LKQ CORP

Previous wording

We are organized into three operating segments: North America; Europe; 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 in the prior year. See Note 3, "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.

Current wording

We are organized into three operating segments: North America; Europe; and Specialty, each of which is presented as a reportable segment.

Previous wording

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. See Note 2, "Business Combinations", Note 3, "Discontinued Operations" and Note 6, "Equity Method Investments" 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 acquisitions, divestitures and investments.

Current wording

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. See Note 2, "Business Combinations and Divestitures", Note 3, "Discontinued Operations" and Note 6, "Equity Method Investments" 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 acquisitions, divestitures and investments.

Previous wording

The discussion and analysis of our financial condition and results of operations are based upon our Unaudited Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make use of certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. 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 six months ended June 30, 2026.

Current wording

The discussion and analysis of our financial condition and results of operations are based upon our Unaudited Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make use of certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. 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, 2026.

Previous wording

We continue to monitor for certain triggering events 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 an impairment to goodwill in one of our segments. For the three months ended June 30, 2026, we did not identify any triggering events or other indicators of impairment that necessitated an interim test of goodwill impairment. See Note 5, "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.

Current wording

For the first nine months of 2026, we did not identify any triggering events or other indicators of impairment that necessitated any further interim test of goodwill impairment for our North America reporting unit.

Previous wording

See "Strategic Restructuring and Transformation Initiatives" in Note 8, "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 Germany. See Part I, Item 4 of this Quarterly Report on Form 10-Q for information related to the ERP system implementation in Germany.

Current wording

See "Strategic Restructuring and Transformation Initiatives" in Note 8, "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 Germany. See Part I, Item 4 of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 filed with the SEC on July 30, 2026 for information related to the ERP system implementation in Germany.

Previous wording

The decrease in parts and services revenue of $122 million, or 3.6%, represented a decrease in segment revenue of $154 million, or 9.6%, in Europe, partially offset by increases of $23 million, or 5.0%, in Specialty and $9 million, or 0.5%, in North America. This overall decrease was driven by an organic parts and services revenue decrease of $174 million, or 5.1%, partially offset by a $34 million, or 1.0%, increase due to fluctuations in foreign exchange rates, and a $17 million, or 0.5%, increase 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 June 30, 2026 compared to the three months ended June 30, 2025.

Current wording

The decrease in parts and services revenue of $192 million, or 5.6%, represented decreases in segment revenue of $164 million, or 10.2%, in Europe and $37 million, or 2.6%, in North America, partially offset by an increase of $9 million, or 1.9%, in Specialty. This overall decrease was driven by an organic parts and services revenue decrease of $186 million, or 5.4%, and a $24 million, or 0.7%, decrease due to fluctuations in foreign exchange rates, partially offset by a $19 million, or 0.6%, increase 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, 2026 compared to the three months ended September 30, 2025.

Previous wording

Cost of goods sold increased by $54 million, or 1.3%, to $4,225 million for the six months ended June 30, 2026. Cost of goods sold includes a $129 million unfavorable impact from a weakening U.S. dollar. Cost of goods sold primarily reflects increases of $64 million from North America and $27 million from Specialty, partially offset by a decrease of $37 million from Europe. Cost of goods sold as a percentage of revenue increased to 61.4% for the six months ended June 30, 2026 from 61.0% for the six months ended June 30, 2025. Cost of goods sold as a percentage of revenue primarily reflects an increase of 0.5% from 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, 2026 compared to the six months ended June 30, 2025.

Current wording

Cost of goods sold decreased by $75 million, or 3.5%, to $2,083 million for the three months ended September 30, 2026. Cost of goods sold includes an $18 million favorable impact from a strengthening U.S. dollar. Cost of goods sold reflects decreases of $70 million from Europe and $17 million from North America, partially offset by an increase of $12 million from Specialty. Cost of goods sold as a percentage of revenue increased to 62.8% for the three months ended September 30, 2026 from 61.7% for the three months ended September 30, 2025. Cost of goods sold as a percentage of revenue primarily reflects an increase of 1.0% 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, 2026 compared to the three months ended September 30, 2025.

Previous wording

Our Selling, general and administrative ("SG&A") expenses increased by $32 million, or 3.3%, to $990 million for the three months ended June 30, 2026. SG&A expenses includes a $10 million unfavorable impact from a weakening U.S. dollar. The year over year increase in SG&A expense primarily reflects increases of $18 million from North America, $12 million from Specialty and $2 million from Europe. SG&A expenses as a percentage of revenue increased to 29.0% for the three months ended June 30, 2026 from 27.3% for the three months ended June 30, 2025. SG&A expenses as a percentage of revenue primarily reflects increases of 1.3% from Europe, 0.4% from North America, and 0.2% from Specialty, partially offset by a decrease of 0.2% attributable to mix. 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, 2026 compared to the three months ended June 30, 2025.

Current wording

Our Selling, general and administrative ("SG&A") expenses increased by $1 million, or 0.1%, to $959 million for the three months ended September 30, 2026. SG&A expenses includes a $6 million favorable impact from a strengthening U.S. dollar. The year over year increase in SG&A expenses primarily reflects increases of $2 million from Europe and $6 million from Specialty, partially offset by a decrease of $7 million from North America. SG&A expenses as a percentage of revenue increased to 28.9% for the three months ended September 30, 2026 from 27.4% for the three months ended September 30, 2025. SG&A expenses as a percentage of revenue primarily reflects increases of 1.6% from Europe and 0.2% from Specialty, partially offset by a decrease of 0.2% attributable to North America and mix. 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, 2026 compared to the three months ended September 30, 2025.

Previous wording

Restructuring and transaction related expenses increased by $28 million, primarily due to a $23 million increase in restructuring expenses related to our Strategic Restructuring and Transformation Initiatives and a $5 million increase in transaction related expenses. See Note 8, "Restructuring and Transaction Related Expenses" for further information on the restructuring charges.

Current wording

Restructuring and transaction related expenses increased by $10 million, primarily due to a $14 million increase in restructuring expenses related to our Strategic Restructuring and Transformation Initiatives, partially offset by a $2 million decrease in transaction related expenses and a $2 million decrease in acquisition integration expenses. See Note 8, "Restructuring and Transaction Related Expenses" for further information on the restructuring charges.

Previous wording

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, 2025, the Czech koruna, euro and pound sterling rates used to translate the three months ended June 30, 2026 statements of income increased by 5.1%, 2.5%, and 0.5%, 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 neutral effect on diluted earnings per share from continuing operations relative to the prior year period.

Current wording

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, 2025, the Canadian dollar, euro, Czech koruna, and pound sterling rates used to translate the three months ended September 30, 2026 statements of income decreased by 1.6%, 1.5%, 0.4%, and 0.3%, 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 neutral effect on diluted earnings per share from continuing operations relative to the prior year period.

Previous wording

The decrease in parts and services revenue of $4 million, or 0.1%, represented a decrease in segment revenue of $56 million, or 1.8%, in Europe, partially offset by increases of $38 million, or 4.4%, in Specialty and $14 million, or 0.5%, in North America. This overall decrease was driven by an organic parts and services revenue decrease of $226 million, or 3.4%, partially offset by a $198 million, or 3.0%, increase due to fluctuations in foreign exchange rates and a $23 million, or 0.3%, increase 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 six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Current wording

The decrease in parts and services revenue of $196 million, or 1.9%, represented decreases in segment revenue of $220 million, or 4.7%, in Europe and $23 million, or 0.6%, in North America, partially offset by an increase of $47 million, or 3.5%, in Specialty. This overall decrease was driven by an organic parts and services revenue decrease of $412 million, or 4.1%, partially offset by a $174 million, or 1.7%, increase due to fluctuations in foreign exchange rates and a $42 million, or 0.4%, increase 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 nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.

Previous wording

Cost of goods sold decreased by $70 million, or 3.3%, to $2,087 million for the three months ended June 30, 2026. Cost of goods sold includes a $22 million unfavorable impact from a weakening U.S. dollar. Cost of goods sold reflects a decrease of $107 million from Europe, partially offset by increases of $21 million from North America and $16 million from Specialty. Cost of goods sold as a percentage of revenue decreased to 61.2% for the three months ended June 30, 2026 from 61.4% for the three months ended June 30, 2025. Cost of goods sold as a percentage of revenue primarily reflects a decrease of 0.4% from Europe, partially offset by an increase of 0.2% from 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 three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Current wording

Cost of goods sold decreased by $21 million, or 0.3%, to $6,308 million for the nine months ended September 30, 2026. Cost of goods sold includes a $111 million unfavorable impact from a weakening U.S. dollar. Cost of goods sold primarily reflects a decrease of $107 million from Europe, partially offset by increases of $47 million from North America and $39 million from Specialty. Cost of goods sold as a percentage of revenue increased to 61.9% for the nine months ended September 30, 2026 from 61.2% for the nine months ended September 30, 2025. Cost of goods sold as a percentage of revenue primarily reflects increases of 0.3% 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 nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.

Previous wording

Our SG&A expenses increased by $77 million, or 4.0%, to $1,984 million for the six months ended June 30, 2026. SG&A expenses includes a $59 million unfavorable impact from a weakening U.S. dollar. The year over year increase in SG&A expense primarily reflects increases of $43 million from Europe, $20 million from Specialty and $14 million from North America. SG&A expenses as a percentage of revenue increased to 28.9% for the six months ended June 30, 2026 from 27.9% for the six months ended June 30, 2025. SG&A expenses as a percentage of revenue primarily reflects increases of 0.9% from Europe and 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 six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Current wording

Our SG&A expenses increased by $78 million, or 2.7%, to $2,943 million for the nine months ended September 30, 2026. SG&A expenses includes a $53 million unfavorable impact from a weakening U.S. dollar. The year over year increase in SG&A expenses primarily reflects increases of $45 million from Europe, $26 million from Specialty and $7 million from North America. SG&A expenses as a percentage of revenue increased to 28.9% for the nine months ended September 30, 2026 from 27.7% for the nine months ended September 30, 2025. SG&A expenses as a percentage of revenue primarily reflects increases of 1.1% from Europe and 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 nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.

Previous wording

Restructuring and transaction related expenses increased by $6 million, primarily due to a $3 million increase in restructuring expenses related to our Strategic Restructuring and Transformation Initiatives and a $3 million increase in transaction related expenses. See Note 8, "Restructuring and Transaction Related Expenses" for further information on the restructuring charges.

Current wording

Restructuring and transaction related expenses increased by $38 million, primarily due to a $37 million increase in restructuring expenses related to our Strategic Restructuring and Transformation Initiatives and a $3 million increase in transaction related expenses, partially offset by a $2 million decrease in acquisition integration expenses. See Note 8, "Restructuring and Transaction Related Expenses" for further information on the restructuring charges.

Previous wording

Our effective income tax rate for the three months ended June 30, 2026 was 26.8%, compared to 26.4% for the three months ended June 30, 2025. The increase in the effective tax rate for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 is primarily attributable to an unfavorable impact of 1.2% for discrete items, mostly related to a nonrecurring benefit from the reversal of a tax assessment in the prior year, partially offset by a favorable impact from changes in the Company's geographic distribution of income.

Current wording

Our effective income tax rate for the nine months ended September 30, 2026 was 35.2%, compared to 24.8% for the nine months ended September 30, 2025. The increase in the effective tax rate for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 is attributable to a 1.3% unfavorable year over year impact from changes in the Company's geographic distribution of income and a 9.1% increase in the impact of discrete items. The increase in discrete items was primarily driven by the nondeductible portion of the goodwill impairment of the Specialty segment, totaling $84 million, recognized in the third quarter of 2026, which increased the effective tax rate by 6.7%.

Previous wording

During thesix months ended June 30, 2026, we recorded a$44 million other-than-temporary impairment related to our equity method investment in Mekonomen. See Note 6, "Equity Method Investments" for further information on the impairment charge.

Current wording

During thenine months ended September 30, 2026, we recorded a$44 million other-than-temporary impairment related to our equity method investment in Mekonomen. See Note 6, "Equity Method Investments" for further information on the impairment charge.

Previous wording

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, 2025, the Czech koruna, euro, pound sterling, and Canadian dollar rates used to translate the six months ended June 30, 2026 statements of income increased by 9.6%, 6.7%, 3.6% and 2.2%, 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.

Current wording

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, 2025, the Czech koruna, euro, pound sterling, and Canadian dollar rates used to translate the nine months ended September 30, 2026 statements of income increased by 6.0%, 3.8%, 2.3% and 0.9%, 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.

Previous wording

Net Income from Discontinued Operations

Current wording

Net (Loss) Income from Discontinued Operations

Previous wording

Discontinued operations for the six months ended June 30, 2026 and 2025 reflected the Self Service segment which was sold in September 2025. See Note 3, "Discontinued Operations" for further information.

Current wording

Discontinued operations for the nine months ended September 30, 2026 and 2025 reflected the Self Service segment which was sold in September 2025. See Note 3, "Discontinued Operations" for further information.

Previous wording

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. See Note 18, "Segment and Geographic Information" to the Unaudited Condensed

Current wording

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 and Loss 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. See Note 18, "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.

Previous wording

(1)Parts and services revenue increased by $9 million, or 0.5%, to $1,371 million for the three months ended June 30, 2026. This increase was due to an organic revenue increase of $7 million, or 0.5%, driven primarily by pricing initiatives to recoup tariff costs and offset inflationary pressures, partially offset by lower volumes in our paint, body and equipment ("PBE") business from increased competition and lower repairable claims and lower volumes in our salvage operations.

Current wording

(1)Parts and services revenue decreased by $37 million, or 2.6%, to $1,306 million for the three months ended September 30, 2026. This decrease was due to an organic revenue decrease of $32 million, or 2.4%, driven primarily by lower volumes in both collision and mechanical parts in our salvage operations and lower volumes in our aftermarket and paint, body and equipment ("PBE") business from lower repairable claims, partially offset by pricing initiatives primarily in our salvage operations.

Previous wording

(2)Other revenue increased by $15 million, or 20.5%, to $95 million for the three months ended June 30, 2026. This increase was due to (i) a $7 million increase in revenue from other scrap (e.g., aluminum) and cores due to higher prices, and to a lesser extent, volumes, (ii) a $6 million increase in revenue from precious metals (platinum, palladium, and rhodium) primarily due to higher prices, and (iii) a $2 million increase in revenue from scrap steel primarily due to higher prices and volumes.

Current wording

(2)Other revenue increased by $15 million, or 18.1%, to $95 million for the three months ended September 30, 2026. This increase was due to (i) a $10 million increase in revenue from other scrap (e.g., aluminum) and cores due to higher prices, (ii) a $3 million increase in revenue from scrap steel primarily due to higher prices and volumes, and (iii) a $2 million increase in revenue from precious metals (platinum, palladium, and rhodium) primarily due to higher prices.

Previous wording

(3)Gross margin increased by $3 million, or 0.7%, to $622 million for the three months ended June 30, 2026. The increase in gross margin dollars was driven primarily by pricing and higher other revenue as described above, partially offset by cost increases from tariffs and inflationary pressures, and lower volumes. Gross margin percentage decreased by 0.4% which was driven by the dilutive effect of increasing prices to recoup tariff costs, lower vendor rebates and unfavorable customer mix.

Current wording

(3)Gross margin decreased by $4 million, or 1.0%, to $594 million for the three months ended September 30, 2026. The decrease in gross margin dollars was driven primarily by lower volumes, partially offset by higher other revenue as described above.

Previous wording

(4)SG&A expenses increased by $18 million, or 4.6%, to $420 million for the three months ended June 30, 2026. The increase in SG&A expense is primarily due to (i) a $7 million increase in professional fees, (ii) a $7 million increase due to higher self insurance reserves, (iii) a $4 million increase in freight costs and (iv) other individually immaterial factors representing a $2 million unfavorable impact in the aggregate, partially offset by (v) a $2 million decrease in personnel costs driven by productivity and other cost savings initiatives, partially offset by increased health and other insurance costs and incentive compensation compared to the prior year.

Current wording

(4)SG&A expenses decreased by $7 million, or 2.1%, to $394 million for the three months ended September 30, 2026. The decrease in SG&A expense is primarily due to (i) a $7 million decrease in personnel costs driven by productivity and other cost savings initiatives and (ii) a $5 million decrease due to lower self insurance reserves, partially offset by (iii) a $5 million increase in freight, vehicle, and fuel costs.

Previous wording

(1)Parts and services revenue decreased by $56 million, or 1.8%, to $3,060 million for the six months ended June 30, 2026. This decrease was primarily due to an organic revenue decrease of $262 million, or 8.4%, primarily driven by lower volumes due to temporary operational challenges resulting from an ERP implementation in Germany, and heightened competition in certain markets and difficult economic conditions, partially offset by the effect of an exchange rate increase of $186 million, or 6.0%, primarily due to the strengthening of the euro, and to a lesser extent, the pound sterling and Czech koruna against the U.S. dollar and an increase in acquisition and divestiture revenue of $20 million, or 0.6%, primarily due to our acquisition of six wholesale businesses from the beginning of 2025 through the one-year anniversary of their respective acquisition dates.

Current wording

(1)Parts and services revenue decreased by $164 million, or 10.2%, to $1,451 million for the three months ended September 30, 2026. This decrease was due to an organic revenue decrease of $158 million, or 9.8%, primarily driven by lower volumes due to operational challenges resulting from an ERP implementation in Germany in the second quarter, and to a lesser extent, volume declines in the United Kingdom and Benelux and the effect of an exchange rate decrease of $19 million, or 1.2%, primarily due to the weakening of the euro against the U.S. dollar. These decreases were partially offset by an increase in acquisition and divestiture revenue of $13 million, or 0.8%, primarily due to our acquisition of seven wholesale businesses from the beginning of the third quarter of 2025 through the one-year anniversary of their respective acquisition dates.

Previous wording

(3)SG&A expenses increased by $2 million, or 0.1%, to $476 million for the three months ended June 30, 2026. The increase in SG&A expense includes a $10 million unfavorable foreign exchange impact from a weakening U.S. dollar, and a $4 million unfavorable impact primarily related to increased freight, vehicle and fuel costs. This was partially offset by a $12 million favorable impact primarily related to decreased personnel costs driven by productivity, restructuring and other cost savings initiatives which more than offset inflationary pressures, and lower incentive compensation compared to the prior year.

Current wording

(3)SG&A expenses increased by $2 million, or 0.6%, to $476 million for the three months ended September 30, 2026. The increase in SG&A expense includes unfavorable impacts of (i) $6 million due to increased professional fees related to several strategic central and regional information technology initiatives, (ii) $6 million primarily related to increased freight, vehicle and fuel costs, and (iii) other individually immaterial factors representing a $1 million unfavorable impact in the aggregate, partially offset by (iv) a $6 million favorable impact primarily related to decreased personnel costs driven by restructuring and other cost savings initiatives which more than offset inflationary pressures and (v) a $5 million favorable foreign exchange impact from a strengthening U.S. dollar.

Previous wording

(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.

Current wording

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

Previous wording

(1)Parts and services revenue increased by $23 million, or 5.0%, to $487 million for the three months ended June 30, 2026. This was primarily due to an organic revenue increase of $21 million, or 4.5%, primarily driven by volume growth in our marine, recreational vehicle ("RV"), and automotive product lines.

Current wording

(1)Parts and services revenue increased by $9 million, or 1.9%, to $465 million for the three months ended September 30, 2026. This was primarily due to an organic revenue increases of $4 million, or 0.9%, primarily driven by volume growth in our recreational vehicle ("RV") and marine product lines, partially offset by volume declines in our automotive product lines, and $5 million, or 1.2%, primarily due to our acquisition of one wholesale business from the beginning of the third quarter of 2025 through the one-year anniversary of its acquisition date.

Previous wording

(1)Parts and services revenue increased by $14 million, or 0.5%, to $2,712 million for the six months ended June 30, 2026. This increase was primarily due to a positive exchange rate effect of $11 million, or 0.4%, primarily due to the stronger Canadian dollar against the U.S. dollar, and to a lesser extent, an organic revenue increase of $2 million, or 0.1%, driven primarily by pricing initiatives to recoup tariff costs and offset inflationary pressures, partially offset by lower volumes in our PBE business from lower repairable claims and increased competition and lower volumes in our salvage operations.

Current wording

(1)Parts and services revenue decreased by $23 million, or 0.6%, to $4,018 million for the nine months ended September 30, 2026. This decrease was primarily due to an organic revenue decrease of $30 million, or 0.7%, driven primarily by lower volumes in both collision and mechanical parts in our salvage operations and lower volumes in our PBE business from increased competition and lower repairable claims, partially offset by pricing initiatives and a positive exchange rate effect of $6 million, or 0.2%, primarily due to the stronger Canadian dollar against the U.S. dollar.

Previous wording

(2)Other revenue increased by $38 million, or 25.2%, to $194 million for the six months ended June 30, 2026. This increase was due to (i) a $17 million increase in revenue from precious metals (platinum, palladium, and rhodium) primarily due to higher prices, (ii) a $14 million increase in revenue from other scrap (e.g., aluminum) and cores due to higher prices, and to a lesser extent, volumes, and (iii) a $7 million increase in revenue from scrap steel primarily due to higher volumes and prices.

Current wording

(2)Other revenue increased by $53 million, or 22.8%, to $289 million for the nine months ended September 30, 2026. This increase was due to (i) a $24 million increase in revenue from other scrap (e.g., aluminum) and cores due to higher prices, and to a lesser extent, volumes, (ii) a $20 million increase in revenue from precious metals (platinum, palladium, and rhodium) primarily due to higher prices, and (iii) a $9 million increase in revenue from scrap steel primarily due to higher volumes and prices.

Previous wording

(3)Gross margin decreased by $12 million, or 0.9%, to $1,234 million for the six months ended June 30, 2026. The decrease in gross margin dollars was driven by cost increases from inflationary pressures, lower vendor rebates from lower volumes, and unfavorable customer mix, partially offset by pricing initiatives and higher other revenue as described above. Gross margin percentage decreased by 1.2% which was driven by the dilutive effect of increasing prices to recoup tariff costs, lower vendor rebates and unfavorable customer mix.

Current wording

(3)Gross margin decreased by $16 million, or 0.9%, to $1,828 million for the nine months ended September 30, 2026. The decrease in gross margin dollars was driven by cost increases from inflationary pressures, lower volumes, and unfavorable customer mix, partially offset by pricing initiatives and higher other revenue as described above. Gross margin percentage decreased by 0.7% which was driven by the dilutive effect of increasing prices to recoup tariff costs, lower vendor rebates and unfavorable customer mix.

Previous wording

(4)SG&A expenses increased by $14 million, or 1.8%, to $830 million for the six months ended June 30, 2026. The increase in SG&A expense is primarily due to (i) an $8 million increase in personnel costs primarily due to increased health and other insurance costs and incentive compensation compared to the prior year, (ii) an $8 million increase due to higher self insurance reserves, and (iii) a $5 million increase in freight, vehicle and fuel costs, partially offset by (iv) other individually immaterial factors representing a $7 million favorable impact in the aggregate.

Current wording

(4)SG&A expenses increased by $7 million, or 0.5%, to $1,224 million for the nine months ended September 30, 2026. The increase in SG&A expense is primarily due to an $11 million increase in freight, vehicle, and fuel costs, partially offset by other individually immaterial factors representing a $4 million favorable impact in the aggregate primarily as a result of cost savings initiatives.

Previous wording

(1)Parts and services revenue decreased by $154 million, or 9.6%, to $1,447 million for the three months ended June 30, 2026. This decrease was due to an organic revenue decrease of $201 million, or 12.6%, primarily driven by lower volumes due to temporary operational challenges resulting from an ERP implementation in Germany, and to a lesser extent, heightened competition in certain markets and difficult economic conditions. This decrease was partially offset by the effect of an exchange rate increase of $34 million, or 2.1%, primarily due to the strengthening of the euro, and to a lesser extent, the Czech koruna and pound sterling against the U.S. dollar, and an increase in acquisition and divestiture revenue of $14 million, or 0.9%, primarily due to our acquisition of six wholesale businesses from the beginning of the second quarter of 2025 through the one-year anniversary of their respective acquisition dates.

Current wording

(1)Parts and services revenue decreased by $220 million, or 4.7%, to $4,511 million for the nine months ended September 30, 2026. This decrease was primarily due to an organic revenue decrease of $420 million, or 8.9%, primarily driven by lower volumes due to operational challenges resulting from an ERP implementation in Germany in the second quarter, and heightened competition in certain markets and difficult economic conditions. The organic revenue decrease was partially offset by the effect of an exchange rate increase of $167 million, or 3.5%, primarily due to the strengthening of the euro, and to a lesser extent, the pound sterling and Czech koruna against the U.S. dollar and an increase in acquisition and divestiture revenue of $34 million, or 0.7%, primarily due to our acquisition of eight wholesale businesses from the beginning of 2025 through the one-year anniversary of their respective acquisition dates.

Previous wording

(2)Gross margin decreased by $45 million, or 7.4%, to $574 million for the three months ended June 30, 2026. The decrease in gross margin dollars was driven by lower organic revenue, partially offset by an exchange rate increase of $12 million. Gross margin percentage increased by 0.9% which was driven by the favorable impacts of pricing initiatives, and to a lesser extent, product mix.

Current wording

(2)Gross margin decreased by $113 million, or 6.1%, to $1,726 million for the nine months ended September 30, 2026. The decrease in gross margin dollars was driven by lower organic revenue, partially offset by an exchange rate increase of $63 million. Gross margin percentage decreased by 0.6% driven by inflationary pressures that were not fully offset by pricing initiatives and lower vendor rebates, partially offset by product mix.

Previous wording

(3)SG&A expenses increased by $43 million, or 4.6%, to $976 million for the six months ended June 30, 2026. The increase in SG&A expense includes a $56 million unfavorable foreign exchange impact from a weakening U.S. dollar, and a $4 million unfavorable impact primarily related to increased freight, vehicle and fuel costs. This was partially offset by a $17 million favorable impact primarily related to decreased personnel costs driven by productivity, restructuring and other cost savings initiatives which more than offset inflationary pressures.

Current wording

(3)SG&A expenses increased by $45 million, or 3.3%, to $1,452 million for the nine months ended September 30, 2026. The increase in SG&A expense includes (i) a $51 million unfavorable foreign exchange impact from a weakening U.S. dollar, (ii) a $9 million unfavorable impact related to increased freight, vehicle and fuel costs, and (iii) a $6 million unfavorable impact due to increased professional fees related to several strategic central and regional information technology initiatives, and (iv) other individually immaterial factors representing a $3 million unfavorable impact in the aggregate, partially offset by (v) a $24 million favorable impact primarily related to decreased personnel costs driven by productivity, restructuring and other cost savings initiatives which more than offset inflationary pressures, and lower incentive compensation compared to the prior year.

Previous wording

(1)Parts and services revenue increased by $38 million, or 4.4%, to $895 million for the six months ended June 30, 2026. This was primarily due to an organic revenue increase of $34 million, or 4.0%, driven by volume growth in our marine and RV product lines.

Current wording

(1)Parts and services revenue increased by $47 million, or 3.5%, to $1,360 million for the nine months ended September 30, 2026. This was primarily due to an organic revenue increase of $38 million, or 2.9%, primarily driven by volume growth in our marine and RV product lines.

Previous wording

(2)Gross margin increased by $7 million, or 5.7%, to $125 million for the three months ended June 30, 2026. This increase was primarily driven by a favorable impact related to tariff refunds and an increase in parts and services revenue as described above, partially offset by an unfavorable impact in sales mix due to higher volumes on lower margin product lines.

Current wording

(2)Gross margin increased by $7 million, or 2.4%, to $334 million for the nine months ended September 30, 2026. This increase was primarily driven by an increase in parts and services revenue as described above and a favorable impact related to tariff refunds, partially offset by an unfavorable impact due to the acquisition of a lower margin business in the second quarter of 2026.

Previous wording

(3)SG&A expenses increased by $20 million, or 12.5%, to $178 million for the six months ended June 30, 2026. This increase was primarily driven by (i) a $13 million increase in credit losses, (ii) a $4 million increase in freight, vehicle and fuel costs, and (iii) other individually immaterial factors representing a $3 million unfavorable impact in the aggregate.

Current wording

(3)SG&A expenses increased by $26 million, or 11.0%, to $267 million for the nine months ended September 30, 2026. This increase was primarily driven by (i) a $14 million increase in credit losses, (ii) a $7 million increase in freight, vehicle and fuel costs, and (iii) other individually immaterial factors representing a $5 million unfavorable impact in the aggregate.

Previous wording

We had$1,629 million available under our revolving credit facilities as of June 30, 2026. Combined with $301 million of cash and cash equivalents at June 30, 2026, we had $1,930 million in available liquidity, a decrease of $274 million from our available liquidity as of December 31, 2025, primarily as a result of increasing our revolving credit facilities borrowings by$289 million.

Current wording

We had$1,339 million available under our revolving credit facilities as of September 30, 2026. Combined with $319 million of cash and cash equivalents at September 30, 2026, we had $1,658 million in available liquidity, a decrease of $546 million from our available liquidity as of December 31, 2025, primarily as a result of increasing our revolving credit facilities borrowings by$579 million mostly due to the prepayment of the $500 million term loan under our Senior Unsecured Credit Agreement with borrowings from our revolving credit facilities.

Previous wording

A summary of the dividend activity for our common stock for thesix months ended June 30, 2026 is as follows:

Current wording

A summary of the dividend activity for our common stock for thenine months ended September 30, 2026 is as follows: