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Item 1. Financial Statements

2025-10-30 compared with 2025-07-24 · 220 added, 129 removed, 524 unchanged (40% of the section changed)

3 unchanged sentences

(In millions, except per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

10 unchanged sentences

Total other expense, net 51 53 145 162

Income before provision for income taxes 260 266 496 497

Income from continuing operations before provision for income taxes 223 246 695 724

Provision for income taxes 45 61 173 210

Equity in (earnings) losses of unconsolidated subsidiaries ( 1 ) ( 2 ) — —

Equity in earnings of unconsolidated subsidiaries — ( 3 ) — ( 3 )

Income from continuing operations 178 188 522 517

Net income from discontinued operations 2 4 20 19

Net income 180 192 542 536

net income attributable to noncontrolling interest 1 1 1 1

net income attributable to continuing noncontrolling interest — 1 1 2

Net income attributable to LKQ stockholders $ 180 $ 191 $ 541 $ 534

Basic earnings per share:

Income from continuing operations $ 0.69 $ 0.71 $ 2.02 $ 1.95

Net income from discontinued operations 0.01 0.02 0.08 0.07

Net income 0.70 0.73 2.10 2.02

net income attributable to noncontrolling interest — — — —

net income attributable to continuing noncontrolling interest — — — —

Net income attributable to LKQ stockholders $ 0.70 $ 0.73 $ 2.10 $ 2.02

Diluted earnings per share:

Income from continuing operations $ 0.69 $ 0.71 $ 2.02 $ 1.95

Net income from discontinued operations 0.01 0.02 0.08 0.07

Net income 0.70 0.73 2.10 2.02

net income attributable to noncontrolling interest — — — —

net income attributable to continuing noncontrolling interest — — — 0.01

Net income attributable to LKQ stockholders $ 0.70 $ 0.73 $ 2.10 $ 2.01

3 unchanged sentences

(In millions)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Net income $ 180 $ 192 $ 542 $ 536

net income attributable to noncontrolling interest 1 1 1 1

net income attributable to continuing noncontrolling interest — 1 1 2

Net income attributable to LKQ stockholders 180 191 541 534

Other comprehensive income (loss):

Other comprehensive (loss) income:

Foreign currency translation, net of tax ( 38 ) 124 330 46

1 unchanged sentence

Net change in unrealized gains/losses on pension plans, net of tax — — 1 —

Other comprehensive (loss) income from unconsolidated subsidiaries

( 7 ) 5 ( 4 ) —

Other comprehensive income (loss) 262 ( 15 ) 366 ( 73 )

Other comprehensive income (loss) from unconsolidated subsidiaries 5 ( 2 ) 1 ( 2 )

Other comprehensive (loss) income ( 33 ) 118 333 45

Comprehensive income 147 310 875 581

comprehensive income attributable to noncontrolling interest 1 1 1 1

comprehensive income attributable to continuing noncontrolling interest — 1 1 2

Comprehensive income attributable to LKQ stockholders $ 147 $ 309 $ 874 $ 579

3 unchanged sentences

(In millions, except per share data)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Current assets:

3 unchanged sentences

Prepaid expenses and other current assets 711 328

Current assets of discontinued operations — 48

Total current assets 5,715 4,906

5 unchanged sentences

Other noncurrent assets 425 376

Noncurrent assets of discontinued operations — 515

Total assets $ 15,600 $ 14,955

9 unchanged sentences

Other current liabilities 177 92

Current liabilities of discontinued operations — 35

Total current liabilities 3,581 2,862

3 unchanged sentences

Other noncurrent liabilities 346 341

Noncurrent liabilities of discontinued operations — 117

Commitments and contingencies

Stockholders' equity:

Common stock, $ 0.01 par value, 1,000.0 shares authorized, 323.8 shares issued and 257.3 shares outstanding at June 30, 2025;

Common stock, $ 0.01 par value, 1,000.0 shares authorized, 324.0 shares issued and 256.3 shares outstanding at September 30, 2025;

323.6 shares issued and 259.1 shares outstanding at December 31, 2024

3 unchanged sentences

Treasury stock, at cost;

66.5 shares at June 30, 2025 and 64.5 shares at December 31, 2024

67.7 shares at September 30, 2025 and 64.5 shares at December 31, 2024

( 2,908 ) ( 2,787 )

7 unchanged sentences

(In millions)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES (1) :

30 unchanged sentences

Net increase in cash, cash equivalents and restricted cash 57 71

Cash, cash equivalents and restricted cash, beginning of period (1)

Cash, cash equivalents and restricted cash of continuing operations, beginning of period (3)

Cash and cash equivalents of discontinued operations, beginning of period — —

Cash, cash equivalents and restricted cash of continuing and discontinued operations, beginning of period (3)

Cash, cash equivalents and restricted cash of continuing and discontinued operations, end of period (3)

Cash and cash equivalents of discontinued operations, end of period — —

Cash, cash equivalents and restricted cash, end of period (3)

2 unchanged sentences

Interest 163 153

(1) Amounts presented contain results from both continuing and discontinued operations.

Refer to Note 2, "Discontinued Operations" for further information regarding cash flows associated with the results of discontinued operations.

(2) Non cash investing activities for the nine months ended September 30, 2025 includes an approximately $ 390 million receivable related to the sale of Self Service .

Refer to Note 2, "Discontinued Operations" for further information.

(3) See Note 14, "Cash, Cash Equivalents and Restricted Cash" for further information on restricted cash.

3 unchanged sentences

(In millions, except per share data)

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

LKQ Stockholders

2 unchanged sentences

Shares Amount Shares Amount

Balance as of April 1, 2025 323.8 $ 3 ( 65.5 ) $ ( 2,827 ) $ 1,558 $ 7,753 $ ( 313 ) $ 15 $ 6,189

Balance as of July 1, 2025 323.8 $ 3 ( 66.5 ) $ ( 2,868 ) $ 1,567 $ 7,867 $ ( 51 ) $ 25 $ 6,543

Net income — — — — — 180 — — 180

Other comprehensive income — — — — — — 262 — 262

Other comprehensive loss — — — — — — ( 33 ) — ( 33 )

Purchase of treasury stock — — ( 1.2 ) ( 40 ) — — — — ( 40 )

Vesting of restricted stock units, net of shares withheld for employee tax 0.2 — — — ( 3 ) — — — ( 3 )

Stock-based compensation expense — — — — 10 — — — 10

Dividends declared to LKQ stockholders ($0.30 per share) — — — — — ( 78 ) — — ( 78 )

Acquisition of a subsidiary with noncontrolling interest — — — — — — — 9 9

Balance as of June 30, 2025 323.8 $ 3 ( 66.5 ) $ ( 2,868 ) $ 1,567 $ 7,867 $ ( 51 ) $ 25 $ 6,543

Three Months Ended June 30, 2024

Balance as of September 30, 2025 324.0 $ 3 ( 67.7 ) $ ( 2,908 ) $ 1,574 $ 7,969 $ ( 84 ) $ 25 $ 6,579

Three Months Ended September 30, 2024

LKQ Stockholders

2 unchanged sentences

Shares Amount Shares Amount

Balance as of April 1, 2024 323.5 $ 3 ( 56.5 ) $ ( 2,454 ) $ 1,541 $ 7,367 $ ( 298 ) $ 14 $ 6,173

Balance as of July 1, 2024 323.6 $ 3 ( 59.4 ) $ ( 2,580 ) $ 1,547 $ 7,472 $ ( 313 ) $ 15 $ 6,144

Net income — — — — — 191 — 1 192

Other comprehensive loss — — — — — — ( 15 ) — ( 15 )

Other comprehensive income — — — — — — 118 — 118

Purchase of treasury stock — — ( 3.0 ) ( 126 ) — — — — ( 126 )

2 unchanged sentences

Dividends declared to LKQ stockholders ($0.30 per share) — — — — — ( 79 ) — — ( 79 )

Purchase of noncontrolling interest — — — — ( 1 ) — — — ( 1 )

Balance as of June 30, 2024 323.6 $ 3 ( 59.4 ) $ ( 2,580 ) $ 1,547 $ 7,472 $ ( 313 ) $ 15 $ 6,144

Balance as of September 30, 2024 323.6 $ 3 ( 62.4 ) $ ( 2,706 ) $ 1,548 $ 7,584 $ ( 195 ) $ 16 $ 6,250

The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(In millions, except per share data)

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

LKQ Stockholders

10 unchanged sentences

Acquisition of a subsidiary with noncontrolling interest — — — — — — — 9 9

Balance as of June 30, 2025 323.8 $ 3 ( 66.5 ) $ ( 2,868 ) $ 1,567 $ 7,867 $ ( 51 ) $ 25 $ 6,543

Six Months Ended June 30, 2024

Balance as of September 30, 2025 324.0 $ 3 ( 67.7 ) $ ( 2,908 ) $ 1,574 $ 7,969 $ ( 84 ) $ 25 $ 6,579

Nine Months Ended September 30, 2024

LKQ Stockholders

4 unchanged sentences

Net income — — — — — 534 — 2 536

Other comprehensive loss — — — — — — ( 73 ) — ( 73 )

Other comprehensive income — — — — — — 45 — 45

Purchase of treasury stock — — ( 6.5 ) ( 282 ) — — — — ( 282 )

3 unchanged sentences

Purchase of noncontrolling interest — — — — ( 1 ) — — — ( 1 )

Balance as of June 30, 2024 323.6 $ 3 ( 59.4 ) $ ( 2,580 ) $ 1,547 $ 7,472 $ ( 313 ) $ 15 $ 6,144

Balance as of September 30, 2024 323.6 $ 3 ( 62.4 ) $ ( 2,706 ) $ 1,548 $ 7,584 $ ( 195 ) $ 16 $ 6,250

The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

8 unchanged sentences

These Unaudited Condensed Consolidated Financial Statements reflect, in the opinion of management, all material adjustments (which include only normally recurring adjustments) necessary to fairly state, in all material respects, our financial position, results of operations and cash flows for the periods presented.

We have reclassified certain prior period amounts in the Unaudited Condensed Consolidated Statements of Cash Flows to conform to the current period presentation.

We have reclassified certain prior period amounts in the Unaudited Condensed Consolidated Statements of Cash Flows to conform to the current period presentation and in the Unaudited Condensed Consolidated Statements of Income and on the Unaudited Condensed Consolidated Balance Sheets for the presentation of discontinued operations as a result of the sale of our Self Service segment as discussed in Note 2, "Discontinued Operations."

Results for interim periods are not necessarily indicative of the results that can be expected for any subsequent interim period or for a full year.

1 unchanged sentence

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No.

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures." The ASU requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures.

The ASU is effective for fiscal years beginning after December 15, 2024, and requires prospective application with the option to apply it retrospectively.

We are currently evaluating the impact of adopting this ASU on our consolidated financial statements.

In November 2024, the FASB issued Accounting Standards Update 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

The ASU is effective for fiscal years beginning after December 15, 2024, and can be adopted prospectively or retrospectively.

The adoption of this ASU is expected to impact the tax disclosure with no impact to the consolidated balance sheets, statements of income, statements of cash flows, and statements of comprehensive income and will be adopted prospectively.

In November 2024, the FASB issued ASU 2024-03, "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses." The ASU requires disclosure of specific expense categories within relevant income statement captions.

2 unchanged sentences

We are currently evaluating the impact of adopting this ASU on our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software." This ASU removes references to software development project stages to better align with current software development methods.

Under the ASU, an entity will begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose.

This update is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years, though early adoption is permitted.

The ASU can be adopted either prospectively, retrospectively, or utilizing a modified transition approach.

We are currently evaluating the impact of adopting this ASU on our consolidated financial statements.

Discontinued Operations

In accordance with FASB Accounting Standards Codification 205-20, "Presentation of Financial Statements - Discontinued Operations" ("ASC 205-20"), we classify operations as discontinued when they meet all the criteria to be classified as held for sale and when the sale represents a strategic shift that will have a major impact on our financial condition and results of operations.

In determining if a disposal constitutes a strategic shift, we evaluate various qualitative and quantitative factors, an example of which is the impact to segment reporting.

We generally consider the disposal of an entire reportable segment to constitute a strategic shift.

When operations are identified for discontinued operations reporting, results of operations for all periods presented are reclassified as discontinued operations in the c onsolidated statements of income , assets and liabilities of the operations are reported as discontinued operations on the consolidated balance sheets, and information is recast throughout the notes to the consolidated financial statements to exclude the results of the discontinued operations.

Furthermore, ASC 205-20 defines what activities may be classified as discontinued operations with general corporate overhead generally not being allocable to discontinued operations .

On August 25, 2025, we entered into a definitive agreement to sell our Self Service segment to an affiliate of Pacific Avenue Capital Partners, LLC for an enterprise value of $ 410 million, subject to customary purchase price adjustments.

The sale of the Self Service segment reflects our continued efforts to simplify our portfolio of businesses by exiting an asset-intensive business heavily affected by changes in commodity prices.

The sale was completed on September 30, 2025.

On October 1, 2025, we received the pretax net pro ceeds from the sale and used these proceeds to repay approximately $ 390 million of revolving credit facility borrowings.

Accordingly, interest expense attributable to the repaid borrowings has been included in discontinued operations for all periods presented .

Additionally, general corporate overhead costs that were historically allocated to the Self Service segment remain within continuing operations for all periods presented.

The pretax net proceeds receivable are recorded within Prepaid expenses and other current assets on the Unaudited Condensed Consolidated Balance Sheets as of September 30, 2025.

In connection with the transaction, we also entered into a transition services agreement to provide certain post-close support services.

These support services, most of which last for up to nine months from the closing date of the sale, are in the areas of human resources, tax, finance, information technology, and operations, among others.

The following table summarizes the comparative financial results of discontinued operations which are presented in Net income from discontinued operations in the Unaudited Condensed Consolidated Statements of Income (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Revenue $ 130 $ 131 $ 395 $ 401

Cost of goods sold 68 76 213 230

Gross margin 62 55 182 171

Impairment on assets held for sale (1)

Selling, general and administrative expenses 43 40 123 118

Depreciation and amortization 2 4 9 11

Operating income 5 11 38 42

Other expense (income):

Interest expense 5 6 15 18

Interest income and other income, net — ( 1 ) ( 1 ) ( 1 )

Total other expense, net 5 5 14 17

Income from discontinued operations before provision for income taxes — 6 24 25

(Benefit) provision for income taxes ( 2 ) 2 4 6

Net income from discontinued operations $ 2 $ 4 $ 20 $ 19

(1) During the three and nine months ended September 30, 2025, we recorded an impairment to write down the carrying value of Self Service to its fair value less costs to sell.

The major classes of Assets of discontinued operations and Liabilities of discontinued operations for Self Service as of December 31, 2024 stated on the Unaudited Condensed Consolidated Balance Sheets are as follows (in millions):

December 31, 2024

Current assets:

Receivables, net of allowance for credit losses $ 9

Inventories 37

Prepaid expenses and other current assets 2

Total current assets of discontinued operations 48

Property, plant and equipment, net 108

Operating lease assets, net 132

Other noncurrent assets 1

Total noncurrent assets of discontinued operations 515

Total assets of discontinued operations $ 563

Current liabilities:

Accounts payable $ 4

Accrued expenses:

Accrued payroll-related liabilities 7

Refund liability 1

Other accrued expenses 6

Current portion of operating lease liabilities 15

Other current liabilities 2

Total current liabilities of discontinued operations 35

Long-term operating lease liabilities, excluding current portion 114

Long-term obligations, excluding current portion 3

Total noncurrent liabilities of discontinued operations 117

Total liabilities of discontinued operations $ 152

The following table summarizes the significant non-cash operating activities and capital expenditures of the Company’s discontinued operations related to the Self Service segment (in millions):

Nine Months Ended September 30,

Depreciation and amortization $ 9 $ 11

Impairment on assets held for sale 12 —

Purchases of property, plant and equipment 5 7

Allowance for Credit Losses

Our allowance for credit losses was $ 52 million and $ 56 million as of June 30, 2025 and December 31, 2024, respectively.

The provision for credit losses was $ 2 million and $ 1 million for the three months ended June 30, 2025 and 2024 and $ 7 million and $ 4 million for the six months ended June 30, 2025 and 2024, respectively.

Our allowance for credit losses was $ 54 million and $ 56 million as of September 30, 2025 and December 31, 2024, respectively.

The provision for credit losses was $ 7 million for both the three months ended September 30, 2025 and 2024 and $ 14 million and $ 11 million for the nine months ended September 30, 2025 and 2024, respectively.

Intangible Assets

Goodwill and indefinite-lived intangible assets are tested for impairment at least annually.

We performed our annual impairment test during the fourth quarter of 2024, and determined no impairment existed as all of our reporting units had a fair value estimate which exceeded the carrying value by at least 10 %.

We performed our annual impairment test during the fourth quarter of 2024, and determined no impairment existed as each of our reporting units had a fair value estimate which exceeded the carrying value by at least 10 %.

The fair value estimates of our reporting units were established using weightings of the results of a discounted cash flow methodology and a comparative market multiples approach.

Goodwill and indefinite-lived intangible assets impairment testing may also be performed on an interim basis when events or circumstances arise that may lead to impairment.

We did not identify any indicators of impairment in the first six months of 2025 that necessitated an interim test of goodwill impairment or indefinite-lived intangible assets impairment.

Goodwill and indefinite-lived intangible assets impairment testing may also be performed on an interim basis when

events or circumstances arise that may lead to impairment.

We did not identify any indicators of impairment in the first nine months of 2025 that necessitated an interim test of goodwill impairment or indefinite-lived intangible assets impairment for our continuing operations.

Revenue Recognition

3 unchanged sentences

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 to improve the performance, functionality and appearance of vehicles.

Services revenue includes (i) additional services that are generally billed concurrently with the related product sales, such as the sale of service-type warranties, (ii) fees for admission to our self service yards, and (iii) diagnostic and repair services.

For Wholesale - North America and Self Service, vehicle replacement products include sheet metal collision parts such as doors, hoods, and fenders;

Services revenue includes additional services that are generally billed concurrently with the related product sales, such as the sale of service-type warranties, and diagnostic and repair services.

For Wholesale - North America, vehicle replacement products include sheet metal collision parts such as doors, hoods, and fenders;

bumper covers;

13 unchanged sentences

Other revenue includes sales of scrap and precious metals (platinum, palladium, and rhodium), bulk sales to mechanical manufacturers (including cores) and sales of aluminum ingots and sows from furnace operations.

We derive scrap metal and other precious metals from several sources in both our Wholesale - North America and Self Service segments, including vehicles that have been used in our recycling operations and vehicles from original equipment manufacturers ("OEMs") and other entities that contract with us for secure disposal of "crush only" vehicles.

Revenue from the sale of hulks in our Wholesale - North America and Self Service segments is recognized based on a price per ton of delivered material when the customer (processor) collects the scrap.

We derive scrap metal and other precious metals from several sources in our Wholesale - North America segment, including vehicles that have been used in our recycling operations and vehicles from original equipment manufacturers ("OEMs") and other entities that contract with us for secure disposal of "crush only" vehicles.

Revenue from the sale of hulks in our Wholesale - North America segment is recognized based on a price per ton of delivered material when the customer (processor) collects the scrap.

The following table sets forth our revenue disaggregated by category and reportable segment (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

2 unchanged sentences

Specialty 456 417 1,313 1,305

Self Service 50 55 101 109

Parts and services 3,414 3,375 10,085 10,353

1 unchanged sentence

Europe 5 4 18 17

Self Service 79 78 164 161

Other 85 78 254 244

2 unchanged sentences

Amounts related to variable consideration on our Unaudited Condensed Consolidated Balance Sheets are as follows (in millions):

Classification June 30, 2025 December 31, 2024

Classification September 30, 2025 December 31, 2024

Return asset Prepaid expenses and other current assets $ 67 $ 66

4 unchanged sentences

The following table sets forth our revenue by geographic area (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

17 unchanged sentences

Our decision to exit these markets constituted a triggering event to evaluate certain long-lived assets for impairment, and as a result, we incurred impairment charges with the divestitures of Slovenia, Poland, and Bosnia.

This plan is scheduled to be substantially complete by the end of 2025 with an estimated total incurred cost of between $ 130 million and $ 140 million.

This plan is scheduled to be substantially complete by the end of 2025 with an estimated total incurred cost of approximately $ 140 million.

1 LKQ Europe Plan

6 unchanged sentences

These costs are typically incurred within a year from the acquisition date and vary in magnitude depending on the size and complexity of the related integration activities.

There are no material acquisition integration plans as of June 30, 2025.

There are no material acquisition integration plans as of September 30, 2025.

The following table sets forth the expenses incurred related to our restructuring plans (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

Plan Expense Type 2025 2024 2025 2024

10 unchanged sentences

Facility exit costs — — — 1

Inventory related costs (1)

Total $ — $ 1 $ 1 $ 4

8 unchanged sentences

Cumulative Program Costs

Wholesale - North America Europe Specialty Self Service Total

Wholesale - North America Europe Specialty Total

2024 Global Plan $ 25 $ 108 $ — $ 133

1 unchanged sentence

Transaction Related Expenses

During the three months ended June 30, 2025 and 2024, we incurred expenses totaling $ 1 million and an insignificant amount, respectively, and during the six months ended June 30, 2025 and 2024 we incurred expenses totaling $ 1 million and $ 2 million, respectively, for legal, accounting and advisory services related to completed and potential transactions.

During the three months ended September 30, 2025 and 2024, we incurred expenses totaling $ 5 million and $ 1 million, respectively, and during the nine months ended September 30, 2025 and 2024, we incurred expenses totaling $ 6 million and $ 3 million, respectively, for legal, accounting and advisory services related to completed and potential transactions.

Earnings Per Share

The following chart sets forth the computation of earnings per share (in millions, except per share amounts):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Net Income $ 193 $ 186 $ 362 $ 344

Income from continuing operations $ 178 $ 188 $ 522 $ 517

Denominator for basic earnings per share—Weighted-average shares outstanding 257.1 262.3 258.1 264.9

3 unchanged sentences

Denominator for diluted earnings per share—Adjusted weighted-average shares outstanding 257.3 262.6 258.4 265.3

Basic earnings per share $ 0.75 $ 0.70 $ 1.40 $ 1.29

Diluted earnings per share (1)

Basic earnings per share from continuing operations $ 0.69 $ 0.71 $ 2.02 $ 1.95

Diluted earnings per share from continuing operations (1)

$ 0.69 $ 0.71 $ 2.02 $ 1.95

(1) Diluted earnings per share was computed using the treasury stock method for dilutive securities.

(1) Diluted earnings per share from continuing operations was computed using the treasury stock method for dilutive securities.

Accumulated Other Comprehensive Income (Loss)

The components of Accumulated Other Comprehensive Income (Loss) are as follows (in millions):

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Foreign Currency Translation Unrealized Gain (Loss) on Cash Flow Hedges Other Comprehensive Income (Loss) from Unconsolidated Subsidiaries Accumulated Other Comprehensive Income (Loss)

Balance as of April 1, 2025

$ ( 311 ) $ ( 9 ) $ 7 $ ( 313 )

Pretax income

Income tax effect — ( 1 ) — ( 1 )

Reclassification of unrealized loss — 1 — 1

Other comprehensive loss from unconsolidated subsidiaries

Balance as of July 1, 2025

$ ( 43 ) $ ( 8 ) $ — $ ( 51 )

Balance as of June 30, 2025

Pretax loss ( 38 ) — — ( 38 )

Other comprehensive income from unconsolidated subsidiaries

Balance as of September 30, 2025

$ ( 81 ) $ ( 8 ) $ 5 $ ( 84 )

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Foreign Currency Translation Unrealized Gain (Loss) on Cash Flow Hedges Unrealized Gain (Loss) on Pension Plans Other Comprehensive Income (Loss) from Unconsolidated Subsidiaries Accumulated Other Comprehensive Income (Loss)

Balance as of April 1, 2024 $ ( 300 ) $ ( 7 ) $ 6 $ 3 $ ( 298 )

Pretax (loss) income ( 21 ) 3 — — ( 18 )

Balance as of July 1, 2024 $ ( 321 ) $ ( 6 ) $ 6 $ 8 $ ( 313 )

Pretax income (loss) 122 ( 4 ) — — 118

Income tax effect — 1 — — 1

Reclassification of unrealized gain — ( 1 ) — — ( 1 )

Reclassification of deferred income taxes — 1 — — 1

Other comprehensive income from unconsolidated subsidiaries — — — 5 5

Balance as of June 30, 2024

Disposal of business 2 — — — 2

Other comprehensive loss from unconsolidated subsidiaries — — — ( 2 ) ( 2 )

Balance as of September 30, 2024

$ ( 197 ) $ ( 10 ) $ 6 $ 6 $ ( 195 )

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

4 unchanged sentences

Reclassification of deferred income taxes — — 1 — 1

Other comprehensive loss from unconsolidated subsidiaries — — — ( 4 ) ( 4 )

Balance as of June 30, 2025

Other comprehensive income from unconsolidated subsidiaries — — — 1 1

Balance as of September 30, 2025

$ ( 81 ) $ ( 8 ) $ — $ 5 $ ( 84 )

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Balance as of January 1, 2024 $ ( 243 ) $ ( 11 ) $ 6 $ 8 $ ( 240 )

Pretax (loss) income ( 78 ) 9 — — ( 69 )

Pretax income 44 5 — — 49

Income tax effect — ( 1 ) — — ( 1 )

1 unchanged sentence

Reclassification of deferred income taxes — 1 — — 1

Balance as of June 30, 2024

Disposal of business 2 — — — 2

Other comprehensive loss from unconsolidated subsidiaries — — — ( 2 ) ( 2 )

Balance as of September 30, 2024

$ ( 197 ) $ ( 10 ) $ 6 $ 6 $ ( 195 )

2 unchanged sentences

We utilize voluntary supply chain finance programs to support our efforts in negotiating payment term extensions with suppliers as a part of our goal to improve our operating cash flows.

As of June 30, 2025 and December 31, 2024, we had $ 450 million and $ 416 million of Accounts payable outstanding under the arrangements, respectively.

As of September 30, 2025 and December 31, 2024, we had $ 450 million and $ 416 million of Accounts payable outstanding under the arrangements, respectively.

Long-Term Obligations

Long-term obligations consist of the following (in millions):

June 30, 2025

September 30, 2025

December 31, 2024

2 unchanged sentences

Term loan payable January 2027 5.64 % $ 500 5.83 % $ 500

Revolving credit facilities January 2028 5.77 % (1)

Revolving credit facilities (2)

January 2028 7.21 % (1)

498 5.86 % (1)

16 unchanged sentences

(1) Interest rate derived via a weighted average.

(2) Higher rate borrowings on the revolving credit facility of approximately $ 390 million at an interest rate of 7.63 % were repaid on October 1, 2025 with the pretax net proceeds from the sale of our Self Service segment.

Refer to Note 2, "Discontinued Operations" for additional information.

Senior Unsecured Credit Agreement

In the second quarter of 2025, we entered into Amendment No.

In the second quarter of 2025, we entered into Amendments No.

3 to the Senior Unsecured Credit Agreement and Amendment No.

8 unchanged sentences

Under the terms of the interest rate swap agreement, we pay the fixed interest rate and receive a variable interest rate based on term Secured Overnight Financing Rate ("SOFR") that matches a contractually specified rate under the Senior Unsecured Credit Agreement.

The March 2025 agreement replaced the agreements that matured in February 2025 and include a total $ 400 million notional amount maturing in November 2025 with a fixed interest rate of 4.11 %.

The March 2025

agreement replaced the agreements that matured in February 2025 and include a total $ 400 million notional amount maturing in November 2025 with a fixed interest rate of 4.11 %.

Changes in the fair value of the interest rate swaps are recorded in Accumulated other comprehensive loss and reclassified to Interest expense when the hedged interest payments affect earnings.

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All of our interest rate swap contracts have been executed with counterparties that we believe are creditworthy, and we closely monitor the credit ratings of these counterparties.

As of June 30, 2025 and December 31, 2024, the notional amounts, balance sheet classification and fair values of our derivative instruments designated as cash flow hedges were as follows (in millions):

June 30, 2025

As of September 30, 2025 and December 31, 2024, the notional amounts, balance sheet classification and fair values of our derivative instruments designated as cash flow hedges were as follows (in millions):

September 30, 2025

Notional Amount Balance Sheet Caption Fair Value - Asset / (Liability)

Interest rate swap agreement $ 400 Prepaid expenses and other current assets $ —

Interest rate swap agreement $ 400 Other accrued expenses $ —

Interest rate swap agreements 300 Other accrued expenses —

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Interest rate swap agreements 300 Other noncurrent liabilities ( 1 )

The activity related to our cash flow hedges is included in Note 7, "Accumulated Other Comprehensive Income (Loss)." As of June 30, 2025, we estimate that $ 1 million of derivative losses (net of tax) included in Accumulated other comprehensive loss will be reclassified into our Unaudited Condensed Consolidated Statements of Income within the next 12 months.

The activity related to our cash flow hedges is included in Note 8, "Accumulated Other Comprehensive Income (Loss)." As of September 30, 2025, we estimate that $ 2 million of derivative losses (net of tax) included in Accumulated other comprehensive loss will be reclassified into our Unaudited Condensed Consolidated Statements of Income within the next 12 months.

Fair Value Measurements

Financial Assets and Liabilities Measured at Fair Value

We use the market and income approaches to estimate the fair value of our financial assets and liabilities, and during the three and six months ended June 30, 2025, there were no significant changes in valuation techniques or inputs related to the financial assets or liabilities that we have historically recorded at fair value.

We use the market and income approaches to estimate the fair value of our financial assets and liabilities, and during the three and nine months ended September 30, 2025, there were no significant changes in valuation techniques or inputs related to the financial assets or liabilities that we have historically recorded at fair value.

The tiers in the fair value hierarchy include:

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and Level 3, defined as significant unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The following table presents information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation inputs we utilized to determine such fair value as of June 30, 2025 and December 31, 2024 (in millions):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

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Investments in debt and equity securities relate to our captive insurance subsidiary and are included in Other noncurrent assets on the Unaudited Condensed Consolidated Balance Sheets.

The balance sheet classification of the interest rate swap agreements is presented in Note 10, "Derivative Instruments and Hedging Activities." For contingent consideration liabilities, the current portion is included in Other current liabilities and the noncurrent portion is included in Other noncurrent liabilities on the Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments.

The balance sheet classification of the interest rate swap agreements is presented in Note 11, "Derivative Instruments and Hedging Activities." For contingent consideration liabilities, the entire portion is current at September 30, 2025 and is included in Other current liabilities, while at December 31, 2024, the current portion was included in Other current liabilities and the noncurrent portion was included in Other noncurrent liabilities on the Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments.

We value derivative instruments using a third party valuation model that performs discounted cash flow analysis based on the terms of the contracts and market observable inputs such as current and forward interest rates and current and forward foreign exchange rates.

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The fair value measurements of the borrowings under the credit agreement are classified as Level 2 within the fair value hierarchy since they are determined based upon significant inputs observable in the market, including interest rates on recent financing transactions with similar terms and maturities.

We estimated the fair value by calculating the upfront cash payment a market participant would require at June 30, 2025 and December 31, 2024 to assume these obligations.

We estimated the fair value by calculating the upfront cash payment a market participant would require at September 30, 2025 and December 31, 2024 to assume these obligations.

The fair values of the 5.75% senior notes due June 2028 (the "U.S.

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Notes (2028/2033)"), the 4.13% senior notes due April 2028 (the "Euro Notes (2028)") and the 4.13% senior notes due March 2031 (the "Euro Notes (2031)") are determined based upon observable market inputs including quoted market prices in markets that are not active, and therefore are classified as Level 2 within the fair value hierarchy.

Based on market conditions as of June 30, 2025 and December 31, 2024, the fair value of the borrowings under the Senior Unsecured Credit Agreement reasonably approximated the carrying values of $ 1,250 million and $ 1,164 million, respectively.

As of June 30, 2025 and December 31, 2024, the fair value of the borrowings under the Senior Unsecured Term Loan Credit Agreement ("CAD Note") reasonably approximated the carrying values of $ 514 million and $ 487 million, respectively.

The following table provides the carrying and fair value for our other financial instruments as of June 30, 2025 and December 31, 2024 (in millions):

As of June 30, 2025

Based on market conditions as of September 30, 2025 and December 31, 2024, the fair value of the borrowings under the Senior Unsecured Credit Agreement reasonably approximated the carrying values of $ 998 million and $ 1,164 million, respectively.

As of September 30, 2025 and December 31, 2024, the fair value of the borrowings under the Senior Unsecured Term Loan Credit Agreement ("CAD Note") reasonably approximated the carrying values of $ 503 million and $ 487 million, respectively.

The following table provides the carrying and fair value for our other financial instruments as of September 30, 2025 and December 31, 2024 (in millions):

As of September 30, 2025

As of December 31, 2024

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Euro Notes (2031) 880 899 777 796

At the end of each interim period, we estimate our annual effective tax rate and apply that rate to our interim earnings.

We also record the tax impact of certain unusual or infrequently occurring items, including changes in judgment about valuation allowances and the effects of changes in tax laws or rates, in the interim period in which they occur.

The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in state and foreign jurisdictions, permanent and temporary differences between book and taxable income, and the likelihood of recovering deferred tax assets generated in the current year.

The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the tax environment changes.

Our effective income tax rate for the nine months ended September 30, 2025 was 24.8 %, compared to 29.0 % for the nine months ended September 30, 2024.

The decrease in the effective tax rate for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 is primarily attributable to discrete tax benefits, including a $ 10 million reduction to deferred tax liabilities related to tax rate changes enacted in Germany during the third quarter of 2025 and the nonrecurring unfavorable tax effects of the Global Restructuring Plan impairments in the prior year.

See Note 6, "Restructuring and Transaction Related Expenses" for further information on the impairments.

On July 4, 2025, new U.S.

tax legislation was signed into law, commonly referred to as the One Big Beautiful Bill Act ("OBBBA"), which includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The OBBBA includes the acceleration of fixed asset depreciation, modifications to the capitalization of domestic research and development expenses, modifications to the limitations to the deductibility of interest expense, and modifications to certain international provisions.

These new provisions take effect starting in 2025 through 2027.

The Company has evaluated the OBBBA enacted during the quarter and estimated its impact on the consolidated financial statements to be immaterial.

We will continue to evaluate the full impact of these legislative changes as additional guidance becomes available.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of Cash and cash equivalents as reported in the Unaudited Condensed Consolidated Balance Sheets to Cash, cash equivalents and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows (in millions):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Cash and cash equivalents $ 289 $ 234

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Segment and Geographic Information

We have four operating segments:

We have three operating segments:

Wholesale - North America;

and Self Service, each of which is presented as a reportable segment.

The segments are organized based on a combination of geographic areas served and type of product lines offered.

The segments are managed separately as the businesses serve different customers and are affected by different economic conditions.

Wholesale - North America and Self Service have similar economic characteristics and have common products and services, customers and methods of distribution.

We are reporting these operating segments separately to provide greater transparency to investors.

and Specialty, each of which is presented as a reportable segment.

The segments are organized based on a combination of geographic regions served and the types of product lines offered.

They are managed separately, as each business serves distinct customer bases and is impacted by different economic conditions.

The following tables present our financial performance by reportable segment for the periods indicated (in millions):

Wholesale - North America Europe Specialty Self Service Eliminations Consolidated

Three Months Ended June 30, 2025

Wholesale - North America Europe Specialty Eliminations Consolidated

Three Months Ended September 30, 2025

Third Party $ 1,423 $ 1,620 $ 456 $ — $ 3,499

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$ 49 $ 48 $ 8 $ — $ 105

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Third Party $ 1,423 $ 1,613 $ 417 $ — $ 3,453

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$ 49 $ 39 $ 8 $ — $ 96

Wholesale - North America Europe Specialty Self Service Eliminations Consolidated

Six Months Ended June 30, 2025

Wholesale - North America Europe Specialty Eliminations Consolidated

Nine Months Ended September 30, 2025

Third Party $ 4,277 $ 4,749 $ 1,313 $ — $ 10,339

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$ 148 $ 131 $ 24 $ — $ 303

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Third Party $ 4,396 $ 4,896 $ 1,305 $ — $ 10,597

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The table below provides a reconciliation of Net Income to Segment EBITDA (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Net income $ 180 $ 192 $ 542 $ 536

net income attributable to noncontrolling interest 1 1 1 1

net income attributable to continuing noncontrolling interest — 1 1 2

Net income attributable to LKQ stockholders 180 191 541 534

net income from discontinued operations 2 4 20 19

Net income from continuing operations attributable to LKQ stockholders 178 187 521 515

Depreciation and amortization 105 96 303 289

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Provision for income taxes 45 61 173 210

Equity in (earnings) losses of unconsolidated subsidiaries ( 1 ) ( 2 ) — —

Equity in earnings of unconsolidated subsidiaries — ( 3 ) — ( 3 )

Equity investment fair value adjustments — — ( 1 ) 2

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The following table presents capital expenditures by reportable segment (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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Specialty 5 7 12 16

Self Service 1 3 3 6

Total capital expenditures $ 51 $ 78 $ 155 $ 218

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The following table presents assets by reportable segment (in millions):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Receivables, net of allowance for credit losses

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Specialty 177 102

Self Service 11 9

Total receivables, net of allowance for credit losses 1,399 1,113

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Specialty 446 449

Self Service 33 37

Total inventories 3,316 3,183

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Specialty 110 115

Self Service 102 108

Total property, plant and equipment, net 1,451 1,409

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Specialty 117 121

Self Service 119 132

Total operating lease assets, net 1,291 1,256

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The following table sets forth our tangible long-lived assets by geographic area (in millions):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Long-lived assets

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Total long-lived assets $ 2,742 $ 2,665

Subsequent Event

On July 4, 2025, new U.S tax legislation was signed into law, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), which includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

These new provisions take effect starting in 2025 through 2027.

We are currently evaluating the impact of this new tax legislation.

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.

What changed 10-Q

Item 1. Financial Statements