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Segment and Geographic Information | 9 Months Ended
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Sep. 30, 2017
Segment Reporting [Abstract] |
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 (1) |  | Europe |  | Specialty (1) |  | Eliminations |  | Consolidated
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 (2) | 22,104 |  |  | 32,326 |  |  | 5,472 |  |  | — |  |  | 59,902 |
Three Months Ended September 30, 2016 |  |  |  |  |  |  |  |  |
Revenue: |  |  |  |  |  |  |  |  |
Third Party | $ | 1,118,421 |  |  | $ | 770,219 |  |  | $ | 318,703 |  |  | $ | — |  |  | $ | 2,207,343 |
Intersegment | 200 |  |  | — |  |  | 969 |  |  | (1,169 | ) |  | — |
Total segment revenue | $ | 1,118,621 |  |  | $ | 770,219 |  |  | $ | 319,672 |  |  | $ | (1,169 | ) |  | $ | 2,207,343 |
Segment EBITDA | $ | 139,738 |  |  | $ | 72,586 |  |  | $ | 34,115 |  |  | $ | — |  |  | $ | 246,439 |
Depreciation and amortization (2) | 21,499 |  |  | 27,792 |  |  | 5,745 |  |  | — |  |  | 55,036 |
| North America (1) |  | Europe |  | Specialty (1) |  | Eliminations |  | Consolidated
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 (2) | 64,305 |  |  | 85,809 |  |  | 16,394 |  |  | — |  |  | 166,508 |
Nine Months Ended September 30, 2016 |  |  |  |  |  |  |  |  |
Revenue: |  |  |  |  |  |  |  |  |
Third Party | $ | 3,336,240 |  |  | $ | 2,141,186 |  |  | $ | 956,199 |  |  | $ | — |  |  | $ | 6,433,625 |
Intersegment | 607 |  |  | — |  |  | 3,014 |  |  | (3,621 | ) |  | — |
Total segment revenue | $ | 3,336,847 |  |  | $ | 2,141,186 |  |  | $ | 959,213 |  |  | $ | (3,621 | ) |  | $ | 6,433,625 |
Segment EBITDA | $ | 451,504 |  |  | $ | 220,066 |  |  | $ | 111,083 |  |  | $ | — |  |  | $ | 782,653 |
Depreciation and amortization (2) | 59,174 |  |  | 66,380 |  |  | 16,616 |  |  | — |  |  | 142,170 |
(1) | In the first quarter of 2017, we realigned a portion of our North America operations under our Specialty segment. Prior year results have been recast to reflect the shift in reporting structure in order to present segment results on a comparable basis.
(2) | 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 acquisition related gains and losses and equity in earnings (loss) of unconsolidated subsidiaries. EBITDA, which is the basis for Segment EBITDA, is calculated as net income excluding discontinued operations, depreciation, amortization, interest (which includes loss on debt extinguishment) 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,
| 2017 |  | 2016 |  | 2017 |  | 2016
Net income | $ | 122,381 |  |  | $ | 122,688 |  |  | $ | 409,573 |  |  | $ | 377,644 |
Subtract: |  |  |  |  |  |  |
Income (loss) from discontinued operations, net of tax | — |  |  | 12,844 |  |  | (4,531 | ) |  | 17,819 |
Income from continuing operations | 122,381 |  |  | 109,844 |  |  | 414,104 |  |  | 359,825 |
Add: |  |  |  |  |  |  |
Depreciation and amortization | 56,877 |  |  | 52,979 |  |  | 159,178 |  |  | 137,168 |
Depreciation and amortization - cost of goods sold | 3,025 |  |  | 2,057 |  |  | 7,330 |  |  | 5,002 |
Interest expense, net | 25,222 |  |  | 24,761 |  |  | 73,806 |  |  | 64,002 |
Loss on debt extinguishment | — |  |  | — |  |  | — |  |  | 26,650 |
Provision for income taxes | 58,189 |  |  | 49,835 |  |  | 206,206 |  |  | 173,225 |
EBITDA | 265,694 |  |  | 239,476 |  |  | 860,624 |  |  | 765,872 |
Subtract: |  |  |  |  |  |  |
Equity in earnings (loss) of unconsolidated subsidiaries | 2,673 |  |  | 29 |  |  | 3,878 |  |  | (519 | )
Gains on foreign exchange contracts - acquisition related (1) | — |  |  | — |  |  | — |  |  | 18,342 |
Gains on bargain purchases (2) | 913 |  |  | — |  |  | 3,990 |  |  | — |
Add: |  |  |  |  |  |  |
Restructuring and acquisition related expenses (3) | 4,922 |  |  | 6,923 |  |  | 10,371 |  |  | 30,814 |
Inventory step-up adjustment - acquisition related (4) | — |  |  | 12 |  |  | — |  |  | 3,614 |
Change in fair value of contingent consideration liabilities | 5 |  |  | 57 |  |  | 37 |  |  | 176 |
Segment EBITDA | $ | 267,035 |  |  | $ | 246,439 |  |  | $ | 863,164 |  |  | $ | 782,653 |
(1) | Reflects gains on foreign currency forwards used to fix the euro purchase price of Rhiag. See Note 2, "Business Combinations," for further information.
(2) | Reflects the gains on bargain purchases related to our acquisitions of Andrew Page and a wholesale business in Europe. See Note 2, "Business Combinations," for further information.
(3) | See Note 5, "Restructuring and Acquisition Related Expenses," for further information.
(4) | Reflects the impact on Cost of Goods Sold of the step-up acquisition adjustment to record PGW inventory at its fair value.
The following table presents capital expenditures by reportable segment (in thousands):
| Three Months Ended |  | Nine Months Ended
| September 30, |  | September 30,
| 2017 |  | 2016 |  | 2017 |  | 2016
Capital Expenditures |  |  |  |  |  |  |
North America | $ | 31,021 |  |  | $ | 24,420 |  |  | $ | 69,934 |  |  | $ | 68,271 |
Europe | 12,119 |  |  | 16,554 |  |  | 55,253 |  |  | 57,105 |
Specialty | 852 |  |  | 582 |  |  | 6,752 |  |  | 11,235 |
Discontinued operations | — |  |  | 8,871 |  |  | 3,598 |  |  | 16,135 |
Total capital expenditures | $ | 43,992 |  |  | $ | 50,427 |  |  | $ | 135,537 |  |  | $ | 152,746 |
The following table presents assets by reportable segment (in thousands):
| September 30, |  | December 31,
| 2017 |  | 2016 (1)
Receivables, net |  |  |
North America | $ | 380,463 |  |  | $ | 351,681 |
Europe | 551,862 |  |  | 443,281 |
Specialty | 89,403 |  |  | 65,587 |
Total receivables, net | 1,021,728 |  |  | 860,549 |
Inventories |  |  |
North America | 1,021,386 |  |  | 915,244 |
Europe | 929,006 |  |  | 718,729 |
Specialty | 285,984 |  |  | 301,264 |
Total inventories | 2,236,376 |  |  | 1,935,237 |
Property and Equipment, net |  |  |
North America | 524,738 |  |  | 505,925 |
Europe | 286,364 |  |  | 247,910 |
Specialty | 56,870 |  |  | 57,741 |
Total property and equipment, net | 867,972 |  |  | 811,576 |
Equity Method Investments |  |  |
North America | 336 |  |  | 336 |
Europe | 198,910 |  |  | 183,131 |
Total equity method investments | 199,246 |  |  | 183,467 |
Other unallocated assets | 4,538,616 |  |  | 4,512,370 |
Total assets | $ | 8,863,938 |  |  | $ | 8,303,199 |
(1) | In the first quarter of 2017, we realigned a portion of our North America operations under our Specialty segment. Prior year amounts have been recast to reflect the shift in reporting structure.
We report net receivables, inventories, net property 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, prepaid and other current and noncurrent assets, goodwill, intangibles, assets of discontinued operations and income taxes. The majority of our operations are conducted in the U.S. Our European operations are located in the U.K., the Netherlands, Belgium, France, Italy, Czech Republic, Switzerland, Poland, Hungary, Romania, Ukraine, Bulgaria, Slovakia, Spain, Sweden, Norway and Germany. Our operations in other countries include recycled and aftermarket 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,
| 2017 |  | 2016 |  | 2017 |  | 2016
Revenue |  |  |  |  |  |  |
United States | $ | 1,395,495 |  |  | $ | 1,336,851 |  |  | $ | 4,268,600 |  |  | $ | 3,997,525 |
United Kingdom | 399,155 |  |  | 336,168 |  |  | 1,171,829 |  |  | 1,044,110 |
Other countries | 671,150 |  |  | 534,324 |  |  | 1,826,625 |  |  | 1,391,990 |
Total revenue | $ | 2,465,800 |  |  | $ | 2,207,343 |  |  | $ | 7,267,054 |  |  | $ | 6,433,625 |
The following table sets forth our tangible long-lived assets by geographic area (in thousands):
| September 30, |  | December 31,
| 2017 |  | 2016
Long-lived Assets |  |  |
United States | $ | 547,536 |  |  | $ | 531,425 |
United Kingdom | 178,583 |  |  | 159,689 |
Other countries | 141,853 |  |  | 120,462 |
Total long-lived assets | $ | 867,972 |  |  | $ | 811,576 |
The following table sets forth our revenue by product category (in thousands):
| Three Months Ended |  | Nine Months Ended
| September 30, |  | September 30,
| 2017 |  | 2016 |  | 2017 |  | 2016
Aftermarket, other new and refurbished products | $ | 1,875,369 |  |  | $ | 1,670,960 |  |  | $ | 5,496,004 |  |  | $ | 4,809,775 |
Recycled, remanufactured and related products and services | 458,388 |  |  | 424,876 |  |  | 1,376,577 |  |  | 1,290,488 |
Other | 132,043 |  |  | 111,507 |  |  | 394,473 |  |  | 333,362 |
Total revenue | $ | 2,465,800 |  |  | $ | 2,207,343 |  |  | $ | 7,267,054 |  |  | $ | 6,433,625 |
Our North America reportable segment generates revenue from all of our product categories, while our Europe and Specialty segments generate revenue primarily from the sale of aftermarket products. Revenue from other sources includes scrap sales, bulk sales to mechanical remanufacturers (including cores) and sales of aluminum ingots and sows from our furnace operations.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599 + Details
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