What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-30 compared with 2025-07-24 · 154 added, 162 removed, 311 unchanged (50% of the section changed)

22 unchanged sentences

Collectively, we refer to the four sources that are not new OEM products as alternative parts.

We are organized into four operating segments:

We are organized into three operating segments:

Wholesale - North America;

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

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

We have made certain reclassifications to the prior period financial information to reflect discontinued operations presentation as a result of the sale of our Self Service segment.

See Note 2, "Discontinued Operations" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

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.

1 unchanged sentence

Our Specialty segment is a leading distributor of specialty vehicle aftermarket equipment and accessories reaching most major markets in the U.S.

Our Self Service segment operates self service retail facilities across the U.S.

that sell recycled automotive products from end-of-life-vehicles.

Our operating results have fluctuated on a quarterly and annual basis in the past and can be expected to continue to fluctuate in the future as a result of a number of factors, some of which are beyond our control.

10 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.

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.

Our service revenue is generated primarily from the sale of service-type warranties and diagnostic and repair services.

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.

5 unchanged sentences

Our 2024 Form 10-K includes a summary of the critical accounting estimates we believe are the most important to aid in understanding our financial results.

There have been no changes to those critical accounting estimates that have had a material impact on our reported amounts of assets, liabilities, revenues or expenses during the six months ended June 30, 2025.

Recently Issued Accounting Pronouncements

18 unchanged sentences

The following table sets forth statements of income data as a percentage of total revenue for the periods indicated:

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

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

2025 2024 2025 2024

7 unchanged sentences

Total other expense, net 1.5 % 1.6 % 1.4 % 1.5 %

Income before provision for income taxes 7.1 % 7.2 % 7.0 % 6.7 %

Income from continuing operations before provision for income taxes 6.4 % 7.1 % 6.7 % 6.8 %

Provision for income taxes 1.3 % 1.8 % 1.7 % 2.0 %

Equity in (earnings) losses of unconsolidated subsidiaries — % — % — % — %

Equity in earnings of unconsolidated subsidiaries — % (0.1) % — % — %

Income from continuing operations 5.1 % 5.4 % 5.0 % 4.9 %

Net income from discontinued operations — % 0.1 % 0.2 % 0.2 %

Net income 5.1 % 5.5 % 5.2 % 5.1 %

net income attributable to noncontrolling interest — % — % — % — %

net income attributable to continuing noncontrolling interest — % — % — % — %

Net income attributable to LKQ stockholders 5.1 % 5.5 % 5.2 % 5.0 %

In the table above, the sum of the individual percentages may not equal the total due to rounding.

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

The following table summarizes the changes in revenue by category (in millions):

Three Months Ended June 30,

Three Months Ended September 30,

2025 2024 Change

2 unchanged sentences

Total revenue $ 3,499 $ 3,453 $ 46

The decrease in parts and services revenue of $75 million, or 2.1%, represented decreases in segment revenue of $36 million, or 2.6%, in Wholesale - North America, $32 million, or 1.9%, in Europe, $5 million, or 9.8%, in Self Service, and $2 million, or 0.4%, in Specialty.

This overall decrease was driven by an organic parts and services revenue decrease of $122 million, or 3.4% (2.7% decrease on a per day basis), and a $34 million, or 1.0%, decrease due to the net impact of acquisitions and divestitures, partially offset by an $82 million, or 2.3%, increase due to fluctuations in foreign exchange rates.

Refer to the discussion of our segment results of operations for factors contributing to the changes in revenue by segment for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

The increase in parts and services revenue of $39 million, or 1.1%, represented increases in segment revenue of $39 million, or 9.3%, in Specialty and $6 million, or 0.4%, in Europe, partially offset by a decrease of $6 million, or 0.5%, in Wholesale - North America.

This overall increase was driven by an $88 million, or 2.6%, increase due to fluctuations in foreign exchange rates, partially offset by an organic parts and services revenue decrease of $41 million, or 1.2%, and a $9 million, or 0.3%, decrease due to the net impact of acquisitions and divestitures.

Refer to the discussion of our segment results of operations for factors contributing to the changes in revenue by segment for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Cost of Goods Sold

Cost of goods sold decreased by $40 million, or 1.8%, to $2,230 million for the three months ended June 30, 2025.

Cost of goods sold primarily reflects decreases of $32 million from Europe, $4 million from Self Service, and $3 million from Wholesale - North America.

Cost of goods sold as a percentage of revenue remained flat at 61.2% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Cost of goods sold as a percentage of revenue primarily reflects an increase of 0.4% from Wholesale - North America, partially offset by a decrease of 0.3% from Europe.

Refer to the discussion of our segment results of operations for factors contributing to the changes in cost of goods sold by segment for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Cost of goods sold increased by $43 million, or 2.0%, to $2,158 million for the three months ended September 30, 2025.

Cost of goods sold primarily reflects increases of $33 million from Specialty and $11 million from Wholesale - North America.

Cost of goods sold as a percentage of revenue increased to 61.7% for the three months ended September 30, 2025 from 61.3% for the three months ended September 30, 2024.

Cost of goods sold as a percentage of revenue primarily reflects increases of 0.3% from Wholesale - North America and 0.2% from Specialty, partially offset by a decrease of 0.2% from Europe.

Refer to the discussion of our segment results of operations for factors contributing to the changes in cost of goods sold by segment for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Selling, General and Administrative Expenses

Our Selling, general and administrative ("SG&A") expenses increased by $22 million, or 2.3%, to $998 million for the three months ended June 30, 2025.

The year over year increase in SG&A expense primarily reflects increases of $18 million from Europe, $3 million from Specialty and $1 million from Wholesale - North America.

SG&A expenses as a percentage of revenue increased to 27.4% for the three months ended June 30, 2025 from 26.3% for the three months ended June 30, 2024.

SG&A expenses as a percentage of revenue primarily reflects increases of 0.8% from Europe and 0.2% from Wholesale - North America.

Refer to the discussion of our segment results of operations for factors contributing to the changes in SG&A expenses by segment for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Our Selling, general and administrative ("SG&A") expenses increased by $27 million, or 3.0%, to $958 million for the three months ended September 30, 2025.

The year over year increase in SG&A expense primarily reflects increases of $13 million from Europe and $12 million from Wholesale - North America.

SG&A expenses as a percentage of revenue increased to 27.4% for the three months ended September 30, 2025 from 27.0% for the three months ended September 30, 2024.

SG&A expenses as a percentage of revenue primarily reflects increases of 0.4% from Wholesale - North America and 0.3% from Europe, partially offset by a decrease of 0.2% from Specialty.

Refer to the discussion of our segment results of operations for factors contributing to the changes in SG&A expenses by segment for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Restructuring and Transaction Related Expenses

Restructuring and transaction related expenses decreased by $41 million, primarily due to a $31 million decrease in restructuring expenses related to our 2024 Global Restructuring plan and a $10 million decrease in restructuring expenses related to our Acquisition Integration plans.

Restructuring and transaction related expenses decreased by $6 million, primarily due to an $8 million decrease in restructuring expenses related to our 2024 Global Restructuring plan, partially offset by a $4 million increase in transaction related expenses for legal, accounting and advisory services related to completed and potential transactions.

Provision for Income Taxes

Our effective income tax rate for the three months ended June 30, 2025 was 26.3%, compared to 30.9% for the three months ended June 30, 2024.

The decrease in the effective tax rate for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 is primarily attributable to the 5.2% year over year favorable impact of discrete items, mostly related to the favorable tax effects of the reversal of a tax assessment in the current year and the nonrecurring unfavorable tax effects of the Global Restructuring Plan impairments in the prior year.

See Note 5, "Restructuring and Transaction Related Expenses" for further information on the impairments.

Our effective income tax rate for the three months ended September 30, 2025 was 20.0%, compared to 25.0% for the three months ended September 30, 2024.

The decrease in the effective tax rate for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 is primarily attributable to the 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.

Foreign Currency Impact

We translate our statements of income at the average exchange rates in effect for the period.

Relative to the rates used during the three months ended June 30, 2024, the pound sterling, Czech koruna and euro rates used to translate the three months ended June 30, 2025 statements of income increased by 5.8%, 5.6% and 5.3%, respectively, while the Canadian dollar rate decreased by 1.1%.

Relative to the rates used during the three months ended September 30, 2024, the Czech koruna, euro and pound sterling rates used to translate the three months ended September 30, 2025 statements of income increased by 9.4%, 6.4% and 3.7%, respectively, while the Canadian dollar rate decreased by 0.9%.

Realized and unrealized currency gains and losses combined with the translation effect of the change in foreign currencies against the U.S.

dollar had a net positive effect of $0.03 on diluted earnings per share relative to the prior year period.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

dollar had a net positive effect of $0.02 on diluted earnings per share from continuing operations relative to the prior year period.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

The following table summarizes the changes in revenue by category (in millions):

Six Months Ended June 30,

Nine Months Ended September 30,

2025 2024 Change

2 unchanged sentences

Total revenue $ 10,339 $ 10,597 $ (258)

The decrease in parts and services revenue of $315 million, or 4.4%, represented decreases in segment revenue of $154 million, or 4.7% in Europe, $122 million, or 4.3%, in Wholesale - North America, $31 million, or 3.4%, in Specialty and $8 million, or 7.8%, in Self Service.

This overall decrease was driven by an organic parts and services revenue decrease of $273 million, or 3.9% (2.9% decrease on a per day basis), and a $66 million, or 0.9%, decrease due to the net impact of acquisitions and divestitures, partially offset by a $26 million, or 0.4%, increase due to fluctuations in foreign exchange rates.

Refer to the discussion of our segment results of operations for factors contributing to the changes in revenue by segment for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The decrease in parts and services revenue of $268 million, or 2.6%, represented decreases in segment revenue of $148 million, or 3.0%, in Europe and $128 million, or 3.1%, in Wholesale - North America, partially offset by an increase of $8 million, or 0.6%, in Specialty.

This overall decrease was driven by an organic parts and services revenue decrease of $308 million, or 3.0% (2.3% decrease on a per day basis) and a $74 million, or 0.7%, decrease due to the net impact of acquisitions and divestitures, partially offset by an increase of $114 million, or 1.1%, due to fluctuations in foreign exchange rates.

Refer to the discussion of our segment results of operations for factors contributing to the changes in revenue by segment for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Cost of Goods Sold

Cost of goods sold decreased by $205 million, or 4.5%, to $4,316 million for the six months ended June 30, 2025.

Cost of goods sold primarily reflects decreases of $122 million from Europe, $55 million from Wholesale - North America, $19 million from Specialty, and $9 million from Self Service.

Cost of goods sold as a percentage of revenue decreased to 60.7% for the six months ended June 30, 2025 from 61.0% for the six months ended June 30, 2024.

Cost of goods sold decreased by $153 million, or 2.4%, to $6,329 million for the nine months ended September 30, 2025.

Cost of goods sold primarily reflects decreases of $124 million from Europe and $44 million from Wholesale - North America, partially offset by an increase of $14 million from Specialty.

Cost of goods sold as a percentage of revenue remained flat at 61.2% for the nine months ended September 30, 2025 and 2024.

Cost of goods sold as a percentage of revenue primarily reflects a decrease of 0.3% from Europe, partially offset by an increase of 0.2% from Wholesale - North America.

Refer to the discussion of our segment results of operations for factors contributing to the changes in cost of goods sold by segment for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Refer to the discussion of our segment results of operations for factors contributing to the changes in cost of goods sold by segment for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Selling, General and Administrative Expenses

Our SG&A expenses decreased by $33 million, or 1.6%, to $1,987 million for the six months ended June 30, 2025.

The year over year decrease in SG&A expense primarily reflects decreases of $16 million from Europe and $15 million from Wholesale - North America.

SG&A expenses as a percentage of revenue increased to 28.0% for the six months ended June 30, 2025 from 27.2% for the six months ended June 30, 2024.

Our SG&A expenses decreased by $8 million, or 0.2%, to $2,865 million for the nine months ended September 30, 2025.

The year over year decrease in SG&A expense primarily reflects decreases of $5 million from Wholesale - North America and $3 million from Europe.

SG&A expenses as a percentage of revenue increased to 27.7% for the nine months ended September 30, 2025 from 27.1% for the nine months ended September 30, 2024.

SG&A expenses as a percentage of revenue primarily reflects increases of 0.4% from Europe and 0.3% from Wholesale - North America.

Refer to the discussion of our segment results of operations for factors contributing to the changes in SG&A expenses by segment for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Refer to the discussion of our segment results of operations for factors contributing to the changes in SG&A expenses by segment for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Restructuring and Transaction Related Expenses

1 unchanged sentence

Provision for Income Taxes

Our effective income tax rate for the six months ended June 30, 2025 was 27.0%, compared to 30.8% for the six months ended June 30, 2024.

The decrease in the effective tax rate for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 is primarily attributable to the 4.3% year over year favorable impact of discrete items, mostly related to the nonrecurring unfavorable tax effects of the Global Restructuring Plan impairments in the prior year.

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 the 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.

1 unchanged sentence

We translate our statements of income at the average exchange rates in effect for the period.

Relative to the rates used during the six months ended June 30, 2024, the pound sterling, Czech koruna and euro rates used to translate the six months ended June 30, 2025 statements of income increased by 2.6%, 1.4% and 1.1%, respectively, while the Canadian dollar rate decreased by 3.6%.

Relative to the rates used during the nine months ended September 30, 2024, the Czech koruna, pound sterling, and euro rates used to translate the nine months ended September 30, 2025 statements of income increased by 3.9%, 3.0% and 2.9%, respectively, while the Canadian dollar rate decreased by 2.7%.

Realized and unrealized currency gains and losses combined with the translation effect of the change in foreign currencies against the U.S.

dollar had a net positive effect of $0.02 on diluted earnings per share relative to the prior year period.

dollar had a net positive effect of $0.04 on diluted earnings per share from continuing operations relative to the prior year period.

Results of Operations—Segment Reporting

We have four reportable segments:

We have three reportable segments:

Wholesale - North America;

and Self Service.

and Specialty.

The following table presents our financial performance, including third party revenue, total revenue and Segment EBITDA, by reportable segment for the periods indicated (in millions):

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

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

2025 % of Total Segment Revenue 2024 % of Total Segment Revenue 2025 % of Total Segment Revenue 2024 % of Total Segment Revenue

4 unchanged sentences

Specialty 456 417 1,313 1,305

129 133 265 270

Total third party revenue $ 3,499 $ 3,453 $ 10,339 $ 10,597

4 unchanged sentences

Specialty 457 419 1,316 1,308

129 133 265 270

Eliminations (1) (2) (3) (4)

5 unchanged sentences

Specialty 34 7.3 % 31 7.3 % 94 7.1 % 99 7.6 %

13 10.0 % 13 9.9 % 33 12.3 % 29 10.9 %

In the table above, the percentages of total segment revenue may not recalculate due to rounding.

17 unchanged sentences

See Note 15, "Segment and Geographic Information" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for a reconciliation of total Segment EBITDA to net income.

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

Wholesale - North America

The following table provides a reconciliation of Revenue to Segment EBITDA in our Wholesale - North America segment (in millions):

Three Months Ended June 30,

Three Months Ended September 30,

Wholesale - North America 2025 % of Total Segment Revenue 2024 % of Total Segment Revenue $ Change

1 unchanged sentence

Other revenue 80 74 6

Intersegment revenue — 1 (1)

Total segment revenue 1,423 1,423 —

2 unchanged sentences

Selling, general and administrative expenses (4)

401 28.2 % 389 27.4 % 12 (3)

Other segment items (5)

Segment EBITDA $ 199 14.0 % $ 224 15.8 % $ (25)

(1) Parts and services revenue decreased by $36 million, or 2.6%, to $1,362 million for the three months ended June 30, 2025.

This decrease was primarily due to a parts and services organic revenue decrease of $36 million, or 2.6% (2.2% on a per day basis), driven primarily by lower volumes in our paint, body and equipment business from increased competition and lower repairable claims, partially offset by pricing initiatives and targeted actions to increase market penetration.

(2) Gross margin decreased by $29 million, or 4.4%, to $619 million for the three months ended June 30, 2025.

This decrease was driven by lower revenue as described above as well as unfavorable customer mix not fully offset by price increases due to market competition.

(3) SG&A expenses remained relatively flat to $398 million for the three months ended June 30, 2025, primarily due to (i) $5 million from increased vehicle costs, and (ii) other individually immaterial factors representing a $1 million unfavorable impact in the aggregate, partially offset by (iii) $5 million from decreased professional fees.

(1) Parts and services revenue decreased by $6 million, or 0.5%, to $1,343 million for the three months ended September 30, 2025.

This decrease was primarily due to an organic revenue decrease of $5 million, or 0.4%, driven primarily by lower volumes in our paint, body and equipment business from lower repairable claims and increased competition.

This decrease is partially offset by pricing initiatives and targeted actions to increase market penetration as well as higher aftermarket parts volumes.

(2) Gross margin decreased by $11 million, or 1.7%, to $598 million for the three months ended September 30, 2025.

This decrease was driven by the dilutive effect of increasing prices to recoup tariff costs and unfavorable customer mix.

(3) SG&A expenses increased by $12 million, or 3.2%, to $401 million for the three months ended September 30, 2025.

The increase in SG&A expense is primarily due to (i) $7 million from increased personnel costs due to lower incentive compensation in the prior year, (ii) $3 million from increased professional fees, (iii) $3 million from an increase in credit loss reserves, partially offset by (iv) other individually immaterial factors representing a $1 million favorable impact in the aggregate.

(4) Amounts include certain overhead costs that were historically allocated to the Self Service segment.

See Note 2, "Discontinued Operations" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

(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.

1 unchanged sentence

The following table provides a reconciliation of Revenue to Segment EBITDA in our Europe segment (in millions):

Three Months Ended June 30,

Three Months Ended September 30,

Europe 2025 % of Total Segment Revenue 2024 % of Total Segment Revenue $ Change

7 unchanged sentences

Segment EBITDA $ 162 10.0 % $ 165 10.2 % $ (3)

(1) Parts and services revenue decreased by $32 million, or 1.9%, to $1,601 million for the three months ended June 30, 2025.

This decrease was primarily due to (i) a parts and services organic revenue decrease of $81 million, or 4.9% (3.8% on a per day basis), driven by decreased volumes due to difficult economic conditions, heightened competition in certain markets, temporary operational challenges, and a negative effect from one fewer selling days, and (ii) an acquisition and divestiture decrease of $36 million, or 2.2%, primarily related to the divestiture of certain operations in Poland, Slovenia and Bosnia in 2024, partially offset by (iii) the effect of an exchange rate increase of $85 million, or 5.2%, primarily due to the weaker U.S.

dollar against the euro and pound sterling, and to a lesser extent, the Czech koruna.

(2) Gross margin was flat at $619 million, as the decrease resulting from lower organic growth was offset by net procurement savings contributing to an increase in gross margin percentage of 0.7% compared to the prior year period.

(3) SG&A expenses increased by $18 million, or 4.3%, to $474 million for the three months ended June 30, 2025.

(1) Parts and services revenue increased by $6 million, or 0.4%, to $1,615 million for the three months ended September 30, 2025.

This increase was due to (i) the effect of an exchange rate increase of $91 million, or 5.6%, primarily due to the continued strengthening of the euro and pound sterling, and to a lesser extent, the Czech koruna against the U.S.

dollar, partially offset by (ii) an organic revenue decrease of $75 million, or 4.7%, primarily driven by decreased volumes due to difficult economic conditions, heightened competition in certain markets and a focus on profitable customer mix, and (iii) a net acquisition and divestiture decrease of $10 million, or 0.6%, primarily related to the divestiture of certain operations in Poland, Slovenia and Bosnia in 2024.

(2) Gross margin increased by $9 million, or 1.4%, to $629 million for the three months ended September 30, 2025.

This increase was driven by higher revenue as described above.

The increase as a percentage of total segment revenue was primarily driven by the benefit from the divestiture of certain operations in Poland, Slovenia and Bosnia in 2024.

(3) SG&A expenses increased by $13 million, or 2.8%, to $474 million for the three months ended September 30, 2025.

The increase in SG&A expense is primarily due to (i) a $15 million unfavorable foreign exchange impact from a weakening U.S.

dollar, (ii) a $12 million non-recurring benefit from a reduction in personnel related accruals in the prior year that were previously recorded as a result of union related negotiations, partially offset by (iii) a $9 million favorable impact from the divestiture of certain operations in Poland, Slovenia and Bosnia in 2024, and (iv) other individually immaterial factors representing a $10 million favorable impact in the aggregate, including cost savings from restructuring and other productivity initiatives.

dollar and (ii) other individually immaterial factors representing a $1 million unfavorable impact in the aggregate, partially offset by (iii) a $3 million favorable impact from the divestiture of certain operations in Poland, Slovenia and Bosnia in 2024.

(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.

1 unchanged sentence

The following table provides a reconciliation of Revenue to Segment EBITDA in our Specialty segment (in millions):

Three Months Ended June 30,

Three Months Ended September 30,

Specialty 2025 % of Total Segment Revenue 2024 % of Total Segment Revenue $ Change

7 unchanged sentences

Segment EBITDA $ 34 7.3 % $ 31 7.3 % $ 3

(1) Parts and services revenue decreased by $2 million, or 0.4%, to $464 million for the three months ended June 30, 2025.

This was primarily due to a parts and services organic revenue decrease of $1 million, or 0.3% driven by demand softness in the RV product line resulting from reduced unit retail sales for RVs, partially offset by growth in our marine product line.

(2) Amounts primarily represent other non operating income and expenses, as well as reconciling items to remove depreciation - cost of goods sold, which are excluded from the calculation of Segment EBITDA.

The following table provides a reconciliation of Revenue to Segment EBITDA in our Self Service segment (in millions):

Three Months Ended June 30,

Self Service 2025 % of Total Segment Revenue 2024 % of Total Segment Revenue $ Change

Parts & services revenue $ 50 $ 55 $ (5) (1)

Other revenue 79 78 1

Total segment revenue 129 133 (4)

Cost of goods sold 73 77 (4)

Gross margin 56 43.5 % 56 42.3 % — (2)

Selling, general and administrative expenses 44 33.8 % 44 32.6 % —

Other segment items (3)

Segment EBITDA $ 13 10.0 % $ 13 9.9 % $ —

(1) Parts and services revenue decreased by $5 million, or 9.8%, to $50 million for the three months ended June 30, 2025.

This was primarily due to a parts and services organic revenue decrease of $4 million, or 6.9% (5.9% on a per day basis), driven by lower parts volumes from a reduced number of customer admissions.

(2) Gross margin was flat at $56 million as the decrease resulting from lower revenue was offset by favorable movements in commodity prices.

(3) Amounts primarily represent other non operating income and expenses, as well as reconciling items to remove depreciation - cost of goods sold, which are excluded from the calculation of Segment EBITDA.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

(1) Parts and services revenue increased by $39 million, or 9.3%, to $456 million for the three months ended September 30, 2025.

This was primarily due to an organic revenue increase of $39 million, or 9.4% driven by volume growth in our automotive and marine product lines.

(2) Gross margin increased by $5 million, or 4.3%, to $114 million for the three months ended September 30, 2025.

This increase was primarily driven by increases in parts and services revenue partially offset by unfavorable sales mix with higher volumes on lower margin product lines.

(3) Amounts primarily represent other non operating income and expenses, as well as a reconciling item to remove depreciation - cost of goods sold, which is excluded from the calculation of Segment EBITDA.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Wholesale - North America

The following table provides a reconciliation of Revenue to Segment EBITDA in our Wholesale - North America segment (in millions):

Six Months Ended June 30,

Nine Months Ended September 30,

Wholesale - North America 2025 % of Total Segment Revenue 2024 % of Total Segment Revenue $ Change

6 unchanged sentences

Selling, general and administrative expenses (4)

1,217 28.5 % 1,222 27.8 % (5) (3)

Other segment items (5)

Segment EBITDA $ 640 15.0 % $ 714 16.2 % $ (74)

(1) Parts and services revenue decreased by $122 million, or 4.3%, to $2,698 million for the six months ended June 30, 2025.

This decrease was primarily due to a parts and services organic revenue decrease of $112 million, or 4.0% (3.1% on a per day basis), due to a reduction in repairable claims, and having one fewer selling days in the current year, partially offset by targeted actions to increase market penetration.

(1) Parts and services revenue decreased by $128 million, or 3.1%, to $4,041 million for the nine months ended September 30, 2025.

This decrease was primarily due to an organic revenue decrease of $117 million, or 2.8% (2.2% on a per day basis), driven primarily by lower volumes in our paint, body and equipment business from lower repairable claims and increased competition, and having one fewer selling days in the current year, partially offset by pricing initiatives and targeted actions to increase market penetration.

Additionally, revenue decreased due to a negative exchange rate effect of $19 million, or 0.5%, primarily due to the stronger U.S.

dollar against the Canadian dollar.

(2) Gross margin decreased by $65 million, or 5.0%, to $1,246 million for the six months ended June 30, 2025.

This decrease was driven by lower revenue as described above as well as unfavorable customer mix not fully offset by price increases due to market competition.

(3) SG&A expenses decreased by $15 million, or 1.8%, to $808 million for the six months ended June 30, 2025.

(2) Gross margin decreased by $76 million, or 3.9%, to $1,844 million for the nine months ended September 30, 2025.

This decrease was driven by lower revenue as described above as well as unfavorable customer mix and higher input costs not fully offset by price increases due to market competition.

(3) SG&A expenses decreased by $5 million, or 0.3%, to $1,217 million for the nine months ended September 30, 2025.

The decrease in SG&A expense is primarily due to (i) $17 million from decreased personnel costs due to cost savings initiatives which were partially offset by inflationary pressures, and (ii) other individually immaterial factors representing a $6 million favorable impact in the aggregate, partially offset by (iii) $11 million from increased vehicle costs, and (iv) $7 million from increased facility costs due to increased rent.

(4) Amounts include certain overhead costs that were historically allocated to the Self Service segment.

See Note 2, "Discontinued Operations" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

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The following table provides a reconciliation of Revenue to Segment EBITDA in our Europe segment (in millions):

Six Months Ended June 30,

Nine Months Ended September 30,

Europe 2025 % of Total Segment Revenue 2024 % of Total Segment Revenue $ Change

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Segment EBITDA $ 454 9.6 % $ 482 9.8 % $ (28)

(1) Parts and services revenue decreased by $154 million, or 4.7%, to $3,116 million for the six months ended June 30, 2025.

This decrease was primarily due to (i) a parts and services organic revenue decrease of $126 million, or 3.9% (2.8% on a per day basis), driven by decreased volumes due to difficult economic conditions, heightened competition in certain markets, temporary operational challenges, and a negative effect from one fewer selling days, and (ii) an acquisition and divestiture decrease of $72 million, or 2.2%, primarily related to the divestiture of certain operations in Poland, Slovenia and Bosnia in 2024, partially offset by (iii) the effect of an exchange rate increase of $45 million, or 1.4%, primarily due to the weaker U.S.

dollar against the pound sterling and euro, and to a lesser extent, the Czech koruna.

(2) Gross margin decreased by $32 million, or 2.6%, to $1,210 million for the six months ended June 30, 2025.

The decrease was primarily attributable to decreased revenue, partially offset by a $12 million reduction in cost of goods sold primarily related to restructuring expenses incurred as part of the 2024 Global Restructuring Plan in the prior year period.

(1) Parts and services revenue decreased by $148 million, or 3.0%, to $4,731 million for the nine months ended September 30, 2025.

This decrease was primarily due to (i) an organic revenue decrease of $201 million, or 4.1% (3.4% on a per day basis), primarily driven by decreased volumes due to difficult economic conditions and heightened competition in certain markets, (ii) a net acquisition and divestiture decrease of $82 million, or 1.7%, primarily related to the divestiture of certain operations in Poland, Slovenia and Bosnia in 2024, partially offset by (iii) the effect of an exchange rate increase of $136 million, or 2.8%, primarily due to the strengthening of the pound sterling and euro, and to a lesser extent, the Czech koruna against the U.S.

(2) Gross margin decreased by $23 million, or 1.2%, to $1,839 million for the nine months ended September 30, 2025.

The decrease was primarily attributable to decreased revenue, partially offset by a $12 million reduction in cost of goods sold related to restructuring expenses incurred as part of the 2024 Global Restructuring Plan in the prior year period.

These restructuring expenses are excluded from the calculation of Segment EBITDA.

See Note 6, "Restructuring and Transaction Related Expenses" and Note 15, "Segment and Geographic Information" for further information.

The increase in gross margin as a percentage of total segment revenue was primarily driven by a benefit from the divestiture of certain operations in Poland, Slovenia and Bosnia in 2024 and lower restructuring expense in the current year as described above.

(3) SG&A expenses decreased by $16 million, or 1.7%, to $933 million for the six months ended June 30, 2025.

The decrease in SG&A expense is primarily due to favorable impacts of (i) $20 million from the divestiture of certain operations in Poland, Slovenia and Bosnia in 2024, (ii) $10 million of lower freight, vehicle and fuel cost, and (iii) other individually immaterial factors representing a $6 million favorable impact in the aggregate, partially offset by (iv) a $13 million unfavorable foreign exchange impact from a weakening U.S.

dollar, and (v) a $7 million unfavorable impact in professional fees related to several strategic central and regional information technology initiatives.

The increase in gross margin as a percentage of total segment revenue was primarily driven by (i) a benefit from net procurement savings, (ii) the benefit from the divestiture of certain operations in Poland, Slovenia and Bosnia in 2024 and (iii) lower restructuring expense in the current year as described above.

(3) SG&A expenses decreased by $3 million, or 0.2%, to $1,407 million for the nine months ended September 30, 2025.

The decrease in SG&A expense is primarily due to favorable impacts of (i) $23 million from the divestiture of certain operations in Poland, Slovenia and Bosnia in 2024, (ii) $9 million of lower freight, vehicle and fuel cost and (iii) other individually immaterial factors representing an $11 million favorable impact in the aggregate, partially offset by (iv) a $29 million unfavorable foreign exchange impact from a weakening U.S.

dollar and (v) an $11 million unfavorable impact in professional fees related to several strategic central and regional information technology initiatives.

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The following table provides a reconciliation of Revenue to Segment EBITDA in our Specialty segment (in millions):

Six Months Ended June 30,

Nine Months Ended September 30,

Specialty 2025 % of Total Segment Revenue 2024 % of Total Segment Revenue $ Change

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Segment EBITDA $ 94 7.1 % $ 99 7.6 % $ (5)

(1) Parts and services revenue decreased by $31 million, or 3.4%, to $857 million for the six months ended June 30, 2025.

This was primarily due to a parts and services organic revenue decrease of $28 million, or 3.2% (2.4% on a per day basis), driven by demand softness in the automotive and RV product lines resulting from declining consumer sentiment and reduced unit retail sales for RVs.

(2) Gross margin decreased by $11 million, or 4.8%, to $213 million for the six months ended June 30, 2025.

This decrease was primarily driven by decreases in parts and services revenue and unfavorable sales mix with lower volumes on higher margin product lines.

The following table provides a reconciliation of Revenue to Segment EBITDA in our Self Service segment (in millions):

Six Months Ended June 30,

Self Service 2025 % of Total Segment Revenue 2024 % of Total Segment Revenue $ Change

Parts & services revenue $ 101 $ 109 $ (8) (1)

Other revenue 164 161 3

Total segment revenue 265 270 (5)

Cost of goods sold 145 154 (9)

Gross margin 120 45.3 % 116 43.1 % 4 (2)

Selling, general and administrative expenses 88 33.2 % 88 32.4 % —

Other segment items (3)

Segment EBITDA $ 33 12.3 % $ 29 10.9 % $ 4

(1) Parts and services revenue decreased by $8 million, or 7.8%, to $101 million for the six months ended June 30, 2025.

This was primarily due to a parts and services organic revenue decrease of $7 million, or 6.2% (5.7% on a per day basis), driven by lower parts volumes from a reduced number of customer admissions.

(2) Gross margin increased by $4 million, or 3.1%, to $120 million for the six months ended June 30, 2025.

The increase is attributable to favorable movements in commodity prices and improvements in vehicle procurement costs which more than offset the decrease in revenue.

(1) Parts and services revenue increased by $8 million, or 0.6%, to $1,313 million for the nine months ended September 30, 2025.

This was primarily due to an organic revenue increase of $11 million, or 0.8% (1.4% on a per day basis), driven by continued volume growth in our marine and automotive product lines.

(2) Gross margin decreased by $6 million, or 1.8%, to $327 million for the nine months ended September 30, 2025.

This decrease was primarily driven by unfavorable sales mix with higher volumes on lower margin product lines partially offset by increases in parts and services revenue.

Liquidity and Capital Resources

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The following table summarizes liquidity data as of the dates indicated (in millions):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Capacity under revolving credit facilities $ 2,000 $ 2,000

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Total liquidity $ 1,677 $ 1,456

We had $1,136 million available under our revolving credit facilities as of June 30, 2025 .

Combined with $289 million of cash and cash equivalents at June 30, 2025, we had $1,425 million i n available liquidity, a decrease of $31 million from our available liquidity as of December 31, 2024, primarily as a result of increasing our revolving credit facilities borrowings by $86 million.

We had $1,388 million available under our revolving credit facilities as of September 30, 2025 .

Combined with $289 million of cash and cash equivalents at September 30, 2025, we had $1,677 million i n available liquidity, an increase of $221 million from our available liquidity as of December 31, 2024, primarily as a result of decreasing our revolving credit facilities borrowings by $166 million.

On May 2, 2025, we entered into Amendment No.

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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.

A summary of the dividend activity for our common stock for the six months ended June 30, 2025 is as follows:

A summary of the dividend activity for our common stock for the nine months ended September 30, 2025 is as follows:

Dividend Amount Declaration Date Record Date Payment Date

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$0.30 April 22, 2025 May 15, 2025 May 29, 2025

On July 22, 2025, our Board of Directors declared a quarterly cash dividend of $0.30 per share of common stock, payable on August 28, 2025, to stockholders of record at the close of business on August 14, 2025.

$0.30 July 22, 2025 August 14, 2025 August 28, 2025

On October 28, 2025, our Board of Directors declared a quarterly cash dividend of $0.30 per share of common stock, payable on December 4, 2025, to stockholders of record at the close of business on November 20, 2025.

We believe that our future cash flow generation will permit us to continue paying dividends in future periods;

however, the timing, amount and frequency of such future dividends will be subject to approval by our Board of Directors, and based on considerations of capital availability, and various other factors, many of which are outside of our control.

With $1,425 million of total liquidity as of June 30, 2025 and $34 million of current maturities, we have access to funds to meet our near term commitments.

With $1,677 million of total liquidity as of September 30, 2025 and $537 million of current maturities, we have access to funds to meet our near term commitments.

Our current maturities include the $503 million term loan payable under our Senior Unsecured Term Loan Agreement due July 2026, which we intend to extend or 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.

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The terms maximum total leverage ratio and minimum interest coverage ratio are specifically calculated per both the Senior Unsecured Credit Agreement and CAD Note, and differ in specified ways from comparable GAAP or common usage terms.

We were in compliance with all applicable covenants under both our Senior Unsecured Credit Agreement and CAD Note as of June 30, 2025.

The required debt covenants per both the Senior Unsecured Credit Agreement and CAD Note and our actual ratios with respect to those covenants are as follows as of June 30, 2025:

Covenant Level Ratio Achieved as of June 30, 2025

We were in compliance with all applicable covenants under both our Senior Unsecured Credit Agreement and CAD Note as of September 30, 2025.

The required debt covenants per both the Senior Unsecured Credit Agreement and CAD Note and our actual ratios with respect to those covenants are as follows as of September 30, 2025:

Covenant Level Ratio Achieved as of September 30, 2025

Maximum total leverage ratio 4.00 :

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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.

Furthermore, any additional equity financing may be dilutive to stockholders, and debt financing, if available, may involve restrictive covenants or higher interest costs.

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.

We hold interest rate swaps to hedge the variable rates on a portion of our credit agreement borrowings.

After giving effect to these contracts outstanding, the weighted average interest rate on borrowings outstanding under our Senior Unsecured Credit Agreement was 5.6% at June 30, 2025.

Including our senior notes and CAD Note, our overall weighted average interest rate on borrowings was 5.2% at June 30, 2025.

After giving effect to these contracts outstanding, the weighted average interest rate on borrowings outstanding under our Senior Unsecured Credit Agreement was 6.1% at September 30, 2025.

Including our senior notes and CAD Note, our overall weighted average interest rate on borrowings was 5.3% at September 30, 2025.

Excluding the higher rate borrowings on the revolving credit facility that were repaid on October 1, 2025 with pretax net proceeds from the sale of our Self Service segment, these rates were 5.6% and 5.1%, respectively.

Refer to Note 2, "Discontinued Operations" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Under the Senior Unsecured Credit Agreement, our borrowings bear interest at SOFR plus the applicable spread or other risk-free interest rates that are applicable for the specified currency plus a spread.

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The interest rate swaps are described in Note 11, "Derivative Instruments and Hedging Activities" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

We had outstanding borrowin gs under our revolving credit facilities and term loans payable of $1,764 million and $1,651 million at June 30, 2025 and December 31, 2024, respectively.

Of these amounts, t here wer e no current maturities at June 30, 2025 or December 31, 2024.

The scheduled maturities of long-term obligations outstanding at June 30, 2025 are as follows (in millions):

Six months ending December 31, 2025

We had outstanding borrowin gs under our revolving credit facilities and term loans payable of $1,501 million and $1,651 million at September 30, 2025 and December 31, 2024, respectively.

Of these amounts, t here wer e current maturities of $503 million at September 30, 2025 related to the term loan payable under our Senior Unsecured Term Loan Agreement due July 2026.

There were no current maturities at December 31, 2024.

On October 1, 2025, we repaid approximately $ 390 million of revolving credit facility borrowings with the pretax net proceeds received from the Self Service sale.

Refer to Note 2, "Discontinued Operations" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

The scheduled maturities of long-term obligations outstanding at September 30, 2025 are as follows (in millions):

Three months ending December 31, 2025

Years ending December 31:

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(1) Includes $503 million related to our Senior Unsecured Term Loan Agreement due July 2026, which we intend to extend or refinance on or before the scheduled maturity.

(2) The total debt amounts presented above reflect the gross values to be repaid (excluding debt issuance costs and unamortized bond discounts of $31 million as of June 30, 2025).

As of June 30, 2025, the Company had cash and cash equivalents of $289 million, of which $246 million was held by foreign subsidiaries.

(2) The total debt amounts presented above reflect the gross values to be repaid (excluding debt issuance costs and unamortized bond discounts of $29 million as of September 30, 2025).

As of September 30, 2025, the Company had cash and cash equivalents of $289 million, of which $263 million was held by foreign subsidiaries.

In general, it is our practice and intention to permanently reinvest the undistributed earnings of our foreign subsidiaries.

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See Note 9, "Supply Chain Financing" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for information related to our supply chain financing arrangements.

For the six months ended June 30, 2025, net cash provided by operating activities totaled $293 million compared to $466 million for the same period of 2024.

For the nine months ended September 30, 2025, net cash provided by operating activities totaled $733 million compared to $886 million for the same period of 2024.

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.

Inventories represented $57 million in incremental cash inflows for the six months ended June 30, 2025 compared to the same period of 2024.

Accounts payable produced $245 million in incremental cash outflows for the six months ended June 30, 2025 compared to the same period of 2024.

For the six months ended June 30, 2025, net cash used in investing activities totaled $99 million compared to $178 million for the same period of 2024.

We invested $30 million of cash in business acquisitions during the six months ended June 30, 2024.

There were no significant business acquisitions during the six months ended June 30, 2025.

Property, plant and equipment purchases were $107 million in the six months ended June 30, 2025 compared to $146 million in the prior year period.

Receivables represented $39 million in higher cash outflows for the nine months ended September 30, 2025 compared to the same period of 2024.

Inventories represented $102 million in incremental cash inflows for the nine months ended September 30, 2025 compared to the same period of 2024.

Accounts payable produced $219 million in incremental cash outflows for the nine months ended September 30, 2025 compared to the same period of 2024.

Other operating activities primarily reflects lower cash paid for taxes of $73 million during the nine months ended September 30, 2025 compared to the same period of 2024.

For the nine months ended September 30, 2025, net cash used in investing activities totaled $144 million compared to $300 million for the same period of 2024.

We invested $46 million of cash in business acquisitions during the nine months ended September 30, 2024.

There were no significant business acquisitions during the nine months ended September 30, 2025.

Property, plant and equipment purchases were $160 million in the nine months ended September 30, 2025 compared to $225 million in the prior year period.

The following table reconciles Net Cash Provided by Operating Activities to Free Cash Flow (in millions):

Six Months Ended June 30,

Nine Months Ended September 30,

Net cash provided by operating activities $ 733 $ 886

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Free cash flow (1)

For the six months ended June 30, 2025, net cash used in financing activities totaled $169 million compared to $276 million for the same period in 2024.

Cash outflows for share repurchases were $79 million and dividends paid were $156 million for the six months ended June 30, 2025 compared to $155 million for share repurchases and $161 million for dividends paid for the same period of 2024.

Net debt borrowings (net of unamortized bond discounts) were $59 million for the six months ended June 30, 2025 compared to $80 million for the same period of 2024.

(1) For the nine months ended September 30, 2025 and 2024, Self Service contributed approximately $50 million and $40 million, respectively, of free cash flow.

For the nine months ended September 30, 2025, net cash used in financing activities totaled $562 million compared to $516 million for the same period in 2024.

Cash outflows for share repurchases were $119 million and dividends paid were $234 million for the nine months ended September 30, 2025 compared to $280 million for share repurchases and $240 million for dividends paid for the same period of 2024.

Net debt payments were $203 million for the nine months ended September 30, 2025 compared to net debt borrowings (net of amortized bond discounts) of $45 million for the same period of 2024.

We intend to continue to evaluate markets for potential growth through the internal development of distribution centers, processing and sales facilities, and warehouses, through further integration of our facilities, and through selected business acquisitions.

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Summarized Guarantor Financial Information

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 our 2024 Form 10-K.

Notes (2028/2033) and Euro Notes (2031) are guaranteed on a senior, unsecured basis by certain of our subsidiaries (each, a "subsidiary guarantor" and, together with LKQ, the "Obligor Group"), which are listed in Exhibit 22.1 in Part II, Item 6 of this Quarterly Report on Form 10-Q.

The guarantees are full and unconditional, joint and several, and subject to certain conditions for release.

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Summarized Statements of Income (in millions)

Six Months Ended

June 30, 2025

Nine Months Ended

September 30, 2025

Fiscal Year Ended

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Net income $ 267 $ 404

(1) Guarantor subsidiaries recorded $27 million and $53 million of net sales to and $107 million and $205 million of purchases from non-guarantor subsidiaries for the six months ended June 30, 2025 and fiscal year ended December 31, 2024, respectively.

(1) Guarantor subsidiaries recorded $41 million and $53 million of net sales to and $158 million and $205 million of purchases from non-guarantor subsidiaries for the nine months ended September 30, 2025 and fiscal year ended December 31, 2024, respectively.

(2) Information reflects the current Obligor Group listed in Exhibit 22.1 in Part II, Item 6 of this Quarterly Report on Form 10-Q.

Summarized Balance Sheets (in millions)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024 (3)

Current assets (1)

$ 3,233 $ 2,273

Noncurrent assets 4,440 5,207

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Noncurrent liabilities 3,296 4,046

(1) Current liabilities for guarantor subsidiaries included $328 million and $219 million of short-term notes payable to non-guarantor subsidiaries as of June 30, 2025 and December 31, 2024, respectively.

(1) Current assets for guarantor subsidiaries included $503 million of short-term notes receivable from non-guarantor subsidiaries as of September 30, 2025.

(2) Current liabilities for guarantor subsidiaries included $414 million and $219 million of short-term notes payable to non-guarantor subsidiaries as of September 30, 2025 and December 31, 2024, respectively.

(3) Information reflects the current Obligor Group listed in Exhibit 22.1 in Part II, Item 6 of this Quarterly Report on Form 10-Q.

Quantitative and Qualitative Disclosures About Market Risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis