1 unchanged sentence
The following discussion of our financial condition and results of operations should be read in conjunction with our audited Consolidated Financial Statements and notes thereto included in Part II, Item 8, "Financial Statements and Supplementary Data," of this Annual Report on Form 10-K.
−Removed: Discussion of 2021 items and the year-over-year comparison of changes in our financial condition and the results of operations as of and for the years ended December 31, 2022 and December 31, 2021 can be found in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 23, 2023.
+Added: Discussion of 2022 items and the year-over-year comparison of changes in our financial condition and the results of operations as of and for the years ended December 31, 2023 and December 31, 2022 for our Consolidated Results of Operations can be found in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 22, 2024.
Unless otherwise indicated or the context otherwise requires, as used in this "Management's Discussion and Analysis of Financial Condition and Results of Operations," the terms "we," "us," "the Company," "our," "LKQ" and similar terms refer to LKQ Corporation and its subsidiaries.
14 unchanged sentences
and Self Service, each of which is presented as a reportable segment.
−Removed: Our Wholesale - North America segment is a leading provider of alternative vehicle collision replacement products, paint and related 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, Italy, Czech Republic, Austria, Slovakia, Poland, and various other European countries.
+Added: Our Wholesale - North America segment is a leading provider of alternative vehicle collision replacement products, paint and body repair related products, and alternative vehicle mechanical replacement products, with our sales, processing, and distribution facilities reaching most major markets in the United States and Canada.
+Added: Our Europe segment is a leading provider of alternative vehicle replacement and maintenance products in Germany, the U.K., the Benelux region, Italy, Czech Republic, Austria, Slovakia, France 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: Through 2018, our acquisition strategy was focused on consolidation to build scale in fragmented markets across North America and Europe.
−Removed: We targeted companies that were market leaders, expanded our geographic presence and enhanced our ability to provide a wide array of vehicle products through our distribution network.
−Removed: In the last few years, we have shifted our focus to acquisitions that target high synergies and/or add critical capabilities, including the acquisition of Uni-Select, completed in August 2023, that complements our existing North American paint distribution operations and provides a scaled position in the Canadian mechanical parts space, with opportunity for future consolidation and growth.
−Removed: Additionally, we have made investments in various businesses to advance our strategic objectives.
+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.
+Added: Additionally, from time to time, we make investments in various businesses to advance our strategic objectives.
See Note 3, "Business Combinations" and Note 10, "Equity Method Investments" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information related to our acquisitions and investments.
3 unchanged sentences
Our parts revenue is generated from the sale of vehicle products, including replacement parts, components and systems used in the repair and maintenance of vehicles, and specialty products and accessories used to improve the performance, functionality and appearance of vehicles.
−Removed: Our service revenue is generated primarily from the sale of service-type warranties, fees for admission to our self service yards, and diagnostic and repair services.
+Added: Our service revenue is generated primarily from the sale of service-type warranties, fees for admission to our self service yards, and
+Added: diagnostic and repair services.
During the year ended December 31, 2024, parts and services revenue represented 95.6% of our consolidated revenue.
−Removed: Revenue from other sources includes scrap and other metals (including precious metals - platinum, palladium and rhodium - contained in recycled parts such as catalytic converters) sales, bulk sales to mechanical manufacturers (including cores) and sales of aluminum ingots and sows from our furnace operations.
+Added: Revenue from other sources includes sales of scrap and other metals (including precious metals - platinum, palladium and rhodium - contained in recycled parts such as catalytic converters), bulk sales to mechanical manufacturers (including cores) and sales of aluminum ingots and sows from our furnace operations.
Other revenue will vary from period to period based on fluctuations in commodity prices and the volume of materials sold.
38 unchanged sentences
Sensitivity of Estimate to Change
−Removed: The amount of goodwill recorded from our 2023 acquisitions was $1,221 million as of December 31, 2023.
While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement.
5 unchanged sentences
See Note 12, "Revenue Recognition" and Note 25, "Segment and Geographic Information" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information related to our revenue and long-lived assets by geographic region.
−Removed: 1 LKQ Europe Plan
−Removed: We have undertaken the 1 LKQ Europe plan to create structural centralization and standardization of key functions to facilitate the operation of the Europe segment as a single business.
−Removed: Under this multi-year plan, we expect to recognize the following:
−Removed: • Restructuring expenses — Non-recurring costs resulting directly from the implementation of the 1 LKQ Europe plan from which the business will derive no ongoing benefit.
−Removed: See Note 14, "Restructuring and Transaction Related Expenses" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K 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., non-capitalizable implementation costs related to a common ERP platform).
−Removed: These expenses are recorded in selling, general and administrative ("SG&A") expenses.
−Removed: • Transformation capital expenditures — Capitalizable costs for long-lived assets, such as software and facilities, that directly relate to the execution of the 1 LKQ Europe plan.
−Removed: Costs related to the 1 LKQ Europe plan are reflected in SG&A expenses, Restructuring and transaction related expenses and Purchases of property, plant and equipment in our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K .
−Removed: 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: In the second quarter of 2023, we extended the completion date from 2025 to 2027 based on a detailed project review, after which we concluded that the common ERP system implementation would require additional time to allow for operational process reengineering to support further standardization across the segment.
−Removed: The extended implementation schedule and incremental process reengineering work will help to minimize potential business disruptions but increased the overall cost estimate by $85 million.
−Removed: We expect to achieve additional cost benefits through expanded application of shared services and productivity improvements along with working capital reductions related to inventory rationalization.
−Removed: We are currently realizing a portion of the benefits of the 1 LKQ Europe plan, and we expect to grow Segment EBITDA margin in the future as further actions in the plan are implemented .
−Removed: During the year ended December 31, 2023, we incurred $27 million in costs across all three categories noted above.
−Removed: 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.
−Removed: In the future, we may also identify additional initiatives and projects under the 1 LKQ Europe plan that may result in additional expenditures, although we are currently unable to estimate the range of charges for such potential future initiatives and projects.
−Removed: We expect the plan to continue to enable trade working capital and productivity initiatives that will help fund the plan cost.
−Removed: Ukraine/Russia Conflict
−Removed: The Russian invasion of Ukraine and resulting global governmental response impacted our business in 2022 and 2023, and are expected to continue to impact our business in 2024.
−Removed: Governmental sanctions imposed on Russia have restricted our ability to sell to and collect from customers based in Russia and Belarus, and Russian military activity in Ukrainian territory has temporarily changed the way in which we operate in Ukraine.
−Removed: Many of our branches in Ukraine have remained open, although operating at less than full capacity, during the conflict, while others have closed temporarily.
−Removed: We expect to continue operating in this manner unless conditions change.
−Removed: We currently do not expect the conflict to have a material impact on our ongoing results of operations or cash flows.
−Removed: Our operations in Ukraine represented approximately 1% of b oth our total annual revenue and total annual operating profit for fiscal year 2023 and comprised approxi mately $69 million of total assets as of December 31, 2023.
−Removed: In addition, LKQ r evenue from customers in Russia and Belarus represented less than 0.3% of our total revenue in 2021 (the last full year before we stopped selling to customers in these countries) .
−Removed: As future developments in the conflict are difficult to predict and outside of our control, it is possible that estimates underlying our financial statements may change significantly in future periods.
Key Performance Indicators
We believe that organic revenue growth, Segment EBITDA and free cash flow are key performance indicators for our business.
−Removed: Segment EBITDA is our key measure of segment profit or loss reviewed by our chief operating decision maker.
+Added: Segment EBITDA is our key measure of segment profit or loss reviewed by our chief operating decision maker ("CODM").
Free cash flow is a financial measure that is not prepared in accordance with U.S.
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Restructuring and transaction related expenses 0.9 % 0.5 %
−Removed: Gain on disposal of businesses
Depreciation and amortization 2.5 % 2.0 %
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The following table summarizes the changes in revenue by category (in millions):
−Removed: Year Ended December 31, Percentage Change in Revenue
−Removed: 2023 2022 Organic Acquisition and Divestiture Foreign Exchange Total Change
+Added: Year Ended December 31,
+Added: 2024 2023 Change
Parts & services revenue $ 13,718 $ 13,174 $ 544
1 unchanged sentence
Total revenue $ 14,355 $ 13,866 $ 489
−Removed: 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 10.4% represented increases in segment revenue of 18.2% in Wholesale - North America, 10.4% in Europe, and 2.4% in Self Service, partially offset by a decrease of 6.9% in Specialty.
−Removed: This overall increase was driven by organic parts and services revenue growth of 4.7%, a 4.8% increase due to the net impact of acquisitions and divestitures, and a 0.9% increase due to fluctuations in foreign exchange rates.
−Removed: The decrease in other revenue of 19.6% was primarily driven by a decrease in organic revenue of $138 million due to unfavorable movements in precious metals and scrap steel prices compared to the prior year, primarily attributable to a $93 million decrease in our Self Service segment and a $41 million decrease in our Wholesale - North America segment.
+Added: The increase in parts and services revenue of $544 million, or 4.1%, represented increases in segment revenue of 9.9% in Wholesale - North America and 1.3% in Europe, partially offset by decreases of 8.4% in Self Service and 0.7% in Specialty.
+Added: This overall increase was driven by a 6.3% increase due to the net impact of acquisitions and divestitures, partially offset by an organic parts and services revenue decline of 2.2%.
+Added: The decrease in other revenue of 7.8% was primarily driven by a decrease in organic revenue of $56 million, or 8.1%, due to lower commodities prices and volumes compared to the prior year, which resulted in a $46 million organic revenue decrease in our Self Service segment and a $12 million organic revenue decrease in our Wholesale - North America segment.
Refer to the discussion of our segment results of operations for factors contributing to the changes in revenue by segment for the year ended December 31, 2024 compared to the year ended December 31, 2023.
1 unchanged sentence
Cost of goods sold as a percentage of revenue increased to 60.9% for the year ended December 31, 2024 from 59.8% for the year ended December 31, 2023.
−Removed: Cost of goods sold reflects increases of 0.4% from our Specialty segment, and 0.3% from our Wholesale - North America segment (including a 0.5% dilutive effect related to our acquisition of Uni-Select), partially offset by a decrease of 0.2% attributable to mix primarily due to a decline in revenue in our Specialty segment.
+Added: Cost of goods sold primarily reflects an increase of 1.0% from our Wholesale - North America segment.
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 year ended December 31, 2024 compared to the year ended December 31, 2023.
Selling, General and Administrative Expenses
−Removed: Our SG&A expenses as a percentage of revenue increased to 27.9% for the year ended December 31, 2023 from 27.7% for the year ended December 31, 2022.
−Removed: The year over year change in SG&A expense was mostly impacted by offsetting factors including an unfavorable mix effect, and a reduction in our Wholesale - North America segment, which benefited from the Uni-Select Acquisition.
+Added: Our SG&A expenses as a percentage of revenue decreased to 27.3% for the year ended December 31, 2024 from 27.9% for the year ended December 31, 2023.
+Added: The year over year decrease in SG&A expense primarily reflects an impact of 0.7% related to our Wholesale - North America segment.
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 year ended December 31, 2024 compared to the year ended December 31, 2023.
Restructuring and Transaction Related Expenses
−Removed: The following table summarizes restructuring and transaction related expenses for the periods indicated (in millions):
−Removed: Year Ended December 31,
−Removed: 2023 2022 Change
−Removed: Restructuring expenses $ 44 (1)
−Removed: Transaction related expenses 21 (3)
−Removed: Restructuring and transaction related expenses $ 65 $ 20 $ 45
−Removed: (1) Restructuring expenses for the year ended December 31, 2023 primarily consisted of (i) $29 million related to our acquisition integration plans, (ii) $14 million related to our global restructuring plans, and (iii) $1 million related to our 1 LKQ Europe plan.
−Removed: (2) Restructuring expenses for the year ended December 31, 2022 primarily consisted of (i) $11 million related to our global restructuring plans, (ii) $3 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 years ended December 31, 2023 and 2022 primarily related to external costs such as legal, accounting and advisory fees related to completed and potential acquisitions (including Uni-Select transaction costs in 2023).
−Removed: See Note 14, "Restructuring and Transaction Related Expenses" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further information on our restructuring and acquisition integration plans.
−Removed: Gain on Disposal of Businesses
−Removed: During the year ended December 31, 2022, we recorded a $159 million pretax gain from divestitures including $155 million ($127 million after tax) from the sale of PGW Auto Glass ("PGW") and $4 million from the sale of a business within our Self Service segment.
−Removed: See "Other Divestitures (Not Classified in Discontinued Operations)" in Note 4, "Discontinued Operations and Divestitures" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further information on our gain on disposal of businesses.
−Removed: Depreciation and Amortization
−Removed: The following table summarizes depreciation and amortization for the periods indicated (in millions):
−Removed: Year Ended December 31,
−Removed: 2023 2022 Change
−Removed: Depreciation $ 157 $ 142 $ 15 (1)
−Removed: Amortization 126 95 31 (2)
+Added: Restructuring and transaction related expenses increased by $70 million, primarily due to (i) a $98 million increase in restructuring expenses related to our 2024 Global Restructuring plan, partially offset by (ii) a $17 million decrease related to transaction related expenses and (iii) an $8 million decrease in restructuring expenses related to our 2022 Global Restructuring Plan.
Depreciation and Amortization
−Removed: (1) Depreciation expense increased primarily related to an increase in capital expenditures, primarily in our Europe and Wholesale - North America segments, and $3 million from our acquisition of Uni-Select.
−Removed: (2) Amortization expense increased primarily due to (i) a $34 million increase from our acquisition of Uni-Select, partially offset by (ii) individually insignificant decreases that had a $3 million impact in the aggregate.
+Added: Depreciation and amortization expense increased by $78 million, primarily due to an increase in amortization expense of $56 million driven by an increase in Wholesale - North America primarily due to our acquisition of Uni-Select in August 2023.
+Added: Provision for Income Taxes
+Added: See Note 23, "Income Taxes" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further information.
Total Other Expense, Net
−Removed: The following table summarizes Total other expense, net for the periods indicated (in millions):
−Removed: Year Ended December 31,
−Removed: 2023 2022 Change
Interest Expense
−Removed: Loss on debt extinguishment 1 — 1
+Added: Interest expense increased by $48 million, primarily due to (i) a $52 million increase from higher outstanding debt primarily related to the permanent financing for the Uni-Select Acquisition, and (ii) a $5 million increase from higher interest rates for the year ended December 31, 2024 compared to the prior year, partially offset by (iii) a $9 million decrease related to amortization of pre-acquisition bridge loan financing costs related to the Uni-Select Acquisition.
Gains on Foreign Exchange Contracts - Acquisition Related
−Removed: Interest income and other income, net (44) (15) (29) (3)
−Removed: Total other expense, net $ 122 $ 63 $ 59
−Removed: (1) Interest expense increased primarily due to (i) a $63 million increase from higher interest rates for the year ended December 31, 2023 compared to the prior year, (ii) a $58 million increase from higher outstanding debt primarily related to the permanent financing for the Uni-Select Acquisition, (iii) a $9 million increase related to amortization of pre-acquisition bridge loan financing costs related to the Uni-Select Acquisition, and (iv) a $6 million increase from foreign exchange translation, primarily related to an increase in the euro exchange rate.
−Removed: (2) Related to the Uni-Select Acquisition.
+Added: Gains on foreign exchange contracts - acquisition related decreased due to the $49 million pretax gain on the foreign exchange forward contracts related to the Uni-Select Acquisition in 2023.
See Note 3, "Business Combinations" and Note 19, "Derivative Instruments and Hedging Activities" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further information.
−Removed: (3) The increase in Interest income and other income, net is primarily comprised of (i) a $20 million increase related to interest income, mostly related to the proceeds from the U.S.
−Removed: Notes (2028/33) that were invested in money market funds between the bond issuance date and the Uni-Select Acquisition date, (ii) a $5 million increase from funds received to settle an eminent domain matter in 2023, (iii) a $3 million increase related to fair value adjustments for equity investments
−Removed: not accounted for under the equity method compared to the prior year, and (iv) a $2 million increase from the change in foreign currency gains and losses, partially offset by (v) individually insignificant decreases that had a $1 million impact in the aggregate.
−Removed: Provision for Income Taxes
−Removed: Our effective income tax rate for the year ended December 31, 2023 was 24.8%, compared to 25.3% for the year ended December 31, 2022.
−Removed: The decrease in the effective tax rate for the year ended December 31, 2023 compared to the year ended December 31, 2022, is primarily attributable to greater benefits from discrete items in 2023 than 2022.
−Removed: Discrete items had favorable effects in both years, with a 2% rate benefit in the current year, mostly related to the Uni-Select Acquisition foreign exchange forward contract gain, and a 1% rate benefit in the prior year, primarily related to the sale of PGW in the second quarter of 2022.
−Removed: Unfavorable rate effects in 2023 from non-deductible transaction costs and negative impacts on foreign tax credit availability caused by Uni-Select related transaction activity partially offset the benefit from discrete items.
−Removed: See Note 24, "Income Taxes" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further information.
−Removed: Equity in Earnings of Unconsolidated Subsidiaries
−Removed: Equity in earnings of unconsolidated subsidiaries for the year ended December 31, 2023 increased by $4 million primarily related to an increase in year over year results in an immaterial investment in our Wholesale - North America 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 for the year ended December 31, 2022, the Czech koruna, euro and the pound sterling rate used to translate the 2023 statements of income increased by 5.1%, 2.7% and 0.6%, respectively, while the Canadian dollar rate decreased by 3.6%.
+Added: Relative to the rates used for the year ended December 31, 2023, the Czech koruna and Canadian dollar rates used to translate the 2024 statements of income decreased by 4.4% and 1.5%, respectively, while the pound sterling rate increased by 2.7% and the euro was flat.
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 positive effect of $0.20 on diluted earnings per share for the year ended December 31, 2023, mostly related to the $49 million pretax gain on the foreign exchange forward contract related to the Uni-Select Acquisition.
−Removed: Net (Loss) Income from Discontinued Operations
−Removed: Discontinued operations for the year ended December 31, 2023 reflected the GSF Car Parts business, which was acquired with the Uni-Select Acquisition in August and was sold in October.
−Removed: The loss of $6 million represents the net of the operating results prior to the sale and the loss on disposal.
−Removed: Income from discontinued operations for the year ended December 31, 2022 of $6 million primarily relates to adjustments to tax reserves on our glass manufacturing business.
−Removed: See Note 4, "Discontinued Operations and Divestitures" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further information on these businesses.
+Added: dollar had a net negative effect of $0.20 on diluted earnings per share relative to the prior year primarily related to the $49 million pretax gain on the foreign exchange forward contracts related to the Uni-Select Acquisition in 2023.
Results of Operations—Segment Reporting
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Year Ended December 31,
−Removed: 2023 % of Total Segment Revenue 2022 % of Total Segment Revenue
+Added: 2024 % of Total Segment Revenue 2023 % of Total Segment Revenue 2022 % of Total Segment Revenue
Third Party Revenue
18 unchanged sentences
In the table above, the percentages of total segment revenue may not recalculate due to rounding.
−Removed: The key measure of segment profit or loss reviewed by our chief operating decision maker, our Chief Executive Officer, is Segment EBITDA.
−Removed: We use Segment EBITDA to compare profitability among the segments and evaluate business strategies.
+Added: The key measure of segment profit or loss reviewed by our CODM, our Chief Executive Officer, is Segment EBITDA.
+Added: The CODM uses Segment EBITDA to compare profitability among the segments and evaluate business strategies.
Segment EBITDA includes revenue and expenses that are controllable by the segment.
Corporate general and administrative expenses are allocated to the segments based on usage, with shared expenses apportioned based on the segment's percentage of consolidated revenue.
−Removed: We calculate Segment EBITDA as Net income attributable to LKQ stockholders excluding discontinued operations;
−Removed: depreciation, amortization;
+Added: We calculate Segment EBITDA as Net Income excluding net income and loss attributable to noncontrolling interest;
+Added: income and loss from discontinued operations;
+Added: depreciation;
+Added: amortization;
gains and losses on debt extinguishment;
income tax expense;
−Removed: restructuring and transaction related expenses (which includes restructuring expenses recorded in Cost of goods sold);
+Added: restructuring and transaction related expenses;
change in fair value of contingent consideration liabilities;
3 unchanged sentences
impairment charges;
−Removed: and direct impacts of the Ukraine/Russia conflict and related sanctions (including provisions for and subsequent adjustments to reserves for asset recoverability and expenditures to support our employees and their families).
+Added: and direct impacts of the Ukraine/Russia conflict.
See Note 25, "Segment and Geographic Information" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for a reconciliation of total Segment EBITDA to net income.
1 unchanged sentence
Wholesale - North America
−Removed: Third Party Revenue
−Removed: The following table summarizes the changes in third party revenue by category in our Wholesale - North America segment (in millions):
−Removed: Year Ended December 31, Percentage Change in Revenue
−Removed: Wholesale - North America 2023 2022 Organic Acquisition and Divestiture Foreign Exchange Total Change
+Added: The following table provides a reconciliation of Revenue to Segment EBITDA in our Wholesale - North America segment (in millions):
+Added: Year Ended December 31,
+Added: Wholesale - North America 2024 % of Total Segment Revenue 2023 % of Total Segment Revenue $ Change
Parts & services revenue $ 5,465 $ 4,974 $ 491 (1)
−Removed: (0.2) % 18.2 %
Other revenue 297 307 (10)
−Removed: 0.1 % (0.2) % (12.0) %
−Removed: Total third party revenue $ 5,281 $ 4,556 6.6 % 9.5 % (0.2) % 15.9 %
−Removed: In the table above, the sum of the individual percentages may not equal the total due to rounding.
−Removed: (1) Parts and services organic revenue increased 8.2% (8.6% on a per day basis) for the year ended December 31, 2023 compared to the prior year, primarily driven by pricing initiatives which focused on offsetting inflation on input costs and a net volume increase.
−Removed: Aftermarket collision parts volumes increased year over year due to reduced pressures on our supply chain.
−Removed: Aftermarket collision parts volumes also grew as a result of the continued rollout of State Farm's aftermarket parts program, which began on a trial basis in June 2022 and has subsequently been expanded.
−Removed: (2) Other organic revenue decreased 11.8%, or $41 million, year over year primarily related to (i) a $46 million decrease in revenue from precious metals (platinum, palladium, and rhodium) due to lower prices, partially offset by higher volumes, partially offset by (ii) a $5 million increase in revenue from other scrap (e.g., aluminum) and cores due to higher volumes, partially offset by lower prices.
−Removed: (3) Acquisition and divestiture parts and services revenue was a net increase of $432 million, or 10.3%, primarily due to the acquisition of Uni-Select in the third quarter of 2023, partially offset by the divestiture of our PGW aftermarket glass business in the second quarter of 2022.
−Removed: See Note 3, "Business Combinations" and "Other Divestitures (Not Classified in Discontinued Operations)" in Note 4, "Discontinued Operations and Divestitures" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further information on the acquisition of Uni-Select and the divestiture of PGW, respectively.
+Added: Intersegment revenue 1 1 —
+Added: Total segment revenue 5,763 5,282 481
+Added: Cost of goods sold 3,252 2,796 456
+Added: Gross margin 2,511 43.6 % 2,486 47.0 % 25 (2)
+Added: Selling, general and administrative expenses 1,567 27.2 % 1,535 29.0 % 32 (3)
+Added: Other segment items (4)
Segment EBITDA $ 959 16.6 % $ 975 18.5 % $ (16)
−Removed: Segment EBITDA increased $123 million, or 14.5%, for the year ended December 31, 2023 compared to the prior year, which includes a $46 million 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) and a $19 million negative year over year effect related to the PGW business, which we divested in the second quarter of 2022.
−Removed: The remaining increase is primarily attributable to lower freight costs, higher selling prices on parts, improved aftermarket volumes, and productivity initiatives helping to offset inflationary pressures related to product cost.
−Removed: We estimate that precious metals and scrap steel pricing had a net unfavorable effect of $28 million, or 0.4%, on Segment EBITDA margin relative to the prior year.
−Removed: The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our Wholesale - North America segment:
−Removed: Wholesale - North America Percentage of Total Segment Revenue
−Removed: Segment EBITDA for the year ended December 31, 2022
−Removed: Increase (decrease) due to:
−Removed: Uni-Select Acquisition (1.2) % (1)
−Removed: Change in gross margin 0.7 % (2)
−Removed: Change in segment operating expenses 0.1 % (3)
−Removed: Change in other income and expenses, net 0.1 %
−Removed: Segment EBITDA for the year ended December 31, 2023
−Removed: In the table above, the sum of the individual percentages may not equal the total due to rounding.
−Removed: (1) The unfavorable impact related to the acquisition of Uni-Select in the third quarter of 2023 was primarily driven by (i) a 2.1% decrease in gross margin due to product mix as the paint, body, and equipment and maintenance parts lines have a lower gross margin structure than other wholesale product lines, partially offset by (ii) a favorable impact of 0.9% related to a decrease in overhead expenses as Uni-Select operates with lower overhead expenses than our other wholesale product lines.
−Removed: (2) The increase in gross margin of 0.7% was primarily driven by (i) a 0.5% benefit from lower inbound freight costs and (ii) a 0.2% mix benefit resulting from the PGW divestiture in the second quarter of 2022.
−Removed: (3) The decrease in segment operating expenses as a percentage of revenue reflects the favorable impact of (i) 0.5% from decreased freight, vehicle, and fuel costs and (ii) other individually immaterial factors representing a 0.2% favorable impact in the aggregate, partially offset by (iii) 0.4% from higher professional fees and (iv) 0.2% from higher charitable contributions.
−Removed: Third Party Revenue
−Removed: The following table summarizes the changes in third party revenue by category in our Europe segment (in millions):
−Removed: Year Ended December 31, Percentage Change in Revenue
−Removed: Europe 2023 2022 Organic Acquisition and Divestiture (2)
−Removed: Foreign Exchange Total Change
+Added: (1) Parts and services revenue increased by $491 million, or 9.9%, to $5,465 million for the year ended December 31, 2024.
+Added: This increase was primarily driven by acquisitions, net of divestitures revenue of $779 million, or 15.7%, primarily due to the acquisition of Uni-Select in the third quarter of 2023.
+Added: See Note 3, "Business Combinations" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further information on the acquisition of Uni-Select.
+Added: This was partially offset by an organic revenue decrease of $278 million, or 5.6% (6.3% on a per day basis), primarily due to 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 (i) a reduction in paint revenue related to increased competition and (ii) weather related events in 2024.
+Added: (2) Gross margin increased by $25 million, or 1.0%, to $2,511 million for the year ended December 31, 2024.
+Added: This increase was driven by the acquisition of Uni-Select, partially offset by a decrease in parts and services organic revenue and a decline in commodities prices.
+Added: The decrease in gross margin as a percentage of total segment revenue of 3.4% for the year ended December 31, 2024 compared to the prior year was primarily due to 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 wholesale product lines.
+Added: Additionally, the 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.
+Added: (3) Selling, general and administrative expenses increased by $32 million, or 2.3%, to $1,567 million for the year ended December 31, 2024.
+Added: The increase in Selling, general and administrative expense primarily reflects unfavorable impacts of (i) $71 million from personnel costs excluding incentive compensation primarily due to the acquisition of Uni-Select, (ii) $36 million from facility costs primarily due to the acquisition of Uni-Select, (iii) $11 million from increased freight, vehicle, and fuel costs, partially offset by (iv) $42 million from lower incentive compensation, (v) $27 million from
+Added: professional fees primarily related to proceeds from the favorable settlement of a legal claim in 2024, (vi) $6 million from lower charitable contributions in the prior year period, and (vii) other individually immaterial factors representing an $11 million favorable impact in the aggregate.
+Added: Selling, general and administrative expenses as a percent of total segment revenue decreased by 1.8% to 27.2% for the year ended December 31, 2024.
+Added: In addition to the factors noted above, the decrease in Selling, general and administrative expenses as a percent of total segment revenue was driven by cost saving initiatives and acquisition related synergies, partially offset by inflationary pressures.
+Added: (4) Amounts primarily represent other non operating income and expenses, as well as reconciling items to remove depreciation - cost of goods sold and restructuring - cost of goods sold, which are excluded from the calculation of Segment EBITDA.
+Added: See Note 13, "Restructuring and Transaction Related Expenses" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information on restructuring charges.
+Added: The following table provides a reconciliation of Revenue to Segment EBITDA in our Europe segment (in millions):
+Added: Year Ended December 31,
+Added: Europe 2024 % of Total Segment Revenue 2023 % of Total Segment Revenue $ Change
Parts & services revenue $ 6,386 $ 6,303 $ 83 (1)
−Removed: 1.3 % 2.1 % (3)
Other revenue 21 20 1
−Removed: Total third party revenue $ 6,323 $ 5,735 6.8 % 1.3 % 2.1 % 10.2 %
−Removed: 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 year ended December 31, 2023 increased by 6.9% (7.4% on a per day basis), primarily driven by pricing initiatives across all geographies to offset increased costs resulting from inflationary pressures and to a lesser extent, higher volumes.
−Removed: (2) Acquisition and divestiture revenue was a net increase of $76 million, or 1.3%, primarily related to our acquisition of seven wholesale businesses from the beginning of 2022 through the one-year anniversary of the acquisition dates.
−Removed: (3) Exchange rates increased our revenue growth by $121 million, or 2.1%, primarily due to the weaker U.S.
−Removed: dollar against the euro, Czech koruna and pound sterling for the year ended December 31, 2023 relative to the prior year.
+Added: Total segment revenue 6,407 6,323 84
+Added: Cost of goods sold 3,953 3,886 67
+Added: Gross margin 2,454 38.3 % 2,437 38.5 % 17 (2)
+Added: Selling, general and administrative expenses 1,855 28.9 % 1,842 29.1 % 13 (3)
+Added: Other segment items (4)
+Added: (35) (19) (16)
Segment EBITDA $ 634 9.9 % $ 614 9.7 % $ 20
−Removed: Segment EBITDA increased $29 million, or 5.1%, for the year ended December 31, 2023 compared to the prior year.
−Removed: On a constant currency basis (i.e., excluding the translation impact), Segment EBITDA increased by $18 million , or 3.0% , com pared to the prior year.
−Removed: The increase in dollar terms is attributable to organic revenue growth of $391 million and benefits from productivity initiatives.
−Removed: Europe's results were negatively impacted by an $11 million charge to settle a value-added tax issue in Italy related to prior years and a loss of revenue and associated margin in our German operations caused by labor strikes, which we estimate resulted in lower Segment EBITDA of $17 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 year ended December 31, 2023.
−Removed: The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our Europe segment:
−Removed: Europe Percentage of Total Segment Revenue
−Removed: Segment EBITDA for the year ended December 31, 2022
−Removed: Increase (decrease) due to:
−Removed: Change in gross margin — % (1)
−Removed: Change in segment operating expenses (0.4) % (2)
−Removed: Change in other income and expenses, net (0.1) %
−Removed: Segment EBITDA for the year ended December 31, 2023
−Removed: In the table above, the sum of the individual percentages may not equal the total due to rounding.
−Removed: (1) Gross margin was flat on a year to date basis, as favorable impacts from price increases were offset by inflationary pressures and difficult macro-economic conditions causing consumer price sensitivity, most notably in our Central and Eastern European regions.
−Removed: (2) The increase in segment operating expenses as a percentage of revenue primarily reflects the unfavorable impacts of (i) 0.2% due to the settlement of a value-added tax issue in Italy and (ii) leverage effects of 0.2% caused by strike activity in Germany.
−Removed: Third Party Revenue
−Removed: The following table summarizes the changes in third party revenue by category in our Specialty segment (in millions):
−Removed: Year Ended December 31, Percentage Change in Revenue
−Removed: Specialty 2023 2022 Organic (1)
−Removed: Acquisition and Divestiture (2)
−Removed: Foreign Exchange Total Change
+Added: (1) Parts and services revenue increased by $83 million, or 1.3%, to $6,386 million for the year ended December 31, 2024.
+Added: This increase was primarily due to a parts and services organic revenue increase of $76 million, or 1.2% (0.7% on a per day basis), driven by pricing initiatives to offset increased costs resulting from inflationary pressures and, to a lesser extent, increased volumes.
+Added: (2) Gross margin increased by $17 million, or 0.7%, to $2,454 million for the year ended December 31, 2024.
+Added: This increase was primarily attributable to increased revenue through pricing initiatives, partially offset by unfavorable customer mix, inflationary pressures and a $16 million reduction primarily related to restructuring expenses incurred as part of the 2024 Global Restructuring Plan.
+Added: These restructuring expenses are excluded from the calculation of Segment EBITDA.
+Added: See Note 13, "Restructuring and Transaction Related Expenses" and Note 25, "Segment and Geographic Information" for further information.
+Added: (3) Selling, general and administrative expenses increased by $13 million, or 0.7%, to $1,855 million for the year ended December 31, 2024.
+Added: The increase in selling, general and administrative expense primarily reflects unfavorable impacts of (i) $15 million from professional fees related to several strategic central and regional IT initiatives, (ii) $14 million from increased outbound freight and logistics costs, (iii) $7 million from increased personnel costs mainly due to wage inflation, and (iv) other individually immaterial factors representing a $1 million unfavorable impact in the aggregate, partially offset by favorable impacts of (v) $13 million due to lower energy and utilities costs compared to the prior year across all geographies, and (vi) $11 million of non-recurring expense in the prior year related to the settlement of a value-added tax issue in Italy.
+Added: (4) Amounts primarily represent other non operating income and expenses, as well as reconciling items to remove depreciation - cost of goods sold and restructuring - cost of goods sold, which are excluded from the calculation of Segment EBITDA.
+Added: See Note 13, "Restructuring and Transaction Related Expenses" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information on restructuring charges.
+Added: The following table provides a reconciliation of Revenue to Segment EBITDA in our Specialty segment (in millions):
+Added: Year Ended December 31,
+Added: Specialty 2024 % of Total Segment Revenue 2023 % of Total Segment Revenue $ Change
Parts & services revenue $ 1,654 $ 1,665 $ (11) (1)
+Added: Intersegment revenue 3 3 —
+Added: Total segment revenue 1,657 1,668 (11)
+Added: Cost of goods sold 1,238 1,238 —
+Added: Gross margin 419 25.3 % 430 25.8 % (11) (2)
+Added: Selling, general and administrative expenses 315 19.0 % 305 18.3 % 10 (3)
+Added: Other segment items (4)
+Added: Segment EBITDA $ 113 6.8 % $ 134 8.0 % $ (21)
+Added: (1) Parts and services revenue decreased by $11 million, or 0.7%, to $1,654 million for the year ended December 31, 2024.
+Added: This was primarily due to a parts and services organic revenue decrease of $75 million, or 4.5% (5.3% on a per day basis), driven by demand softness in the RV and automotive product lines, as unit retail sales for RV and certain automotive categories have declined year over year.
+Added: This was partially offset by a net increase of $66 million, or 4.0%, in acquisition and divestiture revenue primarily related to our acquisition of one Specialty business in 2023.
+Added: (2) Gross margin decreased by $11 million, or 2.6%, to $419 million for the year ended December 31, 2024.
+Added: This decrease was primarily driven by higher discounts to help maintain sales volume in the first six months of the year, as well as lower revenue.
+Added: (3) Selling, general and administrative expenses increased by $10 million, or 3.3%, to $315 million for the year ended December 31, 2024.
+Added: The increase in selling, general and administrative expenses reflects unfavorable impacts of (i) $5 million from increased personnel costs, (ii) $3 million related to higher credit loss reserves compared to prior year, and (iii) other individually immaterial factors representing a $5 million unfavorable impact in the aggregate, partially offset by a favorable impact of (iv) $3 million due to lower freight, vehicle and fuel expenses.
+Added: (4) Amounts primarily represent other non operating income and expenses, as well as reconciling items to remove depreciation - cost of goods sold and restructuring - cost of goods sold, which are excluded from the calculation of Segment EBITDA.
+Added: See Note 13, "Restructuring and Transaction Related Expenses" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information on restructuring charges.
+Added: The following table provides a reconciliation of Revenue to Segment EBITDA in our Self Service segment (in millions):
+Added: Year Ended December 31,
+Added: Self Service 2024 % of Total Segment Revenue 2023 % of Total Segment Revenue $ Change
+Added: Parts & services revenue $ 213 $ 232 $ (19) (1)
Other revenue 319 365 (46) (2)
−Removed: Total third party revenue $ 1,665 $ 1,788 (10.1) % 3.6 % (0.3) % (6.9) %
−Removed: 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 year ended December 31, 2023, decreased by 10.1% primarily due to demand softness in the RV product line, as RV unit retail sales and wholesale shipments have declined year over year.
−Removed: (2) Acquisition and divestiture revenue was a net increase of $64 million, or 3.6%, primarily related to our acquisition of one Specialty business in 2023.
+Added: Total segment revenue 532 597 (65)
+Added: Cost of goods sold 305 375 (70)
+Added: Gross margin 227 42.7 % 222 37.2 % 5 (3)
+Added: Selling, general and administrative expenses 179 33.6 % 188 31.5 % (9) (4)
+Added: Other segment items (5)
Segment EBITDA $ 50 9.3 % $ 36 6.0 % $ 14
−Removed: Segment EBITDA decreased $65 million, or 32.7%, for the year ended December 31, 2023 compared to the prior year primarily due to the organic revenue decline and the negative effect of inflation on overhead expenses.
−Removed: The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our Specialty segment:
−Removed: Specialty Percentage of Total Segment Revenue
−Removed: Segment EBITDA for the year ended December 31, 2022
−Removed: Increase (decrease) due to:
−Removed: Change in gross margin (3.3) % (1)
−Removed: Change in segment operating expenses 0.2 % (2)
−Removed: Segment EBITDA for the year ended December 31, 2023
−Removed: 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 primarily was driven by (i) product channel mix toward lower margin auto and marine products and (ii) increased competitive pricing due to broader availability of inventory among competitors in the market.
−Removed: (2) Segment operating expenses as a percentage of revenue decreased despite the negative leverage effect from the 10.1% organic revenue decline.
−Removed: This was primarily due to a 0.2% decrease in personnel costs, mainly driven by decreased workers compensation and health insurance expenses, as well as restructuring activities.
−Removed: Third Party Revenue
−Removed: The following table summarizes the changes in third party revenue by category in our Self Service segment (in millions):
−Removed: Year Ended December 31, Percentage Change in Revenue
−Removed: Self Service 2023 2022 Organic Acquisition and Divestiture (3)
−Removed: Foreign Exchange Total Change
+Added: (1) Parts and services organic revenue decreased by $19 million, or 8.4% (8.7% on a per day basis), to $213 million for the year ended December 31, 2024.
+Added: This decrease was primarily due to lower parts volumes from a reduced number of customer admissions.
+Added: (2) Other organic revenue decreased $46 million, or 12.7%, to $319 million for the year ended December 31, 2024.
+Added: This decrease was primarily driven by (i) a $28 million decrease in revenue from precious metals due to lower prices and lower volumes and (ii) a $24 million decrease in revenue from scrap steel primarily related to lower volumes and lower prices, partially offset by (iii) a $6 million increase in revenue from other scrap (e.g., aluminum) and cores due to higher prices, partially offset by lower volumes.
+Added: (3) Gross margin increased by $5 million, or 2.3%, to $227 million for the year ended December 31, 2024.
+Added: The increase is attributable to improvements in vehicle procurement costs, partially offset by lower commodities prices.
+Added: Decreases in precious metals prices contributed an estimated $13 million decline in gross margin relative to the year ended December 31, 2023.
+Added: During the year ended December 31, 2024, scrap steel prices had a $2 million unfavorable impact on gross margin, compared to a $5 million favorable impact during the year ended December 31, 2023.
+Added: The unfavorable impacts for the year ended December 31, 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: (4) Selling, general and administrative expenses decreased by $9 million, or 5.0%, to $179 million for the year ended December 31, 2024.
+Added: The decrease in Selling, general and administrative expenses primarily reflects individually immaterial factors representing a $9 million favorable impact in the aggregate primarily related to operational productivity initiatives.
+Added: (5) Amounts primarily represent other non operating income and expenses, as well as reconciling items to remove depreciation - cost of goods sold and restructuring - cost of goods sold, which are excluded from the calculation of Segment EBITDA.
+Added: See Note 13, "Restructuring and Transaction Related Expenses" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information on restructuring charges.
+Added: Year Ended December 31, 2023 Compared to Year Ended December 31, 2022
+Added: Wholesale - North America
+Added: The following table provides a reconciliation of Revenue to Segment EBITDA in our Wholesale - North America segment (in millions):
+Added: Year Ended December 31,
+Added: Wholesale - North America 2023 % of Total Segment Revenue 2022 % of Total Segment Revenue $ Change
Parts & services revenue $ 4,974 $ 4,207 $ 767 (1)
+Added: Other revenue 307 349 (42) (2)
+Added: Intersegment revenue 1 — 1
+Added: Total segment revenue 5,282 4,556 726
+Added: Cost of goods sold 2,796 2,347 449
+Added: Gross margin 2,486 47.0 % 2,209 48.5 % 277 (3)
+Added: Selling, general and administrative expenses 1,535 29.0 % 1,372 30.1 % 163 (4)
+Added: Other segment items (5)
(24) (15) (9)
+Added: Segment EBITDA $ 975 18.5 % $ 852 18.7 % $ 123
+Added: (1) Parts and services revenue increased by $767 million, or 18.2%, to $4,974 million for the year ended December 31, 2023.
+Added: This increase was primarily driven by an acquisition and divestiture parts and services revenue net increase of $432 million, or 10.3%, primarily due to the acquisition of Uni-Select in the third quarter of 2023, partially offset by the divestiture of our PGW aftermarket glass business in the second quarter of 2022.
+Added: See Note 3, "Business Combinations" and "Other Divestitures (Not Classified in Discontinued Operations)" in Note 4, "Discontinued Operations and Divestitures" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further information on the acquisition of Uni-Select and the divestiture of PGW, respectively.
+Added: Additionally, parts and services organic revenue increased 8.2% (8.6% on a per day basis) for the year ended December 31, 2023 compared to the prior year, primarily driven pricing initiatives which focused on offsetting inflation on input costs and a net volume increase.
+Added: Aftermarket collision parts volumes increased year over year due to reduced pressures on our supply chain.
+Added: collision parts volumes also grew as a result of the continued rollout of State Farm's aftermarket parts program, which began on a trial basis in June 2022 and has subsequently been expanded.
+Added: (2) Other revenue decreased by $42 million, or 12.0%, to $307 million for the year ended December 31, 2023.
+Added: This decrease was primarily due to an other organic revenue decrease of $41 million, or 11.8%, primarily related to (i) a $46 million decrease in revenue from precious metals (platinum, palladium, and rhodium) due to lower prices, partially offset by higher volumes, partially offset by (ii) a $5 million increase in revenue from other scrap (e.g., aluminum) and cores due to higher volumes, partially offset by lower prices.
+Added: (3) Gross margin increased by $277 million, or 12.5%, to $2,486 million for the year ended December 31, 2023.
+Added: The decrease in gross margin as a percentage of total segment revenue of was primarily driven by (i) an unfavorable impact of 2.1% related to the acquisition of Uni-select in the third quarter of 2023 due to product mix as the paint, body, and equipment and maintenance parts lines have a lower gross margin structure than other wholesale product lines, partially offset by (ii) a 0.5% benefit from lower inbound freight costs and (iii) a 0.2% mix benefit resulting from the PGW divestiture in the second quarter of 2022.
+Added: (4) Selling, general and administrative expenses increased by $163 million, or 11.8%, to $1,535 million for the year ended December 31, 2023.
+Added: The decrease in Selling, general and administrative expenses as a percentage of revenue reflects favorable impacts of (i) 0.9% related to the acquisition of Uni-Select as Uni-Select operates with lower overhead expenses than our other wholesale product lines, (ii) 0.5% from decreased freight, vehicle, and fuel costs and (iii) other individually immaterial factors representing a 0.2% favorable impact in the aggregate, partially offset by (iv) 0.4% from higher professional fees and (v) 0.2% from higher charitable contributions.
+Added: (5) Amounts primarily represent other non operating income and expenses, as well as reconciling items to remove depreciation - cost of goods sold and restructuring - cost of goods sold, which are excluded from the calculation of Segment EBITDA.
+Added: See Note 13, "Restructuring and Transaction Related Expenses" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information on restructuring charges.
+Added: The following table provides a reconciliation of Revenue to Segment EBITDA in our Europe segment (in millions):
+Added: Year Ended December 31,
+Added: Europe 2023 % of Total Segment Revenue 2022 % of Total Segment Revenue $ Change
+Added: Parts & services revenue $ 6,303 $ 5,711 $ 592 (1)
Other revenue 20 24 (4)
−Removed: Total third party revenue $ 597 $ 715 (12.3) % (4.2) % — % (16.5) %
−Removed: In the table above, the sum of the individual percentages may not equal the total due to rounding.
−Removed: (1) Parts and services organic revenue increased 2.4% for the year ended December 31, 2023 compared to the prior year, primarily driven by pricing initiatives which focused on offsetting inflation on input costs resulting from greater competition for vehicles.
−Removed: (2) Other organic revenue decreased 19.1%, or $93 million, year over year due to (i) a $79 million decrease in revenue from precious metals (platinum, palladium, and rhodium) due to lower prices, (ii) a $20 million decrease in revenue from scrap steel related to lower prices and lower volumes, partially offset by (iii) a $6 million increase in revenue from other scrap (including aluminum) and cores primarily related to higher volumes, partially offset by lower prices.
−Removed: (3) Acquisition and divestiture revenue was a net decrease of $30 million, or 4.2% due to the divestiture of a business in the third quarter of 2022.
−Removed: See "Other Divestitures (Not Classified in Discontinued Operations)" in Note 4, "Discontinued Operations and Divestitures" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further information on the divestiture.
+Added: Total segment revenue 6,323 5,735 588
+Added: Cost of goods sold 3,886 3,520 366
+Added: Gross margin 2,437 38.5 % 2,215 38.6 % 222 (2)
+Added: Selling, general and administrative expenses 1,842 29.1 % 1,651 28.8 % 191 (3)
+Added: Other segment items (4)
Segment EBITDA $ 614 9.7 % $ 585 10.2 % $ 29
−Removed: Segment EBITDA decreased $47 million, or 57.3%, for the year ended December 31, 2023 compared to the prior year.
−Removed: The decrease is driven by the decline in revenue due to unfavorable movements in commodity prices compared to the prior year and gross margin compression as vehicle procurement costs have decreased at a lesser rate than commodity prices.
−Removed: Decreases in precious metals prices contributed an estimated $60 million decline in Segment EBITDA relative to the year ended December 31, 2022.
+Added: (1) Parts and services revenue increased by $592 million, or 10.4%, to $6,303 million for the year ended December 31, 2023.
+Added: This increase was primarily due to (i) a parts and services organic revenue increase of 6.9% (7.4% on a per day basis), primarily driven by pricing initiatives across all geographies to offset increased costs resulting from inflationary pressures and to a lesser extent, higher volumes, (ii) an acquisition and divestiture revenue net increase of $76 million, or 1.3%, primarily related to our acquisition of seven wholesale businesses from the beginning of 2022 through the one-year anniversary of the acquisition dates and (iii) an exchange rate increase of $121 million, or 2.1%, primarily due to the weaker U.S.
+Added: dollar against the euro, Czech koruna and pound sterling for the year ended December 31, 2023 relative to the prior year.
+Added: (2) Gross margin increased by $222 million, or 10.0%, to $2,437 million for the year ended December 31, 2023.
+Added: Gross margin as a percent of total segment revenue was flat on a year to date basis, as favorable impacts from price increases were offset by inflationary pressures and difficult macro-economic conditions causing consumer price sensitivity, most notably in our Central and Eastern European regions.
+Added: (3) Selling, general and administrative expenses increased by $191 million, or 11.6%, to $1,842 million for the year ended December 31, 2023.
+Added: The increase in selling, general and administrative expense as a percentage of total segment revenue primarily reflects the unfavorable impacts of 0.2% due to the settlement of a value-added tax issue in Italy and leverage effects of 0.2% caused by strike activity in Germany.
+Added: (4) Amounts primarily represent other non operating income and expenses, as well as reconciling items to remove depreciation - cost of goods sold and restructuring - cost of goods sold, which are excluded from the calculation of Segment EBITDA.
+Added: See Note 13, "Restructuring and Transaction Related Expenses" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information on restructuring charges.
+Added: The following table provides a reconciliation of Revenue to Segment EBITDA in our Specialty segment (in millions):
+Added: Year Ended December 31,
+Added: Specialty 2023 % of Total Segment Revenue 2022 % of Total Segment Revenue $ Change
+Added: Parts & services revenue $ 1,665 $ 1,788 $ (123) (1)
+Added: Intersegment revenue 3 3 —
+Added: Total segment revenue 1,668 1,791 (123)
+Added: Cost of goods sold 1,238 1,270 (32)
+Added: Gross margin 430 25.8 % 521 29.1 % (91) (2)
+Added: Selling, general and administrative expenses 305 18.3 % 325 18.2 % (20) (3)
+Added: Other segment items (4)
+Added: Segment EBITDA $ 134 8.0 % $ 199 11.1 % $ (65)
+Added: (1) Parts and services revenue decreased by $123 million, or 6.9%, to $1,665 million for the year ended December 31, 2023.
+Added: This decrease was primarily due to a parts and services organic revenue decrease of 10.1% primarily due to demand softness in the RV product line, as RV unit retail sales and wholesale shipments have declined year over year.
+Added: This was partially offset by an acquisition and divestiture parts and services revenue net increase of $64 million, or 3.6%, primarily related to our acquisition of one Specialty business in 2023.
+Added: (2) Gross margin decreased by $91 million, or 17.4%, to $430 million for the year ended December 31, 2023.
+Added: Gross margin as a percent of total segment revenue decreased primarily due to product channel mix toward lower margin auto and marine products and increased competitive pricing due to broader availability of inventory among competitors in the market.
+Added: (3) Selling, general and administrative expenses decreased by $20 million, or 6.4%, to $305 million for the year ended December 31, 2023.
+Added: The decrease in selling, general and administrative expenses as a percent of total segment revenue was primarily due to a 0.2% decrease in personnel costs, mainly driven by decreased workers compensation and health insurance expenses, as well as restructuring activities.
+Added: (4) Amounts primarily represent other non operating income and expenses, as well as reconciling items to remove depreciation - cost of goods sold and restructuring - cost of goods sold, which are excluded from the calculation of Segment EBITDA.
+Added: See Note 13, "Restructuring and Transaction Related Expenses" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information on restructuring charges.
+Added: The following table provides a reconciliation of Revenue to Segment EBITDA in our Self Service segment (in millions):
+Added: Year Ended December 31,
+Added: Self Service 2023 % of Total Segment Revenue 2022 % of Total Segment Revenue $ Change
+Added: Parts & services revenue $ 232 $ 227 $ 5 (1)
+Added: Other revenue 365 488 (123) (2)
+Added: Total segment revenue 597 715 (118)
+Added: Cost of goods sold 375 437 (62)
+Added: Gross margin 222 37.2 % 278 38.8 % (56) (3)
+Added: Selling, general and administrative expenses 188 31.5 % 196 27.4 % (8) (4)
+Added: Other segment items (5)
+Added: Segment EBITDA $ 36 6.0 % $ 83 11.7 % $ (47)
+Added: (1) Parts and services organic revenue increased by $5 million, or 2.4%, to $232 million for the year ended December 31, 2023, primarily driven by pricing initiatives which focused on offsetting inflation on input costs resulting from greater competition for vehicles.
+Added: (2) Other revenue decreased by $123 million, or 25.2%, to $365 million for the year ended December 31, 2023, primarily driven by an other organic decrease of $93 million, or 19.1%, due to (i) a $79 million decrease in revenue from precious metals (platinum, palladium, and rhodium) due to lower prices, (ii) a $20 million decrease in revenue from scrap steel related to lower prices and lower volumes, partially offset by (iii) a $6 million increase in revenue from other scrap (e.g., aluminum) and cores primarily related to higher volumes, partially offset by lower prices.
+Added: Additionally, acquisition and divestiture other revenue was a net decrease of $30 million, or 6.1%, due to the divestiture of a business in the third quarter of 2022.
+Added: See "Other Divestitures (Not Classified in Discontinued Operations)" in Note 4, "Discontinued Operations and Divestitures" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further information on the divestiture.
+Added: (3) Gross margin decreased by $56 million, or 20.0%, to $222 million for the year ended December 31, 2023 primarily due to an unfavorable impact resulting from vehicle procurement costs decreasing at a lesser rate than commodity prices.
+Added: Decreases in precious metals prices contributed an estimated $60 million decline in gross margin relative to the year ended December 31, 2022.
Net sequential changes in scrap steel prices partially offset the impact of the decline in precious metals prices.
−Removed: During the year ended December 31, 2023, scrap steel prices had a $5 million favorable impact on Segment EBITDA, compared to an $15 million unfavorable impact during the year ended December 31, 2022.
+Added: During the year ended December 31, 2023, scrap steel prices had a $5 million favorable impact on gross margin compared to a $15 million unfavorable impact during the year ended December 31, 2022.
The favorable impacts for the year ended December 31, 2023 resulted from the increase in scrap steel prices between the date we purchased a vehicle, which influences the price we pay for a vehicle, and the date we scrapped a vehicle, which influences the price we receive for scrapping a vehicle.
−Removed: The following table summarizes the changes in Segment EBITDA as a percentage of revenue in our Self Service segment:
−Removed: Self Service Percentage of Total Segment Revenue
−Removed: Segment EBITDA for the year ended December 31, 2022
−Removed: Increase (decrease) due to:
−Removed: Change in gross margin (1.5) % (1)
−Removed: Change in segment operating expenses (4.2) % (2)
−Removed: Segment EBITDA for the year ended December 31, 2023
−Removed: In the table above, the sum of the individual percentages may not equal the total due to rounding.
−Removed: (1) The decrease in gross margin reflects an unfavorable impact resulting from vehicle procurement costs decreasing at a lesser rate than commodity prices.
−Removed: (2) The increase in segment operating expenses as a percentage of revenue reflects (i) a negative leverage effect of 5.7% from decreases in metals revenue, partially offset by (ii) other individually immaterial factors representing a 1.5% favorable impact in the aggregate.
+Added: (4) Selling, general and administrative expenses decreased by $8 million, or 3.9%, to $188 million for the year ended December 31, 2023.
+Added: The increase in selling, general and administrative expenses as a percent of total segment revenue was primarily due to a negative leverage effect of 5.7% from decreases in metals revenue, partially offset by other individually immaterial factors representing a 1.5% favorable impact in the aggregate.
+Added: (5) Amounts primarily represent other non operating income and expenses, as well as reconciling items to remove depreciation - cost of goods sold and restructuring - cost of goods sold, which are excluded from the calculation of Segment EBITDA.
+Added: See Note 13, "Restructuring and Transaction Related Expenses" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information on restructuring charges.
Liquidity and Capital Resources
−Removed: We assess our liquidity in terms of our ability to fund our operations and provide for expansion through both internal development and acquisitions.
+Added: We assess our liquidity and capital resources in terms of our ability to fund our operations and provide for expansion through both internal development and acquisitions.
Our primary sources of liquidity are cash flows from operations and our revolving credit facilities.
−Removed: We utilize our cash flows from operations to fund working capital and capital expenditures, with the excess amounts going towards funding acquisitions, paying down outstanding debt, paying dividends or repurchasing our common stock.
+Added: We utilize our cash flows from operations to fund working capital and capital expenditures, with the excess amounts going towards paying dividends, repurchasing our common stock, paying down outstanding debt, or funding acquisitions.
As we have pursued acquisitions as part of our historical growth strategy, our cash flows from operations have not always been sufficient to cover our investing activities.
−Removed: To fund our acq uisitions, we have accessed various forms of debt financing, including revolving credit facilities and senior notes.
+Added: To fund our acq uisitions, we have accessed various forms of debt
+Added: financing, including revolving credit facilities, term loans, and senior notes.
We currently believe we have sufficient access to capital markets to support our future growth objectives.
The following table summarizes liquidity data as of the dates indicated (in millions):
−Removed: December 31, 2023 December 31, 2022 December 31, 2022
−Removed: Cash and cash equivalents $ 299 $ 278 $ 278
−Removed: Total debt 4,281 (3)
−Removed: Current maturities (1)
+Added: December 31, 2024 December 31, 2023
Capacity under revolving credit facilities $ 2,000 $ 2,000
−Removed: Availability under revolving credit facilities (2)
−Removed: 976 645 1,295
−Removed: Total liquidity (cash and cash equivalents plus availability under credit facilities) 1,275 923 1,573
−Removed: (1) Debt amounts reflect the gross values to be repaid in the next 12 months (excluding immaterial debt issuance costs as of December 31, 2023 and 2022, respectively).
−Removed: (2) Availability under revolving credit facilities is derived by reducing capacity under the revolving credit facilities by our borrowings under the revolving credit facilities and outstanding letters of credit ($110 million and $69 million at December 31, 2023 and 2022, respectively).
−Removed: (3) Debt amounts reflect the gross values to be repaid (excluding debt issuance costs and unamortized bond discount of $30 million and $6 million as of December 31, 2023 and 2022, respectively).
−Removed: (4) Amounts presented represent the termination of the senior secured credit agreement ("Prior Credit Agreement") and inclusion of the new credit agreement ("Senior Unsecured Credit Agreement") as if both were in effect as of December 31, 2022.
−Removed: See Note 19, "Long-Term Obligations" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further information.
−Removed: (5) Debt amount presented above reflects the gross values to be repaid (excluding debt issuance costs of $13 million as of December 31, 2022).
−Removed: As of December 31, 2023, we had senior debt outstanding as follows:
−Removed: December 31, 2023
−Removed: Maturity Date Interest Rate Amount Outstanding
−Removed: Senior Unsecured Credit Agreement:
−Removed: Term loan payable January 2026 6.83 % $ 500
−Removed: Revolving credit facilities January 2028 6.25 % (1)
−Removed: Senior Unsecured Term Loan Agreement:
−Removed: Term loan payable (CAD 700 million) July 2026 6.82 % 529
−Removed: Unsecured Senior Notes:
−Removed: Notes (2028) June 2028 5.75 % 800
−Removed: Notes (2033) June 2033 6.25 % 600
−Removed: Euro Notes (2024) (€500 million)
−Removed: April 2024 3.875 % 552
−Removed: Euro Notes (2028) ( €250 million)
−Removed: April 2028 4.125 % 276
−Removed: (1) Interest rate derived via a weighted average
−Removed: We had approximately $976 million available under our revolving credit facilities in place as of December 31, 2023.
−Removed: Combined with $299 million of cash and cash equivalents at December 31, 2023, we had approximately $1,275 million i n available liquidity, a decrease of $298 million from our available liquidity as of December 31, 2022, primarily as a result of reducing our overall revolving credit facility capacity by $650 million after entering into the Senior Unsecured Credit Agreement .
−Removed: The enterprise value for the Uni-Select Acquisition at the time of the acquisition was approximately CAD 2.8 billion ($2.1 billion), which was financed with the gross proceeds from the issuance of Unsecured Senior Notes of $1,400 million, Senior Unsecured Term Loan Agreement ("CAD Note") of CAD 700 million, and borrowings under our revolving credit facility and cash on hand of approximately $150 million and $50 million, respectively.
+Added: Revolving credit facilities borrowings 664 914
+Added: Letters of credit 114 110
+Added: Availability under credit revolving facilities 1,222 976
+Added: Cash and cash equivalents 234 299
+Added: Total liquidity $ 1,456 $ 1,275
+Added: We had $1,222 million available under our revolving credit facilities as of December 31, 2024.
+Added: Combined with $234 million of cash and cash equivalents at December 31, 2024, we had $1,456 million i n available liquidity, an increase of $181 million from our available liquidity as of December 31, 2023, primarily as a result of reducing our revolving credit facilities borrowings by $250 million.
+Added: See Note 18, "Long-Term Obligations" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding total debt outstanding.
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: However, as noted, we accessed additional financing sources to fund the Uni-Select transaction.
−Removed: Our capital allocation strategy includes spending to support growth driven capital projects, complete synergistic acquisitions, and return stockholder value through the payment of dividends and repurchasing shares of our common stock.
−Removed: See Part II, Item 5 of this Annual Report on Form 10-K for further information on a summary of the dividend activity for our common stock for the year ended December 31, 2023 .
+Added: 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, completing highly synergistic tuck-in acquisitions and debt repayment.
+Added: See Part II, Item 5 of this Annual Report on Form 10-K for further information regarding the dividend activity for our common stock for the year ended December 31, 2024 .
On February 18, 2025, our Board declared a quarterly cash dividend of $0.30 per share of common stock, payable on March 27, 2025, to stockholders of record at the close of business on March 13, 2025 .
2 unchanged sentences
With $1,456 million of total liquidity as of December 31, 2024 and $38 million of current maturities, we have access to funds to meet our near term commitments.
−Removed: Our current maturities include the 3.875% €500 million Euro Notes (2024) due April 2024, which we intend to refinance on or before the scheduled maturity.
We have a surplus of current assets over current liabilities, which further reduces the risk of short-term cash shortfalls.
7 unchanged sentences
Minimum interest coverage ratio 3.00 :
−Removed: The total leverage rat io increased from 1.5 as of December 31, 2022 as we added debt from the U.S.
−Removed: Notes (2028/33) and the CAD Note in the second and third quarters of 2023.
−Removed: The spread applied to the interest rate on our credit facility borrowings increased in the third quarter and remained the same through the fourth quarter as a result of the total leverage ratio rising above 2.0.
The indentures relating to our U.S.
3 unchanged sentences
There can be no assurance that additional funding, or refinancing of our Senior Unsecured Credit Agreement, if needed, will be available on terms attractive to us, or at all.
−Removed: Furthermore, any additional equity financing may be dilutive to
−Removed: stockholders, and debt financing, if available, may involve restrictive covenants or higher interest costs.
+Added: Furthermore, any additional equity financing may be dilutive to stockholders, and debt financing, if available, may involve restrictive covenants or higher interest costs.
Our failure to raise capital if and when needed could have a material adverse impact on our business, operating results, and financial condition.
1 unchanged sentence
These efforts are supported by our supply chain finance programs.
−Removed: See Note 18, "Supply Chain Financing" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further information related to our supply chain financing arrangements.
+Added: See Note 17, "Supply Chain Financing" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information related to our supply chain financing arrangements.
We hold interest rate swaps to hedge the variable rates on a portion of our credit agreement borrowings.
1 unchanged sentence
Including our senior notes and CAD Note, our overall weighted average interest rate on borrowings was 5.3% at December 31, 2024 .
−Removed: Under the Senior Unsecured Credit Agreement, our borrowings bear interest at Secured Overnight Financing Rate (i.e.
−Removed: SOFR) plus the applicable spread or other risk-free interest rates that are applicable for the specified currency plus a spread.
−Removed: Under the CAD Note, the interest rate may be (i) a forward-looking term rate based on the Canadian Dollar Offer Rate for an interest period chosen by the Company of one or three months or (ii) the Canadian Prime Rate (as defined in the CAD Note), plus in each case a spread based on the Company’s debt rating and total leverage ratio.
+Added: Under the Senior Unsecured Credit Agreement, our borrowings bear interest at the Secured Overnight Financing Rate (i.e., SOFR) plus the applicable spread or other risk-free interest rates that are applicable for the specified currency plus a spread.
+Added: Under the CAD Note, the interest rate may be (i) a forward-looking term rate based on the Canadian Overnight Repo Rate Average ("CORRA") for an interest period chosen by the Company of one or three months or (ii) the Canadian Prime Rate (as defined in the CAD Note), plus in each case a spread.
See Note 18, "Long-Term Obligations" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information related to our borrowings and related interest.
The interest rate swaps are described in Note 19, "Derivative Instruments and Hedging Activities" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
−Removed: We had outstanding borrowin gs under our revolving credit facilities and the term loans payable of $1,943 million and $1,786 million at December 31, 2023 and 2022, respectively.
+Added: We had outstanding borrowin gs under our revolving credit facilities and term loans payable of $1,651 million and $1,943 million at December 31, 2024 and 2023, respectively.
Of these amounts , there were no current maturities at December 31, 2024 or 2023.
−Removed: The scheduled maturities of long-term obligations outstanding at December 31, 2023 are as follows (in millions):
−Removed: Thereafter 611
−Removed: Total debt (2)
−Removed: (1) Long-term obligations maturing by December 31, 2024 include $16 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 discount of $30 million as of December 31, 2023).
+Added: See Note 18, "Long-Term Obligations" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding the scheduled maturities of long-term obligations outstanding .
As of December 31, 2024, the Company had cash and cash equivalents of $234 million , of which $213 million was held by foreign subsidiaries.
8 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 years ended December 31, 2023, and 2022 (in millions):
−Removed: Year Ended December 31,
−Removed: 2023 2022 Change
−Removed: Wholesale - North America
−Removed: $ 1,430 $ 1,172 $ 258 (1)
−Removed: Europe 3,696 3,498 198 (2)
−Removed: Specialty 1,273 1,304 (31) (3)
−Removed: Total $ 6,399 $ 5,974 $ 425
−Removed: (1) Inventory purchases across the Wholesale - North America segment increased for the year ended December 31, 2023 compared to the prior year primarily due to a $393 million increase attributable to inventory purchases at Uni-Select from the date of acquisition through December 31, 2023, partially offset by higher purchasing levels in the prior year due to restocking efforts to rebuild inventory levels.
−Removed: (2) The increase in inventory purchases in our Europe segment included an increase of $70 million attributable to the increase in the value of the euro, and to a lesser extent, the pound sterling for the year ended December 31, 2023 compared to the prior year.
−Removed: On a constant currency basis, inventory purchases increased compared to the prior year, primarily due to increased sales and prices for the year ended December 31, 2023 compared to the prior year.
−Removed: (3) The decrease in inventory purchases in the Specialty segment compared to the prior year was primarily due to matching inventory levels with demand.
−Removed: The following table sets forth a summary of our global wholesale salvage and self service procurement for the years ended December 31, 2023, and 2022 (in thousands):
−Removed: Year Ended December 31,
−Removed: 2023 2022 % Change
−Removed: Wholesale - North America salvage vehicles 258 246 4.9 %
−Removed: Europe wholesale salvage vehicles 29 29 — %
−Removed: Self Service salvage vehicles 497 517 (3.9) %
−Removed: Wholesale - North America salvage purchases in 2023 increased relative to the prior year due to improved availability of vehicles at auctions.
−Removed: Self Service salvage purchases in 2023 decreased relative to the prior year due to a focus on reducing car cost as car costs rose faster than commodity prices in late 2022 and early 2023.
−Removed: The following table summarizes the components of the change in cash provided by operating activities (in millions):
−Removed: Operating Cash
−Removed: Net cash provided by operating activities for the year ended December 31, 2022
−Removed: Increase (decrease) due to:
−Removed: Working capital accounts:
−Removed: Receivables 21
−Removed: Inventories 413
−Removed: Accounts payable (274)
−Removed: Other operating activities (54) (2)
−Removed: Net cash provided by operating activities for the year ended December 31, 2023
+Added: For the year ended December 31, 2024, net cash provided by operating activities totaled $1,121 million compared to $1,356 million for the same period of 2023.
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: • Receivables was a $21 million incremental cash inflow in 2023 primarily at our Wholesale - North America and Europe segments as a result of collections and timing of sales.
−Removed: • Inventories represented $413 million in incremental cash inflows for the year ended December 31, 2023 compared to the same period of 2022, including $294 million in our Europe segment primarily due to improved inventory management, $93 million in our Wholesale - North America segment primarily due to higher purchasing levels in 2022 due to restocking efforts to rebuild inventory levels, and $26 million in our Specialty segment inventory due to decreasing inventory purchasing levels to align with softening demand.
−Removed: • Accounts payable produced $274 million in incremental cash outflows for the year ended December 31, 2023 compared to the same period of 2022 on a consolidated basis.
−Removed: This was primarily attributable to incremental cash outflows in our Wholesale - North America segment of $295 million (partly related to accelerated vendor payments in late 2021 to ensure priority access to inventory), partially offset by our Specialty segment which contributed a $16 million lower cash outflow.
−Removed: Europe was roughly flat primarily attributable to higher payments in 2023, resulting from increased inventory purchases in 2022 that were in accounts payable at the end of December 2022, offset by an increase in its accounts payable under its supply chain financing program, which has longer payment terms.
−Removed: (2) Primarily reflects the aggregate effect of higher interest payments (primarily due to higher interest rates and additional borrowings for the Uni-Select Acquisition), partially offset by lower cash paid for taxes during the year ended December 31, 2023 compared to the same period of 2022.
−Removed: For the year ended December 31, 2023, net cash used in investing activities totaled $2,442 million compared to net cash provided by investing activities of $172 million for the same period of 2022.
+Added: Inventories represented $324 million in incremental cash outflows for the year ended December 31, 2024 compared to the same period of 2023.
+Added: Accounts payable produced $256 million in incremental cash inflows for the year ended December 31, 2024 compared to the same period of 2023.
+Added: Other operating activities primarily reflect the aggregate effect of lower cash earnings, higher interest payments (primarily due to additional borrowings for the Uni-Select Acquisition and higher interest rates), and higher cash paid for taxes during the year ended December 31, 2024 compared to the same period of 2023.
+Added: For the year ended December 31, 2024, net cash used in investing activities totaled $406 million compared to $2,442 million for the same period of 2023.
We invested $49 million and $2,225 million of cash in business acquisitions during the years ended December 31, 2024 and 2023, respectively.
−Removed: Proceeds from the disposal of businesses were $110 million for the year ended December 31, 2023, primarily related to GSF Car Parts, compared to $399 million for the year ended December 31, 2022 primarily related to PGW.
+Added: Proceeds from the disposal of businesses, net of divested cash were an outflow of $11 million for the year ended December 31, 2024, compared to an inflow of $110 million for the year ended December 31, 2023, primarily related to the sale of GSF Car Parts.
Property, plant and equipment purchases were $311 million for the year ended December 31, 2024 compared to $358 million in the prior year.
5 unchanged sentences
Free cash flow $ 810 $ 998
−Removed: For the year ended December 31, 2023, net cash provided by financing activities totaled $1,102 million compared to net cash used in financing activities of $1,394 million for the same period of 2022.
−Removed: The increase is primarily due to proceeds (net of unamortized bond discount) of $1,394 million from the issuance of the U.S.
−Removed: Notes (2028/33) in 2023, decreases in repurchases of common stock of $1,002 million, and net borrowings of $111 million for the year ended December 31, 2023 (including proceeds from the CAD Note of $531 million) compared to net repayments on our debt of $48 million for the same period of 2022.
+Added: For the year ended December 31, 2024, net cash used in financing activities totaled $746 million compared to net cash provided by financing activities of $1,102 million for the same period of 2023.
+Added: The decrease is primarily due to proceeds (net of unamortized bond discounts) of $1,394 million from the issuance of the U.S.
+Added: Notes (2028/33) in 2023.
+Added: Cash outflows for share repurchases were $360 million and dividends paid were $318 million for the year ended December 31, 2024 compared to $38 million for share repurchases and $302 million for dividends paid for the same period of 2023.
+Added: Net debt payments (net of unamortized bond discounts) were $17 million for the year ended December 31, 2024 compared to net debt borrowings (net of unamortized bond discounts) of $111 million for the same period of 2023 (excluding proceeds from the issuance of the U.S.
+Added: Notes (2028/33) of $1,394 million).
We intend to continue to evaluate markets for potential growth through the internal development of distribution centers, processing and sales facilities, and warehouses, through further integration of our facilities, and through selected business acquisitions.
3 unchanged sentences
• Long-term debt of $4,198 million and related interest totaling $914 million, of which $38 million and $223 million, respectively, is expected to be paid within twelve months.
−Removed: Current maturities include the 3.875% €500 million Euro Notes (2024) due on April 1, 2024, which we intend to refinance on or before the scheduled maturity.
See Note 18, "Long-Term Obligations" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for more information related to debt amounts outstanding at December 31, 2024.
6 unchanged sentences
• Self-insurance reserves of $144 million, of which $79 million is expected to be paid within twelve months.
−Removed: See Note 7, "Self-Insurance Reserves" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for more information relates to self-insurance reserves at December 31, 2023.
+Added: See Note 7, "Self-Insurance Reserves" to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for more information related to self-insurance reserves at December 31, 2024.
Summarized Guarantor Financial Information
−Removed: On May 24, 2023, we completed an offering of $1,400 million aggregate principal amount of senior unsecured notes.
−Removed: This offering is 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 on the Company's Registration Statement on Form S-4 filed with the SEC on September 1, 2023.
+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 IV, Item 15 of this Annual Report on Form 10-K.
The guarantees are full and unconditional, joint and several, and subject to certain conditions for release.
−Removed: See Note 19, "Long-Term Obligations" in Part II, Item 8 of this Annual Report on Form 10-K for information related to this offering.
+Added: See Note 18, "Long-Term Obligations" in Part II, Item 8 of this Annual Report on Form 10-K for information related to the Euro Notes (2031) and U.S.
+Added: Notes (2028/2033).
Holders of the notes have a direct claim only against the Obligor Group.
8 unchanged sentences
(1) Guarantor subsidiaries recorded $53 million and $53 million of net sales to and $205 million and $203 million of purchases from non-guarantor subsidiaries for the fiscal years ended December 31, 2024 and December 31, 2023, respectively.
+Added: (2) Information reflects the current Obligor Group listed in Exhibit 22.1 in Part IV, Item 15 of this Annual Report on Form 10-K.
Summarized Balance Sheets (in millions)
3 unchanged sentences
Noncurrent liabilities 4,163 4,031
+Added: (1) Current liabilities for guarantor subsidiaries included $219 million of short term notes payable to non-guarantor subsidiaries as of December 31, 2024.
+Added: (2) Information reflects the current Obligor Group listed in Exhibit 22.1 in Part IV, Item 15 of this Annual Report on Form 10-K.
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.