26 unchanged sentences
Our Wholesale - North America segment is a leading provider of alternative vehicle collision replacement products, paint and related body repair products, and alternative vehicle mechanical replacement products, with our sales, processing, and distribution facilities reaching most major markets in the United States and Canada.
−Removed: Our Europe segment is a leading provider of alternative vehicle replacement and maintenance products in Germany, the U.K., the Benelux region (Belgium, Netherlands, and Luxembourg), Italy, Czech Republic, Austria, Slovakia, Poland, and various other European countries.
+Added: Our Europe segment is a leading provider of alternative vehicle replacement and maintenance products in Germany, the U.K., the Benelux region (Belgium, Netherlands, and Luxembourg), Italy, Czech Republic, Austria, Slovakia, and various other European countries.
Our Specialty segment is a leading distributor of specialty vehicle aftermarket equipment and accessories reaching most major markets in the U.S.
7 unchanged sentences
Since our inception in 1998, we have pursued a growth strategy through both organic growth and acquisitions.
−Removed: Our current acquisition strategy focuses on acquisitions which are highly accretive, synergistic and/or add critical capabilities.
+Added: Our current acquisition strategy focuses on highly accretive tuck-in acquisitions with significant synergies or critical capabilities and no large platform acquisitions are expected.
Additionally, from time to time, we make investments in various businesses to advance our strategic objectives.
12 unchanged sentences
Our 2023 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 six months ended June 30, 2024.
+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 nine months ended September 30, 2024.
Recently Issued Accounting Pronouncements
7 unchanged sentences
See Note 9, "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 details.
−Removed: • Transformation expenses — Period costs incurred to execute the 1 LKQ Europe plan that are expected to contribute to ongoing benefits to the business (e.g.
−Removed: non-capitalizable implementation costs related to a common ERP platform).
+Added: • Transformation expenses — Period costs incurred to execute the 1 LKQ Europe plan that are expected to contribute to ongoing benefits to the business (e.g., non-capitalizable implementation costs related to a common ERP platform).
These expenses are recorded in SG&A expenses.
2 unchanged sentences
We are executing on the various projects associated with the 1 LKQ Europe plan and expect to be completed by the end of 2027.
−Removed: During the three and six months ended June 30, 2024, we incurred $11 million and $19 million, respectively, in costs across all three categories noted above.
+Added: During the three and nine months ended September 30, 2024, we incurred $12 million and $31 million, respectively, in costs across all three categories noted above.
We expect that costs of the plan, reflecting all three categories noted above, will range between $125 million to $155 million for 2024 through the projected plan completion date in 2027.
17 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 June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
7 unchanged sentences
Total other expense, net 1.6 % 1.3 % 1.6 % 0.6 %
−Removed: Income before provision for income taxes 7.2 % 11.3 % 6.7 % 11.0 %
+Added: Income from continuing operations before provision for income taxes 7.0 % 7.4 % 6.8 % 9.8 %
Provision for income taxes 1.7 % 1.7 % 2.0 % 2.5 %
Equity in earnings of unconsolidated subsidiaries 0.1 % 0.1 % — % 0.1 %
+Added: Income from continuing operations 5.3 % 5.8 % 4.9 % 7.3 %
+Added: Net income from discontinued operations — % — % — % — %
Net income 5.3 % 5.9 % 4.9 % 7.3 %
−Removed: net income attributable to noncontrolling interest — % — % — % — %
+Added: net income attributable to continuing noncontrolling interest — % — % — % — %
Net income attributable to LKQ stockholders 5.3 % 5.8 % 4.9 % 7.3 %
In the table above, the sum of the individual percentages may not equal the total due to rounding.
−Removed: Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023
+Added: Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023
The following table summarizes the changes in revenue by category (in millions):
−Removed: Three Months Ended June 30, Percentage Change in Revenue
+Added: Three Months Ended September 30, Percentage Change in Revenue
2024 2023 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 increase in parts and services revenue of 9.0% represented increases in segment revenue of 24.8% in Wholesale - North America and 5.2% in Specialty, partially offset by a decrease of 11.1% in Self Service.
−Removed: This overall increase was driven by an 11.8% increase due to the net impact of acquisitions and divestitures, partially offset by an organic parts and services revenue decrease of 2.1% (2.9% decrease on a per day basis) and a 0.6% decrease due to fluctuations in foreign exchange rates.
+Added: The increase in parts and services revenue of 0.6% represented increases in segment revenue of 2.8% in Wholesale - North America and 1.8% in Europe, partially offset by decreases of 10.5% in Self Service and 8.5% in Specialty.
+Added: This overall increase was driven by a 3.1% increase due to the net impact of acquisitions and divestitures and a 0.4% increase due to fluctuations in foreign exchange rates, partially offset by an organic parts and services revenue decrease of 2.8% (4.3% decrease on a per day basis).
The decrease in other revenue of 2.2% was primarily driven by a decrease in organic revenue of $4 million due to lower commodities prices and volumes compared to the prior year period, which resulted in a $4 million decrease in Self Service and a $2 million decrease in Wholesale - North America.
−Removed: Refer to the discussion of our segment results of operations for factors contributing to the changes in revenue by segment for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
+Added: Refer to the discussion of our segment results of operations for factors contributing to the changes in revenue by segment for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Cost of Goods Sold
−Removed: Cost of goods sold as a percentage of revenue increased to 61.2% of revenue for the three months ended June 30, 2024 from 59.0% of revenue for the three months ended June 30, 2023.
−Removed: Cost of goods sold reflects increases of 1.5% from Wholesale - North America, 0.6% from Europe, and 0.2% attributable to mix shift towards our lower margin segments, partially offset by a decrease of 0.3% from Self Service.
−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 June 30, 2024 compared to the three months ended June 30, 2023.
+Added: Cost of goods sold as a percentage of revenue increased to 61.2% of revenue for the three months ended September 30, 2024 from 61.0% of revenue for the three months ended September 30, 2023.
+Added: Cost of goods sold reflects an increase of 0.7% from Wholesale - North America, partially offset by decreases of 0.3% from Self Service and 0.2% from Europe.
+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 September 30, 2024 compared to the three months ended September 30, 2023.
Selling, General and Administrative Expenses
−Removed: SG&A expenses as a percentage of revenue decreased to 26.3% for the three months ended June 30, 2024 from 27.2% for the three months ended June 30, 2023.
−Removed: The year over year decrease in SG&A expense primarily reflects an impact of 0.9% related to Wholesale - North America.
−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 June 30, 2024 compared to the three months ended June 30, 2023.
+Added: SG&A expenses as a percentage of revenue decreased to 27.1% for the three months ended September 30, 2024 from 27.5% for the three months ended September 30, 2023.
+Added: The year over year decrease in SG&A expense primarily reflects impacts of 0.4% related to Wholesale - North America and 0.3% in Europe, partially offset by an increase of 0.2% from Specialty.
+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 September 30, 2024 compared to the three months ended September 30, 2023.
Restructuring and Transaction Related Expenses
The following table summarizes restructuring and transaction related expenses for the periods indicated (in millions):
−Removed: Three Months Ended June 30,
+Added: Three Months Ended September 30,
2024 2023 Change
2 unchanged sentences
Restructuring and transaction related expenses $ 20 $ 27 $ (7)
−Removed: (1) Restructuring expenses for the three months ended June 30, 2024 primarily consisted of (i) $37 million related to our 2024 Global Restructuring plan, (ii) $10 million related to our acquisition integration plans, (iii) $1 million related to our 1 LKQ Europe plan, and (iv) $1 million related to our 2022 Global Restructuring plan.
−Removed: (2) Restructuring expenses for the three months ended June 30, 2023 primarily consisted of $2 million related to our 2022 Global Restructuring plan.
−Removed: (3) Transaction related expenses for the three months ended June 30, 2023 primarily related to external costs such as legal, accounting and advisory fees related to completed and potential acquisitions (including Uni-Select transaction costs).
+Added: (1) Restructuring expenses for the three months ended September 30, 2024 primarily consisted of (i) $14 million related to our 2024 Global Restructuring plan, (ii) $4 million related to our acquisition integration plans, and (iii) $1 million related to our 2022 Global Restructuring plan.
+Added: (2) Restructuring expenses for the three months ended September 30, 2023 primarily consisted of $20 million related to our acquisition integration plans and $4 million related to our 2022 Global Restructuring plan.
See Note 9, "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.
1 unchanged sentence
The following table summarizes depreciation and amortization for the periods indicated (in millions):
−Removed: Three Months Ended June 30,
+Added: Three Months Ended September 30,
2024 2023 Change
2 unchanged sentences
Depreciation and amortization $ 92 $ 76 $ 16
−Removed: (1) Depreciation expense increased primarily related to an increase in capital expenditures in the last six months of 2023, which is impacting depreciation expense in 2024.
+Added: (1) Depreciation expense increased primarily related to increased capital expenditures in the last three months of 2023 and acquisitions in our Wholesale - North America and Europe segments.
(2) Amortization expense increased primarily due to an increase in Wholesale - North America due to our acquisition of Uni-Select in August 2023.
1 unchanged sentence
The following table summarizes Total other expense, net for the periods indicated (in millions):
−Removed: Three Months Ended June 30,
+Added: Three Months Ended September 30,
2024 2023 Change
3 unchanged sentences
Total other expense, net $ 58 $ 45 $ 13
−Removed: (1) Interest expense increased primarily due to (i) a $17 million increase from higher outstanding debt primarily related to the permanent financing for the Uni-Select Acquisition and (ii) a $3 million increase from higher interest rates in the second quarter of 2024 compared to the second quarter of 2023, partially offset by (iii) a $6 million decrease related to amortization of pre-acquisition bridge loan financing costs related to the Uni-Select Acquisition in the second quarter of 2023.
+Added: (1) Interest expense increased primarily due to a $4 million increase from higher outstanding debt in the current year period.
(2) Related to the Uni-Select Acquisition.
3 unchanged sentences
Provision for Income Taxes
−Removed: Our effective income tax rate for the three months ended June 30, 2024 was 30.9%, compared to 28.0% for the three months ended June 30, 2023.
−Removed: The increase in the effective tax rate for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 is primarily attributable to the 3.4% unfavorable impact of discrete items, mostly related to the 2024 Global Restructuring Plan impairments.
−Removed: Refer to Note 8, "Restructuring and Transaction Related Expenses" for further information on the impairments.
+Added: Our effective income tax rate for the three months ended September 30, 2024 was 25.0%, compared to 22.6% for the three months ended September 30, 2023.
+Added: The increase in the effective tax rate for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 is mostly related to favorable discrete items in the prior year of 4.4%, primarily related to the Uni-Select Acquisition foreign exchange forward contract gain, exceeding the favorable discrete items of 2.4% in the current year.
+Added: Refer to Note 14, "Derivative Instruments and Hedging Activities" for further information on the foreign exchange forward contracts.
See Note 17, "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 June 30, 2024 was $2 million, which was consistent with the three months ended June 30, 2023.
+Added: Equity in earnings of unconsolidated subsidiaries for the three months ended September 30, 2024 decreased by $1 million primarily related to a decrease in year over year results in an immaterial investment in our Europe segment.
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 June 30, 2023, the Czech koruna, Canadian dollar and euro rates used to translate the 2024 statements of income decreased by 6.7%, 1.9% and 1.1%, respectively, while the pound sterling rate increased by 0.8%.
+Added: Relative to the rates used during the three months ended September 30, 2023, the Czech koruna and Canadian dollar rates used to translate the 2024 statements of income decreased by 3.3% and 1.7%, respectively, while the pound sterling and euro rates increased by 2.7% and 1.0%, respectively.
Realized and unrealized currency gains and losses (including the effects of hedge instruments) combined with the translation effect of the change in foreign currencies against the U.S.
−Removed: dollar had a net negative effect of $0.07 on diluted earnings per share relative to the prior year period primarily related to the $23 million pretax gain on the foreign exchange forward contracts in the second quarter of 2023 related to the Uni-Select Acquisition.
−Removed: Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
+Added: dollar had a net negative effect of $0.06 on diluted earnings per share relative to the prior year period primarily related to the gain on the foreign exchange forward contracts in the third quarter of 2023 related to the Uni-Select Acquisition, including the tax effects.
+Added: Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
The following table summarizes the changes in revenue by category (in millions):
−Removed: Six Months Ended June 30, Percentage Change in Revenue
+Added: Nine Months Ended September 30, Percentage Change in Revenue
2024 2023 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 increase in parts and services revenue of 10.5% represented increases in segment revenue of 24.3% in Wholesale - North America, 5.9% in Specialty, and 2.8% in Europe, partially offset by a decrease of 10.8% in Self Service.
+Added: The increase in parts and services revenue of 7.1% represented increases in segment revenue of 16.4% in Wholesale - North America, 2.4% in Europe, and 0.8% in Specialty, partially offset by a decrease of 10.7% in Self Service.
This overall increase was driven by an 8.7% increase due to the net impact of acquisitions and divestitures and a 0.2% increase due to fluctuations in foreign exchange rates, partially offset by an organic parts and services revenue decrease of 1.8%.
The decrease in other revenue of 11.5% was primarily driven by a decrease in organic revenue of $65 million due to lower commodities prices and volumes compared to the prior year period, which resulted in a $58 million decrease in Self Service and a $9 million decrease in Wholesale - North America.
−Removed: Refer to the discussion of our segment results of operations for factors contributing to the changes in revenue by segment for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
+Added: Refer to the discussion of our segment results of operations for factors contributing to the changes in revenue by segment for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Cost of Goods Sold
−Removed: Cost of goods sold as a percentage of revenue increased to 61.0% for the six months ended June 30, 2024 from 59.0% for the six months ended June 30, 2023.
−Removed: Cost of goods sold reflects increases of 1.5% from Wholesale - North America, 0.2% from Europe, 0.2% attributable to mix shift towards our lower margin segments and 0.2% attributable to restructuring, partially offset by a decrease of 0.2% from Self Service.
−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 six months ended June 30, 2024 compared to the six months ended June 30, 2023.
+Added: Cost of goods sold as a percentage of revenue increased to 61.0% for the nine months ended September 30, 2024 from 59.7% for the nine months ended September 30, 2023.
+Added: Cost of goods sold primarily reflects an increase of 1.1% from Wholesale - North America.
+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 nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Selling, General and Administrative Expenses
−Removed: SG&A expenses as a percentage of revenue decreased to 27.2% for the six months ended June 30, 2024 from 27.5% for the six months ended June 30, 2023.
−Removed: The year over year decrease in SG&A expense primarily reflects impacts of 0.8% related to Wholesale - North America, partially offset by an increase of 0.4% in Europe.
−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 six months ended June 30, 2024 compared to the six months ended June 30, 2023.
+Added: SG&A expenses as a percentage of revenue decreased to 27.2% for the nine months ended September 30, 2024 from 27.5% for the nine months ended September 30, 2023.
+Added: The year over year decrease in SG&A expense primarily reflects an impact of 0.6% related to Wholesale - North America, partially offset by an increase of 0.2% in Europe.
+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 nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Restructuring and Transaction Related Expenses
The following table summarizes restructuring and transaction related expenses for the periods indicated (in millions):
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
2024 2023 Change
2 unchanged sentences
Restructuring and transaction related expenses $ 99 $ 53 $ 46
−Removed: (1) Restructuring expenses for the six months ended June 30, 2024 primarily consisted of (i) $56 million related to our 2024 Global Restructuring plan, (ii) $16 million related to our acquisition integration plans, (iii) $3 million related to our 1 LKQ Europe plan, and (iv) $2 million related to our 2022 Global Restructuring plan.
−Removed: (2) Restructuring expenses for the six months ended June 30, 2023 primarily consisted of (i) $7 million related to our 2022 Global Restructuring plan, (ii) $2 million related to our acquisition integration plans, and (iii) $1 million related to our 1 LKQ Europe plan.
−Removed: (3) Transaction related expenses for the six months ended June 30, 2023 primarily related to external costs such as legal, accounting and advisory fees related to completed and potential acquisitions (including Uni-Select transaction costs).
+Added: (1) Restructuring expenses for the nine months ended September 30, 2024 primarily consisted of (i) $70 million related to our 2024 Global Restructuring plan, (ii) $20 million related to our acquisition integration plans, (iii) $3 million related to our 1 LKQ Europe plan, and (iv) $3 million related to our 2022 Global Restructuring plan.
+Added: (2) Restructuring expenses for the nine months ended September 30, 2023 primarily consisted of (i) $22 million related to our acquisition integration plans, (ii) $11 million related to our 2022 Global Restructuring plan, and (iii) $1 million related to our 1 LKQ Europe plan.
+Added: (3) Transaction related expenses for the nine months ended September 30, 2023 primarily related to external costs such as legal, accounting and advisory fees related to completed and potential acquisitions (including Uni-Select transaction costs).
See Note 9, "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.
1 unchanged sentence
The following table summarizes depreciation and amortization for the periods indicated (in millions):
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
2024 2023 Change
2 unchanged sentences
Depreciation and amortization $ 268 $ 195 $ 73
−Removed: (1) Depreciation expense increased primarily related to an increase in capital expenditures in the last six months of 2023, which is impacting depreciation expense in 2024.
+Added: (1) Depreciation expense increased primarily related to increased capital expenditures in the last three months of 2023 and acquisitions in our Wholesale - North America and Europe segments.
(2) Amortization expense increased primarily due to an increase in Wholesale - North America due to our acquisition of Uni-Select in August 2023.
1 unchanged sentence
The following table summarizes Total other expense, net for the periods indicated (in millions):
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
2024 2023 Change
3 unchanged sentences
Total other expense, net $ 179 $ 67 $ 112
−Removed: (1) Interest expense increased primarily due to (i) a $44 million increase from higher outstanding debt primarily related to the permanent financing for the Uni-Select Acquisition and (ii) a $7 million increase from higher interest rates in the first half of 2024, partially offset by (iii) a $9 million decrease related to amortization of pre-acquisition bridge loan financing costs related to the Uni-Select Acquisition in the first half of 2023.
+Added: (1) Interest expense increased primarily due to (i) a $48 million increase from higher outstanding debt primarily related to the permanent financing for the Uni-Select Acquisition and (ii) a $7 million increase from higher interest rates in the first nine months of 2024 compared to the prior year period, partially offset by (iii) a $9 million decrease related to amortization of pre-acquisition bridge loan financing costs related to the Uni-Select Acquisition in the first nine months of 2023.
(2) Related to the Uni-Select Acquisition.
See Note 2, "Business Combinations" and Note 14, "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 for further information.
−Removed: (3) The decrease in Interest income and other income, net is primarily comprised of a $6 million decrease in interest income, primarily related to interest income on the proceeds from the U.S.
−Removed: Notes (2028/33) that were invested in money market funds in 2023 and a $5 million decrease from funds received to settle an eminent domain matter in 2023.
+Added: (3) The decrease in Interest income and other income, net is primarily comprised of (i) an $11 million decrease in interest income, primarily related to interest income on the proceeds from the U.S.
+Added: Notes (2028/33) that were invested in money market funds in 2023, (ii) a $5 million decrease from funds received to settle an eminent domain matter in 2023, and (iii) individually insignificant decreases which in the aggregate had a $1 million impact.
Provision for Income Taxes
−Removed: Our effective income tax rate for the six months ended June 30, 2024 was 30.8%, compared to 27.1% for the six months ended June 30, 2023.
−Removed: The increase in the effective tax rate for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 is primarily attributable to the 3.9% unfavorable impact of discrete items, mostly related to the 2024 Global Restructuring Plan impairments.
−Removed: Refer to Note 8, "Restructuring and Transaction Related Expenses" for further information on the impairments.
+Added: Our effective income tax rate for the nine months ended September 30, 2024 was 28.8%, compared to 25.9% for the nine months ended September 30, 2023.
+Added: The increase in the effective tax rate for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 is primarily attributable to a 2.9% year over year unfavorable impact of discrete items, mostly related to the unfavorable tax effects of the 2024 Global Restructuring Plan impairments in the current year and the favorable tax effects from the Uni-Select Acquisition foreign exchange forward contract gain in the prior year.
+Added: Refer to Note 9, "Restructuring and Transaction Related Expenses" for further information on the impairments and Note 14, "Derivative Instruments and Hedging Activities" for further information on the foreign exchange forward contracts.
See Note 17, "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 six months ended June 30, 2024 decreased by $5 million compared to the six months ended June 30, 2023, primarily related to a decrease in year over year results reported by Mekonomen, which is our largest equity method investment.
+Added: Equity in earnings of unconsolidated subsidiaries for the nine months ended September 30, 2024 decreased by $6 million compared to the nine months ended September 30, 2023, primarily related to a decrease in year over year results reported by Mekonomen, which is our largest equity method 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 six months ended June 30, 2023, the Czech koruna and Canadian dollar rates used to translate the 2024 statements of income decreased by 5.5% and 0.8%, respectively, while the pound sterling rate increased by 2.5% and the euro rate was flat.
+Added: Relative to the rates used during the nine months ended September 30, 2023, the Czech koruna and Canadian dollar rates used to translate the 2024 statements of income decreased by 4.6% and 1.1%, respectively, while the pound sterling and euro rates increased by 2.6% and 0.4%, respectively.
Realized and unrealized currency gains and losses (including the effects of hedge instruments) combined with the translation effect of the change in foreign currencies against the U.S.
−Removed: dollar had a net negative effect of $0.13 on diluted earnings per share relative to the prior year period primarily related to the $46 million pretax gain on the foreign exchange forward contracts in the first half of 2023 related to the Uni-Select Acquisition.
+Added: dollar had a net negative effect of $0.19 on diluted earnings per share relative to the prior year period primarily related to the $49 million pretax gain on the foreign exchange forward contracts in the first nine months of 2023 related to the Uni-Select Acquisition.
Results of Operations—Segment Reporting
10 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 June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2024 % of Total Segment Revenue 2023 % of Total Segment Revenue 2024 % of Total Segment Revenue 2023 % of Total Segment Revenue
39 unchanged sentences
See Note 19, "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 June 30, 2024 Compared to Three Months Ended June 30, 2023
+Added: Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023
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 June 30, Percentage Change in Revenue
+Added: Three Months Ended September 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 decreased 5.3% for the three months ended June 30, 2024 compared to the prior year period, primarily driven by decreased aftermarket collision volumes which were negatively impacted by lower repairable claims, which we believe are primarily attributable to difficult economic conditions, comparatively warmer weather in the first quarter of 2024 which reduced backlog at body shops going into the second quarter of 2024 and, to a lesser extent, inventory availability issues due to delays in inbound deliveries.
−Removed: (2) Other organic revenue decreased 4.0%, or $3 million, year over year primarily related to (i) a $3 million decrease in revenue from precious metals due to lower prices, partially offset by higher volumes, (ii) a $1 million decrease in revenue from scrap steel due to lower prices, partially offset by (iii) a $1 million increase in revenue from other scrap (e.g., aluminum) and cores due to higher prices.
+Added: (1) Parts and services organic revenue decreased 6.1% (7.5% on a per day basis) for the three months ended September 30, 2024 compared to the prior year period.
+Added: This decline was primarily driven by a reduction in paint revenue, related to increased competition, and a decrease in aftermarket collision volumes.
+Added: The latter was negatively impacted by fewer repairable claims, which we believe are mostly attributable to difficult economic conditions and, to a lesser extent, inventory availability issues due to delays in inbound deliveries.
+Added: Additionally, adverse weather conditions caused by hurricane Helene led to temporary operational closures in the southeast region, which had a small but negative impact on revenue towards the end of September 2024.
+Added: (2) Other organic revenue decreased 2.4%, or $2 million, year over year primarily related to a $2 million decrease in revenue from precious metals due to lower prices and lower volumes.
(3) Acquisition and divestiture parts and services revenue was an increase of $119 million, or 9.1%, primarily due to the acquisition of Uni-Select in the third quarter of 2023.
1 unchanged sentence
Segment EBITDA
−Removed: Segment EBITDA increased $8 million, or 3.1%, for the three months ended June 30, 2024 compared to the prior year period, which includes a positive impact related to the acquisition of Uni-Select in the third quarter of 2023 (Uni-Select increases Segment EBITDA dollars but dilutes the Segment EBITDA percentage), including accelerated synergies, and cost savings initiatives, partially offset by lower collision volumes, lower precious metals prices, a decrease in salvage margins and continued inflationary pressures.
+Added: Segment EBITDA decreased $8 million, or 2.9%, for the three months ended September 30, 2024 compared to the prior year period, primarily due to the organic revenue decline, continued inflationary pressures, unfavorable commodities prices and a decrease in salvage margins, partially offset by cost savings initiatives, acquisition related synergies, lower incentive compensation for the three months ended September 30, 2024, and positive impacts from the acquisition of Uni-Select in the third quarter of 2023 (Uni-Select increases Segment EBITDA dollars but dilutes the Segment EBITDA percentage).
We estimate that precious metals and scrap steel prices had a net unfavorable effect of $4 million, or 0.3%, on Segment EBITDA margin relative to the comparable prior year period.
2 unchanged sentences
Percentage of Total Segment Revenue
−Removed: Segment EBITDA for the three months ended June 30, 2023
+Added: Segment EBITDA for the three months ended September 30, 2023
Increase (decrease) due to:
Change in gross margin (1.8) % (1)
−Removed: Segment EBITDA adjustments 0.2 % (1)
Change in segment operating expenses 0.9 % (2)
−Removed: Change in other income and expenses, net 0.1 %
−Removed: Segment EBITDA for the three months ended June 30, 2024
+Added: Segment EBITDA for the three months ended September 30, 2024
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 of 5.9% was driven by the dilutive nature of the acquisition of Uni-Select, which changed the segment's product mix to reflect a greater percentage of paint, body and equipment and maintenance product lines.
−Removed: These product lines have a lower gross margin structure than our other wholesale product lines.
−Removed: The year over year effect will be noted through the third quarter, after which the impact will be annualized.
−Removed: Additionally, gross margin was
−Removed: negatively affected by the related mix effect resulting from lower aftermarket revenue, which has a higher margin than our other wholesale lines and decreases in salvage margins tied to softening salvage revenue.
−Removed: Reported gross margin also includes a 0.2% reduction primarily related to restructuring expenses incurred as part of the 2024 Global Restructuring Plan.
−Removed: These costs are excluded from the calculation of Segment EBITDA.
−Removed: See Note 8, "Restructuring and Transaction Related Expenses" and Note 17, "Segment and Geographic Information" for further information.
−Removed: (2) The decrease in segment operating expenses as a percentage of revenue primarily reflects favorable impacts of (i) 1.1% related to lower incentive compensation, (ii) 0.7% from other personnel expenses primarily related to cost savings initiatives, (iii) 0.4% from decreased freight, vehicle, and fuel costs and (iv) other individually immaterial factors representing a 0.1% favorable impact in the aggregate.
+Added: (1) The decrease in gross margin of 1.8% was driven by decreases in salvage margins tied to softening salvage revenue, a decline in commodities prices and the related mix effect resulting from lower aftermarket revenue, which has a higher margin than our other wholesale lines.
+Added: Additionally, gross margin was negatively affected by the dilutive nature of the acquisition of Uni-Select, which changed the segment's product mix to reflect a greater percentage of paint, body and equipment and maintenance product lines.
+Added: These product lines have a lower gross margin structure than our other
+Added: wholesale product lines.
+Added: The year over year effect was noted through the third quarter, and the impact has now been annualized.
+Added: (2) The decrease in segment operating expenses as a percentage of revenue primarily reflects favorable impacts of (i) 0.8% related to lower incentive compensation and (ii) 0.3% in other personnel costs primarily related to higher operating leverage, partially offset by (iii) other individually immaterial factors representing a 0.2% unfavorable impact in the aggregate.
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 June 30, Percentage Change in Revenue
+Added: Three Months Ended September 30, Percentage Change in Revenue
Europe 2024 2023 Organic Acquisition and Divestiture (2)
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 June 30, 2024 increased by 0.3% (1.3% decrease on a per day basis), primarily driven by an increased number of selling days in the current quarter compared to the prior year period, partially offset by decreased volumes as a result of difficult economic conditions, and strike activity and heightened competition in certain markets.
−Removed: (2) Acquisition and divestiture revenue was an increase of $13 million, or 0.8%, primarily related to our acquisition of four wholesale businesses from the beginning of the second quarter of 2023 through the one-year anniversary of the acquisition dates.
−Removed: (3) Exchange rates decreased our revenue growth by $18 million, or 1.1%, primarily due to the stronger U.S.
−Removed: dollar against the euro and Czech koruna, partially offset by the weaker U.S.
−Removed: dollar against the pound sterling for the three months ended June 30, 2024 relative to the prior year period.
+Added: (1) Parts and services organic revenue for the three months ended September 30, 2024 increased by 1.8% (0.1% on a per day basis), primarily driven by an increased number of selling days in the current quarter compared to the prior year period.
+Added: On a per day basis, organic revenue was roughly flat as the effects of pricing initiatives to offset increased costs resulting from inflationary pressures were mostly offset by decreased overall volumes, despite increases in several markets, as a result of difficult economic conditions and heightened competition in certain markets.
+Added: (2) Acquisition and divestiture revenue was a net decrease of $16 million, or 1.0%, primarily related to our divestment of three wholesale businesses in 2024.
+Added: (3) Exchange rates increased our revenue growth by $15 million, or 0.9%, primarily due to the weaker U.S.
+Added: dollar against the pound sterling and euro, partially offset by the stronger U.S.
+Added: dollar against the Czech koruna for the three months ended September 30, 2024 relative to the prior year period.
Segment EBITDA
−Removed: Segment EBITDA decreased $14 million, or 7.4%, for the three months ended June 30, 2024 compared to the prior year period.
−Removed: On a constant currency basis (i.e., excluding translation impact), Segment EBITDA decreased by $12 million, or 6.3%, compared to the prior year period.
−Removed: The decrease in dollar terms is mainly attributable to the negative impact of higher supplier costs and unfavorable customer mix, which more than offset the effects of lower operating expenses and organic revenue growth of $6 million.
−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 June 30, 2024.
+Added: Segment EBITDA increased $18 million, or 12.1%, for the three months ended September 30, 2024 compared to the prior year period.
+Added: On a constant currency basis (i.e., excluding translation impact), Segment EBITDA increased by $17 million, or 11.2%, compared to the prior year period.
+Added: The increase in dollar terms is mainly attributable to organic revenue growth of $30 million and a decrease in segment operating expenses largely driven by an $11 million charge in the prior year to settle a value-added tax issue in Italy.
+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 September 30, 2024.
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 June 30, 2023
+Added: Segment EBITDA for the three months ended September 30, 2023
Increase (decrease) due to:
Change in gross margin 0.1 %
−Removed: Segment EBITDA adjustments 0.3 % (1)
Change in segment operating expenses 0.7 % (1)
Change in other income and expenses, net 0.1 %
−Removed: Segment EBITDA for the three months ended June 30, 2024
+Added: Segment EBITDA for the three months ended September 30, 2024
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 unfavorable customer mix and inflationary pressures that were not fully offset by pricing initiatives.
−Removed: Additionally, reported gross margin includes a 0.3% reduction primarily related to restructuring expenses incurred as part of the 2024 Global Restructuring Plan.
−Removed: These costs are excluded from the calculation of Segment EBITDA.
−Removed: See Note 8, "Restructuring and Transaction Related Expenses" and Note 17, "Segment and Geographic Information" for further information.
−Removed: (2) The decrease in segment operating expenses as a percentage of revenue reflects favorable impacts of (i) 0.9% due to a reduction in personnel related accruals previously recorded as a result of union related negotiations, (ii) 0.2% due to lower energy and utilities costs compared to the prior year period, and (iii) other individually immaterial factors representing a 0.1% favorable impact in aggregate, partially offset by unfavorable impacts of (iv) 0.5% from increased personnel costs mainly due to wage inflation, (v) 0.2% from professional fees related to several strategic central and regional information technology initiatives, and (vi) 0.2% from increased outbound freight and logistics costs.
+Added: (1) The decrease in segment operating expenses as a percentage of revenue primarily reflects a favorable impact of 0.7% due to the settlement of a value-added tax issue in Italy in the prior year.
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 June 30, Percentage Change in Revenue
+Added: Three Months Ended September 30, Percentage Change in Revenue
Specialty 2024 2023 Organic (1)
−Removed: Acquisition and Divestiture (2)
−Removed: Foreign Exchange Total Change
+Added: Acquisition and Divestiture Foreign Exchange Total Change
Parts & services revenue $ 417 $ 456 (8.5) % 0.2 % (0.1) % (8.5) %
2 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 June 30, 2024 decreased by 2.1% primarily due to demand softness in the recreational vehicle ("RV") product line, as RV unit retail sales have declined year over year.
−Removed: (2) Acquisition and divestiture revenue was a net increase of $33 million, or 7.4%, primarily related to our acquisition of one Specialty business in 2023.
+Added: (1) Parts and services organic revenue for the three months ended September 30, 2024 decreased by 8.5% (10.0% on a per day basis) primarily due to demand softness in the automotive and recreational vehicle ("RV") product lines, as automotive and RV unit retail sales have declined year over year.
Segment EBITDA
−Removed: Segment EBITDA decreased $1 million, or 2.2%, for the three months ended June 30, 2024 compared to the prior year period primarily due to a lower gross margin percentage.
+Added: Segment EBITDA decreased $9 million, or 22.7%, for the three months ended September 30, 2024 compared to the prior year period primarily due to the organic revenue decline and higher credit loss reserves.
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 June 30, 2023
+Added: Segment EBITDA for the three months ended September 30, 2023
Increase (decrease) due to:
1 unchanged sentence
Change in segment operating expenses (1.6) % (2)
−Removed: Change in other income and expenses, net (0.1) %
−Removed: Segment EBITDA for the three months ended June 30, 2024
+Added: Segment EBITDA for the three months ended September 30, 2024
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 driven by higher discounts to help maintain sales volume.
−Removed: (2) The decrease in segment operating expenses as a percentage of revenue was due to individually immaterial factors representing a 0.5% favorable impact in the aggregate, partially offset by an unfavorable impact of 0.4% due to duplicate facility costs associated with consolidating distribution centers.
+Added: (1) The increase in gross margin was primarily driven by lower discounts to offset increased costs from inflationary pressures.
+Added: (2) The increase in segment operating expenses as a percentage of revenue was primarily due to unfavorable impacts of (i) 0.8% related to higher credit loss reserves compared to the prior year period, (ii) 0.4% in personnel costs as a result of lower operating leverage, (iii) 0.3% due to duplicate facility costs associated with consolidating distribution centers, and (iv) other individually immaterial factors representing a 0.1% unfavorable impact in the aggregate.
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 June 30, Percentage Change in Revenue
+Added: Three Months Ended September 30, Percentage Change in Revenue
2024 2023 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 decreased 11.1% (12.1% on a per day basis) for the three months ended June 30, 2024 compared to the prior year period, primarily driven by lower parts volumes.
−Removed: (2) Other organic revenue decreased 26.7%, or $28 million, year over year due to a $15 million decrease in revenue from scrap steel primarily related to lower volumes and, to a lesser extent, lower prices and a $13 million decrease in revenue from precious metals due to lower prices and lower volumes.
+Added: (1) Parts and services organic revenue decreased 10.5% for the three months ended September 30, 2024 compared to the prior year period, primarily driven by lower parts volumes from a reduced number of customer admissions.
+Added: (2) Other organic revenue decreased 3.8%, or $4 million, year over year due to a $2 million decrease in revenue from scrap steel primarily related to lower volumes and a $2 million decrease in revenue from precious metals due to lower prices and lower volumes.
Segment EBITDA
−Removed: Segment EBITDA increased $6 million, or 93.1%, for the three months ended June 30, 2024 compared to the prior year period.
−Removed: The increase is driven by improved vehicle procurement costs and improvements in operational productivity, partially offset by the unfavorable movements in commodity prices and lower volumes compared to the prior year period.
−Removed: Decreases in precious metals prices contributed an estimated $5 million decline in Segment EBITDA relative to the three months ended June 30, 2023.
−Removed: During the three months ended June 30, 2024, scrap steel prices had a $5 million unfavorable impact on Segment EBITDA, compared to a $2 million unfavorable impact during the three months ended June 30, 2023.
−Removed: The unfavorable impacts for the three months ended June 30, 2024 resulted from the decrease 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: Segment EBITDA increased $11 million for the three months ended September 30, 2024 compared to the prior year period.
+Added: The increase is driven by improved vehicle procurement costs, operational productivity initiatives and more favorable movements in scrap steel prices, partially offset by lower volumes compared to the prior year period.
+Added: During the three months ended September 30, 2024, scrap steel prices had a $1 million unfavorable impact on Segment EBITDA, compared to a $6 million unfavorable impact during the three months ended September 30, 2023.
+Added: The unfavorable impacts for the three months ended September 30, 2024 resulted from the decrease 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.
The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our Self Service segment:
Percentage of Total Segment Revenue
−Removed: Segment EBITDA for the three months ended June 30, 2023
+Added: Segment EBITDA for the three months ended September 30, 2023
Increase (decrease) due to:
1 unchanged sentence
Change in segment operating expenses (0.4) % (2)
−Removed: Segment EBITDA for the three months ended June 30, 2024
+Added: Segment EBITDA for the three months ended September 30, 2024
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 is attributable to improvements in vehicle procurement costs, which more than offset the negative effects from lower commodities prices.
+Added: (1) The increase in gross margin is primarily attributable to improvements in vehicle procurement costs and improved commodities prices.
(2) The increase in segment operating expenses as a percentage of revenue reflects negative leverage effect of 0.8% from decreases in metals revenue, partially offset by other individually immaterial factors representing a 0.4% favorable impact in the aggregate.
−Removed: Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
+Added: Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
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: Six Months Ended June 30, Percentage Change in Revenue
+Added: Nine Months Ended September 30, Percentage Change in Revenue
Wholesale - North America 2024 2023 Organic Acquisition and Divestiture Foreign Exchange Total Change
Parts & services revenue $ 4,169 $ 3,581 (5.0) % (1)
+Added: (0.1) % 16.4 %
Other revenue 227 234 (3.8) % (2)
2 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 decreased 4.3% for the six months ended June 30, 2024 compared to the prior year period, primarily driven by decreased aftermarket collision volumes which were negatively impacted by lower repairable claims, which we believe are primarily attributable to difficult economic conditions, comparatively warmer weather in the first quarter of 2024 which reduced backlog at body shops going into the second quarter of 2024 and, to a lesser extent, inventory availability issues due to delays in inbound deliveries.
−Removed: (2) Other organic revenue decreased 4.4%, or $7 million, year over year primarily related to (i) a $12 million decrease in revenue from precious metals due to lower prices, partially offset by higher volumes and (ii) a $1 million decrease in revenue from scrap steel due to lower prices, partially offset by higher volumes, partially offset by (iii) a $6 million increase in revenue from other scrap (e.g., aluminum) and cores due to higher volumes and higher prices.
+Added: (1) Parts and services organic revenue decreased 5.0% (5.4% on a per day basis) for the nine months ended September 30, 2024 compared to the prior year period.
+Added: This decline was primarily driven by a reduction in aftermarket collision volumes, which were negatively impacted by a reduction in repairable claims.
+Added: We believe this is mainly attributable to difficult economic conditions.
+Added: Additionally, organic revenue was negatively impacted by a reduction in paint revenue related to increased competition, comparatively warmer weather in the first quarter of 2024 which reduced backlog at body shops going into the second quarter of 2024 and, to a lesser extent, inventory availability issues due to delays in inbound deliveries.
+Added: (2) Other organic revenue decreased 3.8%, or $9 million, year over year primarily related to (i) a $16 million decrease in revenue from precious metals due to lower prices and (ii) a $1 million decrease in revenue from scrap steel due to lower prices, partially offset by (iii) an $8 million increase in revenue from other scrap (e.g., aluminum) and cores due to higher prices and higher volumes.
(3) Acquisition and divestiture parts and services revenue was an increase of $769 million, or 21.5%, primarily due to the acquisition of Uni-Select in the third quarter of 2023.
1 unchanged sentence
Segment EBITDA
−Removed: Segment EBITDA dollars were flat for the six months ended June 30, 2024 compared to the prior year period, which includes a positive impact related to the acquisition of Uni-Select in the third quarter of 2023 (Uni-Select increases Segment EBITDA dollars but dilutes the Segment EBITDA percentage), primarily offset by lower aftermarket volumes, a decrease in salvage margins and lower metals pricing and continued inflationary pressures.
+Added: Segment EBITDA decreased $8 million, or 1.0%, for the nine months ended September 30, 2024 compared to the prior year period, primarily due to lower aftermarket volumes, continued inflationary pressures, lower precious metals pricing and a decrease in salvage margins, partially offset by positive impacts from the acquisition of Uni-Select in the third quarter of 2023 (Uni-Select increases Segment EBITDA dollars but dilutes the Segment EBITDA percentage), cost savings initiatives, acquisition related synergies, and lower incentive compensation for the nine months ended September 30, 2024.
We estimate that precious metals and scrap steel prices had a net unfavorable effect of $17 million, or 0.4%, on Segment EBITDA margin relative to the comparable prior year period.
1 unchanged sentence
Wholesale - North America Percentage of Total Segment Revenue
−Removed: Segment EBITDA for the six months ended June 30, 2023
+Added: Segment EBITDA for the nine months ended September 30, 2023
Increase (decrease) due to:
2 unchanged sentences
Change in other income and expenses, net (0.2) % (3)
−Removed: Segment EBITDA for the six months ended June 30, 2024
+Added: Segment EBITDA for the nine months ended September 30, 2024
In the table above, the sum of the individual percentages may not equal the total due to rounding.
1 unchanged sentence
These product lines have a lower gross margin structure than our other wholesale product lines.
−Removed: The year over year effect will be noted through the third quarter, after which the impact will be annualized.
−Removed: Additionally, gross margin was negatively affected by the related mix effect resulting from lower aftermarket revenue, which has a higher margin that our other wholesale lines as well as decreases in salvage margins tied to softening salvage revenue and the effects of higher car costs.
+Added: The year over year effect was noted through the third quarter, and the impact now has been annualized.
+Added: Additionally, gross margin was negatively affected by the related mix effect resulting from lower aftermarket revenue, which has a higher margin than our other wholesale lines as well as decreases in salvage margins tied to softening salvage revenue and a decline in commodities prices.
(2) The decrease in segment operating expenses as a percentage of revenue primarily reflects favorable impacts of (i) 0.7% from lower incentive compensation, (ii) 0.3% from decreased freight, vehicle, and fuel costs, (iii) 0.2% from higher charitable contributions in the prior year period and (iv) other individually immaterial factors representing a 0.4% favorable impact in the aggregate.
2 unchanged sentences
The following table summarizes the changes in third party revenue by category in our Europe segment (in millions):
−Removed: Six Months Ended June 30, Percentage Change in Revenue
+Added: Nine Months Ended September 30, Percentage Change in Revenue
Europe 2024 2023 Organic Acquisition and Divestiture (2)
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 six months ended June 30, 2024 increased by 1.5%, primarily driven by increased volumes in the first quarter of 2024 and, to a lesser extent, pricing initiatives to offset increased costs resulting from inflationary pressures.
−Removed: (2) Acquisition and divestiture revenue was a net increase of $34 million, or 1.1%, primarily related to our acquisition of five wholesale businesses from the beginning of 2023 through the one-year anniversary of the acquisition dates.
+Added: (1) Parts and services organic revenue for the nine months ended September 30, 2024 increased by 1.6% (1.0% on a per day basis), primarily driven by increased volumes in the first quarter of 2024 and, to a lesser extent, pricing initiatives to offset increased costs resulting from inflationary pressures.
+Added: (2) Acquisition and divestiture revenue was a net increase of $18 million, or 0.4%, primarily related to our acquisition of six wholesale businesses from the beginning of 2023 through the one-year anniversary of the acquisition dates, partially offset by our divestment of three wholesale businesses in 2024.
(3) Exchange rates increased our revenue growth by $23 million, or 0.5%, primarily due to the weaker U.S.
−Removed: dollar against the pound sterling, partially offset by the stronger U.S.
−Removed: dollar against the Czech koruna for the six months ended June 30, 2024 relative to the prior year period.
+Added: dollar against the pound sterling and euro, partially offset by the stronger U.S.
+Added: dollar against the Czech koruna for the nine months ended September 30, 2024 relative to the prior year period.
Segment EBITDA
−Removed: Segment EBITDA decreased $22 million, or 6.5%, for the six months ended June 30, 2024 compared to the prior year period.
+Added: Segment EBITDA decreased $4 million, or 0.9%, for the nine months ended September 30, 2024 compared to the prior year period.
On a constant currency basis (i.e., excluding translation impact), Segment EBITDA decreased by $6 million, or 1.3%, com pared to the prior year period.
−Removed: The decrease in dollar terms is mainly attributable to lower gross margin and the negative impact of higher operating expenses, primarily related to increased personnel costs, that more than offset the effects of organic revenue growth of $48 million.
−Removed: Refer to the Foreign Currency Impact discussion within the Results of Operations–Consolidated
−Removed: section above for further detail regarding foreign currency impact on our results for the six months ended June 30, 2024.
+Added: The decrease in dollar terms is mainly attributable to lower gross margin and the negative impact of higher operating expenses that more than offset the effects of organic revenue growth of $78 million.
+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 nine months ended September 30, 2024.
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 six months ended June 30, 2023
+Added: Segment EBITDA for the nine months ended September 30, 2023
Increase (decrease) due to:
2 unchanged sentences
Change in segment operating expenses (0.2) % (2)
−Removed: Change in other expense, net 0.1 %
−Removed: Segment EBITDA for the six months ended June 30, 2024
+Added: Segment EBITDA for the nine months ended September 30, 2024
In the table above, the sum of the individual percentages may not equal the total due to rounding.
3 unchanged sentences
See Note 9, "Restructuring and Transaction Related Expenses" and Note 19, "Segment and Geographic Information" for further information.
−Removed: (2) The increase in segment operating expenses as a percentage of revenue reflects unfavorable impacts of (i) 0.3% from increased personnel costs mainly due to wage inflation, (ii) 0.3% from increased outbound freight and logistics costs, (iii) 0.2% from professional fees related to several strategic central and regional information technology initiatives, and (iv) other individually immaterial factors representing a 0.2% unfavorable impact in aggregate, partially offset by a favorable impact of (v) 0.3% due to lower energy and utilities costs compared to the prior year period across all geographies.
+Added: (2) The increase in segment operating expenses as a percentage of revenue reflects unfavorable impacts of (i) 0.2% from increased personnel costs mainly due wage inflation, (ii) 0.2% from increased outbound freight and logistics costs, (iii) 0.2% from professional fees related to several strategic central and regional information technology initiatives, and (iv) other individually immaterial factors representing a 0.1% unfavorable impact in aggregate, partially offset by favorable impacts of (v) 0.3% due to lower energy and utilities costs compared to the prior year period across all geographies, and (vi) 0.2% due to the settlement of a value-added tax issue in Italy in the prior year.
Third Party Revenue
The following table summarizes the changes in third party revenue by category in our Specialty segment (in millions):
−Removed: Six Months Ended June 30, Percentage Change in Revenue
+Added: Nine Months Ended September 30, Percentage Change in Revenue
Specialty 2024 2023 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 six months ended June 30, 2024 decreased by 1.8% primarily due to demand softness in the RV product line, as RV unit retail sales have declined year over year.
+Added: (1) Parts and services organic revenue for the nine months ended September 30, 2024 decreased by 4.1% (4.6% on a per day basis) primarily due to demand softness in the RV and automotive product lines, as unit retail sales for RV and certain automotive categories have declined year over year.
(2) Acquisition and divestiture revenue was a net increase of $66 million, or 5.1%, primarily related to our acquisition of one Specialty business in 2023.
Segment EBITDA
−Removed: Segment EBITDA decreased $5 million, or 6.9%, for the six months ended June 30, 2024 compared to the prior year period primarily due to the organic revenue decline and the decline in gross margin as explained below.
+Added: Segment EBITDA decreased $14 million, or 12.4%, for the nine months ended September 30, 2024 compared to the prior year period primarily due to the organic revenue decline and the decline in gross margin as explained below.
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 six months ended June 30, 2023
+Added: Segment EBITDA for the nine months ended September 30, 2023
Increase (decrease) due to:
1 unchanged sentence
Change in segment operating expenses (0.5) % (2)
−Removed: Segment EBITDA for the six months ended June 30, 2024
+Added: Segment EBITDA for the nine months ended September 30, 2024
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 driven by higher discounts to help maintain sales volume.
−Removed: (2) The decrease in segment operating expenses as a percentage of revenue was due to individually immaterial factors representing a 0.3% favorable impact in the aggregate, partially offset by an unfavorable impact of 0.2% due to duplicate facility costs associated with consolidating distribution centers.
+Added: (1) The decrease in gross margin was primarily driven by higher discounts to help maintain sales volume in the first six months of the year.
+Added: (2) The increase in segment operating expenses as a percentage of revenue was primarily due to unfavorable impacts of 0.3% related to higher credit loss reserves compared to the prior year and 0.2% due to duplicate facility costs associated with consolidating distribution centers .
Third Party Revenue
The following table summarizes the changes in third party revenue by category in our Self Service segment (in millions):
−Removed: Six Months Ended June 30, Percentage Change in Revenue
+Added: Nine Months Ended September 30, Percentage Change in Revenue
Self Service 2024 2023 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 decreased 10.8% (11.3% on a per day basis) for the six months ended June 30, 2024 compared to the prior year period, primarily driven by lower parts volumes from a reduced number of customer admissions, which were impacted by adverse weather conditions (primarily in California).
+Added: (1) Parts and services organic revenue decreased 10.7% (11.1% on a per day basis) for the nine months ended September 30, 2024 compared to the prior year period, primarily driven by lower parts volumes from a reduced number of customer admissions.
(2) Other organic revenue decreased 19.5%, or $58 million, year over year due to a $32 million decrease in revenue from precious metals due to lower prices and lower volumes and a $26 million decrease in revenue from scrap steel primarily related to lower volumes and, to a lesser extent, lower prices.
Segment EBITDA
−Removed: Segment EBITDA dollars were flat for the six months ended June 30, 2024 compared to the prior year period.
−Removed: This is driven by improved vehicle procurement costs and improvements in operational productivity, partially offset by unfavorable movements in commodity prices and lower volumes compared to the prior year period.
−Removed: Decreases in precious metals prices contributed an estimated $13 million decline in Segment EBITDA relative to the six months ended June 30, 2023.
−Removed: During the six months ended June 30, 2024, scrap steel prices had a $1 million unfavorable impact on Segment EBITDA, compared to a $9 million favorable impact during the six months ended June 30, 2023.
−Removed: The unfavorable impacts for the six months ended June 30, 2024 resulted from decreases 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: Segment EBITDA increased $11 million, or 36.2%, for the nine months ended September 30, 2024 compared to the prior year period.
+Added: This is driven by improved vehicle procurement costs and operational productivity, partially offset by lower volumes and lower commodities prices compared to the prior year period.
+Added: Decreases in precious metals prices contributed an estimated $13 million decline in Segment EBITDA relative to the nine months ended September 30, 2023.
+Added: During the nine months ended September 30, 2024, scrap steel prices had a $2 million unfavorable impact on Segment EBITDA, compared to a $3 million favorable impact during the nine months ended September 30, 2023.
+Added: The unfavorable impacts for the nine months ended September 30, 2024 resulted from decreases 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.
The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our Self Service segment:
Self Service Percentage of Total Segment Revenue
−Removed: Segment EBITDA for the six months ended June 30, 2023
+Added: Segment EBITDA for the nine months ended September 30, 2023
Increase (decrease) due to:
Change in gross margin 6.4 % (1)
−Removed: Segment EBITDA adjustments (0.2) % (1)
Change in segment operating expenses (2.7) % (2)
−Removed: Segment EBITDA for the six months ended June 30, 2024
+Added: Segment EBITDA for the nine months ended September 30, 2024
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 is attributable to improvements in vehicle procurement costs, which more than offset the negative effects from lower commodities prices.
−Removed: Additionally, prior year reported gross margin included a 0.2% reduction primarily related to restructuring expenses incurred as part of the 2022 Global Restructuring Plan.
−Removed: These costs are excluded from the calculation of Segment EBITDA.
−Removed: See Note 8, "Restructuring and Transaction Related Expenses" and Note 17, "Segment and Geographic Information" for further information.
+Added: (1) The increase in gross margin is attributable to improvements in vehicle procurement costs, partially offset by lower commodities prices.
(2) The increase in segment operating expenses as a percentage of revenue reflects negative leverage effect of 4.2% from decreases in metals revenue, partially offset by other individually immaterial factors representing a 1.5% favorable impact in the aggregate.
7 unchanged sentences
The following table summarizes liquidity data as of the dates indicated (in millions):
−Removed: June 30, 2024 December 31, 2023
+Added: September 30, 2024 December 31, 2023
Capacity under revolving credit facilities $ 2,000 $ 2,000
4 unchanged sentences
Total liquidity $ 1,524 $ 1,275
−Removed: We had $1,152 million available under our revolving credit facilities as of June 30, 2024 .
−Removed: Combined with $276 million of cash and cash equivalents at June 30, 2024, we had $1,428 million i n available liquidity, an increase of $153 million from our available liquidity as of December 31, 2023, primarily as a result of reducing our revolving credit facilities borrowings by $180 million .
−Removed: As of June 30, 2024, we had $4,334 million total debt outstanding and $44 million current debt, including the following senior debt (in millions):
−Removed: June 30, 2024
+Added: We had $1,171 million available under our revolving credit facilities as of September 30, 2024 .
+Added: Combined with $353 million of cash and cash equivalents at September 30, 2024, we had $1,524 million i n available liquidity, an increase of $249 million from our available liquidity as of December 31, 2023, primarily as a result of reducing our revolving credit facilities borrowings by $201 million.
+Added: As of September 30, 2024, we had $4,371 million total debt outstanding and $44 million current debt, including the following senior debt (in millions):
+Added: September 30, 2024
Maturity Date Interest Rate Amount Outstanding
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In March 2024, we completed an offering of €750 million aggregate principal amount of the 4.125% Euro Notes (2031).
−Removed: We used the net proceeds from the offering and cash on hand to pay outstanding indebtedness, including all of the outstanding €500 million aggregate principal amount of the 3.875% Euro Notes (2024) as well as Euro revolver borrowings, and pay accrued interest and related fees, premiums and expenses.
+Added: We used the net proceeds from the offering and cash on hand to pay outstanding indebtedness, including all of the outstanding €500 million aggregate principal amount of the 3.875% Euro Notes (2024) and revolver borrowings, and pay accrued interest and related fees, premiums and expenses.
We believe that our current liquidity, cash expected to be generated by operating activities in future periods and access to capital markets will be sufficient to meet our current operating and capital requirements.
−Removed: Our capital allocation strategy includes spending to support growth driven capital projects, return stockholder value through the payment of dividends and repurchasing shares of our common stock and complete synergistic acquisitions.
−Removed: A summary of the dividend activity for our common stock for the six months ended June 30, 2024 is as follows:
+Added: Our capital allocation strategy includes spending to support growth driven capital projects, returning stockholder value through the payment of dividends and repurchasing shares of our common stock, completing highly synergistic tuck-in acquisitions and debt repayment.
+Added: A summary of the dividend activity for our common stock for the nine months ended September 30, 2024 is as follows:
Dividend Amount Declaration Date Record Date Payment Date
1 unchanged sentence
$0.30 April 22, 2024 May 16, 2024 May 30, 2024
−Removed: On July 23, 2024, our Board of Directors declared a quarterly cash dividend of $0.30 per share of common stock, payable on August 29, 2024, to stockholders of record at the close of business on August 15, 2024.
+Added: $0.30 July 23, 2024 August 15, 2024 August 29, 2024
+Added: On October 22, 2024, our Board of Directors declared a quarterly cash dividend of $0.30 per share of common stock, payable on November 27, 2024, to stockholders of record at the close of business on November 14, 2024.
We believe that our future cash flow generation will permit us to continue paying dividends in future periods;
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.
−Removed: With $1,428 million of total liquidity as of June 30, 2024 and $44 million of current maturities, we have access to funds to meet our near term commitments.
+Added: With $1,524 million of total liquidity as of September 30, 2024 and $44 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.
2 unchanged sentences
The terms maximum total leverage ratio and minimum interest coverage ratio are specifically calculated per both the Senior Unsecured Credit Agreement and CAD Note, and differ in specified ways from comparable GAAP or common usage terms.
−Removed: We were in compliance with all applicable covenants under both our Senior Unsecured Credit Agreement and CAD Note as of June 30, 2024.
−Removed: The required debt covenants per both the Senior Unsecured Credit Agreement and CAD Note and our actual ratios with respect to those covenants are as follows as of June 30, 2024:
−Removed: Covenant Level Ratio Achieved as of June 30, 2024
+Added: We were in compliance with all applicable covenants under both our Senior Unsecured Credit Agreement and CAD Note as of September 30, 2024.
+Added: The required debt covenants per both
+Added: the Senior Unsecured Credit Agreement and CAD Note and our actual ratios with respect to those covenants are as follows as of September 30, 2024:
+Added: Covenant Level Ratio Achieved as of September 30, 2024
Maximum total leverage ratio 4.00 :
Minimum interest coverage ratio 3.00 :
−Removed: The spread applied to the interest rate on our credit facility borrowings increased in the third quarter of 2023 and remained the same through the second quarter of 2024 as a result of the total leverage ratio rising above 2.0.
The indentures relating to our U.S.
9 unchanged sentences
We hold interest rate swaps to hedge the variable rates on a portion of our credit agreement borrowings.
−Removed: After giving effect to these contracts outstanding, the weighted average interest rate on borrowings outstanding under our Senior Unsecured Credit Agreement was 6.2% at June 30, 2024.
−Removed: Including our senior notes and CAD Note, our overall weighted average interest rate on borrowings was 5.6% at June 30, 2024.
+Added: After giving effect to these contracts outstanding, the weighted average interest rate on borrowings outstanding under our Senior Unsecured Credit Agreement was 6.0% at September 30, 2024.
+Added: Including our senior notes and CAD Note, our overall weighted average interest rate on borrowings was 5.5% at September 30, 2024.
Under the Senior Unsecured Credit Agreement, our borrowings bear interest at SOFR plus the applicable spread or other risk-free interest rates that are applicable for the specified currency plus a spread.
2 unchanged sentences
The interest rate swaps are described in Note 14, "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: We had outstanding borrowin gs under our revolving credit facilities and term loans payable of $1,746 million and $1,943 million at June 30, 2024 and December 31, 2023, respectively.
−Removed: Of these amounts, t here wer e no current maturities at June 30, 2024 or December 31, 2023.
−Removed: The scheduled maturities of long-term obligations outstanding at June 30, 2024 are as follows (in millions):
−Removed: Six months ending December 31, 2024 (1)
+Added: We had outstanding borrowin gs under our revolving credit facilities and term loans payable of $1,731 million and $1,943 million at September 30, 2024 and December 31, 2023, respectively.
+Added: Of these amounts, t here wer e no current maturities at September 30, 2024 or December 31, 2023.
+Added: The scheduled maturities of long-term obligations outstanding at September 30, 2024 are as follows (in millions):
+Added: Three months ending December 31, 2024 (1)
Years ending December 31:
2 unchanged sentences
(1) Long-term obligations maturing by December 31, 2024 include $8 million of short-term debt that may be extended beyond the current year ending December 31, 2024.
−Removed: (2) The total debt amounts presented above reflect the gross values to be repaid (excluding debt issuance costs and unamortized bond discounts of $37 million as of June 30, 2024).
−Removed: As of June 30, 2024, the Company had cash and cash equivalents of $276 million, of which $225 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 and unamortized bond discounts of $35 million as of September 30, 2024).
+Added: As of September 30, 2024, the Company had cash and cash equivalents of $353 million, of which $289 million was held by foreign subsidiaries.
In general, it is our practice and intention to permanently reinvest the undistributed earnings of our foreign subsidiaries.
7 unchanged sentences
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 and six months ended June 30, 2024 and 2023 (in millions):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: The following table sets forth a summary of our aftermarket and manufactured inventory procurement for the three and nine months ended September 30, 2024 and 2023 (in millions):
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 Change 2024 2023 Change
5 unchanged sentences
Total $ 1,684 $ 1,709 $ (25) $ 5,297 $ 4,639 $ 658
−Removed: (1) Inventory purchases across the Wholesale - North America segment increased in the six months ended June 30, 2024 compared to the prior year period primarily due to the acquisition of Uni-Select.
−Removed: (2) The increase in inventory purchases in our Europe segment included an increase of $12 million attributable to the increase in the value of the pound sterling in the six months ended June 30, 2024 compared to the prior year period.
−Removed: (3) The increase in inventory purchases in the Specialty segment compared to the prior year period was primarily due to decreased inventory purchases in the prior year period to align inventory levels with demand.
−Removed: 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, 2024 and 2023 (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: (1) Inventory purchases across the Wholesale - North America segment increased in the nine months ended September 30, 2024 compared to the prior year period primarily due to the acquisition of Uni-Select.
+Added: (2) The increase in inventory purchases in our Europe segment included an increase of $25 million attributable to the increase in the value of the pound sterling and, to a lesser extent, the euro in the nine months ended September 30, 2024 compared to the prior year period.
+Added: (3) The increase in inventory purchases in the Specialty segment compared to the prior year period was primarily due to lower purchasing activity in the prior year as purchasing activity was reduced to align inventory levels with demand.
+Added: The following table sets forth a summary of our global wholesale salvage and self service procurement for the three and nine months ended September 30, 2024 and 2023 (in thousands):
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 % Change 2024 2023 % Change
2 unchanged sentences
Self Service salvage vehicles 117 117 — % 340 397 (14.4) %
−Removed: Wholesale - North America salvage purchases decreased in the six months ended June 30, 2024 relative to the prior year period due to working down the backlog caused by ramped up purchasing in the fourth quarter of 2023.
−Removed: Self Service salvage purchases in 2024 decreased relative to the prior year period due to a focus on reducing car cost.
+Added: Self Service salvage purchases decreased in the nine months ended September 30, 2024 relative to the prior year period due to a focus on reducing car cost.
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 six months ended June 30, 2023
+Added: Net cash provided by operating activities for the nine months ended September 30, 2023
Increase (decrease) due to:
4 unchanged sentences
Other operating activities (116) (2)
−Removed: Net cash provided by operating activities for the six months ended June 30, 2024
+Added: Net cash provided by operating activities for the nine months ended September 30, 2024
(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.
−Removed: • Inventories represented $169 million in incremental cash outflows in the first six months of 2024 compared to the same period of 2023, including $101 million in our Europe segment primarily due to lower purchasing levels in the prior period, $68 million in our Specialty segment due to the benefit in the prior year period of decreasing inventory purchasing levels to align with softening demand and $13 million in our Wholesale - North America segment, partially offset by our Self Service segment which contributed a $13 million lower cash outflow.
−Removed: • Accounts payable produced $76 million in incremental cash inflows in the first six months of 2024 compared to the same period of 2023 on a consolidated basis.
−Removed: This was primarily attributable to higher cash inflows in our Europe segment of $81 million mainly due to timing of payments.
−Removed: (2) Primarily reflects the aggregate effect of lower cash earnings and higher interest payments (primarily due to additional borrowings for the Uni-Select Acquisition and higher interest rates), partially offset by lower cash paid for taxes during the six months ended June 30, 2024 compared to the same period of 2023.
−Removed: Net cash used in investing activities totaled $178 million and $185 million during the six months ended June 30, 2024 and 2023, respectively.
−Removed: We invested $30 million and $52 million of cash in business acquisitions during the six months ended June 30, 2024 and 2023, respectively.
−Removed: Property, plant and equipment purchases were $146 million in the six months ended June 30, 2024 compared to $136 million in the prior year period.
+Added: • Inventories represented $176 million in incremental cash outflows in the first nine months of 2024 compared to the same period of 2023, including $112 million in our Europe segment primarily due to lower purchasing levels in the prior period following higher purchasing levels in 2022 due to restocking efforts to rebuild inventory levels, $40 million in our Specialty segment due to the benefit in the prior year period of decreasing inventory purchasing levels to align with softening demand and $28 million in our Wholesale - North America segment, partially offset by our Self Service segment which contributed a $4 million higher cash inflow.
+Added: • Accounts payable produced $53 million in incremental cash inflows in the first nine months of 2024 compared to the same period of 2023.
+Added: This was primarily attributable to higher cash inflows in our Wholesale - North America segment of $34 million and $15 million in our Specialty segment due to timing of payments.
+Added: (2) Primarily reflects the aggregate effect of lower cash earnings and higher interest payments (primarily due to additional borrowings for the Uni-Select Acquisition and higher interest rates), partially offset by lower cash paid for taxes during the nine months ended September 30, 2024 compared to the same period of 2023.
+Added: Net cash used in investing activities totaled $300 million and $2,389 million during the nine months ended September 30, 2024 and 2023, respectively.
+Added: We invested $46 million and $2,199 million of cash in business acquisitions during the nine months ended September 30, 2024 and 2023, respectively.
+Added: Property, plant and equipment purchases were $225 million in the nine months ended September 30, 2024 compared to $233 million in the prior year period.
+Added: During the nine months ended September 30, 2023, we settled our foreign exchange forward contracts with the counterparties and received $49 million due primarily to strengthening in the Canadian exchange rate relative to the contract rates.
The following table reconciles Net Cash Provided by Operating Activities to Free Cash Flow (in millions):
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Net cash provided by operating activities $ 886 $ 1,144
1 unchanged sentence
Free cash flow $ 661 $ 911
−Removed: For the six months ended June 30, 2024, net cash used in financing activities totaled $276 million compared to net cash provided by financing activities of $1,099 million for the same period in 2023.
+Added: For the nine months ended September 30, 2024, net cash used in financing activities totaled $516 million compared to net cash provided by financing activities of $1,391 million for the same period in 2023.
The decrease is primarily due to proceeds (net of unamortized bond discounts) of $1,394 million from the issuance of the U.S.
−Removed: Notes (2028/33) for the six months ended June 30, 2023.
−Removed: Cash outflows for share repurchases were $155 million and dividends paid were $161 million for the six months ended June 30, 2024 compared to $8 million for share repurchases and $148 million for dividends paid for the same period of 2023.
−Removed: Net debt borrowings (net of unamortized bond discounts) were $80 million for the six months ended June 30, 2024 compared to net repayments on our debt of $90 million (excluding proceeds from the issuance of the U.S.
+Added: Notes (2028/33) for the nine months ended September 30, 2023.
+Added: Cash outflows for share repurchases were $280 million and dividends paid were $240 million for the nine months ended September 30, 2024 compared to $8 million for share repurchases and $222 million for dividends paid for the same period of 2023.
+Added: Net debt borrowings (net of unamortized bond discounts) were $45 million for the nine months ended September 30, 2024 compared to $282 million (excluding proceeds from the issuance of the U.S.
Notes (2028/33) of $1,394 million) for the same period of 2023.
2 unchanged sentences
Summarized Guarantor Financial Information
−Removed: Notes (2028/2033) and Euro Notes (2031) currently are guaranteed on a senior, unsecured basis by certain of our subsidiaries (each, a “subsidiary guarantor” and, together with LKQ, the “Obligor Group”), which are listed on the Company's Registration Statement on Form S-3 (File No.
−Removed: 333-277267) filed with the SEC on February 22, 2024.
+Added: Notes (2028/2033) and Euro Notes (2031) are guaranteed on a senior, unsecured basis by certain of our subsidiaries (each, a “subsidiary guarantor” and, together with LKQ, the “Obligor Group”), which are listed in Exhibit 22.1 in Part II, Item 6 of this Quarterly Report on Form 10-Q.
The guarantees are full and unconditional, joint and several, and subject to certain conditions for release.
4 unchanged sentences
Summarized Statements of Income (in millions)
−Removed: Six Months Ended
−Removed: June 30, 2024
+Added: Nine Months Ended
+Added: September 30, 2024
Fiscal Year Ended
5 unchanged sentences
Net income $ 329 $ 589
−Removed: (1) Guarantor subsidiaries recorded $27 million and $53 million of net sales to and $104 million and $203 million of purchases from non-guarantor subsidiaries for the six months ended June 30, 2024 and fiscal year ended December 31, 2023, respectively.
+Added: (1) Guarantor subsidiaries recorded $41 million and $53 million of net sales to and $157 million and $203 million of purchases from non-guarantor subsidiaries for the nine months ended September 30, 2024 and fiscal year ended December 31, 2023, respectively.
(2) Information reflects the current Obligor Group listed in Exhibit 22.1 in Part II, Item 6 of this Quarterly Report on Form 10-Q.
Summarized Balance Sheets (in millions)
−Removed: June 30, 2024 December 31, 2023 (1)
+Added: September 30, 2024 December 31, 2023 (1)
Current assets $ 2,253 $ 2,167
3 unchanged sentences
(1) Information reflects the current Obligor Group listed in Exhibit 22.1 in Part II, Item 6 of this Quarterly Report on Form 10-Q.
−Removed: (2) Current liabilities for guarantor subsidiaries included $107 million of short term notes payable to non-guarantor subsidiaries as of June 30, 2024.
+Added: (2) Current liabilities for guarantor subsidiaries included $111 million of short term notes payable to non-guarantor subsidiaries as of September 30, 2024.
Quantitative and Qualitative Disclosures About Market Risk
2 unchanged sentences
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.