GENUINE PARTS COMPANY
2013 ANNUAL REPORT
FINANCIAL HISTORY
86 YEARS OF GROWTH
$
$
$
$
INCOME TAXES
-
$
YEAR
1928
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Financial information as reported in the Company’s annual reports (includes discontinued operations) *Excludes facility consolidation and impairment charges **Excludes cumulative effect adjustment
NET SALES
75,129
227,978
339,732
402,463
482,525
629,751
904,580
1,035,477
1,299,185
1,520,199
1,858,252
3,180,241
3,928,342
6,109,724
6,592,707
8,205,316
10,084,893
11,355,633
19,237,291
18,531,472
20,729,280
19,845,875
24,447,042
26,244,669
28,468,962
29,731,105
30,744,504
34,073,288
41,325,377
48,140,313
56,504,293
71,581,580
75,010,726
80,533,146
90,248,450
96,651,445
120,313,692
171,545,228
175,132,785
204,893,008
245,443,798
303,455,677
340,036,395
387,138,252
450,500,768
501,189,438
572,833,282
678,353,280
846,192,692
942,958,756
1,148,632,000
1,337,468,000
1,431,713,000
1,584,642,000
1,936,524,000
2,068,231,000
2,303,594,000
2,332,544,000
2,394,072,000
2,606,246,000
2,941,963,000
3,161,198,000
3,319,394,000
3,434,642,000
3,668,814,000
4,384,294,000
4,858,415,000
5,261,904,000
5,697,592,000
5,981,224,000
6,587,576,000
7,950,822,000
8,369,857,000
8,220,668,000
8,258,927,000
8,449,300,000
9,097,267,000
9,783,050,000
10,457,942,000
10,843,195,000
11,015,263,000
10,057,512,000
11,207,589,000
12,458,877,000
13,013,868,000
14,077,843,000
NET INCOME
-2,570
7,428
14,508
19,659
14,052
28,454
41,956
31,363
57,047
54,975
60,120
109,582
125,796
199,670
133,018
170,550
179,465
209,642
971,481
659,922
738,092
646,921
818,557
567,019
671,905
672,023
777,817
901,629
1,163,717
1,575,798
1,989,593
2,835,963
2,673,551
3,010,113
3,312,524
3,360,807
4,704,827
6,372,510
6,379,363
7,491,411
8,794,941
10,778,467
13,290,852
16,535,006
17,567,931
20,341,677
24,005,057
29,981,108
37,763,166
42,243,015
50,263,000
61,715,000
67,833,000
77,543,000
100,167,000
103,634,000
119,667,000
126,241,000
121,552,000
148,292,000
181,373,000
199,488,000
206,596,000
207,677,000
219,788,000
257,813,000
288,548,000
309,168,000
330,076,000
342,397,000
355,794,000
377,622,000
385,323,000
361,524,000*
367,500,000**
353,642,000**
395,552,000
437,434,000
475,405,000
506,339,000
475,417,000
399,575,000
475,511,000
565,116,000
648,041,000
684,959,000
INCOME BEFORE
INCOME TAXES
-2,570
8,027
15,666
21,516
16,839
34,614
52,115
38,503
70,234
72,622
78,305
136,902
176,301
348,690
337,252
430,634
489,547
532,944
1,621,541
1,088,967
1,176,590
1,067,096
1,454,832
1,168,405
1,416,235
1,408,213
1,642,148
1,921,777
2,473,384
3,328,598
4,251,175
6,001,005
5,661,551
6,491,113
7,107,524
7,210,807
9,324,827
12,262,510
12,409,363
14,918,758
19,330,334
24,228,557
28,163,228
33,897,667
36,104,767
42,088,098
50,234,298
63,552,088
79,321,897
88,365,511
105,070,000
121,953,000
133,996,000
154,271,000
193,560,000
200,822,000
234,713,000
245,203,000
240,565,000
262,068,000
290,445,000
321,877,000
333,219,000
335,027,000
353,998,000
425,829,000
474,868,000
510,794,000
545,233,000
565,600,000
589,117,000
628,067,000
646,750,000
603,813,000*
605,736,000
571,743,000
635,919,000
709,064,000
770,916,000
816,745,000
768,468,000
644,165,000
761,783,000
890,806,000
1,018,932,000
1,044,304,000
599
1,158
1,857
2,787
6,160
10,159
7,140
13,187
17,647
18,185
27,320
50,505
149,020
204,234
260,084
310,082
323,302
650,060
429,045
438,498
420,175
636,275
601,386
744,330
736,190
864,331
1,020,148
1,309,667
1,752,800
2,261,582
3,165,042
2,988,000
3,481,000
3,795,000
3,850,000
4,620,000
5,890,000
6,030,000
7,272,000
10,362,000
13,240,000
14,600,000
16,966,000
18,200,000
21,280,000
25,408,000
32,650,000
40,538,000
44,918,000
53,429,000
58,808,000
64,545,000
74,471,000
92,552,000
97,188,000
115,046,000
118,962,000
119,013,000
113,776,000
109,072,000
122,389,000
126,623,000
127,350,000
134,210,000
166,961,000
186,320,000
201,626,000
215,157,000
223,203,000
233,323,000
250,445,000
261,427,000
242,289,000*
238,236,000
218,101,000
240,367,000
271,630,000
295,511,000
310,406,000
293,051,000
244,590,000
286,272,000
325,690,000
370,891,000
359,345,000
TOTAL EQUITY
END OF YEAR
38,756
49,837
60,591
78,097
90,187
109,025
149,176
171,238
185,119
240,140
358,621
476,750
623,521
738,536
859,449
1,032,182
1,202,955
1,415,974
2,379,001
3,029,334
4,005,910
4,372,831
4,966,086
5,325,561
5,647,553
6,022,077
6,449,894
7,001,523
7,815,241
8,969,272
10,807,320
13,285,215
14,967,697
17,142,687
19,213,273
21,189,880
29,268,289
45,565,926
47,308,163
55,679,256
63,649,275
77,437,679
85,290,945
95,476,147
108,053,465
121,548,638
137,156,965
163,092,941
206,861,402
233,641,292
275,127,000
320,706,000
359,889,000
410,689,000
581,915,000
636,218,000
701,113,000
729,231,000
758,493,000
760,256,000
863,159,000
971,764,000
1,033,100,000
1,126,718,000
1,235,366,000
1,445,263,000
1,526,165,000
1,650,882,000
1,732,054,000
1,859,468,000
2,053,332,000
2,177,517,000
2,260,806,000
2,345,123,000
2,130,009,000
2,312,283,000
2,544,377,000
2,693,957,000
2,549,991,000
2,716,716,000
2,324,332,000
2,629,372,000
2,802,714,000
2,792,819,000
3,008,179,000
3,358,768,000
GENUINE PARTS COMPANY
BY THE NUMBERS
Genuine Parts Company, founded in 1928,
is a service organization engaged in the
distribution of automotive replacement
parts, industrial replacement parts, office
products and electrical/electronic materials.
The Company serves numerous customers
from more than 2,600 operations and has
approximately 37,500 employees.
SALES
2009
2010
2011
2012
2013
9
9.75
10.5
11.25
12
BILLIONS
12.75
13.5
$14.25
EARNINGS PER SHARE
AUTOMOTIVE
53%
GPC
ASIA PACIFIC
4%
ELECTRICAL/
ELECTRONIC
INDUSTRIAL
31%
OFFICE
PRODUCTS
12%
2009
2010
2011
2012
2013
2.00
2.50
3.00
3.50
4.00
$4.50
DOLLARS
CASH FROM OPERATIONS
2009
2010
2011
2012
2013
GPC NET SALES BY SEGMENT
0
200
400
600
MILLIONS
800
1,000
$1,200
FINANCIAL HIGHLIGHTS
2013
Increase
2012
Increase
2011
Net Sales
Income Before Taxes
Income Taxes
Net Income
Shareholders’ Equity
Rate Earned on Shareholders’ Equity
at the Beginning of the Year
Average Common Shares
Outstanding-Assuming Dilution
PER COMMON SHARE:
Diluted Net Income
Dividends Declared
$ 14,077,843,000
1,044,304,000
359,345,000
684,959,000
3,358,768,000
22.8%
155,714,000
$4.40
$2.15
8%
2%
-3%
6%
12%
-
-
6%
9%
$13,013,868,000
4%
$12,458,877,000
1,018,932,000
370,891,000
648,041,000
3,008,179,000
23.5%
156,420,000
$4.14
$1.98
14%
14%
15%
9%
-
-
16%
10%
890,806,000
325,690,000
565,116,000
2,753,591,000
20.4%
157,660,000
$3.58
$1.80
TO OUR SHARE HOLDERS
ANOTHER YEAR OF RECORD SALES & EARNINGS FOR GENUINE PARTS COMPANY
We are pleased to report that 2013 was another
year of record sales and earnings for Genuine Parts
Company. Total Company sales were $14.1 billion and
this represents an 8% increase compared to 2012.
Net earnings and earnings per share for the year were
each up 6% to $685 million and $4.40, respectively,
compared to 2012. Our overall results reflect the
good job that was done by the GPC Team in 2013,
despite the challenging market conditions that
were experienced by our non-automotive business
segments. We are also pleased to report that the
total value of the Company increased nicely again in
2013, with our stock price increasing 30.8% for the
year. This, combined with our dividend, gave us a total
shareholder return of 34.5% in 2013.
L-R: Paul D. Donahue President; Thomas C. Gallagher Chairman and Chief Executive Officer;
Carol B. Yancey Executive Vice President and Chief Financial Officer
FINANCIAL STRENGTH
Genuine Parts Company further strengthened its financial condition in
2013 with increased net income and a continued emphasis on effectively
managing the balance sheet. Our ongoing asset management and
working capital initiatives helped us to maintain a strong cash position,
with cash of approximately $200 million at December 31, 2013. For
the year, cash from operations totaled a record $1.1 billion and, after
dividends paid of $326 million and capital expenditures of $124 million,
our free cash flow was approximately $600 million, also a new record
for us. At December 31, 2013, our total debt was $765 million, which
represents a modest 19% of total capitalization.
ACQUISITIONS
During 2013, we acquired several new businesses, which positively
impacted our overall results for the year. Effective April 1, 2013, the
Company completed the purchase of the remaining 70% stake of Exego,
which we subsequently renamed GPC Asia Pacific. The Company had
previously purchased a 30% stake in this Melbourne, Australia based
business on January 1, 2012. GPC Asia Pacific is a leading Australasian
aftermarket distributor with 460 locations across Australia and New
Zealand and annual revenues of approximately $1.1 billion (US$).
The Company’s Industrial Group made two strategic acquisitions, with
the addition of AST Bearings on October 26, 2013, and Paragon Service
and Supply on December 2, 2013. We expect the combined annual
revenues for these value-add industrial distributors to approximate $50
million. Additionally, our Electrical/Electronic Group made two strategic
acquisitions. Trient Technologies was acquired August 1, 2013, and
Tekra Corporation was acquired October 31, 2013. Both of these
businesses complement the fabrication capabilities at EIS and we expect
their combined annual revenues to be approximately $85 million.
The Company has continued to add to its operations with three more
acquisitions thus far in 2014. Effective January 31, 2014, the Industrial
Group acquired Commercial Solutions, an industrial distributor based in
Edmonton, Alberta, with expected annual revenue of approximately $100
million. Effective February 1, 2014, the Electrical/Electronic Group added
Electro-Wire to its operations, which significantly expands its specialty
wire and cable product offering. We expect the annual revenue for this
business to approximate $100 million. Also effective February 1, 2014,
the Office Products Group acquired Garland C. Norris Company, a
regional wholesale distributor of food service disposables and janitorial
and cleaning supplies. This acquisition will further diversify the S. P.
Richards’ product offering into complementary, adjacent market channels
and it will add approximately $35 million in annual revenues.
SHARE REPURCHASES
We repurchased approximately 1.5 million shares of our Company
stock in 2013 and we continue to view this as a good use of our cash.
As of December 31, 2013, we were authorized to repurchase up to
an additional 10.7 million shares, and we expect to continue making
opportunistic share repurchases during 2014.
OPERATIONS
The Company’s revenue growth in 2013 was driven by strong sales
results in our automotive business. Sales growth among our non-
automotive businesses proved more challenging, as these businesses
were impacted by relatively weak customer demand and soft industry
fundamentals throughout most of the year. Acquisitions were integral to
our overall growth in revenue for the year, contributing approximately 7%
to 2013 sales.
The Automotive Group, our largest segment at 53% of 2013 revenues,
reported a strong 18.5% sales increase for the year. The 2012 acquisition
of Quaker City and the April 1, 2013 acquisition of the Australasian
business drove the high-teens revenue growth. Our underlying sales
were up approximately 4% for the year, driven by our commercial business
and, in particular, solid results in NAPA AutoCare and Major Accounts, our
two primary commercial initiatives. As we turn to 2014, the fundamentals
supporting demand in the automotive aftermarket remain favorable and,
combined with our internal growth initiatives, we are optimistic for another
year of solid growth for our Automotive Group.
Motion Industries, our industrial distribution company, represents 31%
of our 2013 revenues. Sales for Motion in 2013 were down slightly
from the prior year, as weak demand patterns in select customer
segments continued to challenge the industry. Looking ahead, the recent
acquisitions for this business, as well as other internal growth initiatives
and relatively stable manufacturing indicators, provide us with confidence
for our Industrial Group in 2014. Staying within the manufacturing
segment of the economy, EIS, our electrical/electronic distribution
company, represents 4% of our 2013 revenues and showed sales down
2% for the year. This group was also impacted by slow market conditions
in 2013 but, much like the industrial business, should benefit from
their internal growth initiatives and a gradually improving manufacturing
environment in 2014, as well as the incremental revenue from their
recently completed acquisitions.
S.P. Richards, our Office Products Group, represents 12% of our 2013
revenues and had a 3% sales decrease for the year. The industry-wide
weakness in office products consumption continues to pressure this
segment, and we do not expect any meaningful improvement in these
conditions in the near future. Our focus in 2014 will be on market share
initiatives, product line extensions and further diversification of our product
and customer portfolios.
GPC DIRECTORS
At the April 28, 2014 Shareholders’ Meeting, we are asking the
shareholders to elect Gary P. Fayard as a new Director of the Company.
Mr. Fayard joined the Coca-Cola Company in 1994 and has served as
their Chief Financial Officer since 1999. Previously, Mr. Fayard served
19 years with Ernst & Young, where he was partner, area director of
audit services and area director of manufacturing services. Mr. Fayard’s
financial background and broad business exposure will bring a wealth of
knowledge to the Board and we look forward to having him serve with us.
MANAGEMENT
Over the last year, there were several key management changes and
promotions that we would like to share with you. First, in September
2013, Timothy P. Breen was named President and Chief Operating
Officer at Motion Industries, further expanding his management
responsibilities within the company. Tim has served the industry
for more than 30 years and was most recently the Executive Vice
President and Chief Operating Officer for Motion’s U.S. operations.
His proven leadership skills and vast experience make him a good fit
for this key position.
In March 2013, James R. Neill joined the GPC Corporate Human
Resources organization as Senior Vice President of Employee
Development and HR Services. Previously, Jim was the Senior Vice
President of Human Resources for Motion Industries, a position he
had filled quite admirably since 2008. Jim joined Motion in 2006 and
has also served in a variety of other human resources roles over his
distinguished career.
Senior Vice President of Human Resources for the Company, upon
Bruce’s retirement on April 1, 2014. Bruce has been extremely valuable
to our management team in his 18 years at GPC, and we want to thank
him for his tremendous leadership and wish him the very best in his
retirement. Likewise, we welcome Jim to this important role and look
forward to his many future contributions.
CONCLUSION
In looking back, 2013 was an interesting year, with a number of
challenges encountered in each of our four business segments. As
previously stated, Automotive fared the best with their 18.5% sales
increase. The non-automotive segments had the most difficult time and
ended the year with a combined 1% sales decrease. However, in all four
businesses key decisions were made and actions taken that position
them for solid performances in the year ahead, and we look forward
to reporting on our progress as we move through the new year. We
remain committed to our core objectives of growing sales and earnings,
showing continued operating margin improvement, generating solid
cash flows and maintaining a strong balance sheet. Further progress in
each of these important areas will keep the Company moving ahead and
they will help to ensure another successful year in 2014.
We want to take this opportunity to express our appreciation to our
employees, customers, vendors and shareholders for their commitment
to and ongoing support of Genuine Parts Company.
Respectfully submitted,
Thomas C. Gallagher
Chairman and
Chief Executive Officer
Paul D. Donahue
President
Additionally, we are pleased to tell you that at our February 2014 Board
meeting, our Directors elected Mr. Neill to replace R. Bruce Clayton as
February 27, 2014
Carol B. Yancey
Executive Vice President and
Chief Financial Officer
DIVIDENDS & SHAREHOLDER RETURN
58TH CONSECUTIVE YEAR OF INCREASED DIVIDENDS
The Company has paid a cash
dividend to shareholders every
year since going public in 1948,
and on February 17, 2014
the Board of Directors raised
the cash dividend payable
April 1, 2014 to an annual rate
of $2.30 per share, up 7% from
$2.15 in 2013.
2014 marks our 58th
consecutive year of
increased dividends paid
to our shareholders.
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
1.25
1.35
1.46
1.56
TOTAL SHAREHOLDER RETURN
1 Year
3 Years
5 Years
7 Years
34.5%
21.2%
21.3%
12.3%
1.60
10 Years
13.4%
includes dividends
1.64
1.80
1.98
2.15
2.30
DIVIDENDS PER SHARE IN DOLLARS
AUTOMOTIVE PARTS GROUP | 53% OF TOTAL GPC NET SALES
The Automotive Parts Group, the largest division of GPC, distributes automotive replacement parts, accessory items and service items throughout North
America and, effective in 2013, in Australia and New Zealand. In North America, parts are sold primarily under the NAPA brand name, widely recognized for
quality parts, quality service and knowledgeable people. The Company’s GPC Asia Pacific business serves the Australasian markets primarily under the brand
name Repco.
Web site: napaonline.com
Headquarters: Atlanta, GA
This Group Operates: In the U.S.:
• 62 NAPA Distribution Centers
• 4 Balkamp Distribution Centers
• 4 Rayloc Facilities
In Canada:
• 213 NAPA and Heavy Vehicle Facilities
• 13 Altrom Canada Import Parts
Distribution Centers
In total, serves approx. 6,000 NAPA AUTO PARTS stores
throughout the U.S., 700 wholesalers in Canada and 460
automotive locations in Australia and New Zealand. These
stores sell to both the Retail (DIY) and Commercial (DIFM)
automotive aftermarket customer.
In Mexico:
• 19 Auto Todo Facilities
• 2 Altrom Import Parts Distribution Centers
• 1 TW Heavy Vehicle Parts Distribution Center
In Australia and New Zealand:
• 8 Distribution Centers
• 1,100 Company Owned NAPA AUTO PARTS stores
• 399 Repco AUTO PARTS stores
• 14 TRACTION Heavy Duty Parts stores
• 49 Ashdown Ingram Branches
• 12 Motospecs and McLeod Facilities
MAJOR PRODUCTS:
Access to nearly 450,000 items including:
• Automotive Replacement Parts
• Tools and Equipment
• Farm and Marine Supplies
• Automotive Accessories
• Paint and Refinishing Supplies
• Heavy Duty Parts
These products cover substantially all domestic and
foreign motor vehicle models.
INDUSTRIAL PARTS GROUP | 31% OF TOTAL GPC NET SALES
The Industrial Parts Group offers access to more than 5.6 million industrial replacement parts and related supplies and serves over 150,000 MRO and OEM
customers throughout North America and in all types of industries. These include the food and beverage, forest products, primary metal, pulp and paper,
mining, automotive, oil and gas, petrochemical and pharmaceutical industries.
Strategically targeted specialty industries include power generation, wastewater treatment facilities, wind power generation, solar power, government projects,
pipelines, railroads and ports, among others.
Web site: motionindustries.com
Headquarters: Birmingham, AL
Locations in U.S., Canada, Mexico
and Puerto Rico:
• 15 Distribution Centers
• 511 Branches
• 42 Service Centers
SERVICE CAPABILITIES INCLUDE:
• 24/7/365 product delivery • Application and design
• Repair and fabrication
• Inventory management & Logistics
• Quality processes (ISO)
• Training programs
• Technical expertise
• E-business technologies
• Asset repair tracking
• Storeroom & replenishment tracking
MAJOR PRODUCTS:
• Mechanical and
Electrical Power
• Hose
• Transmission
• Industrial
Automation
• Bearings
• Hydraulic and
Pneumatic
Components
• Industrial Supplies
• Material Handling
OFFICE PRODUCTS GROUP | 12% OF TOTAL GPC NET SALES
The Office Products Group distributes more than 55,000 items to over 4,300 resellers and distributors throughout the United States and Canada from
a network of 41 distribution centers. Customers include independently owned office product dealers, large contract stationers, national office supply
superstores, mail order distributors, internet resellers, college bookstores, office furniture dealers, janitorial and sanitation supply distributors, safety product
resellers and food service distributors.
Web site: sprichards.com
Headquarters: Atlanta, GA
Locations:
• 34 Full-Stocking Distribution Centers
• 2 Furniture Only Distribution Centers
• 5 S.P. Richards Canada Distribution
Centers
MAJOR PRODUCTS:
PROPRIETARY BRANDS OF PRODUCTS:
• General Office Products
• Office Furniture
• Technology Supplies
and Accessories
• Cleaning and
Breakroom Supplies
• Disposable Food
Service Products
• School Supplies
• Healthcare Products
• Safety & Security Items
• Sparco Brand
office supplies
• Genuine Joe cleaning
and breakroom supplies
• Compucessory
computer accessories
• Nature Saver recycled
paper products
• Business Source
office supplies
• Lorell office furniture
• Elite Image printer
supplies
• Integra writing
instruments
ELECTRICAL/ELECTRONIC MATERIALS GROUP | 4% OF TOTAL GPC NET SALES
The Electrical/Electronic Materials Group distributes process materials, production supplies, industrial MRO and value added fabricated parts to more than
20,000 customers, including original equipment manufacturers, motor repair shops and a broad variety of industrial assembly and specialty wire/cable markets
in North America. Products cover over 100,000 items including wire and cable, insulating and conductive materials, assembly tools and test equipment.
Web site: eis-inc.com
Headquarters: Atlanta, GA
Locations in U.S., Canada,
Mexico, Puerto Rico and
Dominican Republic:
47 Branches and
6 Fabrication Facilities
MAJOR PRODUCTS & INDUSTRY SEGMENTS:
Electrical/Electronic
• Adhesives, Silicone and
Encapsulates
• Hand Tools/Soldering
Equipment
• Static Control Products
• Insulating Papers
• Solder and Chemicals
• Lead Wire
• Magnet Wire
• Motors and Bearings
• Varnish and Resins
• Industrial MRO Materials
Fabrication & Coating
• Pressure Sensitive
Specialty Tapes
• Insulating Papers
• EMI / RFI Shielding
• Films – Coated and
Uncoated
Specialty Wire & Cable
• Telecom
• Marine
• Oil and Gas
• Transit
• Defense Marine
• Cable Lugs
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
Í
‘
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2013
Or
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)
Georgia
(State or other jurisdiction of
incorporation or organization)
2999 Circle 75 Parkway, Atlanta, Georgia
(Address of principal executive offices)
58-0254510
(I.R.S. Employer
Identification No.)
30339
(Zip Code)
770-953-1700
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Name of Each Exchange on Which Registered
Common Stock, $1 par value per share
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act. Yes Í No ‘
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)
of the Exchange Act. Yes ‘ No Í
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 Í No ‘
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web
site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regu-
lation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit
and post such files). Yes Í No ‘
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not con-
tained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Í
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-
accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer Í Accelerated filer ‘ Non-accelerated filer ‘ Smaller reporting company ‘
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ‘ No Í
As of June 30, 2013, the aggregate market value of the registrant’s common stock held by non-affiliates of
the registrant was approximately $11,558,411,000 based on the closing sale price as reported on the New York
Stock Exchange.
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest
practicable date.
Class
Outstanding at February 18, 2014
Common Stock, $1 par value per share
153,727,213 shares
Specifically identified portions of the Company’s definitive Proxy Statement for the Annual Meeting of
Shareholders to be held on April 28, 2014 are incorporated by reference into Part III of this Form 10-K.
ITEM 1. BUSINESS.
PART I.
Genuine Parts Company, a Georgia corporation incorporated on May 7, 1928, is a service organization
engaged in the distribution of automotive replacement parts, industrial replacement parts, office products and
electrical/electronic materials through our four operating segments, each described in more detail below. In 2013,
business was conducted from approximately 2,600 locations throughout the United States, Canada and Mexico
and, effective April 1, 2013, Australia and New Zealand. As of December 31, 2013, the Company employed
approximately 37,500 persons.
As used in this report, the “Company” refers to Genuine Parts Company and its subsidiaries, except as other-
wise indicated by the context; and the terms “automotive parts” and “industrial parts” refer to replacement parts
in each respective category.
Financial Information about Segments. For financial information regarding segments as well as our geo-
graphic areas of operation, refer to Note 10 of Notes to Consolidated Financial Statements beginning on
page F-1.
Available Information. The Company’s internet website can be found at www.genpt.com. The Company
makes available, free of charge through its internet website, access to the Company’s annual reports on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other reports,
and any amendments to these documents, as soon as reasonably practicable after such material is filed with or
furnished to the Securities and Exchange Commission (“SEC”). Additionally, our corporate governance guide-
lines, codes of conduct and ethics, and charters of the Audit Committee and the Compensation, Nominating and
Governance Committee of our Board of Directors, as well as information regarding our procedure for share-
holders and other interested parties to communicate with our Board of Directors, are available on our website.
In Part III of this Form 10-K, we incorporate certain information by reference to our proxy statement for our
2014 annual meeting of shareholders. We expect to file that proxy statement with the SEC on or about Febru-
ary 27, 2014, and we will make it available online at the same time at http://www.proxydocs.com/gpc. Please
refer to the proxy statement for the information incorporated by reference into Part III of this From 10-K when it
is available.
AUTOMOTIVE PARTS GROUP
The Automotive Parts Group, the largest division of the Company, distributes automotive parts and
accessory items. In addition to nearly 450,000 available part numbers, the Company offers complete inventory,
cataloging, marketing, training and other programs in the automotive aftermarket. The Company, as a result of its
acquisition of Quaker City Motor Parts Co. in May 2012, is the sole member of the National Automotive Parts
Association (“NAPA”), a voluntary trade association formed in 1925 to provide nationwide distribution of auto-
motive parts.
During 2013, the Company’s Automotive Parts Group included NAPA automotive parts distribution centers
and automotive parts stores (“auto parts stores” or “NAPA AUTO PARTS stores”) owned and operated in the
United States by the Company; NAPA and Traction automotive parts distribution centers and auto parts stores in
the United States and Canada owned and operated by the Company and NAPA Canada/UAP Inc. (“NAPA
Canada/UAP”), a wholly-owned subsidiary of the Company; auto parts stores and distribution centers in the
United States operated by corporations in which the Company owned either a noncontrolling or controlling inter-
est; auto parts stores in Canada operated by corporations in which UAP owns a 50% interest; import automotive
parts distribution centers in the United States owned by the Company and operated by its Altrom America divi-
sion; import automotive parts distribution centers in Canada owned and operated by Altrom Canada Corporation
(“Altrom Canada”), a wholly-owned subsidiary of the Company; distribution centers in the United States owned
by Balkamp, Inc. (“Balkamp”), a wholly-owned subsidiary of the Company; distribution facilities in the United
1
States owned by the Company and operated by its Rayloc division; and automotive parts distribution centers and
automotive parts stores in Mexico, owned and operated by Grupo Auto Todo, S.A. de C.V. (“Auto Todo”), a
wholly-owned subsidiary of the Company.
In addition, effective April 1, 2013, the Company completed the purchase of the remaining 70% stake of
Exego Group, subsequently renamed GPC Asia Pacific, for approximately $590 million (USD), net of cash
acquired of $70 million, and the assumption of approximately $230 million (USD) in net debt. The purchase was
funded using a combination of cash on hand and borrowings under existing credit facilities. The Company had
previously purchased a 30% stake in GPC Asia Pacific on January 1, 2012 for approximately $166 million
(USD) in cash. GPC Asia Pacific, headquartered in Melbourne, Australia, is a leading aftermarket distributor of
automotive replacement parts and accessories in Australasia, with annual revenues of approximately $1.1 billion
(USD) and a company-owned store footprint of 460 locations across Australia and New Zealand. In 2012, the
Company accounted for this investment under the equity method of accounting.
The Company has a 15% interest in Mitchell Repair Information (“MRIC”), a subsidiary of Snap-on
Incorporated. MRIC is a leading automotive diagnostic and repair information company with over 40,000 North
American subscribers linked to its services and information databases. MRIC’s core product, “Mitchell ON-
DEMAND”, is a premier electronic repair information source in the automotive aftermarket.
The Company’s NAPA automotive parts distribution centers distribute replacement parts (other than body
parts) for substantially all motor vehicle makes and models in service in the United States, including imported
vehicles, trucks, SUVs, buses, motorcycles, recreational vehicles and farm vehicles. In addition, the Company
distributes replacement parts for small engines, farm equipment and heavy duty equipment. The Company’s
inventories also include accessory items for such vehicles and equipment, and supply items used by a wide
variety of customers in the automotive aftermarket, such as repair shops, service stations, fleet operators,
automobile and truck dealers, leasing companies, bus and truck lines, mass merchandisers, farms, industrial
concerns and individuals who perform their own maintenance and parts installation. Although the Company’s
domestic automotive operations purchase from approximately 100 different suppliers, approximately 50% of
2013 automotive parts inventories were purchased from 10 major suppliers. Since 1931, the Company has had
return privileges with most of its suppliers, which have protected the Company from inventory obsolescence.
Distribution System.
In 2013, the Company operated 62 domestic NAPA automotive parts distribution
centers located in 41 states and approximately 1,100 domestic company-owned NAPA AUTO PARTS stores
located in 46 states. At December 31, 2013, the Company owned either a noncontrolling or controlling interest in
six corporations, which operated approximately 114 auto parts stores in nine states.
NAPA Canada/UAP, founded in 1926, is a Canadian leader in the distribution and marketing of replacement
parts and accessories for automobiles and trucks. NAPA Canada/UAP employs approximately 3,800 people and
operates a network of 12 distribution centers supplying approximately 594 NAPA stores and 104 Traction
wholesalers. Traction is a supplier of parts to small and large fleet owners and operators and, together with
NAPA stores, is a significant supplier to the mining and forestry industries. The NAPA stores and Traction
wholesalers in Canada include approximately 187 company owned stores, 12 joint ventures and 28 progressive
owners in which NAPA Canada/UAP owns a 50% interest and approximately 471 independently owned stores.
NAPA and Traction operations supply bannered installers and independent installers in all provinces of Canada,
as well as networks of service stations and repair shops operating under the banners of national accounts. UAP is
a licensee of the NAPA® name in Canada.
In Canada, Altrom Canada operates 13 import automotive parts distribution centers. In the United States,
Altrom America operates two import automotive parts distribution centers.
In Mexico, Auto Todo owns and operates 11 distribution centers, four auto parts stores and four tire centers.
Auto Todo is a licensee of the NAPA® name in Mexico.
In Australia and New Zealand, GPC Asia Pacific is leading distributor of automotive replacement parts and
accessories. GPC Asia Pacific operates eight distribution centers, 399 Repco stores and 61 branches associated
with the Ashdown Ingram, Motospecs and McLeod operations.
2
The Company’s domestic distribution centers serve approximately 4,900 independently owned NAPA
AUTO PARTS stores located throughout the United States. NAPA AUTO PARTS stores, in turn, sell to a wide
variety of customers in the automotive aftermarket. Collectively, these independent automotive parts stores
account for approximately 65% of the Company’s total U.S. Automotive sales and 24% of the Company’s total
sales, with no automotive parts store or group of automotive parts stores with individual or common ownership
accounting for more than 0.25% of the total sales of the Company.
Products. Distribution centers have access to over 446,000 different parts and related supply items. Each
item is cataloged and numbered for identification and accessibility. Significant inventories are carried to provide
for fast and frequent deliveries to customers. Most orders are filled and shipped the same day as they are
received. The majority of sales are paid from statements with varied terms and conditions. The Company does
not manufacture any of the products it distributes. The majority of products are distributed under the NAPA®
name, a mark licensed to the Company by NAPA, which is important to the sales and marketing of these prod-
ucts. Traction sales also include products distributed under the HD Plus name, a proprietary line of automotive
parts for the heavy duty truck market.
Related Operations. Balkamp, a wholly-owned subsidiary of the Company, distributes a wide variety of
replacement parts and accessory items for passenger cars, heavy-duty vehicles, motorcycles and farm equipment.
In addition, Balkamp distributes service items such as testing equipment, lubricating equipment, gauges, cleaning
supplies, chemicals and supply items used by repair shops, fleets, farms and institutions. Balkamp packages
many of the 45,000 products, which constitute the “Balkamp” line of products that are distributed through the
NAPA system. These products are categorized into over 175 different product categories purchased from approx-
imately 450 domestic suppliers and over 100 foreign manufacturers. Balkamp has two distribution centers
located in Plainfield, Indiana, and West Jordan, Utah. In addition, Balkamp operates two redistribution centers
that provide the NAPA system with over 1,100 SKUs of oils and chemicals. BALKAMP®, a federally registered
trademark, is important to the sales and marketing promotions of the Balkamp organization.
The Company, through its Rayloc division, operates four facilities where certain small automotive parts are
distributed through the NAPA system under the NAPA® brand name. Rayloc® is a mark licensed to the Com-
pany by NAPA.
The Company’s Heavy Vehicle Parts Group operates as TW Distribution, with one warehouse location in
Atlanta, Georgia, which serves 22 Traction Heavy Duty parts stores in the United States, of which 14 are
company-owned and eight are independently owned. This group distributes heavy vehicle parts through the
NAPA system and direct to small fleet owners and operators.
Segment Data.
In the year ended December 31, 2013, sales from the Automotive Parts Group were
approximately 53% of the Company’s net sales, as compared to 49% in 2012 and 2011. For additional segment
information, see Note 10 of Notes to Consolidated Financial Statements beginning on page F-1.
Service to NAPA AUTO PARTS Stores. The Company believes that the quality and the range of services
provided to its automotive parts customers constitute a significant advantage for its automotive parts distribution
system. Such services include fast and frequent delivery, parts cataloging (including the use of electronic NAPA
AUTO PARTS catalogs) and stock adjustment through a continuing parts classification system which, as ini-
tiated by the Company from time to time, allows independent retailers (“jobbers”) to return certain merchandise
on a scheduled basis. The Company offers its NAPA AUTO PARTS store customers various management aids,
marketing aids and service on topics such as inventory control, cost analysis, accounting procedures, group
insurance and retirement benefit plans, as well as marketing conferences and seminars, sales and advertising
is available through TAMS® (Total
manuals and training programs. Point of sale/inventory management
Automotive Management Systems), a computer system designed and developed by the Company for the NAPA
AUTO PARTS stores.
The Company, has developed and refined an inventory classification system to determine optimum dis-
tribution center and auto parts store inventory levels for automotive parts stocking based on automotive registra-
tions, usage rates, production statistics, technological advances and other similar factors. This system, which
undergoes continuous analytical review, is an integral part of the Company’s inventory control procedures and
3
comprises an important feature of the inventory management services that the Company makes available to its
NAPA AUTO PARTS store customers. Over the last 20 years, losses to the Company from obsolescence have
been insignificant and the Company attributes this to the successful operation of its classification system, which
involves product return privileges with most of its suppliers.
Competition. The automotive parts distribution business is highly competitive. The Company competes
with automobile manufacturers (some of which sell replacement parts for vehicles built by other manufacturers
as well as those that they build themselves), automobile dealers, warehouse clubs and large automotive parts
retail chains. In addition, the Company competes with the distributing outlets of parts manufacturers, oil compa-
nies, mass merchandisers, including national retail chains, and with other parts distributors and retailers. The
Automotive Parts Group competes primarily on product offering, service, brand recognition and price. Further
information regarding competition in the industry is set forth in “Item 1A. Risk Factors — We Face Substantial
Competition in the Industries in Which We Do Business.”
NAPA. The Company is the sole member of the National Automotive Parts Association, a voluntary
association formed in 1925 to provide nationwide distribution of automotive parts. NAPA, which neither buys
nor sells automotive parts, functions as a trade association whose sole member in 2013 owned and operated 62
distribution centers located throughout the United States. NAPA develops marketing concepts and programs that
may be used by its members which, at December 31, 2013, includes only the Company. It is not involved in the
chain of distribution.
Among the automotive lines within the NAPA system that the Company purchases and distributes are certain
lines designated, cataloged, advertised and promoted as “NAPA” lines. The Company is not required to purchase any
specific quantity of parts so designated and may, and does, purchase competitive lines from other supply sources.
The Company uses the federally registered trademark NAPA® as part of the trade name of its distribution
centers and parts stores. The Company contributes to NAPA’s national advertising program, which is designed to
increase public recognition of the NAPA name and to promote NAPA product lines.
The Company is a party, together with the former members of NAPA, to a consent decree entered by the
Federal District Court in Detroit, Michigan, on May 4, 1954. The consent decree enjoins certain practices under
the federal antitrust laws, including the use of exclusive agreements with manufacturers of automotive parts,
allocation or division of territories among the Company and former NAPA members, fixing of prices or terms of
sale for such parts among such members, and agreements to adhere to any uniform policy in selecting parts cus-
tomers or determining the number and location of, or arrangements with, auto parts customers.
INDUSTRIAL PARTS GROUP
The Industrial Parts Group is operated as Motion Industries, Inc. (“Motion”), a wholly-owned subsidiary of
the Company headquartered in Birmingham, Alabama. Motion distributes industrial replacement parts and
related supplies such as bearings, mechanical and electrical power transmission, industrial automation, hose,
hydraulic and pneumatic components, industrial supplies and material handling products to MRO (maintenance,
repair and operation) and OEM (original equipment manufacturer) customers throughout the United States,
Canada and Mexico.
In Canada, industrial parts are distributed by Motion Industries (Canada), Inc. (“Motion Canada”). The
Mexican market is served by Motion Mexico S de RL de CV (“Motion Mexico”). These organizations operate in
the Company’s North American structure.
In 2013, the Industrial Parts Group served more than 150,000 customers in all types of industries located
throughout North America, including the food and beverage, forest products, primary metal, pulp and paper,
mining, automotive, oil and gas, petrochemical and pharmaceutical industries; as well as strategically targeted
specialty industries such as power generation, wastewater treatment facilities, wind power generation, solar
power, government projects, pipelines, railroad, ports, and others. Motion services all manufacturing and
processing industries with access to a database of 5.6 million parts. Additionally, Motion provides U.S. govern-
ment agencies access to approximately 600,000 products and replacement parts through a Government Services
Administration (GSA) schedule.
4
In the fourth quarter of 2013, Motion made two strategic acquisitions. Effective October 26, 2013, Motion
acquired the stock of AST Bearings LLC (“AST”), with facilities in Montville, New Jersey and Irvine, California.
AST is an industrial distributor specializing in high-precision, miniature and specialty bearings, bushings and related
services, with annual revenues of approximately $35 million. Effective December 2, 2013, Motion acquired the
assets of Paragon Service & Supply, Inc. (“Paragon”), located in Lima, Ohio. Paragon is a distributor of industrial
cutting tools, abrasives and metal-working equipment, with approximately $15 million in annual revenues.
Effective January 31, 2014, Motion Canada acquired Commercial Solutions Inc. (“CSI”), which at that time
was a public company traded on the Toronto Stock Exchange under the ticker symbol “CSA”. CSI’s shares were
delisted following the acquisition. Headquartered in Edmonton, Alberta, CSI is an independent national distrib-
utor of industrial supplies, including bearings and power transmission products, complete solutions for drilling
rigs and industrial and safety supplies. Its customers represent a broad cross-section of industries and are served
from 22 locations across Canada and one in the U.S. CSI is expected to generate approximately $100 million in
annual revenues.
The Industrial Parts Group provides customers with supply chain efficiencies achieved through inventory
management and logistical solutions coupled with Motion’s vast product knowledge and system capabilities. The
Company meets the MRO demand of a large and fragmented market with high levels of service in the areas of
asset management, inventory and logistics management, product application and utilization management proc-
esses. A highly developed supply chain with vendor partnerships and customer connectivity are enhanced by
Motion’s leading e-business capabilities, such as MiSupplierConnect, which provides integration between the
Company’s information technology network and suppliers’ systems, creating numerous benefits for both the
supplier and customer.
Distribution System.
In North America, the Industrial Parts Group operated 511 branches, 15 distribution
centers and 42 service centers as of December 31, 2013. The distribution centers stock and distribute more than
240,000 different items purchased from more than 1,100 different suppliers. The service centers provide hydraulic,
hose and mechanical repairs for customers. Approximately 34% of 2013 total industrial product purchases were
made from 10 major suppliers. Sales are generated from the Industrial Parts Group’s branches located in 49 states,
Puerto Rico, nine provinces in Canada, and Mexico. Each branch has warehouse facilities that stock significant
amounts of inventory representative of the products used by customers in the respective market area served.
Products. The Industrial Parts Group distributes a wide variety of parts and products to its customers,
primarily industrial concerns. Products include such items as hoses, belts, bearings, pulleys, pumps, valves,
chains, gears, sprockets, speed reducers, electric motors, and industrial supplies. In recent years, Motion
expanded its offering to include systems and automation products in response to the increasing sophistication of
motion control and process automation for full systems integration of plant equipment. Manufacturing trends and
government policies have led to opportunities in the “green” and energy-efficient product markets, focusing on
product offerings such as energy-efficient motors and drives, recyclable and environmentally friendly parts and
supplies. The nature of this group’s business demands the maintenance of adequate inventories and the ability to
promptly meet demanding delivery requirements. Virtually all of the products distributed are installed by the
customer or used in plant and facility maintenance activities. Most orders are filled immediately from existing
stock and deliveries are normally made within 24 hours of receipt of order. The majority of all sales are on open
account. Motion has ongoing purchase agreements with existing customers that represent approximately 50% of
the annual sales volume.
Supply Agreements. Non-exclusive distributor agreements are in effect with most of the Industrial Parts
Group’s suppliers. The terms of these agreements vary; however, it has been the experience of the Industrial
Parts Group that the custom of the trade is to treat such agreements as continuing until breached by one party or
until terminated by mutual consent. Motion has return privileges with most of its suppliers, which has protected
the Company from inventory obsolescence.
Segment Data.
In the year ended December 31, 2013, sales from the Company’s Industrial Parts Group
approximated 31% of the Company’s net sales, as compared to 34% in 2012 and 33% in 2011. For additional
segment information, see Note 10 of Notes to Consolidated Financial Statements beginning on page F-1.
5
Competition. The industrial parts distribution business is highly competitive. The Industrial Parts Group
competes with other distributors specializing in the distribution of such items, general line distributors and others
who provide similar services. To a lesser extent, the Industrial Parts Group competes with manufacturers that sell
directly to the customer. The Industrial Parts Group competes primarily on the breadth of product offerings, serv-
ice and price. Further information regarding competition in the industry is set forth in “Item 1A. Risk Factors —
We Face Substantial Competition in the Industries in Which We Do Business.”
OFFICE PRODUCTS GROUP
The Office Products Group, operated through S. P. Richards Company (“S. P. Richards”), a wholly owned
subsidiary of the Company, is headquartered in Atlanta, Georgia. S. P. Richards is engaged in the wholesale dis-
tribution of a broad line of office and other business related products through a diverse customer base of
resellers. These products are used in homes, businesses, schools, offices, and other institutions. Office products
fall into the general categories of computer supplies, imaging products, office furniture, office machines, general
office products, school supplies, cleaning, janitorial, sanitation and breakroom supplies, safety and security
items, healthcare products and disposable food service products.
The Office Products Group is represented in Canada through S. P. Richards Canada, a wholly-owned sub-
sidiary of the Company headquartered near Toronto, Ontario. S. P. Richards Canada services office product
resellers throughout Canada from locations in Vancouver, Toronto, Calgary, Edmonton and Winnipeg.
Effective February 1, 2014, S. P. Richards acquired the assets of Garland C. Norris Company, Inc. (“GCN”),
headquartered in Apex, North Carolina. GCN is a regional wholesale distributor of food service disposables and
janitorial and cleaning supplies, with annual revenues of approximately $35 million.
Distribution System. The Office Products Group distributes more than 55,000 items to over 4,300 resellers
and distributors throughout the United States and Canada from a network of 41 distribution centers. This group’s
network of strategically located distribution centers provides overnight delivery of the Company’s compre-
hensive product offering. Approximately 47% of the Company’s 2013 total office products purchases were made
from 10 major suppliers.
The Office Products Group sells to a wide variety of resellers. These resellers include independently owned
office product dealers, national office product superstores and mass merchants, large contract stationers, mail
order companies, Internet resellers, college bookstores, military base stores, office furniture dealers, value-added
technology resellers, business machine dealers, janitorial and sanitation supply distributors, safety product
resellers and food service distributors. Resellers are offered comprehensive marketing programs, which include
print and electronic catalogs and flyers, electronic content for reseller websites, and education and training
resources. In addition, market analytics programs are made available to qualified resellers.
Products. The Office Products Group distributes computer supplies including storage media, printer sup-
plies and computer accessories; office furniture including desks, credenzas, chairs, chair mats, partitions, file
cabinets and computer furniture; office machines including telephones, answering machines, calculators, fax
machines, multi-function copiers, printers, digital cameras, televisions, laminators and shredders; general office
supplies including desk accessories, business forms, accounting supplies, binders, filing supplies, report covers,
writing instruments, envelopes, note pads, copy paper, mailroom and shipping supplies, drafting supplies and
audiovisual supplies; school supplies including bulletin boards, teaching aids and art supplies; healthcare prod-
ucts including exam room supplies and accessories; janitorial and cleaning supplies; safety supplies; disposable
food service products; and breakroom supplies including napkins, utensils, snacks and beverages. S. P. Richards
has return privileges with most of its suppliers, which have protected the Company from inventory obsolescence.
While the Company’s inventory includes products from nearly 600 of the industry’s leading manufacturers
worldwide, S. P. Richards also markets products under its eight proprietary brands. These brands include: Spar-
cotm, an economical line of office supply basics; Compucessory®, a line of computer accessories; Lorelltm, a line
of office furniture; NatureSaver®, an offering of recycled products; Elite Image®, a line of new and remanufac-
tured toner cartridges, premium papers and labels; Integratm, a line of writing instruments; Genuine Joe®, a line
6
of cleaning and breakroom products; and Business Source®, a line of basic office supplies available only to
independent resellers. Through the Company’s FurnitureAdvantagetm program, S. P. Richards provides resellers
with an additional 11,000 furniture items made available to consumers in 7 to 10 business days.
Segment Data.
In the year ended December 31, 2013, sales from the Company’s Office Products Group
approximated 12% of the Company’s net sales, as compared to 13% in 2012 and 14% in 2011. For additional
segment information, see Note 10 of Notes to Consolidated Financial Statements beginning on page F-1.
Competition. The office products distribution business is highly competitive. In the distribution of its
product offering to resellers, S. P. Richards competes with many other wholesale distributors, as well as with
certain manufacturers of office products. S. P. Richards competes primarily on price, product offerings, service,
marketing programs and brand recognition. Further information regarding competition in the industry is set forth
in “Item 1A. Risk Factors — We Face Substantial Competition in the Industries in Which We Do Business.”
ELECTRICAL/ELECTRONIC MATERIALS GROUP
The Electrical/Electronic Materials Group was formed on July 1, 1998 through the acquisition of EIS, Inc.
(“EIS”), a wholly-owned subsidiary of the Company headquartered in Atlanta, Georgia. This Group distributes
materials to more than 20,000 electrical and electronic manufacturers, as well as industrial assembly and spe-
cialty wire and cable markets in North America. With 47 branch locations in the United States, Puerto Rico, the
Dominican Republic, Mexico and Canada, this Group distributes over 100,000 items including wire and cable,
insulating and conductive materials, assembly tools and test equipment. EIS also has six manufacturing facilities
that provide custom fabricated parts.
In 2013, EIS made two strategic acquisitions. Effective August 1, 2013, EIS acquired the assets of Trient
Technologies Inc., a fabricator of flexible materials with one location in Woodville, Wisconsin and annual rev-
enues of approximately $9 million. Effective October 31, 2013, EIS acquired the assets of Tekra Corporation
(“Tekra”), headquartered in New Berlin, Wisconsin. Tekra is an independent fabricator and coater of films and
flexible materials with approximately $75 million in annual revenues.
Additionally, effective February 1, 2014, EIS acquired the assets of Electro-Wire, Inc. (“Electro-Wire”).
Headquartered in Schaumburg, Illinois, Electro-Wire is a North American distributor and contract manufacturer
of specialty wire and cable products with four locations in the U.S. and primarily serving the telecom and transit
markets. Electro-Wire is expected to generate approximately $100 million in annual revenues.
Distribution System. The Electrical/Electronic Materials Group provides distribution services to OEM’s,
motor repair shops, specialty wire and cable users and a broad variety of industrial assembly markets. EIS
actively utilizes its e-commerce Internet site to present its products to customers while allowing these on-line
visitors to conveniently purchase from a large product assortment.
Electrical and electronic, industrial assembly, and wire and cable products are distributed from warehouse
locations in major user markets throughout the United States, as well as in Mexico, Canada, Puerto Rico, and the
Dominican Republic. EIS has return privileges with some of its suppliers, which have protected the Company
from inventory obsolescence.
Products. The Electrical/Electronic Materials Group distributes a wide variety of products to customers
from over 350 vendors. These products include custom fabricated flexible materials that are used as components
within a customer’s manufactured finished product in a variety of market segments. Among the products dis-
tributed and fabricated are such items as magnet wire, conductive materials, electrical wire and cable, insulating
and shielding materials, assembly tools, test equipment, adhesives and chemicals, pressure sensitive tapes, solder,
anti-static products, thermal management products and coated films. To meet the prompt delivery demands of its
customers, this Group maintains large inventories. The majority of sales are on open account. Approximately
45% of 2013 total Electrical/Electronic Materials Group purchases were made from 10 major suppliers.
Integrated Supply. The Electrical/Electronic Materials Group’s integrated supply programs are a part of
the marketing strategy, as a greater number of customers — especially national accounts — are given the oppor-
tunity to participate in this low-cost, high-service capability. The Group developed AIMS (Advanced Inventory
7
Management System), a totally integrated, highly automated solution for inventory management. The Group’s
Integrated Supply offering also includes AIMS EASI, an electronic vending dispenser used to eliminate costly
tool cribs, or in-house stores, at customer warehouse facilities.
Segment Data.
In the years ended December 31, 2013, 2012 and 2011, sales from the Company’s Elec-
trical/Electronic Materials Group approximated 4% of the Company’s net sales. For additional segment
information, see Note 10 of Notes to Consolidated Financial Statements beginning on page F-1.
Competition. The electrical and electronics distribution business is highly competitive. The Electrical/
Electronic Materials Group competes with other distributors specializing in the distribution of electrical and elec-
tronic products, general line distributors and, to a lesser extent, manufacturers that sell directly to customers. EIS
competes primarily on factors of price, product offerings, service and engineered solutions. Further information
regarding competition in the industry is set forth in “Item 1A. Risk Factors — We Face Substantial Competition
in the Industries in Which We Do Business.”
ITEM 1A. RISK FACTORS.
FORWARD-LOOKING STATEMENTS
Some statements in this report, as well as in other materials we file with the SEC or otherwise release to the
public and in materials that we 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. Senior officers may
also make verbal statements to analysts, investors, the media and others that are forward-looking. Forward-
looking statements may relate, for example, to future operations, prospects, strategies, financial condition, eco-
nomic performance (including growth and earnings), industry conditions and demand for our products and
services. The Company cautions that its 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 in our forward-looking statements as a result of various important factors. Such
factors include, but are not limited to, those discussed below.
Forward-looking statements are only as of the date they are made, and the Company undertakes no duty to
update its 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-Q, Form 8-K and other reports to the SEC.
Set forth below are the material risks and uncertainties that, if they were to occur, could materially and
adversely affect our business or could cause our actual results to differ materially from the results contemplated
by the forward-looking statements in this report and in the other public statements we make. Please be aware that
these risks may change over time and other risks may prove to be important in the future. New risks may emerge
at any time, and we cannot predict such risks or estimate the extent to which they may affect our business, finan-
cial condition, results of operations or the trading price of our securities.
Our business will be adversely affected if demand for our products slows.
Our business depends on customer demand for the products that we distribute. Demand for these products
depends on many factors.
With respect to our automotive group, the primary factors are:
• the number of miles vehicles are driven annually, as higher vehicle mileage increases the need for main-
tenance and repair;
• the quality of the vehicles manufactured by the original vehicle manufacturers and the length of the war-
ranty or maintenance offered on new vehicles;
• the number of vehicles in current service that are six years old and older, as these vehicles are typically no
longer under the original vehicle manufacturers’ warranty and will need more maintenance and repair
than newer vehicles;
8
• gas prices, as increases in gas prices may deter consumers from using their vehicles;
• changes in travel patterns, which may cause consumers to rely more on other transportation;
• restrictions on access to diagnostic tools and repair information imposed by the original vehicle manu-
facturers or by governmental regulation, as consumers may be forced to have all diagnostic work, repairs
and maintenance performed by the vehicle manufacturers’ dealer networks; and
• the economy generally, which in declining conditions may cause consumers to defer vehicle maintenance
and repair and defer discretionary spending.
With respect to our industrial parts group, the primary factors are:
• the level of industrial production and manufacturing capacity utilization, as these indices reflect the need
for industrial replacement parts;
• changes in manufacturing reflected in the level of the Institute for Supply Management’s Purchasing
Managers Index, as an index reading of 50 or more implies an expanding manufacturing economy, while
a reading below 50 implies a contracting manufacturing economy;
• the consolidation of certain of our manufacturing customers and the trend of manufacturing operations
being moved overseas; and
• the economy in general, which in declining conditions may cause reduced demand for industrial output.
With respect to our office products group, the primary factors are:
• the increasing digitization of the workplace, as this impacts the need for certain office products;
• the level of unemployment, especially as it relates to white collar and service jobs, as this impacts the
need for office products; and
• the economy in general, which in declining conditions may cause reduced demand for office products
consumption.
With respect to our electrical/electronic materials group, the primary factors are:
• changes in manufacturing reflected in the level of the Institute for Supply Management’s Purchasing
Managers Index, as an index reading of 50 or more implies an expanding manufacturing economy, while
a reading below 50 implies a contracting manufacturing economy; and
• the economy in general, which in declining conditions may cause reduced demand for industrial output.
Uncertainty and/or deterioration in general macro-economic conditions, including unemployment, inflation
or deflation, high energy costs, uncertain credit markets, or other economic conditions, could have a neg-
ative impact on our business, financial condition, results of operations and cash flows.
Our business and operating results may in the future be adversely affected by uncertain global economic
conditions, including instability in credit markets, declining consumer and business confidence, fluctuating
commodity prices, volatile exchange rates, and other challenges that could affect the global economy. Both our
commercial and retail customers may experience deterioration of their financial resources, which could result in
existing or potential customers delaying or canceling plans to purchase our products. Our vendors could experi-
ence similar conditions, which could impact their ability to fulfill their obligations to us. Future weakness in the
global economy could adversely affect our results of operations, financial condition and cash flows in future
periods.
We depend on our relationships with our vendors, and a disruption of our vendor relationships or a dis-
ruption in our vendors’ operations could harm our business.
As a distributor of automotive parts, industrial parts, office products and electrical/electronic materials, our
business depends on developing and maintaining close and productive relationships with our vendors. We depend
9
on our vendors to sell us quality products at favorable prices. Many factors outside our control, including, with-
out limitation, raw material shortages, inadequate manufacturing capacity, labor disputes, transportation dis-
ruptions or weather conditions, could adversely affect our vendors’ ability to deliver to us quality merchandise at
favorable prices in a timely manner. Furthermore, financial or operational difficulties with a particular vendor
could cause that vendor to increase the cost of the products or decrease the quality of the products we purchase
from it. Vendor consolidation could also limit the number of suppliers from which we may purchase products
and could materially affect the prices we pay for these products. In our automotive business, the number of ven-
dors could decrease considerably, and the prices charged to us by the remaining vendors could increase, to the
extent that vehicle production slows due to a decline in consumer spending and, possibly, the failure of one or
more of the large automobile manufacturers. We would suffer an adverse impact if our vendors limit or cancel
the return privileges that currently protect us from inventory obsolescence.
We face substantial competition in the industries in which we do business.
The sale of automotive and industrial parts, office products and electrical materials is highly competitive
and impacted by many factors, including name recognition, product availability, customer service, anticipating
changing customer preferences, store location, and pricing pressures. Because we seek to offer competitive
prices, if our competitors reduce their prices, we may be forced to reduce our prices, which could result in a
material decline in our revenues and earnings. Increased competition among distributors of automotive and
industrial parts, office products and electronic materials, including internet-related initiatives, could cause a
material adverse effect on our results of operations. The Company anticipates no decline in competition in any of
its four business segments in the foreseeable future.
In particular, the market for replacement automotive parts is highly competitive and subjects us to a wide
variety of competitors. We compete primarily with national and regional auto parts chains, independently owned
regional and local automotive parts and accessories stores, automobile dealers that supply manufacturer replace-
ment parts and accessories, mass merchandisers and wholesale clubs that sell automotive products and regional
and local full service automotive repair shops. Furthermore, the automotive aftermarket has experienced con-
solidation in recent years. Consolidation among our competitors could further enhance their financial position,
provide them with the ability to provide more competitive prices to customers for whom we compete, and allow
them to achieve increased efficiencies in their consolidated operations that enable them to more effectively
compete for customers. If we are unable to continue to develop successful competitive strategies or if our com-
petitors develop more effective strategies, we could lose customers and our sales and profits may decline.
We may not be able to successfully implement our business initiatives in each of our four business segments
to grow our sales and earnings, which could adversely affect our business, financial condition, results of
operations and cash flows.
We have implemented numerous initiatives in each of our four business segments to grow sales and earn-
ings, including the introduction of new and expanded product lines, strategic acquisitions, geographic expansion
(including through acquisitions), sales to new markets, enhanced customer marketing programs and a variety of
gross margin and cost savings initiatives. If we are unable to implement these initiatives efficiently and effec-
tively, or if these initiatives are unsuccessful, our business, financial condition, results of operations and cash
flows could be adversely affected.
Successful implementation of these initiatives also depends on factors specific to the automotive parts
industry and the other industries in which we operate and numerous other factors that may be beyond our control.
In addition to the other risk factors contained in this “Item 1A. Risk Factors”, adverse changes in the following
factors could undermine our business initiatives and have a material adverse affect on our business, financial
condition, results of operations and cash flows:
• the competitive environment in our end markets may force us to reduce prices below our desired pricing
level or to increase promotional spending;
• our ability to anticipate changes in consumer preferences and to meet customers’ needs for our products in
a timely manner;
10
• our ability to successfully enter new markets, including by successfully identifying and acquiring suitable
acquisition targets in these new markets;
• our ability to effectively manage our costs;
• our ability to continue to grow through acquisitions and successfully integrate acquired businesses in our
existing operations; and
• the economy in general.
Because we are involved in litigation from time to time and are subject to numerous laws and governmental
regulations, we could incur substantial judgments, fines, legal fees and other costs.
We are sometimes the subject of complaints or litigation from customers, employees or other third parties
for various actions. The damages sought against us in some of these litigation proceedings are substantial.
Although we maintain liability insurance for some litigation claims, if one or more of the claims were to greatly
exceed our insurance coverage limits or if our insurance policies do not cover a claim, this could have a material
adverse affect on our business, financial condition, results of operations and cash flows.
Additionally, we are subject to numerous federal, state and local laws and governmental regulations relating
to environmental protection, product quality standards, building and zoning requirements, as well as employment
law matters. If we fail to comply with existing or future laws or regulations, we may be subject to governmental
or judicial fines or sanctions, while incurring substantial legal fees and costs. In addition, our capital expenses
could increase due to remediation measures that may be required if we are found to be noncompliant with any
existing or future laws or regulations.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not applicable.
ITEM 2. PROPERTIES.
The Company’s headquarters and Automotive Parts Group headquarters are located in two office buildings
owned by the Company in Atlanta, Georgia.
The Company’s Automotive Parts Group currently operates 62 NAPA Distribution Centers in the United
States distributed among ten geographic divisions. Approximately 90% of the distribution center properties are
owned by the Company. At December 31, 2013, the Company operated approximately 1,100 NAPA AUTO
PARTS stores located in 46 states, and the Company owned either a noncontrolling or controlling interest in
114 additional auto parts stores in nine states. Other than NAPA AUTO PARTS stores located within Company
owned distribution centers, the majority of the automotive parts stores in which the Company has an ownership
interest are operated in leased facilities. In addition, NAPA Canada/UAP operates 12 distribution centers and
approximately 199 automotive parts and Traction stores in Canada, excluding any joint ventures. Auto Todo
operates 11 distribution centers and eight stores and tire centers in Mexico. These operations are conducted in
leased facilities. GPC Asia Pacific operates throughout Australia and New Zealand with eight distribution cen-
ters, 399 Repco stores and 61 branches associated with the Ashdown Ingram, Motospecs and McLeod operations.
These distribution center, store and branch operations are conducted in leased facilities.
The Company’s Automotive Parts Group also operates four Balkamp distribution/redistribution centers, four
Rayloc distribution facilities and two transfer and shipping facilities. Nearly all of the Balkamp and Rayloc oper-
ations are conducted in facilities owned by the Company. Altrom Canada operates 13 import parts distribution
centers and Altrom America operates two import parts distribution centers. The Heavy Vehicle Parts Group
operates one TW distribution center, which serves 22 Traction stores of which 14 are company owned and
located in the U.S. These operations are conducted in leased facilities.
The Company’s Industrial Parts Group, operating through Motion and Motion Canada, operates 15 dis-
tribution centers, 42 service centers and 511 branches. Approximately 90% of these branches are operated in
leased facilities.
11
The Company’s Office Products Group operates 36 facilities in the United States and five facilities in
Canada distributed among the Group’s five geographic divisions. Approximately 75% of these facilities are
operated in leased buildings.
The Company’s Electrical/Electronic Materials Group operates in 47 locations in the United States, one
location in Puerto Rico, one location in the Dominican Republic, three locations in Mexico and one location in
Canada. All of this Group’s 53 facilities are operated in leased buildings.
We believe that our facilities on the whole are in good condition, are adequately insured, are fully utilized
and are suitable and adequate for the conduct of our current operations.
For additional information regarding rental expense on leased properties, see Note 4 of Notes to Con-
solidated Financial Statements beginning on page F-1.
ITEM 3. LEGAL PROCEEDINGS.
The Company is subject to various legal and governmental proceedings, many involving routine litigation
incidental to the businesses, including approximately 3,000 product liability lawsuits resulting from its national
distribution of automotive parts and supplies. Many of these involve claims of personal injury allegedly resulting
from the use of automotive parts distributed by the Company. While litigation of any type contains an element of
uncertainty, the Company believes that its defense and ultimate resolution of pending and reasonably anticipated
claims will continue to occur within the ordinary course of the Company’s business and that resolution of these
claims will not have a material effect on the Company’s business, results of operations or financial condition.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
12
PART II.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information Regarding Common Stock
The Company’s common stock is traded on the New York Stock Exchange under the ticker symbol “GPC”.
The following table sets forth the high and low sales prices for the common stock per quarter as reported on the
New York Stock Exchange and dividends per share of common stock paid during the last two fiscal years:
Sales Price of Common Shares
2013
2012
High
Low
High
Low
Quarter
First . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$78.12
84.27
85.41
84.89
$64.43
71.87
77.80
76.26
$66.43
66.50
65.18
66.90
$60.84
55.58
58.73
59.53
Dividends
Declared per
Share
2013
2012
Quarter
First . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$0.5375
0.5375
0.5375
0.5375
$0.4950
0.4950
0.4950
0.4950
13
Stock Performance Graph
Set forth below is a line graph comparing the yearly dollar change in the cumulative total shareholder return
on the Company’s Common Stock against the cumulative total shareholder return of the Standard and Poor’s 500
Stock Index and a peer group composite index structured by the Company as set forth below for the five year
period that commenced December 31, 2008 and ended December 31, 2013. This graph assumes that $100 was
invested on December 31, 2008 in Genuine Parts Company Common Stock, the S&P 500 Stock Index (the
Company is a member of the S&P 500, and its cumulative total shareholder return went into calculating the S&P
500 results set forth in the graph) and the peer group composite index as set forth below and assumes reinvest-
ment of all dividends.
Comparison of five year cumulative total shareholder return
Genuine Parts Company
S&P 500
Peer Index
S
R
A
L
L
O
D
350
325
300
275
250
225
200
175
150
125
100
75
50
25
0
2008
2009
2010
2011
2012
2013
Genuine Parts Company, S&P 500 Index and peer group composite index
Cumulative Total Shareholder Return
$ at Fiscal Year End
2008
2009
2010
2011
2012
2013
Genuine Parts Company
100.00
105.22
147.87
182.23
195.48
263.01
S&P 500
Peer Index
100.00
126.46
145.50
148.58
172.35
228.17
100.00
142.97
207.35
199.05
227.70
321.78
In constructing the peer group composite index (“Peer Index”) for use in the stock performance graph
above, the Company used the shareholder returns of various publicly held companies (weighted in accordance
with each company’s stock market capitalization at December 31, 2008 and including reinvestment of dividends)
that compete with the Company in three industry segments: automotive parts, industrial parts and office products
(each group of companies included in the Peer Index as competing with the Company in a separate industry
segment is hereinafter referred to as a “Peer Group”). Included in the automotive parts Peer Group are those
companies making up the Dow Jones U.S. Auto Parts Index (the Company is a member of such industry group,
and its individual shareholder return was included when calculating the Peer Index results set forth in the
performance graph). Included in the industrial parts Peer Group are Applied Industrial Technologies, Inc. and
Kaman Corporation and included in the office products Peer Group is United Stationers Inc. The Peer Index does
not break out a separate electrical/electronic peer group due to the fact that there is currently no true market
comparative to EIS. The electrical/electronic component of sales is redistributed to the Company’s other seg-
ments on a pro rata basis to calculate the final Peer Index.
14
In determining the Peer Index, each Peer Group was weighted to reflect the Company’s annual net sales in
each industry segment. Each industry segment of the Company comprised the following percentages of the
Company’s net sales for the fiscal years shown:
Industry Segment
2008
2009
2010
2011
2012
2013
Automotive Parts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Industrial Parts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Office Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Electrical/Electronic Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Holders
48% 52% 50% 49% 49% 53%
32% 29% 31% 33% 34% 31%
16% 16% 15% 14% 13% 12%
4%
4%
4%
4%
4%
3%
As of December 31, 2013, there were 5,071 holders of record of the Company’s common stock. The number
of holders of record does not include beneficial owners of the common stock whose shares are held in the names
of various dealers, clearing agencies, banks, brokers and other fiduciaries.
Issuer Purchases of Equity Securities
The following table provides information about the purchases of shares of the Company’s common stock
during the three month period ended December 31, 2013:
Period
October 1, 2013 through October 31, 2013 . . .
November 1, 2013 through November 30,
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
215,475
$78.66
214,400
11,065,142
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
276,080
$80.71
220,547
10,844,595
December 1, 2013 through December 31,
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
190,561
682,116
$81.31
$80.23
176,216
611,163
10,668,379
10,668,379
(1) Includes shares surrendered by employees to the Company to satisfy tax withholding obligations in con-
nection with the vesting of shares of restricted stock, the exercise of stock options and/or tax withholding
obligations.
(2) On November 17, 2008, the Board of Directors announced that it had authorized the repurchase of 15 million
shares. The authorization for this repurchase plan continues until all such shares have been repurchased or the
repurchase plan is terminated by action of the Board of Directors. Approximately 10.7 million shares
authorized in the 2008 plan remain available to be repurchased by the Company. There were no other pub-
licly announced plans as of December 31, 2013.
15
ITEM 6. SELECTED FINANCIAL DATA.
The following table sets forth certain selected historical financial and operating data of the Company as of
the dates and for the periods indicated. The following selected financial data are qualified by reference to, and
should be read in conjunction with, the consolidated financial statements, related notes and other financial
information beginning on page F-1, as well as in “Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations” of this report.
Year Ended December 31,
2011
2012
2013
2010
2009
Net sales . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . .
Operating and non-operating
expenses, net . . . . . . . . . . . . . . . . . .
Income before taxes . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . .
Weighted average common shares
outstanding during year —
assuming dilution . . . . . . . . . . . . . .
Per common share:
$14,077,843
9,857,923
(In thousands, except per share data)
$12,458,877
8,852,837
$13,013,868
9,235,777
$11,207,589
7,954,645
$10,057,512
7,047,750
3,175,616
1,044,304
359,345
684,959
$
2,759,159
1,018,932
370,891
648,041
$
2,715,234
890,806
325,690
565,116
$
2,491,161
761,783
286,272
475,511
$
2,365,597
644,165
244,590
399,575
$
155,714
156,420
157,660
158,461
159,707
Diluted net income . . . . . . . . . . . . .
Dividends declared . . . . . . . . . . . . .
December 31 closing stock price . .
Total debt, less current maturities . . . .
Total equity . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . .
$
4.40
2.15
83.19
500,000
3,358,768
$ 7,680,297
$
4.14
1.98
63.58
250,000
3,008,179
$ 6,807,061
$
3.58
1.80
61.20
500,000
2,753,591
$ 6,202,774
$
3.00
1.64
51.34
250,000
2,763,486
$ 5,788,227
$
2.50
1.60
37.96
500,000
2,590,144
$ 5,327,872
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
OVERVIEW
Genuine Parts Company is a service organization engaged in the distribution of automotive parts, industrial
parts, office products and electrical/electronic materials. We have a long tradition of growth dating back to 1928,
the year we were founded in Atlanta, Georgia. In 2013, the Company conducted business throughout the United
States, Canada, Australia, New Zealand, Mexico and Puerto Rico from approximately 2,600 locations.
We recorded consolidated net sales of $14.1 billion for the year ended December 31, 2013, an increase of
8% compared to $13.0 billion in 2012. Consolidated net income for the year ended December 31, 2013 was
$685 million, up 6% from $648 million in 2012. The Company’s internal growth initiatives, including the pos-
itive impact of acquisitions, as well as effective cost management, which we discuss further below, served to
drive our solid financial performance for the year, despite the challenging market conditions that were experi-
enced by our non-automotive business segments.
The 8% sales growth in 2013 follows a 4.5% revenue increase in 2012 and an 11% increase in revenues in
2011. Our 6% increase in net income follows a 15% increase in net income in 2012 and a 19% increase in net
income in 2011. In 2011, we experienced strong and steady growth in three of our four business segments, as
conditions in these industries improved significantly from the depressed levels associated with the recessionary
period of 2009. These favorable conditions began to moderate following the first quarter of 2012, which created a
more challenging sales environment over the balance of the year. In 2013, we continued to experience difficult
market conditions in the Industrial, Electrical/Electronic and Office industries, while the Automotive business
performed reasonably well. Over the three year period of 2011 through 2013, our financial performance was
positively impacted by a variety of initiatives we implemented to grow sales and earnings in each of our four
16
businesses. Examples of such initiatives include strategic acquisitions, the introduction of new and expanded
product lines, geographic expansion, sales to new markets, enhanced customer marketing programs and a variety
of gross margin and cost savings initiatives. We discuss these initiatives further below.
With regard to the December 31, 2013 consolidated balance sheet, the Company’s cash balance of $197
million was down from cash of $403 million at December 31, 2012, due primarily to recent acquisitions in our
Automotive, Industrial and Electrical/Electronic business segments during 2013, which are discussed further
under Liquidity and Capital Resources. The Company continues to maintain a strong cash position, supported by
the increase in net income and ongoing working capital management in 2013. Accounts receivable increased by
approximately 12%, which is less than our sales increase in the fourth quarter of the year, and inventory was up
by approximately 13%, or approximately 1% before the impact of acquisitions. Accounts payable increased
$588 million or 35% from the prior year. The significant increase in this line item is due primarily to improved
payment terms with certain suppliers. Additionally, accounts payable associated with acquisitions accounted for
approximately 10% of the increase. Total debt outstanding at December 31, 2013 was $765 million, an increase
of $265 million from $500 million at December 31, 2012.
RESULTS OF OPERATIONS
Our results of operations are summarized below for the three years ended December 31, 2013, 2012 and
2011.
Year Ended December 31,
2013
2012
2011
Net Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted Earnings Per Share . . . . . . . . . . . . . . . . . . . . . .
Net Sales
(In thousands except per share data)
$13,013,868
3,778,091
648,041
4.14
$14,077,843
4,219,920
684,959
4.40
$12,458,877
3,606,040
565,116
3.58
Consolidated net sales for the year ended December 31, 2013 totaled $14.1 billion, an 8% increase from
2012 driven by an 18.5% increase in the Automotive segment, that was offset by a 1% sales decrease in our non-
automotive businesses. Acquisitions, primarily in Automotive, but also in the Industrial and Electrical/Electronic
businesses, contributed 7% to our total sales growth and increased sales volume accounted for the remaining 1%.
The impact of product inflation varied by business again in 2013 and, cumulatively, prices were flat in the
Automotive segment, up approximately 1% in the Industrial and Electrical/Electronic segments and up approx-
imately 0.5% in the Office segment. The Company is well positioned to improve sales in 2014.
Consolidated net sales for the year ended December 31, 2012 totaled $13.0 billion, a 4.5% increase from
2011 and driven by sales increases in three of our four business segments. Acquisitions in our Automotive and
Electrical businesses contributed 2% to our sales growth and increased sales volume added approximately 2% to
sales. The impact of product inflation varied by business, as, cumulatively, prices in 2012 were flat in the Auto-
motive segment, up approximately 2% in the Industrial segment, flat in the Electrical/Electronic segment and up
approximately 3% in the Office segment.
Automotive Group
Net sales for the Automotive Group (“Automotive”) were $7.5 billion in 2013, an increase of 18.5% from
2012. The increase in sales for the year was primarily due to the April 1, 2013 acquisition of GPC Asia Pacific,
formerly Exego, and the May 1, 2012 acquisition of Quaker City Motor Parts Co. (“Quaker City”). Combined,
these acquisitions contributed approximately 15% to sales. Additionally, Automotive achieved a positive com-
parable store sales increase of approximately 4%, offset slightly by the 0.5% negative impact of currency asso-
ciated with our Canadian business. Automotive sales were not materially impacted by product inflation or the
effect of currency associated with our Mexican businesses. In 2013, Automotive revenues were up 3% in the first
quarter, then up 22% in the second and third quarters and up 25% in the fourth quarter. We believe that the
17
underlying fundamentals in the automotive aftermarket, including the overall aging of the vehicle population,
remain solid and will serve to drive increased demand for automotive aftermarket maintenance and supply items
in 2014. Based on these fundamentals and the internal growth initiatives in our Automotive business, we expect
to grow our sales for this group again in 2014.
Net sales for Automotive were $6.3 billion in 2012, an increase of 4% from 2011. The increase in sales for
the year was primarily due to the May 1, 2012 acquisition of Quaker City, which contributed approximately 3%
to sales. Additionally, Automotive achieved a positive comparable store sales increase of slightly more than 1%.
Automotive sales were not materially impacted by product inflation or the effect of currency associated with our
Canadian and Mexican businesses. In 2012, Automotive revenues were up 6% in the first quarter, then up 4% in
the second quarter, up 2.5% in the third quarter and up 5% in the fourth quarter.
Industrial Group
Net sales for Motion Industries, our Industrial Group (“Industrial”), were $4.4 billion in 2013, down slightly
compared to 2012. Sales volumes in this business were down approximately 1% from the prior year, while higher
transaction values associated with product inflation added 1% to sales in 2013. The slight positive impact on
sales from acquisitions was offset by the slight negative impact of currency associated with our Canadian busi-
ness. Industrial revenues were down 2% in the first quarter of 2013 , down 1% in the second quarter, down 2.5%
in the third quarter and up 3% in the fourth quarter. We expect the recent acquisitions for this business segment,
as well as other internal growth initiatives and relatively stable manufacturing indicators, to provide us ample
growth opportunities for our Industrial business in 2014.
Net sales for Industrial, were $4.5 billion in 2012, an increase of 7% compared to 2011. The positive impact
of Industrial’s internal sales initiatives, which drove higher sales volume, contributed 5% to sales. Higher trans-
action values in 2012 associated with product inflation added another 2% to sales. There was no material impact
on sales from acquisitions and no effect of currency associated with our Canadian business. Industrial revenues
were up 12% in the first quarter of 2012, up 8% in the second quarter, then up 4.5% and 2% in the third and
fourth quarters, respectively.
Office Group
Net sales for S. P. Richards, our Office Products Group (“Office”), were $1.6 billion in 2013, a 3% decrease
in sales from 2012. The industry-wide weakness in office products consumption, driven by the ongoing elevated
levels of white collar unemployment and the declining demand for paper and paper-based office products due to
workplace digitization, continues to pressure this segment, and we do not expect any meaningful improvement in
these conditions in the near future. Overall, sales volume in Office declined by approximately 3.5% for the year,
offset by the benefit of slightly higher transaction values associated with price inflation of 0.5%. Sales decreased
by 1% in the first quarter, 3% in the second and third quarters and 4% in the fourth quarter of 2013. Our focus in
2014 will be on market share initiatives, product line extensions and further diversification of our product and
customer portfolios.
Net sales for Office were $1.7 billion in 2012, flat with revenues in 2011. Overall, sales volume in Office
declined by 3% for the year, offset by higher transaction values associated with price inflation of approximately
3%. Sales decreased by 1% in the first, second and third quarters, and were up 3% in the fourth quarter of 2012.
Electrical/Electronic Group
Net sales for EIS, our Electrical and Electronic Group (“Electrical/Electronic”), decreased to $569 million in
2013, down 2% from 2012. The decrease in revenues is attributable to several factors, as sales volume was down
by 5% and copper pricing negatively impacted sales by 1% relative to 2012. These items were partially offset by
a 3% positive sales contribution from acquisitions and the benefit of higher transaction values associated with 1%
price inflation for the year. Sales for Electrical/Electronic decreased by 5% in the first quarter, 4% in the second
quarter and 5% in the third quarter and were up 6% in the fourth quarter. Despite the slow market conditions for
this segment in 2013, we expect the Electrical/Electronic business to benefit from its internal growth initiatives, a
gradually improving manufacturing environment and the incremental revenue from their recently completed
acquisitions in the periods ahead.
18
Net sales for Electrical/Electronic increased to $583 million in 2012, up 4.5% from 2011. The increase in
revenues is due primarily to acquisitions, which contributed approximately 8% to our sales growth in 2012. A
2.5% decrease in sales volume and a 1% negative impact from copper pricing for the year served to offset this
increase. Sales for Electrical/Electronic increased by 5% in the first quarter, and were up 9% in the second quar-
ter, up 5% in the third quarter and were down 2% in the fourth quarter.
Cost of Goods Sold
The Company includes in Cost of goods sold the actual cost of merchandise, which represents the vast
majority of this line item. Other costs in Cost of goods sold include warranty costs and in-bound freight from the
supplier, net of any vendor allowances and incentives. Cost of goods sold was $9.9 billion, $9.2 billion and
$8.9 billion in 2013, 2012 and 2011, respectively. The 7% increase in cost of goods sold in 2013 from 2012 is
directly related to the sales increase for the same period, as product inflation was relatively insignificant and
actual costs were relatively unchanged from the prior year. Cost of goods sold represented 70.0% of net sales in
2013, 71.0 % of net sales in 2012 and 71.1% of net sales in 2011. The 100 basis point decrease in cost of goods
sold as a percent of net sales in 2013 primarily reflects the positive gross margin impact of the 100% company
owned store model at GPC Asia Pacific. Other changes in cost of goods sold, including the slight decrease in
2012 from 2011, reflect our gross margin initiatives to enhance our pricing strategies, promote and sell higher
margin products and minimize material acquisition costs.
In 2013, the Industrial, Electrical/Electronic and Office business segments experienced slight vendor price
increases. In 2012, only the Industrial and Office business segments experienced vendor price increases. In 2011,
all four of our business segments experienced vendor price increases. In any year where we experience price
increases, we are able to work with our customers to pass most of these along to them.
Operating Expenses
The Company includes in Selling, administrative and other expenses (“SG&A”), all personnel and personnel
related costs at its headquarters, distribution centers and stores, which accounts for approximately 65% of total
SG&A. Additional costs in SG&A include our facilities, delivery, marketing, advertising, legal and professional
costs.
SG&A increased by $371 million or approximately 14% to $3.0 billion in 2013, representing 21.4% of net
sales, which compares to 20.4% of net sales in 2012. Primarily, the increase in SG&A expenses as a percentage
of net sales from the prior year is due to the 100% company owned store model at GPC Asia Pacific, which
serves to increase both gross profit and SG&A expenses. Additionally, we experienced decreased expense lever-
age in 2013 associated with the weak sales environment in our non-automotive businesses throughout the year.
These items were partially offset by a $54 million one-time gain, net of other expense adjustments, recorded to
SG&A in the second quarter of 2013 as a purchase accounting adjustment associated with the April 1, 2013
acquisition of GPC Asia Pacific. Our management teams remain focused on properly managing the Company’s
expenses and continuing to assess the appropriate cost structure in our businesses. Depreciation and amortization
expense was $134 million in 2013, an increase of $36 million or 36% from 2012. This increase primarily relates
to the depreciation for higher levels of capital expenditures and the amortization associated with acquisitions
during the year. The provision for doubtful accounts was $9 million in 2013, an increase from $8 million in 2012.
We believe the Company is adequately reserved for bad debts at December 31, 2013.
SG&A increased by $54 million or approximately 2% to $2.6 billion in 2012, representing 20.4% of net
sales and down from 20.8% of net sales in 2011. SG&A expenses as a percentage of net sales improved from the
prior year due to slightly greater expense leverage associated with our sales growth, combined with manage-
ment’s ongoing cost control measures in areas such as personnel, freight, fleet and logistics. Excluding acquis-
itions, the Company’s headcount at December 31, 2012 decreased by approximately 1% from 2011. These
expense initiatives have served to further improve the Company’s cost structure. Depreciation and amortization
expense was $98 million in 2012, an increase of $9 million or 11% from 2011. This increase primarily relates to
the amortization associated with acquisitions during the year. The provision for doubtful accounts was $8 million
in 2012, down $5 million or 40% from $13 million in 2011.
19
Total share-based compensation expense for the years ended December 31, 2013, 2012 and 2011 was
$12.6 million, $10.7 million and $7.5 million, respectively. Refer to Note 5 of the Consolidated Financial State-
ments for further information regarding share-based compensation.
Non-Operating Expenses and Income
Non-operating expenses consist primarily of interest. Interest expense was $27 million in 2013, $20 million
in 2012 and $27 million in 2011. The $7 million increase in interest expense in 2013 is due to higher debt levels
incurred for the GPC Asia Pacific acquisition. In November 2013, the Company renewed certain debt at a favor-
able interest rate and although the renewal did not materially reduce interest expense in 2013, the new interest
rate will save approximately $4 million in annual interest expense beginning in 2014. In 2012, the Company
benefited from an improved interest rate on certain long-term debt, effective November 2011, which reduced
interest expense by $7 million from the prior year.
In “Other”, the net benefit of interest income, equity method investment income and noncontrolling interests
in 2013 was $13 million, a decrease of $3 million from 2012. These items had increased to $16 million in 2012,
up approximately $8 million from 2011. This increase reflects the Company’s equity income recorded in 2012
for its 30% investment interest in GPC Asia Pacific.
Income Before Income Taxes
Income before income taxes was $1.0 billion in 2013, an increase of 2.5% from 2012. As a percentage of net
sales, income before income taxes was 7.4% in 2013 compared to 7.8% in 2012. In 2012, income before income
taxes of $1.0 billion was up 14% from $891 million in 2011 and as a percentage of net sales was 7.8%, an
increase from 7.1% in 2011.
Automotive Group
Automotive income before income taxes as a percentage of net sales, which we refer to as operating margin,
was steady with the prior year at 8.6%. The changes in gross profit and operating costs as a percentage of net
sales, which related primarily to the acquisition of GPC Asia Pacific, were relatively neutral to operating profit
during the year. Looking forward, Automotive’s initiatives to grow sales and control costs are intended to
improve its operating margin in the years ahead.
Automotive’s operating margin increased to 8.6% in 2012 from 7.7% in 2011. The improvement in operat-
ing margin for 2012 is attributed primarily to effective cost controls and cost reductions implemented during the
year. A slight increase in gross margin also positively impacted the operating margin.
Industrial Group
Industrial’s operating margin decreased to 7.2% in 2013 from 7.9% in 2012. The decrease in operating
margin in 2013 is due to the combination of reduced expense leverage associated with the slight decrease in sales
relative to the prior year and the decline in volume incentives for the year. These items were partially offset by
effective cost control measures. Industrial has made several recent acquisitions which will positively impact this
segment and will continue to focus on its many sales initiatives and cost controls to further improve its operating
margin in the years ahead.
Industrial’s operating margin decreased to 7.9% in 2012 from 8.1% in 2011. The decrease in operating
margin in 2012 is due to the combination of reduced expense leverage associated with slower sales growth rela-
tive to the prior year and the decline in volume incentives for the year. These items were partially offset by effec-
tive cost control measures.
Office Group
Office’s operating margin decreased to 7.5% in 2013 from 8.0% in 2012, primarily related to the reduced
expense leverage associated with the decrease in sales for this segment relative to 2012. Previously, the operating
margin at Office was relatively steady over the last few years, at 8.0% in 2012 and 7.9% in 2011. In each of these
20
periods, the cost savings measures in the Office segment were somewhat offset by the ongoing gross margin
pressures associated with the slow demand for office products across the industry. Office will continue to focus
on its sales initiatives and cost controls to further improve its operating margin in the years ahead.
Electrical/Electronic Group
Electrical/Electronic’s operating margin decreased to 8.4% in 2013 from 8.7% in 2012. The slight decline in
operating margin is primarily due loss of expense leverage associated with the sales decrease for this segment in
2013 relative to 2012. Electrical/Electronic will continue to focus on its sales initiatives and cost controls to
improve its operating margin in the years ahead.
Electrical/Electronic’s operating margin increased to 8.7% in 2012 from 7.3% in 2011. The increase in
operating margin in 2012 is primarily due to the positive impact of effective cost management as well as an
improved gross margin. The improvement in gross margin reflects several factors, including higher margin busi-
ness associated with recent acquisitions, and the decrease in copper prices during the year, which generally do
not affect profit dollars, but positively impact margins, as the standard industry practice is to bill copper to the
customer at cost.
Income Taxes
The effective income tax rate of 34.4% in 2013 was down from 36.4% in 2012. The decrease reflects the
favorable impact of a lower Australian tax rate applied to the pre-tax earnings of GPC Asia Pacific, as well as the
favorable tax rate applied to the one-time acquisition gain recorded in the second quarter of 2013. The income tax
rate of 36.4% in 2012 was down slightly from 36.6% in 2011, primarily due to the favorable impact of a retire-
ment asset valuation adjustment in 2012 relative to 2011.
Net Income
Net income was $685 million in 2013, an increase of 6% from $648 million in 2012. On a per share diluted
basis, net income was $4.40 in 2013 compared to $4.14 in 2012, up 6%. Net income in 2013 was 4.9% of net
sales compared to 5.0% of net sales in 2012.
In connection with the acquisition of GPC Asia Pacific, the Company recorded one-time positive purchase
accounting adjustments of $33 million or $0.21 per diluted share in 2013.
Net income was $648 million in 2012, an increase of 15% from $565 million in 2011. On a per share diluted
basis, net income was $4.14 in 2012 compared to $3.58 in 2011, up 16%. Net income in 2012 was 5.0% of net
sales compared to 4.5% of net sales in 2011.
In December 2012, the Company’s U.S. Defined Benefit Plan was amended to reflect a hard freeze as of
December 31, 2013. The Company recorded a one-time noncash curtailment gain of $23.5 million or $0.10 per
diluted share in the fourth quarter of 2012 in connection with this amendment.
FINANCIAL CONDITION
Our cash balance of $197 million at December 31, 2013 reflects a decrease of 51% compared to our cash
balance of $403 million at December 31, 2012. In 2013, record levels of cash from operations provided by the
increase in net income and ongoing working capital management was offset by approximately $712 million used
for the acquisition of businesses and other investing activities. The Company’s accounts receivable balance at
December 31, 2013 increased by approximately 12% from the prior year, which is less than the Company’s 13%
sales increase for the fourth quarter of 2013. Inventory at December 31, 2013 was up by approximately 13%
from December 31, 2012, which is primarily attributable to acquisitions. Excluding acquisitions, inventory was
up by approximately 1% from the prior year. Accounts payable increased $588 million or approximately 35%
from December 31, 2012 due primarily to improved payment terms with certain suppliers and the impact of the
GPC Asia Pacific acquisition. Goodwill and other intangible assets increased by $492 million and $300,
respectively, from December 31, 2012 due to the Company’s acquisitions during the year, primarily GPC Asia
Pacific. The change in our December 31, 2013 balances for deferred tax assets, down $182 million, and pension
21
and other post-retirement benefits liabilities, down $433 million, from December 31, 2012, is primarily due to a
change in funded status of the Company’s pension plans in 2013. Finally, the change in our December 31, 2013
balance for other assets, down $241 million or 38%, is primarily due to the purchase of the remaining 70% inter-
est in GPC Asia Pacific in 2013. Previously, the Company accounted for the 30% investment under the equity
method of accounting, which was included in other assets in 2012.
LIQUIDITY AND CAPITAL RESOURCES
The Company’s sources of capital consist primarily of cash flows from operations, supplemented as neces-
sary by private issuances of debt and bank borrowings. We have $765 million of total debt outstanding at
December 31, 2013, of which $250 million matures in November 2016 and $250 million matures in December
2023. In addition, the Company entered into a Syndicated Facility Agreement (the “Syndicated Facility”) for
$850 million in September 2012, which replaced the $350 million unsecured revolving line of credit that was
scheduled to mature in December 2012. $265 million was outstanding under the Syndicated Facility or line of
credit at December 31, 2013 and no amount was outstanding at December 31, 2012. Currently, we believe that
our cash on hand and available short-term and long-term sources of capital are sufficient to fund the Company’s
interest payments, capital
operations,
expenditures, benefit plan contributions, income tax obligations, dividends, share repurchases and contemplated
acquisitions.
including working capital requirements, scheduled debt payments,
The ratio of current assets to current liabilities was 1.6 to 1 at December 31, 2013 and this compares to 1.9
to 1 at December 31, 2012. Our liquidity position remains solid. The Company’s total debt outstanding at
December 31, 2013 is up $265 million or 53% from December 31, 2012 and primarily relates to the incremental
borrowings utilized for the GPC Asia Pacific acquisition.
Sources and Uses of Net Cash
A summary of the Company’s consolidated statements of cash flows is as follows:
Year Ended December 31,
Percent Change
Net Cash Provided by (Used in):
2013
2012
2011
2013 vs. 2012
2012 vs. 2011
Operating Activities . . . . . . . . . . . . . . . . . . . . .
Investing Activities . . . . . . . . . . . . . . . . . . . . . .
Financing Activities . . . . . . . . . . . . . . . . . . . . .
$1,056,731
(825,579)
(425,117)
(In thousands)
$ 906,438
(651,867)
(378,834)
$ 624,927
(231,497)
(394,140)
17%
27%
12%
45%
182%
(4)%
Net Cash Provided by Operating Activities:
The Company continues to generate cash and in 2013 net cash provided by operating activities totaled $1.1
trade accounts receivable, merchandise
billion. This reflects a 17% increase from 2012 as, collectively,
inventories and trade accounts payable net to a $278 million source of cash in 2013 compared to a $208 million
source of cash in 2012. Additionally, net income and depreciation and amortization in 2013 increased by $37
million and $36 million, respectively, from 2012. Net cash provided by operating activities was $906 million in
2012, a 45% increase from 2011, as, collectively, trade accounts receivable, merchandise inventories and trade
accounts payable represented a $208 million source of cash in 2012 compared to a $19 million use of cash in
2011. Additionally, net income in 2012 increased by $83 million.
Net Cash Used in Investing Activities:
Net cash flow used in investing activities was $826 million in 2013 compared to $652 million in 2012, an
increase of 27%. Cash used for acquisitions of businesses and other investing activities in 2013 was $712 million,
as previously discussed, or $154 million greater than in 2012. Capital expenditures of $124 million in 2013
increased by $22 million or 22% from 2012, but were within our estimate of $115 to $135 million, and we esti-
mate that cash used for capital expenditures in 2014 will be approximately $140 to $160 million. Net cash flow
used in investing activities was $652 million in 2012 compared to $231 million in 2011, an increase of 182%.
22
Cash used for acquisitions of businesses and other investing activities in 2012 was $558 million, as previously
discussed, or $421 million greater than in 2011. Capital expenditures of $102 million in 2012 were relatively
consistent with 2011.
Net Cash Used in Financing Activities:
The Company used $425 million of cash in financing activities in 2013, up 12% from the $379 million used
in financing activities in 2012. Cash used in financing activities in 2012 was down $15 million or 4% from the
$394 million used in 2011. For the three years presented, net cash used in financing activities was primarily for
dividends paid to shareholders and repurchases of the Company’s common stock. The Company paid dividends
to shareholders of $326 million, $301 million and $276 million during 2013, 2012 and 2011, respectively. The
Company expects this trend of increasing dividends to continue in the foreseeable future. During 2013, 2012 and
2011, the Company repurchased $121 million, $82 million and $122 million, respectively, of the Company’s
common stock. We expect to remain active in our share repurchase program, but the amount and value of shares
repurchased will vary.
Notes and Other Borrowings
The Company maintains an $850 million unsecured revolving line of credit with a consortium of financial
institutions, which matures in September 2017 and bears interest at LIBOR plus a margin, which is based on the
Company’s leverage ratio (0.92% at December 31, 2013). The Company also has the option under this agreement
to increase its borrowing an additional $350 million, as well as an option to decrease the borrowing capacity or
terminate the Syndicated Facility with appropriate notice. At December 31, 2013, approximately $265 million
was outstanding under this line of credit. No amounts were outstanding under this line of credit at December 31,
2012. Due to the workers’ compensation and insurance reserve requirements in certain states, the Company also
had unused letters of credit of approximately $62 million and $61 million outstanding at December 31, 2013 and
2012, respectively.
At December 31, 2013, the Company had unsecured Senior Notes outstanding under financing arrangements
as follows: $250 million series D and E senior unsecured notes, 3.35% fixed, due 2016; and $250 million series F
senior unsecured notes, 2.99% fixed, due 2023. These borrowings contain covenants related to a maximum debt-
to-capitalization ratio and certain limitations on additional borrowings. At December 31, 2013, the Company was
in compliance with all such covenants. The weighted average interest rate on the Company’s total outstanding
borrowings was approximately 2.82% at December 31, 2013 and 4.01% at December 31, 2012. Total interest
expense, net of interest income, for all borrowings was $24.3 million, $19.6 million and $24.6 million in 2013,
2012 and 2011, respectively.
Contractual and Other Obligations
The following table shows the Company’s approximate obligations and commitments, including interest due
on credit facilities, to make future payments under specified contractual obligations as of December 31, 2013:
Contractual Obligations
Payment Due by Period
Total
Less Than
1 Year
1-3 Years
3-5 Years
Over
5 Years
Credit facilities . . . . . . . . . . . . . . . . . . . . .
Operating leases . . . . . . . . . . . . . . . . . . . .
$ 863,212
728,600
$280,508
191,400
(In thousands)
$281,002
261,300
$ 14,950
126,400
$286,752
149,500
Total contractual cash obligations . . . . . . .
$1,591,812
$471,908
$542,302
$141,350
$436,252
Due to the uncertainty of the timing of future cash flows associated with the Company’s unrecognized tax
benefits at December 31, 2013, the Company is unable to make reasonably reliable estimates of the period of
23
cash settlement with the respective taxing authorities. Therefore, $60 million of unrecognized tax benefits have
been excluded from the contractual obligations table above. Refer to Note 6 of the Consolidated Financial State-
ments for a discussion on income taxes.
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 con-
tractual obligations, 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. The Company does not have significant agreements for the purchase of inventory or other goods speci-
fying minimum quantities or set prices that exceed our expected requirements.
The Company guarantees the borrowings of certain independently owned automotive parts stores
(independents) and certain other affiliates in which the Company has a noncontrolling equity ownership interest
(affiliates). The Company’s maximum exposure to loss as a result of its involvement with these independents and
affiliates is generally equal to the total borrowings subject to the Company’s guarantee. To date, the Company
has had no significant losses in connection with guarantees of independents’ and affiliates’ borrowings. The fol-
lowing table shows the Company’s approximate commercial commitments as of December 31, 2013:
Other Commercial Commitments
Amount of Commitment Expiration per Period
Total Amounts
Committed
Less Than
1 Year
1-3 Years
3-5 Years
Over
5 Years
Line of credit . . . . . . . . . . . . . . . . . . . . . . . . .
Standby letters of credit . . . . . . . . . . . . . . . . .
Guaranteed borrowings of independents and
affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
— $
61,617
61,617
— $ — $—
—
—
—
(In thousands)
— $
Total commercial commitments . . . . . . . . . .
$320,320
$153,807
$165,251
$1,262
258,703
92,190
165,251
1,262
—
$—
In addition, the Company sponsors defined benefit pension plans that may obligate us to make contributions
to the plans from time to time. Contributions in 2013 were $74 million. We expect to make a $51 million cash
contribution to our qualified defined benefit plans in 2014, and contributions required for 2014 and future years
will depend on a number of unpredictable factors including the market performance of the plans’ assets and
future changes in interest rates that affect the actuarial measurement of the plans’ obligations.
Share Repurchases
In 2013, the Company repurchased approximately 1.5 million shares and the Company had remaining
authority to purchase approximately 10.7 million shares at December 31, 2013.
CRITICAL ACCOUNTING POLICIES
General
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. generally accepted account-
ing principles. 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 appa-
rent 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 deemed to be critical if it requires an accounting estimate to
24
be made based on assumptions about matters that are uncertain at the time the estimate is made and if different
estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely
to occur periodically, could materially impact the consolidated financial statements. Management believes the
following critical accounting policies reflect its most significant estimates and assumptions used in the prepara-
tion of the consolidated financial statements. For further information on the critical accounting policies, see
Note 1 of the Consolidated Financial Statements.
Inventories — Provisions for Slow Moving and Obsolescence
The Company identifies slow moving or obsolete inventories and estimates appropriate loss provisions
related thereto. Historically, these loss provisions have not been significant as the vast majority of the Company’s
inventories are not highly susceptible to obsolescence and are eligible for return under various vendor return
programs. While the Company has no reason to believe its inventory return privileges will be discontinued in the
future, its risk of loss associated with obsolete or slow moving inventories would increase if such were to occur.
Allowance for Doubtful Accounts — Methodology
The Company evaluates the collectability of accounts receivable based on a combination of factors. The
Company estimates an allowance for doubtful accounts as a percentage of net sales based on historical bad debt
experience and periodically adjusts this estimate when the Company becomes aware of a specific customer’s
inability to meet its financial obligations (e.g., bankruptcy filing) or as a result of changes in the overall aging of
accounts receivable. While the Company has a large customer base that is geographically dispersed, a general
economic downturn in any of the industry segments in which the Company operates could result in higher than
expected defaults and, therefore, the need to revise estimates for bad debts. For the years ended December 31,
2013, 2012 and 2011, the Company recorded provisions for doubtful accounts of $8.7 million, $8.0 million, and
$13.2 million, respectively.
Consideration Received from Vendors
The Company enters into agreements at the beginning of each year with many of its vendors that provide for
inventory purchase incentives. Generally, the Company earns inventory purchase incentives upon achieving
specified volume purchasing levels or other criteria. The Company accrues for the receipt of these incentives as
part of its inventory cost based on cumulative purchases of inventory to date and projected inventory purchases
through the end of the year. While management believes the Company will continue to receive consideration
from vendors in 2014 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.
Impairment of Property, Plant and Equipment and Goodwill and Other Intangible Assets
At least annually, the Company evaluates property, plant and equipment, goodwill and other intangible
assets for potential impairment indicators. The Company’s judgments regarding the existence of impairment
indicators are based on market conditions and operational performance, among other factors. Future events could
cause the Company to conclude that impairment indicators exist and that assets associated with a particular oper-
ation are impaired. Evaluating for impairment also requires the Company to estimate future operating results and
cash flows which require judgment by management. Any resulting impairment loss could have a material adverse
impact on the Company’s financial condition and results of operations.
Employee Benefit Plans
The Company’s benefit plan committees in the U.S. and Canada establish investment policies and strategies
and regularly monitor the performance of the Company’s pension plan assets. The pension plan investment strat-
egy implemented by the Company’s management is to achieve long-term objectives and invest the pension assets
in accordance with the applicable pension legislation in the U.S. and Canada, as well as fiduciary standards. The
long-term primary objectives for the pension plan funds are to provide for a reasonable amount of long-term
growth of capital without undue exposure to risk, protect the assets from erosion of purchasing power and pro-
25
vide investment results that meet or exceed the pension plan’s actuarially assumed long term rate of return. The
Company’s investment strategy with respect to pension plan assets is to generate a return in excess of the passive
portfolio benchmark (49% S&P 500 Index, 5% Russell Mid Cap Index, 8% Russell 2000 Index, 5% MSCI EAFE
Index, 5% DJ Global Moderate Index and 28% BarCap U.S. Govt/Credit).
We make several critical assumptions in determining our pension plan assets and liabilities and related pen-
sion expense. 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 compensa-
tion increases, mortality rates, retirement patterns and turnover rates.
Based on the investment policy for the pension plans, as well as an asset study that was performed based on the
Company’s asset allocations and future expectations, the Company’s expected rate of return on plan assets for meas-
uring 2014 pension expense or income is 7.85% for the plans. The asset study forecasted expected rates of return for
the approximate duration of the Company’s benefit obligations, using capital market data and historical relationships.
The discount rate is chosen as the rate at which pension obligations could be effectively settled and is based
on capital market conditions as of the measurement date. We have matched the timing and duration of the
expected cash flows of our pension obligations to a yield curve generated from a broad portfolio of high-quality
fixed income debt instruments to select our discount rate. Based upon this cash flow matching analysis, we
selected a weighted average discount rate for the plans of 5.10% at December 31, 2013.
Net periodic benefit cost for our defined benefit pension plans was $51.1 million, $26.8 million and
$32.3 million for the years ended December 31, 2013, 2012 and 2011, respectively. The increase in pension cost
in 2013 from 2012 was primarily due to the curtailment gain recorded in connection with the 2012 amendment to
the U.S. defined benefit pension plan. Such curtailment gain, net of the change in assumptions for the rate of
return on plan assets and discount rate, also accounts for the decrease in pension cost in 2012 from 2011. The
2012 amendment and related curtailment decreased benefit costs in 2012 and are discussed further below. Refer
to Note 7 of the Consolidated Financial Statements for more information regarding employee benefit plans.
In December 2012, the Company’s U.S. defined benefit plan was amended to reflect a hard freeze as of
December 31, 2013. No further benefits were provided after this date for additional credited service or earnings
and all participants became fully vested as of December 31, 2013. The Company recorded a $23.5 million non-
cash curtailment gain in December 2012 in connection with this amendment.
QUARTERLY RESULTS OF OPERATIONS
The following is a summary of the quarterly results of operations for the years ended December 31, 2013
and 2012:
2013
Net Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings Per Share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012
Net Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings Per Share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
Three Months Ended
March 31,
June 30,
Sept. 30,
Dec. 31,
(In thousands except per share data)
$3,198,802
921,748
144,389
$3,675,997
1,105,108
216,357
$3,685,243
1,100,923
173,746
$3,517,801
1,092,141
150,467
.93
.93
1.40
1.39
1.12
1.12
.98
.97
$3,181,288
919,111
146,255
$3,337,836
972,286
168,618
$3,375,778
976,036
172,943
$3,118,966
910,658
160,225
.94
.93
1.08
1.08
1.11
1.11
1.03
1.03
We recorded the quarterly earnings per share amounts as if each quarter was a discrete period. As a result,
the sum of the basic and diluted earnings per share will not necessarily total the annual basic and diluted earnings
per share.
The preparation of interim consolidated financial statements requires management to make estimates and
assumptions for the amounts reported in the interim condensed consolidated financial statements. Specifically,
the Company makes estimates and assumptions in its interim consolidated financial statements for the accrual of
bad debts, inventory adjustments (including adjustments for a majority of inventories that are valued under the
last-in, first-out (“LIFO”) method), customer sales returns, and volume incentives earned, among others. Bad
debts are accrued based on a percentage of sales, and volume incentives are estimated based upon cumulative and
projected purchasing levels. Inventory adjustments are accrued on an interim basis and adjusted in the fourth
quarter based on the annual book-to-physical inventory adjustment and LIFO valuation. The methodology and
practices used in deriving estimates and assumptions for interim reporting typically result in adjustments upon
accurate determination at year-end. The effect of these adjustments in 2013 and 2012 was not significant.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Although the Company does not face material risks related to interest rates and commodity prices, the
Company is exposed to changes in foreign currency rates with respect to foreign currency denominated operating
revenues and expenses.
Foreign Currency
The Company has translation gains or losses that result from translation of the results of operations of an
operating unit’s foreign functional currency into U.S. dollars for consolidated financial statement purposes. The
Company’s principal foreign currency exchange exposure is the Canadian dollar, the functional currency of our
Canadian operations, and the Australian dollar, the functional currency of our Australasian operations. Foreign
currency exchange exposure, particularly in regard to the Canadian and Australian dollar and, to a lesser extent,
the Mexican peso, negatively impacted our results for the year ended December 31, 2013.
During 2013 and 2012, it was estimated that a 10% shift in exchange rates between those foreign functional
currencies and the U.S. dollar would have impacted translated net sales by approximately $255 million and
$176 million, respectively.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this Item 8 is set forth in a separate section of this report. See “Index to Con-
solidated Financial Statements and Financial Statement Schedules” beginning on page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Management’s conclusion regarding the effectiveness of disclosure controls and procedures
As of the end of the period covered by this report, an evaluation was performed under the supervision and
with the participation of the Company’s management, including the Chief Executive Officer (CEO) and Chief
Financial Officer (CFO), of the effectiveness of the Company’s disclosure controls and procedures, as such term
is defined in SEC Rule 13a-15(e). Based on that evaluation, the Company’s management, including the CEO and
CFO, concluded that the Company’s 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 in the
Company’s reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
and reported within the time periods specified in the SEC’s rules and forms, and that such information is
accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate, to
allow timely decisions regarding required disclosure.
27
Management’s report on internal control over financial reporting
A report of management’s assessment of our internal control over financial reporting, as such term is
defined in SEC Rule 13a-15(f), as of December 31, 2013 is set forth in a separate section of this report. See
“Index to Consolidated Financial Statements and Financial Statement Schedules” beginning on page F-1.
The attestation report called for by Item 308(b) of Regulation S-K is incorporated herein by reference to the
“Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting”, which
is set forth in a separate section of this report. See “Index to Consolidated Financial Statements and Financial
Statement Schedules” beginning on page F-1.
Changes in internal control over financial reporting
There have been no changes in the Company’s internal control over financial reporting during the Compa-
ny’s fourth fiscal quarter ended December 31, 2013 that have materially affected, or are reasonably likely to
materially affect, the Company’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION.
None.
28
PART III.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
EXECUTIVE OFFICERS OF THE COMPANY.
Executive officers of the Company are elected by the Board of Directors and each serves at the pleasure of
the Board of Directors until his successor has been elected and qualified, or until his earlier death, resignation,
removal, retirement or disqualification. The current executive officers of the Company are:
Thomas C. Gallagher, age 66, has been Chief Executive Officer since August 2004 and Chairman of
the Board since February 2005. Mr. Gallagher served as President of the Company from 1990 until January
2012 and Chief Operating Officer of the Company from 1990 until August 2004.
Paul D. Donahue, age 57, has been a director of the Company since April 2012, was appointed Presi-
dent of the Company in January 2012, and has served as President of the Company’s U.S. Automotive Parts
Group since July 2009. Mr. Donahue served as Executive Vice President of the Company from August 2007
until his appointment as President in 2012. Previously, Mr. Donahue was President and Chief Operating
Officer of S.P. Richards Company from 2004 to 2007 and was Executive Vice President-Sales and Market-
ing in 2003, the year he joined the Company.
Carol B. Yancey, age 50, was appointed Executive Vice President, Chief Financial Officer and Corpo-
rate Secretary of the Company in March 2013. Ms. Yancey was Senior Vice President — Finance and
Corporate Secretary from 2005 until her appointment as Executive Vice President — Finance in November
2012. Previously, Ms. Yancey was named Vice President of the Company in 1999 and Corporate Secretary
in 1995.
R. Bruce Clayton, age 67, has been the Senior Vice President-Human Resources at the Company since
November 2004. Previously, Mr. Clayton held the position of Vice President-Risk Management and
Employee Services from June 2000 to November 2004.
William J. Stevens, age 65, has been the President and Chief Executive Officer of Motion Industries
since 1997. Previously, Mr. Stevens was President and Chief Operating Officer from 1994 to 1997. In 1993,
Mr. Stevens served as Executive Vice President.
Further information required by this item is set forth under the heading “Nominees for Director”, under the
heading “Corporate Governance — Code of Conduct and Ethics”, under the heading “Corporate Governance —
Board Committees — Audit Committee”, under the heading “Corporate Governance — Director Nominating
Process” and under the heading “Section 16(a) Beneficial Ownership Reporting Compliance” of the Proxy
Statement and is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
Information required by this item is set forth under the headings “Executive Compensation”, “Additional
Information Regarding Executive Compensation”, “2013 Grants of Plan-Based Awards”, “2013 Outstanding
Equity Awards at Fiscal Year-End”, “2013 Option Exercises and Stock Vested”, “2013 Pension Benefits”, “2013
Nonqualified Deferred Compensation”, “Post Termination Payments and Benefits”, “Compensation, Nominating
and Governance Committee Report”, “Compensation, Nominating and Governance Committee Interlocks and
Insider Participation” and “Compensation of Directors” of the Proxy Statement and is incorporated herein by
reference.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS.
Certain information required by this item is set forth below. Additional information required by this item is
set forth under the headings “Security Ownership of Certain Beneficial Owners” and “Security Ownership of
Management” of the Proxy Statement and is incorporated herein by reference.
29
Equity Compensation Plan Information
The following table gives information as of December 31, 2013 about the common stock that may be issued
under all of the Company’s existing equity compensation plans:
Plan Category
Equity Compensation Plans Approved by
Shareholders: . . . . . . . . . . . . . . . . . . . . . . . .
Equity Compensation Plans Not Approved by
Shareholders: . . . . . . . . . . . . . . . . . . . . . . . .
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,654,623
(a)
Number of Securities to
be Issued upon Exercise
of Outstanding Options,
Warrants and Rights(1)
(b)
Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights
(c)
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities
Reflected in Column (a))
359,200(2)
4,220,518(3)
74,905(4)
$43.82
$56.96
n/a
—
—
2,743,421(5)
925,095
3,668,516
(1) Reflects the maximum number of shares issuable pursuant to the exercise or conversion of stock options,
stock appreciation rights, restricted stock units and common stock equivalents. The actual number of shares
issued upon exercise of stock appreciation rights is calculated based on the excess of fair market value of our
common stock on date of exercise and the grant price of the stock appreciation rights.
(2) Genuine Parts Company 1999 Long-Term Incentive Plan, as amended
(3) Genuine Parts Company 2006 Long-Term Incentive Plan
(4) Genuine Parts Company Director’s Deferred Compensation Plan, as amended
(5) All of these shares are available for issuance pursuant to grants of full-value stock awards.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
Information required by this item is set forth under the headings “Corporate Governance — Independent
Directors” and “Transactions with Related Persons” of the Proxy Statement and is incorporated herein by refer-
ence.
ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES.
Information required by this item is set forth under the heading “Proposal 3. Ratification of Selection of
Independent Auditors” of the Proxy Statement and is incorporated herein by reference.
30
PART IV.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Documents filed as part of this report
(1) Financial Statements
The following consolidated financial statements of Genuine Parts Company and subsidiaries are included in
this Annual Report on Form 10-K. See, also, the Index to Consolidated Financial Statements on Page F-1.
Report of independent registered public accounting firm on internal control over financial reporting
Report of independent registered public accounting firm on the financial statements
Consolidated balance sheets — December 31, 2013 and 2012
Consolidated statements of income and comprehensive income — Years ended December 31, 2013, 2012
and 2011
Consolidated statements of equity — Years ended December 31, 2013, 2012 and 2011
Consolidated statements of cash flows — Years ended December 31, 2013, 2012 and 2011
Notes to consolidated financial statements — December 31, 2013
(2) Financial Statement Schedules
The following consolidated financial statement schedule of Genuine Parts Company and subsidiaries, set
forth immediately following the consolidated financials statements of Genuine Parts Company and Subsidiaries,
is filed pursuant to Item 15(c):
Schedule II — Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting regulations of the Securities
and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have
been omitted.
(3) Exhibits.
The following exhibits are filed as part of or incorporated by reference in this report. Exhibits that are
incorporated by reference to documents filed previously by the Company under the Securities Exchange Act of
1934, as amended, are filed with the Securities and Exchange Commission under File No. 1-5690. The Company
will furnish a copy of any exhibit upon request to the Company’s Corporate Secretary.
Exhibit 3.1
Exhibit 3.2
Exhibit 4.2
Amended and Restated Articles of Incorporation of the Company, as amended April 23, 2007.
(Incorporated herein by reference from the Company’s Current Report on Form 8-K, dated
April 23, 2007.)
By-Laws of the Company, as amended and restated November 18, 2013. (Incorporated herein by
reference from the Company’s Current Report on Form 8-K, dated November 18, 2013.)
Specimen Common Stock Certificate. (Incorporated herein by reference from the Company’s
Registration Statement on Form S-1, Registration No. 33-63874.)
Instruments with respect to long-term debt where the total amount of securities authorized there under does
not exceed 10% of the total assets of the Registrant and its subsidiaries on a consolidated basis have not been
filed. The Registrant agrees to furnish to the Commission a copy of each such instrument upon request.
Exhibit 10.1*
The Genuine Parts Company Tax-Deferred Savings Plan, effective January 1, 1993.
(Incorporated herein by reference from the Company’s Annual Report on Form 10-K, dated
March 3, 1995.)
31
Exhibit 10.2*
Exhibit 10.3*
Exhibit 10.4*
Exhibit 10.5*
Exhibit 10.6*
Exhibit 10.7*
Exhibit 10.8*
Exhibit 10.9*
Exhibit 10.10*
Exhibit 10.11*
Exhibit 10.12*
Exhibit 10.13*
Exhibit 10.14*
Exhibit 10.15*
Exhibit 10.16*
Exhibit 10.17*
Amendment No. 1 to the Genuine Parts Company Tax-Deferred Savings Plan, dated June 1,
1996, effective June 1, 1996. (Incorporated herein by reference from the Company’s Annual
Report on Form 10-K, dated March 7, 2005.)
Genuine Parts Company Death Benefit Plan, effective July 15, 1997. (Incorporated herein by
reference from the Company’s Annual Report on Form 10-K, dated March 10, 1998.)
Amendment No. 2 to the Genuine Parts Company Tax-Deferred Savings Plan, dated April 19,
1999, effective April 19, 1999. (Incorporated herein by reference from the Company’s Annual
Report on Form10-K, dated March 10, 2000.)
The Genuine Parts Company Original Deferred Compensation Plan, as amended and restated
as of August 19, 1996. (Incorporated herein by reference from the Company’s Annual Report
on Form 10-K, dated March 8, 2004.)
Amendment to the Genuine Parts Company Original Deferred Compensation Plan, dated April
19, 1999, effective April 19, 1999. (Incorporated herein by reference from the Company’s
Annual Report on Form 10-K, dated March 10, 2000.)
Amendment No. 3 to the Genuine Parts Company Tax-Deferred Savings Plan, dated
November 28, 2001, effective July 1, 2001. (Incorporated herein by reference from the
Company’s Annual Report on Form 10-K, dated March 7, 2002.)
Genuine Parts Company 1999 Long-Term Incentive Plan, as amended and restated as of
November 19, 2001. (Incorporated herein by reference from the Company’s Annual Report on
Form 10-K, dated March 21, 2003.)
Amendment No. 4 to the Genuine Parts Company Tax-Deferred Savings Plan, dated June 5,
2003, effective June 5, 2003. (Incorporated herein by reference from the Company’s Annual
Report on Form 10-K, dated March 8, 2004.)
Genuine Parts Company Directors’ Deferred Compensation Plan, as amended and restated
effective January 1, 2003, and executed November 11, 2003. (Incorporated herein by reference
from the Company’s Annual Report on Form 10-K, dated March 8, 2004.)
Amendment No. 5 to the Genuine Parts Company Tax-Deferred Savings Plan, dated December
28, 2005, effective January 1, 2006. (Incorporated herein by reference from the Company’s
Annual Report on Form 10-K, dated March 3, 2006.)
Amendment No. 2 to the Genuine Parts Company Death Benefit Plan, dated November 9,
2005, effective April 1, 2005. (Incorporated herein by reference from the Company’s Annual
Report on Form 10-K, dated March 3, 2006.)
Genuine Parts Company 2006 Long-Term Incentive Plan, effective April 17, 2006.
(Incorporated herein by reference from the Company’s Current Report on Form 8-K, dated
April 18, 2006.)
Amendment to the Genuine Parts Company 2006 Long-Term Incentive Plan, dated November
20, 2006, effective November 20, 2006. (Incorporated herein by reference from the Compa-
ny’s Annual Report on Form 10-K, dated February 28, 2007.)
Amendment No. 1 to the Genuine Parts Company Directors’ Deferred Compensation Plan,
dated November 19, 2007, effective January 1, 2008. (Incorporated herein by reference from
the Company’s Annual Report on Form 10-K, dated February 29, 2008.)
Amendment No. 6 to the Genuine Parts Company Tax-Deferred Savings Plan, dated
November 28, 2007, effective January 1, 2008. (Incorporated herein by reference from the
Company’s Annual Report on Form 10-K, dated February 29, 2008.)
Amendment No. 2 to the Genuine Parts Company 2006 Long-Term Incentive Plan, dated
November 19, 2007, effective November 19, 2007. (Incorporated herein by reference from the
Company’s Annual Report on Form 10-K, dated February 29, 2008.)
32
Exhibit 10.18*
Genuine Parts Company Performance Restricted Stock Unit Award Agreement. (Incorporated
herein by reference from the Company’s Annual Report on Form 10-K, dated February 29,
2008.)
Exhibit 10.19*
Genuine Parts Company Restricted Stock Unit Award Agreement. (Incorporated herein by
reference from the Company’s Annual Report on Form 10-K, dated February 29, 2008.)
Exhibit 10.20*
Form of Amended and Restated Change in Control Agreement. (Incorporated herein by refer-
ence from the Company’s Annual Report on Form 10-K, dated February 29, 2008.)
Exhibit 10.21*
Exhibit 10.22*
Exhibit 10.23*
Exhibit 10.24*
Genuine Parts Company Supplemental Retirement Plan, as amended and restated as of January
1, 2009. (Incorporated herein by reference from the Company’s Annual Report on Form 10-K,
dated February 27, 2009.)
Genuine Parts Company 2009 Annual Incentive Bonus Plan, dated March 31, 2009, effective
January 1, 2009. (Incorporated herein by reference from the Company’s Quarterly Report on
Form 10-Q dated May 7, 2009).
Amendment No. 1 to the Genuine Parts Company Supplemental Retirement Plan, as amended
and restated as of January 1, 2009, dated August 16, 2010, effective August 16, 2010.
(Incorporated herein by reference from the Company’s Annual Report on Form 10-K, dated
February 25, 2011.)
Amendment No. 2 to the Genuine Parts Company Supplemental Retirement Plan, as amended
and restated as of January 1, 2009, dated November 16, 2010, effective January 1, 2011.
(Incorporated herein by reference from the Company’s Annual Report on Form 10-K, dated
February 25, 2011.)
Exhibit 10.25*
Amendment No. 7 to the Genuine Parts Company Tax-Deferred Savings Plan, dated
November 16, 2010, effective January 1, 2011. (Incorporated herein by reference from the
Company’s Annual Report on Form 10-K, dated February 25, 2011.)
Exhibit 10.26*
Description of Director Compensation. (Incorporated herein by reference from the Company’s
Quarterly Report on Form 10-Q, dated August 4, 2011.)
Exhibit 10.27*
Exhibit 10.28*
Exhibit 10.29*
Amendment No. 2 to the Genuine Parts Company Director’s Deferred Compensation Plan,
dated December 7, 2012, effective December 7, 2012. (Incorporated herein by reference from
the Company’s Annual Report on Form 10-K, dated February 26, 2013.)
Amendment No. 8 to the Genuine Parts Company Tax-Deferred Savings Plan, dated December
7, 2012, effective December 7, 2012. (Incorporated herein by reference from the Company’s
Annual Report on Form 10-K, dated February 26, 2013.)
Amendment No. 3 to the Genuine Parts Company Supplemental Retirement Plan, as amended
and restated as of January 1, 2009, dated December 7, 2012, effective December 31, 2013.
(Incorporated herein by reference from the Company’s Annual Report on Form 10-K, dated
February 26, 2013.)
Exhibit 10.30*
to the Amended and Restated Change in Control Agreement.
Form of Amendment
(Incorporated herein by reference from the Company’s Annual Report on Form 10-K, dated
February 26, 2013.)
Exhibit 10.31*
Genuine Parts Company Stock Appreciation Rights Agreement. (Incorporated herein by refer-
ence from the Company’s Annual Report on Form 10-K, dated February 26, 2013.)
* Indicates management contracts and compensatory plans and arrangements.
Exhibit 21
Exhibit 23
Exhibit 31.1
Exhibit 31.2
Subsidiaries of the Company.
Consent of Independent Registered Public Accounting Firm.
Certification signed by Chief Executive Officer pursuant to SEC Rule 13a-14(a).
Certification signed by Chief Financial Officer pursuant to SEC Rule 13a-14(a).
33
Exhibit 32.1
Exhibit 32.2
Exhibit 101
Statement of Chief Executive Officer of Genuine Parts Company pursuant to 18 U.S.C. Section
1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
Statement of Chief Financial Officer of Genuine Parts Company pursuant to 18 U.S.C. Section
1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
Interactive data files pursuant to Rule 405 of Regulation S-T:
(i) the Consolidated Balance Sheets as of December 31, 2013 and 2012; (ii) the Consolidated
Statements of Income and Comprehensive Income for the Years ended December 31, 2013,
2012 and 2011; (iii) the Consolidated Statements of Equity for the Years ended December 31,
2013, 2012 and 2011; (iv) the Consolidated Statements of Cash Flows for Years ended
December 31, 2013, 2012 and 2011; (v) the Notes to the Consolidated Financial Statements,
tagged as blocks of text; and (vi) Financial Statement Schedule II — Valuation and Qualifying
Accounts.
(b) Exhibits
See the response to Item 15(a)(3) above.
(c) Financial Statement Schedules
See the response to Item 15(a)(2) above.
34
Pursuant to the requirements of Section 13 or 15(d) 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.
SIGNATURES.
GENUINE PARTS COMPANY
/s/ Thomas C. Gallagher
Thomas C. Gallagher
Chairman and Chief Executive Officer
2/27/14
(Date)
/s/ Carol B. Yancey
Carol B. Yancey
Executive Vice President and Chief Financial and
Accounting Officer
2/27/14
(Date)
35
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by
the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
/s/ Dr. Mary B. Bullock
Dr. Mary B. Bullock
Director
Jean Douville
/s/
Jean Douville
Director
/s/ George C. Guynn
George C. Guynn
Director
John D. Johns
/s/
John D. Johns
Director
/s/ Robert C. Loudermilk, Jr.
Robert C. Loudermilk, Jr.
Director
Jerry W. Nix
/s/
Jerry W. Nix
Director
2/17/14
(Date)
2/17/14
(Date)
2/17/14
(Date)
2/17/14
(Date)
2/17/14
(Date)
2/17/14
(Date)
/s/ Paul D. Donahue
Paul D. Donahue
Director
/s/ Thomas C. Gallagher
Thomas C. Gallagher
Director
Chairman and Chief Executive Officer
(Principal Executive Officer)
John R. Holder
/s/
John R. Holder
Director
/s/ Michael M. E. Johns
Michael M. E. Johns
Director
/s/ Wendy B. Needham
Wendy B. Needham
Director
/s/ Gary W. Rollins
Gary W. Rollins
Director
2/17/14
(Date)
2/17/14
(Date)
2/17/14
(Date)
2/17/14
(Date)
2/17/14
(Date)
2/17/14
(Date)
36
ANNUAL REPORT ON FORM 10-K
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULE
Report of Management on Internal Control Over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting . .
Report of Independent Registered Public Accounting Firm on Financial Statements and Schedule . . . . . . .
Consolidated Balance Sheets as of December 31, 2013 and 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2013,
2012 and 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Equity for the Years Ended December 31, 2013, 2012 and 2011 . . . . . . . . . . . .
Consolidated Statements of Cash Flows for the Years Ended December 31, 2013, 2012 and 2011 . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statement Schedule II — Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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F-1
Genuine Parts Company
Management’s Responsibility for the Financial Statements
Report of Management
We have prepared the accompanying consolidated financial statements and related information included herein
for the years ended December 31, 2013, 2012 and 2011. The opinion of Ernst & Young LLP, the Company’s
independent registered public accounting firm, on those consolidated financial statements is included herein. The
primary responsibility for the integrity of the financial information included in this annual report rests with
management. Such information was prepared in accordance with generally accepted accounting principles appro-
priate in the circumstances based on our best estimates and judgments and giving due consideration to materiality.
Management’s Report on Internal Control over Financial Reporting
The management of Genuine Parts Company and its subsidiaries (the “Company”) is responsible for estab-
lishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the
Securities Exchange Act of 1934.
The Company’s internal control system was designed to provide reasonable assurance to the Company’s
management and to the board of directors regarding the preparation and fair presentation of the Company’s pub-
lished consolidated financial statements. The Company’s internal control over financial reporting includes those
policies and procedures that:
i. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the trans-
actions and dispositions of the assets of the Company;
ii. provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with authorizations of management and
directors of the Company; and
iii. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the Company’s assets that could have a material effect on the financial statements.
All internal control systems, no matter how well designed, have inherent limitations and may not prevent or
detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable
assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions or that the degree of compliance with the policies or procedures may deteriorate. The Company’s
management did not include the internal controls of GPC Asia Pacific, which was acquired on April 1, 2013, and
is included in the Company’s 2013 consolidated balance sheet.
The Company’s management, including our Chief Executive Officer and Chief Financial Officer, assessed
the effectiveness of the Company’s internal control over financial reporting as of December 31, 2013.
In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in “Internal Control-Integrated Framework.” Based on this assessment, management
concluded that, as of December 31, 2013, the Company’s internal control over financial reporting was effective.
Ernst & Young LLP has issued an audit report on the Company’s operating effectiveness of internal control
over financial reporting as of December 31, 2013. This report appears on page F-3.
Audit Committee Responsibility
The Audit Committee of Genuine Parts Company’s Board of Directors is responsible for reviewing and
monitoring the Company’s financial reports and accounting practices to ascertain that they are within acceptable
limits of sound practice in such matters. The membership of the Committee consists of non-employee Directors.
At periodic meetings, the Audit Committee discusses audit and financial reporting matters and the internal audit
function with representatives of financial management and with representatives from Ernst & Young LLP.
/s/ Carol B. Yancey
CAROL B. YANCEY
Executive Vice President and Chief Financial Officer
February 27, 2014
F-2
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting
The Board of Directors and Shareholders of Genuine Parts Company and Subsidiaries
We have audited Genuine Parts Company and Subsidiaries’ internal control over financial reporting as of
December 31, 2013, based on criteria established in Internal Control — Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (1992 Framework) (the COSO criteria).
Genuine Parts Company and Subsidiaries’ management is responsible for maintaining effective internal control
over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting
included in the accompanying Management’s Report on Internal Control Over Financial Reporting section of the
accompanying Report of Management. Our responsibility is to express an opinion on the company’s internal
control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether effective internal control over financial reporting was maintained in all material respects. Our
audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the compa-
ny’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect mis-
statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that con-
trols may become inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting,
management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did
not include the internal controls of GPC Asia Pacific, which is included in the 2013 consolidated financial state-
ments of Genuine Parts Company and constituted approximately 16% of total assets and approximately 23% of
net assets, as of December 31, 2013 and constituted 6% of revenues and less than 1% of net income for the year
then ended. Our audit of internal control over financial reporting of Genuine Parts Company also did not include
an evaluation of the internal control over the financial reporting of this entity.
In our opinion, Genuine Parts Company and Subsidiaries maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2013, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the consolidated balance sheets of Genuine Parts Company and Subsidiaries as of December 31,
2013 and 2012, and the related consolidated statements of income and comprehensive income, equity, and cash
flows for each of the three years in the period ended December 31, 2013 of Genuine Parts Company and Sub-
sidiaries and our report dated February 27, 2014 expressed an unqualified opinion thereon.
Atlanta, Georgia
February 27, 2014
/s/ Ernst & Young LLP
F-3
Report of Independent Registered Public Accounting Firm on the Financial Statements
The Board of Directors and Shareholders of Genuine Parts Company and Subsidiaries
We have audited the accompanying consolidated balance sheets of Genuine Parts Company and Subsidiaries
as of December 31, 2013 and 2012, and the related consolidated statements of income and comprehensive
income, equity, and cash flows for each of the three years in the period ended December 31, 2013. Our audits
also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and
schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on
these financial statements and schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assess-
ing the accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the con-
solidated financial position of Genuine Parts Company and Subsidiaries at December 31, 2013 and 2012, and the
consolidated results of their operations and their cash flows for each of the three years in the period ended
December 31, 2013, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the
related financial statement schedule, when considered in relation to the basic financial statements taken as a
whole, presents fairly in all material respects the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), Genuine Parts Company and Subsidiaries’ internal control over financial reporting as of
December 31, 2013, based on criteria established in Internal Control-Integrated Framework issued by the Com-
mittee of Sponsoring Organizations of the Treadway Commission (1992 Framework) and our report dated
February 27, 2014 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
Atlanta, Georgia
February 27, 2014
F-4
Genuine Parts Company and Subsidiaries
Consolidated Balance Sheets
December 31
2013
2012
(In Thousands, Except Share
Data and per Share Amounts)
Assets
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merchandise inventories, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangible assets, less accumulated amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant, and equipment:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings, less accumulated depreciation (2013 — $251,541; 2012 — $237,504)
. . . . . . . . .
Machinery and equipment, less accumulated depreciation (2013 — $555,895;
2012 — $522,136) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net property, plant, and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 196,893
1,664,819
2,946,021
413,758
5,221,491
789,971
499,385
97,555
401,834
87,658
281,408
300,995
670,061
$ 403,095
1,490,028
2,602,560
324,448
4,820,131
298,040
199,799
279,463
643,263
88,710
266,694
210,961
566,365
$7,680,297
$6,807,061
Liabilities and equity
Current liabilities:
Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension and other post-retirement benefit liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 153,773,098 in 2013 and 154,841,438 shares in 2012 . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total parent equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,269,671
264,658
145,052
411,680
82,746
9,237
3,183,044
500,000
140,171
83,316
414,998
$1,681,900
250,000
115,348
359,395
76,641
4,354
2,487,638
250,000
572,988
—
488,256
—
—
153,773
14,935
(397,655)
3,578,021
3,349,074
9,694
154,841
—
(501,492)
3,344,538
2,997,887
10,292
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,358,768
3,008,179
$7,680,297
$6,807,061
See accompanying notes.
F-5
Genuine Parts Company and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
Year Ended December 31
2013
2012
2011
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses:
(In Thousands, Except per Share Amounts)
$13,013,868
9,235,777
$12,458,877
8,852,837
$14,077,843
9,857,923
4,219,920
3,778,091
3,606,040
Selling, administrative, and other expenses . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,019,036
133,957
8,691
2,648,430
98,383
8,047
2,594,372
88,936
13,248
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-operating expenses (income):
3,161,684
2,754,860
2,696,556
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26,971
(13,039)
20,482
(16,183)
Total non-operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic net income per common share . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted net income per common share . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average common shares outstanding . . . . . . . . . . . . . . . . .
Dilutive effect of stock options and nonvested restricted stock
13,932
1,044,304
359,345
684,959
4.43
4.40
$
$
$
4,299
1,018,932
370,891
648,041
4.17
4.14
$
$
$
$
$
$
154,636
155,413
156,656
awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,078
1,007
1,004
Weighted average common shares outstanding — assuming
dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
155,714
156,420
157,660
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . .
Pension and postretirement benefit adjustments, net of income
taxes of 2013 — ($175,297) , 2012 — $26,465, and
2011 — $98,973 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss), net of tax . . . . . . . . . . . . . . . . . .
$
684,959
$
648,041
$
565,116
(168,703)
23,846
(22,017)
272,540
103,837
(43,300)
(161,669)
(19,454)
(183,686)
Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
788,796
$
628,587
$
381,430
See accompanying notes.
F-6
27,036
(8,358)
18,678
890,806
325,690
565,116
3.61
3.58
Genuine Parts Company and Subsidiaries
Consolidated Statements of Equity
(In Thousands, Except Share and per Share Amounts)
Common Stock
Shares
Amount
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
(Loss) Income
Retained
Earnings
Total
Parent
Equity
Non-
controlling
Interests in
Subsidiaries
Total
Equity
Balance at January 1, 2011 . . . . . . . . . . . 157,636,261 $157,636 $
— $(298,352)
—
—
$2,895,307 $2,754,591
565,116
565,116
$ 8,895
—
$2,763,486
565,116
Net income . . . . . . . . . . . . . . . . . . . . .
Other comprehensive loss, net of
tax . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends declared, $1.80 per
share . . . . . . . . . . . . . . . . . . . . . . . .
Stock options exercised, including tax
benefit of $5,356 . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . .
Purchase of stock . . . . . . . . . . . . . . . .
Noncontrolling interest activities . . . .
—
—
—
—
—
—
443,170
—
(2,428,315)
—
443
—
(2,428)
—
3,864
7,547
(11,411)
—
Balance at December 31, 2011 . . . . . . . . 155,651,116
—
Net income . . . . . . . . . . . . . . . . . . . . .
Other comprehensive loss, net of
155,651
—
tax . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends declared, $1.98 per
share . . . . . . . . . . . . . . . . . . . . . . . .
Stock options exercised, including tax
benefit of $11,018 . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . .
Purchase of stock . . . . . . . . . . . . . . . .
Noncontrolling interest activities . . . .
—
—
—
—
551,779
—
(1,361,457)
—
552
3,423
— 10,747
(14,170)
—
(1,362)
—
Balance at December 31, 2012 . . . . . . . . 154,841,438
—
Net income . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income, net of
154,841
—
tax . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends declared, $2.15 per
share . . . . . . . . . . . . . . . . . . . . . . . .
Stock options exercised, including tax
benefit of $12,905 . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . .
Purchase of stock . . . . . . . . . . . . . . . .
Noncontrolling interest activities . . . .
—
—
—
—
449,986
—
(1,518,326)
—
450
2,287
— 12,648
—
—
(1,518)
—
—
—
—
—
—
—
—
—
—
—
(183,686)
— (183,686)
—
—
—
—
—
(281,790)
(281,790)
—
—
(108,239)
—
4,307
7,547
(122,078)
—
—
—
—
—
—
689
(183,686)
(281,790)
4,307
7,547
(122,078)
689
(482,038)
—
3,070,394
648,041
2,744,007
648,041
9,584
—
2,753,591
648,041
(19,454)
— (19,454)
—
—
—
—
—
(307,603)
(307,603)
—
—
(66,294)
—
3,975
10,747
(81,826)
—
—
—
—
—
—
708
(19,454)
(307,603)
3,975
10,747
(81,826)
708
(501,492)
—
3,344,538
684,959
2,997,887
684,959
10,292
—
3,008,179
684,959
103,837
— 103,837
—
—
—
—
—
(332,322)
(332,322)
—
—
(119,154)
—
2,737
12,648
(120,672)
—
—
—
—
—
—
(598)
103,837
(332,322)
2,737
12,648
(120,672)
(598)
Balance at December 31, 2013 . . . . . . . . 153,773,098 $153,773 $ 14,935
$(397,655)
$3,578,021 $3,349,074
$ 9,694
$3,358,768
See accompanying notes.
F-7
Genuine Parts Company and Subsidiaries
Consolidated Statements of Cash Flows
Operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefits from share-based compensation . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .
Gain on sale of property, plant, and equipment
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on GPC Asia Pacific equity investment . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities:
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts receivable, net
Merchandise inventories, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term assets and liabilities . . . . . . . . . . . . . . . . . . . . . . .
Other long-term assets and liabilites . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . .
Investing activities
Purchases of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of property, plant, and equipment
. . . . . . . . . . . . . . . .
Acquisition of businesses and other investing activities . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing activities
Proceeds from debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments on debt
Stock options exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefits from share-based compensation . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rate changes on cash . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net decrease in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . .
Year Ended December 31
2013
2012
2011
(In Thousands)
$
684,959
$ 648,041
$ 565,116
133,957
(12,905)
(4,729)
(21,622)
12,648
(59,000)
(116,080)
(79,253)
473,424
(14,418)
59,750
98,383
(11,018)
(3,943)
14,751
10,747
—
13,366
(25,845)
220,694
(86,294)
27,556
88,936
(5,356)
(3,012)
(2,337)
7,547
—
(85,011)
(19,624)
85,766
(52,166)
45,068
371,772
258,397
59,811
1,056,731
906,438
624,927
(124,063)
10,657
(712,173)
(101,987)
8,504
(558,384)
(103,469)
8,908
(136,936)
(825,579)
(651,867)
(231,497)
3,019,931
(2,995,335)
(15,728)
12,905
(326,217)
(120,673)
(425,117)
(12,237)
(206,202)
403,095
750,000
(750,000)
(7,043)
11,018
(300,983)
(81,826)
(378,834)
2,304
(121,959)
525,054
250,000
(250,000)
(1,049)
5,356
(276,369)
(122,078)
(394,140)
(4,204)
(4,914)
529,968
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . .
$
196,893
$ 403,095
$ 525,054
Supplemental disclosures of cash flow information
Cash paid during the year for:
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
342,372
$ 381,407
$ 317,748
27,221
$ 20,416
$ 27,640
See accompanying notes.
F-8
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
Business
Genuine Parts Company and all of its majority-owned subsidiaries (the Company) is a distributor of automo-
tive replacement parts, industrial replacement parts, office products, and electrical/electronic materials. The
Company serves a diverse customer base through approximately 2,600 locations in North America and Austral-
asia and, therefore, has limited exposure from credit losses to any particular customer, region, or industry seg-
ment. The Company performs periodic credit evaluations of its customers’ financial condition and generally does
not require collateral. The Company has evaluated subsequent events through the date the financial statements
were issued.
Principles of Consolidation
The consolidated financial statements include all of the accounts of the Company. The net income attribut-
able to noncontrolling interests is not material to the Company’s consolidated net income. Intercompany
accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of the consolidated financial statements, in conformity with U.S. generally accepted
accounting principles, requires management to make estimates and assumptions that affect the amounts reported
in the consolidated financial statements and accompanying notes. Actual results may differ from those estimates
and the differences could be material.
Revenue Recognition
The Company records revenue when the following criteria are met: persuasive evidence of an arrangement
exists, delivery has occurred, the Company’s price to the customer is fixed and determinable and collectability is
reasonably assured. Delivery is not considered to have occurred until the customer assumes the risks and rewards
of ownership.
Foreign Currency Translation
The consolidated balance sheets and statements of income and comprehensive income of the Company’s
foreign subsidiaries have been translated into U.S. dollars at the current and average exchange rates, respectively.
The foreign currency translation adjustment is included as a component of accumulated other comprehensive
loss.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less when
purchased to be cash equivalents.
Trade Accounts Receivable and the Allowance for Doubtful Accounts
The Company evaluates the collectability of trade accounts receivable based on a combination of factors.
The Company estimates an allowance for doubtful accounts as a percentage of net sales based on historical bad
debt experience and periodically adjusts this estimate when the Company becomes aware of a specific customer’s
inability to meet its financial obligations (e.g., bankruptcy filing) or as a result of changes in the overall aging of
accounts receivable. While the Company has a large customer base that is geographically dispersed, a general
economic downturn in any of the industry segments in which the Company operates could result in higher than
F-9
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
expected defaults and, therefore, the need to revise estimates for bad debts. For the years ended December 31,
2013, 2012, and 2011, the Company recorded provisions for doubtful accounts of approximately $8,691,000,
$8,047,000, and $13,248,000, respectively. At December 31, 2013 and 2012, the allowance for doubtful accounts
was approximately $14,423,000 and $19,180,000, respectively.
Merchandise Inventories, Including Consideration Received From Vendors
Merchandise inventories are valued at the lower of cost or market. Cost is determined by the last-in, first-out
(LIFO) method for a majority of automotive parts, electrical/electronic materials, and industrial parts, and by the
first-in, first-out (FIFO) method for office products and certain other inventories. If the FIFO method had been
used for all inventories, cost would have been approximately $432,150,000 and $428,260,000 higher than
reported at December 31, 2013 and 2012, respectively. During 2013, 2012, and 2011 reductions in inventory
levels in automotive parts inventories (2013 and 2012), industrial parts inventories (2013, 2012, and 2011), and
electrical parts inventories (2012 and 2011) resulted in liquidations of LIFO inventory layers. The effect of the
LIFO liquidation in 2013, 2012, and 2011 was to reduce cost of goods sold by approximately $5,000,000,
$6,000,000, and $16,000,000, respectively.
The Company identifies slow moving or obsolete inventories and estimates appropriate provisions related
thereto. Historically, these losses have not been significant as the vast majority of the Company’s inventories are
not highly susceptible to obsolescence and are eligible for return under various vendor return programs. While
the Company has no reason to believe its inventory return privileges will be discontinued in the future, its risk of
loss associated with obsolete or slow moving inventories would increase if such were to occur.
The Company enters into agreements at the beginning of each year with many of its vendors that provide for
inventory purchase incentives. Generally, the Company earns inventory purchase incentives upon achieving
specified volume purchasing levels or other criteria. The Company accrues for the receipt of these incentives as
part of its inventory cost based on cumulative purchases of inventory to date and projected inventory purchases
through the end of the year. While management believes the Company will continue to receive consideration
from vendors in 2014 and beyond, there can be no assurance that vendors will continue to provide comparable
amounts of incentives in the future.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist primarily of prepaid expenses and amounts due from
vendors.
Goodwill
The Company reviews its goodwill annually in the fourth quarter, or sooner if circumstances indicate that
the carrying amount may exceed fair value. The present value of future cash flows approach was used to
determine any potential impairment. The Company determined that goodwill was not impaired and, therefore, no
impairments were recognized for the years ended December 31, 2013, 2012, or 2011. If an impairment occurs at
a future date, it may have the effect of increasing the volatility of the Company’s earnings.
F-10
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
Other Assets
Other assets are comprised of the following:
Retirement benefit assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred compensation benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash surrender value of life insurance policies . . . . . . . . . . . . . . . . . . . . . . . . .
Customer sales returns inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term prepayments and receivables . . . . . . . . . . . . . . . . . . . . . . . . .
December 31
2013
2012
(In Thousands)
$ 41,919
24,939
28,760
95,094
55,200
155,922
$
4,021
20,642
206,487
78,860
134,367
198,886
Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$401,834
$643,263
Property, Plant, and Equipment
Property, plant, and equipment are stated at cost. Depreciation and amortization is primarily determined on a
straight-line basis over the following estimated useful life of each asset: buildings and improvements, 10 to 40
years; machinery and equipment, 5 to 15 years.
Long-Lived Assets Other Than Goodwill
The Company assesses its long-lived assets other than goodwill for impairment whenever facts and circum-
stances indicate that the carrying amount may not be fully recoverable. To analyze recoverability, the Company
projects undiscounted net future cash flows over the remaining life of such assets. If these projected cash flows
are less than the carrying amount, an impairment would be recognized, resulting in a write-down of assets with a
corresponding charge to earnings. Impairment losses, if any, are measured based upon the difference between the
carrying amount and the fair value of the assets.
Other Long-Term Liabilities
Other long-term liabilities are comprised of the following:
Post-employment and other benefit/retirement liabilities . . . . . . . . . . . . . . . . .
Insurance liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31
2013
2012
(In Thousands)
$ 55,150
47,930
27,815
59,107
65,826
159,170
$ 35,273
45,865
33,748
57,510
161,936
153,924
Total other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$414,998
$488,256
Self-Insurance
The Company is self-insured for the majority of group health insurance costs. A reserve for claims incurred
but not reported is developed by analyzing historical claims data provided by the Company’s claims admin-
F-11
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
istrators. These reserves are included in accrued expenses in the accompanying consolidated balance sheets as the
expenses are expected to be paid within one year.
Long-term insurance liabilities consist primarily of reserves for the workers’ compensation program. In
addition, the Company carries various large risk deductible workers’ compensation policies for the majority of
workers’ compensation liabilities. The Company records the workers’ compensation reserves based on an analy-
sis performed by an independent actuary. The analysis calculates development factors, which are applied to total
reserves as provided by the various insurance companies who underwrite the program. While the Company
believes that the assumptions used to calculate these liabilities are appropriate, significant differences in actual
experience or significant changes in these assumptions may materially affect workers’ compensation costs.
Accumulated Other Comprehensive (Loss) Income
Accumulated other comprehensive loss is comprised of the following:
December 31
2013
2012
(In Thousands)
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrecognized net actuarial loss, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrecognized prior service credit, net of tax . . . . . . . . . . . . . . . . . . . . . . . . .
$ (37,619)
(366,454)
6,418
$ 131,084
(644,244)
11,668
Total accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . .
$(397,655)
$(501,492)
The following table presents the changes in accumulated other comprehensive (loss) income by component
for the year ended December 31, 2013:
Beginning balance, January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) before reclassifications,
net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified from accumulated other
Changes in Accumulated Other Comprehensive
(Loss) Income by Component
Pension
Benefits
Other
Post-
Retirement
Benefits
Foreign
Currency
Translation
(in Thousands)
Total
$(629,907)
$(2,669)
$ 131,084
$(501,492)
223,991
1,629
(168,703)
56,917
comprehensive (loss) income, net of tax . . . . . . . . . . . . . .
46,837
83
—
46,920
Net current period other comprehensive income (loss) . . . . .
270,828
1,712
(168,703)
103,837
Ending balance, December 31 . . . . . . . . . . . . . . . . . . . . . . . . . .
$(359,079)
$ (957)
$ (37,619) $(397,655)
The accumulated other comprehensive loss components related to the pension benefits are included in the
computation of net periodic benefit cost in the employee benefit plans footnote.
Fair Value of Financial Instruments
The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, trade
accounts receivable and trade accounts payable approximate their respective fair values based on the short-term
nature of these instruments. At December 31, 2013 and 2012, the fair value of fixed rate debt was approximately
$496,000,000 and $516,000,000, respectively. The fair value of fixed rate debt is designated as Level 2 in the fair
value hierarchy (i.e., significant observable inputs) and is based primarily on the discounted value of future cash
flows using current market interest rates offered for debt of similar credit risk and maturity.
F-12
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
Shipping and Handling Costs
Shipping and handling costs are classified as selling, administrative and other expenses in the accompanying
consolidated statements of income and comprehensive income and totaled approximately $250,000,000,
$220,000,000, and $190,000,000, for the years ended December 31, 2013, 2012, and 2011, respectively.
Advertising Costs
Advertising costs are expensed as incurred and totaled $57,900,000, $43,200,000, and $45,100,000 in the
years ended December 31, 2013, 2012, and 2011, respectively.
Accounting for Legal Costs
The Company’s legal costs expected to be incurred in connection with loss contingencies are expensed as
such costs are incurred.
Share-Based Compensation
The Company maintains various long-term incentive plans, which provide for the granting of stock options,
stock appreciation rights (SARs), restricted stock, restricted stock units (RSUs), performance awards, dividend
equivalents and other share-based awards. SARs represent a right to receive upon exercise an amount, payable in
shares of common stock, equal to the excess, if any, of the fair market value of the Company’s common stock on
the date of exercise over the base value of the grant. The terms of such SARs require net settlement in shares of
common stock and do not provide for cash settlement. RSUs represent a contingent right to receive one share of
the Company’s common stock at a future date. The majority of awards previously granted vest on a pro-rata basis
for periods ranging from one to five years and are expensed accordingly on a straight-line basis. The Company
issues new shares upon exercise or conversion of awards under these plans.
Net Income per Common Share
Basic net income per common share is computed by dividing net income by the weighted average number of
common shares outstanding during the year. The computation of diluted net income per common share includes
the dilutive effect of stock options, stock appreciation rights and nonvested restricted stock awards options.
Options to purchase approximately 630,000, 730,000, and 850,000 shares of common stock ranging from $54 —
$81 per share were outstanding at December 31, 2013, 2012, and 2011, respectively. These options were
excluded from the computation of diluted net income per common share because the options’ exercise price was
greater than the average market price of common stock in each respective year.
Recently Adopted Accounting Pronouncements
In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”)
2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. Under ASU
2013-02, an entity is required to provide information about the amounts reclassified out of accumulated other
comprehensive income by component. In addition, an entity is required to present, either on the face of the finan-
cial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income
by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its
entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net
income, an entity is required to cross-reference to other disclosures that provide additional details about those
amounts. ASU 2013-02 does not change the current requirements for reporting net income or other compre-
hensive income in the financial statements. ASU 2013-02 is effective for the Company’s interim and annual
periods beginning after December 15, 2012. The adoption of ASU 2013-02 did not have a material impact on the
consolidated financial statements for the year ended December 31, 2013.
F-13
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
2. Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill during the years ended December 31, 2013, 2012, and 2011
by reportable segment, as well as other identifiable intangible assets, are summarized as follows (in thousands):
Automotive
Industrial
Balance as of January 1, 2012 . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . . . .
Amortization . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . .
$ 43,705
114,206
—
638
$ 99,011
—
—
221
Balance as of December 31, 2012 . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . . . .
Amortization . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . .
158,549
541,836
—
(78,205)
99,232
17,420
—
(516)
Goodwill
Office
Products
$10,554
—
—
—
Electrical/
Electronic
Materials
$24,350
5,355
—
—
Other
Intangible
Assets, Net
Total
$177,620
119,561
$102,155
110,014
— (12,991)
621
859
10,554
298,040
570,652
29,705
— 11,396
—
—
— (78,721)
—
199,799
379,834
— (28,987)
(51,261)
Balance as of December 31, 2013 . . . . . . .
$622,180
$116,136
$10,554
$41,101
$789,971
$499,385
The gross carrying amounts and accumulated amortization relating to other
intangible assets at
December 31, 2013 and 2012 is as follows (in thousands):
2013
2012
Gross
Carrying
Amount
Accumulated
Amortization
Net
Gross
Carrying
Amount
Accumulated
Amortization
Net
Customer relationships . . . . . . . . . . . .
Trademarks . . . . . . . . . . . . . . . . . . . . .
Non-competition agreements . . . . . . .
$412,634
149,949
7,306
$(59,686)
(5,018)
(5,800)
$352,948 $209,328
144,931
29,337
1,506
4,483
$(38,030)
(1,944)
(3,375)
$171,298
27,393
1,108
$569,889
$(70,504)
$499,385 $243,148
$(43,349)
$199,799
Amortization expense for other intangible assets totaled $28,987,000, $12,991,000, and $6,774,000 for the
years ended December 31, 2013, 2012, and 2011, respectively. Estimated other intangible assets amortization
expense for the succeeding five years is as follows (in thousands):
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 31,000
30,000
30,000
30,000
29,000
$150,000
F-14
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
3. Credit Facilities
The principal amounts of the Company’s borrowings subject
to variable rates totaled approximately
$264,658,000 at December 31, 2013. There were no amounts subject to variable rates at December 31, 2012. The
weighted average interest rate on the Company’s outstanding borrowings was approximately 2.82% at
December 31, 2013 and 4.01% at December 31, 2012.
The Company maintains an $850,000,000 unsecured revolving line of credit with a consortium of financial
institutions that matures in September 2017 and bears interest at LIBOR plus a margin, which is based on the
Company’s leverage ratio (0.92% at December 31, 2013). The Company also has the option under this agreement
to increase its borrowing an additional $350,000,000, as well as an option to decrease the borrowing capacity or
terminate the Syndicated Facility with appropriate notice. At December 31, 2013, approximately $264,658,000
was outstanding under this line of credit. No amounts were outstanding under this line of credit at December 31,
2012.
Certain borrowings require the Company to comply with a financial covenant with respect to a maximum
debt-to-capitalization ratio. At December 31, 2013, the Company was in compliance with all such covenants.
Due to the workers’ compensation and insurance reserve requirements in certain states, the Company also had
unused letters of credit of $61,617,000 and $61,119,000 outstanding at December 31, 2013 and 2012,
respectively.
Amounts outstanding under the Company’s credit facilities consist of the following:
December 31
2013
2012
(In Thousands)
Unsecured revolving line of credit, $850,000,000, LIBOR plus 0.75%
variable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$264,658
$
—
Unsecured term notes:
November 30, 2008, Series C Senior Unsecured Notes, $250,000,000,
4.67% fixed, due November 30, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
250,000
November 30, 2011, Series D and E Senior Unsecured Notes,
$250,000,000, 3.35% fixed, due November 30, 2016 . . . . . . . . . . . . . . . .
250,000
250,000
December 2, 2013, Series F Senior Unsecured Notes, $250,000,000,
2.99% fixed, due December 2, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
250,000
—
Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less debt due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
764,658
264,658
500,000
250,000
Long-term debt, excluding current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$500,000
$250,000
F-15
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
4. Leased Properties
Future minimum payments, by year and in the aggregate, under the noncancelable operating leases with ini-
tial or remaining terms of one year or more was approximately the following at December 31, 2013
(in thousands):
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$191,400
151,100
110,200
76,400
50,000
149,500
Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$728,600
Rental expense for operating leases was approximately $208,000,000, $158,200,000, and $154,500,000 for
2013, 2012, and 2011, respectively.
5. Share-Based Compensation
At December 31, 2013, total compensation cost related to nonvested awards not yet recognized was approx-
imately $26,000,000. The weighted-average period over which this compensation cost is expected to be recog-
nized is approximately three years. The aggregate intrinsic value for options and RSUs outstanding at
December 31, 2013 and 2012 was approximately $154,000,000 and $90,300,000, respectively. The aggregate
intrinsic value for options and RSUs vested totaled approximately $93,600,000 and $57,600,000 at December 31,
2013 and 2012, respectively. At December 31, 2013, the weighted-average contractual life for outstanding and
exercisable options and RSUs was six and five years, respectively. Share-based compensation cost of
$12,648,000, $10,747,000, and $7,547,000, was recorded for the years ended December 31, 2013, 2012, and
2011, respectively. The total income tax benefit recognized in the consolidated statements of income and
comprehensive income for share-based compensation arrangements was approximately $5,100,000, $4,300,000,
and $3,000,000, for 2013, 2012, and 2011, respectively. There have been no modifications to valuation method-
ologies or methods during the years ended December 31, 2013, 2012, and 2011.
For the years ended December 31, 2013, 2012 and 2011 the fair value for options and SARs granted was
estimated using a Black-Scholes option pricing model with the following weighted-average assumptions,
respectively: risk-free interest rate of 2.0%, 2.0%, and 3.6%; dividend yield of 3.2%, 3.3%, and 3.8%; annual
historical volatility factor of the expected market price of the Company’s common stock of 19% for each of the
three years; an average expected life and estimated turnover based on the historical pattern of existing grants of
approximately seven years and 5.0%, respectively. The fair value of RSUs is based on the price of the Compa-
ny’s stock on the date of grant. The total fair value of shares vested during the years ended December 31, 2013,
2012, and 2011, was $8,100,000, $6,700,000, and $7,200,000, respectively.
F-16
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
A summary of the Company’s share-based compensation activity and related information is as follows:
Outstanding at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding at end of year (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercisable at end of year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares available for future grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013
Shares (1)
(In Thousands)
5,100
900
(1,335)
(85)
4,580
2,601
2,743
Weighted-
Average
Exercise
Price (2)
$50
77
45
63
$56
$48
(1) Shares include Restricted Stock Units (RSUs).
(2) The weighted-average exercise price excludes RSUs.
(3) The exercise prices for options and SARs outstanding as of December 31, 2013 ranged from approximately
$37 to $77. The weighted-average remaining contractual life of all options and SARs outstanding is approx-
imately six years.
The weighted-average grant date fair value of options and SARs granted during the years 2013, 2012, and
2011 was $10.14, $7.96, and $8.18, respectively. The aggregate intrinsic value of options exercised during the
years ended December 31, 2013, 2012, and 2011 was $43,900,000, $41,500,000, and $25,100,000.
In 2013, the Company granted approximately 727,000 SARs and 172,000 RSUs. In 2012, the Company
the Company granted approximately
granted approximately 858,000 SARs and 145,000 RSUs. In 2011,
1,028,000 SARs and 126,000 RSUs.
A summary of the Company’s nonvested share awards (RSUs) activity is as follows:
Nonvested Share Awards (RSUs)
Nonvested at January 1, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares
(In Thousands)
316
172
(18)
(26)
Nonvested at December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
444
Weighted-
Average Grant
Date Fair
Value
$54
78
77
72
$62
For the years ended December 31, 2013, 2012, and 2011 approximately $12,900,000, $11,000,000, and
$5,400,000, respectively, of excess tax benefits was classified as a financing cash inflow.
F-17
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
6.
Income Taxes
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and amounts used for income tax purposes. As of
December 31, 2013, approximately $552,000,000 of cumulative undistributed earnings of the Company’s foreign
subsidiaries is considered to be indefinitely reinvested. As such, no U.S. federal and state income taxes have been
provided thereon, and it is not practicable to determine the amount of the related unrecognized deferred income
tax liability. Significant components of the Company’s deferred tax assets and liabilities are as follows:
Deferred tax assets related to:
Expenses not yet deducted for tax purposes . . . . . . . . . . . . . . . . . . . . . . . . .
Pension liability not yet deducted for tax purposes . . . . . . . . . . . . . . . . . . .
Capital loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$343,156
227,880
—
—
$362,265
405,048
16,803
(16,803)
2013
2012
(In Thousands)
Deferred tax liabilities related to:
Employee and retiree benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant, and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
571,036
767,313
188,235
152,641
110,272
53,751
29,733
205,268
191,047
23,295
41,130
28,321
534,632
489,061
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of deferred tax (assets) liabilities . . . . . . . . . . . . . . . . . . . . . .
36,404
(22,165)
278,252
1,211
Noncurrent net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 14,239
$279,463
The current portion of the deferred tax assets and liabilities are included in prepaid expenses and other cur-
rent assets and income taxes payable, respectively, in the consolidated balance sheets.
The components of income before income taxes are as follows:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 850,866
193,438
(In Thousands)
$ 903,698
115,234
$784,841
105,965
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,044,304
$1,018,932
$890,806
2013
2012
2011
F-18
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
The components of income tax expense are as follows:
2013
2012
2011
(In Thousands)
Current:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$303,016
47,010
30,941
(21,622)
$288,135
44,653
23,352
14,751
$260,222
41,511
26,294
(2,337)
$359,345
$370,891
$325,690
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:
Statutory rate applied to income . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . .
Plus state income taxes, net of Federal tax benefit
Earnings in jurisdictions taxed at rates different from the
statutory US tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital loss expiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversal of capital loss valuation allowance . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013
2012
2011
$365,506
28,823
(In Thousands)
$356,626
30,227
$311,782
26,790
(37,873)
16,803
(16,803)
2,889
(17,419)
—
—
1,457
(13,443)
—
—
561
$359,345
$370,891
$325,690
The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, various
states, and foreign jurisdictions. With few exceptions, the Company is no longer subject to federal, state and local
tax examinations by tax authorities for years before 2009 or subject to non-United States income tax examina-
tions for years ended prior to 2002. The Company is currently under audit in the United States and Canada. Some
audits may conclude in the next twelve months and the unrecognized tax benefits recorded in relation to the
audits may differ from actual settlement amounts. It is not possible to estimate the effect, if any, of the amount of
such change during the next twelve months to previously recorded uncertain tax positions in connection with the
audits. However, the Company does not anticipate total unrecognized tax benefits will significantly change dur-
ing the year due to the settlement of audits and the expiration of statutes of limitations.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions based on tax positions related to the current year . . . . . . .
Additions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . .
Reductions for tax positions for prior years . . . . . . . . . . . . . . . . . . . .
Reduction for lapse in statute of limitations . . . . . . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013
2012
2011
$45,455
3,238
3,759
(1,472)
(1,714)
(2,076)
(In Thousands)
$46,845
5,702
2,172
(5,025)
(2,658)
(1,581)
$39,425
6,035
7,966
(481)
(4,563)
(1,537)
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$47,190
$45,455
$46,845
F-19
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
The amount of gross tax effected unrecognized tax benefits,
including interest and penalties, as of
December 31, 2013 and 2012 was approximately $59,530,000 and $58,020,000, respectively, of which approx-
imately $18,287,000 and $17,615,000, respectively, if recognized, would affect the effective tax rate. During the
years ended December 31, 2013, 2012, and 2011, the Company paid interest and penalties of approximately
$405,000, $493,000, and $759,000, respectively. The Company had approximately $12,340,000 and $12,565,000
of accrued interest and penalties at December 31, 2013 and 2012, respectively. The Company recognizes poten-
tial interest and penalties related to unrecognized tax benefits as a component of income tax expense.
7. Employee Benefit Plans
The Company’s defined benefit pension plans cover employees in the U.S. and Canada who meet eligibility
requirements. The plan covering U.S. employees is noncontributory and benefits are based on the employees’
compensation during the highest five of their last ten years of credited service. The Canadian plan is contributory
and benefits are based on career average compensation. The Company’s funding policy is to contribute an
amount equal to the minimum required contribution under applicable pension legislation. The Company may
increase its contribution above the minimum if appropriate to its tax and cash position and the plans’ funded
position.
In December 2012, the U.S. defined benefit plan was amended to reflect a hard freeze as of December 31,
2013. Therefore, no further benefit accruals were provided after that date for additional credited service or earn-
ings. In addition, all participants will became fully vested as of December 31, 2013. The Company recognized a
one-time noncash curtailment gain in 2012 of $23,507,000 in connection with this amendment.
The Company also sponsors supplemental retirement plans covering employees in the U.S. and Canada. The
Company uses a measurement date of December 31 for its pension plans.
Changes in benefit obligations for the years ended December 31, 2013 and 2012 were:
Changes in benefit obligation
Benefit obligation at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency exchange rate changes . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquired plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Curtailments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013
2012
(In Thousands)
$2,165,692
19,083
89,408
3,543
—
(164,784)
(13,893)
(73,186)
9,322
—
$1,958,399
15,254
100,338
3,962
(4,217)
330,028
5,489
(67,767)
—
(175,794)
Benefit obligation at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,035,185
$2,165,692
The benefit obligations for the Company’s U.S. pension plans included in the above were $1,838,810,000
and $1,955,414,000 at December 31, 2013 and 2012, respectively. The total accumulated benefit obligation for
the Company’s defined benefit pension plans was approximately $2,017,619,000 and $2,112,134,000 at
December 31, 2013 and 2012, respectively.
F-20
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
The assumptions used to measure the pension benefit obligations for the plans at December 31, 2013 and
2012, were:
2013
2012
Weighted-average discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of increase in future compensation levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.10% 4.17%
3.04% 3.30%
Changes in plan assets for the years ended December 31, 2013 and 2012 were:
Changes in plan assets
Fair value of plan assets at beginning of year . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency exchange rate changes . . . . . . . . . . . . . . . . . . . . . . . . . .
Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquired plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013
2012
(In Thousands)
$1,595,679
336,151
(12,155)
74,347
8,684
3,543
(73,186)
$1,470,030
168,491
4,498
16,465
—
3,962
(67,767)
Fair value of plan assets at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,933,063
$1,595,679
The fair values of plan assets for the Company’s U.S. pension plans included in the above were
$1,745,769,000 and $1,425,047,000 at December 31, 2013 and 2012, respectively.
The asset allocations for the Company’s funded pension plans at December 31, 2013 and 2012, and the tar-
get allocation for 2014, by asset category were:
Asset Category
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Target
Allocation
2014
Percentage of
Plan Assets at
December 31
2013
2012
71%
29%
76% 68%
24% 32%
100% 100% 100%
The Company’s benefit plan committees in the U.S. and Canada establish investment policies and strategies
and regularly monitor the performance of the funds. The pension plan strategy implemented by the Company’s
management is to achieve long-term objectives and invest the pension assets in accordance with the applicable
pension legislation in the U.S. and Canada, as well as fiduciary standards. The long-term primary objectives for
the pension plans are to provide for a reasonable amount of long-term growth of capital, without undue exposure
to risk, protect the assets from erosion of purchasing power, and provide investment results that meet or exceed
the pension plans’ actuarially assumed long-term rates of return. The Company’s investment strategy with
respect to pension plan assets is to generate a return in excess of the passive portfolio benchmark (49% S&P 500
Index, 5% Russell Mid Cap Index, 8% Russell 2000 Index, 5% MSCI EAFE Index, 5% DJ Global Moderate
Index, and 28% BarCap U.S. Govt/Credit).
The fair values of the plan assets as of December 31, 2013 and 2012, by asset category, are shown in the
tables below. Various inputs are considered when determining the value of the Company’s pension plan assets.
F-21
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated
with investing in these securities. Level 1 represents observable market inputs that are unadjusted quoted prices
for identical assets or liabilities in active markets. Level 2 represents other significant observable inputs
(including quoted prices for similar securities, interest rates, credit risk, etc.). Level 3 represents significant
unobservable inputs (including the Company’s own assumptions in determining the fair value of investments).
The valuation methods may produce a fair value calculation that may not be indicative of net realizable
value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are
appropriate and consistent with other market participants, the use of different methodologies or assumptions to
determine the fair value of certain financial instruments could result in a different fair value measurement at the
reporting date. Equity securities are valued at the closing price reported on the active market on which the
individual securities are traded on the last day of the calendar plan year. Debt securities including corporate
bonds, U.S. Government securities, and asset-backed securities are valued using price evaluations reflecting the
bid and/or ask sides of the market for an investment as of the last day of the calendar plan year.
2013
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
Total
Significant
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
(In Thousands)
Equity Securities
Common stocks — mutual funds — equity . . . . . . . . . . . .
Genuine Parts Company . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt Securities
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset-backed and mortgage-backed securities . . . . . . . . . .
Other-international
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Municipal bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Municipal funds-fixed income . . . . . . . . . . . . . . . . . . . . . .
Cash surrender value of life insurance policies . . . . . . . . . .
$ 505,572
167,788
791,728
$ 505,572
167,788
791,728
$
—
—
—
$ —
—
—
59,058
9,022
144,447
123,773
19,345
12,072
1,304
96,231
2,723
59,058
9,022
61,171
—
—
83,276
— 123,773
19,345
—
11,200
872
1,304
—
96,231
—
—
—
—
—
—
—
—
—
—
—
2,723
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,933,063
$1,605,539
$324,801
$2,723
F-22
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
2012
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
Total
Significant
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
(In Thousands)
Equity Securities
Common stocks — mutual funds — equity . . . . . . . . . . . .
Genuine Parts Company . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt Securities
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset-backed and mortgage-backed securities . . . . . . . . . .
Other-international
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Municipal bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Municipal funds-fixed income . . . . . . . . . . . . . . . . . . . . . .
Cash surrender value of life insurance policies . . . . . . . . . .
$ 342,846
128,236
608,017
$ 342,846
128,236
608,017
$
—
—
—
$ —
—
—
37,626
45,719
166,413
127,824
24,077
10,188
532
101,578
2,623
37,626
45,719
74,707
—
—
91,706
— 127,824
24,077
—
—
10,188
—
532
— 101,578
—
—
—
—
—
—
—
—
—
—
2,623
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,595,679
$1,247,339
$345,717
$2,623
Equity securities include Genuine Parts Company common stock in the amounts of $167,788,000 (8.7% of
total plan assets) and $128,236,000 (8.0% of total plan assets) at December 31, 2013 and 2012, respectively.
Dividend payments received by the plan on Company stock totaled approximately $4,336,000 and $3,994,000 in
2013 and 2012, respectively. Fees paid during the year for services rendered by parties in interest were based on
customary and reasonable rates for such services.
The changes in the fair value measurement of plan assets using significant unobservable inputs (Level 3)
during 2013 and 2012 were not material.
Based on the investment policy for the pension plans, as well as an asset study that was performed based on
the Company’s asset allocations and future expectations, the Company’s expected rate of return on plan assets for
measuring 2014 pension cost or income is 7.85% for the plans. The asset study forecasted expected rates of
return for the approximate duration of the Company’s benefit obligations, using capital market data and historical
relationships.
The following table sets forth the funded status of the plans and the amounts recognized in the consolidated
balance sheets at December 31:
Other long-term asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension and other post-retirement liabilities . . . . . . . . . . . . . . . . . . . . . . . . .
$ 41,919
(5,976)
(138,065)
$
4,021
(5,402)
(568,632)
$(102,122)
$(570,013)
2013
2012
(In Thousands)
F-23
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
Amounts recognized in accumulated other comprehensive loss (income) consist of:
2013
2012
(In Thousands)
Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$590,568
(3,074)
$1,043,089
(10,612)
$587,494
$1,032,477
The following table reflects the total benefits expected to be paid from the pension plans’ or the Company’s
assets. Of the pension benefits expected to be paid in 2014, approximately $5,978,000 is expected to be paid
from employer assets. Expected employer contributions reflect amounts expected to be contributed to funded
plans. Information about the expected cash flows for the pension plans follows (in thousands):
Employer contribution
2014 (expected) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 50,605
Expected benefit payments
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 through 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 79,073
88,704
96,385
104,225
112,082
662,040
Net periodic benefit cost included the following components:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service cost
Interest cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service credit . . . . . . . . . . . . . . . . . . . . .
Amortization of actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . .
Curtailment gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013
2012
2011
$ 19,083
89,408
(133,816)
(7,538)
83,934
—
(In Thousands)
$ 15,254
100,338
(128,208)
(7,270)
70,161
(23,507)
$ 13,039
97,293
(124,150)
(6,970)
53,039
—
Net periodic benefit cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 51,071
$ 26,768
$ 32,251
F-24
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
Other changes in plan assets and benefit obligations recognized in other comprehensive (loss) income are
as follows:
Current year actuarial (gain) loss . . . . . . . . . . . . . . . . . . . . . . . .
Recognition of actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current year prior service credit . . . . . . . . . . . . . . . . . . . . . . . . .
Recognition of prior service credit . . . . . . . . . . . . . . . . . . . . . . .
2013
2012
2011
$(368,587)
(83,934)
—
7,538
(In Thousands)
$114,061
(70,161)
(4,217)
30,777
$311,038
(53,039)
—
6,970
Total recognized in other comprehensive (loss) income . . . . . .
$(444,983)
$ 70,460
$264,969
Total recognized in net periodic benefit cost and other
comprehensive (loss) income . . . . . . . . . . . . . . . . . . . . . . . . .
$(393,912)
$ 97,228
$297,220
The estimated amounts that will be amortized from accumulated other comprehensive loss (income) into net
periodic benefit cost in 2014 are as follows in thousands:
Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$26,606
(1,904)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$24,702
The assumptions used in measuring the net periodic benefit costs for the plans follow:
2013
2012
2011
Weighted average discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of increase in future compensation levels . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected long-term rate of return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . .
4.17% 5.17% 5.74%
3.30% 3.30% 3.39%
7.83% 7.84% 7.87%
The Company has two defined contribution plans that cover substantially all of its domestic employees. The
Company’s matching contributions are determined based on the employee’s participation in the U.S. pension
plan. Prior to 2014, U.S. pension plan participants who continue earning credited service after 2008 receive a
matching contribution of 20% of the first 6% of the employee’s salary. Other employees receive a matching con-
tribution of 100% of the first 5% of the employee’s salary. In December 2012, the Company approved an
amendment to merge the two plans effective January 1, 2014. Beginning in 2014, all employees will receive a
matching contribution of 100% of the first 5% of the employees’ salary. Total plan expense for both plans was
approximately $43,236,000 in 2013, $43,155,000 in 2012, and $38,773,000 in 2011.
8. Guarantees
The Company guarantees the borrowings of certain independently controlled automotive parts stores
(independents) and certain other affiliates in which the Company has a noncontrolling equity ownership interest
(affiliates). Presently, the independents are generally consolidated by unaffiliated enterprises that have a control-
ling financial interest through ownership of a majority voting interest in the independent. The Company has no
voting interest or other equity conversion rights in any of the independents. The Company does not control the
independents or the affiliates, but receives a fee for the guarantee. The Company has concluded that the
independents are variable interest entities, but that the Company is not the primary beneficiary. Specifically, the
equity holders of the independents have the power to direct the activities that most significantly impact the enti-
ty’s 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
F-25
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
appropriate inventories, and store hours. Separately, the Company concluded the affiliates are not variable inter-
est entities. The Company’s maximum exposure to loss as a result of its involvement with these independents and
affiliates is generally equal to the total borrowings subject to the Company’s guarantee. While such borrowings
of the independents and affiliates are outstanding, the Company is required to maintain compliance with certain
covenants, including a maximum debt to capitalization ratio and certain limitations on additional borrowings. At
December 31, 2013, the Company was in compliance with all such covenants.
At December 31, 2013, the total borrowings of the independents and affiliates subject to guarantee by the
Company were approximately $258,703,000. These loans generally mature over periods from one to six years. In
the event that the Company is required to make payments in connection with guaranteed obligations of the
independents or the affiliates, the Company would obtain and liquidate certain collateral (e.g., accounts receiv-
able and inventory) to recover all or a portion of the amounts paid under the guarantee. When it is deemed prob-
able that the Company will incur a loss in connection with a guarantee, a liability is recorded equal to this
losses in connection with guarantees of
estimated loss. To date,
independents’ and affiliates’ borrowings.
the Company has had no significant
The Company has accrued for guarantees related to the independents’ and affiliates’ borrowings as of
December 31, 2013 and 2012. These liabilities are not material to the financial position of the Company and are
included in other long-term liabilities in the accompanying consolidated balance sheets.
9. Acquisitions
During 2013, the Company acquired one company each in the Automotive Group (including GPC Asia
Pacific), Industrial Group, and Electrical/Electronic Materials Group for approximately $650,000,000, net of cash
acquired. During 2012, the Company acquired one company in the Automotive Group (Quaker City Motor Parts
Co.) for approximately $343,000,000, net of cash acquired. During 2011, the Company acquired three companies
in the Industrial Group and one company in the Electrical/Electronic Materials Group for approximately
$115,600,000.
For each acquisition, the Company allocated 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 the
acquired companies were included in the Company’s consolidated statements of income and comprehensive
income beginning on their respective acquisition dates. The Company recorded approximately $950,000,000,
$230,000,000 and $78,210,000 of goodwill and other intangible assets associated with the 2013, 2012, and 2011
acquisitions, respectively.
For the 2013 acquisitions, other intangible assets acquired consisted of customer relationships of
$235,000,000, trademarks of $141,000,000, and non-competition agreements of $4,000,000 with weighted aver-
age amortization lives of 15, 40, and 1 years, respectively. For the 2012 acquisitions, other intangible assets
acquired consisted of customer relationships of $108,000,000 and trademarks of $2,000,000, with weighted aver-
age amortization lives of 15 and 40 years, respectively. For the 2011 acquisitions, other intangible assets
acquired consisted of customer relationships of $37,378,000, trademarks of $12,100,000, and non-competition
agreements of $650,000, with weighted average amortization lives of 15, 40, and 5 years, respectively.
Additional disclosures on the 2013 automotive acquisition of GPC Asia Pacific and the 2012 automotive
acquisition of Quaker City Motor Parts Co. are provided below.
GPC Asia Pacific
The Company acquired a 30% investment in GPC Asia Pacific, formerly known as the Exego Group, for
approximately $166,000,000 effective January 1, 2012. On April 1, 2013, the Company acquired the remaining
70% interest in GPC Asia Pacific for approximately $590,000,000, net of cash acquired of $70,000,000, and the
F-26
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
assumption of approximately $230,000,000 in debt. The acquisition was financed using a combination of cash on
hand and borrowings under existing credit facilities. GPC Asia Pacific, which is headquartered in Melbourne,
Australia, is a leading aftermarket distributor of automotive replacement parts and accessories in Australasia,
with annual revenues of approximately $1,100,000,000 and a company-owned store footprint of more than 460
locations across Australia and New Zealand. This acquisition provides an opportunity for the Company to partic-
ipate in the ongoing and significant growth opportunities in the Australasian aftermarket.
The Company recognized certain one-time positive purchase accounting pre-tax adjustments of approx-
imately $33,000,000, or $0.21 net of taxes on a per share diluted basis, as a result of the acquisition. The net one-
time purchase accounting adjustments consisted of a gain of approximately $59,000,000 related to remeasuring
the 30% investment in GPC Asia Pacific held before the business combination to fair value, the post-closing sale
of acquired inventory written up to fair value of $21,000,000 as part of the purchase price allocation, and certain
negative adjustments of approximately $5,000,000.
Prior to the 70% acquisition, the Company accounted for the 30% investment under the equity method of
accounting. The acquisition-date fair value of the 30% investment was approximately $234,000,000 and is
included in the measurement of the consideration transferred. The difference between the acquisition-date fair
value and the carrying amount of the equity method investment resulted in the recognition of a gain of approx-
imately $59,000,000 on the acquisition date. The acquisition-date fair value was determined using a market and
income approach with the assistance of a third party valuation firm.
As part of the allocation of purchase price described below, acquired inventory was written up to fair value,
which was approximately $21,000,000 above the cost of the acquired inventory. Based on the inventory turn of
the acquired inventories, the entire write-up was recognized in cost of goods sold during 2013.
The net $54,000,000 of one-time gain and other adjustments are included in the line item “Selling, admin-
istrative & other expenses” and the acquired inventory adjustment of $21,000,000 is included in “Cost of goods
sold” in the consolidated statements of income and comprehensive income.
The acquisition date fair value of the consideration transferred totaled approximately $824,000,000, net of
cash acquired of $70,000,000, which consisted of the following:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of 30% investment held prior to business combination . . . . . . . . . . . . . . . . .
April 1, 2013
(In Thousands)
$590,000
234,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$824,000
F-27
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at
the acquisition date. The Company is in the process of analyzing the estimated values of assets and liabilities
acquired as of the acquisition date and is obtaining third-party valuations of certain intangible assets. The alloca-
tion of the purchase price is therefore preliminary and subject to revision.
Trade accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merchandise inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total identifiable assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April 1, 2013
(In Thousands)
$ 94,000
306,000
32,000
59,000
347,000
24,000
862,000
(223,000)
(230,000)
(117,000)
Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(570,000)
Net identifiable assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
292,000
532,000
Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 824,000
The acquired intangible assets of approximately $347,000,000 were provisionally assigned to customer rela-
tionships of $202,000,000, trademarks of $141,000,000, and non-compete agreements of $4,000,000, with
weighted average amortization lives of 16, 40, and 1 year, respectively, for a total weighted average amortization
life of 26 years. The fair value of the acquired identifiable intangible assets is provisional pending completion of
the final valuations for these assets.
The estimated goodwill recognized as part of the acquisition is not tax deductible and has been assigned to
the automotive segment. The goodwill is attributable primarily to expected synergies and the assembled work-
force of GPC Asia Pacific.
The amounts of net sales and earnings of GPC Asia Pacific included in the Company’s consolidated state-
ments of income and comprehensive income from April 1, 2013 to December 31, 2013 were approximately
$839,000,000 in net sales and net income of $0.43 on a per share diluted basis, respectively.
The unaudited pro forma consolidated statements of income and comprehensive income of the Company as
if GPC Asia Pacific had been included in the consolidated results of the Company for the years ended
December 31, 2013 and 2012 would be estimated at $14,400,000,000 and $14,100,000,000 in net sales,
respectively, and net income of $4.42 and $4.53 on a per share diluted basis, respectively. The pro forma
information is not necessarily indicative of the results of operations that we would have reported had the trans-
action actually occurred at the beginning of these periods, nor is it necessarily indicative of future results.
The adjustments to the pro forma amounts include, but are not limited to, applying the Company’s account-
ing policies, amortization related to fair value adjustments to intangible assets, one-time purchase accounting
adjustments, interest expense on acquisition related debt, and any associated tax effects.
F-28
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
Quaker City Motor Parts
On May 1, 2012 the Company acquired Quaker City Motor Parts Co. (“Quaker City”) for $343,000,000, net
of cash acquired. Quaker City, headquartered in Middleton, Delaware, is a long-standing NAPA distributor with
annual revenues of approximately $300,000,000. Quaker City serves approximately 260 auto parts stores, of
which approximately 135 are company-owned. The Company funded the acquisition with cash on hand and
short-term borrowings under credit facilities.
10. Segment Data
The Company’s reportable segments consist of automotive, industrial, office products, and electrical/
electronic materials. Within the reportable segments, certain of the Company’s operating segments are
aggregated since they have similar economic characteristics, products and services, type and class of customers,
and distribution methods.
The Company’s automotive segment distributes replacement parts (other than body parts) for substantially
all makes and models of automobiles, trucks, and other vehicles.
The Company’s industrial segment distributes a wide variety of industrial bearings, mechanical and fluid
power transmission equipment, including hydraulic and pneumatic products, material handling components, and
related parts and supplies.
The Company’s office products segment distributes a wide variety of office products, computer supplies,
office furniture, and business electronics.
The Company’s electrical/electronic materials segment distributes a wide variety of electrical/electronic
materials, including insulating and conductive materials for use in electronic and electrical apparatus.
Inter-segment sales are not significant. Operating profit for each industry segment is calculated as net sales
less operating expenses excluding general corporate expenses, interest expense, equity in income from investees,
amortization, and noncontrolling interests. Approximately $193,400,000, $115,200,000 and $106,000,000 of
income before income taxes was generated in jurisdictions outside the United States for the years ended
December 31, 2013, 2012, and 2011, respectively. Net sales and net long-lived assets by country relate directly to
the Company’s operations in the respective country. Corporate assets are principally cash and cash equivalents
and headquarters’ facilities and equipment.
F-29
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
For management purposes, net sales by segment exclude the effect of certain discounts, incentives, and
freight billed to customers. The line item “other” represents the net effect of the discounts, incentives, and freight
billed to customers that are reported as a component of net sales in the Company’s consolidated statements of
income and comprehensive income.
2013
2012
2011
2010
2009
(In Thousands)
Net sales:
Automotive . . . . . . . . . . . . . . . . . . .
Industrial . . . . . . . . . . . . . . . . . . . . .
Office products . . . . . . . . . . . . . . . .
Electrical/electronic materials . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . .
$ 7,489,186
4,429,976
1,638,618
568,872
(48,809)
$ 6,320,882
4,453,574
1,686,690
582,820
(30,098)
$ 6,061,424
4,173,574
1,689,368
557,537
(23,026)
$ 5,608,101
3,521,863
1,641,963
449,770
(14,108)
$ 5,225,389
2,885,782
1,639,018
345,808
(38,485)
Total net sales . . . . . . . . . . . . . . . . . . .
$14,077,843
$13,013,868
$12,458,877
$11,207,589
$10,057,512
Operating profit:
Automotive . . . . . . . . . . . . . . . . . . .
Industrial . . . . . . . . . . . . . . . . . . . . .
Office products . . . . . . . . . . . . . . . .
Electrical/electronic materials . . . . .
$
$
641,492
320,720
122,492
47,584
$
540,678
352,119
134,441
50,910
. . . . . . . . . . . . .
Total operating profit
Interest expense, net
. . . . . . . . . . . . . .
Corporate expense . . . . . . . . . . . . . . . .
Intangible asset amortization . . . . . . . .
1,132,288
(24,330)
(34,667)
(28,987)
1,078,148
(19,619)
(26,606)
(12,991)
$
467,806
337,628
134,124
40,663
980,221
(24,608)
(58,033)
(6,774)
$
421,109
255,616
131,746
30,910
839,381
(26,598)
(46,263)
(4,737)
387,945
162,353
126,104
25,254
701,656
(27,112)
(26,735)
(3,644)
Income before income taxes . . . . . . . .
$ 1,044,304
$ 1,018,932
$
890,806
$
761,783
$
644,165
Assets:
Automotive . . . . . . . . . . . . . . . . . . .
Industrial . . . . . . . . . . . . . . . . . . . . .
Office products . . . . . . . . . . . . . . . .
Electrical/electronic materials . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . .
Goodwill and other intangible
$ 4,009,244
1,162,697
708,944
156,780
353,276
$ 3,411,252
1,130,877
731,564
137,237
898,292
$ 3,218,931
1,100,024
700,720
129,933
773,391
$ 3,177,644
955,241
694,166
113,757
637,871
$ 3,148,876
865,431
619,612
76,716
445,705
assets . . . . . . . . . . . . . . . . . . . . . .
1,289,356
497,839
279,775
209,548
171,532
Total assets . . . . . . . . . . . . . . . . . . . . .
$ 7,680,297
$ 6,807,061
$ 6,202,774
$ 5,788,227
$ 5,327,872
F-30
Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
2013
2012
2011
2010
2009
(In Thousands)
Depreciation and amortization:
$
Automotive . . . . . . . . . . . . . . . . . . .
Industrial . . . . . . . . . . . . . . . . . . . . .
Office products . . . . . . . . . . . . . . . .
Electrical/electronic materials . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . .
Intangible asset amortization . . . . . .
$
76,238
8,751
10,166
1,904
7,911
28,987
$
60,630
8,307
10,837
1,733
3,885
12,991
$
60,252
7,495
9,999
1,554
2,862
6,774
$
63,942
7,208
9,737
1,414
2,294
4,737
65,554
7,611
9,685
1,666
2,251
3,644
Total depreciation and amortization . . $
133,957
$
98,383
$
88,936
$
89,332
$
90,411
Capital expenditures:
$
Automotive . . . . . . . . . . . . . . . . . . .
Industrial . . . . . . . . . . . . . . . . . . . . .
Office products . . . . . . . . . . . . . . . .
Electrical/electronic materials . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . .
$
97,735
8,808
9,297
1,730
6,493
$
67,482
13,015
16,013
1,029
4,448
$
61,795
9,851
22,036
1,762
8,025
$
46,888
4,307
29,866
1,957
2,361
53,911
2,987
5,782
676
6,089
Total capital expenditures . . . . . . . . . .
$
124,063
$
101,987
$
103,469
$
85,379
$
69,445
Net sales:
United States . . . . . . . . . . . . . . . . . .
Canada . . . . . . . . . . . . . . . . . . . . . . .
Australasia . . . . . . . . . . . . . . . . . . . .
Mexico . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . .
$11,594,713
1,560,799
839,353
131,787
(48,809)
$11,299,291
1,616,921
—
127,754
(30,098)
$10,791,303
1,571,733
—
118,867
(23,026)
$ 9,793,820
1,327,552
—
100,325
(14,108)
$ 8,935,651
1,078,799
—
81,547
(38,485)
Total net sales . . . . . . . . . . . . . . . . . . .
$14,077,843
$13,013,868
$12,458,877
$11,207,589
$10,057,512
Net long-lived assets:
United States . . . . . . . . . . . . . . . . . .
Canada . . . . . . . . . . . . . . . . . . . . . . .
Australasia . . . . . . . . . . . . . . . . . . . .
Mexico . . . . . . . . . . . . . . . . . . . . . . .
$
$
503,882
99,135
60,614
6,430
$
466,473
93,496
—
6,396
411,193
84,210
—
4,801
$
$
398,318
80,978
—
4,834
402,937
78,502
—
3,585
Total net long-lived assets . . . . . . . . . .
$
670,061
$
566,365
$
500,204
$
484,130
$
485,024
F-31
Item 15(a)
Annual Report on Form 10-K
Financial Statement Schedule II — Valuation and Qualifying Accounts
Genuine Parts Company and Subsidiaries
Balance at
Beginning
of Period
Charged
to Costs
and Expenses
Deductions(1)
Balance at
End
of Period
Year ended December 31, 2011:
Reserves and allowances deducted from asset
accounts:
Allowance for doubtful accounts . . . . . . . . . . . .
Year ended December 31, 2012:
Reserves and allowances deducted from asset
accounts:
Allowance for doubtful accounts . . . . . . . . . . . .
Year ended December 31, 2013:
Reserves and allowances deducted from asset
accounts:
Allowance for doubtful accounts . . . . . . . . . . . .
(1) Doubtful accounts written off, net of recoveries.
$15,598,912
$13,247,731
$(11,930,188) $16,916,455
$16,916,455
$ 8,046,605
$ (5,782,870) $19,180,190
$19,180,190
$ 8,691,000
$(13,448,190) $14,423,000
S-1
ANNUAL REPORT ON FORM 10-K
INDEX OF EXHIBITS
The following exhibits are filed (or furnished, if so indicated) herewith as a part of this Report:
21
23
31.1
31.2
32.1
32.2
Subsidiaries of the Company.
Consent of Independent Registered Public Accounting Firm.
Certification signed by the Chief Executive Officer pursuant to SEC Rule 13a-14(a).
Certification signed by the Chief Financial Officer pursuant to SEC Rule 13a-14(a).
Statement of Chief Executive Officer of Genuine Parts Company pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
Statement of Chief Financial Officer of Genuine Parts Company pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101
Interactive data files pursuant to Rule 405 of Regulation S-T.
The following exhibits are incorporated by reference as set forth in Item 15 of this Form 10-K:
— 3.1
— 3.2
— 4.2
Amended and Restated Articles of Incorporation of the Company, amended April 23, 2007.
By-Laws of the Company as amended and restated November 18, 2013.
Specimen Common Stock Certificate.
Instruments with respect to long-term debt where the total amount of securities authorized there under does
not exceed 10% of the total assets of the Registrant and its subsidiaries on a consolidated basis have not been
filed. The Registrant agrees to furnish to the Commission a copy of each such instrument upon request.
— 10.1*
The Genuine Parts Company Restated Tax-Deferred Savings Plan, effective January 1, 1993.
— 10.2*
Amendment No. 1 to the Genuine Parts Company Tax-Deferred Savings Plan, dated June 1, 1996,
effective June 1, 1996.
— 10.3*
Genuine Parts Company Death Benefit Plan, effective July 15, 1997.
— 10.4*
— 10.5*
— 10.6*
— 10.7*
— 10.8*
— 10.9*
Amendment No. 2 to the Genuine Parts Company Tax-Deferred Savings Plan, dated April 19,
1999, effective April 19, 1999.
The Genuine Parts Company Original Deferred Compensation Plan, as amended and restated as of
August 19, 1996.
Amendment to the Genuine Parts Company Original Deferred Compensation Plan, dated April 19,
1999, effective April 19, 1999.
Amendment No. 3 to the Genuine Parts Company Tax-Deferred Savings Plan, dated
November 28, 2001, effective July 1, 2001.
Genuine Parts Company 1999 Long-Term Incentive Plan, as amended and restated as of
November 19, 2001.
Amendment No. 4 to the Genuine Parts Company Tax-Deferred Savings Plan, dated June 5, 2003,
effective June 5, 2003.
— 10.10*
Genuine Parts Company Directors’ Deferred Compensation Plan, as amended and restated effec-
tive January 1, 2003, and executed November 11, 2003.
— 10.11*
Amendment No. 5 to the Genuine Parts Company Tax-Deferred Savings Plan.
— 10.12*
Amendment No. 2 to the Genuine Parts Company Death Benefit Plan.
— 10.13*
Genuine Parts Company 2006 Long-Term Incentive Plan, effective April 17, 2006.
— 10.14*
— 10.15*
— 10.16*
— 10.17*
Amendment to the Genuine Parts Company 2006 Long-Term Incentive Plan, dated November 20,
2006, effective November 20, 2006.
Amendment No. 1 to the Genuine Parts Company Directors’ Deferred Compensation Plan, dated
November 19, 2007, effective January 1, 2008.
Amendment No. 6 to the Genuine Parts Company Tax-Deferred Savings Plan, dated
November 28, 2007, effective January 1, 2008.
Amendment No. 2 to the Genuine Parts Company 2006 Long-Term Incentive Plan, dated
November 19, 2007, effective November 19, 2007.
— 10.18*
Genuine Parts Company Performance Restricted Stock Unit Award Agreement.
— 10.19*
Genuine Parts Company Restricted Stock Unit Award Agreement.
— 10.20*
Form of Amended and Restated Change in Control Agreement.
— 10.21*
— 10.22*
— 10.23*
— 10.24*
— 10.25*
Genuine Parts Company Supplemental Retirement Plan, as amended and restated as of January 1,
2009.
Genuine Parts Company 2009 Annual Incentive Bonus Plan, dated March 31, 2009, effective
January 1, 2009.
Amendment No. 1 to the Genuine Parts Company Supplemental Retirement Plan, as amended and
restated as of January 1, 2009, dated August 16, 2010, effective August 16, 2010.
Amendment No. 2 to the Genuine Parts Company Supplemental Retirement Plan, as amended and
restated January 1, 2009, dated November 16, 2010, effective January 1, 2011.
Amendment No. 7 to the Genuine Parts Company Tax-Deferred Savings Plan, dated
November 16, 2010, effective January 1, 2011.
— 10.26*
Description of Director Compensation.
— 10.27*
— 10.28*
— 10.29*
Amendment No. 2 to the Genuine Parts Company Director’s Deferred Compensation Plan, dated
December 7, 2012, effective December 7, 2012.
Amendment No. 8 to the Genuine Parts Company Tax-Deferred Savings Plan, dated December 7,
2012, effective December 7, 2012.
Amendment No. 3 to the Genuine Parts Company Supplemental Retirement Plan, as amended and
restated January 1, 2009, dated December 7, 2012, effective December 31, 2013.
— 10.30*
Form of amendment to the Amended and Restated Change in Control Agreement.
— 10.31*
Genuine Parts Company Stock Appreciation Rights Agreement.
* Indicates management contracts and compensatory plans and arrangements.
SUBSIDIARIES OF THE COMPANY
(as of December 31, 2013)
EXHIBIT 21
Name
BALKAMP, INC.
EIS, INC.
EIS DOMINICAN REPUBLIC, LLC
GPC FINANCE COMPANY
GPC PROCUREMENT COMPANY
NATIONAL AUTOMOTIVE PARTS ASSOCIATION
MOTION INDUSTRIES, INC.
S.P. RICHARDS COMPANY
SPR PROCUREMENT COMPANY
SHUSTER CORPORATION
1ST CHOICE AUTO PARTS, INC.
THE FLOWERS COMPANY
GPC MEXICO, S.A. de C.V.
GRUPO AUTO TODO S.A. de C.V.
ELECTRICAL INSULATION SUPPLIERS de MEXICO,
%
Owned
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
51.0%
46.5%
100.0%
100.0%
Jurisdiction of
Incorporation
INDIANA
GEORGIA
GEORGIA
DELAWARE
GEORGIA
MICHIGAN
DELAWARE
GEORGIA
GEORGIA
GEORGIA
GEORGIA
NORTH CAROLINA
PUEBLA, MEXICO
PUEBLA, MEXICO
S.A. de C.V.
EIS HOLDINGS (CANADA) INC.
POLIFIBRA CANADA (1987) INC.
MOTION INDUSTRIES (CANADA), INC.
MOTION — MEXICO, S. de R.L. de C.V.
S. P. RICHARDS CO. CANADA INC.
UAP INC.
GARANAT INC.
UAPRO INC.
UNITED AUTO PARTS (Eastern) LTD.
SERVICES FINANCIERS UAP INC.
WTC PARTS CANADA
PIECES DE CAMION DE LA BEAUCE
GPC GLOBAL SOURCING LIMITED
GENUINE PARTS SOURCING (SHENZHEN)
COMPANY LIMITED
ALTROM CANADA CORP.
EIS-GPC SERVICIOS de MEXICO, S. de R.L. De C.V.
RIEBE’S AUTO PARTS, LLC
AUTOPARTSPROS, LLC
ADAMS AUTO PARTS, LLC
MOTOR PARTS OF CARROLL COUNTY, INC.
POTOMAC AUTO PARTS, INC.
REISTERSTOWN AUTO PARTS, INC.
WILLIAMSPORT AUTOMOTIVE, INC.
AST BEARINGS LLC
GPC GLOBAL HOLDINGS B.V.
GPC ASIA PACIFIC HOLDINGS COOPERATIEF U.A.
GPC ASIA PACIFIC HOLDINGS PTY LTD
ONTARIO, CANADA
OTTAWA, ONTARIO
GUADALAJARA, MEXICO
100.0% GUADALAJARA, JALISCO, MEXICO
100.0% BRITISH COLUMBIA, CANADA
100.0%
100.0%
100.0%
100.0% BRITISH COLUMBIA, CANADA
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
90.0%
100.0%
QUEBEC, CANADA
FEDERAL, CANADA
FEDERAL, CANADA
ONTARIO, CANADA
QUEBEC, CANADA
FEDERAL, CANADA
QUEBEC, CANADA
HONG KONG, CHINA
SHENZHEN, CHINA
100.0%
100.0% BRITISH COLUMBIA, CANADA
100.0% GUADALAJARA, JALISCO, MEXICO
22.0%
20.0%
90.0%
75.8%
79.0%
79.0%
79.0%
100.0%
100.0% AMSTERDAM, THE NETHERLANDS
100.0% AMSTERDAM, THE NETHERLANDS
100.0%
GEORGIA
GEORGIA
DELAWARE
MARYLAND
MARYLAND
MARYLAND
PENNSYLVANIA
DELAWARE
VICTORIA, AUSTRALIA
Exhibit 23
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
(1) Registration Statement No. 333-21969 on Form S-8 pertaining to the Genuine Parts Company Direc-
tors’ Deferred Compensation Plan,
(2) Registration Statement No. 333-76639 on Form S-8 pertaining to the Genuine Parts Company 1999
Long-Term Incentive Plan, and
(3) Registration Statement No. 333-133362 on Form S-8 pertaining to the Genuine Parts Company 2006
Long-Term Incentive Plan;
of our reports dated February 27, 2014, with respect to the consolidated financial statements and schedule of
Genuine Parts Company and Subsidiaries and the effectiveness of internal control over financial reporting of
Genuine Parts Company and Subsidiaries included in this Annual Report (Form 10-K) for the year ended
December 31, 2013.
/s/ Ernst & Young LLP
Atlanta, Georgia
February 27, 2014
EXHIBIT 31.1
CERTIFICATIONS
I, Thomas C. Gallagher, certify that:
1. I have reviewed this annual report on Form 10-K of Genuine Parts Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining dis-
closure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over finan-
cial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of
an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a sig-
nificant role in the registrant’s internal control over financial reporting.
Date: February 27, 2014
/s/ Thomas C. Gallagher
Thomas C. Gallagher
Chairman and Chief Executive Officer
EXHIBIT 31.2
CERTIFICATIONS
I, Carol B. Yancey, certify that:
1. I have reviewed this annual report on Form 10-K of Genuine Parts Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining dis-
closure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over finan-
cial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of
an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a sig-
nificant role in the registrant’s internal control over financial reporting.
/s/ Carol B. Yancey
Carol B. Yancey
Executive Vice President and Chief Financial Officer
Date: February 27, 2014
EXHIBIT 32.1
STATEMENT OF CHIEF EXECUTIVE OFFICER OF
GENUINE PARTS COMPANY
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
§ 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Genuine Parts Company (the “Company”) on Form 10-K for the
year ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the
“Report”), I, Thomas C. Gallagher, Chairman and Chief Executive Officer, certify, pursuant to 18 U.S.C. § 1350,
as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and
2) The information contained in the Report fairly presents, in all material respects, the financial con-
dition and results of operations of the Company.
/s/ Thomas C. Gallagher
Thomas C. Gallagher
Chairman and Chief Executive Officer
February 27, 2014
EXHIBIT 32.2
STATEMENT OF CHIEF FINANCIAL OFFICER OF
GENUINE PARTS COMPANY
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
§ 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Genuine Parts Company (the “Company”) on Form 10-K for the
year ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the
“Report”), I, Carol B. Yancey, Executive Vice President and Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of
my knowledge:
1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and
2) The information contained in the Report fairly presents, in all material respects, the financial con-
dition and results of operations of the Company.
/s/ Carol B. Yancey
Carol B. Yancey
Executive Vice President and Chief Financial Officer
February 27, 2014
BOARD OF DIRECTORS AND OFFICERS OF THE COMPANY
Board of Directors
Dr. Mary B. Bullock
Paul D. Donahue
Jean Douville
Thomas C. Gallagher
George C. “Jack” Guynn
John R. Holder
John D. Johns
Michael M. E. Johns, MD
Executive Vice Chancellor of Duke Kunshan University and President Emerita of Agnes Scott College
President
Chairman of the Board of Directors of UAP Inc.
Chairman and Chief Executive Officer
Retired President and Chief Executive Officer of the Federal Reserve Bank of Atlanta
Chairman and Chief Executive Officer of Holder Properties
Chairman, President & Chief Executive Officer of Protective Life Corporation
Professor, Emory School of Medicine and Rollins School of Public Health; Chancellor and Executive
Vice President of Health Affairs Emeritus, Emory University
Robert C. “Robin” Loudermilk, Jr.
Wendy B. Needham
Jerry W. Nix
Gary W. Rollins
President and Chief Executive Officer of The Loudermilk Companies, LLC
Retired Managing Director, Global Automotive Research at Credit Suisse First Boston
Retired Chief Financial Officer
Vice Chairman and Chief Executive Officer of Rollins Inc.
Corporate Officers
Thomas C. Gallagher
Paul D. Donahue
Carol B. Yancey
Treg S. Brown
Charles A. Chesnutt
R. Bruce Clayton
Frank M. Howard
James R. Neill
Michael D. Orr
Scott C. Smith
Lisa K. Hamilton
David A. Haskett
Philip C. Johnson
Sidney G. Jones
Karl J. Koenig
Napoleon B. Rutledge, Jr.
Eric N. Sundby
Matthew P. Brigham
Christopher T. Galla
Jessica E. Morgan
Christine E. Powell
Robert L. Swann
Jennifer L. Ellis
U.S. Automotive Parts Group
Paul D. Donahue
Lee A. Maher
Glenn M. Chambers
Scott W. LeProhon
Daniel F. Askey
Todd P. Helms
Gregory N. Miller
J. Richard Borman
Michael A. Briggs
Byron H. Frantz
Michael J. Fusaro
Richard A. Geiger
Mark W. Hohe
Karen E. Kreider
Jett W. Kuntz
David B. Nicki
J. Michael Phillips
Bret A. Robyck
Vickie S. Smith
Gaylord M. Spencer
Michael L. Swartz
Dennis P. Tolivar
Chairman and Chief Executive Officer
President
Executive Vice President, Chief Financial Officer and Corporate Secretary
Senior Vice President — Planning and Acquisitions
Senior Vice President — Technology and Process Improvement
Senior Vice President — Human Resources
Senior Vice President and Treasurer
Senior Vice President — Employee Development and Human Resource Services
Senior Vice President — Operations and Logistics
Senior Vice President — Corporate Counsel
Vice President — Benefits and Communications
Vice President and Corporate Controller
Vice President — Compensation
Vice President — Investor Relations
Vice President — Real Estate and Construction
Vice President and Assistant Treasurer
Vice President — Information Technology
Assistant Vice President — Treasury Services
Assistant Vice President and Senior Counsel
Assistant Vice President — Risk Management
Assistant Vice President — Financial Analysis
Assistant Vice President — Internal Audit and Compliance
Associate Counsel and Assistant Secretary
President
Executive Vice President and Chief Operating Officer
Executive Vice President — Operations
Executive Vice President — Merchandising and Product Strategy
Senior Vice President — Sales
Senior Vice President — Human Resources
Senior Vice President and Chief Financial Officer
Vice President — Supply Chain and Logistics
Vice President — Retail Product Management and Merchandising
Vice President — Wholesale Product Management
Vice President — Process Improvement — Distribution
Vice President — Finance
Vice President — Store Operations
Vice President and Chief Information Officer
Vice President — Integrated Business Solutions
Vice President — NAPA Tools and Equipment Sales
Vice President — Organizational Development
Vice President — AutoCare Sales
Vice President — Human Resources
Vice President — Marketing Strategy
Vice President — Inventory & Procurement
Vice President — Major Accounts
Divisions
M. Todd McMurtrie
Grant L. Morris
Michael J. Kelleher
Gregg T. Sargent
Kevin E. Herron
Eric G. Fritsch
Christopher R. Agostino
Patrick A. Wolfe
Stuart A. Kambury
Bradley A. Shaffer
Vice President — Atlantic Division
Vice President — Central Division
Vice President — Eastern Division
Vice President — Florida Operations
Vice President — Midwest Division
Vice President — Mountain Division
Vice President — Quaker City Division
Vice President — Southern Division
Vice President — Southwest Division
Vice President — Western Division
Heavy Vehicle Parts Group (Atlanta, GA)
D. Gary Silva
Greg A. Lancour
President
Vice President — Operations
Rayloc (Atlanta, GA)
William J. Westerman III
Michael S. Gaffney II
Chris C. Koenigshof
Joseph W. Lashley
Scott J. Rolf
President
Vice President — Operations
Vice President — Human Resources
Vice President — Information Services
Vice President — Sales and Marketing
Balkamp, Inc. (Indianapolis, IN)
D. Tip Tollison
Frank C. Amato
Mary F. Knudsen
President
Executive Vice President
Vice President — Finance and Treasurer
Grupo Auto Todo (Puebla, Mexico)
Juan Lujambio
Jorge Otero
Juan Quintal
President and Chief Executive Officer
Executive Vice President — Finance
Vice President and General Manager NAPA Mexico
Altrom Import Parts Group (Vancouver, Canada)
Patrick K. Nichol
President
NAPA Canada/UAP Inc. (Montreal, Canada)
Jean Douville
Robert Hattem
Sylvie Leduc
Alain Masse
John Buckley
Daniel Dallaire
Joseph P. Herauf
Thomas Hunt
Mark Miron
Frank Pipito
Chairman of the Board
President and Chief Executive Officer
Executive Vice President — Heavy Vehicle Parts Division
Executive Vice President — NAPA Operations
Senior Regional Vice President — Auto Parts Division
Vice President — Human Resources
Vice President — Sales
Vice President — Product Development
Vice President — Distribution and Logistics
Vice President — Finance and Secretary
GPC Asia Pacific (Melbourne, Australia)
John L. Moller
Mark G. Brunton
Wayne F. Bryant
Rob Cameron
Gary T. Dunwell
Cary D. Laverty
Lincoln P. McFayden
J. Scott Mosteller
Craig Sandiford
Mark B. Sookias
Julian Buckley
Managing Director
Executive General Manager — Repco New Zealand
Executive General Manager — Repco Australia, Sales and Operations
Executive General Manager — Automotive Specialist Group
Executive General Manager — Repco Australia, Merchandising and Strategic Marketing
Executive General Manager — Legal and Commercial
Executive General Manager — McLeod Accessories
Executive General Manager — Logistics and Technology
Executive General Manager — Human Resources
Executive General Manager — Motospecs
Chief Financial Officer
EIS, Inc. (Atlanta, GA)
Robert W. Thomas
Alexander Gonzalez
Larry L. Griffin
William C. Knight
Peter F. Sheehan
Matthew C. Tyser
Derek B. Goshay
President and Chief Executive Officer
Senior Vice President — Electrical and Electronics
Senior Vice President — Fabrication and Coating
Senior Vice President — Logistics and Operations
Senior Vice President — Specialty Wire and Cable
Senior Vice President — Finance and Secretary
Vice President — Human Resources
Motion Industries (Birmingham, AL)
William J. Stevens
Timothy P. Breen
G. Harold Dunaway, Jr.
Austin W. Amos
Randall P. Breaux
Richard W. Burmester
Anthony G. Cefalu
Ellen H. Holladay
Scott A. MacPherson
Mark W. Sheehan
Gerald V. Sourbeer
Kevin P. Storer
Mark R. Thompson
Randy R. Till
Darryl J. Britain
Frederick H. “Ted” Cowie
Zahirudin K. Hameer
Billy W. Hamilton
M. Keith Knight
N. Joe Limbaugh
Douglas R. Osborne
C. Jeff Rouse
Brandon C. Scordino
James R. Summers
J. Marvin Walker
James F. Williams
Michael D. Harper
Dermot R. Strong
Chairman and Chief Executive Officer
President and Chief Operating Officer
Executive Vice President — Finance & Administration and Secretary
Senior Vice President & Group Executive — Midwest
Senior Vice President — Marketing, Strategic Planning and Product Support
Senior Vice President & Group Executive — Southwest
Senior Vice President & Group Executive — Central and Hose & Rubber
Senior Vice President, Chief Information Officer and Operational Excellence Officer
Senior Vice President — Sales
Senior Vice President — OEM, Global Sourcing, Automation & Process Pumps
Senior Vice President & Group Executive — Southeast
Senior Vice President & Group Executive — West and President — Motion Mexico
Senior Vice President — Corporate Accounts
Senior Vice President & Group Executive — East
Vice President — Technology Process, Support and Communications
Vice President — Sales — Safety Products
Vice President — Inventory Management
Vice President — Human Resources
Vice President — Business Systems
Vice President — Operations
Vice President — MI Services
Vice President — Government Sales and Export
Vice President — Technology Planning and Development
Vice President — Systems Assurance & Data Center Operations
Vice President — Finance
Vice President — Corporate Purchasing and Distribution Centers
Treasurer
President — Motion Canada
S. P. Richards Company (Atlanta, GA)
C. Wayne Beacham
Richard T. Toppin
Steven E. Lynn
G. Henry Martin
Donald C. Mikolasy
James F. O’Brien
J. Phillip Welch, Jr.
Dennis J. Arnold
John K. Burgess
Thomas E. Dunmon, Jr.
Dennis J. Flynn
E. Chadwick Lee
Charles E. Macpherson
Tom C. Maley
Brian M. McGill
James C. Moseley
John R. Reagan
Jason R. Smith
Thomas M. Testa
Chris F. Whiting
Bryan A. Wight
Lester P. Christian
Bryan T. Hall
Gregory L. Nissen
Ray J. Sreca
Richard A. Wiltz
Peter R. Dalglish
Chairman of the Board and Chief Executive Officer
President and Chief Operating Officer
Senior Vice President — Merchandising
Senior Vice President — Human Resources
Senior Vice President — Sales
Senior Vice President — Marketing
Senior Vice President — Finance and CFO
Vice President — Furniture
Vice President — Sales
Vice President — Finance and Controller
Vice President — Supply Chain
Vice President — New Market Development
Vice President — Strategic Pricing
Vice President — Business Development & Analytics
Vice President — Information Technology & CIO
Vice President — Information Systems
Vice President — Merchandising
Vice President — Sales — Emerging Markets
Vice President — Sales
Vice President — Cleaning and Breakroom Supply
Vice President — Sales — Independent Dealer Channel
Vice President — Southeast Division
Vice President — South Central Division
Vice President — Western Division
Vice President — Northeast Division
Vice President — North Central Division
Managing Director — S. P. Richards Canada
®
SHAREHOLDERS’ INFORMATION
GENUINE PARTS COMPANY
STOCK LISTING
Genuine Parts Company’s common
stock is traded on the New York Stock
Exchange under the symbol “GPC”.
STOCK TRANSFER AGENT,
REGISTRAR OF STOCK, DIVIDEND
DISBURSING AGENT AND OTHER
SHAREHOLDER SERVICES
Communications concerning share
transfer requirements, duplicate
mailings, direct deposit of dividends, lost
certificates or dividend checks or change
of address should be directed to the
Company’s transfer agent at:
Regular Mail
COMPUTERSHARE
P.O. BOX 30170
COLLEGE STATION, TX 77842-3170
Overnight
COMPUTERSHARE
211 QUALITY CIRCLE, SUITE 210
COLLEGE STATION, TX 77845
ANNUAL SHAREHOLDERS’ MEETING
The 2014 annual meeting of the
shareholders of Genuine Parts Company
will be held at the Executive Offices of
the Company, 2999 Circle 75 Parkway,
Atlanta, Georgia at 10:00 a.m. on
Monday, April 28, 2014.
DIVIDEND REINVESTMENT PLAN
Shareholders can build their investments
in Genuine Parts Company through a
low-cost plan for automatically reinvesting
dividends and by making optional cash
purchases of the Company’s stock.
FOR ENROLLMENT INFORMATION,
WRITE TO THE STOCK TRANSFER
AGENT LISTED ABOVE OR
SHAREHOLDER RELATIONS AT THE
COMPANY ADDRESS.
INVESTOR RELATIONS
Inquiries from security analysts and
investment professionals should be
directed to the Company’s investor
relations contacts:
CAROL B. YANCEY, Executive Vice
President and Chief Financial Officer
SID JONES, Vice President - Investor
Relations, at 770.953.1700.
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Ernst & Young LLP - Atlanta, Georgia
GENERAL COUNSEL
Alston & Bird LLP - Atlanta, Georgia
EXECUTIVE OFFICES
GENUINE PARTS COMPANY
2999 CIRCLE 75 PARKWAY
ATLANTA, GEORGIA 30339
770.953.1700
Shareholder website:
www.computershare.com/investor
Shareholder online inquiries:
https://www-us.computershare.com/investor/Contact
Genuine Parts Company
2999 CIRCLE 75 PARKWAY
ATLANTA, GA 30339
770.953.1700
www.genpt.com