UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


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

For the quarterly period ended ~~June~~September 30, 2024


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

For the transition period from to

Commission file number: 1-5690

__________________________________________

GENUINE PARTS COMPANY

(Exact name of registrant as specified in its charter)

__________________________________________


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

2999 WILDWOOD PARKWAY,

30339

ATLANTA,

(Address of principal executive offices)

(Zip Code)

678-934-5000

(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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

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

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

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 ☒

There were 139,036,487 shares of common stock outstanding as of October 17, 2024.

Table of Contents
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	1618
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2427
Item 4.	Controls and Procedures	2427
PART II
Item 1.	Legal Proceedings	2529
Item 1A.	Risk Factors	2529
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2529
Item 5.	Other Information	2529
Item 6.	Exhibits	2630
	Signatures	2731

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share data)	~~June~~September 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	~~555~~1,~~277~~078,118	$	1,102,007
Trade accounts receivable, less allowance for doubtful accounts (2024 – $59,179; 2023 – $56,608)	2,526,060		2,223,431
Trade accounts receivable, less allowance for doubtful accounts (2024 – $64,138; 2023 – $56,608)	2,380,518		2,223,431
Merchandise inventories, net	5,~~103~~527,~~644~~034		4,676,686
Prepaid expenses and other current assets	1,~~611~~723,~~717~~832		1,603,728
Total current assets	910,~~796~~709,~~698~~502		9,605,852
Goodwill	23,~~858~~034,~~668~~339		2,734,681
Other intangible assets, less accumulated amortization	1,~~818~~915,~~954~~832		1,792,913
Property, plant and equipment, less accumulated depreciation (2024 – $1,695,974; 2023 – $1,592,658)	1,787,822		1,616,785
Property, plant and equipment, less accumulated depreciation (2024 – $1,783,163; 2023 – $1,592,658)	1,909,522		1,616,785
Operating lease assets	1,~~604~~665,~~559~~818		1,268,742
Other assets	1,~~002~~024,~~692~~165		949,481
Total assets	$	1820,~~869~~259,~~393~~178	$	17,968,454
Liabilities and equity
Current liabilities:
Trade accounts payable	$	56,~~931~~100,~~993~~534	$	5,499,536
Current portion of debt	~~853~~810,~~236~~982		355,298
Dividends payable	139,~~375~~111		132,635
Other current liabilities	12,~~841~~072,~~809~~781		1,839,640
Total current liabilities	89,~~766~~123,~~413~~408		7,827,109
Long-term debt	3,~~027~~806,~~491~~950		3,550,930
Operating lease liabilities	1,~~318~~372,~~307~~283		979,938
Pension and other post–retirement benefit liabilities	~~222~~224,~~378~~019		219,644
Deferred tax liabilities	~~473~~483,~~125~~262		437,674
Other long-term liabilities	~~505~~539,~~556~~102		536,174
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 – 2024 – 139,346,018 shares; 2023 – 139,567,071 shares	139,346		139,567
Common stock, par value – $1 per share; authorized – 450,000,000 shares; issued and outstanding – 2024 – 139,078,065 shares; 2023 – 139,567,071 shares	139,078		139,567
Additional paid-in capital	~~180~~193,~~527~~491		173,025
Accumulated other comprehensive loss	(1942,~~035,739~~852)		(976,872)
Retained earnings	5,~~256~~306,~~514~~755		5,065,327
Total parent equity	4,~~540~~696,~~648~~472		4,401,047
Noncontrolling interests in subsidiaries	1513,~~475~~682		15,938
Total equity	4,~~556~~710,~~123~~154		4,416,985
Total liabilities and equity	$	1820,~~869~~259,~~393~~178	$	17,968,454

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands, except per share data)

2024

2023

2024

2023

Net sales

5,~~962~~970,~~567~~198

5,~~915~~824,~~006~~602

1117,~~746~~716,~~198~~396

1117,~~680~~504,~~124~~726

Cost of goods sold

3,~~782~~771,~~264~~757

3,~~780~~715,~~263~~361

711,~~491~~262,~~240~~997

711,~~531~~247,~~980~~341

Gross profit

2,~~180~~198,~~303~~441

2,~~134~~109,~~743~~241

46,~~254~~453,~~958~~399

46,~~148~~257,~~144~~385

Operating expenses:

Selling, administrative and other expenses

1,~~647~~722,~~456~~400

1,~~581~~551,~~653~~799

34,~~222~~944,~~383~~783

34,~~092~~644,~~897~~696

Depreciation and amortization

99106,~~202~~036

9083,~~873~~860

~~189~~295,~~812~~848

~~178~~261,~~088~~948

Provision for doubtful accounts

57,~~678~~119

8,~~322~~417

1119,~~889~~008

1322,~~961~~378

Restructuring and other costs

2941,~~760~~023

—

~~112~~153,~~802~~825

—

Total operating expenses

1,~~782~~876,~~096~~578

1,~~680~~644,~~848~~076

35,~~536~~413,~~886~~464

34,~~284~~929,~~946~~022

Non-operating (income) expense:

Interest expense, net

2127,~~921~~818

1615,~~455~~827

3967,~~611~~429

3349,~~319~~146

Other

(93,~~915~~548)

(1615,~~649~~722)

(3236,~~921~~469)

(2844,~~616~~338)

Total non-operating (income) expense

1224,~~006~~270

~~(194)~~105

630,~~690~~960

4,~~703~~808

Income before income taxes

~~386~~297,~~201~~593

~~454~~465,~~089~~060

~~711~~1,~~382~~008,975

~~858~~1,~~495~~323,555

Income taxes

9071,~~657~~011

~~109~~113,~~595~~862

~~166~~237,~~944~~955

~~210~~323,~~044~~906

Net income

~~295~~226,~~544~~582

~~344~~351,~~494~~198

~~544~~771,~~438~~020

~~648~~999,~~451~~649

Dividends declared per common share

1.00

0.95

23.00

12.9085

Basic earnings per share

21.1263

2.4550

35.9153

47.6111

Diluted earnings per share

21.1162

2.4449

35.8951

47.5808

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,
	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Net income	$	~~295~~226,~~544~~582	$	~~344~~351,~~494~~198	$	~~544~~771,~~438~~020	$	~~648~~999,~~451~~649
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustments	1590,~~278~~001		(977,~~540~~314)		~~(64~~25,~~642)~~359		14(63,~~287~~027)
Cash flow hedge, net of income taxes in 2023 — $951 and $951 respectively	—		2,572		—		2,572
Cash flow hedge, net of income taxes in 2023 — $0 and $951 respectively	—		—		—		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
Pension and postretirement benefit adjustments, net of income taxes in 2024 — $1,062 and $3,188; 2023 — $703 and $2,108 respectively	2,886		1,909		8,661		5,735
Other comprehensive income (loss), net of income taxes	1892,~~165~~887		(575,~~056~~405)		~~(58~~34,~~867)~~020		20(54,~~685~~720)
Comprehensive income	$	~~313~~319,~~709~~469	$	~~339~~275,~~438~~793	$	~~485~~805,~~571~~040	$	~~669~~944,~~136~~929

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, 2024
	Three Months Ended September 30, 2024
(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, 2024	139,335,342	$	139,335	$	179,349	$	(1,053,904)	$	5,137,597	$	4,402,377	$	14,799	$	4,417,176
July 1, 2024	139,346,018	$	139,346	$	180,527	$	(1,035,739)	$	5,256,514	$	4,540,648	$	15,475	$	4,556,123
Net income	—	—		—		—		~~295~~226,~~544~~582		~~295~~226,~~544~~582		—		~~295~~226,~~544~~582
Other comprehensive income, net of tax	—	—		—		1892,~~165~~887		—		1892,~~165~~887		—		1892,~~165~~887
Cash dividend declared, $1.0000 per share	—	—		—		—		(139,376)		(139,376)		—		(139,376)
Cash dividend declared, $1.00 per share	—	—		—		—		(139,111)		(139,111)		—		(139,111)
Shares issued from employee incentive plans	~~259~~1,~~702~~693	~~259~~2		~~(16~~2,~~828)~~254		—		—		~~(16~~2,~~569)~~256		—		~~(16~~2,~~569)~~256
Share-based compensation	—	—		1810,~~006~~710		—		—		1810,~~006~~710		—		1810,~~006~~710
Purchase of stock	(~~249~~269,~~026~~646)	(~~248~~270)		—		—		(37,~~251~~230)		(37,~~499~~500)		—		(37,~~499~~500)
Noncontrolling interest activities	—	—		—		—		—		—		~~676~~(1,793)		~~676~~(1,793)
June 30, 2024	139,346,018	$	139,346	$	180,527	$	(1,035,739)	$	5,256,514	$	4,540,648	$	15,475	$	4,556,123
September 30, 2024	139,078,065	$	139,078	$	193,491	$	(942,852)	$	5,306,755	$	4,696,472	$	13,682	$	4,710,154

	Six Months Ended June 30, 2024
	Nine Months Ended September 30, 2024
(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, 2024	139,567,071	$	139,567	$	173,025	$	(976,872)	$	5,065,327	$	4,401,047	$	15,938	$	4,416,985
Net income	—	—		—		—		~~544~~771,~~438~~020		~~544~~771,~~438~~020		—		~~544~~771,~~438~~020
Other comprehensive loss, net of tax	—	—		—		(58,867)		—		(58,867)		—		(58,867)
Other comprehensive income, net of tax	—	—		—		34,020		—		34,020		—		34,020
Cash dividend declared, $2.0000 per share	—	—		—		—		(278,761)		(278,761)		—		(278,761)
Cash dividend declared, $3.00 per share	—	—		—		—		(417,872)		(417,872)		—		(417,872)
Shares issued from employee incentive plans	~~288~~290,~~513~~206	~~288~~290		(1916,~~068~~814)		—		—		(1816,~~780~~524)		—		(1816,~~780~~524)
Share-based compensation	—	—		2637,~~570~~280		—		—		2637,~~570~~280		—		2637,~~570~~280
Purchase of stock	(~~509~~779,~~566~~212)	(~~509~~779)		—		—		(74111,~~490~~720)		(74112,~~999~~499)		—		(74112,~~999~~499)
Noncontrolling interest activities	—	—		—		—		—		—		(~~463~~2,256)		(~~463~~2,256)
June 30, 2024	139,346,018	$	139,346	$	180,527	$	(1,035,739)	$	5,256,514	$	4,540,648	$	15,475	$	4,556,123
September 30, 2024	139,078,065	$	139,078	$	193,491	$	(942,852)	$	5,306,755	$	4,696,472	$	13,682	$	4,710,154

Table of Contents

	Three Months Ended June 30, 2023
	Three Months Ended September 30, 2023
(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, 2023	140,545,475	$	140,545	$	147,690	$	(1,006,801)	$	4,644,770	$	3,926,204	$	13,432	$	3,939,636
July 1, 2023	140,467,550	$	140,468	$	153,748	$	(1,011,857)	$	4,788,852	$	4,071,211	$	14,583	$	4,085,794
Net income	—	—		—		—		~~344~~351,~~494~~198		~~344~~351,~~494~~198		—		~~344~~351,~~494~~198
Other comprehensive loss, net of tax	—	—		—		(575,~~056~~405)		—		(575,~~056~~405)		—		(575,~~056~~405)
Cash dividend declared, $0.9500 per share	—	—		—		—		(133,492)		(133,492)		—		(133,492)
Cash dividend declared, $0.95 per share	—	—		—		—		(133,254)		(133,254)		—		(133,254)
Shares issued from employee incentive plans	~~351~~5,~~648~~991	~~351~~6		(~~22,241~~541)		—		—		(~~21,890~~535)		—		(~~21,890~~535)
Share-based compensation	—	—		2810,~~299~~395		—		—		2810,~~299~~395		—		2810,~~299~~395
Purchase of stock	(~~429~~238,~~573~~755)	(~~428~~239)		—		—		(6637,~~920~~258)		(6737,~~348~~497)		—		(6737,~~348~~497)
Noncontrolling interest activities	—	—		—		—		—		—		~~1,151~~579		~~1,151~~579
June 30, 2023	140,467,550	$	140,468	$	153,748	$	(1,011,857)	$	4,788,852	$	4,071,211	$	14,583	$	4,085,794
September 30, 2023	140,234,786	$	140,235	$	163,602	$	(1,087,262)	$	4,969,538	$	4,186,113	$	15,162	$	4,201,275

	Six Months Ended June 30, 2023
	Nine Months Ended September 30, 2023
(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, 2023	140,941,649	$	140,941	$	140,324	$	(1,032,542)	$	4,541,640	$	3,790,363	$	14,084	$	3,804,447
Net income	—	—		—		—		~~648~~999,~~451~~649		~~648~~999,~~451~~649		—		~~648~~999,~~451~~649
Other comprehensive income, net of tax	—	—		—		20,685		—		20,685		—		20,685
Other comprehensive loss, net of tax	—	—		—		(54,720)		—		(54,720)		—		(54,720)
Cash dividend declared, $1.9000 per share	—	—		—		—		(267,229)		(267,229)		—		(267,229)
Cash dividend declared, $2.85 per share	—	—		—		—		(400,483)		(400,483)		—		(400,483)
Shares issued from employee incentive plans	~~366~~372,~~480~~471	~~366~~373		(2324,~~521~~062)		—		—		(23,~~155~~689)		—		(23,~~155~~689)
Share-based compensation	—	—		3647,~~945~~340		—		—		3647,~~945~~340		—		3647,~~945~~340
Purchase of stock	(~~840~~1,~~579~~079,334)	(~~839~~1,079)		—		—		(~~134~~171,~~010~~268)		(~~134~~172,~~849~~347)		—		(~~134~~172,~~849~~347)
Noncontrolling interest activities	—	—		—		—		—		—		~~499~~1,078		~~499~~1,078
June 30, 2023	140,467,550	$	140,468	$	153,748	$	(1,011,857)	$	4,788,852	$	4,071,211	$	14,583	$	4,085,794
September 30, 2023	140,234,786	$	140,235	$	163,602	$	(1,087,262)	$	4,969,538	$	4,186,113	$	15,162	$	4,201,275

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,

(in thousands)

2024

2023

Operating activities:

Net income

~~544~~771,~~438~~020

~~648~~999,~~451~~649

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

~~189~~295,~~812~~848

~~178~~261,~~088~~948

Share-based compensation

2637,~~570~~280

3647,~~945~~340

Excess tax benefits from share-based compensation

(8,~~233~~301)

(6,~~431~~770)

Other operating activities, including changes in operating assets and liabilities

~~(140,672)~~378

(~~400~~219,~~050~~721)

Net cash provided by operating activities

~~611~~1,~~915~~096,225

~~457~~1,~~003~~082,446

Investing activities:

Purchases of property, plant and equipment

(~~259~~385,~~245~~590)

(~~205~~349,~~336~~858)

Proceeds from sale of property, plant and equipment

7374,~~645~~215

47,~~762~~339

Proceeds from divestitures of businesses

3,715

—

Acquisitions of businesses

(954,207)

(218,177)

Proceeds from divestitures of businesses

3,401

—

Proceeds from sale of investments

—

80,482

Acquisitions and other investing activities

(580,141)

(106,028)

Other investing activities

16,989

6,785

Net cash used in investing activities

(~~762~~1,~~026~~245,192)

(~~226~~473,~~120~~429)

Financing activities:

Proceeds from debt

~~539~~797,~~722~~602

12,~~668~~543,~~757~~882

Payments on debt

(~~544~~124,~~355~~337)

(12,~~602~~544,~~138~~619)

Shares issued from employee incentive plans

(1816,~~780~~524)

(23,~~155~~689)

Dividends paid

(~~272~~411,~~021~~396)

(~~259~~393,~~929~~420)

Purchases of stock

(74112,~~999~~499)

(~~134~~172,~~849~~347)

Other financing activities

(118,~~893~~018)

(68,~~436~~826)

Net cash used in financing activities

(382,326)

(357,750)

Net cash provided by (used in) financing activities

124,828

(599,019)

Effect of exchange rate changes on cash and cash equivalents

~~(14,293)~~250

3(8,~~509~~824)

Net decrease in cash and cash equivalents

(546,730)

(123,358)

Net (decrease) increase in cash and cash equivalents

(23,889)

1,174

Cash and cash equivalents at beginning of period

1,102,007

653,463

Cash and cash equivalents at end of period

~~555~~1,~~277~~078,118

~~530~~654,~~105~~637

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 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~~nine months ended ~~June~~September 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. This standard also requires disclosure of the title and position of the CODM. 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:

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(in thousands)	~~June~~September 30, 2024		December 31, 2023
Prepaid expenses	$	~~151~~145,~~407~~377	$	110,863
Consideration receivable from vendors	~~891~~1,~~864~~013,785		928,499
Other current assets	~~568~~564,~~446~~670		564,366
Total prepaid expenses and other current assets	$	1,~~611~~723,~~717~~832	$	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
		September 30, 2024				December 31, 2023
Instrument	Balance Sheet Location	Notional		Balance		Notional		Balance
Net investment hedges:
Forward contracts	Prepaid expenses and other current assets	$	1481,~~053,110~~140	$	6323,~~056~~809	$	606,950	$	37,676
Forward contract	Other current liabilities	$	106,800	$	487	$	106,800	$	4,383
Forward contracts	Other current liabilities	$	1,020,460	$	24,928	$	106,800	$	4,383
Foreign currency debt	Long-term debt	€	700,000	$	~~749~~781,~~910~~480	€	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,
Three Months Ended September 30,
Net investment hedges:
Forward contracts	$	6(52,~~994~~429)	$	(919,~~212)~~217	$	4,~~651~~731	$	3,158
Foreign currency debt	5(31,~~670~~570)		220,~~940~~300		—		—
Total	$	12(83,~~664~~999)	$	(639,~~272)~~517	$	4,~~651~~731	$	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,
Nine Months Ended September 30,
Net investment hedges:
Forward contracts	$	20(32,~~256~~174)	$	~~(14~~4,~~536)~~681	$	913,~~020~~750	$	69,~~317~~475
Foreign currency debt	22(8,~~750~~820)		~~(11~~9,~~200)~~100		—		—
Total	$	43(40,~~006~~994)	$	~~(25~~13,~~736)~~781	$	913,~~020~~750	$	69,~~317~~475

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.

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Fair Value of Financial Instruments

As of September 30, 2024, the fair value of our senior unsecured notes was approximately $4.5 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~~September 30, 2024, we were in compliance with all such covenants.

As of ~~June~~September 30, 2024, the total borrowings of the independents and affiliates subject to guarantee by us were approximately $~~757~~626 million. This number decreased from $954 million as of December 31, 2023 due to acquisitions of our independent stores, including Motor Parts and Equipment Corporation ("MPEC") in April 2024 and Walker Automotive Supply, Inc. ("Walker") in July 2024. 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 the 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~~September 30, 2024, 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~~September 30, 2024, we have recognized $5245 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 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 Statement of Cash Flows. As of ~~June~~September 30, 2024 and December 31, 2023, the outstanding payment obligations to the financial institutions are $3.13 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

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because their inclusion would have been anti-dilutive. Antidilutive common stock equivalents excluded from the diluted earnings per share calculation are not material.


(in thousands)	September 30, 2024
Obligations outstanding at the beginning of the year	$	3,054,586
Invoices confirmed during the year	3,207,893
Confirmed invoices paid during the year	(2,980,121)
Confirmed obligations outstanding at the end of period	$	3,282,358

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,
	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)	2024		2023		2024		2023
Net income	$	~~295~~226,~~544~~582	$	~~344~~351,~~494~~198	$	~~544~~771,~~438~~020	$	~~648~~999,~~451~~649
Weighted average common shares outstanding	139,~~358~~193		140,~~574~~335		139,~~394~~326		140,~~688~~569
Dilutive effect of non-vested restricted stock awards	~~471~~406		~~673~~599		~~567~~500		~~808~~716
Weighted average common shares outstanding – assuming dilution	139,~~829~~599		~~141~~140,~~247~~934		139,~~961~~826		141,~~496~~285
Basic earnings per share	$	21.1263	$	2.4550	$	35.9153	$	47.6111
Diluted earnings per share	$	21.1162	$	2.4449	$	35.8951	$	47.5808

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,
	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Net sales:
Automotive	$	3,~~726~~799,~~991~~789	$	3,~~654~~626,~~999~~943	$	711,~~301~~100,~~011~~800	$	710,~~160~~787,~~826~~769
Industrial	2,~~235~~170,~~576~~409		2,~~260~~197,~~007~~659		46,~~445~~615,~~187~~596		46,~~519~~716,~~298~~957
Total net sales	$	5,~~962~~970,~~567~~198	$	5,~~915~~824,~~006~~602	$	1117,~~746~~716,~~198~~396	$	1117,~~680~~504,~~124~~726
Segment profit:
Automotive	$	~~313~~262,~~975~~195	$	~~329~~322,~~347~~004	$	~~586~~849,~~911~~106	$	~~593~~915,~~767~~771
Industrial	~~276~~258,~~841~~753		~~283~~282,~~372~~807		~~547~~806,~~680~~433		~~545~~828,~~359~~166
Total segment profit	590,816		612,719		1,134,591		1,139,126
Interest expense, net	(27,818)		(15,827)		(67,429)		(49,146)
Interest expense, net	(21,921)		(16,455)		(39,611)		(33,319)
Intangible asset amortization	(36,292)		(33,667)		(105,077)		(113,414)
Intangible asset amortization	(34,685)		(40,625)		(68,785)		(79,747)
Corporate expense (1)	(113,949)		(90,257)		(283,695)		(257,822)
Corporate expense	(85,984)		(101,550)		(169,746)		(167,565)
Other unallocated costs (2)	(45,296)		—		(190,363)		—
Other unallocated costs (1)	(62,025)		—		(145,067)		—
Income before income taxes	$	297,593	$	465,060	$	1,008,975	$	1,323,555
Income before income taxes	$	386,201	$	454,089	$	711,382	$	858,495

(1) ~~The~~ Amount ~~following~~reflects ~~table~~costs ~~presents~~related ato ~~summary~~headquarter's ofbroad ~~the~~based support to our business units and other ~~unallocated~~costs that are managed centrally and not allocated to business segments. These include personnel and other costs: for company-wide functions such as executive leadership, human resources, technology,

	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.

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~~(3) Amount~~cybersecurity, ~~primarily~~legal, ~~reflects~~corporate ~~integration~~finance, ~~costs~~internal ~~related~~audit, ~~to the completion of the acquisition of Motor Parts~~ and ~~Equipment~~risk ~~Corporation ("MPEC") in April 2024~~management, ~~including~~as ~~professional~~well ~~services~~as ~~costs,~~product ~~personnel~~liability costs, and ~~lease~~A/R ~~and~~Sales ~~other~~Agreement ~~exit costs~~fees.

(2) The following table presents a summary of the other unallocated costs:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Other unallocated costs:
Restructuring and other costs (2)	$	(41,023)	$	—	$	(161,312)	$	—
Acquisition and integration related costs and other (3)	(4,273)		—		(29,051)		—
Total other unallocated costs	$	(45,296)	$	—	$	(190,363)	$	—

(2) Amount reflects costs related to our 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. Refer to the Restructuring Footnote in the Notes to Condensed Consolidated Financial Statements for more information.

(3) Amount primarily reflects ongoing acquisition and integration costs related to the acquisitions of MPEC in April 2024 and Walker in July 2024, including professional services costs, personnel costs, and lease and other exit costs. Refer to the Acquisitions Footnote in the Notes to Condensed Consolidated Financial Statements for more information.

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,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

2024

2023

2024

2023

North America:

Automotive

2,~~352~~390,~~254~~463

2,~~344~~315,~~701~~733

46,~~549~~939,~~144~~607

46,~~550~~865,~~086~~819

Industrial

2,~~101~~026,~~811~~759

2,~~128~~066,~~747~~284

46,~~181~~208,~~937~~696

46,~~259~~325,~~462~~746

Total North America

4,~~454~~417,~~065~~222

4,~~473~~382,~~448~~017

813,~~731~~148,~~081~~303

813,~~809~~191,~~548~~565

Australasia:

Automotive

~~412~~449,~~883~~296

~~407~~411,~~853~~422

~~813~~1,~~231~~262,527

~~814~~1,~~615~~226,037

Industrial

~~133~~143,~~765~~650

131,~~260~~375

~~263~~406,~~250~~900

~~259~~391,~~836~~211

Total Australasia

~~546~~592,~~648~~946

~~539~~542,~~113~~797

1,~~076~~669,~~481~~427

1,~~074~~617,~~451~~248

Europe – Automotive

~~961~~960,~~854~~030

~~902~~899,~~445~~788

12,~~938~~898,~~636~~666

12,~~796~~695,~~125~~913

Total net sales

5,~~962~~970,~~567~~198

5,~~915~~824,~~006~~602

1117,~~746~~716,~~198~~396

1117,~~680~~504,~~124~~726

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 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 currently allowed under the ~~agreement~~A/R asSales ~~amended on January 3, 2022~~Agreement).

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.

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The total principal amount outstanding of receivables sold is approximately $1.0 billion as of both September 30, 2024 and December 31, 2023. The amount of receivables pledged as collateral as of September 30, 2024 and December 31, 2023 is approximately $1.4 billion and $1.2 ~~Employee~~billion, ~~Benefit~~respectively. ~~Plans~~

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Receivables sold to the financial institutions and derecognized	$	2,144,736	$	2,206,769	$	6,450,489	$	6,511,568
Cash collected on sold receivables	$	2,144,742	$	2,206,755	$	6,450,412	$	6,511,559

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 $47 million and $44 million for the nine months ended September 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 September 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.

4. Debt

On October 30, 2020, we entered into a $1.5 billion Syndicated Facility Agreement (as amended, the "Unsecured Revolving Credit Facility"). The Unsecured Revolving Credit Facility is scheduled to mature on September 30, 2026. We had no outstanding borrowings under the Unsecured Revolving Credit Facility as of September 30, 2024 or December 31, 2023.

Due to the workers’ compensation and insurance reserve requirements in certain states, we also had unused letters of credit of approximately $71 million outstanding as of September 30, 2024.

On November 29, 2023, we established a commercial paper program that allows us to issue unsecured commercial paper notes up to $1.5 billion outstanding. The maturities of the commercial paper notes may not exceed 364 days from the date of issuance. The Unsecured Revolving Credit Facility is used as a liquidity backstop for the repayment of commercial paper outstanding under the program. We had no borrowings outstanding under our commercial paper program as of September 30, 2024 or December 31, 2023.

In the Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2024, we have presented commercial paper activity with original maturities of three-months or less on a net basis given their short-term nature. In the Statements of Cash Flows for the six months ended June 30, 2024, such amounts were presented on a gross basis in “Proceeds from debt” and “Payments on debt” line items. This change in presentation does not impact previously reported net cash used in financing activities. We had no net commercial paper activity for the nine months ended September 30, 2024 and no activity in the prior year period.

On August 7, 2024, we issued $750 million of unsecured 4.95% Senior Notes due 2029. Interest is payable on February 15 and August 15 of each year, beginning February 15, 2025. We intend to utilize the proceeds of this offering to repay the Series J Private Placement Notes and have utilized a portion of the proceeds to repay indebtedness under our commercial paper program that was outstanding as of June 30, 2024. Any remaining amounts will be utilized for general corporate purposes.

The weighted average interest rate on our outstanding borrowings was approximately 3.49% as of September 30, 2024. Certain borrowings require us to comply with a financial covenant with respect to a maximum debt to EBITDA ratio. We were in compliance with all such covenants as of September 30, 2024.

See Note 6 to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for further information regarding the Company's indebtedness.

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5. 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,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

2024

2023

2024

2023

Service cost

1,~~711~~718

1,~~503~~504

35,~~438~~156

24,~~997~~501

Interest cost

25,~~324~~335

26,~~136~~141

5076,~~689~~024

5278,~~253~~394

Expected return on plan assets

(44,~~339~~352)

(41,~~263~~270)

(88133,~~743~~095)

(82123,~~503~~773)

Amortization of prior service cost

281

173

~~562~~843

~~346~~519

Amortization of actuarial loss

3,~~567~~564

2,340

710,~~134~~698

47,~~681~~021

Net periodic benefit income

(13,~~456~~454)

(11,~~111~~112)

(2640,~~920~~374)

(2233,~~226~~338)

Service cost is recorded in selling, administrative and other expenses in the Condensed Consolidated Statements of Income while all other components are recorded within other non-operating (income) expense. Pension benefits also include amounts related to supplemental retirement plans.

5.Planned ~~Acquisitions~~Pension Plan Termination

WeOn ~~acquired~~April ~~several~~29, ~~businesses for approximately $651 million~~2024, ~~which~~our ~~includes~~Board ~~certain~~of ~~non-cash~~Directors ~~consideration,~~approved ~~and~~the ~~$116 million,~~termination ~~net~~ of ~~cash~~the ~~acquired,~~frozen ~~during~~U.S. ~~the~~qualified ~~six~~defined ~~months~~benefit ~~ended~~plan ~~June~~(pension 30plan), ~~2024~~effective ~~and~~September ~~June~~ 30, ~~2023, respectively~~2024. We ~~recognized~~intend ~~approximately $100 million and $5 million of revenue related~~ to ~~our~~transfer ~~current~~the ~~year~~management ~~Automotive~~ and ~~Industrial~~delivery ~~acquisitions, respectively. We recorded approximately $283 million~~ of ~~goodwill~~continuing ~~and~~benefits ~~other intangible assets~~ associated with ~~these~~the ~~acquisitions.~~pension ~~Other~~plan ~~intangible~~to ~~assets~~a ~~acquired~~third-party ofinsurance ~~$120 million~~company. ~~consisted~~The ofpension ~~customer~~plan ~~relationships~~settlement ~~with~~process ~~weighted~~involves ~~average~~several ~~amortization~~regulatory ~~lives~~steps ofand ~~19 years~~approvals. ~~For~~Subject ~~each acquisition, we allocate the purchase price~~ to ~~the~~completion ~~assets~~of ~~acquired~~these steps and ~~the~~approvals, ~~liabilities~~settlement ~~assumed~~is ~~based~~expected onbetween ~~their~~late ~~fair~~2025 ~~values~~and asearly ~~of the respective acquisition date~~2026. ~~The~~As ~~fair~~part ~~values~~ of the ~~assets~~plan ~~acquired~~settlement ~~and liabilities assumed are preliminary. Additional adjustments~~process, ~~particularly~~pension toplan ~~inventory~~participants ~~and~~not ~~intangible~~currently ~~assets,~~receiving ~~may~~payments bewill ~~made~~have to the ~~acquisition~~opportunity ~~accounting~~to ~~during~~select ~~the~~a ~~measurement~~single ~~period,~~lump ~~which~~sum ~~may~~payment beor upan toannuity ~~one year~~ from the ~~respective~~insurance ~~acquisition~~company ~~date.~~that ~~The~~will ~~results~~pay ofand ~~operations~~administer ~~for~~future ~~acquired~~benefit ~~businesses are included in our Condensed Consolidated Statements of Income beginning on their respective acquisition dates~~payments.

~~These~~Upon ~~acquisitions included MPEC~~settlement, ~~the~~we ~~largest~~expect ~~independent~~to ~~owner~~recognize ofa ~~NAPA~~non-cash, ~~Auto~~pre-tax ~~Part~~pension ~~stores~~settlement charge in ~~the~~2025 ~~U.S.,~~equal ~~which~~to wethe ~~acquired~~actuarial onlosses ~~April~~accumulated 30in AOCI, ~~2024.~~which Wetotaled ~~recognized~~ approximately $~~100~~620 million of($450 million, ~~goodwill~~net ~~and~~of ~~other~~tax) ~~intangible~~as ~~assets~~of ~~associated~~September ~~with~~30, ~~MPEC~~2024. ~~Approximate~~The ~~values~~actual amount of ~~other~~the ~~assets~~settlement ~~acquired~~charges ~~and~~will ~~liabilities~~depend ~~assumed~~on ~~included~~the ~~inventory~~valuation of ~~$200 million~~the pension obligation at the settlement date, ~~operating~~which ~~lease~~is ~~assets~~dependent ofupon ~~$200 million~~interest rates, U.S. pension plan asset returns, the lump sum election rate, and ~~operating~~other ~~lease~~factors. ~~liabilities~~Once settled, we will be fully relieved of ~~$200 million~~all obligations under the pension plan.

~~6. Accumulated Other Comprehensive Loss~~ 14

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

	Changes in Accumulated OtherComprehensive Loss by Component
(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)

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	Changes in Accumulated OtherComprehensive Loss by Component
(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)

6. Acquisitions

We acquired various businesses for approximately $1.1 billion and $230 million, which includes certain non-cash consideration and is net of cash acquired, during the nine months ended September 30, 2024 and September 30, 2023, respectively.

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 and may be subject to additional adjustments, particularly to inventory and intangible assets during the measurement period, which may be up to one year from the respective acquisition dates.

The results of operations for acquired businesses are included in our Condensed Consolidated Statements of Income beginning on their respective acquisition dates. We recognized approximately $300 million and $20 million of revenue for the nine months ended September 30, 2024 for our Automotive and Industrial acquisitions, respectively.

2024 Acquisitions

The following table summarizes the preliminary, estimated fair values of the assets acquired and liabilities assumed at the acquisition dates for the aggregate of these businesses during the nine months ended September 30, 2024:


(in thousands)	As of Acquisition Dates
Trade accounts receivable	$	130,000
Merchandise inventories	520,000
Prepaid expenses and other current assets	10,000
Other intangible assets	200,000
Property, plant and equipment	90,000
Operating lease assets	210,000
Other assets	10,000
Total identifiable assets acquired	1,170,000
Current liabilities	(90,000)
Operating lease liabilities	(210,000)
Deferred tax liabilities	(30,000)
Other long-term liabilities	(10,000)
Total liabilities assumed	(340,000)
Net identifiable assets acquired	830,000
Goodwill	270,000
Net assets acquired	$	1,100,000

Other intangible assets acquired, totaling approximately $200 million, consisted primarily of customer relationships and trade names with weighted average amortization lives of 19 years. The provisional fair value of the identifiable intangible assets are subject to adjustment pending final valuation.

The estimated goodwill recognized as part of the acquisitions is generally not tax deductible. Goodwill of $240 million and $30 million has been assigned to the Automotive and Industrial segments, respectively. This goodwill is attributable primarily to the expected synergies and assembled work forces of the acquired businesses.

The businesses acquired included two of the largest independent owners of NAPA Auto Parts Stores in the U.S., MPEC in April 2024 and Walker in July 2024. We recognized approximately $100 million of goodwill and other intangible assets associated with the MPEC and Walker acquisitions. Approximate values of other assets acquired and liabilities assumed included inventory of $300 million, operating lease assets of $200 million and operating lease liabilities of $200 million.

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7. Accumulated Other Comprehensive Loss

The following tables present the changes in AOCL by component for the nine months ended September 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, 2024	$	(517,941)	$	—	$	(458,931)	$	(976,872)
Other comprehensive income (loss) before reclassifications	—		—		25,359		25,359
Amounts reclassified from accumulated other comprehensive loss	8,661		—		—		8,661
Other comprehensive income (loss), net of income taxes	8,661		—		25,359		34,020
Ending balance, September 30, 2024	$	(509,280)	$	—	$	(433,572)	$	(942,852)


	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, 2023	$	(506,610)	$	(2,572)	$	(523,360)	$	(1,032,542)
Other comprehensive income (loss) before reclassifications	—		2,765		(63,027)		(60,262)
Amounts reclassified from accumulated other comprehensive loss	5,735		(193)		—		5,542
Other comprehensive income (loss), net of income taxes	5,735		2,572		(63,027)		(54,720)
Ending balance, September 30, 2023	$	(500,875)	$	—	$	(586,387)	$	(1,087,262)

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.

78. Commitments and Contingencies

Legal Matters

We are subject to various legal proceedings, many involving routine litigation incidental to the businesses, including approximately 2,~~516~~617 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~~235 million as of ~~June~~September 30, 2024, which ~~represents~~represented our best estimate of the liability within our calculated range of $~~180~~181 million to $~~255~~257 million, discounted using a discount rate of 43.3681%. The amount accrued for pending and future claims was $244 million as of December 31, 2023, which ~~represents~~represented 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~~292 million and $308 million as of ~~June~~September 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.

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89. 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~~nine months ended ~~June~~September 30, 2024, we incurred $3741 million and $~~120~~161 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~~September 30, 2024, costs of $3741 million include severance and other employee costs of $411 million, and other restructuring costs of $2630 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~~nine months ended ~~June~~September 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	6577,~~954~~157		4676,~~848~~668		~~112~~153,~~802~~825
Cash payments	(4155,~~277~~832)		(3259,~~872~~715)		(74115,~~149~~547)
Non-cash charges	3,~~094~~198		(1215,~~844~~619)		(912,~~750~~421)
Translation	~~(90)~~501		2		~~(88)~~503
Liability as of June 30, 2024	$	27,681	$	1,134	$	28,815
Liability as of September 30, 2024	$	25,024	$	1,336	$	26,360

(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~~non-cash charge reflected in cost of goods sold for inventory liquidated rather than moved during facility consolidation in connection with the restructuring.

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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, 2023. The results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2024 are not necessarily indicative of results for the year ended December 31, 2024.

Forward-Looking Statements

Some statements in this report, as well as in other materials we file with the Securities and Exchange Commission (“SEC”), release to the public, 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 priorities. Senior officers may also make verbal statements to analysts, investors, the media and others that are forward-looking.

We caution you that 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, changes in general economic conditions, including unemployment, inflation (including the impact of tariffs) or deflation, financial institution disruptions and geopolitical conflicts such as the conflict between Russia and Ukraine, the conflict in the Gaza strip and other unrest in the Middle East; volatility in oil prices; significant cost increases, such as rising fuel and freight expenses; natural disasters or adverse weather conditions, such as recent severe hurricanes; public health emergencies, 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; 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; our ability to successfully attract and retain employees in the current labor market; uncertain credit markets and other macroeconomic conditions; competitive product, service and pricing pressures; failure or weakness in our disclosure controls and procedures and internal controls over financial reporting~~, including as a result of the work from home environment~~; the uncertainties and costs of litigation; disruptions caused by a failure or breach of our information systems, as well as other risks and uncertainties discussed in our 2023 Annual Report on Form 10-K and from time to time in our subsequent filings with the SEC.

Forward-looking statements speak only as of the date they are made, and we undertake no duty to update 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 Forms 10-K, 10-Q, 8-K and other reports filed with the SEC.

Overview

Genuine Parts Company is a service organization engaged in the global distribution of automotive and industrial replacement parts. We have a long tradition of growth dating back to 1928, the year we were founded in Atlanta, Georgia. We conduct business in North America, Europe and Australasia from a network of more than 10,700 locations.

Our Automotive Parts Group ("Automotive") operates in the U.S., Canada, Mexico, France, the U.K., Ireland, Germany, Poland, the Netherlands, Belgium, Spain, Portugal, Australia and New Zealand, and accounted for approximately 6263% of total revenues for the ~~six~~nine months ended ~~June~~September 30, 2024. Our Industrial Parts Group ("Industrial") operates in the U.S., Canada, Mexico, Australia, New Zealand, Indonesia and Singapore, and accounted for approximately 3837% of our total revenues for the ~~six~~nine months ended ~~June~~September 30, 2024.

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Key Performance Indicators

We consider a variety of performance and financial measures in assessing our business, and the key performance indicators used to measure our results are Comparable Sales, Gross Profit and Gross Margin, Selling, Administrative and Other Expenses ("SG&A"), Segment Profit and Segment Margin, and Net Income and EBITDA along with their adjusted measures. For more information regarding our key performance indicators please reference the 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, 2023.

Results of Operations

Our ~~second~~third quarter net sales were $6.0 billion, up 2.5% year-over-year, and net income was $227 million, down 35.5%. Acquired businesses contributed 3.2% of net sales growth, of 0which 1.85% was ~~driven~~from byacquired ~~growth~~stores in ~~Automotive,~~our ~~partially~~U.S. ~~offset~~Automotive bybusiness, aincluding ~~modest~~Motor ~~decline~~Parts atEquipment ~~Industrial.~~Corporation ~~The~~("MPEC") ~~macroeconomic~~and ~~environment~~Walker ~~remained~~Automotive ~~challenging~~Supply, ~~with~~Inc. ~~lagging~~("Walker"). ~~industrial~~An ~~production~~extra ~~driving~~selling ~~soft~~day ~~demand~~contributed ~~and~~to ~~difficult~~an ~~trading~~additional ~~conditions~~1.1% inof ~~Industrial~~net sales growth. ~~Performance~~These inbenefits ~~our~~were ~~U.S.~~partially ~~and~~offset ~~European~~by ~~automotive~~essentially ~~businesses~~flat ~~also~~comparable ~~reflected~~sales ~~moderating~~in ~~demand~~Automotive and adeclines ~~softer~~in ~~pricing~~Industrial ~~environment~~comparable ~~from~~sales ~~lower~~of ~~inflation~~2.4%, ~~Despite~~primarily ~~this,~~driven ~~Automotive~~by ~~sales~~ongoing ~~continued~~weak tomarket ~~benefit~~conditions ~~from~~across ~~the~~our ~~prior~~geographies. ~~year~~We ~~European~~also ~~acquisitions~~estimate the disruption from hurricanes and ~~current~~the ~~quarter~~CrowdStrike ~~acquisitions~~technology outage in the U.S. Onnegatively ~~April~~impacted ~~30,~~comparable wesales ~~completed~~in ~~the~~both ~~acquisition~~segments by a total of ~~MPEC,~~0.7%. ~~our~~Our ~~largest~~gross ~~independent~~margin ~~owner~~improved of0.6% ~~NAPA~~primarily ~~Auto~~due ~~Parts~~to the benefits of acquired stores in ~~the~~our U.S., ~~operating~~Automotive ~~181~~business. ~~locations~~Net income declined 35.5% primarily due to fixed cost deleveraging from declines in comparable sales and increased costs related to: personnel, rent, acquisitions, technology investments, depreciation, restructuring, and interest expense.

~~Second~~Our ~~quarter~~results ~~gross~~of ~~margin~~operations ~~improved~~are 50summarized ~~basis~~below ~~points~~for ~~year-over-year,~~the ~~however~~three ~~net~~and ~~income~~nine ~~declined~~months ~~$49~~ended ~~million~~September ~~primarily due to restructuring costs~~30, ~~investments~~2024 ~~in technology,~~ and ~~increased personnel costs resulting from acquisitions and inflation~~2023.

Our results of operations are summarized below for the three and six months ending June 30, 2024 and 2023.


	Three Months Ended September 30,
	2024				2023
(in thousands)	$		% of Sales		$		% of Sales		$ Change		% Change
Net sales	$	5,970,198	100.0	%	$	5,824,602	100.0	%	$	145,596	2.5	%
Cost of goods sold	3,771,757		63.2	%	3,715,361		63.8	%	56,396		1.5	%
Gross profit	2,198,441		36.8	%	2,109,241		36.2	%	89,200		4.2	%
Operating expense:
Selling, administrative and other expenses	1,722,400		28.8	%	1,551,799		26.6	%	170,601		11.0	%
Depreciation and amortization	106,036		1.8	%	83,860		1.4	%	22,176		26.4	%
Provision for doubtful accounts	7,119		0.1	%	8,417		0.1	%	(1,298)		(15.4)	%
Restructuring and other costs	41,023		0.7	%	—		—	%	41,023		—	%
Total operating expense	1,876,578		31.4	%	1,644,076		28.2	%	232,502		14.1	%
Non-operating (income) expense:
Interest expense, net	27,818		0.5	%	15,827		0.3	%	11,991		75.8	%
Other	(3,548)		(0.1)	%	(15,722)		(0.3)	%	12,174		(77.4)	%
Total non-operating (income) expense	24,270		0.4	%	105		—	%	24,165		23014.3	%
Income before income taxes	297,593		5.0	%	465,060		8.0	%	(167,467)		(36.0)	%
Income taxes	71,011		1.2	%	113,862		2.0	%	(42,851)		(37.6)	%
Net income	$	226,582	3.8	%	$	351,198	6.0	%	$	(124,616)	(35.5)	%

	Three Months Ended June 30,
	2024				2023
(in thousands)	$		% of Sales		$		% of Sales		$ Change		% Change
Net sales	$	5,962,567	100.0	%	$	5,915,006	100.0	%	$	47,561	0.8	%
Cost of goods sold	3,782,264		63.4	%	3,780,263		63.9	%	2,001		0.1	%
Gross profit	2,180,303		36.6	%	2,134,743		36.1	%	45,560		2.1	%
Operating expense:
Selling, administrative and other expenses	1,647,456		27.6	%	1,581,653		26.7	%	65,803		4.2	%
Depreciation and amortization	99,202		1.7	%	90,873		1.5	%	8,329		9.2	%
Provision for doubtful accounts	5,678		0.1	%	8,322		0.1	%	(2,644)		(31.8)	%
Restructuring and other costs	29,760		0.5	%	—		—	%	29,760		—	%
Total operating expense	1,782,096		29.9	%	1,680,848		28.4	%	101,248		6.0	%
Non-operating (income) expense:
Interest expense, net	21,921		0.4	%	16,455		0.3	%	5,466		33.2	%
Other	(9,915)		(0.2)	%	(16,649)		(0.3)	%	6,734		(40.4)	%
Total non-operating (income) expense	12,006		0.2	%	(194)		—	%	12,200		(6288.7)	%
Income before income taxes	386,201		6.5	%	454,089		7.7	%	(67,888)		(15.0)	%
Income taxes	90,657		1.5	%	109,595		1.9	%	(18,938)		(17.3)	%
Net income	$	295,544	5.0	%	$	344,494	5.8	%	$	(48,950)	(14.2)	%

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	Three Months Ended June 30,
	Three Months Ended September 30,
(in thousands, except per share data)	2024			2023			$ Change		% Change
Diluted EPS	$	21.1162		$	2.4449		$	(0.3387)	(1334.59)	%
Adjusted diluted EPS	$	21.4488		$	2.4449		$	—(0.61)	—(24.5)	%
Total adjusted EBITDA	$	~~569~~476,~~349~~743		$	~~561~~564,~~417~~747		$	7(88,~~932~~004)	1(15.46)	%
Automotive segment profit	$	~~313~~262,~~975~~195		$	~~329~~322,~~347~~004		$	(1559,~~372~~809)	(418.76)	%
Industrial segment profit	$	~~276~~258,~~841~~753		$	~~283~~282,~~372~~807		$	(624,~~531~~054)	(28.35)	%
Total segment profit	$	590,816		$	612,719		$	(21,903)	(3.6)	%
Automotive segment margin	6.9		%	8.9		%
Automotive segment margin	8.4		%	9.0		%
Industrial segment margin	11.9		%	12.9		%
Industrial segment margin	12.4		%	12.5		%
Total segment margin	9.9		%	10.4		%

	Six Months Ended June 30,
	Nine Months Ended September 30,
	2024				2023
(in thousands)	$		% of Sales		$		% of Sales		$ Change		% Change
Net sales	$	1117,~~746~~716,~~198~~396	100.0	%	$	1117,~~680~~504,~~124~~726	100.0	%	$	66211,~~074~~670	01.62	%
Cost of goods sold	711,~~491~~262,~~240~~997		63.86	%	711,~~531~~247,~~980~~341		64.53	%	~~(40~~15,~~740)~~656		(0.5)1	%
Gross profit	46,~~254~~453,~~958~~399		36.24	%	46,~~148~~257,~~144~~385		35.57	%	~~106~~196,~~814~~014		23.61	%
Operating expense:
Selling, administrative and other expenses	34,~~222~~944,~~383~~783		27.49	%	34,~~092~~644,~~897~~696		26.5	%	~~129~~300,~~486~~087		46.25	%
Depreciation and amortization	~~189~~295,~~812~~848		1.67	%	~~178~~261,~~088~~948		1.5	%	1133,~~724~~900		612.69	%
Provision for doubtful accounts	1119,~~889~~008		0.1	%	1322,~~961~~378		0.1	%	(23,~~072~~370)		(1415.81)	%
Restructuring and other costs	~~112~~153,~~802~~825		1.0.9	%	—		—	%	~~112~~153,~~802~~825		—	%
Total operating expense	35,~~536~~413,~~886~~464		30.16	%	34,~~284~~929,~~946~~022		28.12	%	~~251~~484,~~940~~442		79.78	%
Non-operating (income) expense:
Interest expense, net	3967,~~611~~429		0.34	%	3349,~~319~~146		0.3	%	618,~~292~~283		1837.92	%
Other	(3236,~~921~~469)		(0.32)	%	(2844,~~616~~338)		(0.23)	%	(47,~~305)~~869		15(17.07)	%
Total non-operating (income) expense	630,~~690~~960		0.12	%	4,~~703~~808		—	%	126,~~987~~152		42543.29	%
Income before income taxes	~~711~~1,~~382~~008,975		65.17	%	~~858~~1,~~495~~323,555		7.46	%	(~~147~~314,~~113~~580)		(1723.18)	%
Income taxes	~~166~~237,~~944~~955		1.43	%	~~210~~323,~~044~~906		1.89	%	(4385,~~100~~951)		(2026.5)	%
Net income	$	~~544~~771,~~438~~020	4.64	%	$	~~648~~999,~~451~~649	5.67	%	$	(~~104~~228,~~013~~629)	(1622.09)	%

	Six Months Ended June 30,
	Nine Months Ended September 30,
(in thousands, except per share data)	2024			2023			$ Change		% Change
Diluted EPS	$	35.8951		$	47.5808		$	(01.6957)	(1522.12)	%
Adjusted diluted EPS	$	46.6655		$	47.5808		$	(0.0853)	1.(7.5)	%
Total adjusted EBITDA	$	1,~~085~~562,~~872~~615		$	1,~~069~~634,~~902~~649		$	15(72,~~970~~034)	1(4.54)	%
Automotive segment profit	$	~~586~~849,~~911~~106		$	~~593~~915,~~767~~771		$	(666,~~856~~665)	(17.23)	%
Industrial segment profit	$	~~547~~806,~~680~~433		$	~~545~~828,~~359~~166		$	2(21,~~321~~733)	0(2.46)	%
Total segment profit	$	1,134,591		$	1,139,126		$	(4,535)	(0.4)	%
Automotive segment margin	7.6		%	8.5		%
Automotive segment margin	8.0		%	8.3		%
Industrial segment margin	12.2		%	12.3		%
Industrial segment margin	12.3		%	12.1		%
Total segment margin	9.7		%	9.8		%

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Net Sales

For the three months ended ~~June~~September 30, 2024 our net sales increased ~~slightly~~2.5% compared to 2023. We experienced a 23.2% benefit from acquisitions, ~~partially offset by a 0.9% decrease in comparable sales~~ and afavorable ~~net unfavorable~~ impact of foreign currency and other of 0.51%, partially offset by a 0.8% decrease in comparable sales.

For the ~~six~~nine months ended ~~June~~September 30, 2024 our net sales increased ~~slightly~~1.2% compared to 2023. We experienced a 2.14% benefit from acquisitions, partially offset by a 0.9% decrease in comparable sales and a net unfavorable impact of foreign currency and other of 0.63%.

The ~~decrease~~decreases in comparable sales isfor the three and nine months ended September 30, 2024 are primarily driven by a sales decline in ~~our~~Industrial ~~industrial business~~ due to the impact of weaker macro-economic conditions on ~~our~~certain customers ~~in 2024~~ as discussed further below. Third quarter comparable sales across both segments were disrupted by Hurricanes Beryl and Helene and the CrowdStrike outage, with an estimated total negative impact of 0.7%.

Automotive

Automotive sales for the three months ended ~~June~~September 30, 2024 were $3.78 billion, an increase of 24.08% from 2023. The increase ~~consisted~~reflects of a 34.14% benefit from acquisitions which was primarily driven by acquired stores in our ~~European~~U.S. ~~acquisitions~~Automotive ~~and~~business, ~~the~~including MPEC ~~acquisition,~~and ~~partially~~Walker. ~~offset~~We byalso experienced a 0.62% ~~decrease~~increase in comparable sales and a 0.52% ~~unfavorable~~favorable impact of foreign currency and other. ~~The~~We ~~slight~~faced ~~decrease~~the ineffects ~~comparable~~of ~~sales~~persistent ~~reflects~~soft ~~softened~~ demand in our U.S. ~~and~~businesses, ~~European~~inclusive ~~businesses~~of sales disruption from Hurricanes Beryl and Helene and the ~~negative~~CrowdStrike ~~impact~~outage, ofand ~~moderating~~adverse ~~inflation~~economic conditions in our European automotive businesses.

Automotive sales for the ~~six~~nine months ended ~~June~~September 30, 2024 were $711.31 billion, an increase of 2.09% from 2023. The increase ~~consisted~~reflects of a 3.04% benefit from acquisitions, partially offset by a 0.21% decrease in comparable sales and a 0.84% unfavorable impact of foreign currency and other. Year-over-year comparable sales also were impacted by persistent soft demand in the U.S., the hurricanes and CrowdStrike outage, and adverse economic conditions in Europe.

Industrial

Net sales for the three months ended ~~June~~September 30, 2024 were $2.2 billion, a decrease of 1.12% compared to 2023. The decrease reflects a 12.64% decrease in comparable sales and a 0.21% unfavorable impact of foreign currency, slightly offset by a 01.73% benefit from acquisitions.

Net sales for ~~six~~the nine months ended ~~June~~September 30, 2024 were $46.46 billion, a decrease of 1.65% compared to 2023. The decrease reflects a 2.12% decrease in comparable sales and a 0.1% unfavorable impact of foreign currency, slightly offset by a 0.68% benefit from acquisitions.

The decrease in comparable sales for the three and nine months ended September 30, 2024 reflects continued softness in industrial production and the ongoing moderation in demand in ~~certain~~several customer sectors. In particular, we believe certain customers that are sensitive to the interest rate environment and ~~continued~~political ~~softness~~uncertainty inare ~~industrial~~delaying ~~production~~capital expenditures. We continue to experience an adverse macro-economic environment when compared to 2023, which caused slowing global industrial demand. In addition, sales disruption from Hurricanes Beryl and Helene and the CrowdStrike outage had a negative impact on third quarter net sales.

Gross Profit and Gross Margin

Gross profit for the three months ended ~~June~~September 30, 2024 increased $4689 million, or 24.12%, compared to ~~last year, and gross margin increased 50 basis points to 36.6% compared to~~ the same period of the previous year., ~~Gross~~and ~~profit~~gross ~~for~~margin ~~the six months ended June 30, 2024~~ increased ~~$107 million, or 2~~0.6% ~~compared~~ to ~~the~~36.8%. ~~same~~The ~~period~~improvements inare ~~the~~primarily ~~prior~~driven ~~year.~~by ~~Gross~~acquired ~~margin~~stores ~~increased~~in 70our ~~basis points to 36~~U.2%S. ~~compared~~Automotive ~~to that same period of the previous year~~business.

~~These~~Gross ~~increases~~profit for the nine months ended September 30, 2024 increased $196 million, or 3.1% compared to the same period in the prior year, and gross margin improved 0.7% to 36.4%. Approximately 50% of these improvements are due to acquired businesses. The remainder of the improvements primarily reflect the positive contributions of our strategic category management and sourcing initiatives. We continue to invest in enhancing technology to generate better pricing data and analytics, which allows us to shift pricing dynamics across each market we serve.

~~Operating Expenses~~21

~~SG&A~~Table ~~expenses represent 27.6% and 27.4%~~ of sales for the three and six months ended June 30, 2024, respectively, compared to 26.7% and 26.5% in the prior year. We experienced increased personnel and rent costs primarily related to acquisitions, annual merit wage increases and inflation.Contents

~~In addition~~Selling, weAdministrative ~~incurred $37 million of costs related to the global restructuring initiative~~ and ~~$25~~Other million primarily related to the acquisition and integration of MPEC, which closed on April 30, 2024. Refer to the Restructuring Footnote in the Notes to Condensed Consolidated Financial Statements for more information on our global restructuring initiative.Expenses

SG&A expenses represent 28.8% of sales for the three months ended September 30, 2024, an increase of 2.2% from the prior year. For the nine months ended September 30, 2024, SG&A expenses represent 27.9% of sales, an increase of 1.4% from the prior year. We estimate operating cost inflation, including personnel costs and rent, caused approximately 40% and 70% of the increase for the three and nine month periods, respectively. Increased operating costs from owning more U.S. automotive stores contributed approximately 25% of the increase in each period. We also incurred acquisition and integration costs and costs related to increased investments in technology, among other things.

Restructuring and Other Costs

For the three and nine months ended September 30, 2024, we incurred $41 million and $161 million, respectively, of costs related to the global restructuring initiative that was approved in February 2024. We recognized approximately $25 million of benefits related to this global restructuring initiative for the nine months ended September 30, 2024. Refer to the Restructuring Footnote in the Notes to Condensed Consolidated Financial Statements for more information on our global restructuring initiative.

Depreciation and Amortization

Depreciation and amortization expenses increased $22 million related to ongoing investments in technology and supply chain initiatives.

Interest Expense

Interest expense for the three months ended September 30, 2024 increased $12 million, or 75.8%, compared to the same period of the previous year, due to increased borrowing to fund acquisitions, including the senior notes issued in August 2024.

Segment Profit

Automotive

For the three months ended ~~June~~September 30, 2024, Automotive segment profit decreased 418.76% compared to the same period in 2023, and Automotive segment profit margin decreased to 86.49% compared to 8.9% in the same period last year.0 We estimate that 40% of these declines relates to persistent segment operating cost pressures from ongoing inflation, particularly personnel costs and rent. The remainder primarily reflects the effects of rising freight costs, technology investments and changes in sales mix. Partially offsetting the declines was a 20 basis point segment profit margin benefit related to acquisitions, particularly acquired stores in U.S. Automotive such as MPEC and Walker. For the nine months ended September 30, 2024, Automotive segment profit decreased 7.3% compared to the same period in 2023, and Automotive segment profit margin decreased to 7.6% compared to 8.5% for the same period last year, based on similar inflationary and other segment operating cost pressures and sales mix changes.

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period last year. For six months ended June 30, 2024, Automotive segment profit decreased 1.2% compared to the same period in 2023, and Automotive segment profit margin decreased to 8.0% compared to 8.3% for the same period last year. These decreases are primarily due to increased freight costs as well as personnel costs resulting from acquisitions and inflation.

Industrial

For the three months ended ~~June~~September 30, 2024, Industrial segment profit decreased 28.35% compared to the same period in 2023 and Industrial segment profit margin was 1211.49%, down 101.0% ~~basis points~~ from the prior year. These declines primarily relate to persistent segment operating cost pressures from inflation, particularly personnel costs and rent. For the ~~six~~nine months ended ~~June~~September 30, 2024, Industrial segment profit ~~increased~~decreased 02.46% compared to the same period last year and Industrial segment profit margin ~~increased~~decreased to 12.32% compared to 12.13% in the same period in the previous year~~. The decrease in segment profit for the three months ended June 30~~, ~~2024~~based ~~resulted~~on ~~from~~similar ~~deleveraging~~inflationary ~~expenses~~segment ~~driven~~operating bycost ~~lower sales~~pressures. The improvements in the six months ended June 30, 2024 occurred, despite a year-over-year sales decline of 1.6%, primarily due to expense management and ongoing execution of our supply chain initiatives and strategic category management.

Income Taxes

Our effective income tax rate for the three and ~~six~~nine ~~month~~months ~~periods~~ ended ~~June~~September 30, 2024 was 23.59% ~~compared~~and ~~to 24~~23.16%, ~~and~~respectively, as compared to 24.5% for the same periods in 2023~~, respectively~~. The rate decrease is primarily due to expanded investment ~~benefits~~ and ~~earnings~~domestic ~~mix~~credit ~~shift across our global businesses~~benefits.

Net Income, Diluted Earnings Per Share and Adjusted EBITDA

For the three months ended ~~June~~September 30, 2024, net income was $~~296~~227 million, a decrease of 1435.25% compared to net income of $~~344~~351 million for the same three month period of the prior year. On a per share diluted basis, net income was $21.1162, a decrease of 1334.59% compared to $2.4449 in 2023. These decreases are primarily due to $3741 million of costs related to the global restructuring initiative, ~~and~~ $254 million ~~primarily~~of ~~related to the~~ acquisition ofand ~~MPEC.~~integration ~~Adjusted~~costs, ~~net~~persistent ~~income~~cost ~~for~~pressures ~~the~~from ~~three~~personnel ~~months~~costs ~~ended~~and ~~June~~rent 30inflation, ~~2024~~increased ~~was~~costs ~~$342~~and ~~million,~~depreciation afrom ~~decrease~~ongoing oftechnology ~~0.9%~~investments ~~compared~~and toincreased ~~net~~interest ~~income~~costs offrom ~~$344~~borrowings ~~million for the same period of 2023. On a per share diluted basis, adjusted net income was $2.44, remaining flat compared~~ to ~~diluted~~fund ~~earnings per share of $2~~acquisitions.44 ~~last~~For ~~year.~~the ~~Second~~nine ~~quarter~~months ~~2024 adjusted EBITDA was $569 million, an increase of 1.4% from $561 million in 2023.~~

For the six months ended June 30, 2024, net income was $544 million, a decrease of 16.0% compared to net income of $648 million for the same three month period of the prior year. On a per share diluted basis, net income was $3.89, a decrease of 15.1% compared to $4.58 in 2023. These decreases are primarily due to $120 million of costs related to the global restructuring initiative and $25 million primarily related to the acquisition of MPEC. Adjusted net income for the six months ended June 30, 2024 was $652 million an increase of 0.6% compared to net income of $648 million in 2023. On a per share diluted basis, adjusted net income was $4.66, an increase of 1.7% compared to diluted earnings per share of $4.58 last year. Second quarter 2024 adjusted EBITDA was $1.09 billion, an increase of 1.5% from EBITDA of $1.07 billion from 2023.22

~~The~~Table ~~increases in these adjusted measures reflect the positive effects~~ of ~~executing our strategic category management and other initiatives, as discussed more fully in the commentary above.~~Contents

ended September 30, 2024, net income was $771 million, a decrease of 22.9% compared to net income of $1.0 billion for the same nine month period of the prior year. On a per share diluted basis, net income was $5.51, a decrease of 22.2% compared to $7.08 in 2023. These decreases are primarily due to $161 million of costs related to the global restructuring initiative, $29 million of acquisition and integration costs, persistent cost pressures from personnel costs and rent inflation, increased costs and depreciation from ongoing technology investments and increased interest costs from borrowings to fund acquisitions.

Adjusted net income for the three months ended September 30, 2024, which excludes the effects of restructuring and other costs and acquisition and integration costs, was $263 million, a decrease of 25.1% compared to net income of $351 million for the same period of 2023. On a per share diluted basis, adjusted net income was $1.88, a decrease compared to diluted earnings per share of $2.49 last year. Third quarter 2024 adjusted EBITDA was $477 million, a decrease of 15.6% from $565 million in 2023. Adjusted net income, which excludes the effects of restructuring and other costs and acquisition and integration costs, for the nine months ended September 30, 2024 was $915 million, a decrease of 8.4% compared to net income of $1.0 billion in 2023. On a per share diluted basis, adjusted net income was $6.55, a decrease of 7.5% compared to diluted earnings per share of $7.08 last year. Third quarter 2024 adjusted EBITDA was $1.6 billion, a decrease of 4.4% from EBITDA of $1.6 billion from 2023. The decreases in these adjusted measures reflect the negative effects of lost expense leverage on comparable sales declines combined with increased costs, as discussed more fully in the commentary above.

Corporate Expense and other Segment Reconciling items

This section explains the material reconciling items displayed in the Segment Footnote in the Notes to Condensed Consolidated Financial Statements, that are not discussed above including corporate expense and other unallocated costs.

Corporate expense reflects costs related to headquarter's broad based support to our business units and other costs that are managed centrally and not allocated to business segments. These include personnel and other costs for company-wide functions such as executive leadership, human resources, technology, cybersecurity, legal, corporate finance, internal audit, and risk management, as well as product liability costs and A/R Sales Agreement fees. Our operational objective is to maintain Corporate expenses within a range of 1.5% to 2.0% of net sales. Corporate expense amounted to $114 million and $90 million in the third quarter of 2024 and 2023, respectively. For the nine months ended September 30, 2024 corporate expense amounted to $284 million, or 1.6% of net sales, in 2024, compared to $258 million, or 1.5% of net sales, in 2023.

Corporate expenses increased in both periods primarily due to the effects of persistent inflation on personnel costs and ongoing investments in technology.

Other unallocated costs represent restructuring and other costs and acquisition and integration related costs and other. These increased year-over-year due to the global restructuring initiative that was approved in February 2024 and significantly increased acquisition activity in 2024.

Non-GAAP Financial Measures

Adjusted net income, adjusted diluted EPS, adjusted EBITDA, ~~total segment profit, total segment margin,~~ and adjusted EBITDA for each segment and Corporate are non-GAAP measures (see table below for reconciliations to the most directly comparable GAAP measures).

The following tables set forth reconciliations of net income and diluted EPS to adjusted net income and adjusted diluted EPS, respectively, to account for the impact of adjustments. We also include reconciliations from net income to adjusted EBITDA, ~~net income to total~~ segment profit ~~and total segment margin and segment profit~~ to segment EBITDA and adjusted EBITDA for each segment and Corporate. We believe that the presentation of adjusted net income, adjusted diluted EPS, ~~total segment profit~~ and adjusted EBITDA, which are not calculated in accordance with GAAP, 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. In the case of adjusted EBITDA by segment and Corporate, we believe this additional metric is useful to investors as it provides further insight into the performance of our segments and Corporate. We believe the non-GAAP metrics included herein also enhance the comparability of our results from period to period and with our competitors, as well as to show ongoing results from operations distinct from items that are infrequent or not associated with our core operations. For example, for the three and nine months ended September 30, 2024, adjusted net income, adjusted EBITDA and adjusted diluted earnings per share exclude costs relating to our global

2023

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~~three and six months ended June 30, 2024, adjusted net income, adjusted EBITDA and adjusted diluted earnings per share exclude costs relating to our global~~ restructuring initiative and ~~acquisition~~acquisitions of ~~Motor~~MPEC ~~Parts~~ and ~~Equipment Corporation~~Walker. We do not, nor do we suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information.

	Three Months Ended June 30,				Six Months Ended June 30,
	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
GAAP net income	$	~~295~~226,~~544~~582	$	~~344~~351,~~494~~198	$	~~544~~771,~~438~~020	$	~~648~~999,~~451~~649
Adjustments:
Restructuring and other costs (1)	3741,~~247~~023		—		~~120~~161,~~289~~312		—
Acquisition and integration related costs and other (2)	244,~~778~~273		—		2429,~~778~~051		—
Total adjustments	6245,~~025~~296		—		~~145~~190,~~067~~363		—
Tax impact of adjustments (3)	(168,~~008~~865)		—		(3745,~~046~~911)		—
Adjusted net income	$	~~341~~263,~~561~~013	$	~~344~~351,~~494~~198	$	~~652~~915,~~459~~472	$	~~648~~999,~~451~~649

The table below represents amounts per common share assuming dilution:

	Three Months Ended June 30,				Six Months Ended June 30,
	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)	2024		2023		2024		2023
GAAP diluted earnings per share	$	21.1162	$	2.4449	$	35.8951	$	47.5808
Adjustments:
Restructuring and other costs (1)	0.2729		—		01.8615		—
Acquisition and integration related costs and other (2)	0.1703		—		0.1722		—
Total adjustments	0.4432		—		1.0337		—
Tax impact of adjustments (3)	(0.1106)		—		(0.2633)		—
Adjusted diluted earnings per share	$	21.4488	$	2.4449	$	46.6655	$	47.5808
Weighted average common shares outstanding – assuming dilution	139,~~829~~599		~~141~~140,~~247~~934		139,~~961~~826		141,~~496~~285

(1) 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.

(2) Amount primarily reflects integration costs related to the completion of the ~~acquisition~~acquisitions of MPEC in April 2024 and Walker in July 2024, including professional services costs, personnel costs, and lease and other exit costs.

(3) We determine the tax effect of non-GAAP adjustments by considering the tax laws and statutory income tax rates applicable in the tax jurisdictions of the underlying non-GAAP adjustments, including any related valuation allowances. For the three and ~~six~~nine months ended ~~June~~September 30, 2024, we applied the statutory income tax rates to the taxable portion of all of our adjustments, which resulted in a tax impact of $169 million and $3746 million.

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The table below represents a reconciliation from GAAP net income to adjusted EBITDA:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

2024

2023

2024

2023

GAAP net income

~~295~~226,~~544~~582

~~344~~351,~~494~~198

~~544~~771,~~438~~020

~~648~~999,~~451~~649

Depreciation and amortization

99106,~~202~~036

9083,~~873~~860

~~189~~295,~~812~~848

~~178~~261,~~088~~948

Interest expense, net

2127,~~921~~818

1615,~~455~~827

3967,~~611~~429

3349,~~319~~146

Income taxes

9071,~~657~~011

~~109~~113,~~595~~862

~~166~~237,~~944~~955

~~210~~323,~~044~~906

EBITDA

~~507~~431,~~324~~447

~~561~~564,~~417~~747

~~940~~1,~~805~~372,252

1,~~069~~634,~~902~~649

Total adjustments (1)

6245,~~025~~296

—

~~145~~190,~~067~~363

—

Adjusted EBITDA

~~569~~476,~~349~~743

~~561~~564,~~417~~747

1,~~085~~562,~~872~~615

1,~~069~~634,~~902~~649

(1) Amounts are the same as adjustments included within the adjusted net income table above.

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Line item:
Cost of goods sold	$	7,487	$	—	$	7,487	$	—
Selling, administrative and other expenses	24,778		—		24,778		—
Restructuring and other costs	29,760		—		112,802		—
Total adjustments	$	62,025	$	—	$	145,067	$	—

The table below represents a reconciliation from GAAP net income to total segment profit:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2024			2023			2024			2023
GAAP net income	$	295,544		$	344,494		$	544,438		$	648,451
Income taxes	90,657			109,595			166,944			210,044
Income before income taxes	386,201			454,089			711,382			858,495
Interest expense, net	21,921			16,455			39,611			33,319
Corporate expense	85,984			101,550			169,746			167,565
Intangible asset amortization	34,685			40,625			68,785			79,747
Other unallocated income, net (1)	62,025			—			145,067			—
Total segment profit	$	590,816		$	612,719		$	1,134,591		$	1,139,126
GAAP net sales	$	5,962,567		$	5,915,006		$	11,746,198		$	11,680,124
GAAP net income margin (2)	5.0		%	5.8		%	4.6		%	5.6		%
Total segment profit margin (3)	9.9		%	10.4		%	9.7		%	9.8		%

(1) Amounts are the same as adjustments included within the adjusted net income table above.

(2) Represents GAAP net income as a percentage of GAAP net sales.

(3) Represents total segment profit as a percentage of GAAP net sales.

The table below represents a reconciliation from segment profit to segment EBITDA and adjusted EBITDA:

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The table below clarifies where the adjusted items are presented in the Condensed Consolidated Statements of Income:

	Three Months Ended June 30,				Six Months Ended June 30,
	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Automotive:
Line item:
Segment Profit	$	313,975	$	329,347	$	586,911	$	593,767
Cost of goods sold	$	—	$	—	$	7,487	$	—
Depreciation	48,894		40,901		95,634		79,010
Selling, administrative and other expenses	4,273		—		29,051		—
Automotive segment EBITDA	362,869		370,248		682,545		672,777
Restructuring and other costs	41,023		—		153,825		—
Industrial:
Total adjustments	$	45,296	$	—	$	190,363	$	—
Segment Profit	276,841		283,372		547,680		545,359
Depreciation	8,119		7,080		16,267		14,130
Industrial segment EBITDA	284,960		290,452		563,947		559,489
Corporate:
Corporate expense	(85,984)		(101,550)		(169,746)		(167,565)
Depreciation	7,504		2,267		9,126		5,201
Other unallocated costs (1)	62,025		—		145,067		—
Corporate EBITDA	(16,455)		(99,283)		(15,553)		(162,364)
Total adjustments (1)	(62,025)		—		(145,067)		—
Corporate adjusted EBITDA	(78,480)		(99,283)		(160,620)		(162,364)
Adjusted EBITDA	$	569,349	$	561,417	$	1,085,872	$	1,069,902

The table below represents a reconciliation from segment profit to segment EBITDA and adjusted EBITDA:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Automotive:
Segment Profit	$	262,195	$	322,004	$	849,106	$	915,771
Depreciation	53,947		40,673		149,581		119,683
Automotive segment EBITDA	316,142		362,677		998,687		1,035,454

Industrial:
Segment Profit	258,753		282,807		806,433		828,166
Depreciation	8,534		7,644		24,801		21,774
Industrial segment EBITDA	267,287		290,451		831,234		849,940

Corporate:
Corporate expense	(113,949)		(90,257)		(283,695)		(257,822)
Depreciation	7,263		1,876		16,389		7,077
Other unallocated costs (1)	45,296		—		190,363		—
Corporate EBITDA	(61,390)		(88,381)		(76,943)		(250,745)
Total adjustments (1)	(45,296)		—		(190,363)		—
Corporate adjusted EBITDA	(106,686)		(88,381)		(267,306)		(250,745)

Adjusted EBITDA	$	476,743	$	564,747	$	1,562,615	$	1,634,649

(1) Amounts are the same as adjustments included within the adjusted net income table above.

Financial Condition

Our cash balance was $~~555~~1.1 ~~million~~billion as of ~~June~~September 30, 2024, a decrease of $~~547~~24 million from December 31, 2023. For the ~~six~~nine months ended ~~June~~September 30, 2024, we had net cash provided by operating activities of $~~612~~1.1 ~~million~~billion, net cash used in investing activities of $~~762~~1.2 ~~million~~billion and net cash used in financing activities of $~~382~~125 million.

The cash provided by operating activities increased as compared to prior year primarily driven by changes in working capital. We had $~~762~~1.2 ~~million~~billion in net cash used for investing activities, consisting of capital expenditures and acquisitions and other investing activities of $~~839~~1.3 ~~million~~billion, partially offset by proceeds from the sale of property, plant and equipment and the divestiture of businesses. The financing activities consisted primarily of $~~272~~411 million for dividends paid to our shareholders and $75112 million of stock repurchases.

Accounts receivable increased $~~303~~157 million, or 137.61%, from December 31, 2023. Inventory increased $~~427~~850 million, or 918.12%. Accounts receivable and inventory were both impacted by ~~second~~third quarter increases in revenues and related product demand. Inventory also increased $200 million as a result of the MPEC acquisition. Accounts payable increased $432 million, or 7.9% from December 31, 2023, in line with the increase in inventory. Total debt of $3.9 billion at June 30, 2024 decreased $26 million, or 0.7%, from December 31, 2023.

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related product demand. Inventory also increased approximately $520 million as a result of acquiring an approximate 150 net new stores, including stores acquired in the acquisitions of MPEC and Walker. Accounts payable increased approximately $600 million, or 10.9% from December 31, 2023, in line with the increase in inventory. Total debt of $4.6 billion at September 30, 2024 decreased $712 million, or 18.2%, from December 31, 2023.

Liquidity and Capital Resources

We ended the quarter with $2.06 billion of total liquidity. Total liquidity comprises of $~~555~~1.1 ~~million~~billion of cash and cash equivalents and $1.45 billion ofavailable on our ~~$1.5 billion~~ revolving credit facility ~~available after the effect of $100 million of commercial paper outstanding as of June 30, 2024~~. 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 existing lines of credit, commercial paper program, and cash generated from operations will be sufficient to fund anticipated operations for the foreseeable future.

On April 29, 2024, our Board of Directors approved the termination of the frozen U.S. qualified defined benefit plan (pension plan), effective September 30, 2024. We intend to transfer the management and delivery of continuing benefits associated with the pension plan to a third-party insurance company. Upon settlement, we expect to recognize a non-cash, pre-tax pension settlement charge in 2025 equal to the actuarial losses accumulated in AOCI, which totaled approximately $620 million ($450 million, net of tax) as of September 30, 2024.

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.

23We expect to be able to continue to borrow funds at reasonable rates over the long term. At September 30, 2024, our total average cost of debt was 3.49%, and we remain in compliance with all covenants connected with our borrowings.

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We expect to be able to continue to borrow funds at reasonable rates over the long term. At June 30, 2024, our total average cost of debt was 3.25%, and we remain in compliance with all covenants connected with our borrowings. In addition, we repaid the 155 million Australian dollar principal amount of our Series A Senior Unsecured Note, due June 30, 2024.

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 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 15, 2024, we announced a 5.3% increase in the regular quarterly cash dividend for 2024. Our Board of Directors increased the cash dividend payable to an annual rate of $4.00 per share compared with the prior year dividend of $3.80 per share. We have paid a cash dividend every year since going public in 1948, and 2024 marks the 68th consecutive year of increased dividends paid to shareholders.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

For quantitative and qualitative disclosures about market risk, refer to “Quantitative and Qualitative Disclosures About Market Risk” in Item 7A of Part II of our 2023 Annual Report on Form 10-K. Our exposure to market risk has not changed materially since December 31, 2023.

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 our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our CEO and CFO concluded that 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 us in the reports that we file or furnish 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 our management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

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Changes in Internal Control over Financial Reporting

There have been no changes in 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 our last quarter ended ~~June~~September 30, 2024 that have materially affected, or are reasonably likely to materially affect, 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 2023 Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. 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

The following table provides information about the purchases of shares of our common stock during the three months ended ~~June~~September 30, 2024:

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, 2024 through April 30, 2024	105,441	$154.20	99,364	8,178,141
July 1, 2024 through July 31, 2024	102,784	$138.64	102,784	7,925,695
May 1, 2024 through May 31, 2024	223,232	$154.38	100,890	8,077,251
August 1, 2024 through August 31, 2024	119,661	$140.39	117,600	7,808,095
June 1, 2024 through June 30, 2024	48,772	$142.38	48,772	8,028,479
September 1, 2024 through September 30, 2024	49,262	$137.02	49,262	7,758,833
Totals	~~377~~271,~~445~~707	$~~152~~139.7812	~~249~~269,~~026~~646	87,~~028~~758,~~479~~833

(1)Includes shares surrendered by employees to satisfy tax withholding obligations in connection with the vesting of shares of restricted stock, the exercise of share appreciation rights 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 87.08 million shares authorized remain available to be repurchased. There were no other repurchase plans announced as of ~~June~~September 30, 2024.

Item 5. Other Information

Rule 10b5-1 Trading Plans

During the fiscal quarter ended ~~June~~September 30, 2024, none of the Company’s directors or executive officers adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

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Item 6. Exhibits

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

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 19, 2018 (incorporated herein by reference from Exhibit 3.2 to the Company’s Current Report on Form 8-K dated November 19, 2018)
Exhibit 10.1*						Genuine Parts Company Amended and Restated 2015 Incentive Plan (incorporated herein by reference to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A, filed March 1, 2024)
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						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 and Chief Financial Officer – furnished herewith
Exhibit 101.INS						XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
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 period ended ~~June~~September 30, 2024 formatted in Inline XBRL

* Indicates management contract or compensatory plan or arrangement.30

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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 23, 2024						/s/ Bert Nappier
Date: October 22, 2024						/s/ Bert Nappier
						Bert Nappier
						Executive Vice President and Chief Financial Officer(Duly Authorized Officer and Principal Financial andAccounting Officer)

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