v2.4.0.8

Business Combinations | 3 Months Ended
--- | ---
Mar. 31, 2014
Business Combinations [Abstract] |
Business Combinations | Business Combinations On January 3, 2014, we completed our acquisition of Keystone Specialty, which is a leading distributor and marketer of specialty aftermarket equipment and accessories in North America serving the following six product segments: truck and off-road; speed and performance; recreational vehicle; towing; wheels, tires and performance handling; and miscellaneous accessories. Total acquisition date fair value of the consideration for our Keystone Specialty acquisition was $471.9 million, composed of $427.1 million of cash (net of cash acquired), $31.5 million of notes payable and $13.3 million of other purchase price obligations (non-interest bearing). The purchase price is subject to certain adjustments, including an adjustment related to the net working capital amount of Keystone Specialty at closing. We recorded $236.6 million of goodwill related to our acquisition of Keystone Specialty, which we do not expect to be deductible for income tax purposes. In the period between January 3, 2014 and March 31, 2014, Keystone Specialty generated approximately $177.0 million of revenue and $6.2 million of net income. In addition to our acquisition of Keystone Specialty, we made four acquisitions during the three months ended March 31, 2014, including two wholesale businesses in North America, a wholesale business in Europe and a self service retail operation. Our other acquisitions completed during the three months ended March 31, 2014 enabled us to expand into new product lines and enter new markets. Total acquisition date fair value of the consideration for these additional acquisitions was $66.4 million, composed of $58.6 million of cash (net of cash acquired), $2.7 million of notes payable, $0.9 million of other purchase price obligations (non-interest bearing) and $4.3 million for the estimated value of contingent payments to former owners (with maximum potential payments totaling $5.0 million). During the three months ended March 31, 2014, we recorded $24.7 million of goodwill related to these acquisitions and immaterial adjustments to preliminary purchase price allocations related to certain of our 2013 acquisitions. We expect $13.9 million of the $24.7 million of goodwill recorded to be deductible for income tax purposes. In the period between the acquisition dates and March 31, 2014, these acquisitions generated $20.3 million of revenue and $0.5 million of net income. In April 2014, we signed letters of intent to acquire five businesses in the Netherlands, all of which are customers of our European operations. The transactions are subject to, among other conditions, negotiation by the parties of definitive agreements and authorization under the Dutch merger control procedures. While we are targeting completion of the acquisitions in the second or third quarter of 2014, there are no assurances that all or any of these transactions will be completed. On May 1, 2013, we acquired the shares of Sator Beheer B.V. ("Sator"), a vehicle mechanical aftermarket parts distribution company based in the Netherlands, with operations in the Netherlands, Belgium and Northern France. With the acquisition of Sator, we expanded our geographic presence in the European vehicle mechanical aftermarket products market into continental Europe to complement our existing U.K. operations. Total acquisition date fair value of the consideration for the acquisition of Sator was €209.8 million ($272.8 million) of cash, net of cash acquired. We recorded $142.7 million of goodwill related to our acquisition of Sator, which we do not expect will be deductible for income tax purposes. In addition to our acquisition of Sator, we made 19 acquisitions during 2013, including 10 wholesale businesses in North America, 7 wholesale businesses in Europe and 2 self service retail operations. Our European acquisitions included five automotive paint distribution businesses in the U.K., which enabled us to expand our collision product offerings. Our other acquisitions completed during 2013 enabled us to expand into new product lines and enter new markets. Total acquisition date fair value of the consideration for these additional 2013 acquisitions was $146.1 million, composed of $134.6 million of cash (net of cash acquired), $7.5 million of notes payable, $0.2 million of other purchase price obligations (non-interest bearing) and $3.9 million for the estimated value of contingent payments to former owners (with maximum potential payments totaling $5.0 million). During the year ended December 31, 2013, we recorded $92.7 million of goodwill related to these acquisitions and immaterial adjustments to preliminary purchase price allocations related to certain of our 2012 acquisitions. We expect $18.3 million of the $92.7 million of goodwill recorded to be deductible for income tax purposes. Our acquisitions are accounted for under the purchase method of accounting and are included in our unaudited Condensed Consolidated financial statements from the dates of acquisition. The purchase prices were allocated to the net assets acquired based upon estimated fair market values at the dates of acquisition. The purchase price allocations for the acquisitions made during the three months ended March 31, 2014 and the last nine months of 2013 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 final estimation of 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. The preliminary purchase price allocations for the acquisitions completed during the three months ended March 31, 2014 and the year ended December 31, 2013 are as follows (in thousands):
| Three Months Ended |  | Year Ended
| March 31, 2014 |  | December 31, 2013
| Keystone Specialty |  | Other Acquisitions |  | Total |  | Sator |  | Other Acquisitions |  | Total
Receivables | $ | 49,976 |  |  | $ | 25,451 |  |  | $ | 75,427 |  |  | $ | 61,639 |  |  | $ | 38,685 |  |  | $ | 100,324 |
Receivable reserves | (4,403 | ) |  | (1,310 | ) |  | (5,713 | ) |  | (8,563 | ) |  | (3,246 | ) |  | (11,809 | )
Inventory | 151,743 |  |  | 9,392 |  |  | 161,135 |  |  | 71,784 |  |  | 26,455 |  |  | 98,239 |
Income taxes receivable | 13,972 |  |  | — |  |  | 13,972 |  |  | — |  |  | — |  |  | — |
Prepaid expenses and other current assets | 8,058 |  |  | 462 |  |  | 8,520 |  |  | 7,184 |  |  | 1,933 |  |  | 9,117 |
Property and equipment | 36,197 |  |  | 878 |  |  | 37,075 |  |  | 19,484 |  |  | 14,015 |  |  | 33,499 |
Goodwill | 236,645 |  |  | 24,671 |  |  | 261,316 |  |  | 142,721 |  |  | 92,726 |  |  | 235,447 |
Other intangibles | 70,830 |  |  | 12,070 |  |  | 82,900 |  |  | 45,293 |  |  | 12,353 |  |  | 57,646 |
Other assets | 7,805 |  |  | 199 |  |  | 8,004 |  |  | 2,049 |  |  | 1,251 |  |  | 3,300 |
Deferred income taxes | (17,418 | ) |  | 385 |  |  | (17,033 | ) |  | (14,100 | ) |  | (564 | ) |  | (14,664 | )
Current liabilities assumed | (67,342 | ) |  | (3,913 | ) |  | (71,255 | ) |  | (49,593 | ) |  | (36,799 | ) |  | (86,392 | )
Debt assumed | — |  |  | — |  |  | — |  |  | — |  |  | (664 | ) |  | (664 | )
Other noncurrent liabilities assumed | (14,147 | ) |  | (1,846 | ) |  | (15,993 | ) |  | (5,074 | ) |  | — |  |  | (5,074 | )
Contingent consideration liabilities | — |  |  | (4,317 | ) |  | (4,317 | ) |  | — |  |  | (3,854 | ) |  | (3,854 | )
Other purchase price obligations | (13,278 | ) |  | (855 | ) |  | (14,133 | ) |  | — |  |  | (214 | ) |  | (214 | )
Notes issued | (31,500 | ) |  | (2,675 | ) |  | (34,175 | ) |  | — |  |  | (7,482 | ) |  | (7,482 | )
Cash used in acquisitions, net of cash acquired | $ | 427,138 |  |  | $ | 58,592 |  |  | $ | 485,730 |  |  | $ | 272,824 |  |  | $ | 134,595 |  |  | $ | 407,419 |
The primary reason for our acquisitions made during the three months ended March 31, 2014 and the year ended December 31, 2013 was to create economic value for our stockholders by enhancing our position as a leading source for alternative collision and mechanical repair products and expanding into other product lines and businesses that may benefit from our operating strengths. Our acquisition of Keystone Specialty allows us to enter into new product lines and increase the size of our addressable market. In addition, we believe that the acquisition creates potential cross-selling opportunities and logistics and administrative cost synergies, which contributed to the goodwill recorded on the Keystone Specialty acquisition. Our other acquisitions enabled us to further expand our market presence, including continental Europe through the Sator acquisition, as well as to widen our product offerings such as paint and related equipment in the U.K. We believe that our Sator acquisition will allow for synergies within our European operations, most notably in procurement, warehousing and product management. These projected synergies contributed to the goodwill recorded on the Sator acquisition. When we identify potential acquisitions, we attempt to target companies with a leading market share, an experienced management team and workforce that provide 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 can 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 three months ended March 31, 2014 as though they had been acquired as of January 1, 2013 and the businesses acquired during the year ended December 31, 2013 as though they had been acquired as of January 1, 2012. The pro forma adjustments are based upon unaudited financial information of the acquired entities (in thousands, except per share data):
| Three Months Ended
| March 31,
| 2014 |  | 2013
Revenue, as reported | $ | 1,625,777 |  |  | $ | 1,195,997 |
Revenue of purchased businesses for the period prior to acquisition: |  |  |
Keystone Specialty | 3,433 |  |  | 167,444 |
Sator | — |  |  | 95,003 |
Other acquisitions | 411 |  |  | 75,430 |
Pro forma revenue | $ | 1,629,621 |  |  | $ | 1,533,874 |
Net income, as reported | $ | 104,653 |  |  | $ | 84,592 |
Net income of purchased businesses for the period prior to acquisition, including pro forma purchase accounting adjustments: |  |  |
Keystone Specialty | 241 |  |  | 6,695 |
Sator | — |  |  | 2,550 |
Other acquisitions | 64 |  |  | 4,035 |
Pro forma net income | $ | 104,958 |  |  | $ | 97,872 |
Earnings per share-basic, as reported | $ | 0.35 |  |  | $ | 0.28 |
Effect of purchased businesses for the period prior to acquisition: |  |  |
Keystone Specialty | 0.00 |  |  | 0.02 |
Sator | — |  |  | 0.01 |
Other acquisitions | 0.00 |  |  | 0.01 |
Pro forma earnings per share-basic (a) | $ | 0.35 |  |  | $ | 0.33 |
Earnings per share-diluted, as reported | $ | 0.34 |  |  | $ | 0.28 |
Effect of purchased businesses for the period prior to acquisition: |  |  |
Keystone Specialty | 0.00 |  |  | 0.02 |
Sator | — |  |  | 0.01 |
Other acquisitions | 0.00 |  |  | 0.01 |
Pro forma earnings per share-diluted (a) | $ | 0.34 |  |  | $ | 0.32 |
(a) 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 net realizable value, adjustments to depreciation on acquired property 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 Keystone Specialty acquisition reflects the elimination of acquisition related expenses totaling $0.2 million for the three months ended March 31, 2014, which do not have a continuing impact on our operating results. Additionally, the pro forma impact of our other acquisitions reflects the elimination of acquisition related expenses totaling $0.3 million for the three months ended March 31, 2013; the pro forma impact of acquisition related expenses for our other acquisitions was not material for the three months ended March 31, 2014. Refer to Note 9, "Restructuring and Acquisition Related Expenses," for further information on our acquisition related expenses. These pro forma results are not necessarily indicative either of what would have occurred if the acquisitions had been in effect for the periods presented or of future results.

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1383-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6996-128479 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4922-128472 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7000-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1392-128463 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1486-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6927-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1497-128463 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1490-128463 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7008-128479 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1500-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1524-128463 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration