Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2024 | Jul. 18, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 1-5690 | |
Entity Registrant Name | GENUINE PARTS CO | |
Entity Incorporation, State or Country Code | GA | |
Entity Tax Identification Number | 58-0254510 | |
Entity Address, Address Line One | 2999 WILDWOOD PARKWAY, | |
Entity Address, Postal Zip Code | 30339 | |
Entity Address, City or Town | ATLANTA, | |
Entity Address, State or Province | GA | |
City Area Code | 678 | |
Local Phone Number | 934-5000 | |
Title of 12(b) Security | Common Stock, $1.00 par value per share | |
Trading Symbol | GPC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 139,317,735 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0000040987 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 555,277 | $ 1,102,007 |
Trade accounts receivable, less allowance for doubtful accounts (2024 – $59,179; 2023 – $56,608) | 2,526,060 | 2,223,431 |
Merchandise inventories, net | 5,103,644 | 4,676,686 |
Prepaid expenses and other current assets | 1,611,717 | 1,603,728 |
Total current assets | 9,796,698 | 9,605,852 |
Goodwill | 2,858,668 | 2,734,681 |
Other intangible assets, less accumulated amortization | 1,818,954 | 1,792,913 |
Property, plant and equipment, less accumulated depreciation (2024 – $1,695,974; 2023 – $1,592,658) | 1,787,822 | 1,616,785 |
Operating lease assets | 1,604,559 | 1,268,742 |
Other assets | 1,002,692 | 949,481 |
Total assets | 18,869,393 | 17,968,454 |
Current liabilities: | ||
Trade accounts payable | 5,931,993 | 5,499,536 |
Current portion of debt | 853,236 | 355,298 |
Dividends payable | 139,375 | 132,635 |
Other current liabilities | 1,841,809 | 1,839,640 |
Total current liabilities | 8,766,413 | 7,827,109 |
Long-term debt | 3,027,491 | 3,550,930 |
Operating lease liabilities | 1,318,307 | 979,938 |
Pension and other post–retirement benefit liabilities | 222,378 | 219,644 |
Deferred tax liabilities | 473,125 | 437,674 |
Other long-term liabilities | 505,556 | 536,174 |
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 – 2024 – 139,346,018 shares; 2023 – 139,567,071 shares | 139,346 | 139,567 |
Additional paid-in capital | 180,527 | 173,025 |
Accumulated other comprehensive loss | (1,035,739) | (976,872) |
Retained earnings | 5,256,514 | 5,065,327 |
Total parent equity | 4,540,648 | 4,401,047 |
Noncontrolling interests in subsidiaries | 15,475 | 15,938 |
Total equity | 4,556,123 | 4,416,985 |
Total liabilities and equity | $ 18,869,393 | $ 17,968,454 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 59,179 | $ 56,608 |
Accumulated depreciation | $ 1,695,974 | $ 1,592,658 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 450,000,000 | 450,000,000 |
Common stock, shares issued (in shares) | 139,346,018 | 139,567,071 |
Common stock, shares outstanding (in shares) | 139,346,018 | 139,567,071 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement [Abstract] | ||||
Net sales | $ 5,962,567 | $ 5,915,006 | $ 11,746,198 | $ 11,680,124 |
Cost of goods sold | 3,782,264 | 3,780,263 | 7,491,240 | 7,531,980 |
Gross profit | 2,180,303 | 2,134,743 | 4,254,958 | 4,148,144 |
Operating expenses: | ||||
Selling, administrative and other expenses | 1,647,456 | 1,581,653 | 3,222,383 | 3,092,897 |
Depreciation and amortization | 99,202 | 90,873 | 189,812 | 178,088 |
Provision for doubtful accounts | 5,678 | 8,322 | 11,889 | 13,961 |
Restructuring and other costs | 29,760 | 0 | 112,802 | 0 |
Total operating expenses | 1,782,096 | 1,680,848 | 3,536,886 | 3,284,946 |
Non-operating (income) expense: | ||||
Interest expense, net | 21,921 | 16,455 | 39,611 | 33,319 |
Other | (9,915) | (16,649) | (32,921) | (28,616) |
Total non-operating (income) expense | 12,006 | (194) | 6,690 | 4,703 |
Income before income taxes | 386,201 | 454,089 | 711,382 | 858,495 |
Income taxes | 90,657 | 109,595 | 166,944 | 210,044 |
Net income | $ 295,544 | $ 344,494 | $ 544,438 | $ 648,451 |
Dividends declared per common share (in dollars per share) | $ 1 | $ 0.9500 | $ 2 | $ 1.9000 |
Basic earnings per share (in dollars per share) | 2.12 | 2.45 | 3.91 | 4.61 |
Diluted earnings per share (in dollars per share) | $ 2.11 | $ 2.44 | $ 3.89 | $ 4.58 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 295,544 | $ 344,494 | $ 544,438 | $ 648,451 |
Other comprehensive income (loss), net of income taxes: | ||||
Foreign currency translation adjustments | 15,278 | (9,540) | (64,642) | 14,287 |
Cash flow hedge, net of income taxes in 2023 — $951 and $951 respectively | 0 | 2,572 | 0 | 2,572 |
Pension and postretirement benefit adjustments, net of income taxes in 2024 — $1,063 and $2,126; 2023 — $702 and $1,405 respectively | 2,887 | 1,912 | 5,775 | 3,826 |
Other comprehensive income (loss), net of income taxes | 18,165 | (5,056) | (58,867) | 20,685 |
Comprehensive income | $ 313,709 | $ 339,438 | $ 485,571 | $ 669,136 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Cash flow hedge adjustment, tax | $ 951 | $ 951 | ||
Pension and postretirement benefit adjustments, tax | $ (1,063) | $ (702) | $ (2,126) | $ (1,405) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands | Total | Total Parent Equity | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Non-controlling Interests in Subsidiaries |
Beginning balance (in shares) at Dec. 31, 2022 | 140,941,649 | ||||||
Beginning balance at Dec. 31, 2022 | $ 3,804,447 | $ 3,790,363 | $ 140,941 | $ 140,324 | $ (1,032,542) | $ 4,541,640 | $ 14,084 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 648,451 | 648,451 | 648,451 | ||||
Other comprehensive income (loss), net of tax | 20,685 | 20,685 | 20,685 | ||||
Cash dividends declared | (267,229) | (267,229) | (267,229) | ||||
Shares issued from employee incentive plans (in shares) | 366,480 | ||||||
Shares issued from employee incentive plans | (23,155) | (23,155) | $ 366 | (23,521) | |||
Share-based compensation | 36,945 | 36,945 | 36,945 | ||||
Purchase of stock (in shares) | (840,579) | ||||||
Purchase of stock | (134,849) | (134,849) | $ (839) | (134,010) | |||
Noncontrolling interest activities | 499 | 499 | |||||
Ending balance (in shares) at Jun. 30, 2023 | 140,467,550 | ||||||
Ending balance at Jun. 30, 2023 | 4,085,794 | 4,071,211 | $ 140,468 | 153,748 | (1,011,857) | 4,788,852 | 14,583 |
Beginning balance (in shares) at Mar. 31, 2023 | 140,545,475 | ||||||
Beginning balance at Mar. 31, 2023 | 3,939,636 | 3,926,204 | $ 140,545 | 147,690 | (1,006,801) | 4,644,770 | 13,432 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 344,494 | 344,494 | 344,494 | ||||
Other comprehensive income (loss), net of tax | (5,056) | (5,056) | (5,056) | ||||
Cash dividends declared | (133,492) | (133,492) | (133,492) | ||||
Shares issued from employee incentive plans (in shares) | 351,648 | ||||||
Shares issued from employee incentive plans | (21,890) | (21,890) | $ 351 | (22,241) | |||
Share-based compensation | 28,299 | 28,299 | 28,299 | ||||
Purchase of stock (in shares) | (429,573) | ||||||
Purchase of stock | (67,348) | (67,348) | $ (428) | (66,920) | |||
Noncontrolling interest activities | 1,151 | 1,151 | |||||
Ending balance (in shares) at Jun. 30, 2023 | 140,467,550 | ||||||
Ending balance at Jun. 30, 2023 | $ 4,085,794 | 4,071,211 | $ 140,468 | 153,748 | (1,011,857) | 4,788,852 | 14,583 |
Beginning balance (in shares) at Dec. 31, 2023 | 139,567,071 | 139,567,071 | |||||
Beginning balance at Dec. 31, 2023 | $ 4,416,985 | 4,401,047 | $ 139,567 | 173,025 | (976,872) | 5,065,327 | 15,938 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 544,438 | 544,438 | 544,438 | ||||
Other comprehensive income (loss), net of tax | (58,867) | (58,867) | (58,867) | ||||
Cash dividends declared | (278,761) | (278,761) | (278,761) | ||||
Shares issued from employee incentive plans (in shares) | 288,513 | ||||||
Shares issued from employee incentive plans | (18,780) | (18,780) | $ 288 | (19,068) | |||
Share-based compensation | 26,570 | 26,570 | 26,570 | ||||
Purchase of stock (in shares) | (509,566) | ||||||
Purchase of stock | (74,999) | (74,999) | $ (509) | (74,490) | |||
Noncontrolling interest activities | $ (463) | (463) | |||||
Ending balance (in shares) at Jun. 30, 2024 | 139,346,018 | 139,346,018 | |||||
Ending balance at Jun. 30, 2024 | $ 4,556,123 | 4,540,648 | $ 139,346 | 180,527 | (1,035,739) | 5,256,514 | 15,475 |
Beginning balance (in shares) at Mar. 31, 2024 | 139,335,342 | ||||||
Beginning balance at Mar. 31, 2024 | 4,417,176 | 4,402,377 | $ 139,335 | 179,349 | (1,053,904) | 5,137,597 | 14,799 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 295,544 | 295,544 | 295,544 | ||||
Other comprehensive income (loss), net of tax | 18,165 | 18,165 | 18,165 | ||||
Cash dividends declared | (139,376) | (139,376) | (139,376) | ||||
Shares issued from employee incentive plans (in shares) | 259,702 | ||||||
Shares issued from employee incentive plans | (16,569) | (16,569) | $ 259 | (16,828) | |||
Share-based compensation | 18,006 | 18,006 | 18,006 | ||||
Purchase of stock (in shares) | (249,026) | ||||||
Purchase of stock | (37,499) | (37,499) | $ (248) | (37,251) | |||
Noncontrolling interest activities | $ 676 | 676 | |||||
Ending balance (in shares) at Jun. 30, 2024 | 139,346,018 | 139,346,018 | |||||
Ending balance at Jun. 30, 2024 | $ 4,556,123 | $ 4,540,648 | $ 139,346 | $ 180,527 | $ (1,035,739) | $ 5,256,514 | $ 15,475 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared per share (in dollars per share) | $ 1 | $ 0.9500 | $ 2 | $ 1.9000 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Operating activities: | ||
Net income | $ 544,438 | $ 648,451 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 189,812 | 178,088 |
Share-based compensation | 26,570 | 36,945 |
Excess tax benefits from share-based compensation | (8,233) | (6,431) |
Other operating activities, including changes in operating assets and liabilities | (140,672) | (400,050) |
Net cash provided by operating activities | 611,915 | 457,003 |
Investing activities: | ||
Purchases of property, plant and equipment | (259,245) | (205,336) |
Proceeds from sale of property, plant and equipment | 73,645 | 4,762 |
Proceeds from divestitures of businesses | 3,715 | 0 |
Proceeds from sale of investments | 0 | 80,482 |
Acquisitions and other investing activities | (580,141) | (106,028) |
Net cash used in investing activities | (762,026) | (226,120) |
Financing activities: | ||
Proceeds from debt | 539,722 | 1,668,757 |
Payments on debt | (544,355) | (1,602,138) |
Shares issued from employee incentive plans | (18,780) | (23,155) |
Dividends paid | (272,021) | (259,929) |
Purchases of stock | (74,999) | (134,849) |
Other financing activities | (11,893) | (6,436) |
Net cash used in financing activities | (382,326) | (357,750) |
Effect of exchange rate changes on cash and cash equivalents | (14,293) | 3,509 |
Net decrease in cash and cash equivalents | (546,730) | (123,358) |
Cash and cash equivalents at beginning of period | 1,102,007 | 653,463 |
Cash and cash equivalents at end of period | $ 555,277 | $ 530,105 |
General
General | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
General | 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 U.S. (“U.S. GAAP”) for complete financial statements. Except as disclosed herein, there have been no material 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,” “we,” “our,” “us,” or “its”) for the year ended December 31, 2023. Accordingly, the unaudited Condensed Consolidated Financial Statements and related disclosures herein should be read in conjunction with our 2023 Annual Report on Form 10-K. The preparation of interim financial statements requires management to make estimates and assumptions that affect the amounts reported in the unaudited Condensed Consolidated Financial Statements. Specifically, we make estimates and assumptions in 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. Reserves for bad debts, credit losses on guaranteed loans and customer sales returns are estimated and accrued on an interim basis based on a consideration of historical experience, current conditions, and reasonable and supportable forecasts. Volume incentives are estimated based upon cumulative and projected purchasing levels. In the opinion of management, all adjustments necessary for a fair presentation of our financial results for the interim periods have been made. These adjustments are of a normal recurring nature. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of results for the year ended December 31, 2024. We have evaluated subsequent events through the date the unaudited Condensed Consolidated Financial Statements covered by this quarterly report were issued. Recent Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASU”) to the FASB Accounting Standards Codification (“ASC”). We consider the applicability and impact of all ASUs and any not listed below were assessed and determined to not be applicable or are expected to have an immaterial impact on our Condensed Consolidated Financial Statements. Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This standard requires disclosures of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss, an amount and description of other segment items by reportable segment, and all annual disclosures currently required by Topic 280 to be included in interim periods. The guidance is effective for our Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent interim periods, with early adoption permitted. We are currently evaluating the impact of adopting this standard on our financial statements and disclosures. Income Taxes (Topic 740): Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard requires disclosure of specific categories in the rate reconciliation and additional information for reconciling items, income before tax expense disaggregated between domestic and foreign, income tax expense disaggregated by federal, state and foreign, as well as further information on income taxes paid. The guidance is effective for our Annual Report on Form 10-K for the year ended December 31, 2025, with early adoption permitted. The guidance should be applied on a prospective basis, with retrospective application permitted. We are currently evaluating the impact of adopting this standard on our financial statements and disclosures. Prepaid Expenses and Other Current Assets The following table provides a detail of prepaid expenses and other current assets reported within the Condensed Consolidated Balance Sheets as of: (in thousands) June 30, 2024 December 31, 2023 Prepaid expenses $ 151,407 $ 110,863 Consideration receivable from vendors 891,864 928,499 Other current assets 568,446 564,366 Total prepaid expenses and other current assets $ 1,611,717 $ 1,603,728 Derivatives and Hedging We are exposed to various risks arising from business operations and market conditions, including fluctuations in certain foreign currencies. We use derivative and non-derivative instruments as risk management tools to mitigate the potential impact of foreign exchange rate risks. The objective of using these tools is to reduce fluctuations in our earnings and cash flows associated with changes in these rates. Derivative instruments are recognized in the Condensed Consolidated Balance Sheets at fair value and are designated as Level 2 in the fair value hierarchy. They are valued using inputs other than quoted prices, such as foreign exchange rates and yield curves. The following table summarizes the classification and carrying amounts of the 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, 2024 December 31, 2023 Instrument Balance Sheet Location Notional Balance Notional Balance Net investment hedges: Forward contracts Prepaid expenses and other current assets $ 1,053,110 $ 63,056 $ 606,950 $ 37,676 Forward contract Other current liabilities $ 106,800 $ 487 $ 106,800 $ 4,383 Foreign currency debt Long-term debt € 700,000 $ 749,910 € 700,000 $ 772,660 The tables below presents 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) 2024 2023 2024 2023 Three Months Ended June 30, Net investment hedges: Forward contracts $ 6,994 $ (9,212) $ 4,651 $ 3,158 Foreign currency debt 5,670 2,940 — — Total $ 12,664 $ (6,272) $ 4,651 $ 3,158 Gain (Loss) Recognized in AOCL before Reclassifications Gain Recognized in Interest Expense for Excluded Components (in thousands) 2024 2023 2024 2023 Six Months Ended June 30, Net investment hedges: Forward contracts $ 20,256 $ (14,536) $ 9,020 $ 6,317 Foreign currency debt 22,750 (11,200) — — Total $ 43,006 $ (25,736) $ 9,020 $ 6,317 Fair Value of Financial Instruments As of June 30, 2024, the fair value of our senior unsecured notes was approximately $3.6 billion, which are designated as Level 2 in the fair value hierarchy. Our valuation technique is based primarily on prices and other relevant information generated by observable transactions involving identical or comparable assets or liabilities. Guarantees 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. As of June 30, 2024, we were in compliance with all such covenants. As of June 30, 2024, the total borrowings of the independents and affiliates subject to guarantee by us were approximately $757 million. These loans generally mature over periods from one As of June 30, 2024, we have recognized $52 million of certain assets and liabilities for the guarantees related to the independents’ and affiliates’ borrowings. These assets and liabilities are included in other assets and other long-term liabilities in the Condensed Consolidated Balance Sheets. The liabilities relate to our noncontingent obligation to stand ready to perform under the guarantee programs and they are distinct from our current expected credit loss reserve. Supply Chain Finance Programs Several global financial institutions offer voluntary supply chain finance (“SCF”) programs which enable our suppliers (generally those that grant extended terms), 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. We and our suppliers 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. Our current payment terms with the majority of our suppliers range from 30 to 360 days. 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 our suppliers that elected to participate in the SCF program are included in the line item accounts payable 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 Statement of Cash Flows. As of June 30, 2024 and December 31, 2023, the outstanding payment obligations to the financial institutions are $3.1 billion and $3.0 billion, respectively. (in thousands) June 30, 2024 Obligations outstanding at the beginning of the year $ 3,041,187 Invoices confirmed during the year 2,058,584 Confirmed invoices paid during the year (1,967,840) Confirmed obligations outstanding at the end of period $ 3,131,931 Earnings Per Share We calculate basic earnings per share by dividing net income by the weighted average number of common shares outstanding. Certain outstanding options are not included in the diluted earnings per share calculation because their inclusion would have been anti-dilutive. Antidilutive common stock equivalents excluded from the diluted earnings per share calculation are not material. The following table summarizes basic and diluted shares outstanding: Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share data) 2024 2023 2024 2023 Net income $ 295,544 $ 344,494 $ 544,438 $ 648,451 Weighted average common shares outstanding 139,358 140,574 139,394 140,688 Dilutive effect of non-vested restricted stock awards 471 673 567 808 Weighted average common shares outstanding – assuming dilution 139,829 141,247 139,961 141,496 Basic earnings per share $ 2.12 $ 2.45 $ 3.91 $ 4.61 Diluted earnings per share $ 2.11 $ 2.44 $ 3.89 $ 4.58 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Segment Information | 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) 2024 2023 2024 2023 Net sales: Automotive $ 3,726,991 $ 3,654,999 $ 7,301,011 $ 7,160,826 Industrial 2,235,576 2,260,007 4,445,187 4,519,298 Total net sales $ 5,962,567 $ 5,915,006 $ 11,746,198 $ 11,680,124 Segment profit: Automotive $ 313,975 $ 329,347 $ 586,911 $ 593,767 Industrial 276,841 283,372 547,680 545,359 Total segment profit 590,816 612,719 1,134,591 1,139,126 Interest expense, net (21,921) (16,455) (39,611) (33,319) Intangible asset amortization (34,685) (40,625) (68,785) (79,747) Corporate expense (85,984) (101,550) (169,746) (167,565) Other unallocated costs (1) (62,025) — (145,067) — Income before income taxes $ 386,201 $ 454,089 $ 711,382 $ 858,495 (1) The following table presents a summary of the other unallocated costs: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Other unallocated costs: Restructuring and other costs (2) $ (37,247) $ — $ (120,289) $ — Acquisition and integration related costs and other (3) (24,778) — (24,778) — Total other unallocated costs $ (62,025) $ — $ (145,067) $ — (2) Amount reflects costs related to the global restructuring initiative which includes a voluntary retirement offer in the U.S., inventory liquidation costs, and rationalization and optimization of certain distribution centers, stores and other facilities. (3) Amount primarily reflects integration costs related to the completion of the acquisition of Motor Parts and Equipment Corporation ("MPEC") in April 2024, including professional services costs, personnel costs, and lease and other exit costs. 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) 2024 2023 2024 2023 North America: Automotive $ 2,352,254 $ 2,344,701 $ 4,549,144 $ 4,550,086 Industrial 2,101,811 2,128,747 4,181,937 4,259,462 Total North America $ 4,454,065 $ 4,473,448 $ 8,731,081 $ 8,809,548 Australasia: Automotive $ 412,883 $ 407,853 $ 813,231 $ 814,615 Industrial 133,765 131,260 263,250 259,836 Total Australasia $ 546,648 $ 539,113 $ 1,076,481 $ 1,074,451 Europe – Automotive $ 961,854 $ 902,445 $ 1,938,636 $ 1,796,125 Total net sales $ 5,962,567 $ 5,915,006 $ 11,746,198 $ 11,680,124 |
Accounts Receivable Sales Agree
Accounts Receivable Sales Agreement | 6 Months Ended |
Jun. 30, 2024 | |
Receivables [Abstract] | |
Accounts Receivable Sales Agreement | 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 expiring in January 2025, which we intend to renew. We continue to be involved with the receivables transferred by the SPE to the unaffiliated financial institutions by providing collection services. As cash is collected on sold receivables, the SPE continuously transfers ownership and control of new qualifying receivables to the unaffiliated financial institutions so that the total principal amount outstanding of receivables sold is approximately $1.0 billion at any point in time (which is the maximum amount allowed under the agreement as amended on January 3, 2022). The total principal amount outstanding of receivables sold is approximately $1.0 billion as of both June 30, 2024 and December 31, 2023. The amount of receivables pledged as collateral as of June 30, 2024 and December 31, 2023 is approximately $1.5 billion and $1.2 billion, 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) 2024 2023 2024 2023 Receivables sold to the financial institutions and derecognized $ 2,135,710 $ 2,139,392 $ 4,305,752 $ 4,304,799 Cash collected on sold receivables $ 2,135,626 $ 2,139,393 $ 4,305,670 $ 4,304,804 Continuous cash activity related to the 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 institutions related to the accounts receivable sales transactions. Those fees, which totaled $31 million and $29 million for the six months ended June 30, 2024 and 2023, respectively, are recorded within other non-operating (income) expense in the Condensed Consolidated Statements of Income. The SPE has a recourse obligation to repurchase from the unaffiliated financial institutions any previously sold receivables that are not collected due to the occurrence of certain events, including credit quality deterioration and customer sales returns. The reserve recognized for this recourse obligation as of June 30, 2024 and December 31, 2023 is not material. The servicing liability related to our collection services also is not material, given the high quality of the customers underlying the receivables and the anticipated short collection period. |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2024 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Net periodic benefit income from our pension plans included the following components for our pension benefits: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Service cost $ 1,711 $ 1,503 $ 3,438 $ 2,997 Interest cost 25,324 26,136 50,689 52,253 Expected return on plan assets (44,339) (41,263) (88,743) (82,503) Amortization of prior service cost 281 173 562 346 Amortization of actuarial loss 3,567 2,340 7,134 4,681 Net periodic benefit income $ (13,456) $ (11,111) $ (26,920) $ (22,226) |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
Acquisitions | Acquisitions We acquired several businesses for approximately $651 million, which includes certain non-cash consideration, and $116 million, net of cash acquired, during the six months ended June 30, 2024 and June 30, 2023, respectively. We recognized approximately $100 million and $5 million of revenue related to our current year Automotive and Industrial acquisitions, respectively. We recorded approximately $283 million of goodwill and other intangible assets associated with these acquisitions. Other intangible assets acquired of $120 million consisted of customer relationships with weighted average amortization lives of 19 years. For each acquisition, we allocate the purchase price to the assets acquired and the liabilities assumed based on their fair values as of the respective acquisition date. The fair values of the assets acquired and liabilities assumed are preliminary. Additional adjustments, particularly to inventory and intangible assets, may be made to the acquisition accounting during the measurement period, which may be up to one year from the respective acquisition date. The results of operations for acquired businesses are included in our Condensed Consolidated Statements of Income beginning on their respective acquisition dates. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | 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 (in thousands) Pension and Other Post-Retirement Benefits Cash Flow Hedges Foreign Currency Translation Total Beginning balance, January 1, 2024 $ (517,941) $ — $ (458,931) $ (976,872) Other comprehensive income (loss) before reclassifications — — (64,642) (64,642) Amounts reclassified from accumulated other comprehensive loss 5,775 — — 5,775 Other comprehensive income (loss), net of income taxes 5,775 — (64,642) (58,867) Ending balance, June 30, 2024 $ (512,166) $ — $ (523,573) $ (1,035,739) Changes in Accumulated Other (in thousands) Pension and Other Post-Retirement Benefits Cash Flow Hedges Foreign Currency Translation Total Beginning balance, January 1, 2023 $ (506,610) $ (2,572) $ (523,360) $ (1,032,542) Other comprehensive income (loss) before reclassifications — 2,765 14,287 17,052 Amounts reclassified from accumulated other comprehensive loss 3,826 (193) — 3,633 Other comprehensive income (loss), net of income taxes 3,826 2,572 14,287 20,685 Ending balance, June 30, 2023 $ (502,784) $ — $ (509,073) $ (1,011,857) The AOCL components related to the pension benefits are included in the computation of net periodic benefit income in the Employee Benefit Plans Footnote. Generally, tax effects in AOCL are established at the currently enacted tax rate and reclassified to net income in the same period that the related pre-tax AOCL reclassifications are recognized. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters We are subject to various legal proceedings, many involving routine litigation incidental to the businesses, including approximately 2,516 pending product liability lawsuits resulting from our national distribution of automotive parts and supplies. Many of these involve claims of personal injury allegedly resulting from the use of automotive parts we distributed. The amount accrued for pending and future claims was $225 million as of June 30, 2024, which represents our best estimate of the liability within our calculated range of $180 million to $255 million, discounted using a discount rate of 4.36%. The amount accrued for pending and future claims was $244 million as of December 31, 2023, which represents our best estimate of the liability within our calculated range of $196 million to $277 million, discounted using a discount rate of 3.88%. Our undiscounted product liability was $285 million and $308 million as of June 30, 2024 and December 31, 2023, respectively. There have been no significant developments to the information presented in our 2023 Annual Report on Form 10-K with respect to litigation or commitments and contingencies. Environmental Liabilities Item 103 of SEC Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that we reasonably believe will exceed an applied threshold not to exceed $1 million. Applying this threshold, there are no environmental matters to disclose for this period. |
Restructuring and other costs
Restructuring and other costs | 6 Months Ended |
Jun. 30, 2024 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and other costs | Restructuring and other costs In February 2024, we approved and initiated a global restructuring designed to better align our assets and further improve the efficiency of the business. This initiative includes an announced voluntary retirement offer in the U.S., along with a rationalization and optimization of certain distribution centers, stores and other facilities. For the three and six months ended June 30, 2024, we incurred $37 million and $120 million, respectively, in costs related to our global restructuring initiative. We expect to incur total costs up to $200 million related to the global restructuring efforts in 2024 and to substantially complete the initiative by the end of 2025. We may incur additional charges not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of these initiatives. The global restructuring was approved and funded by our corporate office and therefore these costs are not allocated to our segments. For the three months ended June 30, 2024, costs of $37 million include severance and other employee costs of $4 million, other restructuring costs of $26 million, and restructuring inventory liquidation costs of $7 million, which are reflected in cost of goods sold. The table below summarizes the activity related to these costs for the six months ended June 30, 2024. (in thousands) Severance and other employee costs Other restructuring costs (1) Total (1) Liability as of January 1, 2024 $ — $ — $ — Restructuring and other costs 65,954 46,848 112,802 Cash payments (41,277) (32,872) (74,149) Non-cash charges 3,094 (12,844) (9,750) Translation (90) 2 (88) Liability as of June 30, 2024 $ 27,681 $ 1,134 $ 28,815 (1) Amount reflects moving expenses, accelerated rent, professional fees, facility closure costs and asset impairment costs that are attributable to our restructuring. Amount excludes a $7 million noncash charge reflected in cost of goods sold for inventory liquidated rather than moved during facility consolidation in connection with the restructuring. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||
Net income | $ 295,544 | $ 344,494 | $ 544,438 | $ 648,451 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
General (Policies)
General (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Accounting | 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 U.S. (“U.S. GAAP”) for complete financial statements. Except as disclosed herein, there have been no material 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,” “we,” “our,” “us,” or “its”) for the year ended December 31, 2023. Accordingly, the unaudited Condensed Consolidated Financial Statements and related disclosures herein should be read in conjunction with our 2023 Annual Report on Form 10-K. |
Use of Estimates | The preparation of interim financial statements requires management to make estimates and assumptions that affect the amounts reported in the unaudited Condensed Consolidated Financial Statements. Specifically, we make estimates and assumptions in 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. Reserves for bad debts, credit losses on guaranteed loans and customer sales returns are estimated and accrued on an interim basis based on a consideration of historical experience, current conditions, and reasonable and supportable forecasts. Volume incentives are estimated based upon cumulative and projected purchasing levels. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASU”) to the FASB Accounting Standards Codification (“ASC”). We consider the applicability and impact of all ASUs and any not listed below were assessed and determined to not be applicable or are expected to have an immaterial impact on our Condensed Consolidated Financial Statements. Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This standard requires disclosures of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss, an amount and description of other segment items by reportable segment, and all annual disclosures currently required by Topic 280 to be included in interim periods. The guidance is effective for our Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent interim periods, with early adoption permitted. We are currently evaluating the impact of adopting this standard on our financial statements and disclosures. Income Taxes (Topic 740): Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard requires disclosure of specific categories in the rate reconciliation and additional information for reconciling items, income before tax expense disaggregated between domestic and foreign, income tax expense disaggregated by federal, state and foreign, as well as further information on income taxes paid. The guidance is effective for our Annual Report on Form 10-K for the year ended December 31, 2025, with early adoption permitted. The guidance should be applied on a prospective basis, with retrospective application permitted. We are currently evaluating the impact of adopting this standard on our financial statements and disclosures. |
Derivatives and Hedging | Derivatives and Hedging We are exposed to various risks arising from business operations and market conditions, including fluctuations in certain foreign currencies. We use derivative and non-derivative instruments as risk management tools to mitigate the potential impact of foreign exchange rate risks. The objective of using these tools is to reduce fluctuations in our earnings and cash flows associated with changes in these rates. Derivative instruments are recognized in the Condensed Consolidated Balance Sheets at fair value and are designated as Level 2 in the fair value hierarchy. They are valued using inputs other than quoted prices, such as foreign exchange rates and yield curves. |
Fair Value of Financial Instruments | Our valuation technique is based primarily on prices and other relevant information generated by observable transactions involving identical or comparable assets or liabilities. |
Guarantees | 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. As of June 30, 2024, we were in compliance with all such covenants. |
Supply Chain Finance Programs | Supply Chain Finance Programs Several global financial institutions offer voluntary supply chain finance (“SCF”) programs which enable our suppliers (generally those that grant extended terms), 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. We and our suppliers 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. Our current payment terms with the majority of our suppliers range from 30 to 360 days. 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 our suppliers that elected to participate in the SCF program are included in the line item accounts payable |
Earnings Per Share | Earnings Per Share We calculate basic earnings per share by dividing net income by the weighted average number of common shares outstanding. Certain outstanding options are not included in the diluted earnings per share calculation |
General (Tables)
General (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Summary of Reconciliation of Prepaid Expenses And Other Current Assets | The following table provides a detail of prepaid expenses and other current assets reported within the Condensed Consolidated Balance Sheets as of: (in thousands) June 30, 2024 December 31, 2023 Prepaid expenses $ 151,407 $ 110,863 Consideration receivable from vendors 891,864 928,499 Other current assets 568,446 564,366 Total prepaid expenses and other current assets $ 1,611,717 $ 1,603,728 |
Summary of Derivative Instruments | The following table summarizes the classification and carrying amounts of the 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, 2024 December 31, 2023 Instrument Balance Sheet Location Notional Balance Notional Balance Net investment hedges: Forward contracts Prepaid expenses and other current assets $ 1,053,110 $ 63,056 $ 606,950 $ 37,676 Forward contract Other current liabilities $ 106,800 $ 487 $ 106,800 $ 4,383 Foreign currency debt Long-term debt € 700,000 $ 749,910 € 700,000 $ 772,660 |
Summary of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The tables below presents 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) 2024 2023 2024 2023 Three Months Ended June 30, Net investment hedges: Forward contracts $ 6,994 $ (9,212) $ 4,651 $ 3,158 Foreign currency debt 5,670 2,940 — — Total $ 12,664 $ (6,272) $ 4,651 $ 3,158 Gain (Loss) Recognized in AOCL before Reclassifications Gain Recognized in Interest Expense for Excluded Components (in thousands) 2024 2023 2024 2023 Six Months Ended June 30, Net investment hedges: Forward contracts $ 20,256 $ (14,536) $ 9,020 $ 6,317 Foreign currency debt 22,750 (11,200) — — Total $ 43,006 $ (25,736) $ 9,020 $ 6,317 |
Summary of Supplier Finance Program | (in thousands) June 30, 2024 Obligations outstanding at the beginning of the year $ 3,041,187 Invoices confirmed during the year 2,058,584 Confirmed invoices paid during the year (1,967,840) Confirmed obligations outstanding at the end of period $ 3,131,931 |
Summary of Earnings per Share, Basic and Diluted | The following table summarizes basic and diluted shares outstanding: Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share data) 2024 2023 2024 2023 Net income $ 295,544 $ 344,494 $ 544,438 $ 648,451 Weighted average common shares outstanding 139,358 140,574 139,394 140,688 Dilutive effect of non-vested restricted stock awards 471 673 567 808 Weighted average common shares outstanding – assuming dilution 139,829 141,247 139,961 141,496 Basic earnings per share $ 2.12 $ 2.45 $ 3.91 $ 4.61 Diluted earnings per share $ 2.11 $ 2.44 $ 3.89 $ 4.58 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Summary of 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) 2024 2023 2024 2023 Net sales: Automotive $ 3,726,991 $ 3,654,999 $ 7,301,011 $ 7,160,826 Industrial 2,235,576 2,260,007 4,445,187 4,519,298 Total net sales $ 5,962,567 $ 5,915,006 $ 11,746,198 $ 11,680,124 Segment profit: Automotive $ 313,975 $ 329,347 $ 586,911 $ 593,767 Industrial 276,841 283,372 547,680 545,359 Total segment profit 590,816 612,719 1,134,591 1,139,126 Interest expense, net (21,921) (16,455) (39,611) (33,319) Intangible asset amortization (34,685) (40,625) (68,785) (79,747) Corporate expense (85,984) (101,550) (169,746) (167,565) Other unallocated costs (1) (62,025) — (145,067) — Income before income taxes $ 386,201 $ 454,089 $ 711,382 $ 858,495 (1) The following table presents a summary of the other unallocated costs: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Other unallocated costs: Restructuring and other costs (2) $ (37,247) $ — $ (120,289) $ — Acquisition and integration related costs and other (3) (24,778) — (24,778) — Total other unallocated costs $ (62,025) $ — $ (145,067) $ — (2) Amount reflects costs related to the global restructuring initiative which includes a voluntary retirement offer in the U.S., inventory liquidation costs, and rationalization and optimization of certain distribution centers, stores and other facilities. (3) Amount primarily reflects integration costs related to the completion of the acquisition of Motor Parts and Equipment Corporation ("MPEC") in April 2024, including professional services costs, personnel costs, and lease and other exit costs. |
Summary of Revenue from External Customers by Geographic Areas | 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) 2024 2023 2024 2023 North America: Automotive $ 2,352,254 $ 2,344,701 $ 4,549,144 $ 4,550,086 Industrial 2,101,811 2,128,747 4,181,937 4,259,462 Total North America $ 4,454,065 $ 4,473,448 $ 8,731,081 $ 8,809,548 Australasia: Automotive $ 412,883 $ 407,853 $ 813,231 $ 814,615 Industrial 133,765 131,260 263,250 259,836 Total Australasia $ 546,648 $ 539,113 $ 1,076,481 $ 1,074,451 Europe – Automotive $ 961,854 $ 902,445 $ 1,938,636 $ 1,796,125 Total net sales $ 5,962,567 $ 5,915,006 $ 11,746,198 $ 11,680,124 |
Accounts Receivable Sales Agr_2
Accounts Receivable Sales Agreement (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Receivables [Abstract] | |
Summary of Loans, Notes, Trade and Other Receivables, Sales | 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) 2024 2023 2024 2023 Receivables sold to the financial institutions and derecognized $ 2,135,710 $ 2,139,392 $ 4,305,752 $ 4,304,799 Cash collected on sold receivables $ 2,135,626 $ 2,139,393 $ 4,305,670 $ 4,304,804 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Retirement Benefits [Abstract] | |
Summary of Components of Net Periodic Benefit Income for the Pension Plans | Net periodic benefit income from our pension plans included the following components for our pension benefits: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Service cost $ 1,711 $ 1,503 $ 3,438 $ 2,997 Interest cost 25,324 26,136 50,689 52,253 Expected return on plan assets (44,339) (41,263) (88,743) (82,503) Amortization of prior service cost 281 173 562 346 Amortization of actuarial loss 3,567 2,340 7,134 4,681 Net periodic benefit income $ (13,456) $ (11,111) $ (26,920) $ (22,226) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Summary of Changes in 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 (in thousands) Pension and Other Post-Retirement Benefits Cash Flow Hedges Foreign Currency Translation Total Beginning balance, January 1, 2024 $ (517,941) $ — $ (458,931) $ (976,872) Other comprehensive income (loss) before reclassifications — — (64,642) (64,642) Amounts reclassified from accumulated other comprehensive loss 5,775 — — 5,775 Other comprehensive income (loss), net of income taxes 5,775 — (64,642) (58,867) Ending balance, June 30, 2024 $ (512,166) $ — $ (523,573) $ (1,035,739) Changes in Accumulated Other (in thousands) Pension and Other Post-Retirement Benefits Cash Flow Hedges Foreign Currency Translation Total Beginning balance, January 1, 2023 $ (506,610) $ (2,572) $ (523,360) $ (1,032,542) Other comprehensive income (loss) before reclassifications — 2,765 14,287 17,052 Amounts reclassified from accumulated other comprehensive loss 3,826 (193) — 3,633 Other comprehensive income (loss), net of income taxes 3,826 2,572 14,287 20,685 Ending balance, June 30, 2023 $ (502,784) $ — $ (509,073) $ (1,011,857) |
Restructuring and other costs (
Restructuring and other costs (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Restructuring and Related Activities [Abstract] | |
Summary of Restructuring and Other Costs | The table below summarizes the activity related to these costs for the six months ended June 30, 2024. (in thousands) Severance and other employee costs Other restructuring costs (1) Total (1) Liability as of January 1, 2024 $ — $ — $ — Restructuring and other costs 65,954 46,848 112,802 Cash payments (41,277) (32,872) (74,149) Non-cash charges 3,094 (12,844) (9,750) Translation (90) 2 (88) Liability as of June 30, 2024 $ 27,681 $ 1,134 $ 28,815 (1) Amount reflects moving expenses, accelerated rent, professional fees, facility closure costs and asset impairment costs that are attributable to our restructuring. Amount excludes a $7 million noncash charge reflected in cost of goods sold for inventory liquidated rather than moved during facility consolidation in connection with the restructuring. |
General - Schedule of Prepaid E
General - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Accounting Policies [Abstract] | ||
Prepaid expenses | $ 151,407 | $ 110,863 |
Consideration receivable from vendors | 891,864 | 928,499 |
Other current assets | 568,446 | 564,366 |
Total prepaid expenses and other current assets | $ 1,611,717 | $ 1,603,728 |
General - Schedule of Location
General - Schedule of Location and Fair Value Amounts of Derivative Instruments (Details) - Net investment hedges - Designated as hedging relationship € in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 EUR (€) | Dec. 31, 2023 EUR (€) | Jun. 30, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
Long-term debt | Foreign currency debt | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Nonderivative notional amount | € | € 700,000 | € 700,000 | ||
Prepaid expenses and other current assets | Forward contracts | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Notional amount | $ 1,053,110 | $ 606,950 | ||
Derivative asset, balance | 63,056 | 37,676 | ||
Other current liabilities | Forward contracts | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Notional amount | 106,800 | 106,800 | ||
Derivative liability, balance | 487 | 4,383 | ||
Long-term debt | Foreign currency debt | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Nonderivative balance | $ 749,910 | $ 772,660 |
General - Schedule of (Losses)
General - Schedule of (Losses) Gains Related to Designated Cash Flow Hedges and Net Investment Hedges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain (Loss) Recognized in AOCL before Reclassifications | $ 12,664 | $ (6,272) | $ 43,006 | $ (25,736) |
Gain Recognized in Interest Expense for Excluded Components | 4,651 | 3,158 | 9,020 | 6,317 |
Forward contracts | Net investment hedges | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain (Loss) Recognized in AOCL before Reclassifications | 6,994 | (9,212) | 20,256 | (14,536) |
Gain Recognized in Interest Expense for Excluded Components | 4,651 | 3,158 | 9,020 | 6,317 |
Foreign currency debt | Net investment hedges | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain (Loss) Recognized in AOCL before Reclassifications | 5,670 | 2,940 | 22,750 | (11,200) |
Gain Recognized in Interest Expense for Excluded Components | $ 0 | $ 0 | $ 0 | $ 0 |
General - Fair Value of Financi
General - Fair Value of Financial Instruments (Details) $ in Billions | Jun. 30, 2024 USD ($) |
Fair Value, Inputs, Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt instrument, fair value disclosure | $ 3.6 |
General - Guarantee (Details)
General - Guarantee (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Guarantor Obligations [Line Items] | |
Total borrowings of the independents and affiliates subject to guarantee | $ 757 |
Guarantor obligation, current carrying value | 52 |
Guarantees related to borrowings, other assets | $ 52 |
Minimum | |
Guarantor Obligations [Line Items] | |
Guaranteed obligations maturity (in years) | 1 year |
Maximum | |
Guarantor Obligations [Line Items] | |
Guaranteed obligations maturity (in years) | 6 years |
General - Supply Chain Finance
General - Supply Chain Finance Programs (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Dec. 31, 2023 | |
Related Party Transaction [Line Items] | ||
Supplier Finance Program, Obligation, Statement of Financial Position [Extensible Enumeration] | Trade accounts payable | |
Outstanding payment obligation | $ 3,100,000 | $ 3,000,000 |
Supplier Finance Program, Obligation [Roll Forward] | ||
Obligations outstanding at the beginning of the year | 3,041,187 | |
Invoices confirmed during the year | 2,058,584 | |
Confirmed invoices paid during the year | (1,967,840) | |
Confirmed obligations outstanding at the end of period | $ 3,131,931 | |
Minimum | ||
Related Party Transaction [Line Items] | ||
Supply chain finance program term | 30 days | |
Maximum | ||
Related Party Transaction [Line Items] | ||
Supply chain finance program term | 360 days |
General - Earning Per Share (De
General - Earning Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Accounting Policies [Abstract] | ||||
Net income | $ 295,544 | $ 344,494 | $ 544,438 | $ 648,451 |
Weighted average common shares outstanding (in shares) | 139,358 | 140,574 | 139,394 | 140,688 |
Dilutive effect of non-vested restricted stock awards (in shares) | 471 | 673 | 567 | 808 |
Weighted average common shares outstanding - assuming dilution (in shares) | 139,829 | 141,247 | 139,961 | 141,496 |
Basic earnings per share (in dollars per share) | $ 2.12 | $ 2.45 | $ 3.91 | $ 4.61 |
Diluted earnings per share (in dollars per share) | $ 2.11 | $ 2.44 | $ 3.89 | $ 4.58 |
Segment Information - Operating
Segment Information - Operating Results by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 5,962,567 | $ 5,915,006 | $ 11,746,198 | $ 11,680,124 |
Income before income taxes | 386,201 | 454,089 | 711,382 | 858,495 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 5,962,567 | 5,915,006 | 11,746,198 | 11,680,124 |
Operating profit | 590,816 | 612,719 | 1,134,591 | 1,139,126 |
Operating Segments | Automotive Parts | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 3,726,991 | 3,654,999 | 7,301,011 | 7,160,826 |
Operating profit | 313,975 | 329,347 | 586,911 | 593,767 |
Operating Segments | Industrial Parts | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 2,235,576 | 2,260,007 | 4,445,187 | 4,519,298 |
Operating profit | 276,841 | 283,372 | 547,680 | 545,359 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Interest expense, net | (21,921) | (16,455) | (39,611) | (33,319) |
Intangible asset amortization | (34,685) | (40,625) | (68,785) | (79,747) |
Corporate expense | (85,984) | (101,550) | (169,746) | (167,565) |
Other unallocated amounts | $ (62,025) | $ 0 | $ (145,067) | $ 0 |
Segment Information - Summary o
Segment Information - Summary of Unallocated Costs (Details) - Other - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting Information [Line Items] | ||||
Restructuring and other costs | $ (37,247) | $ 0 | $ (120,289) | $ 0 |
Acquisition and integration related costs and other | (24,778) | 0 | (24,778) | 0 |
Total other unallocated costs | $ (62,025) | $ 0 | $ (145,067) | $ 0 |
Segment Information - Disaggreg
Segment Information - Disaggregated Geographical Revenue by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 5,962,567 | $ 5,915,006 | $ 11,746,198 | $ 11,680,124 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 4,454,065 | 4,473,448 | 8,731,081 | 8,809,548 |
Australasia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 546,648 | 539,113 | 1,076,481 | 1,074,451 |
Automotive Parts | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 2,352,254 | 2,344,701 | 4,549,144 | 4,550,086 |
Automotive Parts | Australasia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 412,883 | 407,853 | 813,231 | 814,615 |
Automotive Parts | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 961,854 | 902,445 | 1,938,636 | 1,796,125 |
Industrial Parts | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 2,101,811 | 2,128,747 | 4,181,937 | 4,259,462 |
Industrial Parts | Australasia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 133,765 | $ 131,260 | $ 263,250 | $ 259,836 |
Accounts Receivable Sales Agr_3
Accounts Receivable Sales Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Receivables [Abstract] | |||||
Sale agreement term | 3 years | ||||
Sale agreement amount | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | ||
Amount held as collateral | 1,500,000 | 1,500,000 | $ 1,200,000 | ||
Accounts receivable sales transactions fees | 31,000 | $ 29,000 | |||
Receivables sold to the financial institutions and derecognized | 2,135,710 | $ 2,139,392 | 4,305,752 | 4,304,799 | |
Cash collected on sold receivables | $ 2,135,626 | $ 2,139,393 | $ 4,305,670 | $ 4,304,804 |
Accounts Receivable Sales Agr_4
Accounts Receivable Sales Agreement - Summary of Sales Agreement Amount Outstanding (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Receivables [Abstract] | ||||
Receivables sold to the financial institutions and derecognized | $ 2,135,710 | $ 2,139,392 | $ 4,305,752 | $ 4,304,799 |
Cash collected on sold receivables | $ 2,135,626 | $ 2,139,393 | $ 4,305,670 | $ 4,304,804 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Benefit Income for the Pension Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Retirement Benefits [Abstract] | ||||
Service cost | $ 1,711 | $ 1,503 | $ 3,438 | $ 2,997 |
Interest cost | 25,324 | 26,136 | 50,689 | 52,253 |
Expected return on plan assets | (44,339) | (41,263) | (88,743) | (82,503) |
Amortization of prior service cost | 281 | 173 | 562 | 346 |
Amortization of actuarial loss | 3,567 | 2,340 | 7,134 | 4,681 |
Net periodic benefit income | $ (13,456) | $ (11,111) | $ (26,920) | $ (22,226) |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Apr. 30, 2024 | |
Business Acquisition [Line Items] | |||
Acquisitions, consideration transferred | $ 651 | ||
Payments to acquire businesses, net | $ 116 | ||
Other intangible assets and goodwill | $ 283 | ||
Customer Relationships | |||
Business Acquisition [Line Items] | |||
Weighted average amortization lives (in years) | 19 years | ||
Automotive | |||
Business Acquisition [Line Items] | |||
Pro forma revenue | $ 100 | ||
Automotive | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | 120 | ||
Industrial | |||
Business Acquisition [Line Items] | |||
Pro forma revenue | $ 5 | ||
MPEC | |||
Business Acquisition [Line Items] | |||
Goodwill and other intangible assets | $ 100 | ||
Inventory | 200 | ||
Operating lease assets | 200 | ||
Operating lease liabilities | $ 200 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive (Loss) by Component (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
AOCI Attributable to Parent [Roll Forward] | ||
Beginning balance | $ 4,416,985 | $ 3,804,447 |
Other comprehensive income (loss) before reclassifications | (64,642) | 17,052 |
Amounts reclassified from accumulated other comprehensive loss | 5,775 | 3,633 |
Other comprehensive income (loss), net of income taxes | (58,867) | 20,685 |
Ending balance | 4,556,123 | 4,085,794 |
Pension and Other Post-Retirement Benefits | ||
AOCI Attributable to Parent [Roll Forward] | ||
Beginning balance | (517,941) | (506,610) |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 5,775 | 3,826 |
Other comprehensive income (loss), net of income taxes | 5,775 | 3,826 |
Ending balance | (512,166) | (502,784) |
Cash Flow Hedges | ||
AOCI Attributable to Parent [Roll Forward] | ||
Beginning balance | 0 | (2,572) |
Other comprehensive income (loss) before reclassifications | 0 | 2,765 |
Amounts reclassified from accumulated other comprehensive loss | 0 | (193) |
Other comprehensive income (loss), net of income taxes | 0 | 2,572 |
Ending balance | 0 | 0 |
Foreign Currency Translation | ||
AOCI Attributable to Parent [Roll Forward] | ||
Beginning balance | (458,931) | (523,360) |
Other comprehensive income (loss) before reclassifications | (64,642) | 14,287 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Other comprehensive income (loss), net of income taxes | (64,642) | 14,287 |
Ending balance | (523,573) | (509,073) |
Total | ||
AOCI Attributable to Parent [Roll Forward] | ||
Beginning balance | (976,872) | (1,032,542) |
Ending balance | $ (1,035,739) | $ (1,011,857) |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jun. 30, 2024 USD ($) lawsuit | Dec. 31, 2023 USD ($) |
Loss Contingencies [Line Items] | ||
Undiscounted product liability | $ 285 | $ 308 |
Minimum | ||
Loss Contingencies [Line Items] | ||
Undiscounted product liability | 180 | 196 |
Maximum | ||
Loss Contingencies [Line Items] | ||
Undiscounted product liability | $ 255 | 277 |
Product Liability | ||
Loss Contingencies [Line Items] | ||
Number of pending claims | lawsuit | 2,516 | |
Undiscounted product liability | $ 225 | $ 244 |
Product liability accrual discount rate (in percent) | 4.36% | 3.88% |
Restructuring and other costs -
Restructuring and other costs - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2024 USD ($) | Jun. 30, 2024 USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring inventory liquidation costs | $ 7 | |
Global Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other costs incurred | $ 37 | 120 |
Expected total restructuring costs | 200 | $ 200 |
Restructuring inventory liquidation costs | 7 | |
Global Restructuring Plan | Severance and other employee costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other costs incurred | 4 | |
Global Restructuring Plan | Other Restructuring Costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other costs incurred | $ 26 |
Restructuring and other costs_2
Restructuring and other costs - Rollforward of Restructuring and Other Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Restructuring Reserve [Roll Forward] | ||||
Restructuring and other costs | $ 29,760 | $ 0 | $ 112,802 | $ 0 |
Restructuring inventory liquidation costs | 7,000 | |||
Global Restructuring Plan | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance, liability | 0 | |||
Restructuring and other costs | 112,802 | |||
Cash payments | (74,149) | |||
Non-cash charges | (9,750) | |||
Translation | (88) | |||
Ending Balance, liability | 28,815 | 28,815 | ||
Restructuring inventory liquidation costs | 7,000 | |||
Severance and other employee costs | Global Restructuring Plan | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance, liability | 0 | |||
Restructuring and other costs | 65,954 | |||
Cash payments | (41,277) | |||
Non-cash charges | 3,094 | |||
Translation | (90) | |||
Ending Balance, liability | 27,681 | 27,681 | ||
Other Restructuring Costs | Global Restructuring Plan | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance, liability | 0 | |||
Restructuring and other costs | 46,848 | |||
Cash payments | (32,872) | |||
Non-cash charges | (12,844) | |||
Translation | 2 | |||
Ending Balance, liability | $ 1,134 | $ 1,134 |