The Long Case For LKQ Corporation

8/10/2019 The Long Case For LKQ Corporation

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Stock: LKQ CorporationRecommendation: BuyTeam 10

Ziv IsraelOwen GilmoreJerry Jiang

November 5-7, 2014


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RECOMMENDATION: B UY

Current Price: 28.94Target Price: 35.2

Est. Timing: 1-2 YearsUpside: 22%

Summary Valuation

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Perpetuity Growth Method EBITDA Multiple Method

Weighted average cost of capital: 8.0% Weighted average cost of capital: 8.0% Net present value of free cash flow $691 A Net present value of free cash flow $691

Terminal growth rate 4.0% + Terminal multiple 10.5xTerminal value $8,405 Terminal value $8,405 Present value of the terminal value $7,446 B Present value of the terminal value 7,446

Implied EBITDA multiple 10.5x = Implied perpetuity growth 4.0%

Enterprise value $8,137 C Enterprise value $8,137 Plus: Net cash* $2,458 Plus: Net cash $2,458 Equity value $10,595 Equity value $10,595

Diluted shares: 300.8 Diluted shares: 300.8

Equity Value Per Share $35.22 Equity Value Per Share $35.22

Current share price: $28.94 Price Target $35.20Implied upside 22%


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Com pany Descr ip t ion LKQ provides replacement parts, components and systems

needed to repair cars and trucks. Buyers of vehicle replacementproducts have the option to purchase from primarily five sources:new products produced by original equipment manufacturers("OEMs"); new products produced by companies other than theOEMs, which are sometimes referred to as aftermarket products;recycled products obtained from salvage vehicles; used productsthat have been refurbished; and used products that have beenremanufactured.

Main customer body shops (collision andmechanical repair shops), new and used cardealerships, as well as to retail consumers (selfservice)

Main Supplier aftermarket come from automotiveparts manufacturers and distributers. Recycledcome from purchasing salvage vehicles, typicallyseverely damaged in collisions, dismantling andinventorying the parts. Also buy parts in auctions orthrough trade ins.


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Value Prop os i t ion Why buy alternative parts?They are simply cheaper.

LKQ offers an expansive distribution network, responsive service and quickdelivery. The breadth of their alternative parts offerings allows them to serve as a"one-stop" solution for our customers looking for the most cost effective way toprovide quality repairs.

Historically, the distributionchannels for aftermarket andrefurbished products have beendistinct and separate from thosefor recycled andremanufactured productsdespite serving the samecustomer segment


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Value Prop os i t ion Strategic L oc ation s


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Ad dressable Market


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St rong Ac qu i s it ion His to ry

Throughout its history, LKQ has purchasedand successfully integrated more than 170companies.

Management focuses on profitable businesses

with strong management trading at 4-5xEBITDA.

In 2013 alone LKQ acquired Sator, plus anadditional 19 acquisitions, including 10wholesale businesses in North America, 7wholesale businesses in our European

segment and 2 self service operations.


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MetroEastSalvage

Bodymaster Auto

Euro Car Parts

Sator KeystoneSpecialities

Keystone AutomaticIndustries

LKQTranswheel

ATK Vege


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Im po rtant Financial Ratios Ratios

For the Fiscal Period Ending 12 monthsDec-31-2009

12 monthsDec-31-2010




LTM12 months

Sep-30-2014

Profitability Return on Assets % 7.5% 8.6% 8.4% 7.6% 8.2% 8.2%Return on Capital % 8.4% 9.8% 10.0% 9.3% 10.0% 10.0%

Return on Equity % 11.6% 12.9% 13.8% 14.5% 14.4% 15.4%Return on Common Equity % 11.6% 12.9% 13.8% 14.5% 14.4% 15.4%

Margin Analysis

Gross Margin % 45.3% 44.3% 42.6% 41.4% 41.0% 39.7%

SG&A Margin % 32.2% 30.6% 29.8% 29.6% 28.7% 27.8%EBITDA Margin % 13.3% 13.8% 13.0% 12.0% 12.3% 12.0%EBITA Margin % 11.6% 12.3% 11.5% 10.5% 10.9% 10.7%EBIT Margin % 11.4% 12.1% 11.3% 10.3% 10.7% 10.2%Net Income Margin % 6.2% 6.8% 6.4% 6.3% 6.2% 5.9%

Short Term Liquidity Current Ratio 4.2x 3.7x 2.9x 2.8x 2.7x 3.0x Quick Ratio 1.6x 1.3x 0.8x 0.8x 0.9x 1.1x Avg. Days Sales Out. 26.8 25.4 26.4 26.3 27.8 30.0Avg. Days Inventory Out. 116.7 116.5 119.5 124.0 120.8 112.1Avg. Days Payable Out. 18.1 15.7 24.7 30.5 32.8 30.2Avg. Cash Conversion Cycle 125.3 126.1 121.2 119.8 115.8 112.0


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TERRIFI

C

OPPORTU

NIT

Y

1) International Expansion

2) Strong Industry Tailwinds

3) Strong Moat From AdvancedTechnology

4) Attractive Entry Point

Inv es tm en t Thesis


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Thesis #1 Intern at ion al Expan sio n Entry into Europe was extremely profitable for LKQ The UK market reached $70mil Revenue in under two

years with LKQs efforts driving APU growth by 28% ECP achieved organic revenue growth of 10.4% in the

last 12 months Unipart Automotive, ECPs

largest competitor in Europewent into bankruptcy in 2014.ECP bought 27 of its formerbranches. Target of 190branches total by year-end.


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Thesis #1 Intern at ion al Expan sio n Currently, 3 Locations in France, compared to 60 in

Netherlands (going up to 75-80 by 2015) In August 2013 went into agreement with Suncorp

Group, a leading general insurance group in Australiaand New Zealand.

Parts are 38% of US collision market, 9% in Europe.The market is prime to adopt more alternative parts inEurope, as the EU recently enacted a law prohibitingautomakers from voiding warranties if aftermarketparts are used. LKQ is already prepared for this withagreements with insurance companies.


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Thesis #2 Stron g Ind us t ry Tai lwind s Sales of new vehicles have increased since 2010 and are projected

to continue to increase over the next five years, which shouldresult in a greater volume of salvage vehicles at auction. Highersupply means that LKQ can purchase inventory for cheaper.

More miles are beingdriven each year - means

more accidents, and morebusiness for LKQ


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Thesis #2 Stron g Ind us t ry Tai lwind s In 2000, approximately 9% of accident claims resulted

in a total loss; by 2013, this percentage increased toalmost 14%.

Industry reports indicate that over half of claims paidfor by the top insurance companies in 2012 were paidthrough a DRP, compared to 42% in 2009.

Recent market share gains by aggressive alternativeparts users Progressive and Geico.


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In d us try A n alys is (FIVE FORCES) Threat of new Entrants: Low

Advanced IT systems are extremelyhard to copy

Supply Chain Management is critical Regulation is high LKQ buys all of their competitors

Threat of Substitute Products:Medium

More advanced AccidentPrevention Systems, Selfdriving cars

Bargaining Power ofBuyers: Low

No single customeraccounted for 2% or moreof revenue in 2013.

Rivalry Among Existing Firms:Low

LKQ Controls the industry The rest of the industry is

extremely fragmented

Bargaining Power ofSuppliers: Medium

In 2013, approximately46% of LKQsaftermarket purchaseswere made from theirtop five vendors, withtheir largest vendor

providing approximately12% of our inventory.


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Thesis #3 Strong Moat From AdvancedTechnology LKQ has long invested in proprietary information

technology systems which give it a strong andsustainable moat

Inventory management systems (LKQX) assists sales-people with updated availability and pricing. Bidders inauctions equipped with a proprietary software thatcompares the vehicles at the salvage auctions to theircurrent inventory, historical demand and recent averageselling prices.

Utilizes proprietary information systems in identifyinghigh demand for a product and immediately makepurchase recommendations with inventory is runninglow.

Importing takes 40 days, inventory management is key. Automated systems estimate demand for their products by researching sales trends of cars and estimating

the parts needed as well as track new car designs. DRP (Direct Repair Program) agreement between the bodyshops and the insurance companies.

Insurance companies demand quality, timeliness and cost. LKQ offer our repair shop customers access to our proprietary system, Keyless, which provides a link

between their estimating systems and our inventory to identify the availability of alternative products for usein their repair. This data also helps insurance companies monitor the body shops' compliance with its DRPproduct.


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Thesis #4 Attrac t ive Ent ry Poin t The market is (as always) focused on the short term Stock was hammered by a negative earnings surprise

earlier this year (Down 20% on a 7.14% negativesurprise)

Analysts focus on the recent decrease gross margin(from 41% to 39.7%). Do not acknowledge that this isdue to purchase of new lower net margin, higher grossmargin businesses (Specialty Acquisitions)

New entry into Europe through acquisitions producesintegration costs which lower earnings in the shortterm but will increase them in the long run


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Thesis #4 Attrac t ive Ent ry Poin t


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Valuat ion Revenue Breakd ow n Data 2013 2014 2015 2016 2017 2018USNumber of Vehicles3-10 years 97 95 94 94 98 1053-7 years 48 49 54 59 63 66New 16 17 17 17 18 18Total (Mil) 161 161 165 170 179 189 From Company PresentationLKQ Market Share 37% 38% 39% 40% 41% 42%Number of Vehicles (LKQ Market Share) 59.57 61.18 62.7 64.6 68.02 71.82 From Company Presentation

Revenue (Bn) 3,802.9 4,118.1 From IBIS WorldMiles Driven (Bn) 3020 3080 3130 3180 3200 3240Miles Driven % of LKQ Market Share 1117.4 1170.4 1220.7 1272 1312 1360.8Revenue per Miles Driven 3.40 3.52 Miles Driven per Car * Market Share 1.259248013 1.337049935

LKQ US Revenue 3,802.93 4,118.11 4,295.10 4,475.60 4,616.34 4,788.05

Miles per car 18.7578 19.1304 18.9697 18.7059 17.8771 17.1429

EuropeNumber of Vehicles 261 269 277 285 294 303Miles Driven 4896 5046 5196 5346 5515 5684TAM Revenue 16,662.91 17,173.42 17,683.93 18,194.43 18,769.60 19,344.77LKQ Market Share 7% 9% 13% 16% 20% 25% Requires AcquisitionsLKQ European Revenue 1,166.40 1,545.61 2,298.91 2,911.11 3,753.92 4,836.19

Speciality 796.4 800 800 800 800

Total Revenue 4,969.33 6,460.15 7,394.01 8,186.71 9,170.26 10,424.24


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Disco un ted Cash Flow Historical Projected

All Numbers in $ Millions 12/2009 12/2010 12/2011 12/2012 12/2013 12/2014 12/2015 12/2016 12/2017 12/2018

Revenues 2,048 2,470 3,270 4,123 5,063 6,460 7,394 8,187 9,170 10,424Rev % Growth 20.6% 32.4% 26.1% 22.8% 27.6% 14.5% 10.7% 12.0% 13.7%EBIT Margin 11.60% 11.72% 10.84% 10.69% 10.41% 10.5% 11.0% 11.5% 11.5% 11.5%EBIT 238 290 354 441 527 678 822 997 1,209 1,465Taxes (Using historical rate of 34%) 78 103 126 148 164 229 277 336 408 494Tax Adjusted EBIT 159 187 229 293 363 450 545 661 801 971

Depr. & Amort. (Same rate as Rev) 38 41 55 70 86 110 126 140 157 178Change in Op. Work. Cap. 51 133 165 175 105 240 297 368 455 563Capital Expenditures (Historical rate o 56 61 86 88 90 97 105 113 121 131Free Cash Flow 91 33 32 100 255 222 269 320 381 455

Growth AnalysisRevenues Growth 5.7% 20.6% 32.4% 26.1% 22.8% 27.6% 14.5% 10.7% 12.0% 13.7%EBIT Growth 17.9% 21.9% 22.4% 24.3% 19.6% 28.7% 21.2% 21.2% 21.2% 21.2%Tax Adjusted EBIT Growth 17.0% 22.7% 27.8% 24.0% 23.9% 21.2% 21.2% 21.2% 21.2%Working Capital (Operating) Growth 30.6% 28.9% 23.9% 11.5% 23.7% 23.7% 23.7% 23.7% 23.7%

Capital Expenditures Growth -16.5% 10.0% 40.7% 2.1% 2.2% 7.7% 7.7% 7.7% 7.7% 7.7%Free Cash Flow Growth -63.3% -2.5% 206.7% 155.7% -12.6% 21.1% 18.8% 19.1% 19.5%

Margin AnalysisEBIT % of Revenues 11.6% 11.7% 10.8% 10.7% 10.4% 10.5% 11.1% 12.2% 13.2% 14.1%Free Cash Flow % of Revenues 4.4% 1.3% 1.0% 2.4% 5.0% 3.4% 3.6% 3.9% 4.2% 4.4%Tax Rate 32.9% 35.6% 35.4% 33.6% 31.2% 33.7% 33.7% 33.7% 33.7% 33.7%


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Disco un ted Cash Flow Sens i t iv i ty A nalys is

Disc. Rate

8.50x 9.50x 10.50x 11.50x 12.50x

5.5% 32.4 36.2 39.9 43.6 47.37.0% 30.1 33.5 37.0 40.5 44.08.0% 28.6 31.9 35.2 38.5 41.9

9.0% 27.2 30.4 33.5 36.7 39.910.5% 25.2 28.2 31.2 34.1 37.1

Equity Value Pe r Share

Disc. Rate8.50x 9.50x 10.50x 11.50x 12.50x

5.5% 12% 25% 38% 51% 64%7.0% 4% 16% 28% 40% 52%8.0% -1% 10% 22% 33% 45%

9.0% -6% 5% 16% 27% 38%10.5% -13% -3% 8% 18% 28%

Upside

Upside/Downside Ratio isapproximately 6:1(Asymmetric Return)


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Relative Value (Car Parts Wh o lesale)


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1) Future acquisitions will grab the markets attention LKQ currently produces $255mil in Free Cash Flow

2) Rebound in EBIT margin and earnings after European

integration is complete3) Entry into France and Germany, two huge markets

will increase revenues substantially

4) Rebound in scrap metal prices will increase revenuefrom scrap sales

Inv estm ent Catalysts


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Inv es tment Sum m ary

LKQs international expansion is just starting, and its goingstrong

Strong industry tailwinds signals a bright future for LKQs corebusiness

Strong moat from advanced information technology systemsprevents new entrants from seizing market share

Attractive Entry Point provides the best opportunity for gains

Simply an Excellent Opportunity!


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Risk: Technology Risk More advanced Accident Prevention Systems(reduces collisions by up to 27% by NCAP estimates), Self driving cars

Mitigant: Will take considerable time to be implemented, negated by morecars bought each year, more used cars used

Risk: Competition from Internet Based Vehicle Product ProvidersMitigant: Brand assurance is important, sites have to build trust

Risk: Metal Prices continue to deteriorate, Oil prices will bounce backMitigant: Hedging using futures mitigates some of the risk of oil, scrap sale isa small part of the business

Risk: Increased Currency risk from international expansionMitigant: Keeping foreign currency and reinvesting overseas

Inv estm ent Risks / Mit igants


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APPENDIX

LKQ Company


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MA NAGEMENT TEAM Name/Position Background

Robert L. WagmanPresident & Chief Executive

Officer

John S. QuinnExecutive Vice President and

Chief Financial Officer

Victor M. CasiniSenior Vice President, General

Counsel

Robert L. Wagman became our President and Chief Executive Officeron January 1, 2012. He was elected to our Board of Directors on

November 7, 2011. Mr. Wagman was LKQs President and Co-ChiefExecutive Officer from January 1, 2011 to January 1, 2012

John S. Quinn has been our Executive Vice President and ChiefFinancial Officer since November 2009. Prior to joining our Company,he was the Senior Vice President, Chief Financial Officer and Treasurerof Casella Waste Systems, Inc., a company in the solid wastemanagement services industry from January 2009.

Victor M. Casini has been our Vice President, General Counsel andCorporate Secretary from our inception in February 1998. In March2008, he was elected Senior Vice President. Mr. Casini was a memberof our Board of Directors from May 2010 until May 2012.


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Ownersh ip Sum m ary


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Quant i fy ing the Dow ns ide Data 2013 2014 2015 2016 2017 2018USNumber of Vehicles3-10 years 97 95 94 94 98 1053-7 years 48 49 54 59 63 66New 16 17 17 17 18 18Total (Mil) 161 161 165 170 179 189LKQ Market Share 37% 38% 39% 40% 41% 42%Number of Vehicles (LKQ Market Share) 59.57 61.18 62.7 64.6 68.02 71.82

Revenue (Bn) 3,802.9 4,118.1 Miles Driven (Bn) 3020 3080 3130 3180 3200 3240Miles Driven % of LKQ Market Share 1117.4 1170.4 1220.7 1272 1312 1360.8Revenue per Miles Driven 3.40 3.52 Miles Driven per Car * Market Share 1.259248013 1.337049935

LKQ US Revenue 3,802.93 4,118.11 4,295.10 4,475.60 4,616.34 4,788.05

Miles per car 18.7578 19.1304 18.9697 18.7059 17.8771 17.1429

Europe

Number of Vehicles 261 269 277 285 294 303Miles Driven 4896 5046 5196 5346 5515 5684TAM Revenue 16,662.91 17,173.42 17,683.93 18,194.43 18,769.60 19,344.77LKQ Market Share 7% 9% 12% 15% 17% 20%LKQ European Revenue 1,166.40 1,545.61 2,122.07 2,729.16 3,190.83 3,868.95

Speciality 796.4 800 800 800 800

Total Revenue 4,969.33 6,460.15 7,217.17 8,004.76 8,607.17 9,457.00


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Quant i fy ing the Dow ns ide

Disc. Rate

8.50x 9.50x 10.50x 11.50x 12.50x

5.5% 25.2 28.2 31.2 34.3 37.37.0% 23.4 26.2 29.0 31.8 34.6

8.0% 22.2 24.9 27.5 30.2 32.99.0% 21.1 23.6 26.2 28.7 31.310.5% 19.5 21.9 24.3 26.7 29.1

Equity Value Per Share

Disc. Rate8.50x 9.50x 10.50x 11.50x 12.50x

5.5% -13% -2% 8% 18% 29%7.0% -19% -10% 0% 10% 19%8.0% -23% -14% -5% 4% 14%9.0% -27% -18% -10% -1% 8%10.5% -33% -24% -16% -8% 0%

Downside


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Region al Dis t r ibu t ion Im pro ves Ful f il lment


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Capita l izat ion and L iqu idi ty


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HISTORICA L MUL TIPL ES


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Earnin gs Es t imates and Surpr ises


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Income Statement

For the Fiscal Period Ending 12 monthsDec-31-2009





LTM12 months

Sep-30-2014Cu r r en cy USD USD USD USD USD USD Revenue 2,047.9 2,469.9 3,269.9 4,122.9 5,062.5 6,372.6Other Revenue - - - - - - Total Revenue 2,047.9 2,469.9 3,269.9 4,122.9 5,062.5 6,372.6

Cost Of Goods Sold 1,120.1 1,376.4 1,877.9 2,416.7 2,987.1 3,839.6Gross Profit 927.8 1,093.5 1,392.0 1,706.2 2,075.4 2,533.0

Selling General & Admin Exp. 659.7 756.9 973.0 1,219.3 1,454.1 1,769.7R & D Exp. - - - - - -Depreciation & Amort. 34.1 38.0 49.9 64.1 81.0 110.3Other Operating Expense/(Income) - - - - - -

Other Operating Exp., Total 693.8 794.9 1,022.9 1,283.4 1,535.0 1,880.0

Operating Income 234.0 298.5 369.1 422.8 540.4 653.0

Interest Expense (32.3) (29.8) (24.3) (31.4) (51.2) (63.0)Interest and Invest. Income 1.4 1.4 1.9 0.2 0.4 0.4

Net Interest Exp. (30.9) (28.3) (22.4) (31.2) (50.8) (62.7)

Income Tax Expense 78.2 103.0 125.5 147.9 164.2 196.6

Earnings from Cont. Ops. 127.1 167.1 210.3 261.2 311.6 378.9

Earnings of Discontinued Ops. 0.4 2.0 - - - -Extraord. Item & Account. Change - - - - - - Net Income to Company 127.5 169.1 210.3 261.2 311.6 378.9

Minority Int. in Earnings - - - - - - Net Income 127.5 169.1 210.3 261.2 311.6 378.9


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Balance Sheet

Balance Sheet as of:Dec-31-2009 Dec-31-2010 Dec-31-2011 Dec-31-2012 Dec-31-2013 Sep-30-2014

Cu r r en cy USD USD USD USD USD USD

ASSETSCash And Equivalents 108.9 95.7 48.2 59.8 150.5 244.6

Total Cash & ST Investments 108.9 95.7 48.2 59.8 150.5 244.6

Accounts Receivable 152.4 191.1 281.8 311.8 458.1 609.4Total Receivables 152.4 191.1 281.8 311.8 458.1 609.4

Inventory 385.7 492.7 736.8 900.8 1,077.0 1,341.3Prepaid Exp. 9.6 14.0 19.6 28.9 42.3 76.1Deferred Tax Assets, Curr. 31.8 32.5 45.7 53.5 63.9 74.0Other Current Assets 14.4 10.9 17.6 29.5 8.1 - Total Current Assets 702.9 836.9 1,149.7 1,384.4 1,799.8 2,345.5

Gross Property, Plant & Equipment 397.9 473.7 604.0 725.5 840.8 - Accumulated Depreciation (108.0) (142.4) (180.0) (231.1) (294.2) - Net Proper ty, Plant & Equipm ent 289.9 331.3 424.1 494.4 546.7 612.3

Long-term Investments - 4.8 - - 8.9 9.5Goodw ill 938.8 1,033.0 1,476.1 1,690.3 1,937.4 2,257.2Other Intangibles 67.2 69.3 108.9 106.7 153.7 221.0Deferred Tax Assets, LT - - - 0.2 1.5 -Deferred Charges, LT - - - 0.3 15.8 -Other Long-Term Assets 21.3 24.2 40.9 47.3 54.9 89.0Total Assets 2,020.1 2,299.5 3,199.7 3,723.5 4,518.8 5,534.6

LIABILITIES Accounts Payable 51.3 76.4 210.9 219.3 349.1 403.6 Accrued Exp. 89.0 82.1 131.0 134.1 177.0 261.0Curr. Port. of LT Debt 15.1 54.3 29.5 72.4 41.5 72.9Curr. Income Taxes Payable - - 7.3 2.7 17.4 -Unearned Revenue, Current 9.3 - - - - -Def. Tax Liability, Curr. - - 1.6 0.0 3.4 -Other Current Liabilities 3.8 12.5 17.4 59.3 89.6 33.9

Total Current Liabilities 168.5 225.3 397.7 487.9 678.0 771.4

Long-Term Debt 598.2 548.1 937.2 1,061.7 1,272.7 1,830.7

Def. Tax Liability, Non-Curr. 52.2 66.1 88.8 102.3 133.8 159.3Other Non-Current Liabilities 21.8 45.9 132.0 107.4 83.5 105.5Total Liabilities 840.7 885.3 1,555.6 1,759.4 2,168.0 2,866.9

Common Stock 1.4 1.5 2.9 3.0 3.0 3.0 Additional Paid In Capital 816.0 869.8 901.3 950.3 1,006.1 1,044.0Retained Earnings 369.5 538.5 748.8 1,010.0 1,321.6 1,622.7Treasury Stock - - - - - -Comprehensive Inc. and Other (7.4) 4.4 (9.0) 0.8 20.0 (2.0)

Total Common Equity 1,179.4 1,414.2 1,644.1 1,964.1 2,350.7 2,667.7

Total Equity 1,179.4 1,414.2 1,644.1 1,964.1 2,350.7 2,667.7

Total Liabilitie s And Equity 2,020.1 2,299.5 3,199.7 3,723.5 4,518.8 5,534.6


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Cash Flow

For the Fiscal Period EndingReclassified






LTM12 months

Sep-30-2014Cu r r en cy USD USD USD USD USD USD

Net Income 127.5 169.1 210.3 261.2 311.6 378.9Depreciation & Amort. 34.0 37.2 46.6 60.7 72.7 86.0

Amort. of Goodwill and Intangibles 4.1 4.2 7.9 9.5 11.1 26.5Depreciation & Amort., Total 38.1 41.4 54.5 70.2 83.7 112.5

Other Amortization 2.5 - - - 2.7 2.7 Asset Writedown & Restructuring Costs (4.3) - - - - -Stock-Based Compensation 7.3 10.0 13.1 15.6 22.0 22.7Tax Benefit from Stock Options (9.6) (15.0) (8.0) (15.7) (18.3) (16.8)Net Cash From Discontinued Ops. (0.4) - - - - -Other Operating Activities 6.6 8.9 15.9 8.7 13.9 9.9Change in Acc. Receivable (0.4) (12.3) (18.1) (12.8) (44.7) (79.1)Change In Inventories (20.4) (67.8) (90.1) (95.0) (69.2) (106.3)Change in Acc. Payable (18.1) 10.2 28.6 (15.1) 49.6 49.4Change in Unearned Rev. 1.4 - - - - -Change in Inc. Taxes 24.1 7.5 2.3 (0.8) 50.0 30.3

Change in Other Net Operating Assets 9.9 7.3 3.3 (10.1) 26.6 5.4Cash from Ops. 164.0 159.2 211.8 206.2 428.1 409.8

Capital Expenditure (55.9) (61.4) (86.4) (88.3) (90.2) (129.3)Sale of Property, Plant, and Equipment 1.1 1.4 1.7 1.1 2.1 3.8Cash Acquisitions (65.2) (143.6) (486.9) (265.3) (408.4) (663.0)Divestitures - - - - - -Invest. in Marketable & Equity Securt. - - - - (9.1) (2.2)Net (Inc.) Dec. in Loans Originated/Sold - - - - - -Other Investing Activities 17.5 12.0 - - - - Cash from Investing (102.5) (191.6) (571.6) (352.5) (505.6) (790.7)

Short Term Debt Issued - - - - - -Long-Term Debt Issued 2.3 - 1,361.4 1,025.1 1,113.5 -Total Debt Issued 2.3 - 1,361.4 1,025.1 1,113.5 1,428.3Short Term Debt Repaid - - - - - -Long-Term Debt Repaid (53.0) (7.5) (1,058.8) (896.9) (931.5) -Total Debt Repaid (53.0) (7.5) (1,058.8) (896.9) (931.5) (883.8)

Issuance of Common Stock 8.2 14.0 11.9 17.7 15.4 8.3

Total Dividends Paid - - - - - -

Special Dividend Paid - - - - - -Other Financing Activities 9.3 12.5 (3.1) 11.2 (31.5) (32.8)

Cash from Financing (33.2) 19.0 311.4 157.1 165.9 520.0

Foreign Exchange Rate Adj. 1.5 0.2 1.0 0.8 2.3 (1.8)Net Change in Cash 29.8 (13.2) (47.4) 11.5 90.7 137.3

Documents

The Long Case For LKQ Corporation