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Segment and Geographic Information | 12 Months Ended
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Dec. 31, 2024
Segment Reporting [Abstract] |
Segment and Geographic Information | Segment and Geographic Information We have four operating segments: Wholesale - North America; Europe; Specialty; and Self Service, each of which is presented as a reportable segment. The segments are organized based on a combination of geographic areas served and type of product lines offered. The segments are managed separately as the businesses serve different customers and are affected by different economic conditions. Wholesale - North America and Self Service have similar economic characteristics and have common products and services, customers and methods of distribution. We are reporting these operating segments separately to provide greater transparency to investors. The following tables present our financial performance by reportable segment for the periods indicated (in millions):
| Wholesale - North America |  | Europe |  | Specialty |  | Self Service |  | Eliminations |  | Consolidated
Year Ended December 31, 2024 |  |  |  |  |  |  |  |  |  |  |
Revenue: |  |  |  |  |  |  |  |  |  |  |
Third Party | $ | 5,762 |  |  | $ | 6,407 |  |  | $ | 1,654 |  |  | $ | 532 |  |  | $ | — |  |  | $ | 14,355 |
Intersegment | 1 |  |  | — |  |  | 3 |  |  | — |  |  | (4) |  |  | — |
Total segment revenue | $ | 5,763 |  |  | $ | 6,407 |  |  | $ | 1,657 |  |  | $ | 532 |  |  | $ | (4) |  |  | $ | 14,355 |
Less: (1) |  |  |  |  |  |  |  |  |  |  |
Cost of goods sold | 3,252 |  |  | 3,953 |  |  | 1,238 |  |  | 305 |  |  |  |  |
Selling, general and administrative expenses | 1,567 |  |  | 1,855 |  |  | 315 |  |  | 179 |  |  |  |  |
Other segment items (2) | (15) |  |  | (35) |  |  | (9) |  |  | (2) |  |  |  |  |
Segment EBITDA | $ | 959 |  |  | $ | 634 |  |  | $ | 113 |  |  | $ | 50 |  |  | $ | — |  |  | $ | 1,756 |
Total depreciation and amortization (3) | $ | 198 |  |  | $ | 160 |  |  | $ | 34 |  |  | $ | 14 |  |  | $ | — |  |  | $ | 406 |
Year Ended December 31, 2023 |  |  |  |  |  |  |  |  |  |  |
Revenue: |  |  |  |  |  |  |  |  |  |  |
Third Party | $ | 5,281 |  |  | $ | 6,323 |  |  | $ | 1,665 |  |  | $ | 597 |  |  | $ | — |  |  | $ | 13,866 |
Intersegment | 1 |  |  | — |  |  | 3 |  |  | — |  |  | (4) |  |  | — |
Total segment revenue | $ | 5,282 |  |  | $ | 6,323 |  |  | $ | 1,668 |  |  | $ | 597 |  |  | $ | (4) |  |  | $ | 13,866 |
Less: (1) |  |  |  |  |  |  |  |  |  |  |
Cost of goods sold | 2,796 |  |  | 3,886 |  |  | 1,238 |  |  | 375 |  |  |  |  |
Selling, general and administrative expenses | 1,535 |  |  | 1,842 |  |  | 305 |  |  | 188 |  |  |  |  |
Other segment items (2) | (24) |  |  | (19) |  |  | (9) |  |  | (2) |  |  |  |  |
Segment EBITDA | $ | 975 |  |  | $ | 614 |  |  | $ | 134 |  |  | $ | 36 |  |  | $ | — |  |  | $ | 1,759 |
Total depreciation and amortization (3) | $ | 121 |  |  | $ | 150 |  |  | $ | 32 |  |  | $ | 16 |  |  | $ | — |  |  | $ | 319 |
Year Ended December 31, 2022 |  |  |  |  |  |  |  |  |  |  |
Revenue: |  |  |  |  |  |  |  |  |  |  |
Third Party | $ | 4,556 |  |  | $ | 5,735 |  |  | $ | 1,788 |  |  | $ | 715 |  |  | $ | — |  |  | $ | 12,794 |
Intersegment | — |  |  | — |  |  | 3 |  |  | — |  |  | (3) |  |  | — |
Total segment revenue | $ | 4,556 |  |  | $ | 5,735 |  |  | $ | 1,791 |  |  | $ | 715 |  |  | $ | (3) |  |  | $ | 12,794 |
Less: (1) |  |  |  |  |  |  |  |  |  |  |
Cost of goods sold | 2,347 |  |  | 3,520 |  |  | 1,270 |  |  | 437 |  |  |  |  |
Selling, general and administrative expenses | 1,372 |  |  | 1,651 |  |  | 325 |  |  | 196 |  |  |  |  |
Other segment items (2) | (15) |  |  | (21) |  |  | (3) |  |  | (1) |  |  |  |  |
Segment EBITDA | $ | 852 |  |  | $ | 585 |  |  | $ | 199 |  |  | $ | 83 |  |  | $ | — |  |  | $ | 1,719 |
Total depreciation and amortization (3) | $ | 75 |  |  | $ | 145 |  |  | $ | 30 |  |  | $ | 14 |  |  | $ | — |  |  | $ | 264 |
(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. Intersegment expenses are included within the amounts shown. (2) Amounts primarily represent other non operating income and expenses within each segment, 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 13, "Restructuring and Transaction Related Expenses" for additional information on the restructuring charges. (3) Amounts presented include depreciation and amortization expense recorded within Cost of goods sold, SG&A expenses and Restructuring and transaction related expenses. The key measure of segment profit or loss reviewed by our CODM, our Chief Executive Officer, is Segment EBITDA. The CODM uses Segment EBITDA to compare profitability among the segments and evaluate business strategies. Segment EBITDA includes revenue and expenses that are controllable by the segment. Corporate general and administrative expenses are allocated to the segments based on usage, with shared expenses apportioned based on the segment's percentage of consolidated revenue. We calculate Segment EBITDA as Net Income excluding net income and loss attributable to noncontrolling interest; income and loss from discontinued operations; depreciation; amortization; interest; gains and losses on debt extinguishment; income tax expense; restructuring and transaction 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; equity investment fair value adjustments; impairment charges; and direct impacts of the Ukraine/Russia conflict. The table below provides a reconciliation of Net Income to Segment EBITDA (in millions):
| Year Ended December 31,
2024 |  | 2023 |  | 2022
Net income | $ | 693 |  |  | $ | 938 |  |  | $ | 1,150 |
Less: net income attributable to continuing noncontrolling interest | 3 |  |  | 2 |  |  | 1 |
Net income attributable to LKQ stockholders | 690 |  |  | 936 |  |  | 1,149 |
Less: net (loss) income from discontinued operations | — |  |  | (6) |  |  | 6 |
Net income from continuing operations attributable to LKQ stockholders | 690 |  |  | 942 |  |  | 1,143 |
Adjustments: |  |  |  |  |
Depreciation and amortization | 406 |  |  | 319 |  |  | 264 |
Interest expense, net of interest income | 243 |  |  | 186 |  |  | 70 |
Loss on debt extinguishment | — |  |  | 1 |  |  | — |
Provision for income taxes | 273 |  |  | 306 |  |  | 385 |
Equity in earnings of unconsolidated subsidiaries (1) | (8) |  |  | (15) |  |  | (11) |
Gains on foreign exchange contracts - acquisition related (2) | — |  |  | (49) |  |  | — |
Equity investment fair value adjustments | 2 |  |  | 2 |  |  | 5 |
Restructuring and transaction related expenses (3) | 135 |  |  | 65 |  |  | 20 |
Restructuring expenses - cost of goods sold (3) | 15 |  |  | 4 |  |  | — |
Gain on disposal of businesses (4) | — |  |  | — |  |  | (159) |
Gains on previously held equity interests | — |  |  | (3) |  |  | (1) |
Direct impacts of Ukraine/Russia conflict (5) | — |  |  | — |  |  | 3 |
Impairment of net assets held for sale | — |  |  | 1 |  |  | — |
Segment EBITDA | $ | 1,756 |  |  | $ | 1,759 |  |  | $ | 1,719 |
(1) Refer to Note 10, "Equity Method Investments" for further information. (2) Refer to Note 3, "Business Combinations" and Note 19, "Derivative Instruments and Hedging Activities" for further information. (3) Refer to Note 13, "Restructuring and Transaction Related Expenses" for further information. (4) Refer to "Other Divestitures (Not Classified in Discontinued Operations)" in Note 4, "Discontinued Operations and Divestitures" for further information. (5) Adjustments include provisions for and subsequent adjustments to reserves for asset recoverability (receivables and inventory) and expenditures to support our employees and their families in Ukraine. The following table presents capital expenditures by reportable segment (in millions):
| Year Ended December 31,
2024 |  | 2023 |  | 2022
Capital Expenditures |  |  |  |  |
Wholesale - North America | $ | 143 |  |  | $ | 118 |  |  | $ | 84 |
Europe | 134 |  |  | 163 |  |  | 105 |
Specialty | 21 |  |  | 41 |  |  | 19 |
Self Service | 13 |  |  | 36 |  |  | 14 |
Total capital expenditures | $ | 311 |  |  | $ | 358 |  |  | $ | 222 |
The following table presents assets by reportable segment (in millions):
| December 31, 2024 |  | December 31, 2023
Receivables, net of allowance for credit losses |  |  |
Wholesale - North America | $ | 483 |  |  | $ | 470 |
Europe | 528 |  |  | 580 |
Specialty | 102 |  |  | 107 |
Self Service | 9 |  |  | 8 |
Total receivables, net of allowance for credit losses | 1,122 |  |  | 1,165 |
Inventories |  |  |
Wholesale - North America | 1,411 |  |  | 1,217 |
Europe | 1,323 |  |  | 1,390 |
Specialty | 449 |  |  | 475 |
Self Service | 37 |  |  | 39 |
Total inventories | 3,220 |  |  | 3,121 |
Property, plant and equipment, net |  |  |
Wholesale - North America | 675 |  |  | 644 |
Europe | 619 |  |  | 642 |
Specialty | 115 |  |  | 118 |
Self Service | 108 |  |  | 112 |
Total property, plant and equipment, net | 1,517 |  |  | 1,516 |
Operating lease assets, net |  |  |
Wholesale - North America | 668 |  |  | 615 |
Europe | 467 |  |  | 494 |
Specialty | 121 |  |  | 84 |
Self Service | 132 |  |  | 143 |
Total operating lease assets, net | 1,388 |  |  | 1,336 |
Other unallocated assets | 7,708 |  |  | 7,941 |
Total assets | $ | 14,955 |  |  | $ | 15,079 |
We report net receivables; inventories; net property, plant and equipment; and net operating lease assets by segment as that information is used by the CODM 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 expenses and other current and noncurrent assets, goodwill, other intangibles and equity method investments. Our largest countries of operation are the U.S., followed by Germany and the U.K. Additional European operations are located in the Netherlands, Italy, Czech Republic, Belgium, Austria, Slovakia, France and other European countries. As a result of the Uni-Select Acquisition, we further expanded our wholesale operations in Canada. Our operations in other countries include remanufacturing operations in Mexico, an aftermarket parts freight consolidation warehouse in Taiwan, and administrative support functions in India. The following table sets forth our tangible long-lived assets by geographic area (in millions):
| December 31, 2024 |  | December 31, 2023
Long-lived assets |  |  |
United States | $ | 1,590 |  |  | $ | 1,496 |
Germany | 312 |  |  | 324 |
United Kingdom | 296 |  |  | 295 |
Other countries | 707 |  |  | 737 |
Total long-lived assets | $ | 2,905 |  |  | $ | 2,852 |

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- Definition The entire disclosure for reporting segments including data and tables. 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