grepcent / static financial knowledge base

Informational only - not investment advice.

GENUINE PARTS CO (GPC)

CIK: 0000040987. SIC: 5013 Wholesale-Motor Vehicle Supplies & New Parts. Latest 10-K as of: 2026-02-20.

SIC breadcrumb: Wholesale Trade > SIC Major Group 50 > SIC 5013 Wholesale-Motor Vehicle Supplies & New Parts

SEC company page: https://www.sec.gov/edgar/browse/?CIK=40987. Latest filing source: 0000040987-26-000003.

Selected Fundamentals

MetricValueUnitFYFiled
Revenue24,300,141,000USD20252026-02-20
Net income65,945,000USD20252026-02-20
Assets20,795,540,000USD20252026-02-20

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-20. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000040987.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Metric2016201720182019202020212022202320242025
Revenue15,339,713,00016,308,801,00016,831,605,00017,522,234,00016,537,433,00018,870,510,00022,095,973,00023,090,610,00023,486,569,00024,300,141,000
Net income687,240,000616,757,000810,474,000621,085,000-29,102,000898,790,0001,182,701,0001,316,524,000904,076,00065,945,000
Gross profit4,599,607,0004,906,398,0005,519,755,0005,859,683,0005,654,841,0006,634,136,0007,740,104,0008,290,672,0008,523,615,0008,940,698,000
Diluted EPS4.594.185.504.24-0.206.238.319.336.470.47
Assets8,859,400,00012,412,381,00012,683,040,00014,645,629,00013,440,215,00014,352,102,00016,495,379,00017,968,454,00019,282,705,00020,795,540,000
Stockholders' equity3,193,728,0003,412,152,0003,450,451,0003,674,707,0003,204,796,0003,490,742,0003,790,363,0004,401,047,0004,337,407,0004,422,991,000
Net margin4.48%3.78%4.82%3.54%-0.18%4.76%5.35%5.70%3.85%0.27%

Financial Charts

Macro Cross-References

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-20. Report date: 2025-12-31.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis contains forward-looking statements, including, without limitation, statements relating to our plans, strategies, objectives, expectations, intentions and resources. Such forward-looking statements should be read in conjunction with our disclosures under “Item 1A. Risk Factors” of this Form 10-K.

OVERVIEW

Genuine Parts Company ("GPC") is a leading global service provider of automotive and industrial replacement parts and value-added solutions. We have a long history of growth and innovation dating back to our founding in Atlanta, Georgia, in 1928. Over nearly a century, we’ve built a reputation for delivering excellent customer service, profitable growth and strong cash flow generation.

In 2025, we conducted business in North America, Europe and Australasia from more than 10,800 locations. Our Automotive businesses operated 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 63% of total revenues for the year. Our Industrial business operated in the U.S., Canada, Australia, New Zealand, Indonesia and Singapore and accounted for 37% of total revenues.

We are focused on being the preferred employer, supplier, and partner while delivering values to our shareholders. This focus drives our strategic financial objectives which are growing revenue in excess of the market, improving operating margins, maintaining a healthy balance sheet, generating strong cash flows, and allocating capital effectively. As we look to the future, we are leaning into modernizing our supply chain and technology through digital innovation, and data-driven strategies to enhance our competitive edge. By optimizing supply chains and leveraging technology, we are empowering our teams with cutting-edge tools to continue our focus on delivering exceptional customer service and driving sustainable growth. At the heart of it all is our commitment to excellence, supported by a culture of continuous improvement and a legacy of strong leadership that has guided us for nearly a century.

In the fourth quarter of 2025, we disaggregated our automotive aftermarket business into two reportable segments. There were no changes to our Industrial segment. We believe this expanded segmentation will provide our investors with additional information to better understand our performance. Concurrent with the change in reportable segments, we revised our prior period financial information to be consistent with the current period presentation. There was no impact on consolidated net sales, total operating expenses, net income or diluted EPS as a result of these changes. Refer to the Segment Data Footnote in the Notes to Consolidated Financial Statements for additional information.

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 summarized below.

Comparable Sales

Comparable sales is a key metric that refers to period-over-period comparisons of our net sales excluding the impact of acquisitions, foreign currency and other. Our calculation of comparable sales is computed using total business days for the period and is inclusive of sales from our company-owned stores and sales to our independent owners. The company considers this metric useful to investors because it provides greater transparency into management’s view and assessment of the company’s core ongoing operations. This is a metric that is widely used by analysts, investors and competitors in our industry, however our calculation of the metric may not be comparable to similar measures disclosed by other companies, because not all companies and analysts calculate this metric in the same manner.

Gross Profit and Gross Margin

Gross profit represents net sales less cost of goods sold. Gross profit as a percentage of net sales is referred to as gross margin. Cost of goods sold primarily represents the cost of merchandise sold, including the cost of inbound freight from suppliers. It also includes the effects of supplier volume incentives and inventory adjustments. Our gross profit is variable in nature and generally follows changes in net sales. We believe that gross profit and gross margin are useful measures because they allow management, analysts, investors and others to evaluate the profit we generate from our sales, before operating and other expenses and income.

Selling, Administrative and Other Expenses ("SG&A")

SG&A includes all personnel and personnel-related costs at our corporate offices, segment headquarters, distribution centers, stores and branches. Additional costs in SG&A include our facilities, freight and delivery,

22

Table of Contents

marketing, advertising, technology, digital, legal and professional costs. Freight and delivery costs are the shipping and handling costs incurred related to delivering merchandise to our customers. We believe SG&A is a useful measure because it allows management, analysts, investors and others to understand the level of costs we incur operating our business each period.

Segment EBITDA and Segment EBITDA Margin

Segment EBITDA is the measure we use to assess the profitability of our company’s business segments and it is calculated as net sales less cost of goods sold and total other operating expenses of the business segment, and it excludes amounts reflected in Corporate EBITDA, net interest expense, depreciation and amortization and other unallocated costs. Segment EBITDA as a percentage of Segment Net Sales is referred to as Segment EBITDA margin. We believe that Segment EBITDA and Segment EBITDA margin are useful measures because they allow management, analysts, investors, and other interested parties to evaluate the profitability of our segments and they align with how management evaluates performance and sets compensation plans. Refer to the Segment Data Footnote in the Notes to Consolidated Financial Statements for additional information.

Net Income and EBITDA

We believe that net income and EBITDA, along with their respective adjusted measures, are useful measures of operating performance. Net income represents our profitability after the effects of all operating and other expenses and income. EBITDA helps us assess the underlying profitability of our company’s business operations before the effects of certain net expenses that directly arise from our capital investment decisions (depreciation, amortization), financing decisions (interest), and tax strategies (income taxes).

The adjusted measures of net income and EBITDA eliminate certain non-recurring charges and other items that we do not believe are reflective of our ongoing business performance. These adjusted measures help us evaluate our operating performance on a comparable basis from period-to-period so that we can better understand the ongoing factors and trends affecting our business operations. We also use adjusted net income, together with adjusted EBITDA, to forecast our performance, evaluate our actual results against our forecasts and compare our results to others in the industries that we serve. Adjusted EBITDA is also a measure of performance included in our executive incentive compensation plans. See “Non-GAAP Financial Measures” below for a discussion of how we define adjusted net income and adjusted EBITDA and a reconciliation of adjusted net income, EBITDA and adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”).

CONSOLIDATED RESULTS OF OPERATIONS

Our discussion of our results focuses on 2025 and 2024 and year-to-year comparisons between those periods. Discussions of 2023 results and year-to-year comparisons between 2024 and 2023 results that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Our results in 2025 reflect continued headwinds in global market conditions, persistent cost inflation, changes in tariffs and global trade regulations and costs associated with investments in our technology and supply chain capabilities to drive growth.

In 2025, net sales were $24.3 billion, an increase of 3.5%, primarily driven by acquisitions and slight comparable sales growth in all three segments. Gross margin improved 50 basis points due to benefits from ongoing strategic pricing and sourcing initiatives and acquisitions.

Net income totaled $66 million, down 92.7% compared to the prior year period. Our results include discrete charges for our pension settlement of $742 million, credit losses from the bankruptcy of First Brands Group of $151 million, and asbestos-related product liability remeasurement of $103 million. Our lower net income was also driven by lower pension income and higher SG&A expenses from inflationary pressures on salaries, healthcare costs, freight, and rent, as well as planned investments in technology to modernize our systems and digital platforms. These technology investments, along with enhancements to our supply chain capabilities, also contributed to higher depreciation and interest from additional borrowings year over year. These costs were partially offset by increased cost savings of approximately $175 million associated with our global restructuring program, which was designed to better align our assets and cost structure to the current economic environment.

Impact of Tariffs on Our Business

We continue to monitor the global trade environment, including the tariffs on merchandise inventories sourced directly or indirectly from several countries, such as China, Canada, and Mexico and their impact on our operations. During 2025, tariffs drove higher prices to our customers and cost inflation that impacted our gross margin and SG&A expenses. We managed these challenges through strategic pricing and sourcing initiatives, leveraging global

23

Table of Contents

supplier relationships and technology tools. While the ongoing economic volatility continues to add uncertainty to our operating environment, we expect our balanced portfolio and global diversification will help mitigate potential disruptions. See Part I, Item 1A. Risk Factors for further discussion regarding tariff-related risks.

Our results of operations are summarized below for the years ended December 31, 2025 and 2024.

Year Ended December 31,

2025

2024

(in thousands)

$

% of Sales

$

% of Sales

$ Change

% Change

Net sales

$

24,300,141 

100.0 

%

$

23,486,569 

100.0 

%

$

813,572 

3.5 

%

Cost of goods sold

15,359,443 

63.2 

%

14,962,954 

63.7 

%

396,489 

2.6 

%

Gross profit

8,940,698 

36.8 

%

8,523,615 

36.3 

%

417,083 

4.9 

%

Operating expenses:

Selling, administrative and other expenses

7,151,043 

29.4 

%

6,642,900 

28.3 

%

508,143 

7.6 

%

Depreciation and amortization

538,023 

2.2 

%

407,978 

1.7 

%

130,045 

31.9 

%

Provision for doubtful accounts

37,020 

0.2 

%

30,001 

0.1 

%

7,019 

23.4 

%

Restructuring and other costs

253,961 

1.0 

%

213,520 

0.9 

%

40,441 

18.9 

%

Total operating expenses

7,980,047 

32.8 

%

7,294,399 

31.1 

%

685,648 

9.4 

%

Non-operating expenses (income):

Interest expense, net

163,506 

0.7 

%

96,827 

0.4 

%

66,679 

68.9 

%

Pension settlement charge

741,967 

3.1 

%

— 

— 

%

741,967 

100.0 

%

Other

3,010 

— 

%

(43,579)

(0.2)

%

46,589 

(106.9)

%

Total non-operating expenses

908,483 

3.7 

%

53,248 

0.2 

%

855,235 

1606.1 

%

Income before income taxes

52,168 

0.2 

%

1,175,968 

5.0 

%

(1,123,800)

(95.6)

%

Income tax expense (benefit)

(13,777)

(0.1)

%

271,892 

1.2 

%

(285,669)

(105.1)

%

Net income

$

65,945 

0.3 

%

$

904,076 

3.8 

%

$

(838,131)

(92.7)

%

Year Ended December 31,

(in thousands, except per share data)

2025

2024

$ Change

% Change

Diluted EPS

$

0.47

$

6.47

$

(6.00)

(92.7)

%

Adjusted diluted EPS

$

7.37

$

8.16

$

(0.79)

(9.7)

%

North America Automotive segment EBITDA

$

672,182

$

715,530

$

(43,348)

(6.1)

%

International Automotive segment EBITDA

$

544,173

$

568,001

$

(23,828)

(4.2)

%

Industrial segment EBITDA

$

1,146,422

$

1,102,188

$

44,234 

4.0 

%

Corporate EBITDA

$

(357,175)

$

(389,217)

$

32,042 

(8.2)

%

Adjusted EBITDA

$

2,005,602

$

1,996,502

$

9,100 

0.5 

%

North America Automotive segment EBITDA margin

7.1 

%

7.8 

%

International Automotive segment EBITDA margin

9.3 

%

10.2 

%

Industrial segment EBITDA margin

12.9 

%

12.6 

%

Corporate EBITDA margin

(1.5)

%

(1.7)

%

Adjusted EBITDA margin

8.3 

%

8.5 

%

Net Sales

Net sales increased 3.5% in 2025 primarily due to a 2.2% benefit from acquisitions and a 0.9% increase in comparable sales. We estimate that comparable sales benefited from approximately 2.0% of price inflation, including tariff related impacts. We continue to be affected by softer consumer demand, as macro-economic headwinds such as high interest rates and persistent cost inflation continued to impact our customers, particularly in Europe. Economic activity in the U.S. manufacturing sector, measured by PMI, remained contractionary through the

24

Table of Contents

end of 2025 which continued to pressure Industrial net sales. The impact on net sales from foreign currency translation was negligible.

North America Automotive net sales were $9.5 billion in 2025, a 3.3% increase from 2024, primarily driven by a 2.6% contribution from acquisitions. International Automotive net sales were $5.9 billion in 2025, a 5.4% increase from 2024, primarily driven by a 3.3% contribution from acquisitions. Industrial net sales were $8.9 billion in 2025, a 2.3% increase from 2024, primarily driven by a 1.5% increase in comparable sales and a 1.2% contribution from acquisitions.

In 2025, we completed over 50 strategic acquisitions resulting in over 250 additional locations globally. The majority of our completed transactions were in our North America Automotive business, primarily through the acquisition of independent NAPA stores in the U.S. In addition, we made a strategic acquisition of Benson Auto Parts, expanding our store footprint in our key Canadian markets and providing a diversified product offering to better serve our customers in Ontario and Quebec.

Gross Profit & Gross Margin

Gross profit increased $417 million, or approximately 4.9%, from 2024, driven primarily by an increase in net sales. Gross profit improved partly because a $62 million charge to write down certain existing inventory associated with a global rebranding did not recur in 2025. The increase in gross profit was partially offset primarily by a nonrecurring $151 million charge to reserve for expected credit losses on amounts due from First Brands, a key global automotive parts supplier whose business significantly deteriorated in the fourth quarter following its Chapter 11 bankruptcy filing in September 2025. Gross margin increased to 36.8% from 36.3% in 2024, a 50 basis point improvement, driven by our strategic pricing and sourcing initiatives and acquisitions.

Selling, Administrative and Other Expenses

SG&A expenses increased $508 million, or 7.6%, from 2024. The growth in SG&A expenses was largely attributable to elevated operating expenses linked to acquisitions of approximately $225 million and a $103 million increase in our asbestos-related product liability due to adverse trends in claim counts and costs. The remaining increase was driven by inflationary wage pressures, rising healthcare costs and higher rent expense due to lease renewals. We also continue to make investments in technology to enhance our supply chain and digital capabilities as we improve the customer experience, increase automation in distribution centers, and modernize payment platforms. Partially offsetting these increases was approximately $175 million of cost savings associated with our global restructuring program, which was designed to better align our assets and cost structure to the current economic environment.

Restructuring and Other Costs

In February 2024, we approved and announced a global restructuring designed to better align our assets and further improve the profitability of the business. This initiative included severance, an announced voluntary retirement offer in the U.S. during 2024, and rationalization and optimization of certain distribution centers, stores and other facilities. In 2025, we incurred $254 million of restructuring and other costs related to the initiative. We recognized approximately $175 million in cost savings related to this global restructuring initiative for 2025.

Refer to the Restructuring Footnote in the Notes to Consolidated Financial Statements for more information on our global restructuring initiative.

Depreciation and Amortization

Depreciation and amortization increased $130 million in 2025 compared to 2024, as a result of the ongoing enhancements to our technology platforms, such as proprietary digital tools that improve customer experience and operational transparency, as well as supply chain initiatives designed to increase efficiency and service levels. These targeted investments are critical components of our strategy to strengthen our competitive position, support customer needs amid evolving market conditions, and drive long-term value creation. Additionally, approximately $40 million of the increase is attributable to a nonrecurring adjustment related to asset retirement obligations.

Non-Operating Expenses and Income

In 2025, we incurred $908 million in net non-operating expenses, a $855 million increase from $53 million in net non-operating expenses in 2024. This category primarily encompasses a one-time pension settlement charge and net interest expense, as well as investment income, certain other pension costs and income, foreign currency gains and losses, and fees associated with our Accounts Receivable Sales Agreement ("A/R Sales Agreement").

The $855 million increase primarily reflects a $742 million pension charge related to the settlement of our U.S. qualified defined benefit plan. Additionally, increased investments led to higher borrowings, contributing to a $67 million increase in net interest expense in 2025. At the same time, a shift to a more conservative investment

25

Table of Contents

strategy in the months leading up to the settlement of our U.S. pension plan resulted in a $47 million decrease in other non-operating income.

Income Taxes

Our effective income tax rate was (26.4)% as of December 31, 2025, compared to 23.1% in 2024. The rate decrease is primarily due to a change in net income and expanded investment and domestic credit benefits.

The effective tax rate for year ended December 31, 2025 considers the enactment of One Big Beautiful Bill Act ("OBBBA") on July 4, 2025, which did not have a material impact to income tax expense.

Net Income, Adjusted Net Income and Segment EBITDA

Net income was $66 million in 2025, a decrease of 92.7% compared to $904 million in 2024. Diluted earnings per share ("EPS") was $0.47 in 2025, down $6.00 compared to $6.47 in 2024. Adjusted net income was $1.0 billion in 2025, a decrease of 10.0% compared to $1.1 billion in 2024. Adjusted diluted EPS was $7.37, down $0.79 compared to $8.16 in 2024.

The year over year declines in these metrics are primarily due to lower pension income and the settlement of our U.S. qualified defined benefit plan, discrete charges resulting from First Brand's bankruptcy, adverse asbestos claims trends, higher expenses from ongoing investments, persistent cost inflation and higher interest expense. This was partially offset by gross margin expansion and benefits from our global restructuring program and cost actions. Each of these items is explained more fully above.

North America Automotive

North America Automotive EBITDA decreased $43 million, or 6.1%, from 2024, and EBITDA margin decreased 70 basis points to 7.1% from 7.8% in 2024, driven by the following factors.

North America Automotive segment sales grew $308 million, or 3.3%, primarily driven by acquisitions. Gross profit increased $282 million, or 8.2%, with gross margin expanding 170 basis points, primarily due to our strategic pricing, sourcing initiatives and acquisitions. However, these gains were more than offset by rising operating expenses. Operating expenses increased $325 million driven by personnel costs, healthcare costs, rent and freight. While acquisitions contributed to the rise in expenses, the decline in EBITDA and EBITDA margin was mainly driven by persistent cost inflation, primarily in personnel costs, healthcare costs and rent.

International Automotive

2025 EBITDA decreased $24 million, or 4.2%, from 2024, and EBITDA margin decreased 90 basis points to 9.3% in 2025 compared to 10.2% in 2024, driven by the following factors. International Automotive segment sales grew $302 million or 5.4% primarily driven by a 3.3% benefit from acquisitions. Gross profit increased $151 million, or 6.0%, and gross margin improved 20 basis points primarily due to strategic pricing and sourcing initiatives.

Our gross profit improvement was offset by rising operating expenses. Operating expenses increased $175 million driven by personnel costs, healthcare costs, rent and freight. The EBITDA and EBITDA margin declines largely were driven by persistent cost inflation, primarily in personnel costs and rent, in our existing businesses.

Industrial

2025 EBITDA increased 4.0% to $1.1 billion from 2024, and EBITDA margin increased 30 basis points year over year to 12.9% in 2025 compared to 12.6% in 2024, driven by the following factors. Industrial segment sales increased by $204 million or 2.3%, primarily driven by a 1.5% increase in comparable sales coupled with a 1.2% contribution from acquisitions.

Gross profit increased $75 million or 2.8% in 2025 despite gross margin remaining flat. The increase in gross profit was primarily driven by strategic pricing, sourcing initiatives, and acquisitions. In 2025, operating expenses increased due to continued pressure from ongoing cost inflation and to a lesser extent acquisitions.

Corporate EBITDA and other Segment Reconciling items

Corporate EBITDA primarily reflects costs related to our corporate headquarters' broad 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 asbestos-related product liability costs and A/R Sales Agreement fees. Our operational objective is to maintain Corporate EBITDA within a range of 1.5% to 2.0% of net sales.

Corporate EBITDA amounted to a loss of $357 million, or 1.5% of net sales, in 2025, compared to a loss of $389 million, or 1.7% of net sales, in 2024.

26

Table of Contents

Other unallocated costs represent restructuring and other costs, acquisition and integration related costs, and other. These decreased year-over-year due to the global restructuring initiative that was approved in February 2024 and the significant increase in acquisition activity in 2025.

EBITDA

EBITDA was $754 million in 2025, a decrease of 55.2% from $1.7 billion in 2024. The decline in EBITDA were primarily related to lower pension income and the settlement of our U.S. qualified defined benefit plan, discrete charges resulting from First Brand's bankruptcy and adverse asbestos claims trends, and higher expenses from ongoing investments and inflation, partially offset by gross margin expansion and benefits from our global restructuring program and cost actions. Each of these items is explained more fully above. Adjusted EBITDA was $2.0 billion in 2025 which was flat compared to 2024.

Adjusted net income, adjusted diluted EPS, EBITDA and adjusted EBITDA are non-GAAP measures (see table below for reconciliations to the most directly comparable GAAP measures).

Non-GAAP Financial 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. We believe that the presentation of adjusted net income, adjusted diluted EPS 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. We believe these measures to be useful to 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. 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.

The table below reconciles GAAP net income to adjusted net income:

Year Ended December 31,

(in thousands)

2025

2024

GAAP net income

$

65,945 

$

904,076 

Adjustments:

Restructuring and other costs (1)

253,961 

221,007 

Acquisition and integration related costs and other (2)

14,035 

33,126 

Inventory rebranding strategic initiative (3)

— 

61,596 

Asbestos-related product liability (4)

103,352 

— 

Pension settlement (5)

741,967 

— 

First Brands credit loss allowance (6)

150,500 

— 

Retirement obligation and other (7)

30,111 

— 

Total adjustments

1,293,926 

315,729 

Tax impact of adjustments (8)

(333,450)

(79,964)

Adjusted net income

$

1,026,421 

$

1,139,841 

27

Table of Contents

The table below represents amounts per common share assuming dilution:

Year Ended December 31,

(in thousands, except per share data)

2025

2024

GAAP diluted EPS

$

0.47 

$

6.47 

Adjustments:

Restructuring and other costs (1)

1.82 

1.58 

Acquisition and integration related costs and other (2)

0.10 

0.24 

Inventory rebranding strategic initiative (3)

— 

0.44 

Asbestos-related product liability (4)

0.74 

— 

Pension settlement (5)

5.33 

— 

First Brands credit loss allowance (6)

1.08 

— 

Retirement obligation and other (7)

0.22 

— 

Total adjustments

9.29 

2.26 

Tax impact of adjustments (8)

(2.39)

(0.57)

Adjusted diluted EPS

$

7.37 

$

8.16 

Weighted average common shares outstanding - assuming dilution

139,250 

139,670 

(1)Adjustment reflects costs related to the global restructuring initiative which includes a voluntary retirement offer in the U.S. in 2024, and rationalization and optimization of certain distribution centers, stores and other facilities.

(2)Adjustment primarily reflects lease and other exit costs related to the ongoing integration of acquired independent automotive stores.

(3)Adjustment reflects a charge to write down certain existing inventory associated with a new global rebranding and relaunch of a key tool and equipment offering. The existing inventory that will be liquidated is comprised of otherwise saleable inventory, and the liquidation does not arise from our normal, recurring operational activities.

(4)Adjustment reflects a remeasurement of our asbestos-related product liability for a revised estimate of the number of claims to be incurred in future periods based on adverse current year changes in the claims environment, among other assumptions.

(5)Adjustment reflects a pension charge related to the settlement of our U.S. qualified defined benefit plan (U.S. pension plan).

(6)Adjustment reflects a charge for expected credit losses on volume purchase rebates and other amounts due from First Brands, a key automotive parts supplier who filed for Chapter 11 bankruptcy.

(7)Adjustment reflects certain nonroutine charges recorded during the quarter ended December 31, 2025, including a charge related to certain asset retirement obligations.

(8)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 year ended December 31, 2025, we applied the statutory income tax rates to the taxable portion of all of our adjustments, which resulted in a tax impact of $333 million. A portion of our transaction costs included in our non-GAAP adjustments for the year ended December 31, 2025 were not deductible for income tax purposes; therefore, no statutory income tax rate was applied to such costs.

28

Table of Contents

The table below clarifies where the adjusted items are presented in the consolidated statement of income:

Year Ended December 31,

(in thousands)

2025

2024

Line item:

Cost of goods sold

$

160,200 

$

69,083 

Selling, administrative and other expenses

95,777 

33,126 

Depreciation expense

42,021 

— 

Restructuring and other costs

253,961 

213,520 

Pension settlement charge

741,967 

— 

Total adjustments

$

1,293,926 

$

315,729 

The table below reconciles GAAP net income to adjusted EBITDA:

Year Ended December 31,

(in thousands)

2025

2024

GAAP net income

$

65,945 

$

904,076 

Depreciation and amortization

538,023 

407,978 

Interest expense, net

163,506 

96,827 

Income tax expense (benefit)

(13,777)

271,892 

EBITDA

753,697 

1,680,773 

Total adjustments (1)

1,251,905 

315,729 

Adjusted EBITDA

$

2,005,602 

$

1,996,502 

(1)Amounts are the same as adjustments included within the adjusted net income table above. Depreciation adjustment of $42,021 in 2025 is reflected in Depreciation and amortization.

OUTLOOK

As we begin 2026, we have taken a significant step in our commitment to our purpose by announcing our intent to separate Global Automotive and Global Industrial into two independent, industry-leading publicly traded companies. We believe creating two focused, independent companies sharpens customer and market alignment, increases clarity and speed, simplifies operations and enables disciplined, business-specific investments that will also give investors clear line of sight into each business – unlocking stronger valuation and long-term stakeholder value.

In 2026, we expect revenue and earnings growth despite continued weak market conditions. We expect gross margin expansion and we will maintain emphasis on cost control, productivity and disciplined capital allocation, which will position us to perform effectively even amid ongoing cost and interest rate pressures. We will continue to focus on disciplined capital allocation, increasing our dividend, pursuing strategic bolt-on acquisitions that expand our capabilities and footprint, and continuing to invest in technology and supply chain to enhance the customer experience and improve efficiencies in our business.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Our strong financial position and cash flow performance have provided us with the capacity to invest in acquisitions, capital expenditures and technology to support our global growth strategy, as well as return value to our shareholders through dividends. Our sources of capital consist primarily of cash flows from operations, supplemented as necessary by issuing commercial paper, private and public issuances of debt and bank borrowings.

In 2025, we announced a 3% increase in our regular quarterly cash dividend. We have paid a cash dividend every year since going public in 1948, and 2025 marks the 69th consecutive year of increased dividends paid to shareholders.

Currently, we believe that our cash on hand and available short-term and long-term sources of capital are sufficient to fund our operations in both the short and long term, including working capital requirements, strategic acquisitions, dividends, share repurchases, capital expenditures, scheduled debt and interest payments, and income tax obligations.

29

Table of Contents

Cash Flow Activity

During 2025, net cash provided by operating activities was $891 million, a decrease of $360 million, or 28.8%, from 2024 that was driven by lower net income, higher interest payments, and changes in working capital. As noted above, declines in net income were driven by continued soft demand and higher expenses from ongoing investments and inflation. Our 2025 operating cash performance was also impacted by First Brands failing to remit payments owed to us following its Chapter 11 bankruptcy filing. Working capital was primarily impacted by payments for strategic inventory investments we made in 2024 with deferred payment terms that did not repeat in 2025. Changes in working capital can vary significantly period over period depending on factors such as the timing of customer payments, inventory purchases, vendor payments, tax payments, and fluctuations in foreign exchange rates.

During 2025, we continued to invest in our business through strategic acquisitions and capital expenditures to broaden our product and service offerings, improve our business operations and expand our global footprint. In 2025, we deployed $318 million for acquisitions, $470 million for capital expenditures, and $564 million for dividends. In addition, we had net proceeds of debt of approximately $394 million, which reflected borrowings of $600 million on our unsecured revolving line of credit and $343 million under our commercial paper program to support these investments. These proceeds were partially offset by the repayment of the $500 million principal amount of our 1.75% Unsecured Senior Notes due February 1, 2025.

Our cash balance at December 31, 2025 was $477 million compared to cash of $480 million at December 31, 2024. A summary of our consolidated statements of cash flows is as follows:

Year Ended December 31,

(In thousands)

2025

2024

$ Change

% Change

Operating activities

$

890,762 

$

1,251,251 

$

(360,489)

(28.8)

%

Investing activities

$

(711,587)

$

(1,507,524)

$

795,937 

52.8 

%

Financing activities

$

(209,254)

$

(333,936)

$

124,682 

37.3 

%

Liquidity & Capital Resources

Our liquidity is supported by cash generated from operating activities and available borrowings. As of December 31, 2025, total liquidity was $1.5 billion, consisting of $477 million in cash and $1.1 billion of available capacity under the company's $2.0 billion Revolving Credit Agreement. This reflects $600 million drawn on the revolver and $343 million outstanding under our commercial paper program. Due to the workers’ compensation and insurance reserve requirements in certain states, we also had unused letters of credit of approximately $79 million outstanding at December 31, 2025. Our unused letters of credit expire within one year, but have automatic renewal clauses. 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.

Additionally, we have an A/R Sales Agreement to sell short-term receivables from certain customer trade accounts to the unaffiliated financial institutions on a revolving basis. We also facilitate a voluntary supply chain finance program to provide certain of our suppliers with the opportunity to sell receivables due from us to participating financial institutions at the sole discretion of both the suppliers and the financial institutions. Refer to the AR Sales Agreement Footnote and the Supply Chain Finance Footnote in the Notes to Consolidated Financial Statements for more information.

At December 31, 2025, we had $4.8 billion of total debt outstanding. Approximately $1.3 billion of this debt includes unsecured Senior Notes which contain covenants related to a maximum debt to EBITDA ratio and certain limitations on additional borrowings. At December 31, 2025, we were in compliance with the covenants under our outstanding unsecured Senior Notes, as well as our covenants under the Syndicated Facility Agreement, dated as of October 30, 2020, as amended (the "Unsecured Revolving Credit Facility"). Any failure to comply with our debt covenants or restrictions could result in a default under our financing arrangements or 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.

Our total average cost of debt was 3.99% at December 31, 2025 and 3.62% at December 31, 2024. Total interest expense, net of interest income, for all borrowings was $164 million and $97 million in 2025 and 2024, respectively. Refer to the Debt Footnote in the Notes to Consolidated Financial Statements for more information.

We expect to continue to have access to the capital markets on both short-term and long-term bases when needed for liquidity purposes by issuing commercial paper, new long-term debt and our unsecured revolving credit

30

Table of Contents

facility. The availability and the borrowing costs of these funds could be adversely affected, however, by a downgrade of our debt ratings or a deterioration of certain financial ratios. The table below reflects our debt ratings by Standard & Poor’s ("S&P") and Moody’s as of December 31, 2025, which provide an enhanced understanding of our sources of liquidity and the effect of our ratings on our cost of debt.

Debt Ratings

S&P

Moody's

Commercial paper

A-3

P-2

Long-term debt

BBB-

Baa1

Outlook

Negative

Negative

During the first quarter of 2026, we also received ratings from Fitch Ratings (“Fitch”). Fitch assigned our long-term and senior unsecured notes a rating of BBB- with a stable outlook. Additionally, Fitch assigned our commercial paper a rating of F3.

A debt rating is not a recommendation by the rating agency to buy, sell, or hold and each rating should be evaluated independently of any other rating. Credit rating agencies review their ratings periodically and, therefore, the credit ratings assigned to us by each agency may be subject to revision at any time.

U.S. Pension Plan Settlement

On December 19, 2025, we settled all future obligations under the U.S. pension plan through the transfer of the remaining benefit obligations to a third-party insurance company under a group annuity contract. The remaining surplus plan assets following the U.S. plan settlement will be used to fund certain contributions associated with our U.S. defined contribution plan (Qualified Replacement Plan) beginning in 2027, as well as remaining U.S. pension plan expenses. As of December 31, 2025, our $446 million of surplus plan assets consisted of $13 million in cash, a $243 million short-term bond fund and $190 million of GPC stock.

Contractual and Other Obligations

The following table summarizes our material cash requirements at December 31, 2025 that we expect to be paid in cash. The table does not include amounts that are contingent on events or other factors that are uncertain or unknown at this time, including legal contingencies and uncertain tax positions. The amounts presented are based on various estimates and actual results may vary from the amounts presented.

Payment Due by Period

(In thousands)

Total

Less Than 1 Year

1-3 Years

3-5 Years

Over 5 Years

Debt

$

4,820,344 

$

1,297,328 

$

839,986 

$

1,455,590 

$

1,227,440 

Operating leases

2,562,675 

495,498 

812,253 

468,708 

786,216 

Total material cash requirements

$

7,383,019 

$

1,792,826 

$

1,652,239 

$

1,924,298 

$

2,013,656 

Purchase orders or contracts for the purchase of inventory and other goods and services are not included in our estimates. We are not able to determine the aggregate amount of such purchase orders that represent contractual cash requirement, as purchase orders may represent authorizations to purchase rather than binding agreements. Our purchase orders are based on our current distribution needs and are fulfilled by our vendors within short time horizons. We do not have significant agreements for the purchase of inventory or other goods specifying minimum quantities or set prices that exceed our expected requirements.

Additionally, we guarantee the borrowings of certain independently owned automotive parts stores (independents). Our maximum exposure to loss as a result of our involvement with these independents is generally equal to the total borrowings subject to our guarantee. At December 31, 2025, the total borrowings of the independents subject to guarantee by the company were approximately $530 million, down 7.7% from $575 million at December 31, 2024. These loans generally mature over periods from one to six years. Our amount of commitment expiring in 2026 is approximately $375 million. To date, we have had no significant losses in connection with guarantees of independents’ borrowings.

31

Table of Contents

CRITICAL ACCOUNTING POLICIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of our consolidated financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, net sales and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We describe in this section certain critical accounting policies that require us to make significant estimates, assumptions and judgments. An accounting policy is considered critical if it involves making estimates based on assumptions about uncertain matters at the time the estimate is made, and if using different reasonable estimates, or changes in those estimates over time, could have a material impact on the consolidated financial statements. Management believes the following critical accounting policies reflect its most significant estimates and assumptions used in the preparation of the consolidated financial statements. For further information on the critical accounting policies, see the Summary of Significant Accounting Policies Footnote in the Notes to Consolidated Financial Statements.

Consideration Received from Vendors

We frequently enter into agreements with our vendors that provide for inventory purchase incentives. Generally, we earn inventory purchase incentives upon achieving specified volume purchasing levels or other similar criteria. We accrue for the receipt of these incentives as a deduction from our inventory carrying cost based on cumulative purchases of inventory to date and projected inventory purchases through the end of the year. We recognize these incentives in earnings as a reduction of costs of goods sold as the corresponding inventory is sold to our customers. While management believes we will continue to receive consideration from vendors in 2026 and beyond, there can be no assurance that vendors will continue to provide comparable amounts of incentives in the future or that we will be able to achieve the specified volumes necessary to take advantage of such incentives.

Consideration receivable from vendors include rebates receivable for various vendor funding programs. Consideration receivable from vendors, generally reflected in prepaid expenses and other current assets, was $907 million and $973 million as of December 31, 2025 and December 31, 2024, respectively.

Through a long-term supplier agreement with First Brands Group, we earned vendor rebates based on volume purchases across our Automotive business. First Brands Group filed voluntary petitions for Chapter 11 bankruptcy protection in September 2025. Given the bankruptcy, the on-going developments related to the supplier’s operations, and the past due status of certain of the receivables, we evaluated our receivables from the supplier to estimate the current expected credit losses and amounts that we deemed uncollectible. As a result of these events and our on-going assessment of the credit quality of the vendor, we recorded a charge of $151 million to cost of goods sold in 2025.

Employee Benefit Plans

On April 29, 2024, our Board of Directors approved the termination of our U.S. qualified defined benefit plan (U.S. pension plan), effective September 30, 2024. On December 19, 2025, we settled all future obligations under our U.S. pension plan through the transfer of the remaining benefit obligations to a third-party insurance company under a group annuity contract. As a result, we recognized a one-time, non-cash, pre-tax pension settlement charge of $742 million ($541 million, net of tax), primarily related to the recognition of previously unamortized net actuarial losses in accumulated other comprehensive loss. Following the settlement, we had no U.S. pension obligations as of December 31, 2025. Refer to the Employee Benefit Plans Footnote of the Notes to Consolidated Financial Statements for further information on the termination of the U.S. plan.

The Canadian pension plan is managed to achieve long-term growth with controlled risk, targeting returns above a benchmark of 40% equity, 50% fixed income, and 10% other assets. European plans are unfunded and have no plan assets.

We make several assumptions in determining our pension plan assets and liabilities and related pension income. We believe the most critical of these assumptions are the expected rate of return on plan assets and the discount rate. Other assumptions we make relate to employee demographic factors such as rate of compensation increases, mortality rates, retirement patterns and turnover rates. Refer to the Employee Benefit Plans Footnote of the Notes to Consolidated Financial Statements for more information regarding these assumptions.

32

Table of Contents

Based on the investment policy for the Canadian pension plan, as well as an asset study that was performed based on our asset allocations and future expectations, our expected rate of return on plan assets for measuring 2026 pension income is 6.01% for the Canadian plan. The asset study forecasted expected rates of return for the approximate duration of our benefit obligations, using capital market data and historical relationships.

The discount rate, reflecting the rate to settle pension obligations, was determined using a bond matching approach. As of December 31, 2025, the weighted average discount rate was 5.20%.

Net periodic benefit expense for our defined benefit pension plans was $1 million for the year ended December 31, 2025. Net periodic benefit income for our defined benefit pension plans was $54 million and $44 million for the years ended December 31, 2024 and 2023, respectively. The 2025 amount reflects the change in strategy related to the expected settlement.

Business Combinations

When we acquire businesses, we apply the acquisition method of accounting and recognize the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in an acquiree at their fair values on the acquisition date, which requires significant estimates and assumptions. Goodwill is measured as the excess of the fair value of the consideration transferred over the net of the acquisition date fair values of the identifiable assets acquired and liabilities assumed. The acquisition method requires us to record provisional amounts for any items for which the accounting is not complete at the end of a reporting period. We must complete the accounting during the measurement period, which cannot exceed one year. Adjustments made during the measurement period could have a material impact on our financial condition and results of operations.

We typically measure customer relationships and other intangible assets using an income approach. Significant estimates and assumptions used in this approach include discount rates and certain assumptions that form the basis of the forecasted cash flows expected to be generated from the asset (e.g., future revenue growth rates and EBITDA margins). If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop these values, we could record impairment charges. In addition, we have estimated the economic lives of certain acquired tangible and intangible assets and these lives are used to calculate depreciation and amortization expense. If our estimates of the economic lives change, depreciation or amortization expenses could increase or decrease, or the acquired asset could be impaired.

Legal and Asbestos Liabilities

We accrue for potential losses related to legal disputes, litigation, asbestos liability, and regulatory matters when it is probable (the future event or events are likely to occur) that we have incurred a loss and the amount of the loss can be reasonably estimated.

To calculate our asbestos-related product liability, we estimate potential losses relating to pending claims and also estimate the likelihood of additional, similar claims being filed against us in the future. To estimate potential losses on claims that could be filed in the future, we consider claims pending against us, claim filing rates, the number of codefendants and the extent to which they share in settlements, and the amount of loss by claim type. The estimated losses for pending and potential future claims and related adjustments, are calculated on a discounted basis using risk-free interest rates derived from market data about monetary assets with maturities comparable to those of the projected asbestos liability. We use an actuarial specialist to assist with measuring our asbestos liability.

While we believe our legal and asbestos liability estimates are reasonable in light of all available information, if one or more legal claims were to greatly exceed our estimates, our results of operations and cash flows could be materially and adversely affected. Refer to the Commitments and Contingencies Footnote of the Notes to Consolidated Financial Statements for additional information regarding our asbestos-related product liability.

RECENT ACCOUNTING PRONOUNCEMENTS

Refer to the Summary of Significant Accounting Policies Footnote in the Notes to Consolidated Financial Statements for information on recent accounting pronouncements.