UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________________________________ FORM 10-Q ____________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission File Number: 000-50404 ____________________________ LKQ CORPORATION (Exact name of reg ...

Financial Data and Key Metrics Changes - Revenue for Q2 2021 was $3.4 billion, an increase of 31% compared to $2.6 billion in Q2 2020 [13] - Net income for Q2 2021 was $305 million, up 157% from $119 million in the same period of 2020 [14] - Diluted earnings per share for Q2 2021 was $1.01, a 159% increase from $0.39 in Q2 2020 [14] - Adjusted diluted earnings per share for Q2 was $1.13, a 113% increase from $0.53 in the same period last year [14] Business Line Data and Key Metrics Changes - Parts and services organic revenue increased by 22%, with total parts and services revenue increasing by 27% [13] - North American segment organic revenue for parts and services increased by 19.7% year-over-year [17] - European segment organic revenue for parts and services increased by 20.7% on a reported basis [24] - Specialty segment reported organic revenue growth of 30.1%, achieving record-breaking revenue and EBITDA percentages [32] Market Data and Key Metrics Changes - Fuel consumption in North America was 28% above the prior year and 5% below Q2 2019 [17] - European EBITDA margins increased by approximately 300 basis points from 7.7% in Q2 2019 to 10.7% in Q2 2021 [26] - The company noted a modest market recovery in Italy, although it continues to impact overall segment revenue growth [25] Company Strategy and Development Direction - The company is focused on operational excellence, integrating businesses, and simplifying the operating model [61] - Continued emphasis on profitable revenue growth and sustainable margin expansion [61] - The company is targeting tuck-in acquisitions to enhance product offerings and leverage existing networks [35][90] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in core North America and European segments, expecting parts and services revenue to be higher than 2020 on a full-year basis [55] - The company anticipates a decline in growth rates in the second half of the year compared to Q2 due to less severe pandemic effects in the latter half of 2020 [55] - Management highlighted ongoing supply chain challenges, including labor shortages and inflationary pressures [34][85] Other Important Information - The company achieved an investment-grade rating from Fitch, which is expected to positively impact vendor terms in the future [65] - The company repurchased over $800 million of its stock at an average price of approximately $33 per share [40] - The European segment is expected to continue benefiting from revenue recovery and improved net pricing [50] Q&A Session Summary Question: Implications of investment-grade rating on vendor terms - Management indicated that the investment-grade rating does not immediately change vendor terms but may lead to improved conditions in the future [65][66] Question: Handling strong revenue growth with lower headcount - Management acknowledged challenges in labor availability but emphasized the team's efforts to maintain operations and service customers effectively [74][77] Question: Ranking inflation pressures - Management ranked labor as the top inflation pressure, followed by freight and fuel costs [85] Question: M&A pipeline and focus - Management stated that the focus remains on smaller tuck-in acquisitions that enhance capabilities and align with evolving product needs [90][91] Question: Supply chain disruptions and market share - Management noted that while supply chain issues are prevalent, the company is better positioned than smaller competitors due to its scale and contractual agreements [99][102]

| --- | --- | --- | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | Second Quarter 2021 Earnings Call July 29, 2021 | | | | Nick Zarcone – President & Chief Executive Officer Varun Laroyia – Executive Vice President & Chief Financial Officer Joe Boutross – Vice President, Investor Relations | | | Forward Looking State ...

PART I FINANCIAL INFORMATION [Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) Presents LKQ Corporation's unaudited condensed consolidated financial statements for Q1 2021, showing a 5.7% revenue increase and higher net income [Notes to Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Details accounting policies, COVID-19 impact, segment performance, restructuring programs, debt, and segment-level financial data - The company has considered the impacts of the COVID-19 pandemic in the preparation of its financial statements, noting effects such as reduced demand and organizational changes, with the continuing impact remaining uncertain[23](index=23&type=chunk)[24](index=24&type=chunk) Revenue by Reportable Segment (Q1 2021 vs Q1 2020) | Segment | Three Months Ended March 31, 2021 (thousand) | Three Months Ended March 31, 2020 (thousand) | | :--- | :--- | :--- | | **North America** | $1,018,437 | $1,107,342 | | **Europe** | $1,455,370 | $1,357,969 | | **Specialty** | $457,959 | $347,406 | | **Total Parts and Services** | $2,931,766 | $2,812,717 | - The company is engaged in multiple restructuring programs, including the 2020 Global Restructuring Program (estimated cost **$65 million - $75 million**) and the '1 LKQ Europe' program (estimated restructuring charges of **$45 million - $55 million** through 2024)[60](index=60&type=chunk)[64](index=64&type=chunk) - In January 2020, the company redeemed its **$600 million** 4.75% senior notes due 2023, resulting in a **$13 million** loss on debt extinguishment, and subsequently redeemed its **€750 million** senior notes due 2026 on April 1, 2021, which will result in a **$24 million** loss in Q2 2021[88](index=88&type=chunk)[98](index=98&type=chunk) Segment EBITDA (Q1 2021 vs Q1 2020) | Segment | Three Months Ended March 31, 2021 (thousand) | Three Months Ended March 31, 2020 (thousand) | | :--- | :--- | :--- | | **North America** | $249,167 | $211,438 | | **Europe** | $140,958 | $78,262 | | **Specialty** | $61,482 | $32,232 | | **Total Segment EBITDA** | $451,607 | $321,932 | Condensed Consolidated Statements of Income (Q1 2021 vs Q1 2020) | Metric | Three Months Ended March 31, 2021 (thousand) | Three Months Ended March 31, 2020 (thousand) | | :--- | :--- | :--- | | **Revenue** | $3,170,786 | $3,000,935 | | **Gross Margin** | $1,293,714 | $1,213,876 | | **Operating Income** | $371,448 | $241,849 | | **Net Income** | $266,332 | $145,979 | | **Diluted EPS** | $0.88 | $0.47 | Condensed Consolidated Balance Sheets | Metric | March 31, 2021 (thousand) | December 31, 2020 (thousand) | | :--- | :--- | :--- | | **Total Current Assets** | $4,453,946 | $4,034,032 | | **Total Assets** | $12,665,457 | $12,360,533 | | **Total Current Liabilities** | $2,436,626 | $1,988,491 | | **Total Liabilities** | $6,782,753 | $6,665,156 | | **Total Stockholders' Equity** | $5,858,627 | $5,671,300 | Condensed Consolidated Statements of Cash Flows (Q1 2021 vs Q1 2020) | Metric | Three Months Ended March 31, 2021 (thousand) | Three Months Ended March 31, 2020 (thousand) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $522,512 | $194,563 | | **Net cash used in investing activities** | ($33,443) | ($44,872) | | **Net cash used in financing activities** | ($208,495) | ($334,739) | | **Net increase (decrease) in cash** | $278,040 | ($196,794) | [Management's Discussion and Analysis (MD&A)](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Discusses Q1 2021 financial results, highlighting revenue growth, improved margins from cost reductions, and strengthened liquidity - The '1 LKQ Europe' program, designed to centralize and standardize European operations, is expected to incur total costs of **$50 million - $70 million** in 2021 and an additional **$80 million - $100 million** through its completion in 2024[153](index=153&type=chunk)[154](index=154&type=chunk) - Despite the ongoing pandemic, organic parts and services revenue increased by **2.2%** on a per-day basis in Q1 2021, with cost reduction actions from 2020 continuing to yield benefits, as SG&A expenses were down compared to the Q1 2020 run rate[155](index=155&type=chunk)[156](index=156&type=chunk) Consolidated Revenue Change Analysis (Q1 2021 vs Q1 2020) | Revenue Type | Organic Change | Acquisition & Divestiture | Foreign Exchange | Total Change | | :--- | :--- | :--- | :--- | :--- | | **Parts & Services** | 0.6% | (0.6)% | 4.2% | 4.2% | | **Other Revenue** | 26.6% | 0.0% | 0.4% | 27.0% | | **Total Revenue** | 2.3% | (0.6)% | 4.0% | 5.7% | - The company's liquidity position significantly improved, with total liquidity (cash plus credit availability) increasing to **$3.2 billion** at March 31, 2021, from **$1.9 billion** at March 31, 2020, and free cash flow for Q1 2021 was **$480.7 million**, a substantial increase from **$150.0 million** in Q1 2020[200](index=200&type=chunk)[228](index=228&type=chunk) [Market Risk Disclosures](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Outlines primary market risks including foreign exchange, interest rates, and commodity prices, detailing their impact on operations - **Foreign Exchange Risk:** Operations outside the U.S. represented **49.4%** of revenue in Q1 2021, where a hypothetical **10%** change in the U.S. dollar's strength would alter consolidated revenue by **4.9%**[230](index=230&type=chunk) - **Interest Rate Risk:** As of March 31, 2021, the company had approximately **$703 million** of unhedged variable-rate debt, where a **100 basis point** change in interest rates would affect annual interest expense by about **$7 million**[238](index=238&type=chunk) - **Commodity Price Risk:** The company is exposed to fluctuations in scrap metal and precious metal prices, with average scrap metal prices increasing **35%** over Q4 2020, while prices for rhodium, platinum, and palladium rose **59%**, **20%**, and **5%**, respectively, in Q1 2021[239](index=239&type=chunk) [Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) CEO and CFO concluded disclosure controls were effective with no material changes to internal controls in Q1 2021 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2021[241](index=241&type=chunk) - No changes in internal control over financial reporting occurred during Q1 2021 that have materially affected, or are reasonably likely to materially affect, internal controls[242](index=242&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) Current legal proceedings are not expected to have a material adverse effect, including a recent EPA enforcement matter - In April 2021, the company was advised that the U.S. EPA planned to issue enforcement letters regarding concerns with NPDES stormwater permits at seven facilities[245](index=245&type=chunk) - Management does not expect any proposed penalty from the EPA matter to have a material effect on its financial position, results of operations, or cash flows[245](index=245&type=chunk) [Issuer Purchases of Equity Securities](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the company's stock repurchase activity, including Q1 2021 repurchases and remaining authorization Stock Repurchases (Q1 2021) | Period | Total Shares Purchased (thousands) | Average Price Paid per Share | Total Cost (approx. millions) | | :--- | :--- | :--- | :--- | | **Jan 2021** | 410 | $35.20 | $14.4 | | **Feb 2021** | 503 | $38.43 | $19.3 | | **Mar 2021** | 573 | $40.52 | $23.2 | | **Total Q1** | **1,486** | **-** | **$57.0** | - As of March 31, 2021, approximately **$474 million** remained available for repurchase under the company's authorized stock repurchase program, which extends through October 25, 2022[248](index=248&type=chunk)[249](index=249&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q1 2021 was $3.17 billion, an increase of 5.7% compared to $3 billion in Q1 2020 [13] - Net income for Q1 was $266 million, an increase of 83% year-over-year [16] - Diluted earnings per share for Q1 was $0.88, a 83% increase [17] - Adjusted diluted earnings per share was $0.94, a 65% increase year-over-year [17] - Consolidated segment EBITDA margins were 14.2%, a 350 basis point increase from Q1 2020 [18] Business Line Data and Key Metrics Changes - North American organic revenue for parts and services declined 8.4% on a reported basis [23] - European organic revenue for parts and services increased by 30 basis points [29] - Specialty segment reported organic revenue growth of 30.9%, the highest quarterly growth since acquisition in 2014 [37] Market Data and Key Metrics Changes - Vehicle miles traveled (VMT) in the U.S. was down approximately 5% recently, with expectations to return to 2019 levels in 2022 [93] - In Europe, VMT is expected to recover to 2019 levels in Q3 or Q4 2021, depending on vaccine rollout [93] Company Strategy and Development Direction - The company aims to integrate businesses and simplify its operating model while focusing on profitable revenue growth and sustainable margin expansion [10] - Continued investment in ESG initiatives, including the release of a Corporate Sustainability Report [12] - The company plans to maintain a balanced capital allocation strategy while driving high levels of cash flow [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in gaining market share from smaller competitors facing capital constraints [24] - The company anticipates continued revenue recovery in the second half of 2021, although it does not expect to return to 2019 revenue levels until 2022 [69] - Inflationary pressures are expected to persist, but the company has strategies in place to mitigate these risks [73] Other Important Information - The company processed 190,000 vehicles in Q1, recycling significant amounts of fuel, waste oil, tires, and batteries [28] - The company acquired a diagnostics business in Q1, which will be integrated into its Elitek Vehicle Services brand [44] Q&A Session Summary Question: Impact of inflationary environment and pricing actions - Management indicated they have been disciplined on pricing and have not seen significant pushback from customers despite inflationary pressures [85] Question: Salvage side of the business and procurement challenges - Management noted that salvage markets are tight, with higher prices for cars at auction, but they are maintaining healthy margins through effective remanufacturing operations [87] Question: Trends in driving in the U.S. and Europe - Management observed a gradual recovery in VMT, with expectations for the U.S. to return to 2019 levels in 2022 and Europe potentially in late 2021 [93] Question: Competitive advantage in inventory availability - Management emphasized their scale and strong vendor relationships, which provide a competitive edge in inventory procurement [109] Question: Demand for EV parts - Management reported very little demand for electric vehicle parts currently, as the market for such parts is expected to lag behind the introduction of EVs [117] Question: Usage of free cash flow and capital deployment - Management indicated that free cash flow will be used for inventory replenishment and potentially for share buybacks, given the improved leverage position [130]

| --- | --- | --- | --- | |---------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | – President & Chief Executive Officer | First Quarter 2021 Earnings Call April 29, 2021 Nick Zarcone Varun Laroyia – Executive Vice President & Chief Financial Officer Joe Boutross – Vice Presi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________________________________ FORM 10-K ________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number: 000-50404 ____________________________ ...

| --- | --- | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------| | | | | | | | | | | | | | | | | | | | Fourth Quarter 2020 Earnings Call | | | February 18, 2021 Nick Zarcone – President & Chief Executive Officer Varun Laroyia – Executive Vice President & Chief Financial Officer Joe Boutross – Vice President, Investor Relations | | Forward Looking Statements an ...

LKQ Corporation (NASDAQ:LKQ) Q4 2020 Earnings Conference Call February 18, 2021 8:00 AM ET Company Participants Joe Boutross - VP, IR Nick Zarcone - President & CEO Varun Laroyia - EVP & CFO Conference Call Participants Craig Kennison - Baird Scott Stember - CL King Bret Jordan - Jefferies Stephanie Benjamin - Truist Gary Prestopino - Barrington Research Daniel Imbro - Stephens Brian Butler - Stifel Operator Good morning. My name is Chris and I'll be your conference operator today. At this time, I would lik ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________________________________ FORM 10-Q ____________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2020 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☐ For the Transition Period from to Commission File Number: 000-50404 ____________________________ LKQ CORPORATION (Exact name o ...