 2018 USD ($)	Apr. 09, 2018 EUR (€)
Business Acquisition
Cash used in acquisitions, net of cash acquired									$ 1,206,067	$ 252,667	$ 513,088
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities			$ 6,948			$ 6,948			6,948		$ 20,187
Revenue			3,122,378		$ 2,465,800				8,873,893	7,267,054
Operating Income (Loss)			234,733		199,099				718,095	679,364
Number of acquisitions											26
Contingent consideration liabilities			(3,107)			(3,107)			(3,107)		$ (6,234)
Goodwill, Purchase Accounting Adjustments			1,000
Warn Industries [Member]
Business Acquisition
Business Acquisition, Effective Date of Acquisition	Nov. 30, 2017
Stahlgruber [Member]
Business Acquisition
Business Acquisition, Effective Date of Acquisition				May 30, 2018
Business Acquisition, Name of Acquired Entity							Stahlgruber GmbH	Stahlgruber GmbH
Total acquisition date fair value of the consideration for acquisitions							$ 1,400,000	€ 1,200
Cash used in acquisitions, net of cash acquired				$ 1,100,000				€ 1,000	1,127,445
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned				$ 251,000			$ 251,000					€ 215
Debt Instrument, Face Amount													$ 1,200,000	€ 1,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares				8,055,569
Business Acquisition, Goodwill, Expected Tax Deductible Amount			292,000			292,000			292,000
Revenue						637,000
Operating Income (Loss)						34,000
Goodwill, Acquired During Period									929,000
Other Than Stahlgruber [Member]
Business Acquisition
Total acquisition date fair value of the consideration for acquisitions									86,000
Cash used in acquisitions, net of cash acquired									76,000
Revenue									19,000
Operating Income (Loss)									2,000
Goodwill, Acquired During Period									72,000
All 2018 Acquisitions excluding Stahlgruber [Member]
Business Acquisition
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities			7,000			7,000			$ 7,000
Wholesale - NA [Member]
Business Acquisition
Number of acquisitions									1		6
Wholesale Europe [Member]
Business Acquisition
Number of acquisitions									7		16
2017 acquisitions and adjustments to 2016 acquisitions [Member]
Business Acquisition
Total acquisition date fair value of the consideration for acquisitions											$ 542,000
Cash used in acquisitions, net of cash acquired											510,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities											20,000
All 2017 Acquisitions [Member]
Business Acquisition
Business Acquisition, Goodwill, Expected Tax Deductible Amount											21,000
Goodwill, Acquired During Period											$ 307,000
Specialty
Business Acquisition
Number of acquisitions											4
Aftermarket Parts Distribution Businesses In Europe [Member]
Business Acquisition
Business Acquisition, Effective Date of Acquisition		Jul. 31, 2017
Number of acquisitions											4
Payment To Former Owners [Member]
Business Acquisition
Contingent consideration liabilities			(3,000)			(3,000)			$ (3,000)		$ (6,000)
Payment To Former Owners [Member] | 2017 acquisitions and adjustments to 2016 acquisitions [Member]
Business Acquisition
Contingent consideration liabilities											(19,000)
Payment To Former Owners [Member] | Maximum | All 2018 Acquisitions excluding Stahlgruber [Member]
Business Acquisition
Contingent consideration liabilities			(5,000)			$ (5,000)			(5,000)
Non-interest Bearing [Member] | 2017 acquisitions and adjustments to 2016 acquisitions [Member]
Business Acquisition
Contingent consideration liabilities											$ (5,000)
Specialty
Business Acquisition
Revenue			$ 390,061		$ 330,594				$ 1,154,726	$ 1,008,998

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Purchase Price Allocations for Acquisitions (Details) $ in Thousands, € in Millions	3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
	Jun. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2018 EUR (€)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Business Acquisition
Receivables				$ 156,348		$ 73,782
Receivable reserves				(3,693)		(7,032)
Inventories (3)				386,296		150,342
Prepaid expenses and other current assets				11,343		(295)
Property, plant and equipment				266,750		41,039
Goodwill				4,475,266		3,536,511
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net						314,817
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill				301,844		181,216
Other assets				16,662		3,257
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities				(98,521)		(65,087)
Current liabilities assumed				(363,883)		(111,484)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt				(70,262)		(33,586)
Other noncurrent liabilities assumed				(91,682)		(1,917)
Consolidation, Less Than Wholly Owned Subsidiary, Non Controlling Interest Acquired, Value				(44,250)
Contingent consideration liabilities				(3,107)		(6,234)
Other purchase price obligations				1,504		(5,074)
Stock Issued During Period, Value, Acquisitions				(251,334)
Notes issued				(6,948)		(20,187)
Settlement of pre-existing balances						242
Gains on bargain purchases		$ (913)		(328)	$ (3,990)	3,870
Settlement of other purchase price obligations (non-interest bearing)				1,698		3,159
Cash used in acquisitions, net of cash acquired				1,206,067	$ 252,667	513,088
Warn Industries [Member]
Business Acquisition
Increase (Decrease) in Intangible Assets, Current				5,000
Inventory step-up adjustment - acquisition related						4,000
2017 Acquisitions Excluding Warn [Member]
Business Acquisition
Business Acquisition Cost Of Acquired Entity Other Purchase Price Obligations Non Interest Bearing, Post Purchase Adjustment				(4,000)
2017 acquisitions and adjustments to 2016 acquisitions [Member]
Business Acquisition
Notes issued						(20,000)
Cash used in acquisitions, net of cash acquired						510,000
Stahlgruber [Member]
Business Acquisition
Receivables				140,979
Receivable reserves				(2,818)
Inventories (3)				374,056
Prepaid expenses and other current assets				9,537
Property, plant and equipment				260,661
Goodwill				929,376
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill				285,529
Other assets				16,625
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities				(97,805)
Current liabilities assumed				(343,221)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt				(65,852)
Other noncurrent liabilities assumed				(81,689)
Consolidation, Less Than Wholly Owned Subsidiary, Non Controlling Interest Acquired, Value				(44,250)
Other purchase price obligations				(2,349)
Stock Issued During Period, Value, Acquisitions				(251,334)
Cash used in acquisitions, net of cash acquired	$ 1,100,000		€ 1,000	1,127,445
Defined Benefit Plan, Benefit Obligation, Business Combination				75,000
All 2018 Acquisitions and adjustments to 2017 acquisitions excluding Stahlgruber
Business Acquisition
Receivables				15,369
Receivable reserves				(875)
Inventories (3)				12,240
Prepaid expenses and other current assets				1,806
Property, plant and equipment				6,089
Goodwill				68,254
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill				16,315
Other assets				37
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities				(716)
Current liabilities assumed				(20,662)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt				(4,410)
Other noncurrent liabilities assumed				(9,993)
Contingent consideration liabilities				(3,107)
Other purchase price obligations				3,853
Notes issued				(6,948)
Gains on bargain purchases				328
Settlement of other purchase price obligations (non-interest bearing)				1,698
Cash used in acquisitions, net of cash acquired				78,622
All 2018 and 2017 Acquisitions [Member]
Business Acquisition
Goodwill				$ 997,630
Rhiag [Member]
Business Acquisition
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment						6,000
PGW [Member]
Business Acquisition
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment						3,000
Andrew Page
Business Acquisition
Gain on bargain purchase						$ (2,000)

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Pro Forma Effect of Businesses Acquired (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		4 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2017
Business Acquisition
Revenue, as reported	$ 3,122,378	$ 2,465,800		$ 8,873,893	$ 7,267,054
Income from continuing operations	$ 134,480	$ 122,381		$ 445,109	$ 414,104
Basic earnings per share from continuing operations	$ 0.42	$ 0.40		$ 1.42	$ 1.34
Diluted earnings per share from continuing operations	$ 0.42	0.39		$ 1.41	1.33
All 2018 Acquisitions [Member]
Business Acquisition
Business Acquisition Pro Forma Net Income attributable to noncontrolling interest				$ 2,799
Business Acquisition Pro Forma Income Loss From Share Issuance attributable to noncontrolling interest, Per Basic Share Effect				$ 0.01
Business Acquisition Pro Forma Income Loss From Share Issuance attributable to noncontrolling interest, Per Diluted Share Effect				0.01
Stahlgruber [Member]
Business Acquisition
Revenue, as reported			$ 637,000
Business Acquisition Pro Forma Income Loss From Share Issuance, Per Basic Share Effect		(0.01)		(0.02)	(0.03)
Business Acquisition Pro Forma Income Loss From Share Issuance, Per Diluted Share Effect		$ (0.01)		$ (0.02)	$ (0.03)
All 2017 acquisitions [Member]
Business Acquisition
Business Acquisition Pro Forma Net Income attributable to noncontrolling interest		$ 888			$ 2,157
Acquisition Related Costs, Net of Tax	$ 681	$ 2,301		$ 13,986	$ 5,010
Business Acquisition Pro Forma Income Loss From Acquisition Related Costs, Net of Tax, Per Basic Share Effect	$ 0.00	$ 0.01		$ 0.04	$ 0.02
Business Acquisition Pro Forma Income Loss From Share Issuance attributable to noncontrolling interest, Per Basic Share Effect		0.00			0.01
Business Acquisition Pro Forma Income Loss From Acquisition Related Costs, Net of Tax, Per Diluted Share Effect	$ 0.00	0.01		$ 0.04	0.02
Business Acquisition Pro Forma Income Loss From Share Issuance attributable to noncontrolling interest, Per Diluted Share Effect		$ 0.00			$ 0.01
Pro Forma [Member]
Business Acquisition
Revenue, as reported	$ 3,129,019	$ 3,023,019		$ 9,740,430	$ 8,943,981
Income from continuing operations	140,376	134,221		474,797	441,426
Income (Loss) from Continuing Operations, Net of Tax, Excluding Portion Attributable to Noncontrolling Interest	$ 140,376	$ 133,333		$ 471,998	$ 439,269
Basic earnings per share from continuing operations	$ 0.44	$ 0.42		$ 1.49	$ 1.39
Income (Loss) from Continuing Operations attributable to LKQ stockholders, Per Basic Share	0.44	0.42		1.49	1.39
Pro forma earnings per share from continuing operations, diluted (3)	0.44	0.42		1.49	1.39
Business Acquisition, Pro Forma Income (Loss) from Continuing Operations attributable to LKQ stockholders, Net of Tax, Per Share, Diluted	$ 0.44	$ 0.42		$ 1.48	$ 1.38
Pro Forma [Member] | Stahlgruber [Member]
Business Acquisition
Revenue, as reported		$ 473,326		$ 815,405	$ 1,289,083
Income from continuing operations	$ 5,054	$ 6,061		$ 14,114	$ 5,298
Basic earnings per share from continuing operations	$ 0.02	$ 0.02		$ 0.05	$ 0.02
Diluted earnings per share from continuing operations	$ 0.02	$ 0.02		$ 0.04	$ 0.02
Pro Forma [Member] | All 2018 Acquisitions excluding Stahlgruber [Member]
Business Acquisition
Revenue, as reported	$ 6,641			$ 51,132
Income from continuing operations	$ 161			$ 1,588
Basic earnings per share from continuing operations	$ 0.00			$ 0.01
Diluted earnings per share from continuing operations	$ 0.00			$ 0.01
Pro Forma [Member] | All 2018 and 2017 acquisitions excluding Stahlgruber [Member]
Business Acquisition
Revenue, as reported		$ 83,893			$ 387,844
Income from continuing operations		$ 3,478			$ 17,014
Basic earnings per share from continuing operations		$ 0.01			$ 0.06
Diluted earnings per share from continuing operations		$ 0.01			$ 0.05

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Discontinued Operations Results Of Discontinued Operations (Details) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended	9 Months Ended
	Mar. 01, 2017	Mar. 31, 2017	Sep. 30, 2017
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Net loss from discontinued operations			$ (4,531)
DCO Footnote 2 [Abstract]
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax			(8,580)
PGW [Member]
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Disposal Group, Including Discontinued Operation, Revenue			111,130
Disposal Group, Including Discontinued Operation, Costs of Goods Sold			100,084
Disposal Group, Including Discontinued Operation, General and Administrative Expense			8,369
Disposal Group, Including Discontinued Operation, Operating Income (Loss)			2,677
Disposal Group, Including Discontinued Operation, Other Expense			1,204
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax			3,881
Discontinued Operation, Tax Effect of Discontinued Operation			3,598
disposal group, including discontinued operation, equity in earnings			(534)
IncomeLossFromDiscontinuedOperationsExcludingLossOnSaleNetOfTaxAttributableToReportingEntity			(251)
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax			(4,280)
Net loss from discontinued operations			$ (4,531)
DCO Footnote 1 [Abstract]
Interest Allocated to Discontinued Operations	$ 2,000
DCO Footnote 2 [Abstract]
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax		$ (8,580)
Discontinued Operation, Tax Effect of Gain (Loss) from Disposal of Discontinued Operation		4,000
Discontinued Operation, Intra-Entity Amounts, Discontinued Operation after Disposal, Expense		$ 6,000

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Discontinued Operations (Details) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended			7 Months Ended	9 Months Ended
	Mar. 01, 2017	Sep. 30, 2018	Sep. 30, 2017	Mar. 31, 2017	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2016
Proceeds from Divestiture of Businesses, Net of Cash Divested							$ 301,297
Proceeds from disposals of business/investment						$ 0	$ 301,297
Cash disposed as part of divestment								$ 7,116
Commitments and Contingencies Disclosure [Abstract]
Related Party Transaction, Purchases from Related Party		$ 4,000	$ 10,000		$ 27,000	$ 22,000
PGW [Member]
Proceeds from Divestiture of Businesses, Net of Cash Divested				$ 301,000
Proceeds from disposals of business/investment				316,000
Cash disposed as part of divestment				$ 15,000
Cash Provided by (Used in) Operating Activities, Discontinued Operations	$ (4,000)
Cash Provided by (Used in) Investing Activities, Discontinued Operations	(4,000)
Cash Provided by (Used in) Financing Activities, Discontinued Operations	15,000
Commitments and Contingencies Disclosure [Abstract]
Intercompany Sales between Continuing and Discontinued Operations	$ (8,000)
Vitro S. A. B. de C.V. [Member] | PGW [Member]
Disposal Date				Mar. 01, 2017

XML

Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands, kr in Millions		3 Months Ended								9 Months Ended
	Dec. 01, 2016 USD ($)	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 SEK (kr)	Jun. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 SEK (kr)	Jun. 30, 2017 USD ($)	Mar. 31, 2017	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]
Reserve for uncollectible accounts			$ 63,000							$ 63,000		$ 58,000
Inventory Disclosure [Abstract]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory			386,296							$ 386,296		150,342
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment, Depreciation Methods										straight-line method
Depreciation			39,000			$ 34,000				$ 115,000	$ 93,000
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense			42,000			26,000				96,000	74,000
Estimated annual amortization expense in year one			40,000							40,000
Estimated annual amortization expense in year two			136,000							136,000
Estimated annual amortization expense in year three			104,000							104,000
Estimated annual amortization expense in year four			75,000							75,000
Estimated annual amortization expense in year five			62,000							62,000
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract]
Equity method investments			157,409							157,409		208,404
Investments in unconsolidated subsidiaries										11,066	7,114
Derivative Asset, Noncurrent			36,600							36,600		24,606
Equity in (losses) earnings of unconsolidated subsidiaries			20,284			(2,673)				$ 18,326	$ (3,878)
Effective Income Tax Rate Reconciliation, Amount [Abstract]
U.S. federal statutory rate									35.00%	21.00%	35.00%
Adoption of ASU 2018-02 (see Note 4)										$ 5,345
ManufacturedProducts [Member]
Inventory Disclosure [Abstract]
Inventory, Raw Materials and Supplies, Gross			16,000							16,000		10,000
Inventory, Work in Process, Gross			2,000							2,000		2,000
Inventory, Finished Goods, Gross			4,000							4,000		$ 4,000
Stahlgruber [Member]
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]
Reserve for uncollectible accounts			3,000							3,000
Inventory Disclosure [Abstract]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory			374,056							374,056
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill, Acquired During Period										929,000
Mekonomen [Member]
Summary of Significant Accounting Policies [Line Items]
Equity Method Investments, Fair Value Disclosure			134,000							134,000
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract]
Equity method investments			134,000							134,000
Equity Method Investment, Additional Information	December 1, 2016
Equity Method Investment, Ownership Percentage	26.50%
Investments in unconsolidated subsidiaries	$ 181,000	$ 48,000
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity			64,000							64,000
Equity in (losses) earnings of unconsolidated subsidiaries			20,000			$ (3,000)				18,000	$ (5,000)
Proceeds from Equity Method Investment, Distribution				kr 67	$ 8,000		kr 67	$ 7,000
Other than Temporary Impairment Losses, Investments			23,000
Accumulated Other Comprehensive Income (Loss)
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Adoption of ASU 2018-02 (see Note 4)										5,345
Right to acquire equity method investment [Domain] | Mekonomen [Member]
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract]
Derivative Asset, Noncurrent			29,000							29,000
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings		$ (8,000)	$ 2,509							$ 2,509
Amendment No. 2, Fourth Amended and Restate Credit Agreement [Member] | Revolving Credit Facility [Member]
Summary of Significant Accounting Policies [Line Items]
Weighted average interest rates			2.20%							2.20%		2.20%

XML

Financial Statement Information Schedule of Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Product Information
Inventories (3)	$ 386,296	$ 150,342
Inventories	2,794,894	2,380,783
Aftermarket and refurbished products
Product Information
Inventories	2,287,776	1,877,653
Salvage and remanufactured products
Product Information
Inventories	484,761	487,108
ManufacturedProducts [Member]
Accounting Policies [Abstract]
Inventory, Raw Materials, Gross	16,000	10,000
Inventory, Work in Process, Gross	2,000	2,000
Inventory, Finished Goods, Gross	4,000	4,000
Product Information
Inventories	$ 22,357	$ 16,022

XML

Financial Statement Information Schedule of Estimated Useful Lives (Details)	9 Months Ended
	Sep. 30, 2018
Buildings and improvements | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful life	20 years
Buildings and improvements | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful life	40 years
Machinery and equipment | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful life	3 years
Machinery and equipment | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful life	20 years
Computer equipment and software | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful life	3 years
Computer equipment and software | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful life	10 years
Furniture and Fixtures [Member] | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful life	5 years
Furniture and Fixtures [Member] | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful life	7 years

XML

Financial Statement Information Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	$ 1,837,915		$ 1,837,915		$ 1,476,716
Less—Accumulated depreciation	(691,086)		(691,086)		(606,112)
Property, Plant and Equipment, Net	1,201,003		1,201,003		913,089
Depreciation	39,000	$ 34,000	115,000	$ 93,000
Land and improvements
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	189,404		189,404		137,790
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	373,607		373,607		233,078
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	618,209		618,209		521,526
Computer equipment and software
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	142,719		142,719		133,753
Vehicles And Trailers [Member]
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	177,778		177,778		161,269
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	52,595		52,595		31,794
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	283,603		283,603		257,506
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	54,174		$ 54,174		$ 42,485
Minimum | Land and improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life			10 years
Minimum | Buildings and improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life			20 years
Minimum | Machinery and equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life			3 years
Minimum | Computer equipment and software
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life			3 years
Minimum | Vehicles And Trailers [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life			3 years
Minimum | Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life			5 years
Maximum | Land and improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life			20 years
Maximum | Buildings and improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life			40 years
Maximum | Machinery and equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life			20 years
Maximum | Computer equipment and software
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life			10 years
Maximum | Vehicles And Trailers [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life			10 years
Maximum | Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life			7 years
Stahlgruber [Member]
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	257,142		$ 257,142
Property, Plant and Equipment, Net	260,661		260,661
Stahlgruber [Member] | Land and improvements
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	47,281		47,281
Stahlgruber [Member] | Buildings and improvements
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	125,649		125,649
Stahlgruber [Member] | Machinery and equipment
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	49,384		49,384
Stahlgruber [Member] | Computer equipment and software
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	3,760		3,760
Stahlgruber [Member] | Vehicles And Trailers [Member]
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	643		643
Stahlgruber [Member] | Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	28,535		28,535
Stahlgruber [Member] | Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	1,890		1,890
Stahlgruber [Member] | Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment excluding construction in progress, gross	$ 3,519		$ 3,519

XML

Changes in Carrying Amount of Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 3,536,511
Business acquisitions and adjustments to previously recorded goodwill	997,630
Exchange rate effects	(58,875)
Ending balance	4,475,266
North America
Goodwill [Roll Forward]
Beginning balance	1,709,354
Business acquisitions and adjustments to previously recorded goodwill	1,073
Exchange rate effects	(3,049)
Ending balance	1,707,378
Europe
Goodwill [Roll Forward]
Beginning balance	1,414,898
Business acquisitions and adjustments to previously recorded goodwill	1,002,277
Exchange rate effects	(55,901)
Ending balance	2,361,274
Specialty
Goodwill [Roll Forward]
Beginning balance	412,259
Business acquisitions and adjustments to previously recorded goodwill	(5,720)
Exchange rate effects	75
Ending balance	406,614
Stahlgruber [Member]
Goodwill [Line Items]
Goodwill, Acquired During Period	929,000
Goodwill [Roll Forward]
Ending balance	$ 929,376

XML

Components of Other Intangibles (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets
Gross carrying amount	$ 1,267,939	$ 976,475
Accumulated amortization	(395,867)	(311,506)
Net	872,072	664,969
Other intangibles, net	$ 953,372	$ 743,769
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		16 years 6 months
Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets
Finite-Lived Intangible Assets, Amortization Method	Straight-line
Gross carrying amount	$ 495,839	$ 327,332
Accumulated amortization	(88,805)	(75,095)
Net	407,034	$ 252,237
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		11 years 2 months 12 days
Customer and supplier relationships
Finite-Lived Intangible Assets
Gross carrying amount	586,221	$ 510,113
Accumulated amortization	(223,085)	(167,532)
Net	$ 363,136	342,581
Software and technology related assets [Member]
Finite-Lived Intangible Assets
Finite-Lived Intangible Assets, Amortization Method	Straight-line
Gross carrying amount	$ 172,391	124,049
Accumulated amortization	(73,760)	(59,081)
Net	$ 98,631	$ 64,968
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		11 years 1 month 6 days
Covenants not to compete
Finite-Lived Intangible Assets
Finite-Lived Intangible Assets, Amortization Method	Straight-line
Gross carrying amount	$ 13,488	$ 14,981
Accumulated amortization	(10,217)	(9,798)
Net	$ 3,271	$ 5,183
Customer and supplier relationships [Member]
Finite-Lived Intangible Assets
Finite-Lived Intangible Assets, Amortization Method	Accelerated
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		18 years 7 months 6 days
Maximum | Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets
Finite-Lived Intangible Asset, Useful Life	30 years
Maximum | Software and technology related assets [Member]
Finite-Lived Intangible Assets
Finite-Lived Intangible Asset, Useful Life	15 years
Maximum | Covenants not to compete
Finite-Lived Intangible Assets
Finite-Lived Intangible Asset, Useful Life	5 years
Maximum | Customer and supplier relationships [Member]
Finite-Lived Intangible Assets
Finite-Lived Intangible Asset, Useful Life	20 years
Minimum | Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets
Finite-Lived Intangible Asset, Useful Life	4 years
Minimum | Software and technology related assets [Member]
Finite-Lived Intangible Assets
Finite-Lived Intangible Asset, Useful Life	3 years
Minimum | Covenants not to compete
Finite-Lived Intangible Assets
Finite-Lived Intangible Asset, Useful Life	2 years
Minimum | Customer and supplier relationships [Member]
Finite-Lived Intangible Assets
Finite-Lived Intangible Asset, Useful Life	3 years
Trademarks [Member]
Finite-Lived Intangible Assets
Indefinite-Lived Intangible Assets (Excluding Goodwill)	$ 81,300	$ 78,800

XML

Changes in Warranty Reserve (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($)
Warranty Reserve [Roll Forward]
Beginning balance	$ 23,151
Warranty expense	33,670
Warranty claims	(31,980)
Ending balance	$ 24,841

XML

Financial Statement Information Schedule of New Accounting Pronouncements (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
Income Statement Related Disclosures [Abstract]
Receivables, Net, Current	$ 1,255,876	$ 1,065,617	$ 1,027,106
Prepaid Expense and Other Assets, Current	200,944	$ 178,987	134,479
Other assets	205,226		142,965
Other current liabilities	57,088		45,727
Deferred Income Taxes	$ (325,537)		$ (252,359)

XML

Financial Statement Information Impact to quarterly financial statements as result of adoption of ASU 2016-09 (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended			9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017		Sep. 30, 2018		Sep. 30, 2017		Jan. 01, 2018	Dec. 31, 2017
Assets
Revenue		$ 3,122,378	$ 2,465,800		$ 8,873,893		$ 7,267,054
Receivables, net		1,255,876			1,255,876				$ 1,065,617	$ 1,027,106
Net Cash Provided by (Used in) Operating Activities					521,167		449,243
Net Cash Provided by (Used in) Financing Activities					979,314		(347,063)
Net income attributable to LKQ stockholders		$ 134,102	$ 122,381		$ 444,069		$ 409,573
Net income attributable to LKQ stockholders	[1]	$ 0.42	$ 0.40		$ 1.42		$ 1.33
Net income attributable to LKQ stockholders	[1]	$ 0.42	$ 0.39		$ 1.41		$ 1.32
Prepaid expenses and other current assets		$ 200,944			$ 200,944				178,987	134,479
Liabilities [Abstract]
Refund liability		106,732			106,732				83,019
Accounts payable		941,747			941,747					788,613
Other current liabilities		57,088			57,088					$ 45,727
Cost of goods sold		1,925,180	$ 1,508,924		5,460,845		$ 4,415,076
Selling, general and administrative expenses (1)		879,150	$ 695,978	[2]	2,472,085	[2]	$ 2,003,065	[2]
Adjustment Due to ASC 606 [Member]
Assets
Receivables, net									38,511
Prepaid expenses and other current assets									44,508
Liabilities [Abstract]
Refund liability									$ 83,019
Amount of adjustment to prior balance [Member]
Assets
Revenue		3,123,468			8,882,558
Receivables, net		1,205,833			1,205,833
Prepaid expenses and other current assets		144,255			144,255
Liabilities [Abstract]
Cost of goods sold		1,925,107			5,467,061
Selling, general and administrative expenses (1)		880,313			2,474,534
Adjustment Due to ASC 606 [Member]
Assets
Revenue		(1,090)			(8,665)
Receivables, net		50,043			50,043
Prepaid expenses and other current assets		56,689			56,689
Liabilities [Abstract]
Refund liability		106,732			106,732
Cost of goods sold		73			(6,216)
Selling, general and administrative expenses (1)		$ (1,163)			$ (2,449)

[1] (2) The sum of the individual earnings per share amounts may not equal the total due to rounding.

[2] (1) Selling, general and administrative expenses contain facility and warehouses expenses and distribution expenses that were previously shown separately.

XML

Financial Statement Information Equity Method Investments (Details)	Dec. 01, 2016
Mekonomen [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Additional Information	December 1, 2016

XML

Financial Statement Information Finite-Lived Intangible Assets Acquired as Part of Business Combination (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($)
Stahlgruber [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	$ 285,529,000
Stahlgruber [Member] | Trademarks and Trade Names [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	173,946,000
Stahlgruber [Member] | Customer and supplier relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	78,239,000
Stahlgruber [Member] | Software and technology related assets [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	33,344,000
All 2018 Acquisitions excluding Stahlgruber [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	11,181,000
All 2018 Acquisitions excluding Stahlgruber [Member] | Trademarks and Trade Names [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	2,895,000
All 2018 Acquisitions excluding Stahlgruber [Member] | Customer and supplier relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	8,194,000
All 2018 Acquisitions excluding Stahlgruber [Member] | Software and technology related assets [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	92,000
All 2018 Acquisitions [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	296,710,000
All 2018 Acquisitions [Member] | Trademarks and Trade Names [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	176,841,000
All 2018 Acquisitions [Member] | Customer and supplier relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	86,433,000
All 2018 Acquisitions [Member] | Software and technology related assets [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	$ 33,436,000

XML

Financial Statement Information Finite-Lived Intangible Assets Acquired As Part Of Business Combination, Remaining Useful Life (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		16 years 6 months
Customer and supplier relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		11 years 2 months 12 days
Customer and supplier relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		18 years 7 months 6 days
Computer Software, Intangible Asset [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		11 years 1 month 6 days
Covenants not to compete [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		4 years 4 months 24 days
All 2018 Acquisitions excluding Stahlgruber [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	12 years 2 months 12 days
All 2018 Acquisitions excluding Stahlgruber [Member] | Customer and supplier relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	20 years
All 2018 Acquisitions excluding Stahlgruber [Member] | Customer and supplier relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	9 years 7 months 6 days
All 2018 Acquisitions excluding Stahlgruber [Member] | Computer Software, Intangible Asset [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	6 years
Stahlgruber [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	13 years 8 months 12 days
Stahlgruber [Member] | Customer and supplier relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	19 years 10 months 24 days
Stahlgruber [Member] | Customer and supplier relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	3 years
Stahlgruber [Member] | Computer Software, Intangible Asset [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	6 years 9 months 18 days
All 2018 Acquisitions [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	13 years 8 months 12 days
All 2018 Acquisitions [Member] | Customer and supplier relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	19 years 10 months 24 days
All 2018 Acquisitions [Member] | Customer and supplier relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	3 years 7 months 6 days
All 2018 Acquisitions [Member] | Computer Software, Intangible Asset [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	6 years 9 months 18 days

XML

Revenue Recognition Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Revenue Recognition [Line Items]
Revenue	$ 3,122,378	$ 2,465,800	$ 8,873,893	$ 7,267,054
Contract with Customer, Refund Liability	107,000		107,000
Contract with Customer, Right to Recover Product	57,000		57,000
Contract With Customer, Right Of Return, Net					$ 38,000
Revenue, Variable Consideration Reserve	114,000		114,000		$ 78,000
North America
Revenue Recognition [Line Items]
Revenue	1,262,799	1,181,943	3,927,808	3,596,697
Europe
Revenue Recognition [Line Items]
Revenue	1,470,856	954,522	3,795,439	2,665,170
Specialty
Revenue Recognition [Line Items]
Revenue	390,061	330,594	1,154,726	1,008,998
Parts and Services
Revenue Recognition [Line Items]
Revenue	2,961,981	2,333,757	8,379,337	6,872,581
Parts and Services | North America
Revenue Recognition [Line Items]
Revenue	1,109,067	1,051,470	3,447,074	3,207,001
Parts and Services | Europe
Revenue Recognition [Line Items]
Revenue	1,464,049	952,765	3,781,091	2,659,804
Parts and Services | Specialty
Revenue Recognition [Line Items]
Revenue	388,865	329,522	1,151,172	1,005,776
Other Revenue
Revenue Recognition [Line Items]
Revenue	$ 160,397	$ 132,043	$ 494,556	$ 394,473

XML

Revenue Recognition Movement in Standard Prodcut Warranty Accrual (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Product Warranty Liability [Line Items]
Deferred Service-Type Warranty Revenue	$ 23,154	$ 19,465
Deferred Revenue, Additions	28,889
Deferred Revenue, Revenue Recognized	$ (25,200)
Minimum
Product Warranty Liability [Line Items]
Standard Product Warranty Period	6 months
Maximum
Product Warranty Liability [Line Items]
Standard Product Warranty Period	36 months

XML

Restructuring and Acquisition Related Expenses - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Acquisition Related Expenses [Abstract]
Business Combination, Acquisition Related Costs	$ 1	$ 3	$ 17	$ 8
Acquisition And Restructuring Integration Plans [Abstract]
Restructuring Costs	5	$ 2	10
Specialty
Acquisition And Restructuring Integration Plans [Abstract]
Restructuring Costs	1		2
Stahlgruber [Member]
Acquisition Related Expenses [Abstract]
Business Combination, Acquisition Related Costs	1		15
Andrew Page
Acquisition And Restructuring Integration Plans [Abstract]
Restructuring Costs	4		8
Maximum
Acquisition And Restructuring Integration Plans [Abstract]
Expected future restructuring expenses	$ (10)		$ (10)

XML

Equity Incentive Plans - Additional Information (Details) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($) shares
RSUs
RSUs [Abstract]
Fair value of RSUs vested during the period | $	$ 27
Performance Shares [Member]
RSUs [Abstract]
Reporting period of positive diluted earnings per share	5 years
Stock options
Stock Options [Abstract]
Options granted during the period	0
Options vested during the period	0
Minimum | Stock options
Stock Options [Abstract]
Stock options expiration period	6 years
Maximum | RSUs
Stock Options [Abstract]
Vesting period	5 years
Maximum | Stock options
Stock Options [Abstract]
Stock options expiration period	10 years
Vesting period	5 years

XML

Equity Incentive Plans Schedule of Unvested Restricted Stock Units Activity (Details) - RSUs - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Shares Outstanding [Abstract]
Unvested RSUs, shares	1,493,522	1,624,390
RSUs granted, shares	601,802
RSUs vested, shares	(698,903)
RSUs forfeited/canceled, shares	(33,767)
RSUs expected to vest	1,344,519
lkq_expected_to_vest_other_than_options_weighted_average_per_share	$ 34.88
Weighted Average Fair Value [Abstract]
Unvested RSUs, weighted average grant date fair value	34.89	$ 29.94
RSUs granted, weighted average grant date fair value	42.58
RSUs vested, weighted average grant date fair value	30.07
RSUs forfeited/canceled, weighted average grant date fair value	$ 33.28
RSUs expected to vest, weighted average remaining contractual term	2 years 7 months 6 days
RSUs expected to vest, aggregate intrinsic value	$ 42,581

XML

Equity Incentive Plans Schedule of Stock Option Activity (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Shares Outstanding [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	1,296,069	1,738,073
Stock options exercised, shares	(441,495)
Stock options forfeited/canceled, shares	(509)
Exercisable and expected to vest stock options, shares	1,296,069
Weighted Average Fair Value [Abstract]
Stock options outstanding, weighted average exercise price	$ 9.42	$ 9.20
Stock options exercised, weighted average exercise price	8.54
Stock options forfeited/canceled, weighted average exercise price	32.31
Exercisable and expected to vest stock options, weighted average exercise price	$ 9.42
Weighted Average Contractual Term [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	1 year
Exercisable and expected to vest stock options, weighted average remaining contractual term (years)	1 year
Aggregate Intrinsic Value [Abstract]
Stock options exercised, aggregate intrinsic value	$ 12,678
Stock options outstanding, aggregate intrinsic value	28,862
Exercisable and expected to vest stock options, aggregate intrinsic value	$ 28,862

XML

Schedule of Stock-Based Compensation Expense Expected to be Recognized (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation expense			$ 17,544	$ 17,582
RSUs
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation expense	$ 5,700	$ 5,158	17,544	$ 17,582
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options	$ 40,000		$ 40,000

XML

Earnings Per Share Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Schedule of Earnings Per Share, Basic and Diluted [Line Items]
Income from continuing operations	$ 134,480	$ 122,381	$ 445,109	$ 414,104
Denominator for basic earnings per share—Weighted-average shares outstanding	318,082	308,909	313,417	308,451
Effect of dilutive securities:
Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding	319,402	310,779	314,951	310,495
Basic earnings per share from continuing operations	$ 0.42	$ 0.40	$ 1.42	$ 1.34
Diluted earnings per share from continuing operations	$ 0.42	$ 0.39	$ 1.41	$ 1.33
RSUs
Effect of dilutive securities:
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements	333	485	452	501
Stock options
Effect of dilutive securities:
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements	987	1,385	1,082	1,543

XML

Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2017
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive securities	375	317	50
Employee Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive securities			51

XML

Accumulated Other Comprehensive Income (Loss) Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss	$ 134,791	$ 97,612	$ 134,791	$ 97,612	$ 116,061	$ 70,476	$ 154,270	$ 267,175
Pretax income (loss)	(14,507)	48,367	(48,338)	132,797
Income tax effect	(699)	(1,532)	3,544	(12,269)
Reclassification of unrealized loss (gain)	(7,263)	12,391	(26,020)	44,630
Reclassification of deferred income taxes	(1,698)	4,598	(6,082)	16,573
Other comprehensive income from unconsolidated subsidiaries	643	(1,034)	2,160	(1,635)
Disposal of business, net				(1,925)
Adoption of ASU 2018-02 (see Note 4)			5,345
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss	146,704	97,735	146,704	97,735	125,753	71,933	157,353	272,529
Pretax income (loss)	(23,405)	63,769	(82,137)	177,434
Income tax effect	(2,454)	4,151	(4,507)	4,151
Reclassification of unrealized loss (gain)	0
Reclassification of deferred income taxes	0
Other comprehensive income from unconsolidated subsidiaries	0
Disposal of business, net				1,511
Adoption of ASU 2018-02 (see Note 4)			2,859
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss	(19,988)	(8,548)	(19,988)	(8,548)	(19,684)	(11,538)	(10,324)	(8,091)
Pretax income (loss)	7,681	(15,402)	33,901	(44,749)
Income tax effect	1,796	(5,683)	7,926	(16,463)
Reclassification of unrealized loss (gain)	(7,284)	12,591	(26,117)	45,551
Reclassification of deferred income taxes	(1,703)	4,648	(6,106)	16,808
Other comprehensive income from unconsolidated subsidiaries	0
Adoption of ASU 2018-02 (see Note 4)			2,486
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss		6,790		6,790
Reclassification of unrealized loss (gain)		(200)
Reclassification of deferred income taxes		50
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss	8,926	6,790	8,926	6,790	(10,200)	(8,772)	(6,640)	$ (2,737)
Pretax income (loss)	1,217		(102)	112
Income tax effect	(41)		125	43
Reclassification of unrealized loss (gain)	21		97	(921)
Reclassification of deferred income taxes	5		24	(235)
Other comprehensive income from unconsolidated subsidiaries	0
Disposal of business, net				(3,436)
Accumulated Gain (Loss) from Unconsoldated Subsidiaries [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss	(851)	1,635	(851)	1,635	$ (208)	$ 1,309	$ 601
Pretax income (loss)	0
Income tax effect	0
Reclassification of unrealized loss (gain)	0
Reclassification of deferred income taxes	0
Other comprehensive income from unconsolidated subsidiaries	643	(1,034)	2,160	(1,635)
Cross Currency Fx Forward Contract [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax	$ 2,000	$ 2,000	$ 6,000	$ 6,000

XML

Accumulated Other Comprehensive Income (Loss) Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]
Adoption of ASU 2018-02 (see Note 4)			$ 5,345
Interest Rate Swap
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax	$ 2,000		5,000	$ 1,000
Cross Currency Fx Forward Contract [Member]
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax	2,000	$ 2,000	6,000	6,000
Cross Currency Interest Rate Contract [Member]
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax	$ 3,000	$ (15,000)	15,000	$ (50,000)
Accumulated Other Comprehensive Income (Loss)
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]
Adoption of ASU 2018-02 (see Note 4)			$ 5,345

XML

Long-Term Obligations - Additional Information (Details) $ in Thousands, € in Millions	3 Months Ended	9 Months Ended	12 Months Ended	13 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)	Jan. 29, 2023 USD ($)	Apr. 09, 2018 EUR (€)	Dec. 01, 2017 USD ($)	Nov. 29, 2016 USD ($)	Apr. 14, 2016	Jan. 29, 2016 USD ($)	May 09, 2013 USD ($)
US Notes (2023) [Member]
Debt Instrument
Long-term Debt	$ 600,000	$ 600,000	$ 600,000
Senior notes interest rate										4.75%
Euro Notes (2024)
Debt Instrument
Long-term Debt	580,200	580,200	600,150
Senior notes interest rate								3.875%
Euro Notes 2026/28 [Member]
Debt Instrument
Payments of Financing Costs		16,000
Long-term Debt	1,160,400	1,160,400			€ 1,000
Receivables securitization
Debt Instrument
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount	100,000	100,000	100,000
Revolving Credit Facility [Member]
Debt Instrument
Long-term Line of Credit	$ 1,800,000	$ 1,800,000	2,000,000
Amendment No. 2, Fourth Amended and Restate Credit Agreement [Member] | Revolving Credit Facility [Member]
Debt Instrument
Line of Credit Facility, Maximum Borrowing Capacity						$ 2,750,000
Line of Credit Facility, Increase (Decrease), Net			$ 300,000
Line of Credit Facility, Frequency of Payments		quarterly installments
Line of Credit Facility, Periodic Payment				$ 9,000
Increment change in applicable margin						0.25%
Weighted average interest rates	2.20%	2.20%	2.20%
Long-Term Line of Credit, Current			$ 18,000
Outstanding letters of credit	$ 65,000	$ 65,000
Availability on the revolving credit facility	$ 1,500,000	$ 1,500,000
Payments of Financing Costs			5,000
Amendment No. 2, Fourth Amended and Restate Credit Agreement [Member] | Letter of Credit [Member]
Debt Instrument
Line of Credit Facility, Commitment Fee Percentage	0.125%
Fourth Amended Credit Agreement | Revolving Credit Facility [Member]
Debt Instrument
Line of Credit Facility, Maximum Borrowing Capacity									$ 2,450,000
Mitsubishi UFJ [Member] | Receivables securitization
Debt Instrument
Line of Credit Facility, Maximum Borrowing Capacity							$ 100,000
Weighted average interest rates	3.10%	3.10%
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount	$ 100,000	$ 100,000	100,000
Twenty Twenty Three [Domain] | US Notes (2023) [Member]
Debt Instrument
Long-term Debt										$ 600,000
TwentyTwentySix [Member] | Euro Notes 2026/28 [Member]
Debt Instrument
Long-term Debt | €					€ 750
Senior notes interest rate					3.625%
TwentyTwentyEight [Member] | Euro Notes 2026/28 [Member]
Debt Instrument
Long-term Debt | €					€ 250
Senior notes interest rate					4.125%
Net Receivables [Member] | Mitsubishi UFJ [Member] | Receivables securitization
Debt Instrument
Debt Instrument, Collateral Amount	$ 127,000	$ 127,000	$ 144,000
Minimum increment [Member] | Amendment No. 2, Fourth Amended and Restate Credit Agreement [Member] | Revolving Credit Facility [Member]
Debt Instrument
Increment change in commitment fees	0.025%	0.025%
Maximum increment [Member] | Amendment No. 2, Fourth Amended and Restate Credit Agreement [Member] | Revolving Credit Facility [Member]
Debt Instrument
Increment change in commitment fees	0.05%	0.05%

XML

Schedule of Long-Term Obligations (Details) $ in Thousands, € in Millions	Sep. 30, 2018 USD ($)	Apr. 09, 2018 EUR (€)	Dec. 31, 2017 USD ($)	Apr. 14, 2016 EUR (€)
Debt Instrument
Long-term obligations, total	$ 4,404,369		$ 3,428,280
Deferred Finance Costs, Noncurrent, Net	(31,251)		(21,476)
Deferred Finance Costs, Current, Net	(4,616)		(2,824)
Long-term obligations, total, net	4,368,502		3,403,980
Current portion of long-term obligations	(118,365)		(126,360)
Long-term obligations, excluding current portion	4,250,137		3,277,620
Loans Payable
Debt Instrument
Term loan	590,000		704,800
Revolving Credit Facility [Member]
Debt Instrument
Long-term Line of Credit	1,183,626		1,283,551
US Notes (2023) [Member]
Debt Instrument
Long-term Debt	600,000		600,000
Euro Notes (2024)
Debt Instrument
Long-term Debt	580,200		600,150
Euro Notes 2026/28 [Member]
Debt Instrument
Long-term Debt	1,160,400	€ 1,000
Receivables securitization
Debt Instrument
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount	100,000		100,000
Notes payable
Debt Instrument
Notes Payable	38,641		29,146
Other Long Term Debt
Debt Instrument
Other long-term debt	151,502		110,633
Revolving Credit Facility [Member]
Debt Instrument
Long-term Line of Credit	$ 1,800,000		$ 2,000,000
Twenty Twenty Four [Domain] | Euro Notes (2024)
Debt Instrument
Long-term Debt | €				€ 500
TwentyTwentySix [Member] | Euro Notes 2026/28 [Member]
Debt Instrument
Long-term Debt | €		750
TwentyTwentyEight [Member] | Euro Notes 2026/28 [Member]
Debt Instrument
Long-term Debt | €		€ 250

XML

Schedule of Long-Term Obligations (Parenthetical) (Details)	Jun. 30, 2018	Dec. 31, 2017
Notes payable
Debt Instrument
Weighted average interest rates	1.50%	1.40%
Other Long Term Debt
Debt Instrument
Weighted average interest rates	2.20%	1.70%

XML

Derivative Instruments and Hedging Activities (Details) $ in Thousands, € in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2018 EUR (€)	Sep. 30, 2018 EUR (€)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 EUR (€)
Effect of Netting Derivative Instruments		$ (19,000)	$ (19,000)			$ (12,000)
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net		4,000	4,000
Settlement of Notional Amounts | €					€ (15)
Derivative Asset, Noncurrent		36,600	36,600			24,606
Derivative Liability, Noncurrent		49,212	49,212			61,492
Interest Rate Swap [Member]
Derivative, Notional Amount		590,000	590,000			590,000
Derivative Asset, Noncurrent		25,719	25,719			19,102
Cross Currency Interest Rate Contract [Member]
Derivative, Notional Amount		394,649	394,649			406,546	$ 422,000	€ 400
Derivative Asset, Noncurrent		10,881	10,881			5,504
Derivative Liability, Noncurrent		49,212	49,212			$ 61,492
Right to acquire equity method investment [Domain] | Mekonomen [Member]
Derivative Asset, Noncurrent		29,000	29,000
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings	$ 8,000	$ (2,509)	$ (2,509)
2018 Cross Currency Swaps [Member] | Cross Currency Interest Rate Contract [Member]
Derivative, Notional Amount	$ 184,000			€ 160

XML

Fair Value Disclosures (Details) $ in Thousands, € in Billions	Sep. 30, 2018 USD ($)	Apr. 09, 2018 EUR (€)	Dec. 31, 2017 USD ($)
Fair Value, Measurements, Recurring [Member]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Assets, Fair Value Disclosure	$ 118,974		$ 70,590
Financial and Nonfinancial Liabilities, Fair Value Disclosure	108,874		111,327
Fair Value, Measurements, Recurring [Member] | Cash Surrender Value [Member]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Assets, Fair Value Disclosure	53,691		45,984
Fair Value, Measurements, Recurring [Member] | Interest Rate Swap [Member]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Assets, Fair Value Disclosure	25,719		19,102
Fair Value, Measurements, Recurring [Member] | Cross Currency Interest Rate Contract [Member]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Assets, Fair Value Disclosure	10,881		5,504
Financial and Nonfinancial Liabilities, Fair Value Disclosure	49,212		61,492
Fair Value, Measurements, Recurring [Member] | Contingent Consideration Liabilities [Member]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Financial and Nonfinancial Liabilities, Fair Value Disclosure	5,243		2,636
Fair Value, Measurements, Recurring [Member] | Deferred Compensation Liabilities [Member]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Financial and Nonfinancial Liabilities, Fair Value Disclosure	54,419		47,199
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Assets, Fair Value Disclosure	118,974		70,590
Financial and Nonfinancial Liabilities, Fair Value Disclosure	103,631		108,691
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Cash Surrender Value [Member]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Assets, Fair Value Disclosure	53,691		45,984
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Assets, Fair Value Disclosure	25,719		19,102
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Cross Currency Interest Rate Contract [Member]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Assets, Fair Value Disclosure	10,881		5,504
Financial and Nonfinancial Liabilities, Fair Value Disclosure	49,212		61,492
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Deferred Compensation Liabilities [Member]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Financial and Nonfinancial Liabilities, Fair Value Disclosure	54,419		47,199
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Financial and Nonfinancial Liabilities, Fair Value Disclosure	5,243		2,636
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Contingent Consideration Liabilities [Member]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Financial and Nonfinancial Liabilities, Fair Value Disclosure	5,243		2,636
Revolving Credit Facility [Member]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Long-term Line of Credit	1,800,000		2,000,000
Euro Notes 2026/28 [Member]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Long-term Debt	1,160,400	€ 1.0
Euro Notes (2024)
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Long-term Debt, Fair Value	615,000		658,000
Long-term Debt	580,200		600,150
Receivables securitization
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Transfers Accounted for as Secured Borrowings, Associated Liabilities, Carrying Amount	100,000		100,000
US Notes (2023) [Member]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Long-term Debt, Fair Value	601,000		615,000
Long-term Debt	600,000		$ 600,000
Mekonomen [Member] | Fair Value, Measurements, Recurring [Member] | Right to acquire equity method investment [Domain]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Assets, Fair Value Disclosure	28,683
Mekonomen [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Right to acquire equity method investment [Domain]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Assets, Fair Value Disclosure	$ 28,683

XML

Income Taxes - Additional Information (Details) - USD ($) $ in Millions	9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Effective Income Tax Rate Reconciliation, Other Adjustments, Percent	1.00%
Effective Income Tax Rate Reconciliation, Change in the Discrete Items, Amount	$ 12	$ 8
Tax Cuts and Jobs Act of 2017 Transition Tax Adjustment for Accumulated Foreign Earnings Provisional Amount	10
Excess Tax Benefit on Stock Based Payments	$ 4	$ 7
Tax Cuts and Jobs Act of 2017, transition tax for accumulated foreign earnings, provisional amount			$ 51
Effective Income Tax Rate Reconciliation, Change as a result of the Discrete Items, Percent	0.60%

XML

Employee Benefit Plans (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Liability, Defined Benefit Plan		$ 111,000		$ 111,000
Liability, Defined Benefit Plan, Noncurrent						$ 46,000
Service Cost		628	$ 1,126	1,612	$ 2,902
Interest Cost		996	750	2,442	2,091
Expected Return on Plan Assets		(720)	(507)	(2,220)	(1,059)
Amortization of Prior Service Credit			(71)		(201)
Amortization of Actuarial (Gain) Loss		21	(129)	97	(720)
Net Periodic Benefit Expense		925	$ 1,169	1,931	$ 3,013
Defined Benefit Plan, Plan Assets, Contributions by Employer	$ 1,000			12,000
Stahlgruber [Member]
Defined Benefit Plan Disclosure [Line Items]
Liability, Defined Benefit Plan		$ 75,000		$ 75,000

XML

Future Minimum Lease Commitments (Details) $ in Thousands	Sep. 30, 2018 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year	$ 72,780
Operating Leases, Future Minimum Payments Due, Next Twelve Months	271,642
Operating Leases, Future Minimum Payments, Due in Two Years	226,936
Operating Leases, Future Minimum Payments, Due in Three Years	179,921
Operating Leases, Future Minimum Payments, Due in Four Years	144,700
Operating Leases, Future Minimum Payments, Due in Five Years	122,149
Thereafter	689,583
Future Minimum Lease Payments	$ 1,707,711

XML

Segment and Geographic Information - Additional Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)
Segment Reporting Information
Revenue	$ 3,122,378	$ 2,465,800	$ 8,873,893	$ 7,267,054
Segment EBITDA	326,344	267,035	963,531	863,164
Depreciation and amortization	$ 81,473	59,902	210,977	166,508
Number of operating segments	4
Number of reportable segments	3
Third Party [Member]
Segment Reporting Information
Revenue	$ 3,122,378	2,465,800	8,873,893	7,267,054
North America
Segment Reporting Information
Revenue	1,262,799	1,181,943	3,927,808	3,596,697
Segment EBITDA	154,049	152,627	506,772	502,494
Depreciation and amortization	$ 22,151	22,104	64,985	64,305
Number of reportable segments	1
North America | Intersegment [Member]
Segment Reporting Information
Revenue	$ 142	187	526	589
North America | Third Party [Member]
Segment Reporting Information
Revenue	1,262,657	1,181,756	3,927,282	3,596,108
Europe
Segment Reporting Information
Revenue	1,470,856	954,522	3,795,439	2,665,170
Segment EBITDA	129,358	79,294	315,785	241,537
Depreciation and amortization	52,139	32,326	124,697	85,809
Europe | Third Party [Member]
Segment Reporting Information
Revenue	1,470,856	954,522	3,795,439	2,665,170
Specialty
Segment Reporting Information
Revenue	390,061	330,594	1,154,726	1,008,998
Segment EBITDA	42,937	35,114	140,974	119,133
Depreciation and amortization	7,183	5,472	21,295	16,394
Specialty | Intersegment [Member]
Segment Reporting Information
Revenue	1,196	1,072	3,554	3,222
Specialty | Third Party [Member]
Segment Reporting Information
Revenue	388,865	329,522	1,151,172	1,005,776
Intersegment Eliminations [Member]
Segment Reporting Information
Revenue	(1,338)	(1,259)	(4,080)	(3,811)
Intersegment Eliminations [Member] | Intersegment [Member]
Segment Reporting Information
Revenue	$ (1,338)	$ (1,259)	$ (4,080)	$ (3,811)

XML

Schedule of Financial Performance by Reportable Segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Segment Reporting Information
Revenue	$ 3,122,378	$ 2,465,800	$ 8,873,893	$ 7,267,054
Segment EBITDA	326,344	267,035	963,531	863,164
Depreciation and amortization	81,473	59,902	210,977	166,508
North America
Segment Reporting Information
Revenue	1,262,799	1,181,943	3,927,808	3,596,697
Segment EBITDA	154,049	152,627	506,772	502,494
Depreciation and amortization	22,151	22,104	64,985	64,305
Europe
Segment Reporting Information
Revenue	1,470,856	954,522	3,795,439	2,665,170
Segment EBITDA	129,358	79,294	315,785	241,537
Depreciation and amortization	52,139	32,326	124,697	85,809
Specialty
Segment Reporting Information
Revenue	390,061	330,594	1,154,726	1,008,998
Segment EBITDA	42,937	35,114	140,974	119,133
Depreciation and amortization	7,183	5,472	21,295	16,394
Intersegment Eliminations [Member]
Segment Reporting Information
Revenue	(1,338)	(1,259)	(4,080)	(3,811)
Third Party [Member]
Segment Reporting Information
Revenue	3,122,378	2,465,800	8,873,893	7,267,054
Third Party [Member] | North America
Segment Reporting Information
Revenue	1,262,657	1,181,756	3,927,282	3,596,108
Third Party [Member] | Europe
Segment Reporting Information
Revenue	1,470,856	954,522	3,795,439	2,665,170
Third Party [Member] | Specialty
Segment Reporting Information
Revenue	388,865	329,522	1,151,172	1,005,776
Intersegment [Member] | North America
Segment Reporting Information
Revenue	142	187	526	589
Intersegment [Member] | Specialty
Segment Reporting Information
Revenue	1,196	1,072	3,554	3,222
Intersegment [Member] | Intersegment Eliminations [Member]
Segment Reporting Information
Revenue	$ (1,338)	$ (1,259)	$ (4,080)	$ (3,811)

XML

Reconciliation Of Segment EBITDA To Net Income (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended		12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Reconciliation of Segment Earnings Before Interest Taxes Depreciation And Amortization to Net Income Table [Line Items]
Interest expense, net		$ 40,860	$ 25,222	$ 107,647	$ 73,806
Net income		134,480	122,381	445,109	409,573
Less: net income attributable to noncontrolling interest		378		1,040
Noncontrolling interest		56,956		56,956		$ 8,484
Net income attributable to LKQ stockholders		134,102	122,381	444,069	409,573
Net loss from discontinued operations					(4,531)
Net income from continuing operations attributable to LKQ stockholders		134,102	122,381	444,069	414,104
Depreciation and amortization		76,701	56,877	196,322	159,178
Depreciation and amortization - cost of goods sold		4,772	3,025	14,655	7,330
Provision for income taxes		46,068	58,189	156,427	206,206
EBITDA		302,503	265,694	919,120	860,624
Equity in (losses) earnings of unconsolidated subsidiaries		(20,284)	2,673	(18,326)	3,878
Gains on bargain purchases			913	328	3,990	$ (3,870)
Restructuring and acquisition related expenses		6,614	4,922	26,546	10,371
Inventory step-up adjustment - acquisition related				403
Impairment of net assets held for sale				2,438
Change in fair value of contingent consideration liabilities		548	(5)	465	(37)
Segment EBITDA		326,344	$ 267,035	963,531	$ 863,164
Right to acquire equity method investment [Domain] | Mekonomen [Member]
Reconciliation of Segment Earnings Before Interest Taxes Depreciation And Amortization to Net Income Table [Line Items]
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings	$ (8,000)	$ 2,509		$ 2,509

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Schedule of Capital Expenditures by Reportable Segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Segment Reporting Information
Capital Expenditures	$ 56,342	$ 43,992	$ 171,763	$ 135,537
North America
Segment Reporting Information
Capital Expenditures	27,996	31,021	86,864	69,934
Europe
Segment Reporting Information
Capital Expenditures	23,904	12,119	69,582	55,253
Specialty
Segment Reporting Information
Capital Expenditures	$ 4,442	$ 852	$ 15,317	6,752
Discontinued Operations [Member]
Segment Reporting Information
Capital Expenditures				$ 3,598

XML

Schedule of Assets by Reportable Segment (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
Segment Reporting Information
Receivables, net	$ 1,255,876	$ 1,065,617	$ 1,027,106
Inventories	2,794,894		2,380,783
Property, plant and equipment, net	1,201,003		913,089
Equity method investments	157,409		208,404
Other unallocated assets	6,176,154		4,837,490
Total assets	11,585,336		9,366,872
North America
Segment Reporting Information
Receivables, net	437,429		379,666
Inventories	1,058,310		1,076,393
Property, plant and equipment, net	560,918		537,286
Equity method investments	16,075		336
Europe
Segment Reporting Information
Receivables, net	696,106		555,372
Inventories	1,391,578		964,068
Property, plant and equipment, net	554,550		293,539
Equity method investments	141,334		208,068
Specialty
Segment Reporting Information
Receivables, net	122,341		92,068
Inventories	345,006		340,322
Property, plant and equipment, net	$ 85,535		$ 82,264

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Segment and Geographic Information Schedule of Revenue by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues from External Customers and Long-Lived Assets
Revenue	$ 3,122,378	$ 2,465,800	$ 8,873,893	$ 7,267,054
UNITED STATES
Revenues from External Customers and Long-Lived Assets
Revenue	1,535,557	1,395,495	4,716,927	4,268,600
UNITED KINGDOM
Revenues from External Customers and Long-Lived Assets
Revenue	408,474	399,155	1,294,155	1,171,829
GERMANY
Revenues from External Customers and Long-Lived Assets
Revenue	415,748	549	564,698	862
Other countries
Revenues from External Customers and Long-Lived Assets
Revenue	$ 762,599	$ 670,601	$ 2,298,113	$ 1,825,763

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Schedule of Tangible Long-Lived Assets by Geographic Area (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Revenues from External Customers and Long-Lived Assets
Long-lived Assets	$ 1,201,003	$ 913,089
UNITED STATES
Revenues from External Customers and Long-Lived Assets
Long-lived Assets	609,562	583,236
UNITED KINGDOM
Revenues from External Customers and Long-Lived Assets
Long-lived Assets	170,940	178,021
Other countries
Revenues from External Customers and Long-Lived Assets
Long-lived Assets	210,157	151,791
GERMANY
Revenues from External Customers and Long-Lived Assets
Long-lived Assets	$ 210,344	$ 41

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Subsequent Events (Details) $ in Millions	Dec. 31, 2018 USD ($)
Subsequent Events [Abstract]
Stock Repurchase Program, Authorized Amount	$ 500

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Condensed Consolidating Statements of Income (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended				12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017		Sep. 30, 2018		Sep. 30, 2017		Dec. 31, 2017
Condensed Financial Statements, Captions [Line Items]
Revenue	$ 3,122,378	$ 2,465,800		$ 8,873,893		$ 7,267,054
Cost of goods sold	1,925,180	1,508,924		5,460,845		4,415,076
Gross margin	1,197,198	956,876		3,413,048		2,851,978
Selling, general and administrative expenses (1)	879,150	695,978	[1]	2,472,085	[1]	2,003,065	[1]
Restructuring and acquisition related expenses	6,614	4,922		26,546		10,371
Depreciation and amortization	76,701	56,877		196,322		159,178
Operating Income (Loss)	234,733	199,099		718,095		679,364
Other expense (income):
Interest expense, net	40,860	25,222		107,647		73,806
Gains on bargain purchases		(913)		(328)		(3,990)		$ 3,870
Other (income) expense, net	(6,959)	(3,107)		(9,086)		(6,884)
Total other expense, net	33,901	21,202		98,233		62,932
(Loss) income before (benefit) provision for income taxes	200,832	177,897		619,862		616,432
Provision for income taxes	46,068	58,189		156,427		206,206
Equity in (losses) earnings of unconsolidated subsidiaries	(20,284)	2,673		(18,326)		3,878
Income from continuing operations	134,480	122,381		445,109		414,104
Net loss from discontinued operations						(4,531)
Less: net income attributable to noncontrolling interest	378			1,040
Net income attributable to LKQ stockholders	134,102	122,381		444,069		409,573
Parent
Condensed Financial Statements, Captions [Line Items]
Gross margin		0		0
Selling, general and administrative expenses (1)	6,725	7,861		25,538		26,209
Depreciation and amortization	34	29		84		89
Operating Income (Loss)	(6,759)	(7,890)		(25,622)		(26,298)
Other expense (income):
Interest expense, net	16,191	16,232		52,004		48,904
Intercompany interest (income) expense, net	(15,121)	(2,389)		(45,927)		(10,221)
Other (income) expense, net	(178)	32		(1,076)		286
Total other expense, net	(892)	(13,875)		(5,001)		(38,969)
(Loss) income before (benefit) provision for income taxes	(7,651)	(21,765)		(30,623)		(65,267)
Provision for income taxes	(12,008)	(8,436)		(19,656)		(27,034)
Equity in earnings of subsidiaries	129,745	135,710		455,036		452,337
Income from continuing operations	134,102					414,104
Net loss from discontinued operations						(4,531)
Net income attributable to LKQ stockholders	134,102	122,381		444,069		409,573
Guarantors
Condensed Financial Statements, Captions [Line Items]
Revenue	1,550,301	1,433,742		4,768,292		4,374,693
Cost of goods sold	934,913	861,078		2,869,499		2,613,540
Gross margin	615,388	572,664		1,898,793		1,761,153
Selling, general and administrative expenses (1)	434,965	394,926		1,292,455		1,165,897
Restructuring and acquisition related expenses	1,638	1,473		1,968		4,010
Depreciation and amortization	25,238	25,005		74,102		73,072
Operating Income (Loss)	153,547	151,260		530,268		518,174
Other expense (income):
Interest expense, net	(193)	57		(94)		281
Intercompany interest (income) expense, net	10,014	(2,814)		29,559		(4,530)
Other (income) expense, net	(3,514)	(4,011)		(13,793)		(8,247)
Total other expense, net	(6,307)	6,768		(15,672)		12,496
(Loss) income before (benefit) provision for income taxes	147,240	158,028		514,596		530,670
Provision for income taxes	41,875	56,920		141,295		200,321
Equity in (losses) earnings of unconsolidated subsidiaries	(156)			(156)
Equity in earnings of subsidiaries	4,467	6,674		14,028		17,282
Income from continuing operations	109,676					347,631
Net loss from discontinued operations						(4,531)
Net income attributable to LKQ stockholders	109,676	107,782		387,173		343,100
Non-Guarantors
Condensed Financial Statements, Captions [Line Items]
Revenue	1,609,525	1,069,682		4,216,417		3,001,386
Cost of goods sold	1,027,715	685,470		2,702,162		1,910,561
Gross margin	581,810	384,212		1,514,255		1,090,825
Selling, general and administrative expenses (1)	437,460	293,191		1,154,092		810,959
Restructuring and acquisition related expenses	4,976	3,449		24,578		6,361
Depreciation and amortization	51,429	31,843		122,136		86,017
Operating Income (Loss)	87,945	55,729		213,449		187,488
Other expense (income):
Interest expense, net	24,862	8,933		55,737		24,621
Intercompany interest (income) expense, net	5,107	5,203		16,368		14,751
Gains on bargain purchases		(913)		(328)		(3,990)
Other (income) expense, net	(3,267)	872		5,783		1,077
Total other expense, net	(26,702)	(14,095)		(77,560)		(36,459)
(Loss) income before (benefit) provision for income taxes	61,243	41,634		135,889		151,029
Provision for income taxes	16,201	9,705		34,788		32,919
Equity in (losses) earnings of unconsolidated subsidiaries	(20,128)	2,673		(18,170)		3,878
Income from continuing operations	24,914					121,988
Net loss from discontinued operations						2,050
Less: net income attributable to noncontrolling interest	378			1,040
Net income attributable to LKQ stockholders	24,536	34,602		81,891		124,038
Eliminations
Condensed Financial Statements, Captions [Line Items]
Revenue	(37,448)	(37,624)		(110,816)		(109,025)
Cost of goods sold	(37,448)	(37,624)		(110,816)		(109,025)
Other expense (income):
Equity in earnings of subsidiaries	(134,212)	(142,384)		(469,064)		(469,619)
Income from continuing operations	(134,212)					(469,619)
Net loss from discontinued operations						2,481
Net income attributable to LKQ stockholders	$ (134,212)	$ (142,384)		$ (469,064)		$ (467,138)

[1] (1) Selling, general and administrative expenses contain facility and warehouses expenses and distribution expenses that were previously shown separately.

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Condensed Consolidating Statements of Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Condensed Financial Statements, Captions [Line Items]
Net income	$ 134,480	$ 122,381	$ 445,109	$ 409,573
Less: net income attributable to noncontrolling interest	378		1,040
Net income attributable to LKQ stockholders	134,102	122,381	444,069	409,573
Other comprehensive income (loss):
Foreign currency translation, net of tax	(20,951)	59,618	(77,630)	174,794
Net change in unrealized gains/losses on cash flow hedges, net of tax	304	(1,776)	5,964	457
Net change in unrealized gains/losses on pension plans, net of tax	1,274	150	(154)	(4,053)
Net change in other comprehensive loss from unconsolidated subsidiaries	643	(1,034)	2,160	(1,635)
Other comprehensive (loss) income	(18,730)	56,658	(69,660)	169,563
Comprehensive income	115,750	179,039	375,449	579,136
Less: comprehensive income attributable to noncontrolling interest	378		1,040
Comprehensive income (loss) attributable to LKQ stockholders	115,372	179,039	374,409	579,136
Parent
Condensed Financial Statements, Captions [Line Items]
Net income	134,102		444,069
Net income attributable to LKQ stockholders	134,102	122,381	444,069	409,573
Other comprehensive income (loss):
Foreign currency translation, net of tax	(20,951)	59,618	(77,630)	174,794
Net change in unrealized gains/losses on cash flow hedges, net of tax	304	(1,776)	5,964	457
Net change in unrealized gains/losses on pension plans, net of tax	(1,274)	150	(154)	(4,053)
Net change in other comprehensive loss from unconsolidated subsidiaries	643	(1,034)	2,160	(1,635)
Other comprehensive (loss) income	(18,730)	56,658	(69,660)	169,563
Comprehensive income	115,372		374,409
Comprehensive income (loss) attributable to LKQ stockholders	115,372	179,039	374,409	579,136
Guarantors
Condensed Financial Statements, Captions [Line Items]
Net income	109,676		387,173
Net income attributable to LKQ stockholders	109,676	107,782	387,173	343,100
Other comprehensive income (loss):
Foreign currency translation, net of tax	1,686	3,590	(2,800)	17,565
Net change in unrealized gains/losses on cash flow hedges, net of tax				(133)
Net change in unrealized gains/losses on pension plans, net of tax	(1,246)		(239)	(3,253)
Other comprehensive (loss) income	2,932	3,590	(3,039)	14,179
Comprehensive income	112,608		384,134
Comprehensive income (loss) attributable to LKQ stockholders	112,608	111,372	384,134	357,279
Non-Guarantors
Condensed Financial Statements, Captions [Line Items]
Net income	24,914		82,931
Less: net income attributable to noncontrolling interest	378		1,040
Net income attributable to LKQ stockholders	24,536	34,602	81,891	124,038
Other comprehensive income (loss):
Foreign currency translation, net of tax	(23,901)	62,734	(81,456)	176,769
Net change in unrealized gains/losses on pension plans, net of tax	(28)	150	85	(800)
Net change in other comprehensive loss from unconsolidated subsidiaries	643	(1,034)	2,160	(1,635)
Other comprehensive (loss) income	(23,230)	61,550	(79,211)	174,334
Comprehensive income	1,684		3,720
Less: comprehensive income attributable to noncontrolling interest	378		1,040
Comprehensive income (loss) attributable to LKQ stockholders	1,306	96,152	2,680	298,372
Eliminations
Condensed Financial Statements, Captions [Line Items]
Net income	(134,212)		(469,064)
Net income attributable to LKQ stockholders	(134,212)	(142,384)	(469,064)	(467,138)
Other comprehensive income (loss):
Foreign currency translation, net of tax	22,215	(66,324)	84,256	(194,334)
Net change in unrealized gains/losses on cash flow hedges, net of tax				133
Net change in unrealized gains/losses on pension plans, net of tax	1,274	(150)	154	4,053
Net change in other comprehensive loss from unconsolidated subsidiaries	(643)	1,034	(2,160)	1,635
Other comprehensive (loss) income	20,298	(65,140)	82,250	(188,513)
Comprehensive income	(113,914)		(386,814)
Comprehensive income (loss) attributable to LKQ stockholders	$ (113,914)	$ (207,524)	$ (386,814)	$ (655,651)

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Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 341,346			$ 279,766	$ 275,077
Receivables, net	1,255,876		$ 1,065,617	1,027,106
Inventories	2,794,894			2,380,783
Prepaid expenses and other current assets	200,944		178,987	134,479
Total current assets	4,593,060			3,822,134
Property, plant and equipment, net	1,201,003			913,089
Intangible assets:
Goodwill	4,475,266			3,536,511
Other intangibles, net	953,372			743,769
Equity method investments	157,409			208,404
Other assets	205,226			142,965
Total assets	11,585,336			9,366,872
Current liabilities:
Accounts payable	941,747			788,613
Accrued expenses:
Accrued payroll-related liabilities	153,536			143,424
Other accrued expenses	358,212			218,600
Refund liability	106,732		$ 83,019
Other current liabilities	57,088			45,727
Current portion of long-term obligations	118,365			126,360
Total current liabilities	1,735,680			1,322,724
Long-term obligations, excluding current portion	4,250,137			3,277,620
Deferred income taxes	325,537			252,359
Other noncurrent liabilities	376,566			307,516
Total Company stockholders' equity	4,840,460			4,198,169
Noncontrolling interest	56,956			8,484
Total stockholders' equity	4,897,416	$ 4,776,975		4,206,653	4,041,037	$ 3,856,685	$ 3,442,949
Total liabilities and stockholders’ equity	11,585,336			9,366,872
Parent
Current assets:
Cash and cash equivalents	48,265			34,360	20,286
Receivables, net	341
Intercompany receivables, net	7,173			2,669
Prepaid expenses and other current assets	15,452			34,136
Total current assets	71,231			71,165
Property, plant and equipment, net	845			910
Intangible assets:
Other intangibles, net	286
Investment in subsidiaries	5,351,986			5,952,687
Intercompany notes receivable	1,067,356			1,156,550
Other assets	90,293			70,590
Total assets	6,581,997			7,251,902
Current liabilities:
Accounts payable	2,615			5,742
Accrued expenses:
Accrued payroll-related liabilities	7,169			9,448
Other accrued expenses	12,656			5,219
Other current liabilities	283			282
Current portion of long-term obligations	0			16,468
Total current liabilities	22,723			37,159
Long-term obligations, excluding current portion	1,569,387			2,095,826
Intercompany notes payable				750,000
Deferred income taxes	9,715			12,402
Other noncurrent liabilities	139,712			158,346
Total Company stockholders' equity	4,840,460			4,198,169
Total stockholders' equity	4,840,460			4,198,169
Total liabilities and stockholders’ equity	6,581,997			7,251,902
Guarantors
Current assets:
Cash and cash equivalents	31,082			35,131	22,413
Receivables, net	366,781			290,958
Intercompany receivables, net				3,010
Inventories	1,323,201			1,334,766
Prepaid expenses and other current assets	94,787			44,849
Total current assets	1,815,851			1,708,714
Property, plant and equipment, net	589,898			563,262
Intangible assets:
Goodwill	2,005,560			2,010,209
Other intangibles, net	280,229			291,036
Investment in subsidiaries	114,721			102,931
Intercompany notes receivable	14,958			782,638
Equity method investments	16,075			336
Other assets	38,434			33,597
Total assets	4,875,726			5,492,723
Current liabilities:
Accounts payable	345,660			340,951
Intercompany payables, net	20,573			230
Accrued expenses:
Accrued payroll-related liabilities	48,463			65,811
Other accrued expenses	106,543			95,900
Refund liability	54,554
Other current liabilities	18,210			27,066
Current portion of long-term obligations	2,317			1,912
Total current liabilities	596,320			531,870
Long-term obligations, excluding current portion	14,027			7,372
Intercompany notes payable	617,389			677,708
Deferred income taxes	115,924			116,021
Other noncurrent liabilities	98,133			101,189
Total Company stockholders' equity	3,433,933			4,058,563
Total stockholders' equity	3,433,933			4,058,563
Total liabilities and stockholders’ equity	4,875,726			5,492,723
Non-Guarantors
Current assets:
Cash and cash equivalents	261,999			210,275	$ 232,378
Receivables, net	888,754			736,148
Intercompany receivables, net	20,573			230
Inventories	1,471,693			1,046,017
Prepaid expenses and other current assets	90,705			55,494
Total current assets	2,733,724			2,048,164
Property, plant and equipment, net	610,260			348,917
Intangible assets:
Goodwill	2,469,706			1,526,302
Other intangibles, net	672,857			452,733
Equity method investments	141,334			208,068
Other assets	76,499			38,778
Total assets	6,704,380			4,622,962
Current liabilities:
Accounts payable	593,472			441,920
Intercompany payables, net	7,173			5,679
Accrued expenses:
Accrued payroll-related liabilities	97,904			68,165
Other accrued expenses	239,013			117,481
Refund liability	52,178
Other current liabilities	38,595			18,379
Current portion of long-term obligations	116,048			107,980
Total current liabilities	1,144,383			759,604
Long-term obligations, excluding current portion	2,666,723			1,174,422
Intercompany notes payable	464,925			511,480
Deferred income taxes	199,898			123,936
Other noncurrent liabilities	138,721			47,981
Total Company stockholders' equity	2,032,774			1,997,055
Noncontrolling interest	56,956			8,484
Total stockholders' equity	2,089,730			2,005,539
Total liabilities and stockholders’ equity	6,704,380			4,622,962
Eliminations
Current assets:
Intercompany receivables, net	(27,746)			(5,909)
Total current assets	(27,746)			(5,909)
Intangible assets:
Investment in subsidiaries	(5,466,707)			(6,055,618)
Intercompany notes receivable	(1,082,314)			(1,939,188)
Total assets	(6,576,767)			(8,000,715)
Current liabilities:
Intercompany payables, net	(27,746)			(5,909)
Accrued expenses:
Total current liabilities	(27,746)			(5,909)
Intercompany notes payable	(1,082,314)			(1,939,188)
Total Company stockholders' equity	(5,466,707)			(6,055,618)
Total stockholders' equity	(5,466,707)			(6,055,618)
Total liabilities and stockholders’ equity	$ (6,576,767)			$ (8,000,715)

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Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities			$ 521,167	$ 449,243
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	$ (56,342)	$ (43,992)	(171,763)	(135,537)
Acquisitions, net of cash acquired			(1,206,067)	(252,667)	$ (513,088)
Payments to Acquire Equity Method Investments			(11,066)	(7,114)
Proceeds from Divestiture of Businesses, Net of Cash Divested				301,297
Receipts of deferred purchase price on receivables under factoring arrangements			9,410	0
Other investing activities, net			7,970	9,864
Net cash used in investing activities			(1,371,516)	(84,157)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options			3,772	6,465
Taxes paid related to net share settlements of stock-based compensation awards			(4,768)	(5,095)
Debt issuance costs			(16,938)
Proceeds from issuance of Euro Notes (2026/28)			1,232,100
Borrowings under revolving credit facilities			1,025,496	424,976
Repayments under revolving credit facilities			(1,110,035)	(770,884)
Repayments under term loans			(114,800)	(27,884)
Borrowings under receivables securitization facility				8,525
(Repayments) borrowings of other debt, net			(38,695)	(24,522)
Payments of other obligations				(2,079)
Other financing activities, net			3,182	4,316
Net cash provided by (used in) financing activities			979,314	(347,063)
Effect of exchange rate changes on cash and cash equivalents			(67,385)	22,538
Net increase (decrease) in cash and equivalents			61,580	40,561
Cash and cash equivalents of continuing operations, beginning of period					279,766	$ 227,400
Add: Cash and cash equivalents of discontinued operations, beginning of period				7,116	7,116
Cash and cash equivalents of continuing and discontinued operations, beginning of period	341,346	275,077	341,346	275,077	279,766	234,516
Cash and cash equivalents, end of period	341,346	275,077	341,346	275,077	279,766
Repayments under receivables securitization facility				(9,925)
Parent
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities			334,226	227,314
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment			(315)	(509)
Investment and intercompany note activity with subsidiaries			73,096	296,561
Proceeds from investment in subsidiary, distribution, return of capital			152,443
Other investing activities, net			887
Net cash used in investing activities			226,111	296,052
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options			3,772	6,465
Taxes paid related to net share settlements of stock-based compensation awards			(4,768)	5,095
Debt issuance costs			(1,354)
Borrowings under revolving credit facilities			304,000	187,000
Repayments under revolving credit facilities			(732,897)	(694,896)
Repayments under term loans			(114,800)	(27,884)
(Repayments) borrowings of other debt, net			(385)	(1,700)
Net cash provided by (used in) financing activities			(546,432)	(536,110)
Net increase (decrease) in cash and equivalents			13,905	(12,744)
Cash and cash equivalents of continuing operations, beginning of period					34,360	33,030
Cash and cash equivalents of continuing and discontinued operations, beginning of period						33,030
Cash and cash equivalents, end of period	48,265	20,286	48,265	20,286	34,360
Eliminations
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from investment in subsidiary, distribution, return of capital			(152,443)
Guarantors
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities			142,626	162,114
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment			(93,063)	(70,292)
Acquisitions, net of cash acquired			(2,888)	(79,496)
Payments to Acquire Equity Method Investments			11,066	2,200
Proceeds from Divestiture of Businesses, Net of Cash Divested				305,740
Receipts of deferred purchase price on receivables under factoring arrangements			224,753	226,395
Other investing activities, net			2,162	(3,100)
Net cash used in investing activities			119,898	383,247
CASH FLOWS FROM FINANCING ACTIVITIES:
(Repayments) borrowings of other debt, net			101	(1,238)
Payments of other obligations				1,336
Other financing activities, net				5,000
Investment and intercompany note activity with parent			(62,763)	(286,530)
Dividends			(203,448)	(274,675)
Net cash provided by (used in) financing activities			(266,110)	(558,779)
Effect of exchange rate changes on cash and cash equivalents			(463)	322
Net increase (decrease) in cash and equivalents			(4,049)	(13,096)
Cash and cash equivalents of continuing operations, beginning of period					35,131	35,360
Cash and cash equivalents of continuing and discontinued operations, beginning of period						35,509
Cash and cash equivalents, end of period	31,082	22,413	31,082	22,413	35,131
Non-Guarantors
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities			97,506	108,095
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment			(78,385)	(64,736)
Investment and intercompany note activity with subsidiaries			0
Acquisitions, net of cash acquired			(1,203,179)	(173,171)
Payments to Acquire Equity Method Investments				4,914
Proceeds from Divestiture of Businesses, Net of Cash Divested				(4,443)
Receipts of deferred purchase price on receivables under factoring arrangements			9,410
Other investing activities, net			4,921	(6,764)
Net cash used in investing activities			(1,267,233)	(240,500)
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt issuance costs			(15,584)
Proceeds from issuance of Euro Notes (2026/28)			1,232,100
Borrowings under revolving credit facilities			721,496	237,976
Repayments under revolving credit facilities			(377,138)	(75,988)
Repayments under term loans			0
Borrowings under receivables securitization facility				8,525
(Repayments) borrowings of other debt, net			(38,411)	27,460
Payments of other obligations				743
Other financing activities, net			3,182	(684)
Investment and intercompany note activity with parent			(10,333)	(10,031)
Dividends			(226,939)
Net cash provided by (used in) financing activities			1,288,373	176,590
Effect of exchange rate changes on cash and cash equivalents			(66,922)	22,216
Net increase (decrease) in cash and equivalents			51,724	66,401
Cash and cash equivalents of continuing operations, beginning of period					210,275	159,010
Cash and cash equivalents of continuing and discontinued operations, beginning of period						$ 165,977
Cash and cash equivalents, end of period	$ 261,999	$ 232,378	261,999	232,378	210,275
Repayments under receivables securitization facility				(9,925)
Continuing and Discontinued Operations
CASH FLOWS FROM FINANCING ACTIVITIES:
Add: Cash and cash equivalents of discontinued operations, beginning of period				7,116	7,116
Continuing and Discontinued Operations | Guarantors
CASH FLOWS FROM FINANCING ACTIVITIES:
Add: Cash and cash equivalents of discontinued operations, beginning of period				149	149
Continuing and Discontinued Operations | Non-Guarantors
CASH FLOWS FROM FINANCING ACTIVITIES:
Add: Cash and cash equivalents of discontinued operations, beginning of period				6,967	$ 6,967
Eliminations
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities			(53,191)	(48,280)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment			0
Investment and intercompany note activity with subsidiaries			(73,096)	(296,561)
Receipts of deferred purchase price on receivables under factoring arrangements			(224,753)	(226,395)
Net cash used in investing activities			(450,292)	(522,956)
CASH FLOWS FROM FINANCING ACTIVITIES:
Investment and intercompany note activity with parent			73,096	296,561
Dividends			430,387	274,675
Net cash provided by (used in) financing activities			$ 503,483	$ 571,236