

~~GEORGIA~~GA						58-0254510
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

2999 WILDWOOD PARKWAY,

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of each exchange on which registered

Common Stock, $1.00 par value per share

GPC

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý☒ No ¨☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ý☒ No ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and ~~"emerging~~“emerging growth ~~company"~~company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

~~Large accelerated filer~~

~~Accelerated filer~~

~~Non-accelerated filer~~

o ~~(Do not check if a smaller reporting company)~~

~~Smaller reporting company~~

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No ý☒

~~Indicate the number of~~There were 141,430,948 shares ~~outstanding of each of the issuer’s classes~~ of common stock outstanding as of ~~the latest practicable date.~~

July 25, 2022.



~~Class~~		~~Outstanding at September 30, 2017~~
~~Common Stock, $1.00 par value per share~~		~~146,613,496 Shares~~

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2017 December 31, 2016
(unaudited)
(in thousands, except share
and per share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 210,082
$ 242,879
Trade accounts receivable, less allowance for doubtful accounts (2017 – $19,214; 2016 – $15,557) 2,155,948
1,938,562
Merchandise inventories, net 3,354,178
3,210,320
Prepaid expenses and other current assets 596,400
556,670
TOTAL CURRENT ASSETS 6,316,608
5,948,431
Goodwill 1,059,637
956,153
Other intangible assets, less accumulated amortization 653,932
618,510
Deferred tax assets 122,797
132,652
Other assets 581,047
475,530
Property, plant and equipment, less accumulated depreciation (2017 – $1,018,211; 2016 – $960,999) 760,213
728,124
TOTAL ASSETS $ 9,494,234
$ 8,859,400
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 3,275,155
$ 3,081,111
Current portion of debt 595,000
325,000
Dividends payable 98,959
97,584
Income taxes payable 26,666
6,354
Other current liabilities 806,887
734,101
TOTAL CURRENT LIABILITIES 4,802,667
4,244,150
Long-term debt 550,000
550,000
Pension and other post–retirement benefit liabilities 260,243
341,510
Deferred tax liabilities 50,106
48,326
Other long-term liabilities 441,090
468,058
EQUITY:
Preferred stock, par value – $1 per share
Authorized – 10,000,000 shares; none issued -0-

-0-
Common stock, par value – $1 per share
Authorized – 450,000,000 shares; issued and outstanding – 2017 – 146,613,496 shares; 2016 – 148,410,422 shares 146,613
148,410
Additional paid-in capital 66,152
56,605
Retained earnings 4,042,404
4,001,734
Accumulated other comprehensive loss (876,934 ) (1,013,021 )
TOTAL PARENT EQUITY 3,378,235
3,193,728
Noncontrolling interests in subsidiaries 11,893
13,628
TOTAL EQUITY 3,390,128
3,207,356
TOTAL LIABILITIES AND EQUITY $ 9,494,234
$ 8,859,400
(UNAUDITED)


(in thousands, except share and per share data)	June 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	519,131	$	714,701
Trade accounts receivable, less allowance for doubtful accounts (2022 – $57,413; 2021 – $44,425)	2,235,453		1,797,955
Merchandise inventories, net	4,296,191		3,889,919
Prepaid expenses and other current assets	1,475,493		1,353,847
Total current assets	8,526,268		7,756,422
Goodwill	2,538,240		1,915,307
Other intangible assets, less accumulated amortization	1,853,222		1,406,401
Property, plant and equipment, less accumulated depreciation (2022 – $1,370,095; 2021 – $1,339,706)	1,236,859		1,234,399
Operating lease assets	1,067,614		1,053,689
Other assets	1,015,984		985,884
Total assets	$	16,238,187	$	14,352,102

Liabilities and equity
Current liabilities:
Trade accounts payable	$	5,409,587	$	4,804,939
Current portion of debt	14,118		—
Dividends payable	126,716		115,876
Other current liabilities	1,743,439		1,660,768
Total current liabilities	7,293,860		6,581,583
Long-term debt	3,304,223		2,409,363
Operating lease liabilities	800,672		789,175
Pension and other post–retirement benefit liabilities	263,314		265,134
Deferred tax liabilities	407,763		280,778
Other long-term liabilities	514,792		522,779
Equity:
Preferred stock, par value – $1 per share; authorized – 10,000,000 shares; none issued	—		—
Common stock, par value – $1 per share; authorized – 450,000,000 shares; issued and outstanding – 2022 – 141,280,841 shares; 2021 – 142,180,683 shares	141,281		142,181
Additional paid-in capital	123,388		119,975
Accumulated other comprehensive loss	(953,228)		(857,739)
Retained earnings	4,329,115		4,086,325
Total parent equity	3,640,556		3,490,742
Noncontrolling interests in subsidiaries	13,007		12,548
Total equity	3,653,563		3,503,290
Total liabilities and equity	$	16,238,187	$	14,352,102

See accompanying notes to condensed consolidated financial statements.

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME ~~AND COMPREHENSIVE INCOME~~

See accompanying notes to condensed consolidated financial statements.

Table of Contents

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Net income	$	372,529	$	196,496	$	618,367	$	414,206
Other comprehensive (loss) income, net of income taxes:
Foreign currency translation adjustments, net of income taxes in 2022 — $31,638 and $40,049; 2021 — $7,019 and $14,166, respectively	(159,078)		7,131		(116,946)		6,836
Cash flow hedge adjustments, net of income taxes in 2022 — $1,383 and $2,767 ; 2021 — $1,383 and $2,767, respectively	3,741		3,741		7,482		7,482
Pension and postretirement benefit adjustments, net of income taxes in 2022 — $2,580 and $5,160; 2021 — $3,434 and $6,855, respectively	6,986		9,334		13,975		18,630
Other comprehensive (loss) income, net of income taxes	(148,351)		20,206		(95,489)		32,948
Comprehensive income	$	224,178	$	216,702	$	522,878	$	447,154

See accompanying notes to condensed consolidated financial statements.

Table of Contents

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)


	Three Months Ended June 30, 2022
(in thousands, except share and per share data)	Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Parent Equity		Non-controlling Interests in Subsidiaries		Total Equity
April 1, 2022	141,627,749	$	141,628	$	126,064	$	(804,877)	$	4,132,925	$	3,595,740	$	12,136	$	3,607,876
Net income	—	—		—		—		372,529		372,529		—		372,529
Other comprehensive income, net of tax	—	—		—		(148,351)		—		(148,351)		—		(148,351)
Cash dividend declared, $0.895 per share	—	—		—		—		(126,716)		(126,716)		—		(126,716)
Share-based awards exercised, including tax benefit of $2,423	30,588	30		(13,387)		—		—		(13,357)		—		(13,357)
Share-based compensation	—	—		10,711		—		—		10,711		—		10,711
Purchase of stock	(377,496)	(377)		—		—		(49,623)		(50,000)		—		(50,000)
Noncontrolling interest activities	—	—		—		—		—		—		871		871
June 30, 2022	141,280,841	$	141,281	$	123,388	$	(953,228)	$	4,329,115	$	3,640,556	$	13,007	$	3,653,563


	Six Months Ended June 30, 2022
(in thousands, except share and per share data)	Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Parent Equity		Non-controlling Interests in Subsidiaries		Total Equity
January 1, 2022	142,180,683	$	142,181	$	119,975	$	(857,739)	$	4,086,325	$	3,490,742	$	12,548	$	3,503,290
Net income	—	—		—		—		618,367		618,367		—		618,367
Other comprehensive income, net of tax	—	—		—		(95,489)		—		(95,489)		—		(95,489)
Cash dividend declared, $1.79 per share	—	—		—		—		(253,607)		(253,607)		—		(253,607)
Share-based awards exercised, including tax benefit of $3,137	49,258	49		(14,469)		—		—		(14,420)		—		(14,420)
Share-based compensation	—	—		17,882		—		—		17,882		—		17,882
Purchase of stock	(949,100)	(949)		—		—		(121,970)		(122,919)		—		(122,919)
Noncontrolling interest activities	—	—		—		—		—		—		459		459
June 30, 2022	141,280,841	$	141,281	$	123,388	$	(953,228)	$	4,329,115	$	3,640,556	$	13,007	$	3,653,563

Table of Contents


	Three Months Ended June 30, 2021
(in thousands, except share and per share data)	Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Parent Equity		Non-controlling Interests in Subsidiaries		Total Equity
April 1, 2021	144,458,057	$	144,458	$	117,867	$	(1,023,760)	$	4,085,998	$	3,324,563	$	11,546	$	3,336,109
Net income	—	—		—		—		196,496		196,496		—		196,496
Other comprehensive income, net of tax	—	—		—		20,206		—		20,206		—		20,206
Cash dividend declared, $0.815 per share	—	—		—		—		(117,406)		(117,406)		—		(117,406)
Share-based awards exercised, including tax benefit of $4,863	279,441	280		(14,181)		—		—		(13,901)		—		(13,901)
Share-based compensation	—	—		8,286		—		—		8,286		—		8,286
Purchase of stock	(1,435,825)	(1,436)		—		—		(182,929)		(184,365)		—		(184,365)
Noncontrolling interest activities	—	—		—		—		—		—		(280)		(280)
June 30, 2021	143,301,673	$	143,302	$	111,972	$	(1,003,554)	$	3,982,159	$	3,233,879	$	11,266	$	3,245,145


	Six Months Ended June 30, 2021
(in thousands, except share and per share data)	Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Parent Equity		Non-controlling Interests in Subsidiaries		Total Equity
January 1, 2021	144,354,335	$	144,354	$	117,165	$	(1,036,502)	$	3,979,779	$	3,204,796	$	13,207	$	3,218,003
Net income	—	—		—		—		414,206		414,206		—		414,206
Other comprehensive income, net of tax	—	—		—		32,948		—		32,948		—		32,948
Cash dividend declared, $1.63 per share	—	—		—		—		(235,120)		(235,120)		—		(235,120)
Share-based awards exercised, including tax benefit of $6,627	383,163	384		(19,714)		—		—		(19,330)		—		(19,330)
Share-based compensation	—	—		14,521		—		—		14,521		—		14,521
Purchase of stock	(1,435,825)	(1,436)		—		—		(182,929)		(184,365)		—		(184,365)
Cumulative effect from adoption of ASU 2019-12 (1)	—	—		—		—		6,223		6,223		—		6,223
Noncontrolling interest activities	—	—		—		—		—		—		(1,941)		(1,941)
June 30, 2021	143,301,673	$	143,302	$	111,972	$	(1,003,554)	$	3,982,159	$	3,233,879	$	11,266	$	3,245,145

(1)We adopted Accounting Standards Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes, during the first quarter of 2021.

See accompanying notes to condensed consolidated financial statements.

Table of Contents

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


								Six Months Ended June 30,
	Nine Months Ended September 30,
	2017			2016
	(unaudited) (in thousands)
OPERATING ACTIVITIES:
(in thousands)							(in thousands)	2022		2021
Operating activities:							Operating activities:
Net income	$	508,574		$	534,720		Net income	$	618,367	$	414,206
Adjustments to reconcile net income to net cash provided by operating activities:							Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	117,640			108,247			Depreciation and amortization	173,259		146,256
Share-based compensation	12,912			15,362			Share-based compensation	17,882		14,521
Gain on sale of real estate							Gain on sale of real estate	(102,803)		—
Intangible asset impairment							Intangible asset impairment	17,061		—
Excess tax benefits from share-based compensation	(2,504		)	(10,475		)	Excess tax benefits from share-based compensation	(3,137)		(6,627)
Changes in operating assets and liabilities	(94,265		)	93,498			Changes in operating assets and liabilities	70,356		136,074
NET CASH PROVIDED BY OPERATING ACTIVITIES	542,357			741,352
INVESTING ACTIVITIES:
Net cash provided by operating activities							Net cash provided by operating activities	790,985		704,430
Investing activities:							Investing activities:
Purchases of property, plant and equipment	(97,181		)	(86,650		)	Purchases of property, plant and equipment	(152,976)		(89,993)
Acquisitions and other investing activities	(289,353		)	(365,545		)
NET CASH USED IN INVESTING ACTIVITIES	(386,534		)	(452,195		)
FINANCING ACTIVITIES:
Proceeds from sale of property, plant and equipment							Proceeds from sale of property, plant and equipment	140,841		22,065
Proceeds from divestitures of businesses							Proceeds from divestitures of businesses	26,102		13,705
Acquisitions of businesses and other investing activities							Acquisitions of businesses and other investing activities	(1,557,420)		(97,168)
Net cash used in investing activities							Net cash used in investing activities	(1,543,453)		(151,391)
Financing activities:							Financing activities:
Proceeds from debt	3,420,000			3,020,000			Proceeds from debt	3,850,642		31,599
Payments on debt	(3,150,000		)	(2,870,000		)	Payments on debt	(2,872,124)		(142,295)
Share-based awards exercised	(3,289		)	(11,942		)	Share-based awards exercised	(14,420)		(19,330)
Excess tax benefits from share-based compensation	—			10,475
Dividends paid	(296,517		)	(288,909		)	Dividends paid	(242,767)		(231,627)
Purchases of stock	(171,884		)	(143,810		)	Purchases of stock	(122,919)		(184,365)
NET CASH USED IN FINANCING ACTIVITIES	(201,690		)	(284,186		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	13,070			8,575
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(32,797		)	13,546
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	242,879			211,631
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	210,082		$	225,177
Other financing activities							Other financing activities	(13,901)		(2,159)
Net cash provided by (used in) financing activities							Net cash provided by (used in) financing activities	584,511		(548,177)
Effect of exchange rate changes on cash and cash equivalents							Effect of exchange rate changes on cash and cash equivalents	(27,613)		(7,639)
Net decrease in cash and cash equivalents							Net decrease in cash and cash equivalents	(195,570)		(2,777)
Cash and cash equivalents at beginning of period							Cash and cash equivalents at beginning of period	714,701		990,166
Cash and cash equivalents at end of period							Cash and cash equivalents at end of period	$	519,131	$	987,389

See accompanying notes to condensed consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~Note A –~~ 1. General

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes required by accounting principles generally accepted in the ~~United States~~U.S. (“U.S. GAAP”) for complete financial statements. Except as disclosed herein, there ~~has~~have been no material ~~change~~changes in the information disclosed in the notes to the consolidated financial statements included in the Annual Report on Form 10-K of Genuine Parts Company (the ~~“Company”~~“Company,” “we,” “our,” “us,” or “its”) for the year ended December 31, ~~2016.~~2021. Accordingly, the unaudited ~~interim~~ condensed consolidated financial statements and related disclosures herein should be read in conjunction with ~~the Company’s 2016~~our 2021 Annual Report on Form 10-K. Significant accounting policies and other disclosures normally provided have been omitted since they are disclosed in our Annual Report and have not changed.

The preparation of interim financial statements requires management to make estimates and assumptions ~~for~~that affect the amounts reported in the unaudited condensed consolidated financial statements. Specifically, ~~the Company makes~~we make estimates and assumptions in ~~its interim~~our unaudited condensed consolidated financial statements for inventory adjustments, the accrual of bad debts, credit losses on guaranteed loans, customer sales returns, and volume incentives earned, among others. Inventory adjustments (including adjustments for a majority of inventories that are valued under the last-in, first-out (“LIFO”) method) are accrued on an interim basis and adjusted in the fourth quarter based on the annual book to physical inventory adjustment and LIFO ~~valuation, which is performed each year-end.~~valuation. Reserves for bad debts, credit losses on guaranteed loans and customer sales returns are estimated and accrued on an interim basis based ~~upon~~on a consideration of historical ~~experience.~~experience, current conditions, and reasonable and supportable forecasts. Volume incentives are estimated based upon cumulative and projected purchasing levels. ~~The estimates and assumptions for interim reporting may change upon final determination at year-end, and such changes may be significant.~~

In the opinion of management, all adjustments necessary for a fair presentation of ~~the Company’s~~our financial results for the interim periods have been made. These adjustments are of a normal recurring nature. We have reclassified certain prior period amounts to conform to the current period presentation. The results of operations for the ~~nine month period~~three and six months ended ~~September~~June 30, ~~2017~~2022 are not necessarily indicative of results for the ~~entire year. The Company has~~year ended December 31, 2022. We have evaluated subsequent events through the date the unaudited condensed consolidated financial statements covered by this quarterly report were issued.

~~Note B – Segment Information~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(in thousands) (in thousands)
Net sales:
Automotive $ 2,171,008
$ 2,095,030
$ 6,333,495
$ 6,115,186
Industrial 1,244,234
1,162,224
3,729,183
3,482,246
Office products 509,966
535,175
1,533,372
1,493,434
Electrical/electronic materials 199,236
178,448
588,281
538,803
Other (28,538 ) (29,134 ) (82,606 ) (70,021 )
Total net sales $ 4,095,906
$ 3,941,743
$ 12,101,725
$ 11,559,648
Operating profit:
Automotive $ 178,202
$ 197,874
$ 537,291
$ 555,156
Industrial 94,595
85,608
281,269
255,704
Office products 23,974
30,257
85,184
97,101
Electrical/electronic materials 13,547
14,277
42,715
45,105
Total operating segment profit 310,318
328,016
946,459
953,066
Interest expense, net (8,202 ) (5,244 ) (21,254 ) (14,731 )
Other intangible assets amortization (11,845 ) (10,339 ) (34,085 ) (28,324 )
Other, net (43,916 ) (21,076 ) (103,853 ) (71,957 )
Income before income taxes $ 246,355
$ 291,357
$ 787,267
$ 838,054

Net sales by segment exclude the effect of certain discounts, incentives and freight billed to customers. The line item “Other” represents the net effect of the discounts, incentives and freight billed to customers, which is reported as a component of net sales in the Company’s condensed consolidated statements of income and comprehensive income.

~~Note C – Other Comprehensive Income (Loss)~~

~~The difference between comprehensive income and net income was due to foreign currency translation adjustments and pension and other post-retirement benefit adjustments, as summarized below.~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(in thousands) (in thousands)
Net income $ 158,442
$ 185,326
$ 508,574
$ 534,720
Other comprehensive income (loss):
Foreign currency translation 38,675
11,896
118,852
50,840
Pension and other post-retirement benefit adjustments:
Recognition of prior service credit, net of tax (212 ) (222 ) (637 ) (666 )
Recognition of actuarial loss, net of tax 5,992
4,981
17,872
14,934
Total other comprehensive income 44,455
16,655
136,087
65,108
Comprehensive income $ 202,897
$ 201,981
$ 644,661
$ 599,828

~~The following tables present the changes in accumulated other comprehensive loss by component for the nine months ended September 30:~~

2017
Changes in Accumulated Other
Comprehensive Loss by Component
Pension and
Other Post-
Retirement
Benefits Foreign
Currency
Translation Total
(in thousands)
Beginning balance, January 1 $ (609,080 ) $ (403,941 ) $ (1,013,021 )
Other comprehensive income before reclassifications, net of tax —
118,852
118,852
Amounts reclassified from accumulated other comprehensive loss, net of tax 17,235
—
17,235
Net current period other comprehensive income 17,235
118,852
136,087
Ending balance, September 30 $ (591,845 ) $ (285,089 ) $ (876,934 )

2016
Changes in Accumulated Other
Comprehensive Loss by Component
Pension and
Other Post-
Retirement
Benefits Foreign
Currency
Translation Total
(in thousands)
Beginning balance, January 1 $ (535,634 ) $ (394,984 ) $ (930,618 )
Other comprehensive income before reclassifications, net of tax —
50,840
50,840
Amounts reclassified from accumulated other comprehensive loss, net of tax 14,268
—
14,268
Net current period other comprehensive income 14,268
50,840
65,108
Ending balance, September 30 $ (521,366 ) $ (344,144 ) $ (865,510 )

~~The accumulated other comprehensive loss components related to the pension benefits are included in the computation of net periodic benefit income in the employee benefit plans footnote.~~

~~Note D –~~ Recent Accounting Pronouncements

~~In May 2014,~~Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) ~~issued~~in the form of Accounting Standards ~~Update~~Updates (“ASU”) ~~2014-09,~~ ~~Revenue from Contracts with Customers~~ (~~Topic 606~~) ("ASU 2014-09"), which will create a single, comprehensive revenue recognition model for recognizing revenue from contracts with customers. The standard is effective for interim and annual reporting periods beginning after December 15, 2017 and may be adopted either retrospectively or on a modified retrospective basis. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing guidance, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others.

~~The Company has established a cross-functional implementation team to evaluate and implement the new standard related~~ to the ~~recognition~~FASB Accounting Standards Codification (“ASC”). We consider the applicability and impact of ~~revenue from contracts with customers. The Company primarily sells goods~~all ASUs and recognizes revenue at point of sale or delivery and this will not change under the new standard. We are completing an analysis of revenue streams at each of the business units and are evaluating the impact the new standard may have ~~on revenue recognition. We expect to finalize our~~determined that any recently adopted accounting policy in the short-term and implement any necessary changes to processes and controls in the fourth quarter. In addition, the Company is evaluating recently issued guidance on practical expedients as part of the transition decision.

The Company plans to use the modified retrospective adoption method and does not believe there will be a material impact to the Company’s consolidated revenues upon adoption. However, the Company will present expanded disclosure in accordance with the requirements of the standard. The Company will continue to evaluate the impacts of the pending adoption of ASU 2014-09 and the preliminary assessments are subject to change.

~~In July 2015, the FASB issued ASU 2015-11,~~ ~~Inventory (Topic 330): Simplifying the Measurement of Inventory~~ ("ASU 2015-11"), which modifies existing requirements regarding measuring first-in, first-out and average cost inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (“NRV”), and NRV less an approximately normal profit margin. ASU 2015-11 replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. The Company adopted ASU 2015-11 on January 1, 2017 and itpronouncements did not have a material impact ~~to the Company's condensed consolidated financial statements for the nine months ended September 30, 2017 and it will not have a material impact~~ on ~~the annual consolidated financial statements.~~

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases~~ (~~Topic 842~~) ("ASU 2016-02"), which requires an entity to recognize a right-of-use asset and a lease liability on the balance sheet for all leases, including operating leases, with a term greater than twelve months. Expanded disclosures with additional qualitative and quantitative information will also be required. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018 and early adoption is permitted. The new standard must be adopted using a modified retrospective transition. The Company is currently evaluating the impact of ASU 2016-02 on itsour condensed consolidated financial statements and ~~related disclosures. As disclosed in the leased properties footnote in the 2016 Annual Report on Form 10-K, the future minimum payments under noncancelable operating leases~~all recent accounting pronouncements not yet adopted are ~~approximately $865.0 million and the Company believes the adoption of this standard will~~not applicable or are expected to have ~~a significant~~an immaterial impact on ~~the consolidated balance sheets.~~

~~In March 2016, the FASB issued ASU 2016-09,~~ ~~Compensation—Stock Compensation~~ (~~Topic 718~~): ~~Improvements to Employee Share-Based Payment Accounting~~ ("ASU 2016-09") that changes the accounting for certain aspects of share-based compensation to employees including forfeitures, employer tax withholding, and the financial statement presentation of excess tax benefits or expense. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based compensation, which prospectively reclassifies cash flows from excess tax benefits of share-based compensation currently disclosed in financing activities to operating activities in the period of adoption. The guidance will increase income tax expense volatility, as well as the Company's cash flows from operations. In addition, the Company did not elect to change shares withheld for employment income tax purposes, or the current methodology of estimating forfeitures upon adoption. The Company adopted ASU 2016-09 on January 1, 2017 on a prospective basis. The adoption of ASU 2016-09 did not have a material impact to the Company'sour condensed consolidated financial ~~statements~~statements.

1.750% and 2.750% Senior Notes Offering

We utilized the proceeds from these offerings to repay borrowings under our Revolving Credit Facility, which were incurred to finance a significant portion of the Kaman Distribution Group ("KDG") acquisition.

Derivatives and Hedging

The following table summarizes the classification and carrying amounts of derivative instruments and the foreign currency denominated debt, a non-derivative financial instrument, that are designated and qualify as part of hedging relationships (in thousands):


		June 30, 2022				December 31, 2021
Instrument	Balance Sheet Classification	Notional		Balance		Notional		Balance
Net investment hedges:
Forward contracts	Prepaid expenses and other current assets	$	1,406,950	$	172,393	$	925,810	$	73,819
Forward contract	Other current liabilities	$	—	$	—	$	235,180	$	2,935
Foreign currency debt	Long-term debt	€	700,000	$	730,870	€	700,000	$	792,820

The tables below present gains and losses related to designated net investment hedges:


	Gain (Loss) Recognized in AOCL before Reclassifications				Gain Recognized in Interest Expense for Excluded Components
(in thousands)	2022		2021		2022		2021
Three Months Ended June 30,
Forward contracts	$	66,986	$	(13,329)	$	7,565	$	6,574
Foreign currency debt	50,190		(12,670)		—		—
Total	$	117,176	$	(25,999)	$	7,565	$	6,574


	Gain Recognized in AOCL before Reclassifications				Gain Recognized in Interest Expense for Excluded Components
(in thousands)	2022		2021		2022		2021
Six Months Ended June 30,
Forward contracts	$	86,380	$	24,186	$	15,130	$	13,148
Foreign currency debt	61,950		28,280		—		—
Total	$	148,330	$	52,466	$	15,130	$	13,148

Fair Value of Financial Instruments

As of June 30, 2022 the fair value of our senior unsecured notes was approximately $3 billion, which are designated as Level 2 in the fair value hierarchy.

We guarantee the borrowings of certain independently controlled automotive parts stores and businesses (“independents”) and certain other affiliates in which we have a noncontrolling equity ownership interest (“affiliates”). While such borrowings of the independents and affiliates are outstanding, we are required to maintain compliance with certain covenants. At June 30, 2022, we were in compliance with all such covenants.

As of June 30, 2022, the total borrowings of the independents and affiliates subject to guarantee by us were approximately $902 million. These loans generally mature over periods from one to six years. We regularly monitor the performance of these loans and the ongoing operating results, financial condition and ratings from credit rating agencies of the independents and affiliates that participate in the guarantee programs. In the event that we are required to make payments in connection with these guarantees, we would obtain and liquidate certain collateral pledged by the independents or affiliates (e.g., accounts receivable and inventory) to recover all or a substantial portion of the amounts paid under the guarantees. We recognize a liability equal to current expected credit losses over the lives of the loans in the guaranteed loan portfolio, based on a consideration of historical experience, current conditions, the nature and expected value of any collateral, and reasonable and supportable forecasts. To date, we have not had significant losses in connection with guarantees of independents’ and affiliates’ borrowings and the current expected credit loss reserve is not material. As of June 30, 2022, there are no material guaranteed loans for

which the borrower is experiencing financial difficulty and recovery is expected to be provided substantially through the operation or sale of the collateral.

As of June 30, 2022, we have recognized certain assets and liabilities amounting to $71 million each for the ~~nine months ended September 30, 2017~~guarantees related to the independents’ and ~~it is not expected to have a material impact on the annual consolidated financial statements or related disclosures.~~

~~In March 2017, the FASB issued ASU 2017-07,~~ ~~Compensation-Retirement Benefits (Topic 715)~~ ~~("ASU 2017-07"), which requires an entity to report the service cost component of net periodic benefit cost~~affiliates’ borrowings. These assets and liabilities are included in ~~the same line item as~~ other ~~compensation costs (selling, administrative~~assets and other ~~expenses), and the remaining components in non-operating expense~~long-term liabilities in the ~~consolidated statement of income and comprehensive income. This standard is effective for interim and annual reporting periods beginning after December~~

15, 2017 and early adoption is permitted. The Company will adopt ASU 2017-07 on January 1, 2018 and it is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures.

~~Note E – Credit Facilities~~

In June 2017, the Company exercised its remaining optional one year extension on the $1.2 billion multi-currency Syndicated Facility (the "Syndicated Facility") amended June 19, 2015, to extend the maturity date from June 2021 to June 2022.

~~At September 30, 2017, approximately $595.0 million was outstanding under the Syndicated Facility and is included in "Current portion of debt" in the accompanying~~ condensed consolidated balance ~~sheet.~~

On September 22, 2017, the Company executed a $2.0 billion 364-day bridge facility bearing interest at LIBOR plus a variable margin. At September 30, 2017, the Company did not have any amounts outstandingsheets. The liabilities relate to our noncontingent obligation to stand ready to perform under the ~~facility.~~guarantee programs and they are distinct from our current expected credit loss reserve.

~~Note F – Share-Based Compensation~~Earnings Per Share

~~As more fully discussed in Note 5 of the Company’s notes to the consolidated financial statements in its 2016 Annual Report on Form 10-K, the Company maintains~~We maintain various long-term incentive plans, which provide for the granting of stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), performance awards, dividend equivalents and other share-based awards. ~~SARs represent a right to receive upon exercise an amount, payable~~Certain outstanding options are not included in ~~shares of common stock, equal to~~ the excess, if any, of the fair market value of the Company’s common stock on the date of exercise over the base value of the grant. The terms of such SARs require net settlement in shares of common stock and do not provide for cash settlement. RSUs represent a contingent right to receive one share of the Company’s common stock at a future date. The majority of awards previously granted vest on a pro-rata basis for periods ranging from one to five years and are expensed accordingly on a straight-line basis. The Company issues new shares upon exercise or conversion of awards under these plans. Most awards may be exercised or converted to shares not earlier than twelve months nor later than ten years from the date of grant. At September 30, 2017, total compensation cost related to nonvested awards not yet recognized was approximately $38.0 million, as compared to $34.6 million at December 31, 2016. The weighted-average period over which this compensation cost is expected to be recognized is approximately three years. The aggregate intrinsic value for SARs and RSUs outstanding at September 30, 2017 was approximately $105.7 million. At September 30, 2017, the aggregate intrinsic value for SARs and RSUs vested totaled approximately $55.5 million, and the weighted-average contractual lives for outstanding and exercisable SARs and RSUs were approximately six and five years, respectively. For the nine months ended September 30, 2017, $12.9 million of share-based compensation cost was recorded, as compared to $15.4 million for the same nine month period in the prior year.

~~Options to purchase approximately 2.5 million and 1.9 million shares of common stock were outstanding but excluded from the computation of~~ diluted earnings per share calculation because their inclusion would have been anti-dilutive.

The following table summarizes anti-dilutive shares outstanding:


	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Anti-dilutive shares outstanding	456	186	748	99

2. Segment Information

The following table presents a summary of our reportable segment financial information:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Net sales:
Automotive	$	3,467,494	$	3,196,299	$	6,743,115	$	6,149,464
Industrial	2,134,920		1,587,439		4,153,934		3,098,988
Total net sales	$	5,602,414	$	4,783,738	$	10,897,049	$	9,248,452
Segment profit:
Automotive	$	322,553	$	290,758	$	587,126	$	526,436
Industrial	225,472		150,413		413,825		275,705
Total segment profit	548,025		441,171		1,000,951		802,141
Interest expense, net	(20,248)		(15,362)		(40,098)		(33,686)
Intangible asset amortization	(39,630)		(27,384)		(79,324)		(52,928)
Corporate expense	(73,312)		(51,397)		(115,063)		(82,640)
Other unallocated income (expenses) (1)	76,732		(77,421)		50,817		(77,421)
Income before income taxes	$	491,567	$	269,607	$	817,283	$	555,466

(1) The following table presents a summary of the other unallocated income and expenses:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Other unallocated costs:
Gain on sale of real estate (2)	$	102,803	$	—	$	102,803	$	—
Gain on insurance proceeds (3)	$	873	$	—	$	1,507	$	—
Product liability damages award (4)	—		(77,421)		—		(77,421)
Transaction and other costs (5)	(26,944)		—		(53,493)		—
Total other unallocated costs	$	76,732	$	(77,421)	$	50,817	$	(77,421)

(2) Adjustment reflects a gain on the sale of real estate that had been leased to S.P. Richards.

(3) Adjustment reflects insurance recoveries in excess of losses incurred on inventory, property, plant and equipment and other fire-related costs.

(4) Adjustment reflects damages reinstated by the Washington Supreme Court order on July 8, 2021 in connection with a 2017 automotive product liability claim.

(5) Adjustment primarily reflects legal and professional, restructuring, lease termination and other costs associated with the January 3, 2022 acquisition and subsequent integration of KDG. These costs also include a $17 million impairment charge driven by a decision to retire certain legacy trade names, classified as other intangible assets, prior to the end of their estimated useful lives as part of executing our KDG integration and rebranding strategy. Refer to the acquisition footnote for more information regarding the acquisition.

Net sales are disaggregated by geographical region for each of our reportable segments, as we deem this presentation best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors. The following table presents disaggregated geographical net sales from contracts with customers by reportable segment:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
North America:
Automotive	$	2,302,008	$	2,076,562	$	4,432,881	$	3,939,367
Industrial	2,021,297		1,469,775		3,931,730		2,869,174
Total North America	$	4,323,305	$	3,546,337	$	8,364,611	$	6,808,541
Australasia:
Automotive	$	398,940	$	388,708	$	777,849	$	756,577
Industrial	113,623		117,664		222,204		229,814
Total Australasia	$	512,563	$	506,372	$	1,000,053	$	986,391
Europe – Automotive	$	766,546	$	731,029	$	1,532,385	$	1,453,520
Total net sales	$	5,602,414	$	4,783,738	$	10,897,049	$	9,248,452

3. Accounts Receivable Sales Agreement

Under our accounts receivable sales agreement (the "A/R Sales Agreement"), we continuously sell designated pools of receivables as they are originated by us and certain U.S. subsidiaries to a separate bankruptcy-remote special purpose entity (“SPE”). The A/R Sales Agreement has a three year term, which we intend to renew.

We continue to be involved with the receivables transferred by the SPE to the unaffiliated financial institution by providing collection services. As cash is collected on sold receivables, the SPE continuously transfers ownership and ~~nine month periods ended September~~control of new qualifying receivables to the unaffiliated financial institution so that the total principal amount outstanding of receivables sold is approximately $1 billion at any point in time (which is the maximum amount allowed under the agreement as amended on January 3, 2022).

Total principal amount outstanding of receivables sold is approximately $1 billion and $800 million as of June 30, ~~2017, respectively,~~2022 and December 31, 2021, respectively. The amount of receivables pledged as ~~compared~~collateral as of June 30, 2022 and December 31, 2021 is approximately $1.1 billion and $973 million, respectively.

The following table summarizes the activity and amounts outstanding under the A/R Sales Agreement as of:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Receivables sold to the financial institution and derecognized	$	2,242,273	$	1,888,942	$	4,478,718	$	3,816,873
Cash collected on sold receivables	$	2,242,274	$	1,888,940	$	4,278,729	$	3,816,868

Continuous cash activity related to ~~approximately 0.7 million and 1.2 million for~~ the ~~three and nine month periods ended September 30, 2016, respectively. These options were excluded~~A/R Sales Agreement is reflected in net cash provided by operating activities in the condensed consolidated statements of cash flows. The SPE incurs fees due to the unaffiliated financial institution related to the accounts receivable sales transactions. Those fees, which are immaterial, are recorded within other non-operating expense (income) in the condensed consolidated statements of income. The SPE has a recourse obligation to repurchase from the ~~computation~~unaffiliated financial institution any previously sold receivables that are not collected due to the occurrence of ~~diluted net income per common share because~~certain events, including credit quality deterioration and customer sales returns. The reserve recognized for this recourse obligation as of June 30, 2022 and December 31, 2021 is not material. The servicing liability related to our collection services also is not material, given the ~~options’ exercise prices were greater than the average market price~~high quality of the ~~common stock. During~~customers underlying the ~~nine months ended September 30, 2017,~~receivables and the ~~Company granted approximately 746,000 SARs and 171,000 RSUs.~~anticipated short collection period.

~~Note G –~~4. Employee Benefit Plans

Net periodic benefit income ~~for the~~from our pension plans included the following components for our pension benefits:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Service cost	$	2,586	$	3,101	$	5,202	$	6,142
Interest cost	18,849		17,962		37,716		35,868
Expected return on plan assets	(37,646)		(38,858)		(75,318)		(77,590)
Amortization of prior service cost	172		172		344		344
Amortization of actuarial loss	9,275		12,509		18,554		24,965
Net periodic benefit income	$	(6,764)	$	(5,114)	$	(13,502)	$	(10,271)

Service cost is recorded in selling, administrative and other expenses in the ~~three months ended September 30:~~

Pension Benefits
2017 2016
(in thousands)
Service cost $ 2,240
$ 2,106
Interest cost 24,243
26,195
Expected return on plan assets (38,061 ) (39,296 )
Amortization of prior service credit (88 ) (108 )
Amortization of actuarial loss 9,549
7,860
Net periodic benefit income $ (2,117 ) $ (3,243 )

~~Net periodic benefit~~condensed consolidated statements of income ~~for the pension plans included the following~~while all other components ~~for the nine months ended September 30:~~

Pension Benefits
2017 2016
(in thousands)
Service cost $ 6,530
$ 6,257
Interest cost 72,474
78,505
Expected return on plan assets (117,475 ) (117,767 )
Amortization of prior service credit (263 ) (324 )
Amortization of actuarial loss 28,500
23,530
Net periodic benefit income $ (10,234 ) $ (9,799 )

are recorded within other non-operating expense (income). Pension benefits also include amounts related to a supplemental retirement ~~plan.~~ plans.

We acquired several businesses, including KDG, for approximately $1.6 billion, net of cash acquired, during the six months ended June 30, 2022. For the six months ended June 30, 2021, acquisitions totaled $98 million, net of cash acquired.

During the ~~nine~~six months ended ~~September~~June 30, ~~2017, the Company made a $38.7~~2022, we recognized approximately $238 million ~~contribution to the pension plan.~~

~~Note H – Guarantees~~

~~The Company guarantees the borrowings~~and $550 million of certain independently controlled automotive parts stores (“independents”) and certain other affiliates in which the Company has a noncontrolling equity ownership interest (“affiliates”). Presently, the independents are generally consolidated by unaffiliated enterprises that have controlling financial interests through ownershiprevenue, net of a majority voting interest in the independents. The Company has no voting interest or equity conversion rights in any of the independents. The Company does not control the independents or the affiliates, but receives a fee for the guarantees. The Company has concluded that the independents are variable interest entities, but that the Company is not the primary beneficiary. Specifically, the equity holders of the independents have the power to direct the activities that most significantly impact the entities’ economic performance including, but not limited to, decisions about hiring and terminating personnel, local marketing and promotional initiatives, pricing and selling activities, credit decisions, monitoring and maintaining appropriate inventories, and store hours. Separately, the Company concluded the affiliates are not variable interest entities. The Company’s maximum exposure to loss as a result of its involvement with these independents and affiliates is generally equal to the total borrowings subject to the Company’s guarantees. While such borrowings of the independents and affiliates are outstanding, the Company is required to maintain compliance with certain covenants, including a maximum debt to capitalization ratio and certain limitations on additional borrowings. At September 30, 2017, the Company was in compliance with all such covenants.

At September 30, 2017, the total borrowings of the independents and affiliates subject to guarantee by the Company were approximately $554.2 million. These loans generally mature over periods from one to six years. In the event that the Company is required to make payments in connection with guaranteed obligations of the independents or the affiliates, the Company would obtain and liquidate certain collateral (e.g., accounts receivable and inventory) to recover all or a portion of the amounts paid under the guarantees. When it is deemed probable that the Company will incur a loss in connection with a guarantee, a liability is recorded equal to this estimated loss. To date, the Company has had no significant losses in connection with guarantees of independents’ and affiliates’ borrowings.

~~As of September 30, 2017, the Company has recognized certain assets and liabilities amounting to $59.0 million each for the guarantees~~closures, related to ~~the independents’~~our Automotive and ~~affiliates’ borrowings. These assets and liabilities~~Industrial acquisitions, respectively. The results of operations for acquired businesses are included in ~~other assets and other long-term liabilities in the~~our condensed consolidated ~~balance sheets.~~

~~Note I – Fair Value~~statements of ~~Financial Instruments~~

The carrying amounts reflected in the condensed consolidated balance sheets for cash and cash equivalents, trade accounts receivable, trade accounts payable, and borrowings under the line of credit approximateincome beginning on their respective ~~fair values based on~~acquisition dates.

For each acquisition, we allocate the short-term nature of these instruments. At September 30, 2017, the carrying value and the fair value of fixed rate debt were approximately $550.0 million and $563.6 million, respectively. The fair value of fixed rate debt is designated as Level 2 in the fair value hierarchy (i.e., significant observable inputs) and is based primarily on the discounted value of future cash flows using current market interest rates offered for debt of similar credit risk and maturity. The carrying value of fixed rate debt of $550.0 million is included in long-term debt in the accompanying condensed consolidated balance sheets.

~~Note J – Legal Matters~~

~~On April 17, 2017, a jury awarded damages against the Company of $81.5 million in a litigated automotive product liability dispute.~~Through post-trial motions and offsets from previous settlements, the initial verdict has been reduced to $77.1 million. The Company believes the verdict is not supported by the facts or the law and is contrarypurchase price to the ~~Company’s role in~~assets acquired and the ~~automotive parts industry.~~

The Company intends to challenge the verdict through further post-trial motions and on appeal to a higher court. At the time of the filing of these financial statements, based upon the Company’s legal defenses, insurance coverage, and reserves, the Company does not believe this matter will have a material impact to the condensed consolidated financial statements.

~~Note K – Acquisitions and Equity Investments~~

~~During the nine months ended September 30, 2017, the Company acquired certain companies and equity investments for approximately $266.4 million. The Company recognized and measured the assets and~~ liabilities assumed based on their fair values as of their respective acquisition dates. ~~The results of operations~~Excluding KDG, for the ~~acquired companies were included in the Company’s condensed consolidated statements of income beginning on their respective acquisition dates. The Company~~six months ended June 30, 2022 and June 30, 2021, we recorded approximately ~~$105.4~~$185 million and $70 million of goodwill and other intangible assets associated with acquisitions. Other intangible assets acquired consisted primarily of customer relationships with a weighted average amortization lives of 20 years.

On January 3, 2022, we, through our wholly-owned subsidiary, Motion Industries, Inc., acquired all of the ~~acquisitions.~~ equity interests in KDG for a purchase price of approximately $1.3 billion in cash. KDG, which is headquartered in Bloomfield, Connecticut, is a power transmission, automation and fluid power industrial distributor and solutions provider with operations throughout the United States, providing electro-mechanical products, bearings, power transmission, motion control and electrical and fluid power components to MRO and OEM customers. KDG has approximately 1,700 employees with approximately 220 locations across the United States and Puerto Rico. As of January 3, 2022, KDG had estimated annual revenues of approximately $1 billion.

The ~~Company~~net cash consideration transferred of approximately $1.3 billion is net of the estimated cash acquired of approximately $30 million.

The KDG acquisition was financed using a combination of borrowings under the existing unsecured revolving credit facility, proceeds of $200 million from the selling of additional receivables under our amended A/R Sales Agreement and $109 million of cash.

The following table summarizes the preliminary, estimated fair values of the assets acquired and liabilities assumed at the acquisition date as well as adjustments made to the acquisition accounting during the six months ended June

30, 2022 (referred to as the "measurement period adjustments"). The measurement period adjustments primarily resulted from revisions to the valuation of certain tangible and intangible assets. The fair value of the acquired identifiable intangible assets is provisional pending completion of the final valuations for these assets. We are in the process of analyzing the estimated values of all assets acquired and liabilities ~~acquired and is~~assumed as of the acquisition date, including, among other things, obtaining ~~third-party~~ valuations of certain tangible and intangible ~~assets. The allocations of the respective purchase prices are therefore preliminary and subject to revision. Additional disclosure of the Inenco investment is provided below.~~

Effective April 3, 2017, the Company acquired a 35% investment in the Inenco Group for approximately $72.1 million from Conbear Holdings Pty Limited ("Conbear"). The equity investment was funded with the Company’s cash on hand. The Inenco Group, which is headquartered in Sydney, Australia, is an industrial distributor of bearings, power transmissions, and seals in Australasia, with annual revenues of approximately $325 million and 161 locations across Australia and New Zealand,assets, as well as ~~an emerging presence in Asia.~~the fair value of certain contracts and the determination of certain tax balances. Additional adjustments may be made to the acquisition accounting during the measurement period primarily related to intangible asset revaluations, tax accounting and leases.


	As of January 3, 2022
(in thousands)	Initial Balance		Measurement Period Adjustments		As Adjusted
Trade accounts receivable	$	156,000	$	—	$	156,000
Merchandise inventories	166,000		(1,000)		165,000
Prepaid expenses and other current assets	39,000		(2,000)		37,000
Property, plant and equipment	26,000		(2,000)		24,000
Operating lease assets	49,000		(5,000)		44,000
Other assets	1,000		—		1,000
Other intangible assets	592,000		4,000		596,000
Goodwill	574,000		(6,000)		568,000
Total assets acquired	1,603,000		(12,000)		1,591,000
Trade accounts payable	85,000		—		85,000
Other current liabilities	32,000		—		32,000
Operating lease liabilities	17,000		(1,000)		16,000
Deferred tax liabilities	121,000		(10,000)		111,000
Other long-term liabilities	39,000		(4,000)		35,000
Total liabilities assumed	294,000		(15,000)		279,000
Net assets acquired	$	1,309,000	$	3,000	$	1,312,000

The ~~Company~~other intangible assets acquired included $527 million of customer relationship intangibles and ~~Conbear both~~a $41 million favorable trade name licensing agreement, with amortization lives of 17 and 1.5 years, respectively. The other intangible assets have ~~an option~~a total weighted amortization life of 16 years.

The goodwill was assigned to ~~acquire or sell, respectively,~~ the remaining 65% of Inenco at a later date contingent upon certain conditions being satisfied. However, there can be no guarantee that such conditions will be met or, if they are met, whether either company would exercise its option.

~~On September 22, 2017, the Company entered into a definitive agreement to acquire Alliance Automotive Group (“AAG”). AAG is headquartered in London~~Industrial segment and is ~~a leading European distributor~~attributable primarily to expected synergies and the assembled workforce. Approximately $261 million of ~~vehicle parts, tools and workshop equipment with annual revenues~~the estimated goodwill recognized as part of ~~approximately $1.7 billion. AAG has over 1,800 company-owned stores and affiliated outlets across France,~~ the ~~U.K. and Germany. The~~KDG acquisition is ~~valued at a total purchase price~~expected to be tax deductible.

For the six months ended June 30, 2022, approximately $5 million of ~~approximately $2.0 billion. The Company intends~~inventory amortization step-up cost related to ~~finance~~this acquisition was included in cost of goods sold. Further, $47 million of transaction and other one-time costs, inclusive of the ~~transaction through a combination of new loan agreements~~impairment charge described below, were included in selling, administrative, and ~~note issuances. The Company also has available, but does not expect to utilize, a $2.0 billion 364-day unsecured bridge facility. The bridge facility is discussed further~~other expenses in the ~~credit facilities~~condensed consolidated statements of income.

In June 2022, we incurred a $17 million non-cash impairment charge related to our decision to retire certain legacy Industrial trade names, classified as other intangible assets, prior to the end of their estimated useful lives as part of the KDG integration and rebranding strategy. We evaluate other intangible assets for potential impairment indicators annually or more frequently if circumstances change.

6. Accumulated Other Comprehensive Loss

The following tables present the changes in AOCL by component for the six months ended June 30:


	Changes in Accumulated Other Comprehensive Loss by Component
(in thousands)	Pension and Other Post-Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation		Total
Beginning balance, January 1, 2022	$	(463,227)	$	(15,042)	$	(379,470)	$	(857,739)
Other comprehensive loss before reclassifications	—		—		(116,946)		(116,946)
Amounts reclassified from accumulated other comprehensive loss	13,975		7,482		—		21,457
Other comprehensive income (loss), net of income taxes	13,975		7,482		(116,946)		(95,489)
Ending balance, June 30, 2022	$	(449,252)	$	(7,560)	$	(496,416)	$	(953,228)


	Changes in Accumulated Other Comprehensive Loss by Component
(in thousands)	Pension and Other Post-Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation		Total
Beginning balance, January 1, 2021	$	(692,868)	$	(30,007)	$	(313,627)	$	(1,036,502)
Other comprehensive income before reclassifications	—		—		6,836		6,836
Amounts reclassified from accumulated other comprehensive loss	18,630		7,482		—		26,112
Other comprehensive income, net of income taxes	18,630		7,482		6,836		32,948
Ending balance, June 30, 2021	$	(674,238)	$	(22,525)	$	(306,791)	$	(1,003,554)

7. Commitments and Contingencies

From time to time, we are involved in various claims and legal actions that arise in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we do not believe that the ultimate resolution of these actions will have a material adverse effect on our financial position, results of operations, liquidity and capital resources. There have been no significant developments to the ~~acquisition~~information presented in ~~November 2017.~~our 2021 Annual Report on Form 10-K with respect to litigation or commitments and contingencies.

~~On September 25, 2017,~~Environmental Liabilities

Item 103 of SEC Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the ~~Company entered into a $1.0 billion foreign currency hedge denominated in Euros~~proceedings and such proceedings involve potential monetary sanctions that we reasonably believe will exceed an applied threshold not to ~~hedge the purchase price~~exceed $1 million. Applying this threshold, there are no environmental matters to disclose for ~~AAG acquisition. The hedge does not qualify for hedge accounting.~~this period.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes contained herein and with the audited consolidated financial statements, accompanying notes, related information and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2021. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of results for the year ended December 31, 2022.

Forward-Looking Statements

Some statements in this report, as well as in other materials we file with the Securities and Exchange Commission ~~(SEC) or otherwise~~(“SEC”), release to the public, ~~and in materials that we~~or make available on our website, constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements in the future tense and all statements accompanied by words such as “expect,” “likely,” “outlook,” “forecast,” “preliminary,” “would,” “could,” “should,” “position,” “will,” “project,” “intend,” “plan,” “on track,” “anticipate,” “to come,” “may,” “possible,” “assume,” or similar expressions are intended to identify such forward-looking statements. These forward-looking statements include our view of business and economic trends for the remainder of the year and our expectations regarding our ability to capitalize on these business and economic trends and to execute our strategic

We caution you that ~~its~~all forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the future are reasonable in view of currently available information, you are cautioned not to place undue reliance on our forward-looking statements. Actual results or events may differ materially from those indicated as a result of various important factors. Such factors may include, among other things, the inability to complete the acquisition due to failure to satisfy the customary closing conditions and/or the delay of or inability to obtain all regulatory approvals related to the acquisition, the Company’s ability to successfully integrate AAG into the Company and to realize the anticipated synergies and benefits, changes in the European aftermarket, the Company’s ability to successfully implement its business initiatives in each of its four business segments; slowing demand for the Company’s products; changes in legislation or government regulations or policies; changes in general economic conditions, including unemployment, inflation (including the impact of tariffs) or ~~deflation;~~deflation and geopolitical conflicts, such as the conflict between Russia and Ukraine; volatility in oil prices; significant cost increases, such as rising fuel and freight expenses; the extent and duration of the disruption to our business operations caused by the global health crisis associated with the COVID-19 pandemic, including the effects on the financial health of our business partners and customers, on supply chains and our suppliers, on vehicle miles driven as well as other metrics that affect our business, and on access to capital and liquidity provided by the financial and capital markets; our ability to maintain compliance with our debt covenants; our ability to successfully integrate acquired businesses into our operations and to realize the anticipated synergies and benefits; our ability to successfully implement our business initiatives in our two business segments; slowing demand for our products; the ability to maintain favorable supplier arrangements and relationships; disruptions in global supply chains and in our suppliers' operations, including as a result of the impact of COVID-19 on our suppliers and our supply chain; changes in national and international legislation or government regulations or policies, including changes to import tariffs, environmental and social policy, infrastructure programs and privacy legislation, and their impact to us, our suppliers and customers; changes in tax policies; volatile exchange rates; ~~high energy costs;~~our ability to successfully attract and retain employees in the current labor market; uncertain credit markets and other ~~macro-economic~~macroeconomic conditions; competitive product, service and pricing pressures; ~~the~~

~~ability to maintain favorable vendor arrangements and relationships; disruptions~~failure or weakness in our ~~vendors’ operations;~~disclosure controls and procedures and internal controls over financial reporting, including as a result of the ~~Company’s ability to successfully integrate its acquired businesses;~~work from home environment; the uncertainties and costs of litigation; disruptions caused by a failure or breach of ~~the Company’s~~our information systems, as well as other risks and uncertainties discussed in ~~the Company’s~~our 2021 Annual Report on Form 10-K and Item 1A, Risk Factors, in our report on Form 10-Q for ~~2016~~the quarter ended March 31, 2022 (all of which may be amplified by the COVID-19 pandemic and geopolitical conflicts, such as the current conflict between Russia and Ukraine) and from time to time in ~~the Company’s~~our subsequent filings with the SEC.

Forward-looking statements ~~are~~speak only as of the date they are made, and ~~the Company undertakes~~we undertake no duty to update ~~its~~any forward-looking statements except as required by law. You are advised, however, to review any further disclosures we make on related subjects in our subsequent ~~reports on~~ Forms 10-K, 10-Q, 8-K and other reports tofiled with the SEC.

Genuine Parts Company is a service organization engaged in the global distribution of automotive ~~replacement parts,~~and industrial replacement ~~parts, office products and electrical/electronic materials. The Company has~~parts. We have a long tradition of growth dating back to 1928, the year we were founded in Atlanta, Georgia. ~~During~~We conduct business in North America, Europe and Australasia from a network of more than 10,300 locations.

At Genuine Parts Company, our mission is to be a world-class service organization and the ~~nine~~employer of choice, supplier of choice, valued customer of choice and investment of choice - we keep the world moving! This is our purpose and the foundation of how we do business. Additionally, we strive to be a respected business community member and a good corporate citizen. Our strategic financial objectives are intended to align with our mission and drive value for all our stakeholders. Our strategic financial objectives include: (1) top line revenue growth in excess of market growth; (2) improved operating margin; (3) strong balance sheet and cash flows; and (4) effective capital allocation.

Our Automotive Parts Group operated in the U.S., Canada, Mexico, France, the U.K., Ireland, Germany, Poland, the Netherlands, Belgium, Spain, Portugal, Australia and New Zealand as of June 30, 2022, and accounted for 62% of total revenues for the three and six months ended ~~September~~June 30, ~~2017, business was conducted throughout~~2022. Our Industrial Parts Group operated in the ~~United States,~~U.S., Canada, Mexico, Australia, New Zealand, ~~Mexico~~Indonesia and ~~Puerto Rico~~Singapore. The Industrial Parts Group accounted for 38% of our total revenues for the three and six months ended June 30, 2022.

Key Business Metrics - Comparable Sales

We consider comparable sales, which refers to period-over-period comparisons of our net sales excluding the impact of acquisitions, foreign currency and other, to be a key business metric. Management uses comparable sales to evaluate the results of operations and we believe that this key indicator provides additional perspective and insights when analyzing the operating performance of our business from ~~approximately 2,670 locations.~~period to period and trends in its historical operating results. While this metric is widely used by industry stakeholders, our calculation of the metric may not be comparable to similar measures disclosed by other companies, because not all companies and analysts calculate this metric in the same manner. This metric should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this report.

Results of Operations

Our Automotive Parts Group and Industrial Parts Group both reported strong sales and segment profit margin growth during the three and six months ended June 30, 2022 when compared to the same prior year period. Our Industrial Parts Group also benefited from the January 2022 acquisition of KDG. We expect this strategic and highly synergistic combination to significantly enhance our scale and to strengthen our market leading position, creating a premier leader in industrial solutions. Additionally both businesses were resilient in managing through ongoing supply chain challenges and inflationary pressures, and rising fuel costs, all of which we expect to continue throughout the remainder of the year.

Sales for the three months ended ~~September~~June 30, ~~2017~~2022 were ~~$4.10~~$5.6 billion, a 4%17.1% increase as compared to ~~$3.94~~$4.8 billion in the same period of the prior year. For the three months ended September 30, 2017, the Company recorded consolidated net income of $158.4 million, a decrease of 15% as compared to consolidated net income of $185.3 million in the same three month period of the prior year. For the nine months ended September 30, 2017 sales were $12.10 billion, a 4.7% increase as compared to $11.56 billion in the same period of the prior year. For the nine months ended September 30, 2017, the Company recorded consolidated net income of $508.6 million compared to consolidated net income of $534.7 million in the same nine month period of the prior year.

The Company incurred certain transaction costs primarily related to the pending $2.0 billion European acquisition of Alliance Automotive Group in the third quarter of 2017. Before the impact of these costs, the Company's net income was $170.0 million and $520.2 million in the three and nine month periods ended September 30, 2017.

The Company continues to focus on a variety of initiatives to facilitate continued growth including strategic acquisitions, the introduction of new and expanded product lines, geographic expansion, sales to new markets, enhanced customer marketing programs and a variety of gross margin and cost savings initiatives.

~~As noted above, sales~~ for ~~the three months ended September 30, 2017 were $4.10 billion, a 4% increase as compared to $3.94 billion in~~ the same period of the prior year. The ~~revenue~~ increase in sales is attributable to an 11.5% increase in comparable sales and an 8.8% benefit from acquisitions, slightly offset by a net unfavorable impact of foreign currency and other of 3.2%. Sales for the ~~three~~six months ended ~~September~~June 30, ~~2017, consisted of an approximate 2% contribution from acquisitions, a positive 1% increase in organic sales and a 1% favorable currency impact. For the nine months ended September 30, 2017 sales~~2022 were ~~$12.10~~$10.9 billion, a ~~4.7%~~17.8% increase as compared to ~~$11.56~~$9.2 billion infor the same period of the prior ~~year, which reflects a 1.2%~~year. The increase in ~~organic~~sales is due to a 11.8% increase in comparable sales, a ~~3.1% contribution~~8.6% benefit from acquisitions, and ~~an approximate 0.4% favorable~~a 2.6% net unfavorable impact of foreign currency ~~impact, as~~and other. The increases in comparable sales were primarily driven by the continued increase in consumer activity and the ongoing execution of the strategic pricing and other sales initiatives to offset product and other inflationary cost pressures when compared to the ~~same nine month period in 2016.~~

three and six months ended June 30, 2021.

Sales for the Automotive Parts Group increased ~~3.6% in~~8.5% and 9.7% for the ~~third quarter of 2017, as~~three and six months ended June 30, 2022 compared to the same ~~period~~periods in the prior year. This ~~group’s~~group's revenue increase for the three months ended ~~September~~June 30, ~~2017~~2022 consisted of an approximate ~~1.4%~~8.4% increase in comparable sales driven by strong demand in all geographical regions and pricing increases to offset product costs and other inflationary pressures. The overall sales increase also included a 4.5% benefit from acquisitions and was slightly offset by a ~~positive 1%~~4.4% net unfavorable impact of ~~organic sales~~foreign currency and ~~a 1.2% favorable currency impact.~~other. This ~~group’s 3.6% sales~~group's revenue increase for the ~~nine month period~~six months ended ~~September~~June 30, ~~2017 reflects a 1% increase from organic sales growth,~~2022 consisted of an approximate ~~2% contribution~~9.3% increase in comparable sales and 3.9% benefit from acquisitions, ~~and~~partially offset by a ~~0.6% favorable currency~~3.5% net unfavorable impact from ~~our businesses throughout Australia, Canada~~foreign currency and ~~Mexico. We anticipate the Company’s initiatives to drive both organic and acquisitive growth will positively benefit the Automotive Parts Group through increased sales in the quarters ahead.~~

~~The Industrial Products Group’s sales increased by approximately 7.1% for the three month period ended September 30, 2017, as~~other compared to the same period in ~~2016. The increase in this group’s revenues reflects a 4.1% increase in organic sales, an approximate 2.6% accretive impact~~2021.

Table of acquisitions and a 0.4% favorable foreign currency impact. This group’s 7.1% sales increase for the nine month period ended September 30, 2017 reflects a 4.1% increase in organic sales and a 3% contribution from acquisitions. The Industrial Product Group has multiple initiatives in place to drive continued market share expansion through both organic and acquisitive sales growth in the quarters ahead.Contents

Sales for the ~~Office Products~~Industrial Parts Group ~~decreased 4.7%~~increased 34.5% and 34% for the three and six months ended ~~September~~June 30, ~~2017, due to its decrease in organic sales~~2022 compared to the same ~~three month period~~periods in ~~2016. For~~2021. The increases reflect benefits of 17.6% and 17.7% primarily from the ~~nine months ended September 30, 2017, this group’s revenues increased 2.7% due~~acquisition of KDG and increases of 17.8% and 17% in comparable sales. Our Industrial Parts Group continues to ~~a 6.3% accretive impact~~benefit from ~~acquisitions less an approximate 3.6% decrease in organic sales. We expect~~

the ongoing execution of our ~~internal sales~~strategic initiatives ~~including our plans to further enhance our Facilities, Breakroom~~ and ~~Safety Products offering, to support revenue growth for this group~~the continued expansion in the ~~quarters ahead.~~industrial economy, which is evident in indicators such as the Purchasing Managers Index and Industrial Production Index.

Sales for the Electrical/Electronic Materials Group increased 11.6% for the three months ended September 30, 2017, as compared to the same period in 2016, and reflect an approximate 0.6% decrease in organic sales, a 1.5% favorable impact of copper pricing, and an approximate 10.7% accretive impact of the Company’s acquisitions. For the nine months ended September 30, 2017, this group’s revenues increased 9.2%, and reflect an approximate 8% accretive impact from acquisitions, a marginal increase in organic sales and a 1% favorable impact of copper pricing. We expect our growth initiatives, including acquisitions, to enable this group to report ongoing revenue growth in the quarters ahead.

For the nine month period ended September 30, 2017, industry pricing increased 0.3% in the Automotive segment, increased 0.6% in the Office Products segment, increased 1.3% in the Electrical/Electronic Materials segment and increased 1.8% in the Industrial segment.

Cost of Goods ~~Sold/~~Sold and Operating Expenses

Cost of goods sold for the three months ended ~~September~~June 30, ~~2017~~2022 was ~~$2.87~~$3.6 billion, ~~a 5%~~an 17.7% increase from ~~$2.74~~$3.1 billion for the same period in ~~2016.~~2021. As a percentage of net sales, cost of goods sold was ~~70.0%~~65.0% for the three ~~month period~~months ended ~~September~~June 30, ~~2017, as~~2022 compared to ~~69.6% in the same three month period of 2016. Cost of goods sold for the nine months ended September 30, 2017 was $8.48 billion, a 5% increase from $8.09 billion~~64.7% for the same period in 2021. For the ~~prior year.~~six months ended June 30, 2022, cost of goods sold was $7.1 billion, an 18.1% increase from $6 billion for the same six month period in 2021. As a ~~percent~~percentage of net sales, cost of goods sold was ~~70.1% as~~65.2% for the six months ended June 30, 2022 compared to ~~70.0% in~~65.1% for the same ~~nine month~~ period ~~of 2016. The increase~~ in cost of goods sold for the three and nine month periods ended September 30, 2017 primarily relates to the sales increase for this period as compared to the same three and nine month periods of the prior year. The Company’s cost2021. Cost of goods sold includes the total cost of merchandise sold, including freight expenses associated with moving merchandise from our ~~vendors~~suppliers to our distribution centers, retail stores and branches, as well as ~~vendor~~supplier volume incentives and inventory adjustments. ~~Gross profit as a percentage~~The increases in costs of ~~net sales may fluctuate based on (i) changes~~goods sold for the three and six months ended June 30, 2022 were primarily driven by increased demand, unfavorable foreign exchange impacts, inflation and moderation in ~~merchandise costs and related vendor volume~~supplier incentives, or pricing, (ii) variations in product and customer mix, (iii) price changes in response to competitive pressures, (iv) physical inventory and LIFO adjustments, and (v) changes in foreign currency exchange rates.

which were partially offset by the ongoing favorable impact of strategic category management initiatives.

Total operating expenses increased 1.7% to ~~$980.5 million~~$1.5 billion for the three ~~month period~~months ended ~~September~~June 30, ~~2017 as~~2022 compared to ~~$907.2 million~~$1.4 billion for the same three month period in ~~2016.~~2021. As a percentage of net sales, operating expenses ~~increased~~decreased to ~~23.9% as~~25.9% compared to ~~23.0% in the~~29.9% for same three month period ofin the previous year. For the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2022, these expenses totaled ~~$2.84~~$2.9 billion, ~~or 23.4%~~compared to $2.7 billion for the same period in 2021, and as a percentage of net sales, operating expenses decreased to 27.1% compared to ~~$2.63 billion, or 22.8% as a percentage of net sales~~29.2% for the same ~~nine~~six month period in 2021. For the ~~prior year.~~three and six months ended June 30, 2022 operating expenses included $25 million and $47 million, respectively, of transaction and other costs associated with the KDG acquisition, inclusive of a non-cash impairment charge of $17 million from the retirement of certain legacy trade names that will no longer be used as result of the on-going KDG integration. The increase in total operating expenses for both periods was partially offset by a one-time benefit of $103 million from a gain on the sale of real estate that had been leased to S.P. Richards. The decrease in operating expenses as a percentage of net sales for the three and nine month periods ended September 30, 2017 reflects the Company’s deleveraging of expenses on lower comparable sales, as well as higher costs in areas such as IT, digital, legal, professional and insurance, freight and delivery, and acquisition related costs. In addition, the increase includes approximately $18.5 million of transaction costsperiod is primarily related to ~~the Company's pending $2.0 billion European acquisition of Alliance Automotive Group recorded in the three~~improved leverage on stronger sales and nine month periods ended September 30, 2017. The Company continues to focus on effectively managing the costs in our businesses with ongoing investments in technology and supply chain initiatives primarily associated with freight, digital and logistics related functions.cost control initiatives.

~~The Company’s~~Our operating expenses are substantially comprised of compensation and ~~benefit related~~benefit-related costs for personnel. Other major expense categories include facility occupancy costs for headquarters, distribution centers and retail store/branch operations, ~~insurance~~transportation and delivery costs, technology and digital costs, accounting, legal and professional services, ~~transportation~~insurance costs, and ~~delivery costs,~~ travel and advertising. Management’s ongoing cost control measures in these areas have served to improve the Company’s overall cost structure. The Company's recent acquisitions have lower costs of goods sold and higher levels of operating costs as compared to the Company's other businesses, however, the operating profit margins remain consistent.

~~Operating~~Segment Profit

~~Operating~~The Automotive Parts Group's segment profit ~~decreased to $310.3 million for~~increased 10.9% in the three months ended ~~September~~June 30, 2017, compared to $328.0 million for the same three month period of the prior year. As a percentage of net sales, operating profit was 7.6%, as compared to 8.3% in the same three month period of 2016. For the nine months ended September 30, 2017, operating profit decreased to $946.5 million compared to $953.1 million for the same nine month period of the prior year, and as a percentage of net sales, operating profit was 7.8%, as compared to 8.2% in the same nine month period of 2016. The decrease in operating profit as a percentage of net sales for the three and nine month periods ended September 30, 2017 is primarily due to the deleveraging of fixed costs associated with lower comparable sales growth, higher expenses in areas such as IT, freight and delivery costs, lower volume incentives and a product mix shift to lower margin products, which was partially offset by the positive impact of cost control initiatives.

~~The Automotive Parts Group’s operating profit decreased 10% in the three month period ended September 30, 2017,~~2022 compared to the same period of ~~2016,~~2021, and its ~~operating~~segment profit margin ~~was 8.2%, as~~increased to 9.3% compared to 9.4% in the same three month period of the prior year. For the nine months ended September 30, 2017, the Automotive Parts Group’s operating profit decreased approximately 3% and the operating profit margin was 8.5% as compared to 9.1% in the same nine month period of 2016. The decrease in operating profit margin for the three and nine month periods ended September 30, 2017 is primarily due to the slow organic sales environment in our U.S. Automotive businesses and its impact on expense leverage, higher expenses in areas such as IT, freight and delivery costs lower volume incentives and a product mix shift to lower margin products.

The Industrial Products Group’s operating profit increased 10.5% in the three month period ended September 30, 2017, compared to the same three month period of 2016, and the operating profit margin for this group was 7.6% compared to 7.4% for the same period of the previous year. ~~Operating profit for~~For the Industrial Products Group increased by 10% for the nine month period ended September 30, 2017, compared to the same period in 2016, and the operating profit margin was 7.5% compared to 7.3% for the same nine month period in 2016. The increase in operating profit margin for the three and nine month periods ended September 30, 2017 is primarily due to the increase in organic sales volume and its positive impact on expense leverage, as well as improved core gross margin.

~~The Office Products Group’s operating profit decreased 21% for the three~~six months ended ~~September~~June 30, ~~2017, compared to the same three month period in 2016, and the operating~~2022, this group's segment profit ~~margin for this group was 4.7% compared to 5.7% for the same three month period of 2016. For the nine months ended September 30, 2017, the Office Products Group’s operating profit decreased 12%~~increased 11.5% compared to the same period of the prior year, and ~~the operating~~its segment profit margin ~~was 5.6%~~increased to 8.7% compared to ~~6.5%~~8.6% for the same period in ~~2016. The decrease~~2021. These improvements in ~~operating~~segment profit margin, ~~for~~despite inflationary headwinds, reflect the ~~three~~strong operating results in all geographical regions, driven primarily by strong sales demand and ~~nine month periods ended September 30, 2017 is primarily due to~~ the ~~following factors: the impact~~execution of ~~lower organic sales volume~~our strategic growth and its negative impact on expense leverage; lower volume incentives; and, rising costs associated with serving a growing number of sales channels. The Company has implemented several initiatives to drive significant cost savings for this group in the quarters ahead.

operating initiatives.

The ~~Electrical/Electronic Materials Group operating~~Industrial Parts Group's segment profit ~~decreased 5% for the three months ended September 30, 2017, as compared to the same three month period in 2016,~~increased 49.9% and its operating profit margin was 6.8% compared to 8.0% in the same three month period of the prior year. Operating profit for the Electrical/Electronic Materials Group decreased by approximately 5% for the nine month period ended September 30, 2017, compared to the same period in 2016, and the operating profit margin was 7.3% compared to 8.4% for the same nine month period in 2016. The decrease in operating profit margin for the three and nine month periods ended September 30, 2017 is primarily due to customer and product mix shifts, which were partially offset by the positive impact of cost savings initiatives.

~~Income Taxes~~

The effective income tax rate was 35.7% for the three month period ended September 30, 2017, compared to 36.4% for the same period in 2016. The effective income tax rate was 35.4% for the nine month period ended September 30, 2017, compared to 36.2% for the same period in 2016. The rate decrease50.1% in the three and ~~nine month periods~~six months ended ~~September~~June 30, 2017 reflects the higher mix of foreign earnings, taxed at a lower rate relative to our U.S. operations and the positive impact of the recognition of excess tax benefits due to the adoption of ASU 2016-09 pertaining to Stock Compensation as2022 compared to the same periods in ~~2016.~~2021, primarily driven by the acquisition of KDG. For the three months and six months ended June 30, 2022, this group's segment profit margin increased to 10.6% and 10.0% compared to 9.5% and 8.9%, respectively, for the same periods of the previous year. These improved segment profit margins are primarily due to the benefit of strong sales growth and strategic initiatives in areas such as category management and pricing.

Income Taxes

Our effective income tax rate was 24.2% and 24.3% for the three and six month periods ended June 30, 2022, as compared to 27.1% and 25.4%, respectively, for the same periods in 2021. The rate decrease is primarily due to future tax benefit adjustments and a prior year United Kingdom rate change that required deferred tax asset and liability remeasurement increasing the prior period 2021 comparative rate. The decrease was partially offset by geographic income mix shifts.

Table of Contents

Net Income

For the three months ended ~~September~~June 30, ~~2017, the Company recorded consolidated~~2022, net income was $373 million, an increase of 89.6% compared to net income of ~~$158.4~~$196 million ~~a decrease of 15% as compared to consolidated net income of $185.3 million in~~for the same three month period of the prior year. On a per share diluted basis, net income was ~~$1.08, a decrease~~$2.62, an increase of ~~13% as~~92.6% compared to ~~$1.24~~$1.36 for the same three month period of ~~2016.~~2021. For the ~~nine~~six months ended ~~September~~June 30, ~~2017, the Company recorded consolidated~~2022, net income was $618 million, an increase of 49.3% compared to net income of ~~$508.6~~$414 million asfor the same six month period in 2021. On a per share diluted basis, net income was $4.34, an increase of 52.3% compared to ~~consolidated~~$2.85 for the same six month period of the prior year.

For the three months ended June 30, 2022, net income on an adjusted basis was $313 million, an increase of 23.9% compared to adjusted net income of ~~$534.7~~$253 million infor the same ~~nine~~three month period of the prior year. On a per share ~~diluted~~ basis, net income on an adjusted diluted basis was ~~$3.44, a decrease~~$2.20 for the three months ended June 30, 2022, an increase of ~~3% as~~26.4% compared to ~~$3.56 in~~$1.74 for the same ~~nine~~three month period of 2021. For the six months ended ~~September~~June 30, ~~2016.~~2022, net income on an adjusted basis was $579 million, an increase of 23.1% compared to adjusted net income of $470 million for the same six month period of the prior year. On a per share basis, net income on an adjusted diluted basis was $4.06 for the six months ended June 30, 2022, an increase of 25.3% compared to $3.24 for the same six month period of 2021. For 2021, adjusted net income and adjusted diluted earnings per share are both non-GAAP measures (see table below for reconciliations to the most directly comparable GAAP measures).

The ~~Company incurred certain transaction costs~~growth in net income and adjusted net income in all periods presented reflects strong operating results in both of our segments, driven primarily ~~related~~by strong sales demand, the benefits of key acquisitions (including KDG), and the execution of our strategic growth initiatives, despite inflationary and other macroeconomic headwinds.

The following table sets forth a reconciliation of net income and diluted net income per common share to ~~the pending $2.0 billion European acquisition of Alliance Automotive Group in the third quarter of 2017. Before~~adjusted net income and adjusted diluted net income per common share to account for the impact of these ~~costs,~~adjustments. We believe that the ~~Company's~~presentation of adjusted net income ~~was $170.0 million,~~and adjusted diluted net income per common share, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provide meaningful supplemental information to both management and investors that is indicative of our core operations. We consider these metrics useful to investors because they provide greater transparency into management’s view and assessment of our ongoing operating performance by removing items management believes are not representative of our operations and may distort our longer-term operating trends. We believe these measures are useful and enhance the comparability of our results from period to period and with our competitors, as well as show ongoing results from operations distinct from items that are infrequent or ~~$1.16 on~~not associated with our core operations. We do not, nor do we suggest that investors should, consider such non-GAAP financial measures, as superior to, in isolation from, or as a substitute for, GAAP financial information.


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
GAAP net income	$	372,529	$	196,496	$	618,367	$	414,206

Adjustments:
Gain on sale of real estate (1)	(102,803)		—		(102,803)		—
Gain on insurance proceeds (2)	(873)		—		(1,507)		—
Product liability damages award (3)	—		77,421		—		77,421
Transaction and other costs (4)	26,944		—		53,493		—
Total adjustments	(76,732)		77,421		(50,817)		77,421
Tax impact of adjustments	17,291		(21,322)		11,187		(21,322)
Adjusted net income	$	313,088	$	252,595	$	578,737	$	470,305

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The table below represent amounts per common share ~~diluted basis, and $520.2 million, or $3.52 on a per share diluted basis,~~assuming dilution:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share data)	2022		2021		2022		2021
GAAP net income	$	2.62	$	1.36	$	4.34	$	2.85

Adjustments:
Gain on sale of real estate (1)	(0.72)		—		(0.72)		—
Gain on insurance proceeds (2)	(0.01)		—		(0.02)		—
Product liability damages award (3)	—		0.53		—		0.53
Transaction and other costs (4)	0.19		—		0.38		—
Total adjustments	(0.54)		0.53		(0.36)		0.53
Tax impact of adjustments	0.12		(0.15)		0.08		(0.14)
Adjusted diluted net income per common share	$	2.20	$	1.74	$	4.06	$	3.24
Weighted average common shares outstanding – assuming dilution	142,304		144,983		142,582		145,158

The table below clarifies where the adjusted items are presented in the ~~three~~condensed consolidated statements of income.


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Line item:
Cost of goods sold	$	—	$	—	$	5,000	$	—
Selling, administrative and other expenses	(75,859)		77,421		(54,310)		77,421
Non-operating expense (income): Other	(873)		—		(1,507)		—
Total adjustments	$	(76,732)	$	77,421	$	(50,817)	$	77,421

(1) Adjustment reflects a gain on the sale of real estate that had been leased to S.P. Richards.

(2) Adjustment reflects insurance recoveries in excess of losses incurred on inventory, property, plant and ~~nine month periods ended September 30, 2017.~~equipment and other fire-related costs.

(3) Adjustment reflects damages reinstated by the Washington Supreme Court order on July 8, 2021 in connection with a 2017 automotive product liability claim.

(4) Adjustment primarily reflects legal and professional, restructuring, lease termination and other costs associated with the January 3, 2022 acquisition and subsequent integration of KDG. These costs also include a $17 million impairment charge driven by a decision to retire certain legacy trade names, classified as other intangible assets, prior to the end of their estimated useful lives as part of executing our KDG integration and rebranding strategy. Refer to the acquisition footnote for more information regarding the acquisition.

Financial Condition

~~The Company’s~~Our cash balance of ~~$210.1~~$519 million at ~~September~~June 30, ~~2017~~2022 decreased ~~$32.8~~$196 million, ~~or 14%~~ from December 31, ~~2016.~~2021. For the ~~nine~~six months ended ~~September~~June 30, ~~2017, the Company used $289.4 million for acquisitions and other investing activities,~~

$296.5 million for dividends paid to the Company’s shareholders, $97.2 million for investments in the Company via capital expenditures and $171.9 million for share repurchases. These items were partially offset by the Company’s earnings and2022, we had net cash provided by operating activities ~~as well as~~of $791 million, net cash used in investing activities of $1.5 billion and net cash provided by financing activities of $585 million.

The cash provided by operating activities was driven by higher net income for the ~~Company's~~six months ended June 30, 2022 and the effective management of our working capital, including a $200 million benefit related to our A/R Sales Agreement. We used $1.5 billion cash for investing activities primarily in connection with the acquisition of KDG, in addition to $153 million for capital expenditures. The financing activities consisted primarily of $1 billion of net proceeds from debt ~~structure as outlined~~primarily from the Senior Notes offering (as discussed below). This was partially offset by $243 million for dividends paid to our shareholders and $123 million of stock repurchases.

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Each of our working capital line items were impacted by the acquisition of KDG (refer to our acquisitions footnote in ~~liquidity below.~~

the notes to condensed consolidated financial statements for further information). Accounts receivable increased ~~$217.4~~$437 million, or ~~11%~~24.3%, from December 31, ~~2016, which is due to the Company’s acquisitions and higher sales volume in the nine month period ended September 30, 2017 as compared to the fourth quarter or 2016.~~2021. Inventory increased ~~$143.9~~$406 million, or ~~approximately 4% compared to the~~10.4%. Accounts receivable and inventory ~~balance at December 31, 2016, primarily due to acquisitions~~were both impacted by increases in revenues and ~~the impact of foreign exchange.~~related product demand. Accounts payable increased ~~$194.0~~$605 million, or 6%12.6% from December 31, ~~2016,~~2021, in line with the increase in inventory. Total debt of $3.3 billion at June 30, 2022 increased $909 million, or 37.7%, from December 31, 2021 driven primarily by the Senior Notes offering (as discussed below).

We continue to negotiate extended payment dates with our suppliers. Our current payment terms with the majority of our suppliers range from 30 to 360 days. Several global financial institutions offer voluntary supply chain finance (“SCF”) programs which enable our suppliers, at their sole discretion, to sell their receivables from us to these financial institutions on a non-recourse basis at a rate that takes advantage of our credit rating and may be beneficial to them. The SCF program is primarily available to suppliers of goods and services included in cost of goods sold in our condensed consolidated statements of income. Our suppliers and us agree on commercial terms for the goods and services we procure, including prices, quantities and payment terms, regardless of whether the supplier elects to participate in the SCF program. The suppliers sell goods or services, as applicable, to us and they issue the associated invoices to us based on the agreed-upon contractual terms. Then, if they are participating in the SCF program, our suppliers, at their sole discretion, determine which invoices, if any, they want to sell to the financial institutions. In turn, we direct payment to the financial institutions, rather than the suppliers, for the invoices sold to the financial institutions. No guarantees are provided by us or any of our subsidiaries on third-party performance under the SCF program; however, we guarantee the payment by our subsidiaries to the financial institutions participating in the SCF program for the applicable invoices. We have no economic interest in a supplier’s decision to participate in the SCF program, and we have no direct financial relationship with the financial institutions, as it relates to the SCF program. Accordingly, amounts due to ~~more favorable payment terms negotiated with the Company's vendors~~our suppliers that elected to participate in the ~~nine month period~~SCF program are included in the line item accounts payable in our condensed consolidated balance sheets. All activity related to amounts due to suppliers that elected to participate in the SCF program is reflected in cash flows from operating activities in our condensed consolidated statements of cash flows. As of June 30, 2022 and December 31, 2021, the outstanding payment obligations to the financial institutions are $2.8 billion and $2.7 billion, respectively. The amount settled through the SCF program was $1.8 billion and $1.2 billion for the six months ended ~~September~~June 30, ~~2017. The Company’s debt is discussed below.~~2022 and June 30, 2021, respectively.

Liquidity and Capital Resources

~~Total debt at September 30, 2017 increased $270 million, or 31%, from December 31, 2016, primarily related to funding~~We ended the ~~Company’s working capital needs. The Company maintains a $1.20~~quarter with $2.0 billion ~~unsecured revolving line~~ of credit with a consortium of financial institutions with an option to increase the borrowing capacity by an additional $350.0 million. The line of credit bears interest at LIBOR plus various margins, which are basedtotal liquidity (comprising $1.5 billion availability on the ~~Company’s leverage ratio. In June 2017,~~revolving credit facility and $519 million of cash and cash equivalents). From time to time, we may enter into other credit facilities or financing arrangements to provide additional liquidity and to manage against foreign currency risk. We currently believe that the ~~Company exercised its remaining option to extend the maturity date from June 2021 to June 2022. At September 30, 2017, $595.0 million was outstanding under the line of credit.~~

As of September 30, 2017, the remaining $550.0 million debt outstanding is at fixed rates of interest and remained unchanged as compared to December 31, 2016. The fixed rate debt is comprised of two notes of $250.0 million each and one note of $50.0 million. One $250.0 million note is due in December 2023 and the other is due in November 2026, and each carry an interest rate of 2.99%. The remaining $50.0 million note, which was executed in July 2016, carries a 2.39% interest rate and is due in July 2021.

On September 22, 2017, the Company entered into a definitive agreement to acquire Alliance Automotive Group (“AAG”) for approximately $2.0 billion including the repayment of AAG’s outstanding debt at closing. The Company intends to finance the transaction through a combination of new loan agreements and note issuances. The Company also has available, but does not expect to utilize, a $2.0 billion 364-day unsecured bridge facility bearing interest at LIBOR plus a variable margin. The Company expects to close on the acquisition in November 2017.

~~At September 30, 2017, the Company's total average cost of debt was 2.55% and the Company remained in compliance with all covenants connected with the above borrowings.~~

~~The ratio of current assets to current liabilities was 1.3 to 1 at September 30, 2017, as compared to 1.4 to 1 at December 31, 2016.The Company currently believes~~ existing lines of credit and cash generated from operations will be sufficient to fund anticipated operations ~~including discretionary share repurchases, if any,~~ for the foreseeable future.

We have a strong cash position and solid financial strength to pursue strategic growth opportunities through disciplined, strategic capital deployment. Our key priorities include the reinvestment in our businesses through capital expenditures, mergers and acquisitions, the dividend and share repurchases. We have plans for additional investments in our businesses to drive growth, improve efficiencies and productivity, and drive shareholder value.

On January 3, 2022, we amended our A/R Sales Agreement to increase the facility limit by an additional $200 million bringing the total to $1 billion. The terms of the A/R Sales Agreement limit the balance of receivables sold to approximately $1 billion at any point in time. Refer to the A/R Sales Agreement footnote in the notes to condensed consolidated financial statements for more information.

On January 6, 2022, we issued $500 million of unsecured 1.750% Senior Notes due 2025. Simultaneously, we issued $500 million of unsecured 2.750% Senior Notes due 2032. For both offerings, interest is payable semi-annually on February 1 and August 1 of each year, beginning August 1, 2022. We utilized the proceeds from these offerings to repay the borrowings under the Revolving Credit Facility which were incurred to finance a significant portion of the KDG Acquisition.

We expect to be able to continue to borrow funds at reasonable rates over the long term. At June 30, 2022, our total average cost of debt was 2.34%, and we remain in compliance with all covenants connected with our borrowings.

Any failure to comply with our debt covenants or restrictions could result in a default under our financing arrangements or could require us to obtain waivers from our lenders for failure to comply with these restrictions. The occurrence of a default that remains uncured or the inability to secure a necessary consent or waiver could create

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cross defaults under other debt arrangements and have a material adverse effect on our business, financial condition, results of operations and cash flows.

On February 14, 2022, we announced a 10% increase in the regular quarterly cash dividend for 2022. Our Board of Directors increased the cash dividend payable to an annual rate of $3.58 per share compared with the previous dividend of $3.26 per share. We have paid a cash dividend every year since going public in 1948, and 2022 marks the 66th consecutive year of increased dividends paid to shareholders.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

~~Although the Company does not face material risks related~~For quantitative and qualitative disclosures about market risk, refer to ~~interest rates~~“Quantitative and ~~commodity prices, the Company is exposed to changes~~Qualitative Disclosures About Market Risk” in ~~foreign currency rates with respect to foreign currency denominated operating revenues and expenses. The Company has translation gains or losses that result from translation~~Item 7A of the results of operations of an operating unit’s foreign functional currency into U.S. dollars for consolidated financial statement purposes. The Company’s principal foreign currency exchange exposures are the Australian dollar, Canadian dollar and Mexican peso, which are the functional currenciesPart II of our Australia, Canada and Mexico operations, respectively. As previously noted under “Sales,” foreign currency exchange exposure, particularly in regard to the Australian dollar and Canadian dollar, positively impacted our results for the three and nine month periods ended September 30, 2017. There have been no other material changes in market risk from the information provided in the Company’s 20162021 Annual Report on ~~Form10-K.~~Form 10-K. Our exposure to market risk has not changed materially since December 31, 2021.

Item 4. Controls and Procedures

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of ~~the Company’s~~our management, including the Chief Executive Officer ~~(CEO)~~(“CEO”) and Chief Financial Officer ~~(CFO)~~(“CFO”), of the effectiveness of ~~the Company’s~~our disclosure controls and procedures. Based on that evaluation, ~~the Company’s~~our CEO and CFO concluded that ~~the Company’s~~our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance that information required to be disclosed by ~~the Company~~us in the reports that ~~it files~~we file or furnishes under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods

specified in the SEC’s rules and forms and that such information is accumulated and communicated to ~~the Company’s~~our management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

~~There~~Changes in Internal Control over Financial Reporting

On January 3, 2022, we completed the KDG acquisition. We are in the process of integrating KDG into our system of internal control over financial reporting.

Excluding the KDG acquisition, there have been no changes in ~~the Company’s~~our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 of the SEC that occurred during ~~the Company’s~~our last ~~fiscal~~ quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Information with respect to our legal proceedings may be found in the Commitments and Contingencies footnote in the Notes to Condensed Consolidated Financial Statements in Item 1 of Part I, which is incorporated herein by reference.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our ~~2016~~2021 Annual Report on Form 10-K and our quarterly report on Form 10-Q for the quarter ended March 31, 2022, which could materially affect our business, financial condition or future results. ~~The risks described in our 2016 Annual Report on Form 10-K are not the only risks facing our Company.~~ Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~Purchases of Equity Securities by the Issuer and Affiliated Purchasers~~

The following table provides information about the ~~Company’s~~ purchases of shares of ~~the Company’s~~our common stock during the ~~quarter~~three months ended ~~September~~June 30, ~~2017:~~2022:

ISSUER PURCHASES OF EQUITY SECURITIES


Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
April 1, 2022 through April 30, 2022	187,341	$131.49	155,455	11,138,158
May 1, 2022 through May 31, 2022	197,826	$132.64	156,848	10,981,310
June 1, 2022 through June 30, 2022	90,286	$137.26	65,193	10,916,117
Totals	475,453	$133.06	377,496	10,916,117

(1)Includes shares surrendered by employees to satisfy tax withholding obligations in connection with the vesting of shares of restricted stock, the exercise of stock options and/or tax withholding obligations.

(2)On August 21, 2017, the Board of Directors announced that it had authorized the repurchase of 15 million shares. The authorization for the repurchase continues until all such shares have been repurchased or the repurchase plan is terminated by action of the Board of Directors. Approximately 11 million shares authorized remain available to be repurchased. There were no other repurchase plans announced as of June 30, 2022.

Period
Total
Number of
Shares
Purchased
(1)

Average
Price Paid
Per Share

Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs (2)

Maximum Number of
Shares That May Yet
Be Purchased Under
the Plans or
Programs
July 1, 2017 through
July 31, 2017 — — — 2,613,516
August 1, 2017 through
August 31, 2017 228,082 $81.68 225,000 17,388,516
September 1, 2017 through
September 30, 2017 19,785 $92.60 — 17,388,516
Totals 247,867 $82.55 225,000 17,388,516

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~~(1)~~	Includes shares surrendered by employees to the Company to satisfy tax withholding obligations in connection with the vesting of shares of restricted stock, the exercise of stock options and/or tax withholding obligations.

~~(2)~~

On November 17, 2008, and August 21, 2017, the Board of Directors announced that it had authorized the repurchase of 15 million shares and 15 million shares, respectively. The authorization for these repurchase plans continues until all such shares have been repurchased or the repurchase plan is terminated by action of the Board of Directors. Approximately 2.4 million shares authorized in the 2008 plan and 15.0 million shares authorized in 2017 remain available to be repurchased by the Company. There were no other plans announced as of September 30, 2017.

Item 6. Exhibits

(a) The following exhibits are filed or furnished as part of this report:



Exhibit ~~2.1~~ 3.1		Genuine Parts Company Sale and Purchase Agreement relating to the Alliance Automotive Group by and between BCP Funds, AIG Managers, GPC Europe Acquisition Co. Limited and Genuine Parts Company dated September 22, 2017 – filed herewith

~~Exhibit 3.1~~	Amended and Restated Articles of Incorporation of the Company, dated April 23, 2007 (incorporated herein by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K dated April 23, 2007)

Exhibit 3.2		By-Laws of the Company, as amended and restated November ~~18, 2013~~19, 2018 (incorporated herein by reference from Exhibit 3.2 to the Company’s Current Report on Form 8-K dated November ~~18, 2013)~~19, 2018)

Exhibit ~~10.1~~ 31.1		Genuine Parts Company 364-Day Bridge Credit Agreement dated September 22, 2017 by and among Genuine Parts Company, J.P. Morgan Chase Bank, N.A., as administrative agent, and the other Lender Parties – filed herewith

~~Exhibit 31.1~~	Certification pursuant to SEC Rule 13a-14(a) signed by the Chief Executive Officer – filed herewith

Exhibit 31.2		Certification pursuant to SEC Rule 13a-14(a) signed by the Chief Financial Officer – filed herewith

Exhibit ~~32.1~~32		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by the Chief Executive Officer ~~– furnished herewith~~

~~Exhibit 32.2~~	~~Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by the~~and Chief Financial Officer – furnished herewith

Exhibit ~~101~~101.INS		~~Interactive~~XBRL Instance Document - The instance document does not appear in the interactive data ~~files pursuant to Rule 405 of Regulation S-T:~~file because its XBRL tags are embedded within the inline XBRL document.
		~~(i) the Condensed Consolidated Balance Sheets at September 30, 2017 and December 31, 2016; (ii) the Condensed Consolidated Statements of Income and Comprehensive Income~~
Exhibit 101.SCH		XBRL Taxonomy Extension Schema Document

Exhibit 101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

Exhibit 101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

Exhibit 101.LAB		XBRL Taxonomy Extension Labels Linkbase Document

Exhibit 101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit 104		The cover page from this Quarterly Report on Form 10-Q for the ~~three and nine month periods~~period ended ~~September~~June 30, ~~2017 and 2016; (iii) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016; and (iv) the Notes to the Condensed Consolidated Financial Statements~~2022 formatted in Inline XBRL

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SIGNATURES

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.


		Genuine Parts Company (Registrant)

Date: July 27, 2022		~~Genuine Parts Company~~ ~~(Registrant)~~ /s/ Bert Nappier
		Bert Nappier
~~Date: October 26, 2017~~		~~/s/ Carol B. Yancey~~
	~~Carol B. Yancey~~
	Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial and Accounting Officer)


										Three Months Ended June 30,				Six Months Ended June 30,
	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
	(unaudited) (in thousands, except per share data)
(in thousands, except per share data)									(in thousands, except per share data)	2022		2021		2022		2021
Net sales	$	4,095,906	$	3,941,743	$	12,101,725	$	11,559,648	Net sales	$	5,602,414	$	4,783,738	$	10,897,049	$	9,248,452
Cost of goods sold	2,869,016		2,743,142		8,479,402		8,091,124		Cost of goods sold	3,641,615		3,094,633		7,110,303		6,018,532
Gross profit	1,226,890		1,198,601		3,622,323		3,468,524		Gross profit	1,960,799		1,689,105		3,786,746		3,229,920
Operating expenses:									Operating expenses:
Selling, administrative and other expenses	940,259		869,562		2,717,416		2,522,223		Selling, administrative and other expenses	1,364,015		1,349,309		2,767,994		2,544,473
Depreciation and amortization	40,276		37,682		117,640		108,247		Depreciation and amortization	85,890		73,960		173,259		146,256
	980,535		907,244		2,835,056		2,630,470

Provision for doubtful accounts									Provision for doubtful accounts	2,899		5,037		7,393		9,946
Total operating expenses									Total operating expenses	1,452,804		1,428,306		2,948,646		2,700,675
Non-operating expense (income):									Non-operating expense (income):
Interest expense, net									Interest expense, net	20,248		15,362		40,098		33,686
Other									Other	(3,820)		(24,170)		(19,281)		(59,907)
Total non-operating expense (income)									Total non-operating expense (income)	16,428		(8,808)		20,817		(26,221)
Income before income taxes	246,355		291,357		787,267		838,054		Income before income taxes	491,567		269,607		817,283		555,466
Income taxes	87,913		106,031		278,693		303,334		Income taxes	119,038		73,111		198,916		141,260
Net income	$	158,442	$	185,326	$	508,574	$	534,720	Net income	$	372,529	$	196,496	$	618,367	$	414,206
Basic net income per common share	$	1.08	$	1.24	$	3.45	$	3.58
Diluted net income per common share	$	1.08	$	1.24	$	3.44	$	3.56
Dividends declared per common share	$	.6750	$	.6575	$	2.025	$	1.973	Dividends declared per common share	$	0.8950	$	0.8150	$	1.7900	$	1.6300
Basic earnings per share									Basic earnings per share	$	2.63	$	1.36	$	4.36	$	2.87
Diluted earnings per share									Diluted earnings per share	$	2.62	$	1.36	$	4.34	$	2.85

Weighted average common shares outstanding	146,720		148,899		147,312		149,243		Weighted average common shares outstanding	141,581		144,211		141,747		144,312
Dilutive effect of stock options and non-vested restricted stock awards	502		828		561		781		Dilutive effect of stock options and non-vested restricted stock awards	723		772		835		846
Weighted average common shares outstanding – assuming dilution	147,222		149,727		147,873		150,024		Weighted average common shares outstanding – assuming dilution	142,304		144,983		142,582		145,158
Comprehensive income	$	202,897	$	201,981	$	644,661	$	599,828



ý☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


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PART I		Page

Item 1.	Financial Statements	2
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Income	3
	Condensed Consolidated Statements of Comprehensive Income	4
	Condensed Consolidated Statements of Equity	5
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21

PART II

Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 6.	Exhibits	23
	Signatures	24



	September 30, 2017			December 31, 2016
	(unaudited)
	(in thousands, except share and per share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	210,082		$	242,879
Trade accounts receivable, less allowance for doubtful accounts (2017 – $19,214; 2016 – $15,557)	2,155,948			1,938,562
Merchandise inventories, net	3,354,178			3,210,320
Prepaid expenses and other current assets	596,400			556,670
TOTAL CURRENT ASSETS	6,316,608			5,948,431
Goodwill	1,059,637			956,153
Other intangible assets, less accumulated amortization	653,932			618,510
Deferred tax assets	122,797			132,652
Other assets	581,047			475,530
Property, plant and equipment, less accumulated depreciation (2017 – $1,018,211; 2016 – $960,999)	760,213			728,124
TOTAL ASSETS	$	9,494,234		$	8,859,400
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Trade accounts payable	$	3,275,155		$	3,081,111
Current portion of debt	595,000			325,000
Dividends payable	98,959			97,584
Income taxes payable	26,666			6,354
Other current liabilities	806,887			734,101
TOTAL CURRENT LIABILITIES	4,802,667			4,244,150
Long-term debt	550,000			550,000
Pension and other post–retirement benefit liabilities	260,243			341,510
Deferred tax liabilities	50,106			48,326
Other long-term liabilities	441,090			468,058
EQUITY:
Preferred stock, par value – $1 per share
Authorized – 10,000,000 shares; none issued	-0-			-0-
Common stock, par value – $1 per share
Authorized – 450,000,000 shares; issued and outstanding – 2017 – 146,613,496 shares; 2016 – 148,410,422 shares	146,613			148,410
Additional paid-in capital	66,152			56,605
Retained earnings	4,042,404			4,001,734
Accumulated other comprehensive loss	(876,934		)	(1,013,021		)
TOTAL PARENT EQUITY	3,378,235			3,193,728
Noncontrolling interests in subsidiaries	11,893			13,628
TOTAL EQUITY	3,390,128			3,207,356
TOTAL LIABILITIES AND EQUITY	$	9,494,234		$	8,859,400



	2017
	Changes in Accumulated Other Comprehensive Loss by Component
	Pension and Other Post- Retirement Benefits			Foreign Currency Translation			Total
	(in thousands)
Beginning balance, January 1	$	(609,080	)	$	(403,941	)	$	(1,013,021	)
Other comprehensive income before reclassifications, net of tax	—			118,852			118,852
Amounts reclassified from accumulated other comprehensive loss, net of tax	17,235			—			17,235
Net current period other comprehensive income	17,235			118,852			136,087
Ending balance, September 30	$	(591,845	)	$	(285,089	)	$	(876,934	)



	Pension Benefits
	2017			2016
	(in thousands)
Service cost	$	2,240		$	2,106
Interest cost	24,243			26,195
Expected return on plan assets	(38,061		)	(39,296		)
Amortization of prior service credit	(88		)	(108		)
Amortization of actuarial loss	9,549			7,860
Net periodic benefit income	$	(2,117	)	$	(3,243	)



Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
July 1, 2017 through July 31, 2017	—	—	—	2,613,516
August 1, 2017 through August 31, 2017	228,082	$81.68	225,000	17,388,516
September 1, 2017 through September 30, 2017	19,785	$92.60	—	17,388,516
Totals	247,867	$82.55	225,000	17,388,516