LKQ reports $27M net loss

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For the Quarterly Period Ended June September 30, 2026

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At July 23, October 22, 2026, the registrant had outstanding an aggregate of 253,002,086 252,398,077 shares of Common Stock.

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Financial statements 477 changes

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Three Months Ended June 30, Six Months Ended June 30,

Revenue $ 3,408 $ 3,513 $ 6,877 $ 6,840

Cost of goods sold 2,087 2,157 4,225 4,171

Gross margin 1,321 1,356 2,652 2,669

Selling, general and administrative expenses 990 958 1,984 1,907

Depreciation and amortization 92 91 179 177

Operating income 225 299 442 566

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

Revenue $ 3,319 $ 3,499 $ 10,196 $ 10,339

Cost of goods sold 2,083 2,158 6,308 6,329

Gross margin 1,236 1,341 3,888 4,010

Selling, general and administrative expenses 959 958 2,943 2,865

Restructuring and transaction related expenses 24 14 8 47 19 71 33

Impairment of goodwill 88 88

Impairment of net assets held for sale 23 23

Depreciation and amortization 89 95 268 272

Operating income 53 274 495 840

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Interest expense 55 58 108 115

Total other expense, net 45 47 95 94

Provision for income taxes 48 67 92 128

Income from continuing operations 134 186 211 344

Net income 136 193 215 362

Net income attributable to LKQ stockholders $ 136 $ 192 $ 215 $ 361

Basic earnings per share:

Income from continuing operations $ 0.52 $ 0.72 $ 0.82 $ 1.33

Net income 0.53 0.75 0.84 1.40

Net income attributable to LKQ stockholders $ 0.53 $ 0.75 $ 0.84 $ 1.40

Diluted earnings per share:

Income from continuing operations $ 0.52 $ 0.72 $ 0.82 $ 1.33

Net income 0.53 0.75 0.84 1.40

Net income attributable to LKQ stockholders $ 0.53 $ 0.75 $ 0.84 $ 1.40

Interest expense 56 55 164 170

Interest income and other income, net ( 10 8 ) ( 11 4 ) ( 13 21 ) ( 21 25 )

Total other expense, net 48 51 143 145

Income from continuing operations before provision for income taxes 180 252 347 472 5 223 352 695

Provision for income taxes 32 45 124 173

Equity in (earnings) losses of unconsolidated subsidiaries ( 2 ) 42 (Loss) income from continuing operations ( 1 25 ) 44 178 186 522

Net (loss) income from discontinued operations ( 2 7 4 18 ) 2 2 20

Net (loss) income ( 27 ) 180 188 542

Less: net (loss) income attributable to continuing noncontrolling interest ( 1 ) ( 1 ) 1

Net (loss) income attributable to LKQ stockholders $ ( 26 ) $ 180 $ 189 $ 541 (Loss) income from continuing operations $ ( 0.09 ) $ 0.69 $ 0.73 $ 2.02

Net (loss) income from discontinued operations ( 0.01 0.03 0.02 0.07 ) 0.01 0.01 0.08

Net (loss) income ( 0.10 ) 0.70 0.74 2.10

Less: net (loss) income attributable to continuing noncontrolling interest

Net (loss) income attributable to LKQ stockholders $ ( 0.10 ) $ 0.70 $ 0.74 $ 2.10 (Loss) income from continuing operations $ ( 0.09 ) $ 0.69 $ 0.73 $ 2.02

Net (loss) income from discontinued operations ( 0.01 0.03 0.02 0.07 ) 0.01 0.01 0.08

Net (loss) income ( 0.10 ) 0.70 0.74 2.10

Less: net (loss) income attributable to continuing noncontrolling interest

Net (loss) income attributable to LKQ stockholders $ ( 0.10 ) $ 0.70 $ 0.74 $ 2.10

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Three Months Ended June 30, Six Months Ended June 30,

Net income $ 136 $ 193 $ 215 $ 362

Net income attributable to LKQ stockholders 136 192 215 361

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

Net (loss) income $ ( 27 ) $ 180 $ 188 $ 542

Less: net (loss) income attributable to continuing noncontrolling interest ( 1 ) ( 1 ) 1

Net (loss) income attributable to LKQ stockholders ( 26 ) 180 189 541

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Foreign currency translation, net of tax ( 36 28 ) 268 ( 107 38 ) 368 ( 135 ) 330

Net change in unrealized gains/losses on cash flow hedges, net of tax 1 1 1 1

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Other comprehensive (loss) income ( 33 ) 262 ( 109 ) 366

Comprehensive income 103 455 106 728

Comprehensive income attributable to LKQ stockholders $ 103 $ 454 $ 106 $ 727

Net change in unrealized gains/losses on available for sale debt securities, net of tax ( 2 ) ( 2 )

Other comprehensive income (loss) from unconsolidated subsidiaries 2 ( 7 ) ( 3 ) 5 ( 4 1 ) 1

Other comprehensive (loss) income ( 28 ) ( 33 ) ( 137 ) 333

Comprehensive (loss) income ( 55 ) 147 51 875

Less: comprehensive (loss) income attributable to continuing noncontrolling interest ( 1 ) ( 1 ) 1

Comprehensive (loss) income attributable to LKQ stockholders $ ( 54 ) $ 147 $ 52 $ 874

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Total assets $ 15,029 $ 15,137

June September 30, 2026 December 31, 2025

Cash and cash equivalents $ 301 319 $ 319

Receivables, net of allowance for credit losses 1,399 1,354 1,204

Inventories 3,284 3,262 3,426

Prepaid expenses and other current assets 367 349 299

Total current assets 5,351 5,284 5,248

Property, plant and equipment, net 1,417 1,396 1,452

Operating lease assets, net 1,310 1,283 1,332

Goodwill 5,369 5,274 5,414

Other intangibles, net 1,040 1,007 1,072

Equity method investments 124 126 170

Other noncurrent assets 418 412 449

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and 397 more changes in the filing

Forward-looking statements 247 changes

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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.

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

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In addition to the above, in December 2025, the Company announced that it had commenced a process to explore a potential sale of its Specialty segment. In January 2026, the Company announced that its Board of Directors (the "Board") had initiated a comprehensive review of strategic alternatives to enhance shareholder value. Our Specialty segment is currently being evaluated as part of the broader strategic review process. As part of the review, the Board is working with its advisors to evaluate our strategic alternatives, including a potential sale of the Company.

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.

On October 29, 2026, the Company announced that its Board of Directors has decided to suspend the previously announced strategic review, including the Specialty segment sales process, to provide the new leadership team an opportunity to conduct a comprehensive assessment of the business and evaluate the full range of value creation pathways available to the Company.

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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.

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 nine months ended June September 30, 2026.

We continue to monitor our reporting units for events or changes in circumstances that may indicate it is more likely than not that the fair value of a reporting unit is below its carrying amount and, therefore, require us to perform an interim goodwill impairment test. During the three months ended September 30, 2026, we identified a triggering event under ASC 350 for our Specialty and Europe reporting units resulting from declining financial performance. Both reporting units experienced underperformance relative to our current year forecasts and reductions in expected future segment profitability. For the Specialty reporting unit, the underperformance was due to, among other factors, unfavorable customer and product mix shifts, higher fuel and freight costs, and unexpected declines in certain markets. For the Europe reporting unit, the underperformance was due to lower than expected demand and slower than previously anticipated forecasted revenue recovery from the operational challenges resulting from the ERP implementation in Germany.

As a result, we performed interim quantitative goodwill impairment tests for our Specialty and Europe reporting units as of September 30, 2026. Based on the results of the interim quantitative goodwill impairment tests, we determined that the carrying amount of the Specialty reporting unit was in excess of its fair value and recorded a goodwill impairment charge of $88 million, which was recorded in Impairment of goodwill on the Unaudited Condensed Consolidated State ments of Income. The estimated fair value of the Specialty reporting unit is sensitive to changes in the significant assumptions used in the valuation. Holding all other assumptions constant, a 5% decrease in projected cash flows would result in approximately $45 million of additional impairment, a 25 basis point increase in the discount rate would result in approximately $25 million of additional impairment, and a 0.25 decrease in the market multiples assumption would result in approximately $5 million of additional impairment.

Additionally, 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 result in additional future impairment to the goodwill in our Specialty reporting unit. For our Europe reporting unit, the estimated fair value exceeded the respective carrying value by 20% and, accordingly, no goodwill impairment was recorded. Holding all other assumptions constant, it would take a decrease in projected cash flows in excess of 22%, or an increase in the discount rate of more than 200 basis points to result in an impairment to goodwill.

Management estimated the fair value of each reporting unit using both an income approach and a market approach. Under the income approach, management applied a discounted cash flow method reflecting discounted projected future (debt-free) cash flows, which were based on internal forecasts and other assumptions. Discount rates applied to the projected cash flows were based on the weighted average cost of capital for each reporting unit, which takes market participant assumptions into consideration and may include reporting-unit-specific risk premiums. Under the market approach, management utilized the guideline public company method, which analyzes market multiples (including revenue and/or earnings before interest, taxes, depreciation and amortization) for a group of comparable public companies, and used this market approach to validate the results of the income approach. The interim quantitative goodwill impairment tests utilized significant unobservable inputs, which are considered Level 3 inputs.

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.

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 tests performed for the Specialty and Europe reporting units as of September 30, 2026.

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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 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.

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Three Months Ended June 30, Six Months Ended June 30,

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

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Cost of goods sold 61.2 % 61.4 % 61.4 % 61.0 %

Gross margin 38.8 % 38.6 % 38.6 % 39.0 %

Operating income 6.6 % 8.5 % 6.4 % 8.3 %

Equity in (earnings) losses of unconsolidated subsidiaries % % 0.6 % %

Income from continuing operations 3.9 % 5.3 % 3.1 % 5.0 %

Net income 4.0 % 5.5 % 3.1 % 5.3 %

Net income attributable to LKQ stockholders 4.0 % 5.5 % 3.1 % 5.3 %

Cost of goods sold 62.8 % 61.7 % 61.9 % 61.2 %

Gross margin 37.2 % 38.3 % 38.1 % 38.8 %

Selling, general and administrative expenses 29.0 28.9 % 27.3 27.4 % 28.9 % 27.9 27.7 %

Restructuring and transaction related expenses 0.4 0.7 % 0.2 0.4 % 0.7 % 0.3 %

Impairment of goodwill 2.6 % % 0.9 % %

Impairment of net assets held for sale 0.7 % % 0.2 % %

Depreciation and amortization 2.7 % 2.6 2.7 % 2.6 % 2.6 %

Operating income 1.6 % 7.8 % 4.9 % 8.1 %

Total other expense, net 1.3 1.5 % 1.4 1.5 % 1.4 % 1.4 %

Income from continuing operations before provision for income taxes 5.3 0.1 % 7.1 6.4 % 5.1 3.5 % 6.9 6.7 %

Provision for income taxes 1.4 % 1.9 0.9 % 1.3 % 1.9 1.2 % 1.7 %

Equity in (earnings) losses of unconsolidated subsidiaries (0.1) % % 0.4 % % (Loss) income from continuing operations (0.7) % 5.1 % 1.8 % 5.0 %

Net (loss) income from discontinued operations (0.1) % 0.2 % 0.1 % 0.3 0.2 %

Net (loss) income (0.8) % 5.1 % 1.8 % 5.2 %

Less: net (loss) income attributable to continuing noncontrolling interest % % % %

Net (loss) income attributable to LKQ stockholders (0.8) % 5.1 % 1.9 % 5.2 %

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Three Months Ended June September 30, 2026 Compared to Three Months Ended June September 30, 2025

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Parts & services revenue $ 3,305 $ 3,427 $ (122)

Other revenue 103 86 17

Total revenue $ 3,408 $ 3,513 $ (105)

Three Months Ended June September 30,

Parts & services revenue $ 3,222 $ 3,414 $ (192)

Other revenue 97 85 12

Total revenue $ 3,319 $ 3,499 $ (180)

The decrease in parts and services revenue of $122 $192 million, or 3.6%, 5.6%, represented a decrease decreases in segment revenue of $154 $164 million, or 9.6%, 10.2%, in Europe and $37 million, or 2.6%, in North America, partially offset by increases an increase of $23 million, or 5.0%, in Specialty and $9 million, or 0.5%, 1.9%, in North America. Specialty. This overall decrease was driven by an organic parts and services revenue decrease of $174 $186 million, or 5.1%, partially offset by 5.4%, and a $34 $24 million, or 1.0%, increase 0.7%, decrease due to fluctuations in foreign exchange rates, and partially offset by a $17 $19 million, or 0.5%, 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 June September 30, 2026 compared to the three months ended June September 30, 2025.

Cost of goods sold decreased by $70 $75 million, or 3.3%, 3.5%, to $2,087 $2,083 million for the three months ended June September 30, 2026. Cost of goods sold includes a $22 an $18 million unfavorable favorable impact from a weakening strengthening U.S. dollar. Cost of goods sold reflects a decrease decreases of $107 $70 million from Europe partially offset by increases of $21 and $17 million from North America, and $16 partially offset by an increase of $12 million from Specialty. Cost of goods sold as a percentage of revenue decreased increased to 61.2% 62.8% for the three months ended June September 30, 2026 from 61.4% 61.7% for the three months ended June September 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% 1.0% from North America. 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 June September 30, 2026 compared to the three months ended June September 30, 2025.

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Our Selling, general and administrative ("SG&A") expenses increased by $32 $1 million, or 3.3%, 0.1%, to $990 $959 million for the three months ended June September 30, 2026. SG&A expenses includes a $10 $6 million unfavorable favorable impact from a weakening strengthening U.S. dollar. The year over year increase in SG&A expense expenses primarily reflects increases of $18 $2 million from North America, $12 Europe and $6 million from Specialty, and $2 partially offset by a decrease of $7 million from Europe. North America. SG&A expenses as a percentage of revenue increased to 29.0% 28.9% for the three months ended June September 30, 2026 from 27.3% 27.4% for the three months ended June September 30, 2025. SG&A expenses as a percentage of revenue primarily reflects increases of 1.3% 1.6% from Europe 0.4% from North America, 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 June September 30, 2026 compared to the three months ended June September 30, 2025.

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Restructuring and transaction related expenses increased by $6 $10 million, primarily due to a $3 $14 million increase in restructuring expenses related to our Strategic Restructuring and Transformation Initiatives, and partially offset by a $3 $2 million increase 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.

Impairment of Goodwill

Impairment of goodwill increased by $88 million due to the goodwill impairment charge related to our Specialty reporting unit. See Note 5, "Intangible Assets" for further information on the impairment charge.

Impairment of Net Assets Held for Sale

Impairment of net assets held for sale increased by $23 million due to the impairment charge on net assets held for sale related to the expected divestiture of our operations in Romania. See Note 2, "Business Combinations and Divestitures" for further information on the impairment charge.

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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.

Our effective income tax rate for the three months ended September 30, 2026 was 691.7%, compared to 20.0% for the three months ended September 30, 2025. The increase in the effective tax rate for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 is primarily attributable to the nondeductible portion of the goodwill impairment of the Specialty segment, totaling $84 million, recognized in the third quarter of 2026. Because the impairment reduced pretax income without a corresponding tax benefit, the lower pretax income base significantly increased the effective income tax rate.

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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 September 30, 2025, the Canadian dollar, euro, Czech koruna, euro and pound sterling rates used to translate the three months ended June September 30, 2026 statements of income increased decreased by 5.1%, 2.5%, 1.6%, 1.5%, 0.4%, and 0.5%, 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.

Six Nine Months Ended June September 30, 2026 Compared to Six Nine Months Ended June September 30, 2025

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Six Months Ended June 30,

Parts & services revenue $ 6,667 $ 6,671 $ (4)

Other revenue 210 169 41

Total revenue $ 6,877 $ 6,840 $ 37

Nine Months Ended September 30,

Parts & services revenue $ 9,889 $ 10,085 $ (196)

Other revenue 307 254 53

Total revenue $ 10,196 $ 10,339 $ (143)

The decrease in parts and services revenue of $4 $196 million, or 0.1%, 1.9%, represented a decrease decreases in segment revenue of $56 $220 million, or 1.8%, 4.7%, in Europe and $23 million, or 0.6%, in North America, partially offset by increases an increase of $38 $47 million, or 4.4%, 3.5%, 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 $412 million, or 3.4%, 4.1%, partially offset by a $198 $174 million, or 3.0%, 1.7%, increase due to fluctuations in foreign exchange rates and a $23 $42 million, or 0.3%, 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 six nine months ended June September 30, 2026 compared to the six nine months ended June September 30, 2025.

Cost of goods sold increased decreased by $54 $21 million, or 1.3%, 0.3%, to $4,225 $6,308 million for the six nine months ended June September 30, 2026. Cost of goods sold includes a $129 $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 $64 $47 million from North America and $27 $39 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% 61.9% for the six nine months ended June September 30, 2026 from 61.0% 61.2% for the six nine months ended June September 30, 2025. Cost of goods sold as a percentage of revenue primarily reflects an increase increases of 0.5% 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 six nine months ended June September 30, 2026 compared to the six nine months ended June September 30, 2025.

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Our SG&A expenses increased by $77 $78 million, or 4.0%, 2.7%, to $1,984 $2,943 million for the six nine months ended June September 30, 2026. SG&A expenses includes a $59 $53 million unfavorable impact from a weakening U.S. dollar. The year over year increase in SG&A expense expenses primarily reflects increases of $43 $45 million from Europe, $20 $26 million from Specialty and $14 $7 million from North America. SG&A expenses as a percentage of revenue increased to 28.9% for the six nine months ended June September 30, 2026 from 27.9% 27.7% for the six nine months ended June September 30, 2025. SG&A expenses as a percentage of revenue primarily reflects increases of 0.9% 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 six nine months ended June September 30, 2026 compared to the six nine months ended June September 30, 2025.

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Restructuring and transaction related expenses increased by $28 $38 million, primarily due to a $23 $37 million increase in restructuring expenses related to our Strategic Restructuring and Transformation Initiatives and a $5 $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.

Impairment of Goodwill

Impairment of goodwill increased by $88 million due to the goodwill impairment charge related to our Specialty reporting unit. See Note 5, "Intangible Assets" for further information on the impairment charge.

Impairment of Net Assets Held for Sale

Impairment of net assets held for sale increased by $23 million due to the impairment charge on net assets held for sale related to the expected divestiture of our operations in Romania. See Note 2, "Business Combinations and Divestitures" for further information on the impairment charge.

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Our effective income tax rate for the six months ended June 30, 2026 was 26.6%, compared to 27.1% for the six months ended June 30, 2025. The decrease in the effective tax rate for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 is primarily attributable to a favorable impact from changes in the Company's geographic distribution of income.

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%.

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During the six nine months ended June 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.

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We translate our statements of income at the average exchange rates in effect for the period. Relative to the rates used during the six nine months ended June September 30, 2025, the Czech koruna, euro, pound sterling, and Canadian dollar rates used to translate the six nine months ended June September 30, 2026 statements of income increased by 9.6%, 6.7%, 3.6% 6.0%, 3.8%, 2.3% and 2.2%, 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.

Net (Loss) Income from Discontinued Operations

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Controls and procedures 3 changes

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As of June September 30, 2026, the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of management, including our Chief Executive Officer and our Chief Financial Officer, of our "disclosure controls and procedures" (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective in providing reasonable assurance that information we are required to disclose in this Quarterly Report on Form 10-Q has been recorded, processed, summarized and reported as of the end of the period covered by this Quarterly Report on Form 10-Q. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file under the Securities Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

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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. As a result of this implementation, certain internal controls over financial reporting have been automated, modified, or implemented to address the control environment associated with this ERP. While we believe this updated system will strengthen our internal controls, there are inherent risks in implementing any new system, and we will continue to evaluate these control changes as part of our assessment of internal control over financial reporting. Except for the ERP implementation and associated processes, there have not been any other changes in the Company s internal control over financial reporting during the three months ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There was no change in the Company s internal control over financial reporting that occurred during the Company s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company s internal control over financial reporting.

Risk factors 4 changes

Our operations and financial results are subject to various risks and uncertainties that could adversely affect our business, financial condition and results of operations, and the trading price of our common stock. Please refer to our 2025 Form 10-K for information concerning risks and uncertainties that could negatively impact us. The following item is an update to the risks and uncertainties previously disclosed in such report.

If we determine that our goodwill or other intangible assets have become impaired, we may incur significant charges to our pretax income.

As of September 30, 2026, we had $ 5,274 million of goodwill and $ 1,007 million of other intangible assets, net. Goodwill represents the excess of the purchase price over the fair market value of the net assets acquired in a business combination. Our other intangible assets include both definite- and indefinite-lived intangible assets in connection with trade names, software and other technology related assets, customer relationships, and contractual arrangements. In the future, our goodwill and intangible assets may increase as a result of acquisitions. We test goodwill and indefinite-lived intangible assets for impairment annually in the fourth quarter or more frequently when events or changes in circumstances indicate that any portion of an asset s carrying amount may not be recoverable.

The impairment tests require us to make an estimate of the fair value of our reporting units and other intangible assets. We have previously recorded non-cash impairment charges, including during the year ended December 31, 2025 and the quarter ended September 30, 2026, and could do so again in the future if assumptions, estimates or circumstances change, some of which are beyond our control. Factors which could result in an impairment include, among other things, deterioration in the performance of acquired businesses; deterioration of expected future cash flows or performance; increases in our cost of capital; a sustained decline in our stock price and market capitalization; changes in our discount rate, risk-free rate or other general interest rate; adverse market conditions; and adverse changes in applicable laws or regulations, including modifications that restrict the activities of the acquired business. We cannot accurately predict the amount or timing of any future impairment. Should the value of goodwill or other intangible assets become impaired, our financial condition and results of operations may be adversely affected.

Unregistered sales of stock 8 changes

Our Board of Directors has authorized a stock repurchase program under which we are able to purchase our common stock from time to time. On October 25, 2026, our Board of Directors authorized an extension of the duration of our existing stock repurchase program through October 25, 2028. Repurchases under the program may be made in the open market or in privately negotiated transactions, with the amount and timing of repurchases depending on market conditions and corporate needs. The repurchase program does not obligate us to acquire any specific number of shares and may be suspended or discontinued at any time. Our current program authorization extends through October 25, 2026.

The following table summarizes our stock repurchases for the three months ended June September 30, 2026 (in millions, except per share data):

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April 1, 2026 - April 30, 2026 0.6 $ 30.43 0.6 $ 1,539

May 1, 2026 - May 31, 2026 0.6 $ 27.10 0.6 $ 1,521

June 1, 2026 - June 30, 2026 0.7 $ 25.89 0.7 $ 1,503

July 1, 2026 - July 31, 2026 0.7 $ 25.36 0.7 $ 1,485

August 1, 2026 - August 31, 2026 0.5 $ 24.68 0.5 $ 1,474

September 1, 2026 - September 30, 2026 $ $ 1,474

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Other information 1 change

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During the fiscal quarter ended June September 30, 2026, none of the Company s directors or executive officers adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement."

Exhibits 6 changes

Restated Certificate of Incorporation of LKQ Corporation (incorporated herein by reference to Exhibit 3.1 to the Company's report on Form 10-Q filed with the SEC on October 31, 2014).

Certificate of Amendment to Restated Certificate of Incorporation of LKQ Corporation (incorporated herein by reference to Exhibit 3.1 to the Company's report on Form 8-K filed with the SEC on May 8, 2026).

Amended and Restated Bylaws of LKQ Corporation, as amended as of May 8, 2026 (incorporated herein by reference to Exhibit 3.2 to the Company s report on Form 8-K filed with the SEC on May 8, 2026).

Offer Letter to Salvatore A. Abbate dated October 21, 2026.

Subsidiary Guarantors of Guaranteed Securities.

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on July 30, October 29, 2026.

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