What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-04-30 compared with 2025-10-30 · 154 added, 243 removed, 222 unchanged (64% of the section changed)

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We are a global distributor of vehicle products, including replacement parts, components and systems used in the repair and maintenance of vehicles, and specialty aftermarket products and accessories to improve the performance, functionality and appearance of vehicles.

Buyers of vehicle replacement products have the option to purchase from primarily five sources:

new products produced by OEMs;

Buyers of vehicle replacement products have the option to purchase from primarily four sources:

new products produced by original equipment manufacturers ("OEMs");

new products produced by companies other than the OEMs, which are referred to as aftermarket products;

recycled products obtained from salvage and total loss vehicles;

recycled products that have been refurbished;

and recycled products that have been remanufactured.

We distribute a variety of products to collision and mechanical repair shops, including aftermarket collision and mechanical products;

recycled collision and mechanical products;

refurbished collision products such as wheels, bumper covers and lights;

and remanufactured engines and transmissions.

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

salvaged products taken from total loss vehicles;

and reconditioned products that have been refurbished or remanufactured.

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

We sell a variety of alternative replacement and maintenance parts including collision parts, which are typically exterior components used in the collision repair process to restore a vehicle's appearance and safety, such as bumper covers, fenders, paint and related body repair products, and lights;

hard parts, which are typically internal components that are either mechanical in nature, such as alternators, starters, and clutches, or functional components that are replaced as part of routine maintenance, such as brake pads, discs and sensors, filters and batteries;

and major mechanical parts, such as engines and transmissions.

We also sell specialty products and accessories, which are vehicle products that improve the performance, functionality and appearance of vehicles.

We are organized into three operating segments:

Wholesale - North America;

North America;

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.

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 in the prior year.

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.

Our North America segment is a leading provider of alternative vehicle collision replacement products, paint and related body repair products, and alternative vehicle mechanical replacement and maintenance products, with our sales, processing, and distribution facilities reaching most major markets in the U.S.

Our Europe segment is a leading provider of alternative vehicle replacement and maintenance products in Germany, the U.K., the Benelux region (Belgium, Netherlands, and Luxembourg), Italy, Czech Republic, Austria, Slovakia, France and various other European countries.

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

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

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.

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Accordingly, our historical results of operations may not be indicative of future performance.

Acquisitions and Investments

Since our inception in 1998, we have pursued a growth strategy through both organic growth and acquisitions.

Our current acquisition strategy focuses on highly accretive tuck-in acquisitions with significant synergies or critical capabilities and no large platform acquisitions are expected.

Additionally, from time to time, we make investments in various businesses to advance our strategic objectives.

Portfolio Management

We continuously manage and assess the businesses and investments we own and the markets in which we operate.

Our acquisition strategy is to target highly accretive tuck-in acquisitions with significant synergies or critical capabilities.

Additionally, from time to time, we have sold or divested businesses that do not align with our strategic vision, financial objectives or have limited long-term value potential.

In 2025, aligning with our ongoing strategy to simplify our portfolio and concentrate on our core segments, we completed the sale of our Self Service segment, and commenced a process to explore the potential sale of our Specialty 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 related to our divestitures.

In addition to the above, on January 26, 2026 our Board of Directors (the "Board") announced it has initiated a comprehensive review of strategic alternatives to enhance shareholder value.

As part of the review, the Board is working with its advisors to evaluate our strategic alternatives, including a potential sale of the Company.

Sources of Revenue

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(i) parts and services and (ii) other.

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 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.

Our parts revenue is generated from the sale of alternative parts and vehicle products including collision parts, which are typically exterior components used in the collision repair process to restore a vehicle's appearance and safety;

hard parts, which are typically internal components that are either mechanical in nature or functional components that are replaced as part of routine maintenance;

major mechanical parts;

and specialty products and accessories, which are vehicle products that improve the performance, functionality and appearance of vehicles.

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.

Other revenue 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;

all of which are typically acquired as byproducts of our salvage operations.

Other revenue will vary from period to period based on fluctuations in commodity prices and the volume of materials sold.

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Our 2025 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 nine months ended September 30, 2025.

As we make progress on our previously announced plan to explore a potential sale of our Specialty segment, certain triggering events may occur which would require us to perform an interim goodwill impairment test.

Depending on the facts and circumstances at the time we perform this interim impairment test, we may be required to recognize additional impairment to the goodwill in our Specialty segment.

Furthermore, events that cause declines to Specialty's future cash flows such as underperformance relative to our forecasts, since actual results may differ from our estimates of future performance, or events that have a negative impact on the market value of the business, such as a deterioration in macroeconomic conditions, could also result in future impairment to the goodwill in our Specialty segment.

See Note 4, "Intangible Assets" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for information related the interim impairment test performed for the Specialty segment as of March 31, 2026.

Strategic Transformation Initiatives

See "Strategic Restructuring and Transformation Initiatives" in Note 7, "Restructuring and Transaction Related Expenses" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for information related to our strategic transformation initiatives.

In April 2026, in conjunction with our previously announced plan, we continued our phased rollout of a common Enterprise Resource Planning ("ERP") system across Europe by completing the implementation in one of our major European markets.

Recently Issued Accounting Pronouncements

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Free cash flow is a financial measure that is not prepared in accordance with U.S.

generally accepted accounting principles (“non-GAAP”).

generally accepted accounting principles.

• Organic revenue growth - We define organic revenue growth as total revenue growth from continuing operations excluding the effects of acquisitions and divestitures (i.e., revenue generated from the date of acquisition to the first anniversary of that acquisition, net of reduced revenue due to the disposal of businesses) and foreign currency movements (i.e., impact of translating revenue at different exchange rates).

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We believe that Segment EBITDA provides useful information to evaluate our segment profitability by focusing on the indicators of ongoing operational results.

• Free Cash Flow - We calculate free cash flow as net cash provided by operating activities, less purchases of property, plant and equipment.

• Free Cash Flow - We calculate free cash flow as net cash provided by (used in) operating activities, less purchases of property, plant and equipment.

Free cash flow provides insight into our liquidity and provides useful information to management and investors concerning cash flow available to meet future debt service obligations and working capital requirements, make strategic acquisitions, repurchase stock, and pay dividends.

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

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

2025 2024 2025 2024

Three Months Ended March 31,

Revenue 100.0 % 100.0 %

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Provision for income taxes 1.3 % 1.8 %

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

Equity in losses of unconsolidated subsidiaries 1.3 % — %

Income from continuing operations 2.2 % 4.8 %

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Net income 2.3 % 5.1 %

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 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 September 30,

2025 2024 Change

Parts & services revenue $ 3,414 $ 3,375 $ 39

Other revenue 85 78 7

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

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 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 $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 $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 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 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 $0.02 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

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

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

Nine Months Ended September 30,

Three Months Ended March 31,

2026 2025 Change

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Total revenue $ 3,469 $ 3,327 $ 142

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.

The increase in parts and services revenue of $118 million, or 3.6%, represented increases in segment revenue of $98 million, or 6.5%, in Europe, $15 million, or 3.8%, in Specialty and $5 million, or 0.4%, in North America.

This overall increase was driven by a $164 million, or 5.1%, increase due to fluctuations in foreign exchange rates, and a $6 million, or 0.2%, increase due to the net impact of acquisitions and divestitures, partially offset by an organic parts and services revenue decrease of $53 million, or 1.6%.

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 March 31, 2026 compared to the three months ended March 31, 2025.

Cost of Goods Sold

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 nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Cost of goods sold increased by $124 million, or 6.2%, to $2,138 million for the three months ended March 31, 2026.

Cost of goods sold includes a $107 million unfavorable impact from a weakening U.S.

Cost of goods sold reflects increases of $70 million from Europe, $43 million from North America and $11 million from Specialty.

Cost of goods sold as a percentage of revenue increased to 61.6% for the three months ended March 31, 2026 from 60.5% for the three months ended March 31, 2025.

Cost of goods sold as a percentage of revenue primarily reflects increases of 0.8% from North America and 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 March 31, 2026 compared to the three months ended March 31, 2025.

Selling, General and Administrative Expenses

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 nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Our Selling, general and administrative ("SG&A") expenses increased by $45 million, or 4.8%, to $994 million for the three months ended March 31, 2026.

SG&A expenses includes a $49 million unfavorable impact from a weakening U.S.

The year over year increase in SG&A expense primarily reflects increases of $41 million from Europe and $8 million from Specialty, partially offset by a decrease of $4 million from North America.

SG&A expenses as a percentage of revenue increased slightly to 28.7% for the three months ended March 31, 2026 from 28.5% for the three months ended March 31, 2025.

SG&A expenses as a percentage of revenue primarily reflects an increase of 0.4% from Europe and 0.2% from Specialty and mix, offset by a decrease of 0.4% from 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 March 31, 2026 compared to the three months ended March 31, 2025.

Restructuring and Transaction Related Expenses

Restructuring and transaction related expenses decreased by $66 million, primarily due to a $48 million decrease in restructuring expenses related to our 2024 Global Restructuring plan and a $16 million decrease in restructuring expenses related to our Acquisition Integration plans.

Restructuring and transaction related expenses increased by $22 million, primarily due to a $20 million increase in restructuring expenses related to our Strategic Restructuring and Transformation Initiatives.

See Note 7, "Restructuring and Transaction Related Expenses" for further information on the restructuring charges.

Provision for Income Taxes

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.

Our effective income tax rate for the three months ended March 31, 2026 was 26.4%, compared to 27.8% for the three months ended March 31, 2025.

The decrease in the effective tax rate for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 is primarily attributable to the 1.2% year over year favorable impact of discrete items, mostly related to a return to provision adjustment.

Equity in losses of unconsolidated subsidiaries

Equity in losses of unconsolidated subsidiaries increased by $45 million, primarily related to our equity method investment in Mekonomen.

During the three months ended March 31, 2026 , we recorded a $44 million other-than-temporary impairment related to our equity method investment in Mekonomen.

See Note 5, "Equity Method Investments " for further information on the impairment charge.

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 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%.

Relative to the rates used during the three months ended March 31, 2025, the Czech koruna, euro, pound sterling and Canadian dollar rates used to translate the three months ended March 31, 2026 statements of income increased by 14.5%, 11.2%, 7.0%, and 4.6%, respectively.

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 $0.01 on diluted earnings per share from continuing operations relative to the prior year period.

Net Income from Discontinued Operations

Discontinued operations for the three months ended March 31, 2026 and 2025 reflected the Self Service segment which was sold in September 2025.

See Note 2, "Discontinued Operations" for further information.

Results of Operations—Segment Reporting

We have three reportable segments:

Wholesale - North America;

North America;

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 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

Three Months Ended March 31,

2026 % of Total Segment Revenue 2025 % of Total Segment Revenue

Third Party Revenue

Wholesale - North America

North America

$ 1,440 $ 1,412

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Total Revenue

Wholesale - North America

North America

$ 1,440 $ 1,412

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Segment EBITDA

Wholesale - North America

North America

$ 203 14.1 % $ 217 15.4 %

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See Note 16, "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 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 September 30,

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

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

North America

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

Three Months Ended March 31,

North America 2026 % of Total Segment Revenue 2025 % of Total Segment Revenue $ Change

Parts & services revenue $ 1,341 $ 1,336 $ 5 (1)

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Segment EBITDA $ 203 14.1 % $ 217 15.4 % $ (14)

(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.

(1) Parts and services revenue increased by $5 million, or 0.4%, to $1,341 million for the three months ended March 31, 2026.

This increase was due to a positive exchange rate effect of $11 million, or 0.8%, primarily due to the stronger Canadian dollar against the U.S.

dollar, partially offset by an organic revenue decrease of $5 million, or 0.4%.

This organic revenue decrease was driven primarily by lower volumes in our paint, body and equipment business from lower repairable claims and increased competition, and weather related closures affecting all lines of business, partially offset by pricing initiatives to recoup tariff costs and offset inflationary pressures.

(2) Other revenue increased by $23 million, or 30.0%, to $99 million for the three months ended March 31, 2026.

This increase was due to (i) an $11 million increase in revenue from precious metals (platinum, palladium, and rhodium) primarily due to higher prices, (ii) an $8 million increase in revenue from other scrap (e.g., aluminum) and cores due to higher volumes and prices, and (iii) a $4 million increase in revenue from scrap steel primarily due to higher volumes and, to a lesser extent, higher prices.

(3) Gross margin decreased by $15 million, or 2.4%, to $612 million for the three months ended March 31, 2026.

The decrease in gross margin dollars was driven by cost increases from tariffs and inflationary pressures, unfavorable customer mix, and lower vendor rebates from lower volumes, partially offset by pricing initiatives and higher other revenue.

Gross margin percentage decreased by 2.0% which was driven by the dilutive effect of increasing prices to recoup tariff costs, lower vendor rebates and unfavorable customer mix.

(4) SG&A expenses decreased by $4 million, or 1.0%, to $410 million for the three months ended March 31, 2026.

The decrease in SG&A expense is primarily due to (i) $6 million from decreased professional fees, (ii) $4 million from decreased facility expenses, and (iii) other individually immaterial factors representing a $6 million favorable impact in the aggregate, partially offset by (iv) $12 million from increased personnel costs primarily due to increased health and other insurance costs.

(5) Amounts include certain shared 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.

See Note 6, "Restructuring and Transaction Related Expenses" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information on restructuring charges.

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

Three Months Ended September 30,

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

Parts & services revenue $ 1,615 $ 1,609 $ 6 (1)

Other revenue 5 4 1

Total segment revenue 1,620 1,613 7

Cost of goods sold 991 993 (2)

Gross margin 629 38.8 % 620 38.4 % 9 (2)

Selling, general and administrative expenses 474 29.3 % 461 28.6 % 13 (3)

Other segment items (4)

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

(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 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.

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

Three Months Ended September 30,

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

Parts & services revenue $ 456 $ 417 $ 39 (1)

Intersegment revenue 1 2 (1)

Total segment revenue 457 419 38

Cost of goods sold 343 310 33

Gross margin 114 24.8 % 109 26.0 % 5 (2)

Selling, general and administrative expenses 83 18.1 % 81 19.2 % 2

Other segment items (3)

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

(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.

(6) 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):

Nine Months Ended September 30,

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

Parts & services revenue $ 4,041 $ 4,169 $ (128) (1)

Other revenue 236 227 9

Intersegment revenue — 1 (1)

Total segment revenue 4,277 4,397 (120)

Cost of goods sold 2,433 2,477 (44)

Gross margin 1,844 43.1 % 1,920 43.7 % (76) (2)

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 $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 $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.

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

Nine Months Ended September 30,

Three Months Ended March 31,

Europe 2026 % of Total Segment Revenue 2025 % of Total Segment Revenue $ Change

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Segment EBITDA $ 126 7.8 % $ 141 9.3 % $ (15)

(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 (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.

(1) Parts and services revenue increased by $98 million, or 6.5%, to $1,613 million for the three months ended March 31, 2026.

This increase was due to the effect of an exchange rate increase of $152 million, or 10.1%, primarily due to the strengthening of the euro, and to a lesser extent, the pound sterling and Czech koruna against the U.S.

dollar, partially offset by an organic revenue decrease of $61 million, or 4.0%, primarily driven by decreased volumes due to heightened competition in certain markets and difficult economic conditions.

(2) Gross margin increased by $29 million, or 5.0%, to $620 million for the three months ended March 31, 2026.

The increase in gross margin dollars was driven by an exchange rate increase of $59 million, partially offset by lower organic revenue and lower vendor rebates.

Gross margin percentage decreased by 0.5% which was driven by lower vendor rebates and lower margins from a competitive pricing environment in certain markets.

(3) SG&A expenses increased by $41 million, or 9.3%, to $500 million for the three months ended March 31, 2026.

The increase in SG&A expense includes a $46 million unfavorable foreign exchange impact from a weakening U.S.

The remaining $5 million favorable impact primarily relates to decreased personnel costs driven by productivity initiatives and restructuring activities which more than offset inflationary pressures.

(4) 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.

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

Nine Months Ended September 30,

Three Months Ended March 31,

Specialty 2026 % of Total Segment Revenue 2025 % of Total Segment Revenue $ Change

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Segment EBITDA $ 18 4.4 % $ 21 5.4 % $ (3)

(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.

(1) Parts and services revenue increased by $15 million, or 3.8%, to $408 million for the three months ended March 31, 2026.

This was primarily due to an organic revenue increase of $13 million, or 3.4% primarily driven by volume growth in our marine and recreational vehicle product lines, partially offset by decreases in our automotive product lines.

(2) Gross margin increased by $4 million, or 3.9%, to $99 million for the three months ended March 31, 2026.

This increase was primarily driven by an increase in parts and services revenue as described above.

(3) SG&A expenses increased by $8 million, or 9.7%, to $84 million for the three months ended March 31, 2026.

This increase was primarily driven by a $6 million increase in credit loss reserves.

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

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

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Total liquidity $ 2,012 $ 2,204

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.

2 to the Senior Unsecured Credit Agreement which extended the maturity date of the unsecured term loan facility from January 5, 2026 to January 5, 2027 as well as certain other immaterial modifications.

We had $1,677 million available under our revolving credit facilities as of March 31, 2026 .

Combined with $335 million of cash and cash equivalents at March 31, 2026, we had $2,012 million i n available liquidity, a decrease of $192 million from our available liquidity as of December 31, 2025, primarily as a result of increasing our revolving credit facilities borrowings by $211 million.

See Note 11, "Long-Term Obligations" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for information regarding total debt outstanding.

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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 nine months ended September 30, 2025 is as follows:

A summary of the dividend activity for our common stock for the three months ended March 31, 2026 is as follows:

Dividend Amount Declaration Date Record Date Payment Date

$0.30 February 17, 2026 March 12, 2026 March 26, 2026

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

On April 28, 2026, our Board declared a quarterly cash dividend of $0.30 per share of common stock, payable on June 4, 2026, to stockholders of record at the close of business on May 21, 2026.

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 $1,677 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.

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

With $2,012 million of total liquidity as of March 31, 2026 and $532 million of current maturities, we have access to funds to meet our near term commitments.

Our current maturities include the $500 million term loan payable under our Senior Unsecured Credit Agreement due January 2027, 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 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

We were in compliance with all applicable covenants under both our Senior Unsecured Credit Agreement and CAD Note as of March 31, 2026.

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 March 31, 2026:

Covenant Level Ratio Achieved as of March 31, 2026

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 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.

The weighted average interest rate on borrowings outstanding under our Senior Unsecured Credit Agreement was 5.2% at March 31, 2026.

Including our senior notes and CAD Note, our overall weighted average interest rate on borrowings was 5.0% at March 31, 2026.

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

Under the CAD Note, the interest rate may be (i) a forward-looking term rate based on the Canadian Overnight Repo Rate Average for an interest period chosen by the Company of one or three months or (ii) the Canadian Prime Rate (as defined in the CAD Note), plus in each case a spread.

See Note 11, "Long-Term Obligations" to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for information related to our borrowings and related interest.

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 $1,501 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.

We had outstanding borrowin gs under our revolving credit facilities and term loans payable of $1,215 million and $1,011 million at March 31, 2026 and December 31, 2025, respectively.

Of these amounts, there were current maturities of $500 million at March 31, 2026 related to the term loan payable under our Senior Unsecured Credit Agreement due January 2027.

There were no current maturities at December 31, 2025.

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

The scheduled maturities of long-term obligations outstanding at March 31, 2026 are as follows (in millions):

Nine months ending December 31, 2026 $ 24

Years ending December 31:

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Total debt (2)

(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 $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.

(1) Includes $500 million related to the term loan payable under our Senior Unsecured Credit Agreement due January 2027, 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 $30 million as of March 31, 2026).

As of March 31, 2026, the Company had cash and cash equivalents of $335 million, of which $309 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 10, "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 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.

For the three months ended March 31, 2026, net cash used in operating activities totaled $56 million compared to $3 million for the same period of 2025.

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.

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):

Nine Months Ended September 30,

Net cash provided by operating activities $ 733 $ 886

Receivables represented $15 million in higher cash outflows for the three months ended March 31, 2026 compared to the same period of 2025.

Inventories represented $128 million in incremental cash inflows for the three months ended March 31, 2026 compared to the same period of 2025.

Accounts payable produced $150 million in incremental cash outflows for the three months ended March 31, 2026 compared to the same period of 2025.

Other operating activities primarily reflects the net effect of lower cash earnings and movements in various accruals during the three months ended March 31, 2026 compared to the same period of 2025.

For the three months ended March 31, 2026, net cash used in investing activities totaled $42 million compared to $50 million for the same period of 2025.

Property, plant and equipment purchases were $40 million in the three months ended March 31, 2026 compared to $54 million in the prior year period.

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

Three Months Ended March 31,

Net cash used in operating activities $ (56) $ (3)

purchases of property, plant and equipment 40 54

Free cash flow (1)

(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.

$ (96) $ (57)

(1) For the three months ended March 31, 2025, Self Service contributed approximately $15 million of free cash flow.

For the three months ended March 31, 2026, net cash provided by financing activities totaled $111 million compared to $40 million for the same period in 2025.

Cash outflows for dividends paid were $77 million and share repurchases were $1 million for the three months ended March 31, 2026 compared to $78 million for dividends paid and $40 million for share repurchases for the same period of 2025.

Net debt borrowings were $202 million for the three months ended March 31, 2026 compared to $170 million for the same period of 2025.

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 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)

Nine Months Ended

September 30, 2025

Three Months Ended

March 31, 2026

Fiscal Year Ended

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Net income $ 72 $ 265

(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.

(1) Guarantor subsidiaries recorded $11 million and $51 million of net sales to and $48 million and $259 million of purchases from non-guarantor subsidiaries for the three months ended March 31, 2026 and fiscal year ended December 31, 2025, respectively.

Summarized Balance Sheets (in millions)

September 30, 2025 December 31, 2024 (3)

March 31, 2026 December 31, 2025

Current assets $ 2,434 $ 2,349

$ 3,233 $ 2,273

Noncurrent assets (1)

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Noncurrent liabilities 3,000 3,294

(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.

(1) Noncurrent assets for guarantor subsidiaries included $503 million and $510 million of long-term notes receivable from non-guarantor subsidiaries as of March 31, 2026 and December 31, 2025, respectively.

(2) Current liabilities for guarantor subsidiaries included $489 million and $621 million of short-term notes payable to non-guarantor subsidiaries as of March 31, 2026 and December 31, 2025, respectively.

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