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Financial Statement Information (Policies) | 3 Months Ended
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Mar. 31, 2015
Accounting Policies [Abstract] |
Revenue Recognition | Revenue Recognition The majority of our revenue is derived from the sale of vehicle parts. Revenue is recognized when the products are shipped to, delivered to or picked up by customers and title has transferred, subject to an allowance for estimated returns, discounts and allowances that we estimate based upon historical information. We recorded a reserve for estimated returns, discounts and allowances of approximately $34.2 million and $31.3 million at March 31, 2015 and December 31, 2014, respectively. We present taxes assessed by governmental authorities collected from customers on a net basis. Therefore, the taxes are excluded from revenue on our Unaudited Condensed Consolidated Statements of Income and are shown as a current liability on our Unaudited Condensed Consolidated Balance Sheets until remitted. We recognize revenue from the sale of scrap metal, other metals, and cores when title has transferred, which typically occurs upon delivery to the customer.
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts We recorded a reserve for uncollectible accounts of approximately $18.9 million and $19.4 million at March 31, 2015 and December 31, 2014, respectively.
Inventory | Inventory Inventory consists of the following (in thousands):
| March 31, |  | December 31,
| 2015 |  | 2014
Aftermarket and refurbished products | $ | 968,307 |  |  | $ | 1,022,549 |
Salvage and remanufactured products | 389,749 |  |  | 411,298 |
| $ | 1,358,056 |  |  | $ | 1,433,847 |
Intangible Assets | 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 relationships, software and other technology related assets, and covenants not to compete. The changes in the carrying amount of goodwill by reportable segment during the three months ended March 31, 2015 are as follows (in thousands):
| North America |  | Europe |  | Specialty |  | Total
Balance as of January 1, 2015 | $ | 1,392,032 |  |  | $ | 616,819 |  |  | $ | 280,044 |  |  | $ | 2,288,895 |
Business acquisitions and adjustments to previously recorded goodwill | 540 |  |  | (383 | ) |  | (610 | ) |  | (453 | )
Exchange rate effects | (9,585 | ) |  | (43,820 | ) |  | 6 |  |  | (53,399 | )
Balance as of March 31, 2015 | $ | 1,382,987 |  |  | $ | 572,616 |  |  | $ | 279,440 |  |  | $ | 2,235,043 |
The components of other intangibles are as follows (in thousands):
| March 31, 2015 |  | December 31, 2014
| Gross Carrying Amount |  | Accumulated Amortization |  | Net |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net
Trade names and trademarks | $ | 168,761 |  |  | $ | (37,112 | ) |  | $ | 131,649 |  |  | $ | 173,340 |  |  | $ | (35,538 | ) |  | $ | 137,802 |
Customer relationships | 91,729 |  |  | (29,862 | ) |  | 61,867 |  |  | 92,972 |  |  | (26,751 | ) |  | 66,221 |
Software and other technology related assets | 43,617 |  |  | (11,811 | ) |  | 31,806 |  |  | 44,640 |  |  | (10,387 | ) |  | 34,253 |
Covenants not to compete | 10,507 |  |  | (3,977 | ) |  | 6,530 |  |  | 11,074 |  |  | (3,825 | ) |  | 7,249 |
| $ | 314,614 |  |  | $ | (82,762 | ) |  | $ | 231,852 |  |  | $ | 322,026 |  |  | $ | (76,501 | ) |  | $ | 245,525 |
Trade names and trademarks are amortized over a useful life ranging from 10 to 30 years on a straight-line basis. Customer relationships are amortized over the expected period to be benefited (5 to 20 years) on an accelerated basis. Software and other technology related assets are amortized on a straight-line basis over the expected period to be benefited (five to six years). Covenants not to compete are amortized over the lives of the respective agreements, which range from one to five years, on a straight-line basis. Amortization expense for intangibles was $8.3 million and $7.4 million during the three months ended March 31, 2015 and 2014, respectively. Estimated amortization expense for each of the five years in the period ending December 31, 2019 is $32.5 million, $29.1 million, $26.7 million, $22.0 million and $17.5 million, respectively.
Warranty Reserve | 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 that is supported by certain of the suppliers of those products. We record the estimated warranty costs at the time of sale using historical warranty claim information to project future warranty claims activity. The changes in the warranty reserve are as follows (in thousands):
Balance as of January 1, 2015 | $ | 14,881 |
Warranty expense | 7,307 |
Warranty claims | (6,697 | )
Balance as of March 31, 2015 | $ | 15,491 |
Investments in Unconsolidated Subsidiaries | Investments in Unconsolidated Subsidiaries As of March 31, 2015, the carrying value of our investments in unconsolidated subsidiaries was $13.2 million; of this amount, $12.4 million relates to our investment in ACM Parts Pty Ltd ("ACM Parts"). In August 2013, we entered into an agreement with Suncorp Group, a leading general insurance group in Australia and New Zealand, to develop ACM Parts, an alternative vehicle replacement parts business in those countries. We hold a 49% interest in the entity and are contributing our experience to help establish automotive parts recycling operations and to facilitate the procurement of aftermarket parts; Suncorp Group holds a 51% equity interest and is supplying salvage vehicles to the venture as well as assisting in establishing relationships with repair shops as customers. We are accounting for our interest in this subsidiary using the equity method of accounting, as our investment gives us the ability to exercise significant influence, but not control, over the investee. During the three months ended March 31, 2015, we increased our total investment in ACM Parts by $7.5 million, which is reflected in Other investing activities, net on the Unaudited Condensed Consolidated Statements of Cash Flows. Our total ownership interest in ACM Parts remains unchanged as a result of this additional investment. The total of our investment in ACM Parts and other unconsolidated subsidiaries is included within Other Assets on our Unaudited Condensed Consolidated Balance Sheets. Our equity in the net earnings of the investees for the three months ended March 31, 2015 was not material.
Depreciation Expense | Depreciation Expense Included in Cost of Goods Sold on the Unaudited Condensed Consolidated Statements of Income is depreciation expense associated with our refurbishing, remanufacturing, and furnace operations as well as our distribution centers.
Recent Accounting Pronouncements | Recent Accounting Pronouncements 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 which supersedes most current 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. Entities adopting the standard have the option of using either a full retrospective or modified retrospective approach in the application of this guidance. As currently issued, ASU 2014-09 will be effective for the Company during the first quarter of our fiscal year 2017; however, the FASB has proposed a one-year deferral of the effective date of the standard. Early adoption is not permitted. We are still evaluating the impact that ASU 2014-09 will have on our consolidated financial statements and related disclosures. In April 2015, the FASB issued Accounting Standards Update 2015-03, "Interest-Imputation of Interest " ("ASU 2015-03"). This update simplifies the presentation of debt issuance costs on the financial statements by requiring companies to reduce debt issuance costs from the carrying value of their corresponding liability on the balance sheet, rather than presenting debt issuance costs as deferred charges. ASU 2015-03 will be effective for the Company during the first quarter of our fiscal year 2016. Early adoption is permitted. Entities must retrospectively apply this guidance within the balance sheet for all periods presented in order to reflect the period-specific effects of this new guidance. We do not anticipate the adoption of this guidance will have a material impact on our financial position, results of operations, or cash flows.

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- Definition Disclosure of accounting policy for the equity method of accounting for investments in common stock or other interests including unconsolidated subsidiaries, corporate joint ventures, noncontrolling interests in real estate ventures, limited partnerships, and limited liability companies. The accounting policy may include information such as: (1) initially recording an investment in the stock of an investee at cost; (2) adjusting the carrying amount of the investment to recognize the investor's share of the earnings or losses of the investee after the date of acquisition; and (3) adjustments to reflect the investor's share of changes in the investee's capital (dividends). This disclosure may also include a detailed description of the policy for determining the amount of equity method losses recognized after an investment has been reduced to zero as a result of previous losses, reasons for not using the equity method when the investor company owns 20 percent or more of the voting stock of the investee's company (including identification of the significant investee), reasons for using the equity method when the ownership percentage is less than 20 percent, and discussion of recognition of equity method losses when an investor's total investment in an investee includes, in addition to an investment in common stock, other investments such as preferred stock and loans to the investee. An entity also may describe how such investments are assessed for impairment. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=51655414&loc=d3e18780-107790 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.12) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 50 -Paragraph 3 -Subparagraph (a)(2) -URI http://asc.fasb.org/extlink&oid=6382943&loc=d3e33918-111571 + Details
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