Good day, and thank you for standing by. Welcome to the LKQ Corporation's fourth quarter and full year 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference call is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Joe Boutross, Vice President of Investor Relations for LKQ Corporation. Please go ahead. Thank you, operator. Good morning, everyone, and welcome to LKQ's fourth quarter and full year 2021 earnings conference call. With us today are Nick Zarcone, LKQ's President and Chief Executive Officer, and Varun Laroyia, Executive Vice President and Chief Financial Officer. Please refer to the LKQ website at lkqcorp.com for our earnings release issued this morning, as well as the accompanying slide presentation for this call. Now, let me quickly cover the Safe Harbor. Some of the statements that we make today may be considered forward-looking. These include statements regarding our expectations, beliefs, hopes, intentions, or strategies. Actual events or results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors. We assume no obligation to update any forward-looking statements. For more information, please refer to the risk factors discussed in our Form 10-K and subsequent reports filed with the SEC. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release and slide presentation. Hopefully, everyone has had a chance to look at our 8-K, which we filed with the SEC earlier today. As normal, we are planning to file our 10-K in the coming days. With that, I am happy to turn the call over to our CEO, Nick Zarcone. Thank you, Joe, and good morning to everybody on the call. This morning, I will provide some high-level comments related to our performance in the quarter and full year 2021, and then Varun will dive into the financial details and discuss our 2022 outlook before I come back with a few closing remarks. Before I begin, on behalf of everyone at LKQ, I again want to express our sincere thanks to all those on the front lines who are working hard to keep our communities and our citizens safe and healthy. I also extend condolences to all those who have suffered a personal loss during this unfortunate pandemic. It seems like everyone knows someone who has been seriously impacted by COVID. While we've made great strides across the globe combating the pandemic, it is still a harsh reality that we all have to confront in our daily lives. As most of you know, LKQ spent two decades consolidating fragmented markets into centralized businesses, and in the process, we created the largest and best-in-class operators in each of our major markets. In 2019, we pivoted our strategy to focus on operational excellence. Some folks may have been skeptical about this pivot, but they may not have had a true understanding of our culture, a culture that is centered on outcomes, not obstacles, a culture that is agile and nimble, and a culture that is LKQ proud. It is with great pride that I can say our teams across all of our segments embraced and delivered on our operational excellence initiatives throughout all of 2021. Before I move on to fourth quarter results, let me highlight just a few of the milestones we achieved in 2021. We had record corporate-wide revenue and profitability. North America EBITDA and EBITDA margins reached their highest full-year level in the history of the company. Europe had full-year double-digit EBITDA margins for the first time in over five years and reached the upper end of the expectations we set forth a year ago, and there was more runway ahead. Specialty realized record full-year revenue and EBITDA margins. We generated our second year of free cash flow of over $1 billion. We maintained net leverage well below our target of 2x. We achieved an investment-grade rating from Fitch. We purchased 17.2 million shares of stock for a total of $877 million. We issued the first dividend in the history of the company, and we issued our inaugural corporate sustainability report and received an ESG rating of double A from MSCI, which puts LKQ in the top 19% of our index group. These achievements are the result of the combined effort of each individual at LKQ. For that, I extend a great big thank you to my entire organization. Now on to the quarter. Revenue in the fourth quarter of 2021 was $3.2 billion, an increase of 7.9% as compared to the $3 billion in the fourth quarter of 2020. For the fourth quarter, parts and services organic revenue increased 6.6% on a reported basis and 7.3% on a per-day basis. While the net impact of acquisitions and divestitures increased revenue 1.7% and foreign exchange rates decreased revenue 0.8% for total parts and services revenue increase of 7.5%. Net income for the fourth quarter of 2021 was $236 million as compared to $180 million for the same period of last year, an increase of 30.6%. Diluted earnings per share for the fourth quarter was $0.81 compared to $0.59 for the same period of 2020, an increase of 37.3%. On an adjusted basis, net income in the fourth quarter was $254 million compared to $212 million in the same period of last year, a 20% increase. Adjusted diluted earnings per share for the fourth quarter was $0.87 as compared to $0.69 for the same period of 2020, a 26.1% increase. Net income for the full year of 2021 was $1.1 billion as compared to $639 million for 2020, an increase of 70.7%. Diluted earnings per share for the full year of 2021 was $3.66 as compared to $2.09 for 2020, an increase of 75.1%. On an adjusted basis, net income for the full year of 2021 was $1.2 billion compared to $777 million last year, a 51.8% increase. Adjusted diluted earnings per share for the full year 2021 was $3.96 as compared to $2.55 for 2020, a 55.3% increase. These net income numbers represent a tremendous achievement for the company as we achieve net income in excess of $1 billion in 2021 for the first time in our history. Let's turn to some of the quarterly segment highlights. As you will note from slide six, organic revenue for parts and services in the quarter for our North American segment increased 8.3% on a reported basis and 9.9% on a per-day basis compared to the fourth quarter of 2020. When comparing to pre-pandemic levels, organic revenue for parts and services for our North American segment in Q4 of 2021 declined around 5% on a per-day basis relative to 2019 levels. Industry data indicates repairable claims declined mid-teens relative to 2019, so it was another quarter of outperformance for our North American operations. Our salvage business and the growth in our major mechanical product groups continued its solid performance during the quarter. Although fill rates for aftermarket collision parts have been challenged, we are again witnessing a positive offset from our quote conversion rate. Given the supply chain disruptions, it's no surprise that our aftermarket parts business lagged the results of our recycling and remanufacturing businesses. In 2021, our North America salvage operations continued its leadership as the largest recycler of vehicles by processing over 783,000 vehicles, resulting in, among other things, the recycling of 3.9 million gallons of fuel, 2.2 million gallons of waste oil, 2.1 million tires, 740,000 batteries, and 1.2 million tons of scrap metal. Moving to our European segment, organic revenue for parts and services increased 5.7% on a reported basis and 5.4% on a per-day basis in the quarter. Demand trends strengthened sequentially in the fourth quarter across all of our European regions. Most of our regional operations experienced similar levels of revenue growth, with standout performance from our Fource business in the Benelux region and solid contributions from Germany, the U.K., and Central and Eastern Europe. On a full year basis, these businesses performed quite well both on revenue and profitability. Italy again lagged relative to our other markets. Now let's move on to our Specialty segment. During Q4, Specialty reported organic revenue growth of 5.7% on a reported basis and 7.3% on a per-day basis. Considering the tough comparison to an exceptionally strong 2020, this organic growth exceeded our expectations, and we applaud the tremendous effort by our Specialty team. A few Specialty operational highlights would include the fact that due to the Specialty segment's Department of Transportation safety scores and positive inspection history, the team is now eligible to participate in the department's PrePass program. This program allows our drivers to bypass weigh stations in certain ports of entry. The benefits of this program will include faster travel time to the docks. Less idling time and higher driver retention. Importantly, this program highlights that health and safety of our employees and our other stakeholders is paramount within our organization. Secondly, during the quarter, our Specialty segment moved their industry-leading product catalog to a digital format. At the peak, Specialty printed over 300,000 copies of these catalogs, each consisting of over 1,000 pages, so this represents a savings of 300 million printed pages. This green focus and shift to a digital catalog is another example of how our teams across all segments are driving our environmental leadership into all facets of the business. Looking ahead, we expect solid revenue growth across all three of our segments in 2022 as we creep back to pre-pandemic volumes, get some relief from the aftermarket supply chain in the back half of the year, and utilize strategic pricing initiatives. Specifically, we are still running behind 2019 revenue in North America, but we are closing the gap and expect to approach pre-pandemic revenue levels as we exit 2022. Europe is back to pre-pandemic revenue levels, and we look forward to continuing the positive momentum from Q4 as we move forward in 2022. Specialty is obviously already running well ahead of pre-pandemic revenue levels. On the corporate development front, as mentioned in our last call, in the first week of October, we completed the acquisition of Hamu, one of the leading independent car parts wholesalers in the Netherlands, and SeaWide Marine Distribution, a nationwide electronics wholesale distributor that supplies electrical and electronic products for the marine, outdoor, and personal navigation markets. During the fourth quarter, we continued the build-out of our ESG program by implementing various social initiatives. In December, the company launched our LKQ Cares Holiday Vote, a unique program in which all employees had a voice in determining how LKQ's donations are allocated. With this program, LKQ donated funds to 10 separate nonprofit organizations across the globe during the holiday period. Also in December, the LKQ Community Foundation donated monies to assist various nonprofits with relief and recovery efforts from the long-track tornado that produced severe to catastrophic damage in several states in numerous communities. Let's now turn to the inflationary environment, a key item of interest for most listeners on this call. Inflation was a harsh reality across each of our segments, especially during the fourth quarter, when inflation climbed to a 39-year high in December. The rise in prices is fairly straightforward, a combination of unprecedented supply chain and labor disruptions, which choked output, and monetary and fiscal stimulus, which accelerated demand. Global disruptions of this size and velocity do not reset overnight, and we suspect it will continue to be a headwind throughout 2022, but make no mistake, we are not resting and waiting for this to reset. Our segment teams have implemented processes with our supplier and customer partners to deal with price changes in a more planned and structured way, ultimately staying ahead of the inflationary trends. Of course, the success of these ongoing processes will depend on the timing of the recovery in the supply chain, including some relief in ocean freight costs. Related to labor, by the end of December 2021, there were 11 million job openings in the United States. Simply stated, there is a battle to hire and retain talent at all levels of the organization, and prospective hires clearly have leverage, and that comes at a cost. Our North American operations have over 1,000 open positions, which represents roughly a 6% vacancy rate. In 2021, we witnessed 5%-7% net increase in wages for our business in North America. We are working diligently to develop creative ways to recruit potential candidates beyond just compensation. To expand recruiting efforts, we are building partnerships that focus on the skills needed for the open positions and exploring how we can attract talent. In 2021, we invested in the benefit plans provided to our employees, including, but not limited to, enhancements to our core behavioral health and paid parental leave programs. Our European operations are facing the same challenges and are currently running at a 3.5% vacancy rate, with wages increasing between 3%-5% in 2021. Focusing on retention and recruiting as well, at the end of the fourth quarter, our Europe team launched a comprehensive employee engagement survey with WorkBuzz to further understand the employee experience and how we can be their employer of choice. The team invested in development for their leadership team and mental well-being training. Colleagues across Europe. The labor impact is an industry-wide issue. In the fourth quarter, the national average scheduling backlog for collision repair shops was 3.4 weeks versus pre-pandemic levels of just 1.7 weeks. The doubling of the backlog is predominantly due to technician shortages and to a lesser extent, parts availability. Based on the milestones we achieved throughout 2021, clearly our teams have been judicious with quickly driving change. I am confident we will operate with the same level of vigor to combat the headwinds we face with the supply chain and labor and freight costs, all against the backdrop of the ongoing pandemic. Lastly, before I turn the discussion over to Varun, who will run through the details of the segment results and discuss our outlook for 2022, I am pleased to announce that on February 15, 2022, our board of directors approved our second quarterly cash dividend of $0.25 a share, payable on March 24, 2022 to all stockholders of record at the close of business on March 3, 2022. With that, I will turn it over to Varun. Thank you, Nick. Good morning to everyone joining us today. Before I go into details on the fourth quarter, I'd like to spend a moment to reflect on the last two years operating in the pandemic. Since the world was turned upside down in March of 2020, we leveraged LKQ's core strengths, namely our best-in-class inventory availability and service reliability, extensive distribution network, rock-solid balance sheet, and most importantly, our people to be successful in adverse conditions. We accelerated our operational excellence program to make the business more resilient and have delivered record annual results yet again, while creating a strong position for the company to participate in the demand recovery. The performance of the past three years since the pivot to operational excellence, and in 2021 in particular, highlights the benefits of our operating initiatives. By many measures, 2021 was an outstanding year. In terms of profitability, we generated record full year adjusted diluted earnings per share of $3.96, an increase of 55% compared to 2020, our previous high-water mark. During the September 2020 Investor Day, I set the expectation that LKQ aimed to be a double-digit EPS compounder, with about 1/2 coming from organic growth and productivity and the rest from judicious capital allocation. With our 2021 results, we surpassed this expectation and picked up about three years of EPS growth in a single year. We have sustained the momentum built in recent years around cash flow generation with free cash flow of $1.1 billion in 2021, and successfully reset the business model to operate at this higher level going forward. At a conversion ratio of 60% of EBITDA, we are delivering free cash flow in line with our long-term expectation. Generating significant and sustainable free cash flow has accelerated various capital allocation options, including our share repurchase program, maintaining investment-grade credit metrics, and initiating a regular quarterly dividend. With a focus on operational excellence, including integrating our acquisitions and converting profits to cash, we have made significant progress in improving our return on invested capital. By our internal measure of ROIC, which essentially ignores the amortization of intangibles, we exceeded 15% in 2021 after running at approximately 10% just a few years ago. All of this reflects our commitment to delivering long-term value to our various stakeholders. I'd also like to take this opportunity to extend my sincere thanks to the entire LKQ team for their dedication and hard work. It takes all 45,000 of us rowing in the same direction to deliver such outcomes. We have raised the bar on what LKQ can be, and we have more to come. Now shifting to the fourth quarter. Our fourth quarter results reflect a solid finish to the year with improving revenue, net income, and earnings per share year-over-year, despite, as expected, the negative impact of metals, challenges to inflation, the global supply chain, and the Omicron variant. Gross margin remained a year-over-year benefit, with improvement in Europe offsetting metals-driven softness in North America margins. Unlike the first three quarters of 2021, commodity prices had a negative effect on margins in the fourth quarter. We estimate that scrap steel and precious metal prices produced year-over-year decreases of approximately $16 million in segment EBITDA and $0.04 in adjusted EPS in the fourth quarter. In 2020, we benefited from significant sequential increases in scrap steel and precious metal prices during the fourth quarter, while 2021 showed roughly flat to declining sequential changes. Overhead expenses as a percentage of revenue increased 130 basis points year over year, with over half driven by personnel costs. The tight labor market has pushed wages higher in many of our markets. Additionally, strong performance across all three segments contributed to increased levels of incentive compensation in 2021, which of course resets with new targets for 2022. I'll now turn to segment operating results. Starting on slide 10, North America produced an EBITDA margin of 15.1% for the quarter. Adjusted gross margin was unfavorable by 50 basis points, primarily related to the metals effect, which had a negative 210 basis point effect on gross margin in the fourth quarter. The benefits from ongoing margin initiatives in the wholesale business and improved pricing partially offset the metals impact. Segment overhead expenses increased by 230 basis points, with the largest change owing to personnel expenses. Roughly half of the 140 basis point increase in personnel expenses is attributable to higher incentive compensation, with the remainder related to wages, temporary labor, and medical costs. Higher freight and fuel costs drove a further 80 basis point increase in overhead expenses. With some of the overhead leverage benefit from higher revenue dollars offsetting a portion of the gross margin impact, metals had a negative 170 basis points effect on the reported 15.1% segment EBITDA margin. This result is consistent with our expectations for a mid- to high-16% baseline without the metals impact. For the full year, the reported North America segment EBITDA margin of 18.3% benefited by roughly 100 basis points from metals prices, mostly in the first half of the year. Moving to Europe. Europe continued its strong performance with an 8.9% EBITDA margin, the highest fourth quarter figure since 2015, and finished the full year with 10.2%. As you can see on slide 11, gross margin was the primary driver of the fourth quarter improvement with better net pricing. We are pleased with Europe's progress in delivering a double-digit full-year segment EBITDA margin, and we are confident that there's further opportunity ahead. Moving to slide 12. Specialty held gross margin roughly flat despite inflationary pressures in the segment's PGW operations and a negative mix effect from the SeaWide acquisition, with offsetting benefits in net pricing. Operating expenses, higher wages, medical costs and incentive compensation, which of course, some of it will be reset to reflect 2022 targets. The Specialty team made great progress in the fourth quarter by moving all inventory into existing facilities in December, and subsequently has exited three of the four acquired facilities in January, which of course will create cost savings going forward. Income taxes in the fourth quarter of 2021 included discrete benefits of $0.07, primarily related to the reversal of certain valuation allowances and true-ups related to prior year tax return filings. There was a benefit of $0.025 reflecting the change in estimate of our effective tax rate as we closed out our 2021 financials. While the discrete benefits in the 2021 rate are non-recurring, we expect to benefit from a lower effective tax rate going forward and have included 25.1% in our 2022 guidance assumptions. Shifting to liquidity and capital allocation, we have been foreshadowing a cash outflow for inventory all year as we've looked to rebuild our inventory levels in anticipation of demand recovering. The outflow has been delayed by supply chain issues, but we began to see some real progress in the fourth quarter. As you can see on slide 31, we were able to grow our inventory balances in all three segments in the fourth quarter, an opportunity which drove a higher than expected cash outflow of $182 million. While there are still some challenges getting aftermarket products to our locations, given the challenges with ocean freight and ongoing congestion at the ports here in North America, we saw robust activity at the auctions and grew our salvage inventory to support the strong growth in this category. We were also successful in increasing the inventory for our Specialty segment ahead of the key selling season with a number of shows that take place in the first quarter. We are confident that our inventory positions will enable each segment to continue to offer best in class availability and service relative to our competitors despite the ongoing supply chain challenges. Our capital spending for the quarter was higher than what we've seen in recent years. With a backdrop of inflation continuing for the foreseeable future, the increase was driven by strategic capital deployment during the quarter as we identified a series of opportunities mostly related to our salvage business in North America to invest in real estate. These investments, which include site expansions and the purchase of a new facility for our Denver operation, will provide room for growth in our salvage business. Additionally, we identified other high return investments related to vehicles, equipment, and systems to undertake in the fourth quarter, given the long lead times with the ongoing supply chain disruptions. In total, the real estate and other strategic purchases total about $90 million for the quarter, which accounts for much of the growth in capital spending. Full-year free cash flow, as I mentioned previously, was $1.1 billion, our second year in a row being above the $1 billion mark. At a 60% conversion ratio for free cash flow to EBITDA for the year, this was roughly $275 million above our original guidance flow of $800 million when we gave guidance for 2021 last February. Following our balanced capital allocation philosophy, we repurchased 5.3 million shares in the quarter for $297 million and issued our first quarterly dividend with a $73 million payment in December. We also acquired businesses in the fourth quarter. SeaWide in our Specialty segment and a tuck-in business in the Benelux market for a total consideration of $57 million. Our net leverage ratio came in at 1.4x EBITDA, and interest coverage now exceeds 28x compared to the credit facility requirements of 4x and 3x, respectively. We are well-positioned with our credit metrics, which are consistent with an investment-grade profile, and we remain committed to achieving an investment-grade rating. As our earnings release of this morning indicated, the board has approved the quarterly cash dividend of $0.25 per share, which will be paid to stockholders on record as of March 3rd. I will wrap up my prepared comments with our thoughts on 2022. Over the past two years of living with the once-in-a-hundred-year health crisis, what has become clear is the resiliency of our end markets and our team's ability to deliver solid results utilizing the operational excellence toolkit. This, in effect, gives us the confidence to reinstate full-year guidance, including organic revenue growth for the coming year. Our guidance assumes that, one, there are no significant negative developments related to the COVID-19 in our major markets. Two, foreign exchange rates hold near recent levels for the remainder of the year. Three, scrap and precious metals prices trend lower than what we're currently seeing in the month of February, and an effective tax rate of 25.1%. With that, we expect organic parts and services revenue growth of between 3% and 5%, with higher growth rates in the second half of the year than the first half. With ongoing inflationary pressures exacerbated by the supply chain challenges, we remain confident in our ability to positively work through pricing changes as needed. Second, we are projecting full-year adjusted diluted EPS in the range of $3.72-$4.02, with a midpoint of $3.87. This is a decrease of $0.09 Or 2% at the midpoint relative to the 2021 actual figure. Looking at slide 19, you can see how we get from the 2021 actual EPS to our 2022 expectation. We've been transparent about the commodities benefit on our 2021 results. With lower prices anticipated for 2022, we will face a headwind of roughly $0.27 Related to scrap steel and precious metal prices, predominantly in the self-service operating unit. The favorable discrete tax adjustments in 2021 will not reoccur, which will lower EPS by a further $0.06. Additionally, lower average foreign exchange rates will have a $0.04 negative effect year-over-year, and we had a $0.03 pickup of fair value adjustments related to certain equity investments that we're not projecting to reoccur in 2022. Taking these factors into account, we're looking at a baseline EPS figure of $3.56. On a two-year stack, we remain well above our long-term growth expectations in 2022, and we expect annual growth rates to normalize in 2023. The operational excellence initiatives have created a significantly stronger and more resilient business, which we believe will support our ability to improve operating results despite the current inflationary environment and supply chain challenges. Finally, our balance sheet is solid. We continue to generate outstanding free cash flow through strong profitability and judicious use of trade working capital. We are projecting to generate free cash flow of at least $1 billion in 2022 as we sustain a healthy conversion of EBITDA to free cash flow. Before I turn it back to Nick, I want to inform everyone that we are contemplating breaking out the self-service operating unit as a separate reportable segment in 2022. While we're not planning any changes in how self-service is operated or how it interacts with the wholesale business, we would like to provide investors even greater transparency into the North America business, especially as it relates to the metals impact. We will provide further information on the decision ahead of our first quarter earnings call in late April. Thanks for your time this morning. With that, I'll turn the call back to Nick for his closing comments. Thank you, Varun. In closing, 2021 was a banner year for LKQ, and I could not be prouder of the collective efforts of my global teams. Let me restate our key strategic pillars, which continue to be central to our culture and objectives as we've entered 2022. First, we will continue to integrate our businesses and simplify our operating model. Second, we will continue to focus on profitable revenue growth and sustainable margin expansion. Third, we will continue to drive high levels of cash flow, which in turn will give us the flexibility to maintain a balanced capital allocation strategy. Last but not least, we will continue to invest in our future. With these pillars in place, coupled with our industry-leading teams, we are well-positioned to face the challenges in the first half of the year and will continue to deliver positive year-over-year operating results for our shareholders. As always, I want to thank the over 45,000 people who work at LKQ for all they do to advance our business each and every day. They are truly our greatest asset. With that, operator, we are now ready to open the call for questions. Thank you, sir. As a reminder, if you would like to ask a question, simply press star then the number one on your telephone keypad. Your first question comes from the line of Stephanie Moore of Truist. Hi, good morning and congrats on a great year. Good morning, Stephanie. My first question is really just a clarification question. As you look to your 2022 EPS guidance, does the guide EPS range include incremental share repurchases? Good morning, Stephanie. It's Varun. No, it does not. Really what you see on slide 19 of the earnings deck reflects the annualized benefit of all the share repurchases that we did in 2021. Obviously that flows through into 2022. No, the guidance does not include anything incremental that we may do in 2022. Great. No, that's helpful. Switching to the North America business. Obviously there's been across all segments a tremendous work over the past two years to just improve operating performance, reduce costs, whether it be around labor, et cetera. Maybe if you wanted to kind of bridge what you expect would be incremental expenses in North America. I think you noted and we're all aware of labor, you know, wage pressure, towing. Then also kind of what will be done to offset that from just overall efficiency gains. Thank you. As well as pricing. Thanks. Thank you, Stephanie. Let me answer that one. I think your question is specifically regarding North America margins in the fourth quarter. Again, if you kinda go back to the earnings deck on slide number 10, where we actually break that piece out. First of all, I think just to be cognizant of is that we have a seasonal trend, you know, within our business. Q4 typically is lighter in any case. As you rightly point out, yes, some of the inflationary pressures have certainly been picking up. In my prepared comments, I did call out where the single biggest piece was, which was within the personnel costs. I think everyone understands that there's a tremendous amount of labor shortage here in North America. Arguably the other one is that, you know, how much of that is our higher incentive compensation also. Clearly, from an incentive compensation perspective, that does get reset with new targets in 2022. That entire number that you see, that really is not the true exit run rate. That's kinda an important piece to think through. But with regards to medical costs or for that matter, what we are paying from a talent perspective, that is real, and we do expect, you know, our ability to get positive price associated with that. I think the other piece really, which maybe is kind of more fundamental, is at the gross margin level, while it seems that gross margins, you know, were down by about, what, 40-50 basis points year-over-year, really they were down by 210 basis points according to the metals piece, right? The metals is the single biggest piece in our North America margins. If you go back to the October earnings call, we were aware that metals would impact our North America segment margins. That really is where it shows up. The work that the team has done on positive pricing has been able to offset some of that. The final point really I'd like to highlight is the 15.1 that North America reported for Q4 is impacted by about 170 basis points associated with metals. You add those two pieces together, and it is right where our expectations are, which is the mid- to high-16%, without the metals impact. I hope that helps answer. We're happy with the way the North America business is performing. We are aware of the supply chain challenges and also the inflationary pressures, but the team is doing an outstanding job and really hitting its marks, excluding the metals volatility. Absolutely. Well, thank you so much for the color. Your next question comes from the line of Daniel Imbro of Stephens. Yep. Hey, good morning, guys. Congrats on- Good morning, Daniel. I wanted to follow up on the thoughts around long-term efficiencies. Varun, you kinda mentioned, I think the words, you know, productivity improvements could offset some of these inflationary headwinds this year to drive that improvement. Can you add some more color around what specifically you see an opportunity to improve? I think you mentioned freight and supply chain. Can you kinda quantify any of those savings buckets? Taking a step back. As we look out 2023, 2024 and beyond, I know you're not giving long-term targets now, but how should we think about the pace or the cadence of margin expansion in out years given what you see on the productivity opportunity side? Yeah. Thank you, Daniel. Let me just try and summarize your question. That really is in terms of where we see margin expansion and then really further productivity gains. Let me start with the margin side first. As you saw in our quarterly earnings in the earnings deck, Europe has been doing an outstanding job on the pricing side. You certainly see that gross margin expanding for our European business. That accounts for close to half of our business. As part of the 1 LKQ program that we had called out in September of 2019, that business has hit every single mark that it had suggested. As Nick has previously also called out, we are not done with the 1 LKQ Europe program. We're making tremendous progress, but there's a lot further opportunity yet to come. When you see the full-year 10.2% segment EBITDA margin, we expect 2022 to continue to improve from there on. That's kind of one piece I certainly want to highlight. The second one is, I think from a North America margin perspective, I think folks get a little bit confused about the metals piece. Really with that, as I mentioned, the fourth quarter gross margin owing to metals was impacted by 210 basis points in the quarter, which we had largely anticipated. Excluding the metals impact in the fourth quarter, that would have been a mid- to high-16s. The metals impact was 170 basis points. That may seem to kind of color some of the views, but that business is hitting its marks. Whether it be the permanent cost savings that had been called out at the September 2020 Investor Day, that business is exceeding those at this point in time. As we've talked about, whether it be route optimization, overall network setup that we have across our North America business, each of those pieces continues to deliver. Those are multiyear goals, and the business continues to find further opportunity. Without belaboring the point further, we are excited about where our North America and our European businesses and the same for our Specialty businesses. Easy to forget at times, but that business has just been outstanding from its execution perspective. They are not immune like other businesses in other industries with regards to inflationary pressures. Really that specific segment, while our smallest segment, has just done an outstanding job, really picking up the strong demand that continues to come through and then executing flawlessly on that front. The final point I should kind of highlight is that, you know, when you talked about multiyear views, we are contemplating our biannual Investor Day setup, and that is currently expected to be late spring, early summer, but certainly after the first quarter earnings. We're thinking of a May timeframe at this point in time. Sure. Thanks for that color. Nick, I wanted to follow up with a bit of a longer-term question. Just you mentioned some of the ESG initiatives, and certainly that's a focus for the company with the recycling. But as EVs grow across the country and just over the next decade, how is the infrastructure, in your opinion, on EV battery recycling? Is that something you could be a larger player in since there's a demand for it and you're already, you know, ingrained in the auto recycling ecosystem? Just kind of curious how LKQ can capitalize on that opportunity given where you sit today. Yes, Daniel, great question. As we announced last quarter, we made the acquisition probably four or five months ago of a company called Green Bean that kind of got us into the entire battery remanufacturing, not recycling, but remanufacturing, business. We are looking to make further investments in battery technology, just so we can make sure that we are able to address the opportunities that are going to come along with a very slow shift of the car park to EVs. Within there will be plenty of opportunities for LKQ. Just like the engine is the most expensive and most valuable part of a car today, the battery is the most valuable part on a EV, and that provides a number of different opportunities for a company like LKQ. As the EV population grows in the United States, we fully anticipate that the cars that we buy at auction, coming out of the whole total loss process, that there will be a higher percentage of electric vehicles in that population of cars that we buy, and that will provide a number of opportunities for us on the remanufacturing and potentially recycling side of the EV battery business. We view it as a big opportunity. It's gonna take some time to develop because the impact of EVs on the car park is gonna be very slow and very evolutionary, but we are thinking ahead and trying to get ahead of the curve. Thank you. Your next question comes from the line of Brian Butler of Stifel. Good morning, guys. Thank you for taking my question. Good morning, Brian. Just the first one. Can we kind of maybe summarize the segment margins that are kind of built into the 2022 outlook and also kind of how that might flow seasonally through the year? Yeah. We generally don't provide segment by segment margins, but as we've talked about in this call already, right? Long-term sustainable margins for the North America business will be in the mid- to high-16% range, and that's where we were in Q4 in North America, if you exclude the impact of the metals. So we're very comfortable in the mid- to high-16% in North America. Again, we posted up 10.2 in Europe for the year in 2021. We do anticipate, you know, another 30- to 50 basis point improvement in Europe during the next year. Specialty, you know, has been very strong, and we don't expect a tremendous amount of upside in Specialty margins, but they're gonna more than hold their own. When you put it all together on a corporate level, you're gonna be shaking out probably somewhere in that 13% range, from an EBITDA margin perspective. Again, that all assumes no significant movements in metals pricing and the like. Okay, great. That's helpful. Then follow-up question on the cash flow side. Can you talk a little bit about maybe capital spending in 2022 and how that should trend? You know, what's keeping that high at a higher level? As well as how should we think about working capital in the year? How much of that $1.3 billion of cash from operations is benefiting or being, you know, impacted by the working capital side? Yeah. Brian, it's Varun. Let me take those two questions. Firstly, with regards to capital spending, we are back to our normal cadence, which is between 2%-2.25% of revenue, right? Between 2%-2.25% on a revenue perspective. This really is a bounce back from what took place in 2020. Our ability to quickly act and pull down that CapEx number is what we delivered during the height of the pandemic a couple of years ago. You saw 2021 coming to the 2.2%, and we expect a similar number in 2022 also. Roughly call it between $285 million-$300 million is what we're expecting from a capital expenditure, and that then fits into our top line revenue guidance also. Okay? That's kind of point number one. With regards to the overall free cash flow number, we're essentially targeting the 55%-60% EBITDA conversion. This is what we've been talking about for the past couple of years, and really through 2020, where you saw a significantly higher conversion rate as the business was essentially finding out where the demand was. We certainly flex the balance sheet. Really on a go-forward basis, we're stabilizing the free cash flow at that higher level. The 55%-60% EBITDA conversion piece, and really if anyone's looking for the math associated with that as to why that is a strong conversion factor for a distribution business, really start from an EBITDA perspective. There are cash taxes to be paid. In our case, call it the roughly about $350 million of cash taxes. Capital expenditure, as I just mentioned, roughly 2.2%, so the $285 million-$300 million. Interest expense, which was about $72 million in 2021, call it marginally down in 2022. Then finally, restructuring. Restructuring will be at a similar number to what we did in 2021, so roughly about $20 million. That really is your conversion from a cash basis EBITDA down to, you know, what, we see coming through from a free cash flow perspective. I hope that gives you the math. I certainly hope that, you know, it makes sense, and it's been very consistent to what we've been talking about now for the past couple of years. Okay, great. If I could slip in maybe one last one. Just on the metal side, when you talk about metals coming down, are we really talking about kind of, you know, what's built into the 2022 guidance is metal prices getting back to the 2020 level? I mean, when you take out the full 27% impact. I'm just trying to understand the magnitude of how much, you know, metal prices have to come down to show that impact. Yeah. If you think about where the metals benefit came through in 2021, that's the starting point, right? From that perspective, if you think about catalytic converters, and that really is where the Precious Metals group really sits, that was at an all-time high. I think it touched an all-time high of close to about $285-$290 per cat converter on an average quarterly basis. That number has come down significantly. Really, if you think about, we call this piece significantly lower than the full year average of about $255 on a cat converter, call it about 20% lower than that. Really, I think over the past couple of weeks, really with the geopolitical tensions, there has been a slight uptick associated with that. Really, you know, when we are purchasing salvage vehicles, and that's how we're processing them, there's always a lag associated with it. That really is how you should think about it more than anything else, and that's the underlying assumption of what we have pinned our overall full year guidance on. I hope that gives you a sense in terms of how we're thinking about the volatility associated with metals. Great. Your next question comes from the line of Jordan. From the line of Bret Jordan of Jefferies. Hey, good morning, guys. Good morning, Bret. On the 2022 outlook for growth, could you sort of carve out what is price versus units in that, particularly in the parts and service, the 3%-5%? Yeah, Bret, great question. The answer is it depends. It's really different business by business and product line by product line. I assure you that all of our segments are expecting an increase in demand, increase in volume, if you will. A portion of the 3%-5% is anticipation that we're gonna be able to move prices up, but certainly not all of it. It's a good balance between volume and price. The reality is we look at prices on our products literally daily across the globe. You know, we're always adjusting something up or down. It's a balance, right? On the one hand, we want to make sure we're driving the price to make sure we're doing whatever we can do to protect our gross margins to cover the cost, the incremental cost associated with labor and freight and all the rest. On the other hand, you don't want to take your prices up so much that you start impacting, you know, our ability to sell product and impact volumes. It's a balance. We think we strike a good balance. Again, we're working with our suppliers, we're working with our customers. Embedded in that 3%-5% is volume growth for all three of the segments and some pricing improvements as well. Okay, great. One question on in-stocks. Yeah, I think you called out that supply chain is still an issue. Could you talk about both Europe and North America, you know, sort of where your fill rates are versus where you'd hope they'd be and maybe the cadence of the supply chain? Are you seeing improvement in those fill rates? Yeah. The real challenge that we have is the aftermarket collision parts in North America, because that's where we pull, you know, the better part of 16,000 containers a year over from the Far East, Thailand specifically. That's been the most impacted by the supply chain disruption. Again, we were able to build inventories in each of the segments. We're feeling reasonably good with our current positions in Europe, though it's not perfect. It's better than it was. The same with Specialty. It's not perfect, but it's better than it was. Again, we've gotten great conversion on the salvage side, and so the sticky wicket, if you will, is in the North American aftermarket business where, you know, normally we would be in fulfillment rates well north of 90%, and we're below the 90% level right now. Our goal is to get back to our historical levels, and that's all tied to having product on the shelf in order to sell. It's not necessarily a demand issue, it's truly a supply issue. We saw a little bit of relief towards the end of the year in getting product over. Now, everyone needs to understand that while on the balance sheet, the value of the inventory, even in North America, was up. It's basically our inventory. It's on our books when it hits the ports in Taiwan. With the extended shipping time, it doesn't mean that our sellable inventory sitting in our warehouses was up by the full amount of the increase in North American inventory. It's still a challenge. I mean, what used to take four to six weeks to get product into our warehouses is taking months. You know, we did everything we could to pull product in before the Chinese New Year, which has an impact on the shipping times. We were able to get a bit of product in, and now it's slowing back down a little bit. Overall, we think the supply chain challenges are going to be with us basically through most of the year. We're working hard to do what we can to make sure we've got the product that we need where we need it, so we can sell it and deliver it to our customers. Okay, great. Thank you. Your next question comes from the line of Scott Stember of C.L. King. Good morning, guys. Most of my questions have been answered, but maybe, Nick, you could talk about on the Specialty side again, maybe a little more granularity on this PrePass that the drivers get, you know, the level of benefit you could see in 2022. Also, why is this just limited to the Specialty delivery side? Yeah. You're talking about the Department of Transportation. Yes. program? Yes. You know, every year, every organization has to submit information to the DOT and the like. Our Specialty business, which executes incredibly well, has incredible focus on safety as their number one priority and goal. It's coming through because their results were quite good. You know, we don't anticipate it's gonna have a huge impact on Specialty's margins or ability to. You know, certainly it has nothing to do with sales. On the fringe, on the margin, right, it means that a little bit less waiting time for the drivers, which makes them a little bit more productive, the ability to save some time and money on labor. Again, you probably won't be able to see it because it's not a big item. We wanted to highlight it just to demonstrate the focus that we have on the health and safety of our employees and the other constituents that are important to us. It's, you know, a little bit of a blue ribbon issued by the government saying that we're doing a good job. Got it. That's all I have. Thanks. This concludes today's Q&A session. I will now turn the call back over to Nick Zarcone. Well, we'd certainly like to thank everybody for their time and attention here this morning. We know that this earnings season is always, like always, a busy one. We appreciate your focus on LKQ. Again, we are incredibly proud of what we delivered in 2021. We are incredibly excited about what lays in front of us in 2022. We believe we're gonna be able to deliver and execute on our plan and create value for all of our shareholders and all the other constituents. We look forward to chatting with you again in late April after Q1. As Varun indicated, we'll get everyone together for a longer term strategic view of the business in the late spring, early summer at our Investor Day. We'll be coming out with an exact date in the near term here. Thank you, and have a great day. Thank you. This concludes today's conference call. You may now disconnect.