55 unchanged sentences
Our 2021 Form 10-K includes a summary of the critical accounting estimates we believe are the most important to aid in understanding our financial results.
−Removed: There have been no changes to those critical accounting estimates that have had a material impact on our reported amounts of assets, liabilities, revenues or expenses during the three months ended March 31, 2022.
+Added: There have been no changes to those critical accounting estimates that have had a material impact on our reported amounts of assets, liabilities, revenues or expenses during the six months ended June 30, 2022.
Financial Information by Geographic Area
11 unchanged sentences
We completed the organizational design and implementation projects in June 2021, with the remaining projects scheduled to be completed by the end of 2024.
−Removed: During the three months ended March 31, 2022 we incurred $6 million in costs across all three categories noted above.
+Added: During three and six months ended June 30, 2022 we incurred $8 million and $14 million , respectively, in costs across all three categories noted above.
We expect that costs of the program, reflecting all three categories noted above, will range between $25 million and $45 million in 2022 with an additional $50 million to $70 million in 2023 and 2024 through the projected program completion date.
3 unchanged sentences
The Russian invasion of Ukraine and resulting global governmental response have impacted, and are expected to continue to impact, our business in 2022.
−Removed: Governmental sanctions imposed on Russia have restricted our ability to sell and collect from customers based in Russia, and Russian military activity in Ukrainian territory has temporarily changed the way in which we operate in Ukraine.
−Removed: Many of our branches have remained open, although operating at less than full capacity, during the conflict, while others have closed temporarily.
+Added: Governmental sanctions imposed on Russia have restricted our ability to sell to and collect from customers based in Russia, and Russian military activity in Ukrainian territory has temporarily changed the way in which we operate in Ukraine.
+Added: Many of our branches in Ukraine have remained open, although operating at less than full capacity, during the conflict, while others have closed temporarily.
+Added: As military operations shifted to the eastern part of the country, we were able to increase capacity in branches in the central and western territory, including our central warehouse in Kyiv.
We expect to continue operating in this manner unless conditions change.
−Removed: While we do anticipate to experience some negative impact from the consequences of this conflict, we do not expect it to have a material impact on our results of operations or cash flows.
−Removed: Our operations in Ukraine represent less than 1% of both our total annual revenue and total annual operating profit and comprised approximately $40 million of gross assets as of March 31, 2022.
+Added: While we do anticipate a negative impact from the consequences of this conflict, we do not expect it to have a material impact on our results of operations or cash flows.
+Added: Our operations in Ukraine represent les s than 1% of b oth our total annual revenue and total annual operating profit and comprised approxi mately $50 million of total assets as of June 30, 2022.
In addition, LKQ r evenue from customers in Russia represents less than 0.3% of our total revenue .
5 unchanged sentences
generally accepted accounting principles (“non-GAAP”).
−Removed: • Organic revenue growth - We define organic revenue growth as total revenue growth from continuing operations excluding the effects of acquisitions and divestitures (i.e., revenue generated from the date of acquisition to the first anniversary of that acquisition, net of reduced revenue due to the disposal of businesses) and foreign currency movements (i.e., impact of translating revenue at prior period exchange rates).
+Added: • Organic revenue growth - We define organic revenue growth as total revenue growth from continuing operations excluding the effects of acquisitions and divestitures (i.e., revenue generated from the date of acquisition to the first anniversary of that acquisition, net of reduced revenue due to the disposal of businesses) and foreign currency movements (i.e., impact of translating revenue at different exchange rates).
Organic revenue growth includes incremental sales from both existing and new (i.e., opened within the last twelve months) locations and is derived from expanding business with existing customers, securing new customers and offering additional products and services.
8 unchanged sentences
The following table sets forth statements of income data as a percentage of total revenue for the periods indicated:
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2022 2021 2022 2021
Revenue 100.0 % 100.0 % 100.0 % 100.0 %
3 unchanged sentences
Restructuring and transaction related expenses 0.1 % 0.1 % 0.1 % 0.2 %
+Added: Gain on disposal of businesses
+Added: (4.6) % — % (2.3) % — %
Depreciation and amortization 1.8 % 1.9 % 1.8 % 2.0 %
7 unchanged sentences
Net income 12.6 % 8.9 % 10.4 % 8.6 %
+Added: net income attributable to continuing noncontrolling interest — % — % — % — %
+Added: Net income attributable to LKQ stockholders 12.6 % 8.9 % 10.4 % 8.6 %
In the table above, the sum of the individual percentages may not equal the total due to rounding.
−Removed: Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021
+Added: Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021
The following table summarizes the changes in revenue by category (in millions):
−Removed: Three Months Ended March 31, Percentage Change in Revenue
+Added: Three Months Ended June 30, Percentage Change in Revenue
2022 2021 Organic Acquisition and Divestiture Foreign Exchange Total Change
3 unchanged sentences
In the table above, the sum of the individual percentages may not equal the total due to rounding.
−Removed: The growth in parts and services revenue of 5.9% represented increases in segment revenue of 14.6% in Self Service, 14.2% in Wholesale – North America, 1.8% in Europe, and 0.4% in Specialty.
−Removed: Organic parts and services revenue growth was 6.9% , which included a 1.3% positive effect from one additional selling day in the first quarter, resulting in per day organic growth of 5.6% .
−Removed: The increase in other revenue of 2.0% was primarily driven by a $5 million organic increase, attributable to a $13 million increase in our Wholesale - North America segment, partially offset by a $7 million decrease in our Self Service segment.
−Removed: Refer to the discussion of our segment results of operations for factors contributing to the change in revenue by segment during the first quarter of 2022 compared to the prior year period.
+Added: The decline in parts and services revenue of 2.7% represented decreases in segment revenue of 6.4% in Europe and 3.6% in Specialty, partially offset by increases of 13.2% in Self Service and 2.5% in Wholesale - North America.
+Added: Parts and services revenue increased by 3.8% organically, so the overall decrease was attributable to negative effects from fluctuations in foreign exchange rates of 5.6% and the net reduction from divestitures of 1.0%.
+Added: The decrease in other revenue of 2.9% was primarily driven by a decrease in organic revenue of $7 million, of which our Self Service segment contributed an $8 million decrease.
+Added: Refer to the discussion of our segment results of operations for factors contributing to the changes in revenue by segment during the second quarter of 2022 compared to the prior year period.
Cost of Goods Sold
−Removed: Cost of goods sold increased to 59.5% of revenue in the three months ended March 31, 2022 from 59.2% of revenue in the three months ended March 31, 2021.
−Removed: The cost of goods sold increase reflects impacts of (i) 0.4% in our Self Service segment and (ii) 0.3% in our Europe segment, partially offset by decreases of (iii) 0.3% attributable to mix as a greater portion of sales are coming from Wholesale - North America which has higher margins and (iv) 0.2% in our Specialty segment.
−Removed: Refer to the discussion of our segment results of operations for factors contributing to the changes in cost of goods sold as a percentage of revenue by segment for the three months ended March 31, 2022 compared to the three months ended March 31, 2021.
+Added: Cost of goods sold increased to 59.1% of revenue in the three months ended June 30, 2022 from 58.8% of revenue in the three months ended June 30, 2021.
+Added: The cost of goods sold increase reflects impacts of 0.6% in our Self Service segment and 0.3% in our Wholesale - North America segment, partially offset by decreases of 0.4% in our Europe segment and 0.2% attributable to mix as a greater portion of sales are coming from Wholesale - North America which has higher margins.
+Added: Refer to the discussion of our segment results of operations for factors contributing to the changes in cost of goods sold as a percentage of revenue by segment for the three months ended June 30, 2022 compared to the three months ended June 30, 2021.
Selling, General and Administrative Expenses
−Removed: Our selling, general and administrative ("SG&A") expenses as a percentage of revenue increased to 27.6% in the three months ended March 31, 2022 from 26.8% in the three months ended March 31, 2021.
−Removed: The SG&A expense increase reflects impacts of 0.3% in our Specialty segment and 0.2% in each of our Wholesale - North America and Europe segments.
−Removed: Refer to the discussion of our segment results of operations for factors contributing to the changes in SG&A expenses as a percentage of revenue by segment for the three months ended March 31, 2022 compared to the three months ended March 31, 2021.
+Added: Our selling, general and administrative ("SG&A") expenses as a percentage of revenue increased to 26.8% in the three months ended June 30, 2022 from 26.2% in the three months ended June 30, 2021.
+Added: The SG&A expense increase reflects impacts of 0.2% in each of our Europe, Specialty and Self Service segments.
+Added: Refer to the discussion of our segment results of operations for factors contributing to the changes in SG&A expenses as a percentage of revenue by segment for the three months ended June 30, 2022 compared to the three months ended June 30, 2021.
Restructuring and Transaction Related Expenses
The following table summarizes restructuring and transaction related expenses for the periods indicated (in millions):
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
2022 2021 Change
2 unchanged sentences
Restructuring and transaction related expenses $ 4 $ 5 $ (1)
−Removed: (1) Restructuring expenses for the three months ended March 31, 2021 primarily consisted of (i) $5 million related to our 1 LKQ Europe program and (ii) $3 million related to our global restructuring programs.
−Removed: (2) Transaction related expenses for the three months ended March 31, 2022 primarily related to external costs such as legal, accounting and advisory fees for completed and potential transactions.
−Removed: See Note 4, "Restructuring and Transaction Related Expenses" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on our restructuring and integration plans.
+Added: (1) Restructuring expenses for the three months ended June 30, 2022 primarily consisted of $2 million related to our acquisition integration plans.
+Added: (2) Restructuring expenses for the three months ended June 30, 2021 primarily consisted of $4 million related to our global restructuring programs.
+Added: See Note 4, "Restructuring and Transaction Related Expenses" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on our restructuring and acquisition integration plans.
+Added: Gain on Disposal of Businesses
+Added: During the three months ended June 30, 2022, we recorded a $155 million pretax gain ($127 million after tax) from the sale of PGW.
+Added: See Note 2, "Financial Statement Information" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on our gain on disposal of businesses.
Depreciation and Amortization
The following table summarizes depreciation and amortization for the periods indicated (in millions):
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
2022 2021 Change
2 unchanged sentences
Total depreciation and amortization $ 61 $ 65 $ (4)
−Removed: (1) The decrease in depreciation expense included $1 million from foreign currency translation primarily related to a decrease in the euro and pound sterling exchange rates during the three months ended March 31, 2022 compared to the prior year period with the remaining decrease relating to lower expense in Wholesale - North America and Europe.
−Removed: (2) The decrease in amortization expense primarily reflected (i) a decrease of $2 million related to the customer relationship intangible assets recorded upon our acquisition of Stahlgruber as the accelerated amortization of the customer relationship intangible assets resulted in lower amortization expense during the three months ended March 31, 2022 compared to the prior year period and (ii) a $1 million decrease from foreign exchange translation, primarily related to a decrease in the euro exchange rate.
+Added: (1) The decrease in depreciation expense included $1 million from foreign currency translation primarily related to a decrease in the euro and pound sterling rates during the three months ended June 30, 2022 compared to the prior year period and $1 million related to the sale of PGW with the remaining decrease due to individually immaterial factors.
+Added: (2) The increase in amortization expense primarily reflected (i) a $4 million increase related to software amortization, partially offset by (ii) a decrease of $2 million related to the customer relationship intangible assets recorded upon our acquisition of Stahlgruber as the accelerated amortization of the customer relationship intangible assets resulted in lower amortization expense during the three months ended June 30, 2022 compared to the prior year period and (iii) a $1 million decrease from foreign exchange translation, primarily related to a decrease in the euro exchange rate.
Other Expense, Net
1 unchanged sentence
Other Expense, Net
−Removed: Other expense, net for the three months ended March 31, 2021 $ 18
+Added: Other expense, net for the three months ended June 30, 2021 $ 34
(Decrease) increase due to:
Interest expense, net of interest income (2) (1)
−Removed: Lower Other income, net 6 (2)
+Added: Loss on debt extinguishment (24) (2)
+Added: Other expense (income), net 8 (3)
Net decrease (18)
−Removed: Other expense, net for the three months ended March 31, 2022 $ 15
−Removed: (1) The lower Interest expense, net of interest income is primarily related to (i) an $8 million decrease resulting from lower interest rates during the three months ended March 31, 2022 compared to the prior year period and (ii) a $1 million decrease from foreign exchange translation, primarily related to a decrease in the euro exchange rate.
−Removed: (2) The unfavorable variance in Other income, net primarily related t o $5 million of fair value adjustments in the first quarter of 2021 for appreciation in our equity investments not accounted for under the equity method compared to a $1 million reduction in fair value recorded in the first quarter of 2022.
+Added: Other expense, net for the three months ended June 30, 2022 $ 16
+Added: (1) Net interest expense decreased due to foreign exchange translation, primarily related to a decrease in the euro exchange rate, and higher interest income.
+Added: (2) The $24 million decrease in loss on debt extinguishment is due to the charge recorded in April 2021 related to the redemption of the Euro Notes (2026).
+Added: (3) The variance in Other expense (income), net is primarily related to (i) a $4 million unfavorable variance in our fair value adjustments for equity investments not accounted for under the equity method and (ii) a $3 million unfavorable variance in foreign currency gains and losses.
Provision for Income Taxes
−Removed: Our effective income tax rate for the three months ended March 31, 2022 was 25.0%, compared to 26.3% for the three months ended March 31, 2021.
−Removed: The lower estimated annual effective tax rate for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 is primarily attributable to the geographic distribution of income.
−Removed: For the three months ended March 31, 2022, the effective tax rate was partially decreased by net favorable discrete items including excess tax benefits from stock-based payments partially offset by the revaluation of deferred tax balances in connection with an enacted rate change.
−Removed: Net discrete items for the three months ended March 31, 2021 reduced the effective tax rate by 0.2%, primarily due to excess tax benefits on stock-based payments.
+Added: Our effective income tax rate for the three months ended June 30, 2022 was 23.4%, compared to 26.3% for the three months ended June 30, 2021.
+Added: The decrease in the effective tax rate for the three months ended June 30, 2022 compared to the three months ended June 30, 2021 was attributable to net favorable discrete items of 2.0%, primarily related to the sale of PGW, and the geographic distribution of income.
See Note 12, "Income Taxes" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.
Equity in Earnings of Unconsolidated Subsidiaries
−Removed: Equity in earnings of unconsolidated subsidiaries for the three months ended March 31, 2022 decreased by $4 million primarily related to a decline in year over year results reported by Mekonomen, which is our largest equity method investment, and an immaterial Self Service investment, which incurred a loss in the first quarter of 2022.
+Added: Equity in earnings of unconsolidated subsidiaries for the three months ended June 30, 2022 increased by $1 million primarily related to a Self Service investment.
Foreign Currency Impact
We translate our statements of income at the average exchange rates in effect for the period.
−Removed: Relative to the rates used during the three months ended March 31, 2021 , the euro and pound sterling rates used to translate the 2022 statements of income decreased by 7% and 3%, respectively.
+Added: Relative to the rates used during the three months ended June 30, 2021, the euro, pound sterling and Czech koruna rates used to translate the 2022 statements of income decreased by 12%, 10% and 8%, respectively.
The negative translation effect of the change in foreign currencies against the U.S.
−Removed: dollar combined with the negative impact of realized and unrealized currency gains and losses for the three months ended March 31, 2022 to generate a negative $0.02 effect on diluted earnings per share relative to the prior year period.
+Added: dollar combined with the negative impact of realized and unrealized currency gains and losses for the three months ended June 30, 2022 resulted in a negative $0.03 effect on diluted earnings per share relative to the prior year period.
+Added: Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021
+Added: The following table summarizes the changes in revenue by category (in millions):
+Added: Six Months Ended June 30, Percentage Change in Revenue
+Added: 2022 2021 Organic Acquisition and Divestiture Foreign Exchange Total Change
+Added: Parts & services revenue $ 6,196 $ 6,110 5.3 % 0.3 % (4.2) % 1.4 %
+Added: Other revenue 493 496 (0.5) % 0.3 % (0.3) % (0.5) %
+Added: Total revenue $ 6,689 $ 6,606 4.9 % 0.3 % (3.9) % 1.3 %
+Added: In the table above, the sum of the individual percentages may not equal the total due to rounding.
+Added: The growth in parts and services revenue of 1.4% represented increases in segment revenue of 13.9% in Self Service and 8.2% in Wholesale - North America, partially offset by decreases of 2.4% in Europe and 1.8% in Specialty.
+Added: Organic parts and services revenue growth was 5.3%, which included a 0.5% positive effect from one additional selling day in the first half of 2022, resulting in per day organic growth of 4.8%.
+Added: Additionally, there was a 4.2% negative effect on parts and services revenue from foreign exchange rates.
+Added: The decrease in other revenue of 0.5% was primarily driven by a $2 million organic decrease, attributable to a $15 million decrease in our Self Service segment, partially offset by a $12 million increase in our Wholesale - North America segment.
+Added: Refer to the discussion of our segment results of operations for factors contributing to the changes in revenue by segment during the six months ended June 30, 2022 compared to the prior year period.
+Added: Cost of Goods Sold
+Added: Cost of goods sold increased to 59.3% of revenue in the six months ended June 30, 2022 from 59.0% of revenue in the six months ended June 30, 2021.
+Added: The cost of goods sold increase reflects impacts of 0.5% in our Self Service segment partially offset by a decrease of 0.2% attributable to mix as a greater portion of sales are coming from Wholesale - North America which has higher margins.
+Added: Refer to the discussion of our segment results of operations for factors contributing to the changes in cost of goods sold as a percentage of revenue by segment for the six months ended June 30, 2022 compared to the six months ended June 30, 2021.
+Added: Selling, General and Administrative Expenses
+Added: Our SG&A expenses as a percentage of revenue increased to 27.2% in the six months ended June 30, 2022 from 26.5% in the six months ended June 30, 2021.
+Added: The SG&A expense increase reflects impacts of 0.2% in each of our Europe and Specialty segments and 0.3% related to individually immaterial items.
+Added: Refer to the discussion of our segment results of operations for factors contributing to the changes in SG&A expenses as a percentage of revenue by segment for the six months ended June 30, 2022 compared to the six months ended June 30, 2021.
+Added: Restructuring and Transaction Related Expenses
+Added: The following table summarizes restructuring and transaction related expenses for the periods indicated (in millions):
+Added: Six Months Ended June 30,
+Added: 2022 2021 Change
+Added: Restructuring expenses $ 3 (1)
+Added: Transaction related expenses 4 (3)
+Added: Restructuring and transaction related expenses $ 7 $ 13 $ (6)
+Added: (1) Restructuring expenses for the six months ended June 30, 2022 primarily consisted of $2 million related to our acquisition integration plans.
+Added: (2) Restructuring expenses for the six months ended June 30, 2021 primarily consisted of (i) $7 million related to our global restructuring programs and (ii) $5 million related to our 1 LKQ Europe program.
+Added: (3) Transaction related expenses for the six months ended June 30, 2022 primarily related to external costs such as legal, accounting and advisory fees for completed and potential transactions.
+Added: See Note 4, "Restructuring and Transaction Related Expenses" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on our restructuring and acquisition integration plans.
+Added: Gain on Disposal of Businesses
+Added: During the six months ended June 30, 2022, we recorded a $155 million pretax gain ($127 million after tax) from the sale of PGW.
+Added: See Note 2, "Financial Statement Information" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on our gain on disposal of businesses.
+Added: Depreciation and Amortization
+Added: The following table summarizes depreciation and amortization for the periods indicated (in millions):
+Added: Six Months Ended June 30,
+Added: 2022 2021 Change
+Added: Depreciation $ 70 $ 78 $ (8) (1)
+Added: Amortization 50 53 (3) (2)
+Added: Total depreciation and amortization $ 120 $ 131 $ (11)
+Added: (1) The decrease in depreciation expense included $3 million from foreign currency translation primarily related to a decrease in the euro and pound sterling rates during the six months ended June 30, 2022 compared to the prior year period and $1 million related to the sale of PGW with the remaining decrease due to individually immaterial factors.
+Added: (2) The decrease in amortization expense primarily reflected (i) a decrease of $3 million related to the customer relationship intangible assets recorded upon our acquisition of Stahlgruber as the accelerated amortization of the customer relationship intangible assets resulted in lower amortization expense during the six months ended June 30, 2022 compared to the prior year period and (ii) a $2 million decrease from foreign exchange translation, primarily related to a decrease in the euro exchange rate, partially offset by (iii) a $2 million increase related to software amortization.
+Added: Other Expense, Net
+Added: The following table summarizes the components of the change in other expense, net (in thousands):
+Added: Other Expense, Net
+Added: Other expense, net for the six months ended June 30, 2021 $ 52
+Added: Increase (decrease) due to:
+Added: Interest expense, net of interest income (11) (1)
+Added: Loss on debt extinguishment (24) (2)
+Added: Other expense (income), net 14 (3)
+Added: Net decrease (21)
+Added: Other expense, net for the six months ended June 30, 2022 $ 31
+Added: (1) Net interest expense declined due to (i) a $7 million decrease resulting from lower interest rates during the six months ended June 30, 2022 compared to the prior year period and (ii) a $3 million decrease from foreign exchange translation, primarily related to a decrease in the euro exchange rate.
+Added: (2) The $24 million decrease in loss on debt extinguishment is due to the charge recorded in April 2021 related to the redemption of the Euro Notes (2026).
+Added: (3) The variance in Other expense (income), net is primarily related to (i) a $9 million unfavorable variance in our fair value adjustments for equity investments not accounted for under the equity method and (ii) a $4 million unfavorable variance in foreign currency gains and losses.
+Added: Provision for Income Taxes
+Added: Our effective income tax rate for the six months ended June 30, 2022 was 24.1%, compared to 26.3% for the six months ended June 30, 2021.
+Added: The decrease in the effective tax rate for the six months ended June 30, 2022 compared to the six months ended June 30, 2021 was attributable to net favorable discrete items of 1.2%, primarily related to the sale of PGW, and the geographic distribution of income.
+Added: See Note 12, "Income Taxes" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.
+Added: Equity in Earnings of Unconsolidated Subsidiaries
+Added: Equity in earnings of unconsolidated subsidiaries for the six months ended June 30, 2022 decreased by $3 million primarily related to a decline in year over year results reported by Mekonomen, which is our largest equity method investment.
+Added: Foreign Currency Impact
+Added: We translate our statements of income at the average exchange rates in effect for the period.
+Added: Relative to the rates used during the six months ended June 30, 2021, the euro, pound sterling and Czech koruna rates used to translate the 2022 statements of income decreased by 9%, 7%, and 5%, respectively.
+Added: The negative translation effect of the change in foreign currencies against the U.S.
+Added: dollar combined with the negative impact of realized and unrealized currency gains and losses for the six months ended June 30, 2022 resulted in a $0.05 negative effect on diluted earnings per share relative to the prior year period.
Results of Operations—Segment Reporting
9 unchanged sentences
The following table presents our financial performance, including third party revenue, total revenue and Segment EBITDA, by reportable segment for the periods indicated (in millions):
−Removed: Three Months Ended March 31,
−Removed: 2022 % of Total Segment Revenue 2021 % of Total Segment Revenue
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2022 % of Total Segment Revenue 2021 % of Total Segment Revenue 2022 % of Total Segment Revenue 2021 % of Total Segment Revenue
Third Party Revenue
3 unchanged sentences
Specialty 512 531 972 989
+Added: 208 209 407 408
Total third party revenue $ 3,341 $ 3,435 $ 6,689 $ 6,606
4 unchanged sentences
Specialty 513 532 974 991
+Added: 208 209 407 408
Eliminations (1) (2) (2) (3)
16 unchanged sentences
impairment charges;
−Removed: and direct impacts of the Ukraine/Russia conflict and related sanctions (including provisions for reserves for asset recoverability and expenditures to support our employees and their families).
−Removed: EBITDA, which is the basis for Segment EBITDA, is calculated
−Removed: as net income excluding discontinued operations, depreciation, amortization, interest (which includes gains and losses on debt extinguishment) and income tax expense.
+Added: and direct impacts of the Ukraine/Russia conflict and related sanctions (including provisions for and subsequent adjustments to reserves for asset recoverability and expenditures to support our employees and their families).
+Added: EBITDA, which is the basis for Segment EBITDA, is calculated as net income excluding discontinued operations, depreciation, amortization, interest (which includes gains and losses on debt extinguishment) and income tax expense.
See Note 13, "Segment and Geographic Information" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for a reconciliation of total Segment EBITDA to net income.
−Removed: Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021
+Added: Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021
Wholesale - North America
1 unchanged sentence
The following table summarizes the changes in third party revenue by category in our Wholesale - North America segment (in millions):
−Removed: Three Months Ended March 31, Percentage Change in Revenue
+Added: Three Months Ended June 30, Percentage Change in Revenue
Wholesale - North America
7 unchanged sentences
In the table above, the sum of the individual percentages may not equal the total due to rounding.
−Removed: (1) Parts and services organic revenue increased 13.6% (11.8% on a per day basis) for the three months ended March 31, 2022 compared to the prior year period, primarily driven by pricing for both collision and mechanical parts.
−Removed: Aftermarket collision parts volumes decreased year over year due to ongoing ocean freight delays and supply chain challenges, and were largely offset by increased volumes of aftermarket automotive glass products and collision parts from our salvage business.
−Removed: (2) The 15.8%, or $13 million, year over year organic increase in other revenue is primarily related to (i) an $11 million increase in reven ue from other scrap (e.g., aluminum) and cores due to higher prices as well as higher volumes, and (ii) a $2 million increase in revenue from scrap steel due to higher prices.
−Removed: Revenue from precious metals (platinum, palladium, and rhodium) was flat year over year due to higher volumes offset by lower prices.
+Added: (1) Parts and services organic revenue increased 10.7% for the three months ended June 30, 2022 compared to the prior year period, primarily driven by passing through input cost inflation.
+Added: Aftermarket collision parts volumes decreased year over year due to ongoing ocean freight delays and supply chain challenges, and were partially offset by increased volumes of collision parts from our salvage business.
+Added: (2) Other organic revenue decreased 0.9% primarily related to (i) an $11 million decrease in revenue from precious metals (platinum, palladium, and rhodium) due to lower prices partially offset by (ii) an $8 million increase from other scrap (e.g., aluminum) and cores mainly due to higher prices, and to a lesser extent, higher volumes and (iii) a $3 million increase in revenue from scrap steel related to higher prices and volumes.
+Added: (3) Acquisition and divestiture revenue was a net decrease due to the divestiture of PGW in the second quarter of 2022.
+Added: See Note 2, "Financial Statement Information" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on the divestiture of PGW.
Segment EBITDA
−Removed: Segment EBITDA increased $24 million, or 12.4%, in the first quarter of 2022 compared to the prior year period.
−Removed: This increase is attributable to higher prices on parts and productivity initiatives helping to offset inflationary pressures related to ocean freight, labor, supplies and fuel.
−Removed: Decreases in precious metals prices contributed a $4 million decline in Segment EBITDA relative to the first quarter of 2021.
−Removed: Additionally, net sequential increases in scrap steel prices in our salvage operations had an immaterial favorable impact on Segment EBITDA during the three months ended March 31, 2022 , compared to a $6 million favorable impact du ring the three months ended March 31, 2021.
+Added: Segment EBITDA decreased $5 million , or 2.3%, in the three months ended June 30, 2022 compared to the prior year period.
+Added: The decrease includes a $12 million decline in Segment EBITDA related to the divestiture of PGW in the second quarter of 2022 and an $8 million decline due to lower precious metals prices relative to the comparable prior year period.
+Added: Additionally, net sequential increases in scrap steel prices in our salvage operations had a $1 million favorable impact on Segment EBITDA during the three months ended June 30, 2022 , compared to a $5 million favorable impact du ring the three months ended June 30, 2021.
We estimate that precious metals and scrap steel pricing had an unfavorable effect of 0.9% on Segment EBITDA margin relative to the comparable prior year period.
+Added: The unfavorable impacts were partially offset by higher prices on parts and productivity initiatives helping to offset inflationary pressures related to ocean freight, labor, supplies and fuel.
The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our Wholesale - North America segment:
1 unchanged sentence
Percentage of Total Segment Revenue
−Removed: Segment EBITDA for the three months ended March 31, 2021 18.4 %
+Added: Segment EBITDA for the three months ended June 30, 2021 19.6 %
Increase (decrease) due to:
1 unchanged sentence
Change in segment operating expenses 0.1 % (2)
−Removed: Segment EBITDA for the three months ended March 31, 2022 18.1 %
+Added: Change in other expense, net (0.2) % (3)
+Added: Segment EBITDA for the three months ended June 30, 2022 18.7 %
In the table above, the sum of the individual percentages may not equal the total due to rounding.
−Removed: (1) Gross margin was favorable due to pricing initiatives to offset inflationary increases in material and freight costs.
−Removed: In some cases, we experienced a margin benefit in the first quarter of 2022 as higher prices were enacted ahead of turning the higher cost inventory.
−Removed: The favorable impact was partially offset by a 0.7% unfavorable impact from precious metals and scrap steel pricing.
−Removed: (2) The increase in segment operating expense as a percentage of revenue reflects (i) a 0.2% unfavorable impact from personnel expenses related to inflation and increased stock-based compensation, (ii) a 0.3% unfavorable impact from increased freight and fuel costs, and (iii) several individually immaterial factors that had a 0.3% unfavorable impact in the aggregate, partially offset by (iv) a favorable 0.4% impact from facility related expenses which are relatively fixed in nature.
+Added: (1) The decrease in gross margin of 0.8% was primarily driven by a 0.7% unfavorable impact related to precious metals and scrap steel pricing.
+Added: Inflationary increases in material and freight costs were offset by higher prices on parts and services and by productivity initiatives.
+Added: (2) Segment operating expenses as a percentage of revenue decreased 0.1% to (i) a 0.4% favorable impact from personnel expense due to lower incentive compensation offset by (ii) a 0.3% unfavorable impact from higher professional fees.
+Added: (3) Several individually immaterial factors had a 0.2% unfavorable impact on other expense, net.
Third Party Revenue
The following table summarizes the changes in third party revenue by category in our Europe segment (in millions):
−Removed: Three Months Ended March 31, Percentage Change in Revenue
+Added: Three Months Ended June 30, Percentage Change in Revenue
Europe 2022 2021 Organic Acquisition and Divestiture Foreign Exchange (2)
4 unchanged sentences
In the table above, the sum of the individual percentages may not equal the total due to rounding.
−Removed: (1) Parts and services organic revenue for the three months ended March 31, 2022 increased by 6.9% (6.0% on a per day basis), driven by roughly equal effects from increased volumes and net price increases compared to the prior year.
−Removed: Revenue growth from net price increases reflects actions taken to offset increased costs resulting from inflationary pressures.
−Removed: The U.K., Germany, Central and Eastern Europe, and Benelux reported the largest incremental increases for the period.
+Added: (1) Parts and services organic revenue for the three months ended June 30, 2022 increased by 4.2% (4.9% on a per day basis), primarily due to pricing initiatives across all geographies that have been implemented throughout 2022 to offset increased costs resulting from inflationary pressures.
+Added: The organic revenue growth across most of our European operations was partially offset by 0.6% (0.5% on a per day basis) of a negative effect on certain operations and product lines due to the Ukraine/Russia conflict.
(2) Compared to the prior year, exchange rates decreased our revenue growth by $174 million, or 11.0%, primarily due to the stronger U.S.
−Removed: dollar against the euro and pound sterling during the first quarter of 2022 relative to the prior year period.
+Added: dollar against the euro, pound sterling, and Czech koruna during the second quarter of 2022 relative to the prior year period.
Segment EBITDA
−Removed: Segment EBITDA decreased $10 million, or 6.8%, in the first quarter of 2022 compared to the prior year period.
+Added: Segment EBITDA decreased $8 million, or 5.2%, in the three months ended June 30, 2022 compared to the prior year period.
Our Europe Segment EBITDA included a negative year over year impact of $19 million rel ated to the translation of local currency results into U.S.
−Removed: dollars at lower exchange rates than those experienced during the first quarter of 2021.
−Removed: On a constant currency basis (i.e., excluding the translation impact), Segment EBITDA decreased by $2 million, or 1.5%, co mpared to the prior year.
−Removed: Refer to the Foreign Currency Impact discussion within the Results of Operations–Consolidated section above for further detail regarding foreign currency impact on our results for the three months ended March 31, 2022.
+Added: dollars at lower exchange rates than those experienced during the three months ended June 30, 2021 .
+Added: On a constant currency basis (i.e., excluding the translation impact), Segment EBITDA increased by $10 million, or 6.0% , co mpared to the prior year.
+Added: Refer to the Foreign Currency Impact discussion within the Results of Operations–Consolidated section above for further detail regarding foreign currency impact on our results for the three months ended June 30, 2022.
The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our Europe segment:
Europe Percentage of Total Segment Revenue
−Removed: Segment EBITDA for the three months ended March 31, 2021 9.6 %
+Added: Segment EBITDA for the three months ended June 30, 2021 10.7 %
Increase (decrease) due to:
1 unchanged sentence
Change in segment operating expenses (0.5) % (2)
−Removed: Segment EBITDA for the three months ended March 31, 2022 8.8 %
+Added: Change in other expense, net (0.2) % (3)
+Added: Segment EBITDA for the three months ended June 30, 2022 10.8 %
In the table above, the sum of the individual percentages may not equal the total due to rounding.
−Removed: (1) The decrease in gross margin was primarily attributable to (i) an unfavorable impact of 0.2% from increased excess and obsolete inventory reserves as an indirect result of the Ukraine/Russia conflict, primarily related to a portion of our inventory that fits Russian-made vehicles and may have limited use outside of Russian vehicle applications and (ii) several individually immaterial factors that had an unfavorable impact of 0.3% in the aggregate, including inflationary pressures that are impacting product and freight costs.
−Removed: Net price increases and other margin improvement initiatives continue to be enacted in order to offset these inflationary pressures.
−Removed: (2) The increase in segment operating expenses as a percentage of revenue reflects (i) an unfavorable impact of 0.3% related to a higher provision for credit losses, including impacts related to a customer bankruptcy, and (ii) an unfavorable impact of 0.2% from inflationary pressures around vehicle and fuel expense, partially offset by (iii) several individually immaterial factors that had a favorable impact of 0.2% in the aggregate.
+Added: (1) The increase in gross margin was primarily attributable to favorable impacts of (i) net price increases and margin improvement initiatives undertaken to support profitable revenue growth despite inflationary pressures, primarily at our businesses in the Netherlands, Germany, and Italy, and (ii) to a lesser extent, favorable sales mix shift towards private label products.
+Added: (2) The increase in segment operating expenses as a percentage of revenue reflects unfavorable impacts of (i) 0.5% of personnel costs primarily due to inflationary pressures, (ii) 0.3% from freight, vehicle and fuel expenses due to inflationary pressures, (iii) and 0.2% of increased advertising costs, partially offset by (iv) several individually immaterial factors that had a favorable impact of 0.5% in the aggregate.
+Added: (3) Several individually immaterial factors had a 0.2% unfavorable impact on other expense, net.
Third Party Revenue
The following table summarizes the changes in third party revenue by category in our Specialty segment (in millions):
−Removed: Three Months Ended March 31, Percentage Change in Revenue
+Added: Three Months Ended June 30, Percentage Change in Revenue
Specialty 2022 2021 Organic (1)
5 unchanged sentences
In the table above, the sum of the individual percentages may not equal the total due to rounding.
−Removed: (1) Parts and services organic revenue for the three months ended March 31, 2022 decreased by 8.3% (9.8% on a per day basis) due to the strong growth we experienced in the first quarter of 2021, when parts and services organic revenue growth was 30.9%, and demand softness from lower new vehicle sales caused by supply chain challenges.
−Removed: (2) Acquisition related growth for the three months ended March 31, 2022 reflected revenue from our acquisitions of three Specialty businesses from the beginning of 2021 through the one-year anniversary of the acquisition dates.
+Added: (1) Parts and services organic revenue for the three months ended June 30, 2022 decreased by 11.5% due to the strong growth we experienced in the second quarter of 2021, when parts and services organic revenue growth was 30.1%, and demand softness from lower new vehicle sales caused by supply chain challenges as well as a decrease in drop shipment volumes.
+Added: (2) Acquisition related growth for the three months ended June 30, 2022 reflected revenue from our acquisitions of three Specialty businesses from the beginning of 2021 through the one-year anniversary of the acquisition dates.
Segment EBITDA
−Removed: Segment EBITDA decreased $3 million, or 5.5%, in the first quarter of 2022 compared to the prior year first quarter primarily due to the effect of inflation on overhead expenses.
+Added: Segment EBITDA decreased $11 million, or 13.1%, in the three months ended June 30, 2022 compared to the prior year period primarily due to the organic revenue decline and the negative effect of inflation on overhead expenses.
The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our Specialty segment:
Specialty Percentage of Total Segment Revenue
−Removed: Segment EBITDA for the three months ended March 31, 2021 13.4 %
+Added: Segment EBITDA for the three months ended June 30, 2021 14.9 %
Increase (decrease) due to:
1 unchanged sentence
Change in segment operating expenses (1.2) % (2)
−Removed: Segment EBITDA for the three months ended March 31, 2022 12.6 %
+Added: Segment EBITDA for the three months ended June 30, 2022 13.4 %
In the table above, the sum of the individual percentages may not equal the total due to rounding.
−Removed: (1) The increase in gross margin primarily reflects lower discounting to recover higher input costs and, to an extent, favorable product and channel mix, partially offset by a 0.9% unfavorable impact from acquisitions.
−Removed: (2) The increase in segment operating expenses as a percentage of revenue primarily reflects unfavorable impacts of (i) 1.5% in personnel costs as a result of wage inflation and lower operating leverage due to the organic parts and services revenue decline, (ii) 0.4% in freight, vehicle and fuel expenses primarily due to higher fuel costs, (iii) 0.3% due to distribution center expansion, and (iv) several individual immaterial factors that had an unfavorable impact of 0.3% in the aggregate, partially offset by (v) a favorable impact of 0.6% from operating expense synergies and leverage generated from the 2021 acquisitions.
+Added: (1) The decrease in gross margin primarily reflects a 1.1% unfavorable impact from acquisitions, partially offset by favorable product and channel mix and, to a lesser extent, lower discounting to recover higher input costs.
+Added: (2) The increase in segment operating expenses as a percentage of revenue primarily reflects unfavorable impacts of (i) 1.0% in personnel costs as a result of wage inflation and lower operating leverage due to the organic parts and services revenue decline, (ii) 0.5% in vehicle and fuel expenses primarily due to higher fuel costs, and (iii) several individually immaterial factors that had an unfavorable impact of 0.8% in the aggregate, partially offset by favorable impacts of (iv) 0.6% from operating expense synergies and leverage generated from the 2021 acquisitions, primarily Seawide, and (v) 0.5% in freight expenses primarily driven by reduced usage of third party freight carriers.
Third Party Revenue
The following table summarizes the changes in third party revenue by category in our Self Service segment (in millions):
−Removed: Three Months Ended March 31, Percentage Change in Revenue
+Added: Three Months Ended June 30, Percentage Change in Revenue
2022 2021 Organic Acquisition and Divestiture Foreign Exchange Total Change
5 unchanged sentences
In the table above, the sum of the individual percentages may not equal the total due to rounding.
−Removed: (1) Parts and services organic revenue increased 14.6% for the three months ended March 31, 2022 compared to the prior year period, primarily driven by pricing initiatives to mitigate significant increases in input costs resulting from greater competition for vehicles.
−Removed: (2) The 5.0%, or $7 million, year over year organic decrease in other revenue is related to (i) a $15 million decrease in revenue from precious metals (platinum, palladium, and rhodium) due to both lower prices and volumes, partially offset by (ii) a $4 million increase in revenue from other scrap (including aluminum) and cores and (iii) a $4 million increase in revenue from scrap steel primarily related to higher prices, partially offset by lower volumes.
+Added: (1) Parts and services organic revenue increased 13.2% for the three months ended June 30, 2022 compared to the prior year period, primarily driven by pricing initiatives to mitigate significant increases in input costs resulting from greater competition for vehicles.
+Added: (2) The 4.8%, or $8 million, year over year organic decrease in other revenue is related to (i) a $22 million decrease in revenue from precious metals (platinum, palladium, and rhodium) mainly due to lower prices, partially offset by (ii) a $9 million increase in revenue from other scrap (including aluminum) and cores mainly due to higher prices and (iii) a $6 million increase in revenue from scrap steel related to higher prices, partially offset by lower volumes.
Segment EBITDA
−Removed: Segment EBITDA decreased $16 million, or 28.5%, in the first quarter of 2022 compared to the prior year period.
+Added: Segment EBITDA decreased $24 million, or 43.7%, in the three months ended June 30, 2022 compared to the prior year period.
This decrease is primarily attributable to unfavorable movements in commodity prices compared to the prior year.
−Removed: Decreases in precious metals prices contributed an estimated $9 million decline in Segment EBITDA relative to the first quarter of 2021.
−Removed: Additionally, net sequential increases in scrap steel prices in our self service operations had a $2 million favorable impact on Segment EBITDA during the three months ended March 31, 2022, compared to a $15 million favorable impact during the three months ended March 31, 2021.
+Added: Decreases in precious metals prices contributed an estimated $18 million decline in Segment EBITDA relative to the three months ended June 30, 2021.
+Added: Additionally, net sequential increases in scrap steel prices in our self service operations had a $3 million favorable impact on Segment EBITDA during the three months ended June 30, 2022, compared to a $5 million favorable impact during the three months ended June 30, 2021.
This favorable impact for both periods resulted from the increase in scrap steel prices between the date we purchased a vehicle, which influences the price we pay for a vehicle, and the date we scrapped a vehicle, which influences the price we receive for scrapping a vehicle.
2 unchanged sentences
Percentage of Total Segment Revenue
−Removed: Segment EBITDA for the three months ended March 31, 2021 27.9 %
+Added: Segment EBITDA for the three months ended June 30, 2021 27.2 %
Increase (decrease) due to:
1 unchanged sentence
Change in segment operating expenses (2.9) % (2)
−Removed: Segment EBITDA for the three months ended March 31, 2022 20.0 %
+Added: Change in other expense, net 0.1 %
+Added: Segment EBITDA for the three months ended June 30, 2022 15.3 %
In the table above, the sum of the individual percentages may not equal the total due to rounding.
−Removed: (1) The decrease in gross margin reflects (i) an unfavorable impact of 11.1% resulting from movements in metals prices compounded by car cost increases, partially offset by (ii) a favorable impact of 4.1% due to increased prices for parts and services.
−Removed: (2) The increase in segment operating expense as a percentage of revenue reflects (i) a 0.5% unfavorable impact from increased freight and fuel costs and (ii) several individually immaterial factors that had a 0.4% unfavorable impact in the aggregate.
+Added: (1) The decrease in gross margin reflects (i) an unfavorable impact of 6.8% resulting from movements in metals prices, (ii) an unfavorable impact due to increases in car costs, partially offset by (iii) a favorable impact due to increased prices for parts and services.
+Added: (2) The increase in segment operating expense as a percentage of revenue reflects (i) a 1.6% unfavorable impact from movements in metals prices, (ii) a 0.8% unfavorable impact from increased freight, vehicle, and fuel costs due to inflationary pressures (iii) a 0.5% unfavorable impact from personnel expenses due to inflationary pressures.
+Added: Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021
+Added: Wholesale - North America
+Added: Third Party Revenue
+Added: The following table summarizes the changes in third party revenue by category in our Wholesale - North America segment (in millions):
+Added: Six Months Ended June 30, Percentage Change in Revenue
+Added: Wholesale - North America 2022 2021 Organic Acquisition and Divestiture Foreign Exchange Total Change
+Added: Parts & services revenue $ 2,156 $ 1,993 12.1 % (1)
+Added: (0.1) % 8.2 %
+Added: Other revenue 189 176 6.9 % (2)
+Added: 0.8 % (0.1) % 7.6 %
+Added: Total third party revenue $ 2,345 $ 2,169 11.7 % (3.5) % (0.1) % 8.1 %
+Added: In the table above, the sum of the individual percentages may not equal the total due to rounding.
+Added: (1) Parts and services organic revenue increased 12.1% (11.3% on a per day basis) for the six months ended June 30, 2022 compared to the prior year period, primarily driven by passing through input cost inflation.
+Added: Aftermarket collision parts volumes decreased year over year due to ongoing ocean freight delays and supply chain challenges, and were partially offset by increased volumes of collision parts from our salvage business.
+Added: (2) Organic other revenue increased 6.9%, or $12 million related to (i) a $19 million increase in revenue from other scrap (e.g., aluminum) and cores due to higher prices as well as higher volumes, and (ii) a $5 million increase in revenue from scrap steel due to higher prices and volumes partially offset by (iii) an $11 million decrease in revenue from precious metals (platinum, palladium, and rhodium) primarily due to lower prices.
+Added: (3) Acquisition and divestiture revenue was a net decrease due to the divestiture of PGW in the second quarter of 2022.
+Added: See Note 2, "Financial Statement Information" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on the divestiture of PGW.
+Added: Segment EBITDA
+Added: Segment EBITDA increased $19 million, or 4.6%, for the six months ended June 30, 2022 compared to the prior year.
+Added: This increase is attributable to higher prices on parts and productivity initiatives helping to offset inflationary pressures related to ocean freight, labor, supplies and fuel.
+Added: Decreases in precious metals prices contributed a $12 million decline in Segment EBITDA relative to the six months ended June 30, 2021.
+Added: Additionally, net sequential increases in scrap steel prices in our salvage operations had a $2 million favorable impact on Segment EBITDA during the six months ended June 30, 2022, compared to a $11 million favorable impact during the six months ended June 30, 2021.
+Added: We estimate that precious metals and scrap steel pricing had an unfavorable effect of 0.9% on Segment EBITDA margin relative to the comparable prior year period.
+Added: The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our North America segment:
+Added: Wholesale - North America Percentage of Total Segment Revenue
+Added: Segment EBITDA for the six months ended June 30, 2021
+Added: Increase (decrease) due to:
+Added: Change in gross margin (0.4) % (1)
+Added: Change in segment operating expenses (0.2) % (2)
+Added: Segment EBITDA for the six months ended June 30, 2022
+Added: In the table above, the sum of the individual percentages may not equal the total due to rounding.
+Added: (1) The decrease in gross margin of 0.4% was primarily driven by a decrease in commodity prices resulting in a 0.7% unfavorable impact.
+Added: Inflationary increases in material and freight costs were offset by higher prices on parts and services and productivity initiatives.
+Added: (2) The increase in segment operating expense as a percentage of revenue reflects several immaterial factors that had a 0.2% unfavorable impact in the aggregate.
+Added: Third Party Revenue
+Added: The following table summarizes the changes in third party revenue by category in our Europe segment (in millions):
+Added: Six Months Ended June 30, Percentage Change in Revenue
+Added: Europe 2022 2021 Organic Acquisition and Divestiture Foreign Exchange (2)
+Added: Parts & services revenue $ 2,951 $ 3,025 5.5 % (1)
+Added: 0.4 % (8.3) % (2.4) %
+Added: Other revenue 14 15 2.8 % — % (8.7) % (6.0) %
+Added: Total third party revenue $ 2,965 $ 3,040 5.5 % 0.4 % (8.3) % (2.5) %
+Added: In the table above, the sum of the individual percentages may not equal the total due to rounding.
+Added: (1) Parts and services organic revenue for the six months ended June 30, 2022 increased by 5.5%, primarily driven by net price increases compared to prior year.
+Added: Revenue growth from net price increases reflects actions taken to offset increased costs from inflationary pressures.
+Added: The organic revenue growth across most of our European operations was partially offset by 0.4% of a negative effect on certain operations and product lines due to the Ukraine/Russia conflict.
+Added: (2) Compared to the prior year, exchange rates decreased our revenue growth by $254 million, or 8.3%, primarily due to the stronger U.S.
+Added: dollar against the euro, pound sterling and Czech koruna for the six months ended June 30, 2022 relative to the prior year period.
+Added: Segment EBITDA
+Added: Segment EBITDA decreased $18 million, or 5.9%, for the six months ended June 30, 2022 compared to the prior year period.
+Added: Our Europe Segment EBITDA included a negative year over year impact of $26 million related to the translation of local currency results into U.S.
+Added: dollars at lower exchange rates than those experienced during the six months ended June 30, 2021.
+Added: On a constant currency basis (i.e., excluding the translation impact), Segment EBITDA increased by $8 million, or 2.6%, com pared to the prior year.
+Added: Refer to the Foreign Currency Impact discussion within the Results of Operations–Consolidated section above for further detail regarding foreign currency impact on our results for the six months ended June 30, 2022.
+Added: The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our Europe segment:
+Added: Europe Percentage of Total Segment Revenue
+Added: Segment EBITDA for the six months ended June 30, 2021
+Added: Increase (decrease) due to:
+Added: Change in gross margin 0.1 % (1)
+Added: Change in segment operating expenses (0.4) % (2)
+Added: Change in other expense, net (0.1) %
+Added: Segment EBITDA for the six months ended June 30, 2022
+Added: In the table above, the sum of the individual percentages may not equal the total due to rounding.
+Added: (1) The increase in gross margin was primarily attributable to favorable impacts of year to date net price increases and margin improvement initiatives supporting the pursuit of profitable revenue growth to offset increased costs resulting from inflationary pressures.
+Added: (2) The increase in segment operating expenses as a percentage of revenue primarily reflects unfavorable impacts of (i) 0.2% related to a higher provision for credit losses, including impacts related to a customer bankruptcy, (ii) 0.2% from increased freight, vehicle, and fuel expenses due to inflationary pressures and ongoing supply chain constraints, (iii) 0.2% from increased personnel costs primarily due to inflationary pressures partially offset by (iv) other individually immaterial factors representing a 0.2% favorable impact in the aggregate.
+Added: Third Party Revenue
+Added: The following table summarizes the changes in third party revenue by category in our Specialty segment (in millions):
+Added: Six Months Ended June 30, Percentage Change in Revenue
+Added: Specialty 2022 2021 Organic (1)
+Added: Acquisition and Divestiture (2)
+Added: Foreign Exchange Total Change
+Added: Parts & services revenue $ 972 $ 989 (10.0) % 8.5 % (0.2) % (1.8) %
+Added: Other revenue — — — % — % — % — %
+Added: Total third party revenue $ 972 $ 989 (10.0) % 8.5 % (0.2) % (1.8) %
+Added: In the table above, the sum of the individual percentages may not equal the total due to rounding.
+Added: (1) Parts and services organic revenue for the six months ended June 30, 2022, decreased by 10.0% (10.7% on a per day basis) due to the strong comparative growth for the six months ended June 30, 2021, when parts and services organic revenue growth was 30.5%, and demand softness from lower new vehicle sales caused by supply chain challenges as well as a decrease in drop shipment volumes.
+Added: (2) Acquisition related growth for the six months ended June 30, 2022 reflected revenue from our acquisitions of three Specialty businesses from the beginning of 2021 through the one-year anniversary of the acquisition dates.
+Added: Segment EBITDA
+Added: Segment EBITDA decreased $14 million, or 9.8%, for the six months ended June 30, 2022 compared to the prior year period primarily due to the organic revenue decline and the negative effect of inflation on overhead expenses.
+Added: The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our Specialty segment:
+Added: Specialty Percentage of Total Segment Revenue
+Added: Segment EBITDA for the six months ended June 30, 2021
+Added: Increase (decrease) due to:
+Added: Change in gross margin 0.4 % (1)
+Added: Change in segment operating expenses (1.5) % (2)
+Added: Segment EBITDA for the six months ended June 30, 2022
+Added: In the table above, the sum of the individual percentages may not equal the total due to rounding.
+Added: (1) The increase in gross margin primarily reflects lower discounting to recover higher input costs and, to a lesser extent, favorable product and channel mix, partially offset by a 1.0% unfavorable impact from acquisitions.
+Added: (2) The increase in segment operating expenses as a percentage of revenue primarily reflects unfavorable impacts of (i) 1.1% in personnel costs as a result of wage inflation and lower operating leverage due to the organic parts and services revenue decline, (ii) 0.5% in vehicle and fuel expenses primarily due to higher fuel costs, and (iii) several individually immaterial factors that had an unfavorable impact of 0.5% in the aggregate, partially offset by (iv) a favorable impact of 0.6% from operating expense synergies and leverage generated from the 2021 acquisitions.
+Added: Third Party Revenue
+Added: The following table summarizes the changes in third party revenue by category in our Self Service segment (in millions):
+Added: Six Months Ended June 30, Percentage Change in Revenue
+Added: Self Service 2022 2021 Organic Acquisition and Divestiture Foreign Exchange Total Change
+Added: Parts & services revenue $ 117 $ 103 13.9 % (1)
+Added: — % — % 13.9 %
+Added: Other revenue 290 305 (4.9) % (2)
+Added: — % — % (4.9) %
+Added: Total third party revenue $ 407 $ 408 (0.2) % — % — % (0.2) %
+Added: In the table above, the sum of the individual percentages may not equal the total due to rounding.
+Added: (1) Parts and services organic revenue increased 13.9% for the six months ended June 30, 2022 compared to the prior year period, primarily driven by pricing initiatives to mitigate significant increases in input costs resulting from greater competition for vehicles.
+Added: (2) The 4.9%, or $15 million, year over year organic decrease in other revenue is related to (i) a $38 million decrease in revenue from precious metals (platinum, palladium, and rhodium) due to both lower prices and volumes, partially offset by (ii) a $13 million increase in revenue from other scrap (including aluminum) and cores primarily related to higher prices and (iii) a $10 million increase in revenue from scrap steel primarily related to higher prices, partially offset by lower volumes.
+Added: Segment EBITDA
+Added: Segment EBITDA decreased $40 million, or 36.2%, in the six months ended June 30, 2022 compared to the prior year period.
+Added: The decrease is primarily attributable to unfavorable movements in commodity prices compared to the prior year.
+Added: Decreases in precious metals prices contributed an estimated $27 million decline in Segment EBITDA relative to the six months ended June 30, 2021.
+Added: In addition, net sequential increases in scrap steel prices in our self service operations had a $5 million favorable impact on Segment EBITDA during the six months ended June 30, 2022, compared to a $21 million favorable impact during the six months ended June 30, 2021.
+Added: The favorable impacts for both periods resulted from the increase in scrap steel prices between the date we purchased a vehicle, which influences the price we pay for a vehicle, and the date we scrapped a vehicle, which influences the price we receive for scrapping a vehicle.
+Added: We estimate that precious metals and scrap steel pricing had an unfavorable effect of 9.7% on Segment EBITDA margin relative to the comparable prior year period.
+Added: The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our Self Service segment:
+Added: Self Service Percentage of Total Segment Revenue
+Added: Segment EBITDA for the six months ended June 30, 2021
+Added: Increase (decrease) due to:
+Added: Change in gross margin (8.1) % (1)
+Added: Change in segment operating expenses (1.9) % (2)
+Added: Change in other expense, net 0.1 %
+Added: Segment EBITDA for the six months ended June 30, 2022
+Added: In the table above, the sum of the individual percentages may not equal the total due to rounding.
+Added: (1) The decrease in gross margin reflects (i) an unfavorable impact of 9.0% resulting from movements in metals prices and (ii) an unfavorable impact due to increases in car costs, partially offset by (iii) a favorable impact due to increased prices for parts and services.
+Added: (2) The increase in segment operating expense as a percentage of revenue reflects (i) a 0.8% unfavorable impact from movements in metals prices, (ii) a 0.6% unfavorable impact from increased freight, vehicle and fuel costs due to inflationary pressures, (iii) a 0.3% unfavorable impact from personnel expenses due to inflationary pressures, (iv) several individually immaterial factors that had a 0.2% unfavorable impact in the aggregate.
Liquidity and Capital Resources
The following table summarizes liquidity data as of the dates indicated (in millions):
−Removed: March 31, 2022 December 31, 2021
+Added: June 30, 2022 December 31, 2021
Cash and cash equivalents $ 265 $ 274
4 unchanged sentences
Total liquidity (cash and cash equivalents plus availability under credit facilities) 1,852 1,468
−Removed: (1) Debt amounts reflect the gross values to be repaid (excluding debt issuance costs of $10 million and $12 million as of March 31, 2022 and December 31, 2021, respectively).
−Removed: (2) Debt amounts reflect the gross values to be repaid in the next 12 months (excluding debt issuance costs of immaterial amounts as of March 31, 2022 and December 31, 2021).
+Added: (1) Debt amounts reflect the gross values to be repaid (excluding debt issuance costs of $9 million and $12 million as of June 30, 2022 and December 31, 2021, respectively).
+Added: (2) Debt amounts reflect the gross values to be repaid in the next 12 months (excluding debt issuance costs of immaterial amounts as of June 30, 2022 and December 31, 2021).
(3) Capacity under credit facilities includes our revolving credit facilities and availability under credit facilities is reduced by our outstanding letters of credit.
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To fund our acq uisitions, we have accessed various forms of debt financing, including revolving credit facilities and senior notes.
−Removed: As of March 31, 2022, we had debt outstanding and additional available sources of financing as follows:
−Removed: • Senior secured credit facilities maturing in January 2024, composed of $3,150 million in revolving credit ($1,813 million outstanding at March 31, 2022), bearing interest at variable rates, with availability reduced by $69 million of amounts outstanding under letters of credit
+Added: As of June 30, 2022, we had debt outstanding and additional available sources of financing as follows:
+Added: • Senior secured credit facilities maturing in January 2024, composed of $3,150 million in revolving credit ($1,494 million outstanding at June 30, 2022), bearing interest at variable rates, with availability reduced by $69 million of amounts outstanding under letters of credit
• Euro Notes (2024) totaling $524 million (€500 million), maturing in April 2024 and bearing interest at a 3.875% fixed rate
• Euro Notes (2028) totaling $262 million (€250 million) maturing in April 2028 and bearing interest at a 4.125% fixed rate
−Removed: As of March 31, 2022, we had approximately $1,268 million available under our credit facilities.
−Removed: Combined with $327 million of cash and cash equivalents at March 31, 2022, we had approximately $1,595 million i n available liquidity, an increase of $127 million from our available liquidity as of December 31, 2021.
+Added: As of June 30, 2022, we had approximately $1,587 million available under our credit facilities.
+Added: Combined with $265 million of cash and cash equivalents at June 30, 2022, we had approximately $1,852 million i n available liquidity, an increase of $384 million from our available liquidity as of December 31, 2021.
We believe that our current liquidity and cash expected to be generated by operating activities in future periods will be sufficient to meet our current operating and capital requirements.
−Removed: Our 2022 plan includes further spending to rebuild inventory levels, support growth driven capital projects, and complete strategic acquisitions.
−Removed: Beginning in the fourth quarter of 2021, we expanded our capital allocation strategy to include the payment of dividends as an additional mechanism to return value to our stockholders.
−Removed: A summary of the dividend activity for our common stock for the three months ended March 31, 2022 is as follows:
+Added: Our 2022 plan includes spending to rebuild inventory levels, support growth driven capital projects, complete strategic acquisitions, and return stockholder value through the payment of dividends and repurchasing shares of our common stock.
+Added: A summary of the dividend activity for our common stock for the six months ended June 30, 2022 is as follows:
Dividend Amount Declaration Date Record Date Payment Date
$0.25 February 15, 2022 March 3, 2022 March 24, 2022
−Removed: On April 26, 2022, our Board of Directors declared a quarterly cash dividend of $0.25 per share of common stock, payable on June 2, 2022, to stockholders of record at the close of business on May 19, 2022.
+Added: $0.25 April 26, 2022 May 19, 2022 June 2, 2022
+Added: On July 26, 2022, our Board of Directors declared a quarterly cash dividend of $0.25 per share of common stock, payable on September 1, 2022, to stockholders of record at the close of business on August 11, 2022.
We believe that our future cash flow generation will permit us to continue paying dividends in future periods;
−Removed: however, the timing, amount and frequency of such future dividends will be subject to approval by our Board of Directors, and based on considerations of capital availability, compliance with covenants in our credit facilities and senior note indentures, and various other factors, many of which are outside of our control.
−Removed: With $1,595 million of total liquidity as of March 31, 2022 and $31 million of current maturities, we have access to funds to meet our near term commitments.
+Added: however, the timing, amount and frequency of such future dividends will be subject to approval by our Board of Directors, and based on considerations of capital availability, and various other factors, many of which are outside of our control.
+Added: With $1,852 million of total liquidity as of June 30, 2022 and $47 million of current maturities, we have access to funds to meet our near term commitments.
We have a surplus of current assets over current liabilities, which further reduces the risk of short-term cash shortfalls.
−Removed: Furthermore, in April 2022, we received $362 million in gross proceeds related to the PGW sale, which increased our cash liquidity.
−Removed: Our total liquidity inclu des availability under our senior secured credit facility, which includes the two financial maintenance covenants presented below (our required debt covenants and our actual ratios with respect to those covenants as calculated per the credit agreement as of March 31, 2022):
−Removed: Covenant Level Ratio Achieved as of March 31, 2022
+Added: Our total liquidity inclu des availability under our senior secured credit facility, which includes the two financial maintenance covenants presented below (our required debt covenants and our actual ratios with respect to those covenants as calculated per the credit agreement as of June 30, 2022):
+Added: Covenant Level Ratio Achieved as of June 30, 2022
Maximum net leverage ratio 4.00 :
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The credit agreement also contains financial and affirmative covenants, including limitations on our net leverage ratio and a minimum interest coverage ratio.
−Removed: We were in compliance with all restrictive covenants under our credit agreement as of March 31, 2022.
+Added: During the second quarter of 2022, two ratings agencies, S&P Global Ratings and Moody's Investors Service, upgraded our issuer credit rating to an investment grade rating of 'BBB-' and 'Baa3', respectively, and rated our outlook as stable.
+Added: With the assignment of an investment grade rating, we are no longer required to comply with certain restrictive covenants under the credit agreement.
+Added: We were in compliance with all applicable covenants under our credit agreement as of June 30, 2022.
The indentures relating to our Euro Notes d o not include financial maintenance covenants, and the indentures will not restrict our ability to draw funds on the credit facility.
The indentures do not prohibit amendments to the financial covenants under the credit facility as needed.
−Removed: In the long term, while we believe that we have adequate capacity under our existing credit facilities, from time to time we may need to raise additional funds through public or private financing, strategic relationships or other arrangements, such as (i) our November 2018 amendment to our senior secured credit facility and (ii) the issuance of the "Euro Notes (2026)" and the "Euro Notes (2028)" in April 2018 related to the Stahlgruber acquisition.
+Added: In the long term, while we believe that we have adequate capacity under our existing credit facilities, from time to time we may need to raise additional funds through public or private financing, strategic relationships or modification of our existing credit facilities.
There can be no assurance that additional funding, or refinancing of our credit facilities, if needed, will be available on terms attractive to us, or at all.
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Our failure to raise capital if and when needed could have a material adverse impact on our business, operating results, and financial condition.
−Removed: Beginning in 2019, a number of our European suppliers began participating in a supply chain financing initiative in select countries under which they may sell their accounts receivable to the participating financial institutions, allowing us to extend payment terms which in turn improves our operating cash flows.
−Removed: The initiative allows our suppliers to monetize their receivables prior to their payment date, subject to payment of a discount.
−Removed: We expect more suppliers will begin participating in our European supply chain financing initiative in 2022.
+Added: We utilize a supply chain financing arrangement, which allows us to improve our operating cash flows by extending payment terms.
Financial institutions participate in the supply chain financing initiative on an uncommitted basis and can cease purchasing receivables from our suppliers at any time.
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In the future, if the financial institutions do not continue to purchase receivables from our suppliers under the initiative, the participating vendors may need to renegotiate their payment terms with us, which in turn could cause our borrowings under our revolving credit facility to increase.
−Removed: All outstanding payments owed under the initiative to the participating financial institutions are recorded within Accounts payable in our Unaudited Condensed Consolidated Balance Sheets.
−Removed: Borrowings under the credit agreement accrue interest at variable rates which are tied to various indices, depending on the currency and the duration of the borrowing, plus an applicable margin rate that is subject to change quarterly based on our reported leverage ratio.
+Added: All outstanding
+Added: payments owed under the initiative to the participating financial institutions are recorded within Accounts payable in our Unaudited Condensed Consolidated Balance Sheets.
+Added: We have held interest rate swaps to hedge the variable rates on a portion of our credit agreement borrowings and currency swaps that contain an interest rate swap component and a foreign currency forward contract component.
+Added: As of June 30, 2022, we did not have any of these contracts outstanding.
+Added: The weighted average interest rate on borrowings outstanding under our credit agreement was 1.7% at June 30, 2022.
+Added: Including our senior notes, our overall weighted average interest rate on borrowings was 2.5% at June 30, 2022.
Our borrowings in U.S.
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We do not expect the change in benchmark rates will have a material impact on our results of operations, financial position or liquidity.
−Removed: We have held interest rate swaps to hedge the variable rates on a portion of our credit agreement borrowings, with the effect of fixing the interest rates on the respective notional amounts.
−Removed: In addition, from time to time, we hold currency swaps that contain an interest rate swap component and a foreign currency forward contract component that, when combined with related intercompany financing arrangements, effectively convert variable rate U.S.
−Removed: dollar-denominated borrowings into fixed rate euro-denominated borrowings.
−Removed: These derivative transactions are described in Note 9, "Derivative Instruments and Hedging Activities," to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.
−Removed: As of March 31, 2022, we did not have any of these contracts outstanding.
−Removed: The weighted average interest rate on
−Removed: borrowings outstanding under our credit agreement was 1.2% at March 31, 2022.
−Removed: Including our senior notes, our overall weighted average interest rate on borrowings was 2.1% at March 31, 2022.
−Removed: We had outstanding credit agreement borrowin gs of $1,813 million and $1,887 million at March 31, 2022 and December 31, 2021, respectively.
−Removed: Of these amounts, t here were no current maturities at March 31, 2022 or December 31, 2021.
−Removed: The scheduled maturities of long-term obligations outstanding at March 31, 2022 are as follows (in millions):
−Removed: Nine months ending December 31, 2022 (1)
+Added: See Note 8, "Long-Term Obligations" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for information related to our borrowings and related interest.
+Added: We had outstanding credit agreement borrowin gs of $1,494 million and $1,887 million at June 30, 2022 and December 31, 2021, respectively.
+Added: Of these amounts, t here wer e no current maturities at June 30, 2022 or December 31, 2021.
+Added: The scheduled maturities of long-term obligations outstanding at June 30, 2022 are as follows (in millions):
+Added: Six months ending December 31, 2022 (1)
Years ending December 31:
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(1) Long-term obligations maturing by December 31, 2022 include $32 million of short-term debt that may be extended beyond the current year ending December 31, 2022.
−Removed: (2) The total debt amounts presented above reflect the gross values to be repaid (excluding debt issuance costs of $10 million as of March 31, 2022).
−Removed: As of March 31, 2022, the Company had cash and cash equivalents of $327 million, of which $237 million was held by foreign subsidiaries.
+Added: (2) The total debt amounts presented above reflect the gross values to be repaid (excluding debt issuance costs of $9 million as of June 30, 2022).
+Added: As of June 30, 2022, the Company had cash and cash equivalents of $265 million, of which $210 million was held by foreign subsidiaries.
In general, it is our practice and intention to permanently reinvest the undistributed earnings of our foreign subsidiaries.
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We normally pay for salvage vehicles acquired at salvage auctions and under direct procurement arrangements at the time that we take possession of the vehicles.
−Removed: The following table sets forth a summary of our aftermarket and manufactured inventory procurement for the three months ended March 31, 2022 and 2021 (in millions):
−Removed: Three Months Ended March 31,
−Removed: 2022 2021 Change
+Added: The following table sets forth a summary of our aftermarket and manufactured inventory procurement for the three and six months ended June 30, 2022 and 2021 (in millions):
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2022 2021 Change 2022 2021 Change
Wholesale - North America
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Europe 924 1,005 (81)
+Added: 1,879 1,899 (20) (2)
Specialty 306 362 (56) 709 753 (44) (3)
Total $ 1,532 $ 1,629 $ (97) $ 3,207 $ 3,174 $ 33
−Removed: (1) Inventory purchases across the Wholesale - North America segment increased in the three months ended March 31, 2022 compared to the prior year period primarily due to required restocking to keep up with the high demand for our products.
−Removed: Our inventory purchases did not reach our desired levels in the first three months of 2022 due to ocean freight driven delays in shipping.
−Removed: (2) The increase in inventory purchases in our Europe segment included a decrease of $53 million attributable to the decrease in the value of the euro, and to a lesser extent, the pound sterling in the three months ended March 31, 2022 compared to the prior year period.
+Added: (1) Inventory purchases across the Wholesale - North America segment increased in the six months ended June 30, 2022 compared to the prior year period primarily due to required restocking to keep up with the high demand for our products.
+Added: (2) The decrease in inventory purchases in our Europe segment included a decrease of $167 million attributable to the decrease in the value of the euro, and to a lesser extent, the pound sterling in the six months ended June 30, 2022 compared to the prior year period.
On a constant currency basis, inventory purchases increased compared to the prior year period, due to required restocking to keep up with the high demand for our products as well as purchases to improve availability for customers in certain regions.
−Removed: (3) The increase in inventory purchases in the Specialty segment compared to the prior year period was primarily due to inventory purchases made by acquired companies.
+Added: (3) The decrease in inventory purchases in the Specialty segment compared to the prior year period was primarily due to matching inventory levels with demand.
+Added: This was partially offset by inventory purchases made by acquired companies.
These companies were not acquired until the second half of 2021.
−Removed: The following table sets forth a summary of our global wholesale salvage and self service procurement for the three months ended March 31, 2022 and 2021 (in thousands):
−Removed: Three Months Ended March 31,
−Removed: 2022 2021 % Change
+Added: The following table sets forth a summary of our global wholesale salvage and self service procurement for the three and six months ended June 30, 2022 and 2021 (in thousands):
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2022 2021 % Change 2022 2021 % Change
Wholesale - North America salvage vehicles 65 63 3.2 % 125 113 10.6 %
3 unchanged sentences
Self Service vehicle purchases in 2022 were roughly flat year over year.
−Removed: We expect to increase inventory purchases in 2022 to support the service and fill rate requirements of our businesses based on the revenue trend and expectations for full year 2022, including normal seasonality as supply chain challenges in 2021 deferred a portion of the inventory build to 2022 (although if supply chain challenges continue our ability to increase inventory purchases to the desired level could be affected).
+Added: We expect to increase inventory purchases in 2022 to support the service and fill rate requirements of our businesses based on the revenue trend and expectations for full year 2022, including normal sea sonality as supply chain challenges in 2021 deferred a portion of the inventory build to 2022 (although if supply chain challenges continue our ability to increase or maintain inventory purchases to the desired level could be affected).
The following table summarizes the components of the year over year changes in cash provided by operating activities (in millions):
Operating Cash
−Removed: Net cash provided by operating activities for the three months ended March 31, 2021 $ 523
+Added: Net cash provided by operating activities for the six months ended June 30, 2021
Increase (decrease) due to:
−Removed: Cash paid for taxes 88 (1)
Working capital accounts:
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Other operating activities (33) (2)
−Removed: Net cash provided by operating activities for the three months ended March 31, 2022 $ 409
−Removed: (1) Cash payments related to income taxes were lower for U.S.
−Removed: federal and state income taxes due to the timing of estimated tax payments.
−Removed: (2) Cash flows related to our primary working capital accounts can be volatile as the purchases, payments and collect ions can be timed differently from period to period.
−Removed: • Receivables, net was a $32 million greater outflow in 2022 primarily due to an increase in the revenue for the three months ended March 31, 2022 compared to the three months ended March 31, 2021, which translated to higher receivables balances and larger net outflows in the Wholesale - North America segment of $43 million and in the Europe segment of $32 million.
+Added: Net cash provided by operating activities for the six months ended June 30, 2022
+Added: (1) Cash flows related to our primary working capital accounts can be volatile as the purchases, payments and collections can be timed differently from period to period.
+Added: • Receivables, net was a $25 million greater outflow in 2022 primarily due to an increase in organic revenue in 2022 compared to 2021, which translated to higher receivables balances and larger net outflows in the Wholesale - North America segment of $35 million.
We had a smaller cash outflow in the Specialty segment of $11 million compared to prior period due to lower revenue.
−Removed: • Inventories represented $85 million in incremental cash outflows in the first three months of 2022 compared to the same period of 2021.
+Added: • Inventories represented $266 million in incremental cash outflows in the first six months of 2022 compared to the same period of 2021.
The change is primarily attributable to increased inventory purchases in the current year as a result of strong demand and strategic inventory purchases to curb the impacts of supply chain constraints.
−Removed: • Accounts payable produced $22 million in lower cash inflows primarily due to timing of payments with lower accounts payable balances in our Europe segment of $78 million and Specialty segment of $31 million, partially offset by higher accounts payable balances in our Wholesale - North America segment of $86 million.
−Removed: (3) Reflects a number of individually insignificant fluctuations in cash paid for other operating activities.
−Removed: Net cash used in investing activities tota led $63 million a nd $33 million during the three months ended March 31, 2022 and 2021, respectively.
−Removed: Property, plant and equipment purchases were $59 million in the three months ended March 31, 2022 compared to $42 million in the prior year period, primarily driven by capital projects in our Wholesale - North America segment.
+Added: • Accounts payable produced $128 million in higher cash inflows primarily from North America which contributed a $224 million cash inflow driven by higher accounts payable balances and timing of payments partially offset by lower cash inflows in our Europe segment of $62 million and Specialty segment of $34 million.
+Added: (2) Reflects the aggregate effect of lower cash operating income and higher incentive compensation payments partially offset by lower cash paid for taxes.
+Added: Net cash provided by investing activities totaled $265 million and net cash used in investing activities totaled $109 million during the six months ended June 30, 2022 and 2021, respectively.
+Added: Proceeds from the disposal of businesses (primarily PGW) were $372 million during the six months ended June 30, 2022.
+Added: Property, plant and equipment purchases were $99 million in the six months ended June 30, 2022 compared to $88 million in the prior year period.
The following table reconciles Net Cash Provided by Operating Activities to Free Cash Flow (in millions):
−Removed: Three Months Ended March 31,
+Added: Six Months Ended June 30,
Net cash provided by operating activities $ 737 $ 933
1 unchanged sentence
Free cash flow $ 638 $ 845
−Removed: Net cash used in financing activities totaled $278 million and $208 million for the three months ended March 31, 2022 and 2021, respectively.
−Removed: During the three months ended March 31, 2022, net repayments of our borrowings totaled $53 million compared to $83 million during the three months ended March 31, 2021.
−Removed: We repurcha sed $144 million o f our common stock in the three months ended March 31, 2022, compared to $57 million in the three months ended March 31, 2021.
−Removed: In January 2021, we settled our cross currency swap and other foreign exchange forward contracts with the counterparties for $57 million due primarily to strengthening in the Euro exchange rate relative to the contract rate.
−Removed: We also pai d $71 million in dividends to our stockholders in the three months ended March 31, 2022 (no dividends were paid in the three months ended March 31, 2021).
+Added: Net cash used in financing activities increased by $176 million for the six months ended June 30, 2022 compared to the same period in 2021 due primarily to increases in repurchases of common stock of $184 million and payment of dividends in 2022 of $142 million (no dividends were paid in the six months ended June 30, 2021) partially offset by a decrease in settlement of our cross currency swap and other foreign exchange forward contracts in 2021 of $89 million and lower net repayments on our borrowings of $45 million.
+Added: Please refer to Note 2, "Financial Statement Information for additional information on repurchases of common stock.
We intend to continue to evaluate markets for potential growth through the internal development of distribution centers, processing and sales facilities, and warehouses, through further integration of our facilities, and through selected business acquisitions.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.