Segment and Geographic Information

We have four operating segments: Wholesale – North America, Europe, Specialty and Self Service. Our Wholesale – North America and Self Service operating segments are aggregated into one reportable segment, North America, because they possess similar economic characteristics and have common products and services, customers, and methods of distribution. Our reportable segments are organized based on a combination of geographic areas served and type of product lines offered. The reportable segments are managed separately as each business serves different customers (i.e. geographic in the case of North America and Europe and product type in the case of Specialty) and is affected by different economic conditions. Therefore, we present three reportable segments: North America, Europe and Specialty.

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



	North America		Europe		Specialty		Eliminations			Consolidated
Three Months Ended March 31, 2019
Revenue:
Third Party	$	1,302,206	$	1,445,541	$	352,556	$	—		$	3,100,303
Intersegment	103		—		1,181		(1,284		)	—
Total segment revenue	$	1,302,309	$	1,445,541	$	353,737	$	(1,284	)	$	3,100,303
Segment EBITDA	$	176,636	$	105,298	$	37,959	$	—		$	319,893
Depreciation and amortization ⁽¹⁾	22,239		47,011		6,957		—			76,207
Three Months Ended March 31, 2018
Revenue:
Third Party	$	1,329,660	$	1,040,430	$	350,674	$	—		$	2,720,764
Intersegment	183		—		1,118		(1,301		)	—
Total segment revenue	$	1,329,843	$	1,040,430	$	351,792	$	(1,301	)	$	2,720,764
Segment EBITDA	$	177,713	$	75,534	$	41,969	$	—		$	295,216
Depreciation and amortization ⁽¹⁾	21,228		32,757		7,081		—			61,066

(1) Amounts presented include depreciation and amortization expense recorded within cost of goods sold.

The key measure of segment profit or loss reviewed by our chief operating decision maker, who is our Chief Executive Officer, is Segment EBITDA. Segment EBITDA includes revenue and expenses that are controllable by the segment. Corporate general and administrative expenses are allocated to the segments based on usage, with shared expenses apportioned based on the segment's percentage of consolidated revenue. We calculate Segment EBITDA as EBITDA excluding restructuring and acquisition related expenses, change in fair value of contingent consideration liabilities, other gains and losses related to acquisitions, equity method investments, or divestitures, equity in losses and earnings of unconsolidated subsidiaries, and impairment charges. EBITDA, which is the basis for Segment EBITDA, is calculated as net income, less net income (loss) attributable to noncontrolling interest, excluding depreciation, amortization, interest and income tax expense.

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



	Three Months Ended
	March 31,
	2019			2018
Net income	$	99,063		$	152,763
Less: net income (loss) attributable to noncontrolling interest	1,015			(197		)
Net income attributable to LKQ stockholders	98,048			152,960
Add:
Depreciation and amortization	71,002			56,458
Depreciation and amortization - cost of goods sold	5,205			4,608
Interest expense, net of interest income	36,089			28,515
Provision for income taxes	51,550			49,584
EBITDA	261,894			292,125
Subtract:
Equity in (losses) earnings of unconsolidated subsidiaries ⁽¹⁾	(39,549		)	1,412
Add:
Restructuring and acquisition related expenses ⁽²⁾	3,307			4,054
Inventory step-up adjustment - acquisition related	—			403
Impairment of net assets held for sale ⁽³⁾	15,023			—
Change in fair value of contingent consideration liabilities	120			46
Segment EBITDA	$	319,893		$	295,216


(1)	Refer to "Investments in Unconsolidated Subsidiaries" in Note 3, "Financial Statement Information," for further information.


(2)	Refer to Note 5, "Restructuring and Acquisition Related Expenses," for further information.

(3) Refer to "Net Assets Held for Sale" in Note 3, "Financial Statement Information," for further information.

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



	Three Months Ended
	March 31,
	2019		2018
Capital Expenditures
North America	$	31,234	$	29,662
Europe	19,577		28,815
Specialty	2,205		3,712
Total capital expenditures	$	53,016	$	62,189

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



	March 31,		December 31,
	2019		2018
Receivables, net
North America	$	445,056	$	411,818
Europe	770,543		649,174
Specialty	137,892		93,091
Total receivables, net	1,353,491		1,154,083
Inventories
North America	994,438		1,076,306
Europe	1,363,929		1,410,264
Specialty	333,639		349,505
Total inventories	2,692,006		2,836,075
Property, plant and equipment, net
North America	574,046		570,508
Europe	546,725		562,600
Specialty	85,571		87,054
Total property, plant and equipment, net	1,206,342		1,220,162
Operating lease assets, net ⁽¹⁾
North America	757,590		—
Europe	438,272		—
Specialty	83,714		—
Total operating lease assets, net	1,279,576		—
Equity method investments
North America	17,551		16,404
Europe⁽²⁾	116,683		162,765
Total equity method investments	134,234		179,169
Other unallocated assets	6,000,261		6,003,913
Total assets	$	12,665,910	$	11,393,402


(1)	Refer to "Note 12, "Leases," for further information.


(2)	Refer to "Investments in Unconsolidated Subsidiaries" in Note 3, "Financial Statement Information," for further information.

We report net receivables; inventories; net property, plant and equipment; net operating lease assets; and equity method investments by segment as that information is used by the chief operating decision maker in assessing segment performance. These assets provide a measure for the operating capital employed in each segment. Unallocated assets include cash and cash equivalents, prepaid and other current and noncurrent assets, goodwill and other intangibles.

Our largest countries of operation are the U.S., followed by the U.K. and Germany. Our other European operations are located in the Netherlands, Italy, Czech Republic, Belgium, Poland, Slovakia, Austria, and other European countries. Our operations in other countries include operations in Canada, engine remanufacturing and bumper refurbishing operations in Mexico, an aftermarket parts freight consolidation warehouse in Taiwan, and administrative support functions in India. Our net sales are attributed to geographic area based on the location of the selling operation.

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



	Three Months Ended
	March 31,
	2019		2018
Revenue
United States	$	1,542,026	$	1,560,027
United Kingdom	412,813		430,992
Germany	386,465		803
Other countries	758,999		728,942
Total revenue	$	3,100,303	$	2,720,764

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



	March 31,		December 31,
	2019		2018
Long-lived assets⁽¹⁾
United States	$	1,424,978	$	620,125
Germany	305,442		217,476
United Kingdom	339,147		165,145
Other countries	416,351		217,416
Total long-lived assets	$	2,485,918	$	1,220,162


(1)	The increase in long-lived assets is related to the net operating lease assets added as a result of the adoption of the new lease accounting standard. Refer to "Note 12, "Leases," for further information.