Genuine Parts GPC · USD

Segment InformationWe are a global service provider of automotive and industrial replacement parts and value-added solutions, and our operating segments are organized based on the type of product sold and geography. Certain of our operating segments are aggregated into our reportable segments since they have similar economic characteristics, products and services, type and class of customers, and distribution methods. Effective December 31, 2025, we revised the aggregation of our operating segments to present three reportable segments: North America Automotive Parts Group ("North America Automotive"), International Automotive Parts Group ("International Automotive") and Industrial Parts Group ("Industrial"). Our North America Automotive and International Automotive segments distribute replacement parts for substantially all makes and models of automobiles, trucks, and other vehicles. Our Industrial segment distributes a wide variety of industrial bearings, mechanical and fluid power transmission equipment, hydraulic and pneumatic products, material handling components and other related parts and supplies. We believe this expanded segmentation will provide our investors with additional information to better understand our performance. Prior-period segment information has been recast to conform to the current period presentation.Inter-segment sales are not significant. Approximately $301 million, $415 million and $577 million of income before income taxes were generated in jurisdictions outside the U.S. for the years ended December 31, 2025, 2024, and 2023, respectively. Net sales and net property, plant and equipment by country relate directly to our operations in the respective country. Corporate assets are principally cash and cash equivalents and headquarters’ facilities and equipment.Our President and Chief Executive Officer is our Chief Operating Decision Maker ("CODM") and uses segment EBITDA to assess segment operating performance and make decisions about the allocation of resources.The significant segment expenses regularly provided to the CODM are total cost of sales and total other operating expenses. Total other operating expenses represent all other costs of operating our segments, such as personnel, freight and delivery, facility, technology, marketing costs, as well as items such as foreign currency.

Commitments and Contingencies Legal MattersWe are subject to various claims and lawsuits, principally in the United States, and regulatory proceedings worldwide. The liabilities recognized on these claims and other matters are based on the best available information and assumptions that we believe are reasonable. While litigation of any type contains an element of uncertainty, we believe that our insurance coverage and our defense, and ultimate resolution of pending and reasonably anticipated claims will not have a material adverse effect on our business, results of operations or financial condition.Asbestos-Related Product Liability and Insurance ReceivableWe maintain a liability for probable and estimable claims and settlements associated with our distribution and sales of asbestos-containing brake and friction products sold primarily before 1991. These claims and settlements are unrelated to our ongoing operations, revenue generating activities, and business strategy. We regularly conduct a comprehensive legal review of our asbestos liability. We review recent and historical claims data, including, (i) the number of pending claims filed, (ii) the nature and mix of those claims (e.g., disease type, plaintiff type, geography), (iii) the costs to resolve pending claims, and (iv) trends in filing rates and in costs to resolve claims (collectively, the “Claims Data”). We also consider the known latency periods for common asbestos diseases when projecting future filing trends and claims. We provide the Claims Data to a third-party actuarial specialist with expertise in determining the impact of Claim Data on future filing trends and costs. The actuarial specialist assists us in estimating the number of future claims and costs to resolve pending and future claims. We use this analysis to develop our estimate of probable liability on a discounted basis, using risk-free interest rates derived from market data about monetary assets with maturities comparable to those of the projected liability. Developments may occur that could affect our estimate of asbestos-related product liability and actual results may differ under different assumptions or conditions.

DebtThe following table summarizes our debt outstanding as of December 31, 2025 and December 31, 2024:(in thousands)December 31, 2025December 31, 2024Unsecured revolving line of credit, $2,000,000,000, SOFR plus 1.25% variable,weighted average rate 5.01% as of December 31, 2025$600,000 $— Commercial paper, net of discounts, weighted average rate of 4.39% at December 31, 2025342,791 — Unsecured term notes:January 6, 2022, Senior Unsecured Notes, $500,000, 1.75% fixed, due February 1, 2025— 500,000 June 30, 2019, Series B Senior Unsecured Notes, A$155,000, 3.43% fixed, due June 30, 2026103,788 96,426 November 30, 2016, Series H Senior Unsecured Notes, $250,000, 3.24% fixed, due November 30, 2026250,000 250,000 October 30, 2017, Series K Senior Unsecured Notes, €250,000, 1.81% fixed, due October 30, 2027293,700 260,150 October 30, 2017, Series I Senior Unsecured Notes, $120,000, 3.70% fixed, due October 30, 2027120,000 120,000 November 1, 2023 Senior Unsecured Notes, $425,000, 6.50% fixed, due November 1, 2028425,000 425,000 May 31, 2019, Series A Senior Unsecured Notes, €50,000, 1.55% fixed, due May 31, 202958,740 52,030 August 7, 2024, Senior Unsecured Notes, $750,000, 4.95% fixed, due August 15, 2029750,000 750,000 October 30, 2017, Series L Senior Unsecured Notes, €125,000, 2.02% fixed, due October 30, 2029146,850 130,075 October 27, 2020, Senior Unsecured Notes, $500,000, 1.88% fixed, due November 1, 2030500,000 500,000 May 31, 2019, Series B Senior Unsecured Notes, €100,000, 1.74% fixed, due May 31, 2031117,480 104,060 January 6, 2022, Senior Unsecured Notes, $500,000, 2.75% fixed, due February 1, 2032500,000 500,000 October 30, 2017, Series M Senior Unsecured Notes, €100,000, 2.32% fixed, due October 30, 2032117,480 104,060 November 1, 2023 Senior Unsecured Notes, $375,000, 6.88% fixed, due November 1, 2033375,000 375,000 May 31, 2019, Series C Senior Unsecured Notes, €100,000, 1.

Income TaxesSignificant components of our deferred tax assets and liabilities are as follows:(in thousands)20252024Deferred tax assets related to:Expenses not yet deducted for tax purposes$416,375 $344,858 Operating lease liabilities467,765 622,732 Pension liability not yet deducted for tax purposes— 201,971 Employee and retiree benefits58,591 — Net operating loss95,273 59,154 1,038,004 1,228,715 Deferred tax liabilities related to:Employee and retiree benefits— 257,640 Inventory68,930 67,437 Operating lease assets489,096 635,041 Other intangible assets513,773 495,227 Property, plant and equipment129,986 135,073 Other177,344 52,330 1,379,129 1,642,748 Net deferred tax liability before valuation allowance(341,125)(414,033)Valuation allowance(28,092)(25,758)Total net deferred tax liability$(369,217)$(439,791)We currently have approximately $504 million in gross net operating losses, of which approximately $279 million will carry forward indefinitely. The remaining net operating losses of approximately $225 million will begin to expire in 2026.The components of income before income taxes are as follows:(in thousands)202520242023United States$(248,918)$761,230 $1,164,914 Foreign301,086 414,738 577,434 Income before income taxes$52,168 $1,175,968 $1,742,348 The components of income tax expense are as follows:(in thousands)202520242023Current:Federal$81,244 $129,542 $201,929 State36,534 41,344 51,244 Foreign125,396 123,048 130,538 Deferred:Federal(165,112)(3,774)26,166 State(58,834)(1,477)10,241 Foreign(33,005)(16,791)5,706 $(13,777)$271,892 $425,824 The reasons for the difference between total tax expense and the amount computed by applying the statutory Federal income tax rate to income before income taxes are as follows:202520242023(in thousands)AmountPercentAmountPercentAmountPercentPre-Tax Book Income$52,168 $1,175,968 $1,742,348 U.S. Federal Statutory Tax Rate$10,955 21.00 %$246,953 21.00 %$365,893 21.00 %State and Local Income Taxes, Net of Federal Income Tax Effect (1)(2)(3)(17,618)(33.77)%31,4952.68 %48,5732.79 %Foreign Tax Effects:Australia7,001 13.42 %9,023 0.77 %12,585 0.72 %Canada6,417 12.30 %8,933 0.76 %13,304 0.76 %United Kingdom— — %3,767 0.32 %1,592 0.09 %Other Foreign Jurisdictions(14,492)(27.78)%(15,162)(1.30)%(6,372)(0.36)%Tax Credits(15,568)(29.84)%— — %— — %Other Adjustments9,528 18.26 %(13,117)(1.11)%(9,751)(0.56)%Effective Tax Rate$(13,777)(26.41)%$271,892 23.12 %$425,824 24.

Share-Based CompensationShare-based compensation costs of $47 million, $44 million, and $57 million, were recorded for the years ended December 31, 2025, 2024, and 2023, respectively. The total income tax benefits recognized in the consolidated statements of income for share-based compensation arrangements were approximately $13 million, $12 million, and $15 million for 2025, 2024, and 2023, respectively. At December 31, 2025, total compensation cost related to nonvested awards not yet recognized was approximately $84 million. There have been no modifications to valuation methodologies or methods during the years ended December 31, 2025, 2024, or 2023. As of December 31, 2025, there were 6 million shares of common stock available for issuance pursuant to future equity-based compensation awards.A summary of our restricted stock units activity and related information is as follows:Nonvested Share Awards (RSUs)Shares (1)Weighted Average Grant Date Fair ValueWeighted Average Remaining Contractual Life (Years)Aggregate Intrinsic Value (1)Nonvested at beginning of year881 $152.71 Granted715 $121.91 Vested(418)$140.19 Forfeited(89)$138.15 Nonvested at end of year1,089 $136.98 1.8$133,877 (1) In thousandsA summary of our stock appreciation rights activity and related information is as follows:Stock Appreciation Rights (SARs)Shares (1)Weighted Average Exercise PriceWeighted Average Remaining Contractual Life (Years)Aggregate Intrinsic Value (1)Outstanding at beginning of year103 $95.32 Granted— $— Exercised(51)$95.39 Forfeited(1)$91.75 Outstanding at end of year51 $95.31 0.7$1,407 Exercisable at end of year51 $95.31 0.7$1,407 (1) In thousandsThe aggregate intrinsic value of SARs exercised and RSUs vested during the years ended December 31, 2025, 2024, and 2023 was $59 million, $68 million, and $89 million, respectively. The fair value of RSUs is based on the price of our stock on the date of grant. The fair value of SARs is estimated using a Black-Scholes option pricing model. We ceased issuing SARs in 2017. The total fair value of SARs and RSUs vested during the years ended December 31, 2025, 2024, and 2023 were $60 million, $51 million, and $41 million, respectively.

AcquisitionsFor each acquisition, we allocate the purchase price to the assets acquired and the liabilities assumed based on their fair values as of their respective acquisition dates. The results of operations for acquired businesses are included in our consolidated statements of income beginning on their respective acquisition dates.2025We acquired various businesses for approximately $430 million, which includes certain non-cash consideration and is net of cash acquired, during the year ended December 31, 2025. We recognized approximately $110 million, $60 million, and $70 million of revenue for the year ended December 31, 2025 for our North America Automotive, International Automotive, and Industrial acquisitions, respectively. We recognized approximately $240 million of goodwill and other intangible assets associated with these acquisitions. Other intangible assets acquired of $100 million consisted of customer relationships with a weighted average amortization life of 20 years. The estimated goodwill recognized as part of the acquisitions is generally not tax deductible.The fair values of the assets acquired and liabilities assumed are preliminary and may be subject to additional adjustments during the measurement period.We did not recognize any significant measurement period adjustments related to finalizing acquisition accounting during the year ended December 31, 2025.2024We acquired various businesses for approximately $1.2 billion, which includes certain non-cash consideration and is net of cash acquired, during the year ended December 31, 2024. We recognized approximately $380 million, $120 million, and $30 million of revenue for the year ended December 31, 2024 for our North America Automotive, International Automotive, and Industrial acquisitions, respectively.The following table summarizes the final fair values of the assets acquired and liabilities assumed at the acquisition dates for the aggregate of these businesses.

Our information security program is managed by a dedicated Chief Information Security Officer ("CISO"), whose team is responsible for leading enterprise-wide cybersecurity strategy, risk assessment and management policies, standards, architecture, and processes. The CISO, along with the Chief Information and Digital Officer ("CIDO"), each have over 20 years of prior work experience in various roles involving information technology, including security, compliance, and systems. The CISO provides periodic reports, which take into account information from internal stakeholders, known privacy and security vulnerabilities, threat detection plans, and information from external sources such as reported security incidents, industry trends, and third-party evaluations to our executive leadership team and, as well as regular updates to our Audit Committee. The Audit Committee receives regular updates specific to the company’s cyber security program and IT security risk, including threat protection posture, IT compliance reporting, and IT risk posture. The Board has ultimate oversight for risks relating to our information security program and practices and receives periodic updates from the Audit Committee Chair on cybersecurity and IT security risk and mitigation strategies, as well as periodic updates directly from the CIDO and CISO. Our program is regularly evaluated by internal and external resources with the results of those reviews reported to senior management, the Audit Committee and the Board. We also actively engage with key vendors, industry participants, and intelligence and law enforcement communities for benchmarking and awareness of best practices as part of our continuing efforts to evaluate and enhance the effectiveness of our information security policies and procedures. As part of our cybersecurity risk management system, our governance, risk and compliance team tracks and logs privacy and security incidents across GPC as well as performs third-party risk management to identify and mitigate risks from third parties such as vendors and suppliers. The results of our evaluations and the feedback from our engagements are used to drive alignment on, and prioritization of, initiatives to enhance our cybersecurity strategies, policies, and processes and make recommendations to improve processes.

GuaranteesWe guarantee the borrowings of certain independently controlled automotive parts stores and businesses (“independents”). Presently, the independents are generally consolidated by unaffiliated enterprises that have controlling financial interests through ownership of a majority voting interest in the independents. We have no voting interest or equity conversion rights in any of the independents. We do not control the independents but receive a fee for the guarantees. We have concluded that the independents are variable interest entities, but that we are not the primary beneficiary. Specifically, the equity holders of the independents have the power to direct the activities that most significantly impact the entities’ economic performance including, but not limited to, decisions about hiring and terminating personnel, local marketing and promotional initiatives, pricing and selling activities, credit decisions, monitoring and maintaining appropriate inventories, and store hours. Our maximum exposure to loss as a result of our involvement with these independents is generally equal to the total borrowings subject to our guarantees. While such borrowings of the independents are outstanding, we are required to maintain compliance with certain covenants. At December 31, 2025, we were in compliance with all such covenants.At December 31, 2025, the total borrowings of the independents subject to guarantee by us were approximately $530 million. These loans generally mature over periods from one to six years. We regularly monitor the performance of these loans and the ongoing operating results, financial condition and ratings from credit rating agencies of the independents 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 (e.g., accounts receivable and inventory) to recover all or a substantial portion of the amounts paid under the guarantees. We recognize a liability equal to current expected credit losses over the lives of the loans in the guaranteed loan portfolio, based on a consideration of historical experience, current conditions, the nature and expected value of any collateral, and reasonable and supportable forecasts. To date, we have had no significant losses in connection with guarantees of independents’ borrowings and the current expected credit loss reserve is not material.