v3.24.2
Segment and Geographic Information
 6 Months Ended
Jun. 30, 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 AmericaEuropeSpecialtySelf ServiceEliminationsConsolidated
Three Months Ended June 30, 2024
Revenue:
Third Party$1,473 $1,639 $466 $133 $— $3,711 
Intersegment1 — — — (1)— 
Total segment revenue$1,474 $1,639 $466 $133 $(1)$3,711 
Segment EBITDA$256 $174 $41 $13 $— $484 
Total depreciation and amortization (1)
48 40 9 3 — 100 
Three Months Ended June 30, 2023
Revenue:
Third Party$1,199 $1,638 $442 $169 $— $3,448 
Intersegment— — 1 — (1)— 
Total segment revenue$1,199 $1,638 $443 $169 $(1)$3,448 
Segment EBITDA$248 $188 $42 $7 $— $485 
Total depreciation and amortization (1)
20 39 8 3 — 70 
Wholesale - North AmericaEuropeSpecialtySelf ServiceEliminationsConsolidated
Six Months Ended June 30, 2024
Revenue:
Third Party$2,973 $3,283 $888 $270 $— $7,414 
Intersegment1 — 1 — (2)— 
Total segment revenue$2,974 $3,283 $889 $270 $(2)$7,414 
Segment EBITDA$500 $317 $68 $29 $— $914 
Total depreciation and amortization (1)
97 79 17 7 — 200 
Six Months Ended June 30, 2023
Revenue:
Third Party$2,428 $3,193 $838 $338 $— $6,797 
Intersegment— — 2 — (2)— 
Total segment revenue$2,428 $3,193 $840 $338 $(2)$6,797 
Segment EBITDA$500 $339 $73 $29 $— $941 
Total depreciation and amortization (1)
39 73 16 7 — 135 
(1)    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. We use 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):

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Net income$186 $282 $344 $552 
Less: net income attributable to noncontrolling interest1 1 1 1 
Net income attributable to LKQ stockholders185 281 343 551 
Adjustments:
Depreciation and amortization100 70 200 135 
Interest expense, net of interest income62 42 123 75 
Loss on debt extinguishment— — — 1 
Provision for income taxes82 109 153 203 
Equity in earnings of unconsolidated subsidiaries (1)
(2)(2)— (5)
Gains on foreign exchange contracts - acquisition related (2)
— (23)— (46)
Equity investment fair value adjustments2 — 2 1 
Restructuring and transaction related expenses (3)
49 8 79 26 
Restructuring expenses - cost of goods sold (3)
6 — 14 — 
Segment EBITDA$484 $485 $914 $941 
(1)    Refer to Note 6, "Equity Method Investments" for further information.
(2)    Refer to Note 2, "Business Combinations" and Note 13, "Derivative Instruments and Hedging Activities" for further information.
(3)    Refer to Note 8, "Restructuring and Transaction Related Expenses" for further information.

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

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Capital Expenditures
Wholesale - North America
$52 $16 $73 $36 
Europe20 23 58 56 
Specialty5 5 9 18 
Self Service3 22 6 26 
Total capital expenditures$80 $66 $146 $136 
The following table presents assets by reportable segment (in millions):
June 30, 2024December 31, 2023
Receivables, net of allowance for credit losses
Wholesale - North America
$511 $470 
Europe696 580 
Specialty144 107 
Self Service9 8 
Total receivables, net of allowance for credit losses1,360 1,165 
Inventories
Wholesale - North America
1,257 1,217 
Europe1,305 1,390 
Specialty465 475 
Self Service37 39 
Total inventories3,064 3,121 
Property, plant and equipment, net
Wholesale - North America
671 644 
Europe613 642 
Specialty116 118 
Self Service109 112 
Total property, plant and equipment, net1,509 1,516 
Operating lease assets, net
Wholesale - North America
624 615 
Europe477 494 
Specialty127 84 
Self Service136 143 
Total operating lease assets, net1,364 1,336 
Other unallocated assets7,914 7,941 
Total assets$15,211 $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 United Kingdom ("U.K."). Additional European operations are located in the Netherlands, Italy, Czech Republic, Belgium, Austria, Slovakia, Poland, 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):

June 30, 2024December 31, 2023
Long-lived assets
United States$1,572 $1,496 
Germany322 324 
United Kingdom299 295 
Other countries680 737 
Total long-lived assets$2,873 $2,852