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Business Combinations | 3 Months Ended
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Mar. 31, 2015
Business Combinations [Abstract] |
Business Combinations | Business Combinations During the three months ended March 31, 2015, we acquired one wholesale business in North America and one wholesale business in Europe. These acquisitions enabled us to expand our geographic presence. Total acquisition date fair value of the consideration for acquisitions completed during the first quarter of 2015 was $1.5 million, composed of $0.9 million of cash (net of cash acquired), $0.1 million of notes payable, $0.1 million of other purchase price obligations and $0.4 million of pre-existing balances between us and the acquired entities considered to be effectively settled as a result of the acquisitions. Total recorded goodwill related to these acquisitions and adjustments to preliminary purchase price allocations related to certain of our 2014 acquisitions was immaterial. As the acquisitions completed during the three months ended March 31, 2015 are immaterial to our business, we have omitted the detailed disclosures for these acquisitions prescribed by the accounting guidance on business combinations. On January 3, 2014, we completed our acquisition of Keystone Automotive Holdings, Inc. ("Keystone Specialty"), which is a leading distributor and marketer of specialty vehicle aftermarket equipment and accessories in North America. 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 $13.4 million of other purchase price obligations (non-interest bearing). We recorded $237.7 million of goodwill related to our acquisition of Keystone Specialty, which we do not expect to be deductible for income tax purposes. In addition to our acquisition of Keystone Specialty, we made 22 acquisitions during 2014, including nine wholesale businesses in North America, nine wholesale businesses in Europe, two self service retail operations, and two specialty vehicle aftermarket businesses. Our European acquisitions included seven aftermarket parts distribution businesses in the Netherlands, five of which were customers of and distributors for our Netherlands subsidiary, Sator Beheer B.V. ("Sator"). Our European acquisitions were completed with the objective of aligning our Netherlands and U.K. distribution models; our other acquisitions completed during the year ended December 31, 2014 enabled us to expand existing markets, introduce new product lines, and enter new markets. Total acquisition date fair value of the consideration for these additional acquisitions was $359.1 million, composed of $334.3 million of cash (net of cash acquired), $13.5 million of notes payable, $0.3 million of other purchase price obligations (non-interest bearing), $5.9 million for the estimated value of contingent payments to former owners (with maximum potential payments totaling $8.3 million), and $5.1 million of pre-existing balances between us and the acquired entities considered to be effectively settled as a result of the acquisitions. During the year ended December 31, 2014, we recorded $178.0 million of goodwill related to these acquisitions and immaterial adjustments to preliminary purchase price allocations related to certain of our 2013 acquisitions. We expect $44.2 million of the $178.0 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, 2015 and the last nine months of 2014 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 year ended December 31, 2014 are as follows (in thousands):
|  | Year Ended
|  | December 31, 2014
|  | Keystone Specialty |  | Other Acquisitions |  | Total
Receivables |  | $ | 48,473 |  |  | $ | 75,330 |  |  | $ | 123,803 |
Receivable reserves |  | (7,748 | ) |  | (7,383 | ) |  | (15,131 | )
Inventory |  | 150,696 |  |  | 123,815 |  |  | 274,511 |
Income taxes receivable |  | 14,096 |  |  | — |  |  | 14,096 |
Prepaid expenses and other current assets |  | 8,085 |  |  | 4,050 |  |  | 12,135 |
Property and equipment |  | 38,080 |  |  | 27,026 |  |  | 65,106 |
Goodwill |  | 237,729 |  |  | 177,974 |  |  | 415,703 |
Other intangibles |  | 78,110 |  |  | 51,135 |  |  | 129,245 |
Other assets |  | 6,159 |  |  | 2,793 |  |  | 8,952 |
Deferred income taxes |  | (26,591 | ) |  | 313 |  |  | (26,278 | )
Current liabilities assumed |  | (63,513 | ) |  | (52,961 | ) |  | (116,474 | )
Debt assumed |  | — |  |  | (32,441 | ) |  | (32,441 | )
Other noncurrent liabilities assumed |  | (11,675 | ) |  | (10,573 | ) |  | (22,248 | )
Contingent consideration liabilities |  | — |  |  | (5,854 | ) |  | (5,854 | )
Other purchase price obligations |  | (13,351 | ) |  | (333 | ) |  | (13,684 | )
Notes issued |  | (31,500 | ) |  | (13,535 | ) |  | (45,035 | )
Settlement of pre-existing balances |  | — |  |  | (5,052 | ) |  | (5,052 | )
Cash used in acquisitions, net of cash acquired |  | $ | 427,050 |  |  | $ | 334,304 |  |  | $ | 761,354 |
The primary reason for our acquisitions made during the three months ended March 31, 2015 and the year ended December 31, 2014 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 logistics and administrative cost synergies as well as cross-selling opportunities, which contributed to the goodwill recorded on the Keystone Specialty acquisition. Our other acquisitions completed during 2014 enabled us to expand into new product lines and enter new markets. 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 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 three months ended March 31, 2015 as though the businesses had been acquired as of January 1, 2014 and the businesses acquired during the year ended December 31, 2014 as though they had been acquired as of January 1, 2013. 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,
| 2015 |  | 2014
Revenue, as reported | $ | 1,773,912 |  |  | $ | 1,625,777 |
Revenue of purchased businesses for the period prior to acquisition: |  |  |
Keystone Specialty | — |  |  | 3,443 |
Other acquisitions | 90 |  |  | 123,420 |
Pro forma revenue | $ | 1,774,002 |  |  | $ | 1,752,640 |
Net income, as reported | $ | 107,095 |  |  | $ | 104,653 |
Net income of purchased businesses for the period prior to acquisition, and pro forma purchase accounting adjustments: |  |  |
Keystone Specialty | — |  |  | 248 |
Other acquisitions | (30 | ) |  | 1,769 |
Pro forma net income | $ | 107,065 |  |  | $ | 106,670 |
Earnings per share, basic—as reported | $ | 0.35 |  |  | $ | 0.35 |
Effect of purchased businesses for the period prior to acquisition: |  |  |
Keystone Specialty | — |  |  | 0.00 |
Other acquisitions | 0.00 |  |  | 0.01 |
Pro forma earnings per share, basic (1) | $ | 0.35 |  |  | $ | 0.35 |
Earnings per share, diluted—as reported | $ | 0.35 |  |  | $ | 0.34 |
Effect of purchased businesses for the period prior to acquisition: |  |  |
Keystone Specialty | — |  |  | 0.00 |
Other acquisitions | 0.00 |  |  | 0.01 |
Pro forma earnings per share, diluted (1) | $ | 0.35 |  |  | $ | 0.35 |
(1) 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. Additionally, 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. Refer to Note 9, "Restructuring and Acquisition Related Expenses," for further information regarding our acquisition related expenses. 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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- 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=56956515&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=35744584&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=56956791&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=56956791&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=56956791&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=35744584&loc=d3e7000-128479 Reference 7: 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=35744584&loc=d3e6927-128479 Reference 8: 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=56956515&loc=d3e1392-128463 Reference 9: 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=56956515&loc=d3e1486-128463 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=56956515&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=56956515&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=35744584&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=56956791&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=56956515&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=56956515&loc=d3e1524-128463 + Details
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