LKQ CORPLKQ
LKQ CORP Segments Disclosure
Segment and Geographic Information
We have three operating segments: North America; Europe; and Specialty, each of which is presented as a reportable segment. The segments are organized based on a combination of geographic regions served and the types of product lines offered. They are managed separately, as each business serves distinct customer bases and is impacted by different economic conditions.
The following tables present our financial performance by reportable segment for the periods indicated (in millions):
| North America | Europe | Specialty | Eliminations | Consolidated | |||||||||||||||||||||||||
| Year Ended December 31, 2025 | |||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||
| Third Party | $ | 5,650 | $ | 6,311 | $ | 1,690 | $ | — | $ | 13,651 | |||||||||||||||||||
| Intersegment | 1 | — | 3 | (4) | — | ||||||||||||||||||||||||
| Total segment revenue | $ | 5,651 | $ | 6,311 | $ | 1,693 | $ | (4) | $ | 13,651 | |||||||||||||||||||
Less: (1) | |||||||||||||||||||||||||||||
| Cost of goods sold | 3,232 | 3,884 | 1,274 | ||||||||||||||||||||||||||
| Selling, general and administrative expenses | 1,622 | 1,872 | 319 | ||||||||||||||||||||||||||
Other segment items (2) | (17) | (29) | (11) | ||||||||||||||||||||||||||
| Segment EBITDA | $ | 814 | $ | 584 | $ | 111 | $ | — | $ | 1,509 | |||||||||||||||||||
Total depreciation and amortization (3) | $ | 197 | $ | 180 | $ | 32 | $ | — | $ | 409 | |||||||||||||||||||
| Year Ended December 31, 2024 | |||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||
| Third Party | $ | 5,762 | $ | 6,407 | $ | 1,654 | $ | — | $ | 13,823 | |||||||||||||||||||
| Intersegment | 1 | — | 3 | (4) | — | ||||||||||||||||||||||||
| Total segment revenue | $ | 5,763 | $ | 6,407 | $ | 1,657 | $ | (4) | $ | 13,823 | |||||||||||||||||||
Less: (1) | |||||||||||||||||||||||||||||
| Cost of goods sold | 3,252 | 3,953 | 1,238 | ||||||||||||||||||||||||||
| Selling, general and administrative expenses | 1,588 | 1,855 | 315 | ||||||||||||||||||||||||||
Other segment items (2) | (17) | (35) | (9) | ||||||||||||||||||||||||||
| Segment EBITDA | $ | 940 | $ | 634 | $ | 113 | $ | — | $ | 1,687 | |||||||||||||||||||
Total depreciation and amortization (3) | $ | 198 | $ | 160 | $ | 34 | $ | — | $ | 392 | |||||||||||||||||||
| Year Ended December 31, 2023 | |||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||
| Third Party | $ | 5,281 | $ | 6,323 | $ | 1,665 | $ | — | $ | 13,269 | |||||||||||||||||||
| Intersegment | 1 | — | 3 | (4) | — | ||||||||||||||||||||||||
| Total segment revenue | $ | 5,282 | $ | 6,323 | $ | 1,668 | $ | (4) | $ | 13,269 | |||||||||||||||||||
Less: (1) | |||||||||||||||||||||||||||||
| Cost of goods sold | 2,796 | 3,886 | 1,238 | ||||||||||||||||||||||||||
| Selling, general and administrative expenses | 1,550 | 1,842 | 305 | ||||||||||||||||||||||||||
Other segment items (2) | (23) | (19) | (9) | ||||||||||||||||||||||||||
| Segment EBITDA | $ | 959 | $ | 614 | $ | 134 | $ | — | $ | 1,707 | |||||||||||||||||||
Total depreciation and amortization (3) | $ | 121 | $ | 150 | $ | 32 | $ | — | $ | 303 | |||||||||||||||||||
(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker ("CODM"). Intersegment expenses are included within the amounts shown.
(2) Amounts primarily represent other non operating income and expenses within each segment, as well as reconciling items to remove depreciation - cost of goods sold and restructuring - cost of goods sold, which are excluded from the calculation of Segment EBITDA. See Note 13, "Restructuring and Transaction Related Expenses" for additional information on the restructuring charges.
(3) Amounts presented include depreciation and amortization expense recorded within Cost of goods sold and Restructuring and transaction related expenses.
The key measure of segment profit or loss reviewed by our CODM, our Chief Executive Officer, is Segment EBITDA. The CODM uses Segment EBITDA to compare profitability among the segments and evaluate business strategies. 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 Net Income excluding net income and loss attributable to noncontrolling interest; income and loss from discontinued operations; depreciation; amortization; interest; gains and losses on debt extinguishment; income tax expense; restructuring and transaction related expenses; change in fair value of contingent consideration liabilities; other gains and losses related to acquisitions, equity method investments, or divestitures; equity in losses and earnings of unconsolidated subsidiaries; equity investment fair value adjustments; impairment charges; and direct impacts of the Ukraine/Russia conflict.
The table below provides a reconciliation of Net Income to Segment EBITDA (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Net income | $ | 608 | $ | 693 | $ | 938 | |||||||||||
| Less: net income attributable to continuing noncontrolling interest | 1 | 3 | 2 | ||||||||||||||
| Net income attributable to LKQ stockholders | 607 | 690 | 936 | ||||||||||||||
| Less: net income from discontinued operations | 11 | 24 | 4 | ||||||||||||||
| Net income from continuing operations attributable to LKQ stockholders | 596 | 666 | 932 | ||||||||||||||
| Adjustments: | |||||||||||||||||
| Depreciation and amortization | 409 | 392 | 303 | ||||||||||||||
| Interest expense, net of interest income | 207 | 220 | 162 | ||||||||||||||
| Loss on debt extinguishment | — | — | 1 | ||||||||||||||
| Provision for income taxes | 204 | 265 | 304 | ||||||||||||||
Equity in earnings of unconsolidated subsidiaries (1) | (1) | (8) | (15) | ||||||||||||||
Gains on foreign exchange contracts - acquisition related (2) | — | — | (49) | ||||||||||||||
| Equity investment fair value adjustments | (1) | 2 | 2 | ||||||||||||||
Restructuring and transaction related expenses (3) | 42 | 135 | 65 | ||||||||||||||
Restructuring expenses - cost of goods sold (3) | — | 15 | 4 | ||||||||||||||
| Gains on previously held equity interests | — | — | (3) | ||||||||||||||
Direct impacts of Ukraine/Russia conflict (4) | 1 | — | — | ||||||||||||||
| Impairment of net assets held for sale | — | — | 1 | ||||||||||||||
Impairment of goodwill (5) | 52 | — | — | ||||||||||||||
| Segment EBITDA | $ | 1,509 | $ | 1,687 | $ | 1,707 | |||||||||||
(1) Refer to Note 10, "Equity Method Investments" for further information.
(2) Refer to Note 3, "Business Combinations" and Note 19, "Derivative Instruments and Hedging Activities" for further information.
(3) Refer to Note 13, "Restructuring and Transaction Related Expenses" for further information.
(4) Adjustments include provisions for and subsequent adjustments to reserves for asset recoverability (primarily receivables and inventory).
(5) Refer to Note 9, "Intangible Assets" for further information.
The following table presents capital expenditures by reportable segment (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Capital Expenditures | |||||||||||||||||
North America | $ | 76 | $ | 143 | $ | 118 | |||||||||||
| Europe | 122 | 134 | 163 | ||||||||||||||
| Specialty | 13 | 21 | 41 | ||||||||||||||
| Total capital expenditures | $ | 211 | $ | 298 | $ | 322 | |||||||||||
The following table presents assets by reportable segment (in millions):
| December 31, 2025 | December 31, 2024 | ||||||||||
| Receivables, net of allowance for credit losses | |||||||||||
| North America | $ | 495 | $ | 483 | |||||||
| Europe | 552 | 528 | |||||||||
| Specialty | 157 | 102 | |||||||||
| Total receivables, net of allowance for credit losses | 1,204 | 1,113 | |||||||||
| Inventories | |||||||||||
| North America | 1,479 | 1,411 | |||||||||
| Europe | 1,496 | 1,323 | |||||||||
| Specialty | 451 | 449 | |||||||||
| Total inventories | 3,426 | 3,183 | |||||||||
| Property, plant and equipment, net | |||||||||||
| North America | 651 | 675 | |||||||||
| Europe | 695 | 619 | |||||||||
| Specialty | 106 | 115 | |||||||||
| Total property, plant and equipment, net | 1,452 | 1,409 | |||||||||
| Operating lease assets, net | |||||||||||
| North America | 641 | 668 | |||||||||
| Europe | 544 | 467 | |||||||||
| Specialty | 147 | 121 | |||||||||
| Total operating lease assets, net | 1,332 | 1,256 | |||||||||
| Other unallocated assets | 7,723 | 7,994 | |||||||||
| Total assets | $ | 15,137 | $ | 14,955 | |||||||
We report net receivables; inventories; net property, plant and equipment; and net operating lease assets by segment as that information is used by the CODM in assessing segment performance. These assets provide a measure for the operating capital employed in each segment. Unallocated assets include cash and cash equivalents, prepaid expenses and other current and noncurrent assets, goodwill, other intangibles and equity method investments.
Our largest countries of operation are the U.S., followed by Germany and the U.K. Additional European operations are located in the Netherlands, Italy, Czech Republic, Belgium, Austria, Slovakia, France and other European countries. Our operations in other countries include wholesale operations in Canada, remanufacturing operations in Mexico, an aftermarket parts freight consolidation warehouse in Taiwan, and administrative support functions in India.
The following table sets forth our tangible long-lived assets by geographic area (in millions):
| December 31, 2025 | December 31, 2024 | ||||||||||
Long-lived assets | |||||||||||
| United States | $ | 1,313 | $ | 1,350 | |||||||
| Germany | 369 | 312 | |||||||||
| United Kingdom | 321 | 296 | |||||||||
| Other countries | 781 | 707 | |||||||||
| Total long-lived assets | $ | 2,784 | $ | 2,665 | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 25, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.