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Segment and Geographic Information
 6 Months Ended
Jun. 30, 2021
Segment Reporting [Abstract]  
Segment and Geographic Information Segment and Geographic Information
We have four operating segments: Wholesale – North America, Europe, Specialty and Self Service. Our Wholesale – North America and Self Service operating segments are aggregated into one reportable segment, North America, because they possess similar economic characteristics and have common products and services, customers, and methods of distribution. Our reportable segments are organized based on a combination of geographic areas served and type of product lines offered. The reportable segments are managed separately as each business serves different customers (i.e. geographic in the case of North America and Europe and product type in the case of Specialty) and is affected by different economic conditions. Therefore, we present three reportable segments: North America, Europe and Specialty.
The following tables present our financial performance by reportable segment for the periods indicated (in thousands):
North AmericaEuropeSpecialtyEliminationsConsolidated
Three Months Ended June 30, 2021
Revenue:
Third Party$1,327,050 $1,576,661 $531,403 $— $3,435,114 
Intersegment644 — 876 (1,520)— 
Total segment revenue$1,327,694 $1,576,661 $532,279 $(1,520)$3,435,114 
Segment EBITDA$276,186 $168,106 $79,399 $— $523,691 
Depreciation and amortization (1)
23,721 39,984 7,038 — 70,743 
Three Months Ended June 30, 2020
Revenue:
Third Party$1,011,136 $1,211,185 $404,002 $— $2,626,323 
Intersegment259 — 872 (1,131)— 
Total segment revenue$1,011,395 $1,211,185 $404,874 $(1,131)$2,626,323 
Segment EBITDA$149,554 $89,387 $52,233 $— $291,174 
Depreciation and amortization (1)
25,050 40,493 7,387 — 72,930 
North AmericaEuropeSpecialtyEliminationsConsolidated
Six Months Ended June 30, 2021
Revenue:
Third Party$2,576,424 $3,040,114 $989,362 $— $6,605,900 
Intersegment963 — 1,856 (2,819)— 
Total segment revenue$2,577,387 $3,040,114 $991,218 $(2,819)$6,605,900 
Segment EBITDA$525,353 $309,064 $140,881 $— $975,298 
Depreciation and amortization (1)
47,981 80,242 14,117 — 142,340 
Six Months Ended June 30, 2020
Revenue:
Third Party$2,301,071 $2,574,779 $751,408 $— $5,627,258 
Intersegment519 — 2,048 (2,567)— 
Total segment revenue$2,301,590 $2,574,779 $753,456 $(2,567)$5,627,258 
Segment EBITDA$360,992 $167,649 $84,465 $— $613,106 
Depreciation and amortization (1)
48,198 81,588 14,523 — 144,309 
(1)    Amounts presented include depreciation and amortization expense recorded within Cost of goods sold and Restructuring and acquisition related expenses.
The key measure of segment profit or loss reviewed by our chief operating decision maker, our Chief Executive Officer, is Segment EBITDA. We use Segment EBITDA to compare profitability among our 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 EBITDA excluding restructuring and acquisition related expenses (which includes restructuring expenses recorded in Cost of goods sold); 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 mark to market adjustments; and impairment charges. EBITDA, which is the basis for Segment EBITDA, is calculated as net income attributable to LKQ stockholders excluding discontinued operations and discontinued noncontrolling interest, depreciation, amortization, interest (which includes gains and losses on debt extinguishment) and income tax expense.
The table below provides a reconciliation of Net Income to Segment EBITDA (in thousands):
 Three Months EndedSix Months Ended
June 30,June 30,
2021202020212020
Net income$305,008 $118,770 $571,340 $264,749 
Less: net income (loss) attributable to continuing noncontrolling interest384 (22)803 718 
Less: net income attributable to discontinued noncontrolling interest— — — 103 
Net income attributable to LKQ stockholders304,624 118,792 570,537 263,928 
Subtract:
Net income (loss) from discontinued operations— 277 — (638)
Net income attributable to discontinued noncontrolling interest— — — (103)
Net income from continuing operations attributable to LKQ stockholders304,624 118,515 570,537 264,669 
Add:
Depreciation and amortization64,896 65,747 130,697 131,242 
Depreciation and amortization - cost of goods sold5,649 4,010 11,264 9,095 
Depreciation and amortization - restructuring expenses (1)
198 3,173 379 3,972 
Interest expense, net of interest income16,172 25,616 40,351 51,547 
Loss on debt extinguishment23,564 — 23,564 12,751 
Provision for income taxes107,719 41,869 200,688 102,280 
EBITDA522,822 258,930 977,480 575,556 
Subtract:
Equity in earnings (losses) of unconsolidated subsidiaries (2)
3,478 (2,649)9,297 (2,133)
Equity investment mark to market adjustments1,061 — 5,800 — 
Add:
Restructuring and acquisition related expenses (1)
4,871 21,777 12,575 27,948 
Restructuring expenses - cost of goods sold— 5,665 (163)5,661 
(Gain) loss on disposal of businesses and impairment of net assets held for sale(597)2,485 (582)2,236 
Change in fair value of contingent consideration liabilities1,134 (332)1,085 (428)
Segment EBITDA$523,691 $291,174 $975,298 $613,106 
(1)    The sum of these two captions represents the total amount that is reported in Restructuring and acquisition related expenses in our Unaudited Condensed Consolidated Statements of Income. Refer to Note 5, "Restructuring and Acquisition Related Expenses," for further information.
(2)    Refer to "Investments in Unconsolidated Subsidiaries" in Note 3, "Financial Statement Information," for further information.
The following table presents capital expenditures by reportable segment (in thousands):
Three Months EndedSix Months Ended
June 30,June 30,
2021202020212020
Capital Expenditures
North America$16,817 $10,892 $30,152 $40,213 
Europe21,203 19,502 47,501 32,550 
Specialty8,055 2,369 10,201 4,538 
Total capital expenditures$46,075 $32,763 $87,854 $77,301 
The following table presents assets by reportable segment (in thousands):
June 30,December 31,
20212020
Receivables, net
North America$403,761 $386,289 
Europe669,432 598,615 
Specialty152,542 88,485 
Total receivables, net1,225,735 1,073,389 
Inventories
North America785,064 810,798 
Europe1,286,067 1,302,649 
Specialty323,016 301,165 
Total inventories2,394,147 2,414,612 
Property, plant and equipment, net
North America568,905 583,985 
Europe554,321 583,439 
Specialty83,930 81,279 
Total property, plant and equipment, net1,207,156 1,248,703 
Operating lease assets, net
North America772,614 755,430 
Europe521,703 520,131 
Specialty73,826 77,563 
Total operating lease assets, net1,368,143 1,353,124 
Equity method investments
North America21,255 18,676 
Europe147,212 136,548 
Total equity method investments168,467 155,224 
Other unallocated assets6,074,411 6,115,481 
Total assets$12,438,059 $12,360,533 

We report net receivables; inventories; net property, plant and equipment; net operating lease assets; and equity method investments by segment as that information is used by the chief operating decision maker in assessing segment performance. These assets provide a measure for the operating capital employed in each segment. Unallocated assets include cash and cash equivalents, prepaid and other current and noncurrent assets, goodwill and other intangibles.
Our largest countries of operation are the U.S., followed by the U.K. and Germany. Additional European operations are located in the Netherlands, Italy, Czech Republic, Belgium, Austria, Slovakia, Poland, and other European countries. Our operations in other countries include wholesale operations in Canada, remanufacturing operations in Mexico, an aftermarket parts freight consolidation warehouse in Taiwan, and administrative support functions in India. Our net sales are attributed to geographic area based on the location of the selling operation.
The following table sets forth our revenue by geographic area (in thousands):
Three Months EndedSix Months Ended
June 30,June 30,
 2021202020212020
Revenue
United States$1,749,496 $1,330,543 $3,354,929 $2,864,489 
United Kingdom421,314 278,419 824,752 669,038 
Germany418,817 359,134 806,693 733,686 
Other countries845,487 658,227 1,619,526 1,360,045 
Total revenue$3,435,114 $2,626,323 $6,605,900 $5,627,258 

The following table sets forth our tangible long-lived assets by geographic area (in thousands):
June 30,December 31,
20212020
Long-lived assets
United States$1,414,705 $1,419,113 
Germany347,531 360,184 
United Kingdom304,395 315,333 
Other countries508,668 507,197 
Total long-lived assets$2,575,299 $2,601,827