Genuine Parts Company Annual Report 2015

Plain-text annual report

G E N U I N E PA R T S C O M PA N Y 2 0 1 5 A N N U A L R E P O R T FINANCIAL HISTORY 88 YEARS OF GROWTH 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 2014 2015 $ 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 15,341,647,000 15,280,044,000 $ 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 1,117,739,000 1,123,681,000 $ INCOME TAXES - 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* 238,236,000 218,101,000 240,367,000 271,630,000 295,511,000 310,406,000 293,051,000 244,590,000 286,272,000 325,690,000 370,891,000 359,345,000 406,453,000 418,009,000 $ 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** 395,552,000 437,434,000 475,405,000 506,339,000 475,417,000 399,575,000 475,511,000 565,116,000 648,041,000 684,959,000 711,286,000 705,672,000 $ 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 3,312,364,000 3,159,242,000 Financial information as reported in the Company’s annual reports (includes discontinued operations) *Excludes facility consolidation and impairment charges **Excludes cumulative effect adjustment GENUINE PARTS COMPANY BY THE NUMBERS Genuine Parts Company, founded in 1928, is a service GPC NET SALES BY SEGMENT organization engaged in the distribution of automotive replacement parts, industrial replacement parts, ofﬁ ce products and electrical/electronic materials. The Company serves numerous customers from more than 2,650 operations and has approximately 39,600 employees. SALES BY COUNTRY CANADA – 9% AUSTRALASIA – 6% MEXICO – 1% UNITED STATES 84% AUTOMOTIVE AUTOMOTIVE 52% AUTOMOTIVE GPC ASIA PACIFIC 5% ELECTRICAL/ ELECTRONIC INDUSTRIAL 30% 13% OFFICE PRODUCTS SALES EARNINGS PER SHARE CASH FROM OPERATIONS $15.34 $15.28 $4.61 $4.63 $1,057 $1,159 $14.08 S N O I L L I B $13.01 $12.46 $4.40 $4.14 S R A L L O D $3.58 $906 S N O I L L I M $625 $790 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 FINANCIAL HIGHLIGHTS 2015 Increase 2014 Increase 2013 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 $ 15,280,044,000 1,123,681,000 418,009,000 705,672,000 3,159,242,000 21.3% -0.4% 1% 3% -1% -5% - $ 15,341,647,000 1,117,739,000 406,453,000 711,286,000 3,312,364,000 21.2% 152,496,000 - 154,375,000 $4.63 $2.46 0.4% 7% $4.61 $2.30 9% 7% 13% 4% -1% - - 5% 7% $ 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 TO OUR SHAREHOLDERS 2015 turned out to be a year of mixed results for Genuine Parts Company. On the positive side, our team did a ﬁne job of managing the assets of the Company and in keeping our balance sheet in excellent condition. Cash from operations and free cash generation each reached record levels and our team did a good job on the operating side of the business as well, producing record earnings per share of $4.63, despite the impact of an unfavorable currency translation of $0.14 per share. Conversely, our revenue production was a bit inconsistent across our four business segments and we ended the year with sales of $15.3 billion, which was down just slightly from 2014. The difﬁcult macro-economic environment signiﬁcantly weakened customer demand in our industrial and electrical distribution businesses. Likewise, the impact of currency translation associated with our Canadian, Australasian and Mexican operations was a headwind for both the automotive and industrial businesses. The ofﬁce products business mostly avoided these conditions and recorded solid revenue growth for the year. Despite the tempered growth for 2015, when we adjust our results for the 3% negative impact of currency translation the Company produced an increase in both sales and net earnings. These increases reﬂect the positive impact of our sales initiatives and cost control measures and, combined with our reduced investment in net working capital and record cash ﬂows, represent meaningful accomplishments. Our progress in 2015 supports our investment in growth opportunities such as acquisitions, as well as the return of capital to shareholders via a strong dividend and share repurchases. L-R: Carol B. Yancey Executive Vice President and Chief Financial Ofﬁcer Thomas C. Gallagher Chairman and Chief Executive Ofﬁcer Paul D. Donahue President FINANCIAL STRENGTH Genuine Parts Company further improved its ﬁnancial strength in 2015 with a continued emphasis on sales and earnings growth initiatives and effective management of the balance sheet. Our focus in these key areas produced strong cash ﬂows, with cash from operations reaching a record $1.2 billion and, after dividends paid of $368 million and capital expenditures of $110 million, our free cash ﬂow was $682 million, also a record for us. At December 31, 2015, our total cash on hand was $212 million and total debt of $625 million was a modest 16.5% of total capitalization. OPERATIONS The Company’s 2015 revenues included core sales growth of approximately 1.5% and a 1% contribution from acquisitions. These growth components were offset by the negative impact of currency translation of approximately 3%. The Automotive Group, our largest segment at 52% of 2015 revenues, reported a 1% sales decline for the year. This reﬂects core sales growth of approximately 3.5% and a slight beneﬁt from acquisitions, offset by an approximate 5% currency impact. Each of our four geographic regions, the United States, Canada, Mexico and Australasia, generated positive core sales increases in their local currencies. In addition, we experienced sales growth from both our commercial and retail customers. The fundamentals supporting demand in the automotive aftermarket remain favorable and combined with our internal initiatives, we are optimistic for continued growth in 2016 and beyond. Motion Industries, our industrial distribution business, represents 30% of our 2015 revenues. Sales for Motion were off 3% from 2014, consisting of a 3% decrease in core sales and a 1% headwind from currency, which were partially offset by a 1% contribution from acquisitions. The manufacturing indices we track in this segment, which had improved in 2014, progressively weakened throughout 2015. This correlates to lower demand among our customer base and, in particular, those customers dependent on exports as well as the oil and gas sector. EIS, our electrical/electronic distribution segment, represents 5% of our 2015 revenues. As with Motion, this business is dependent on the manufacturing segment of the economy. EIS grew sales by approximately 1.5% for the year, driven by a 5% contribution from acquisitions, less a 2.5% decrease in core sales and a 1% headwind from falling copper prices. Looking ahead, we expect the tough industrial economy to persist well into 2016. That said, we have multiple initiatives in place at both Motion and EIS to help us overcome these challenges. S. P. Richards, our ofﬁce products distribution business, represents 13% of our 2015 revenues and had sales growth of 7.5% for the year. This follows a 10% sales increase in 2014, and consists of core sales growth of 5% and a 3% contribution from acquisitions, net of a 0.5% unfavorable currency translation. New business with a key customer, initiated in 2014, and growth initiatives to diversify the SPR business positively impacted our core sales. Turning to 2016, the ofﬁce team will continue to focus on its growth initiatives, including the ongoing diversiﬁcation of product and customer portfolios, market share gains and select acquisitions. ACQUISITIONS Acquisitions continue to be a very important component of our growth strategy. During 2015, we expanded our automotive network with the purchase of three automotive store groups in the U.S. and two new businesses in Australasia. At Motion, we made four acquisitions, further expanding our U.S. distribution footprint while also complementing our vast product offering of industrial MRO (maintenance, repair and operations) and supply items. Our electrical distribution business acquired a specialty wire and cable distributor and, ﬁnally, the ofﬁce segment completed three acquisitions, further diversifying their product offering and customer channels. Thus far in 2016, we have made one acquisition for the U.S. automotive business, which enhances our OE (original equipment) import parts distribution capabilities. We are encouraged by the growth prospects for our recent acquisitions and will continue to pursue additional strategic acquisition targets throughout 2016. SHARE REPURCHASES We returned more than $660 million to our shareholders through the combination of share repurchases and dividends in 2015. For the year, we repurchased approximately 3.3 million shares of our Company stock and as of December 31, 2015, we were authorized to repurchase up to an additional 6.3 million shares. We expect to continue making opportunistic share repurchases during 2016 as we view this as a good use of cash. GPC DIRECTORS In April of 2016, Mr. Jean Douville will retire from our Board of Directors and from his role as Chairman of UAP Inc. (“NAPA Canada”). Mr. Douville has served on our Board since 1992 and as UAP’s Chairman since 1999, and we extend him our sincerest gratitude and appreciation for his many years of dedicated service. At our August 2015 Board meeting, Elizabeth W. “Betsy” Camp was elected by the Board as a new Director of the Company. Since 2000, Ms. Camp has served as President and Chief Executive Ofﬁcer of DF Management, Inc., DIVIDENDS & SHAREHOLDER RETURN The Company has paid a cash dividend to shareholders every year since going public in 1948, and on February 15, 2016, the Board of Directors raised the 2016 cash dividend to an annual rate of $2.63 per share, up 7% from $2.46 in 2015. 2016 MARKS OUR 60TH CONSECUTIVE YEAR OF INCREASED DIVIDENDS PAID TO OUR SHAREHOLDERS. $2.30 $2.15 $2.63 $2.46 $1.98 $1.80 TOTAL SHAREHOLDER RETURN $1.46 $1.60 $1.56 $1.64 1 YEAR 3 YEARS 5 YEARS 7 YEARS 10 YEARS -17.1% 13.6% 14.1% 16.2% 10.6% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 INCLUDES DIVIDENDS DIVIDENDS PER SHARE (IN DOLLARS) a private investment and commercial real estate company. Previously, Ms. Camp held other business executive roles and was also an accountant and attorney with major accounting and law ﬁrms. Additionally, at our November 2015 Board meeting, Donna W. Hyland was elected by the Board as a new Director of the Company. Ms. Hyland is President and Chief Executive Ofﬁcer of Children’s Healthcare of Atlanta, one of the largest pediatric healthcare systems in the country. Before being named to her current position in 2008, Ms. Hyland’s career at Children’s included roles as Chief Financial Ofﬁcer and Chief Operating Ofﬁcer. Both of these new directors bring with them a wealth of business acumen and knowledge as well as public company board and committee experience. We are fortunate to have them serve with us. MANAGEMENT Over the last year, there were a number of key management changes and promotions that we would like to share with you. Scott W. LeProhon was named the Company’s Executive Vice President of Global Procurement effective January 1, 2016. Mr. LeProhon brings with him 28 years of experience in a variety of key management roles, most recently serving as Executive Vice President of Merchandising and Product Strategy for the U.S. Automotive Parts Group. Scott is a great ﬁt for this position and we are pleased to have him in his new and expanded role. Lee A. Maher was named President and Chief Operating Ofﬁcer of the U.S. Automotive Parts Group effective February 1, 2016. Mr. Maher is a 38 year veteran of the Company’s automotive business, most recently serving as Executive Vice President and Chief Operating Ofﬁcer of the U.S. Automotive Parts Group. We are pleased to have a proven executive like Lee so uniquely qualiﬁed for this important leadership position. Alain Masse was named President of NAPA Canada, effective September 1, 2015. Mr. Masse has extensive leadership and business experience and was previously NAPA Canada’s Executive Vice President of the Auto Parts and Heavy Duty Parts Divisions. Alain is well qualiﬁed to successfully lead this key automotive group. Effective February 15, 2016, Frank M. Howard retired from the Company after nearly 39 years of service in a variety of key ﬁnancial roles, including the last 12 years as Senior Vice President and Treasurer. We want to thank Frank for his many signiﬁcant contributions to the Company and wish him the very best in his retirement. Board approved Gregory N. Miller as Senior Vice President and Chief Information Ofﬁcer. Mr. Miller was previously the Senior Vice President and Chief Financial Ofﬁcer of the U.S. Automotive Parts Group. Charlie and Greg are strong executives and we look forward to their many future contributions. Lastly, at our August 2015 Board meeting, the Directors elected Christopher T. Galla to Vice President and Assistant Corporate Counsel and Robert L. Swann to Vice President Internal Audit, Compliance and Risk. Chris and Robert are very talented individuals and their well deserved promotions serve to strengthen our corporate legal and ﬁnance teams. CONCLUSION The Company generated record cash ﬂows in 2015 and is well positioned for future growth. While the challenging sales environment and difﬁcult macro-economic and end market conditions may persist, we remained focused on our growth initiatives. We enter 2016 with a cautious outlook on the overall economy. However, we remain committed to growing sales and earnings, showing continued operating margin improvement, generating solid cash ﬂows and maintaining a strong balance sheet. We have plans in place for further improvement in each of these important areas in the year ahead. 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 In consideration of this change, the Company’s Board named Charles A. Chesnutt Senior Vice President and Treasurer. Mr. Chesnutt was previously Senior Vice President and Chief Information Ofﬁcer. Additionally, the February 26, 2016 Carol B. Yancey Executive Vice President and Chief Financial Ofﬁcer AUTOMOTIVE PARTS GROUP 52% OF TOTAL GPC NET SALES INDUSTRIAL PARTS GROUP 30% OF TOTAL GPC NET SALES The Automotive Parts Group distributes automotive replacement parts, accessory items and service items throughout North America, 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. The Industrial Parts Group offers access to more than 6.5 million industrial replacement parts and related supplies and serves over 150,000 MRO (maintenance, repair and operations) and OEM (original equipment manufacturer) customers throughout North America and in all types of industries. These include the food and beverage, forest products, primary metals, pulp and paper, mining, automotive, oil and gas, petrochemical and pharmaceutical industries. Our automotive network serves approx. 6,000 NAPA AUTO PARTS stores in the U.S., 700 wholesalers in Canada, 500 automotive locations in Australia and New Zealand and 27 stores in Mexico. These stores sell to both the Retail (DIY) and Commercial (DIFM) automotive aftermarket customer and cover substantially all domestic and foreign motor vehicle models. WEBSITE: napaonline.com HEADQUARTERS: Atlanta, GA THIS GROUP OPERATES: In the U.S.: (cid:115)(cid:0)(cid:0)(cid:21)(cid:25)(cid:0)(cid:46)(cid:33)(cid:48)(cid:33)(cid:0)(cid:36)(cid:73)(cid:83)(cid:84)(cid:82)(cid:73)(cid:66)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:35)(cid:69)(cid:78)(cid:84)(cid:69)(cid:82)(cid:83) (cid:115)(cid:0)(cid:0)(cid:20)(cid:0)(cid:34)(cid:65)(cid:76)(cid:75)(cid:65)(cid:77)(cid:80)(cid:0)(cid:36)(cid:73)(cid:83)(cid:84)(cid:82)(cid:73)(cid:66)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:35)(cid:69)(cid:78)(cid:84)(cid:69)(cid:82)(cid:83) (cid:115)(cid:0)(cid:0)(cid:20)(cid:0)(cid:50)(cid:65)(cid:89)(cid:76)(cid:79)(cid:67)(cid:0)(cid:38)(cid:65)(cid:67)(cid:73)(cid:76)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83) (cid:115)(cid:0)(cid:0)(cid:18)(cid:0)(cid:33)(cid:76)(cid:84)(cid:82)(cid:79)(cid:77)(cid:0)(cid:41)(cid:77)(cid:80)(cid:79)(cid:82)(cid:84)(cid:0)(cid:48)(cid:65)(cid:82)(cid:84)(cid:83)(cid:0)(cid:36)(cid:73)(cid:83)(cid:84)(cid:14)(cid:0)(cid:35)(cid:69)(cid:78)(cid:84)(cid:69)(cid:82)(cid:83) (cid:115)(cid:0)(cid:0)(cid:17)(cid:0)(cid:52)(cid:55)(cid:0)(cid:40)(cid:69)(cid:65)(cid:86)(cid:89)(cid:0)(cid:54)(cid:69)(cid:72)(cid:73)(cid:67)(cid:76)(cid:69)(cid:0)(cid:48)(cid:65)(cid:82)(cid:84)(cid:83)(cid:0) Distribution Center (cid:115)(cid:0)(cid:0)(cid:17)(cid:12)(cid:17)(cid:16)(cid:16)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:0)(cid:47)(cid:87)(cid:78)(cid:69)(cid:68)(cid:0)(cid:46)(cid:33)(cid:48)(cid:33)(cid:0) AUTO PARTS stores (cid:115)(cid:0)(cid:0)(cid:17)(cid:20)(cid:0)(cid:52)(cid:50)(cid:33)(cid:35)(cid:52)(cid:41)(cid:47)(cid:46)(cid:0)(cid:40)(cid:69)(cid:65)(cid:86)(cid:89)(cid:0)(cid:36)(cid:85)(cid:84)(cid:89)(cid:0) Parts stores In Canada: (cid:115)(cid:0)(cid:0)(cid:18)(cid:16)(cid:22)(cid:0)(cid:46)(cid:33)(cid:48)(cid:33)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:40)(cid:69)(cid:65)(cid:86)(cid:89)(cid:0)(cid:54)(cid:69)(cid:72)(cid:73)(cid:67)(cid:76)(cid:69)(cid:0)(cid:38)(cid:65)(cid:67)(cid:73)(cid:76)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83) (cid:115)(cid:0)(cid:0)(cid:17)(cid:19)(cid:0)(cid:33)(cid:76)(cid:84)(cid:82)(cid:79)(cid:77)(cid:0)(cid:35)(cid:65)(cid:78)(cid:65)(cid:68)(cid:65)(cid:0)(cid:41)(cid:77)(cid:80)(cid:79)(cid:82)(cid:84)(cid:0)(cid:48)(cid:65)(cid:82)(cid:84)(cid:83)(cid:0)(cid:38)(cid:65)(cid:67)(cid:73)(cid:76)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83) In Mexico: (cid:115)(cid:0)(cid:0)(cid:17)(cid:25)(cid:0)(cid:33)(cid:85)(cid:84)(cid:79)(cid:0)(cid:52)(cid:79)(cid:68)(cid:79)(cid:0)(cid:38)(cid:65)(cid:67)(cid:73)(cid:76)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0) (cid:115)(cid:0)(cid:0)(cid:17)(cid:18)(cid:0)(cid:46)(cid:33)(cid:48)(cid:33)(cid:0)(cid:45)(cid:69)(cid:88)(cid:73)(cid:67)(cid:79)(cid:0)(cid:38)(cid:65)(cid:67)(cid:73)(cid:76)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83) In Australia and New Zealand: (cid:115)(cid:0)(cid:0)(cid:24)(cid:0)(cid:36)(cid:73)(cid:83)(cid:84)(cid:82)(cid:73)(cid:66)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:35)(cid:69)(cid:78)(cid:84)(cid:69)(cid:82)(cid:83) (cid:115)(cid:0)(cid:0)(cid:20)(cid:17)(cid:23)(cid:0)(cid:50)(cid:69)(cid:80)(cid:67)(cid:79)(cid:0) AUTO PARTS stores (cid:115)(cid:0)(cid:0)(cid:21)(cid:21)(cid:0)(cid:33)(cid:83)(cid:72)(cid:68)(cid:79)(cid:87)(cid:78)(cid:0)(cid:41)(cid:78)(cid:71)(cid:82)(cid:65)(cid:77)(cid:0) Branches (cid:115)(cid:0)(cid:0)(cid:18)(cid:21)(cid:0)(cid:45)(cid:79)(cid:84)(cid:79)(cid:83)(cid:80)(cid:69)(cid:67)(cid:83)(cid:12)(cid:0)(cid:45)(cid:67)(cid:44)(cid:69)(cid:79)(cid:68)(cid:0)(cid:6)(cid:0)(cid:50)(cid:36)(cid:33)(cid:0)(cid:38)(cid:65)(cid:67)(cid:73)(cid:76)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:0) MAJOR PRODUCTS: ACCESS TO APPROXIMATELY 474,000 ITEMS INCLUDING: (cid:115)(cid:0)(cid:33)(cid:85)(cid:84)(cid:79)(cid:77)(cid:79)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:50)(cid:69)(cid:80)(cid:76)(cid:65)(cid:67)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:48)(cid:65)(cid:82)(cid:84)(cid:83) (cid:115)(cid:0)(cid:48)(cid:65)(cid:73)(cid:78)(cid:84)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:50)(cid:69)(cid:108)(cid:78)(cid:73)(cid:83)(cid:72)(cid:73)(cid:78)(cid:71)(cid:0)(cid:51)(cid:85)(cid:80)(cid:80)(cid:76)(cid:73)(cid:69)(cid:83) (cid:115)(cid:0)(cid:33)(cid:85)(cid:84)(cid:79)(cid:77)(cid:79)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:33)(cid:67)(cid:67)(cid:69)(cid:83)(cid:83)(cid:79)(cid:82)(cid:73)(cid:69)(cid:83) (cid:115)(cid:0)(cid:38)(cid:65)(cid:82)(cid:77)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:45)(cid:65)(cid:82)(cid:73)(cid:78)(cid:69)(cid:0)(cid:51)(cid:85)(cid:80)(cid:80)(cid:76)(cid:73)(cid:69)(cid:83) (cid:115)(cid:0)(cid:52)(cid:79)(cid:79)(cid:76)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:37)(cid:81)(cid:85)(cid:73)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84) (cid:115)(cid:0)(cid:40)(cid:69)(cid:65)(cid:86)(cid:89)(cid:0)(cid:36)(cid:85)(cid:84)(cid:89)(cid:0)(cid:48)(cid:65)(cid:82)(cid:84)(cid:83) OFFICE PRODUCTS GROUP 13% OF TOTAL GPC NET SALES The Ofﬁce Products Group distributes more than 62,000 items to over 6,300 resellers and distributors throughout the United States and Canada from a network of 45 distribution centers. Customers include independently owned ofﬁce product dealers, national ofﬁce supply superstores and mass merchants, large contract stationers, mail order companies, internet resellers, college bookstores, military base stores, ofﬁce furniture dealers, value-add technology resellers, janitorial and sanitation supply distributors, safety product resellers and food service, food processing and laboratory supply distributors. WEBSITE: sprichards.com HEADQUARTERS: Atlanta, GA LOCATIONS: (cid:115)(cid:0)(cid:19)(cid:20)(cid:0)(cid:38)(cid:85)(cid:76)(cid:76)-Stocking Distribution Centers (cid:115)(cid:0)(cid:18)(cid:0)(cid:38)(cid:85)(cid:82)(cid:78)(cid:73)(cid:84)(cid:85)(cid:82)(cid:69)(cid:0)(cid:47)(cid:78)(cid:76)(cid:89)(cid:0)(cid:36)(cid:73)(cid:83)(cid:84)(cid:82)(cid:73)(cid:66)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:35)(cid:69)(cid:78)(cid:84)(cid:69)(cid:82)(cid:83) (cid:115)(cid:0)(cid:21)(cid:0)(cid:51)(cid:14)(cid:48)(cid:14)(cid:0)(cid:50)(cid:73)(cid:67)(cid:72)(cid:65)(cid:82)(cid:68)(cid:83)(cid:0)(cid:35)(cid:65)(cid:78)(cid:65)(cid:68)(cid:65)(cid:0)(cid:36)(cid:73)(cid:83)(cid:84)(cid:82)(cid:73)(cid:66)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:35)(cid:69)(cid:78)(cid:84)(cid:69)(cid:82)(cid:83) (cid:115)(cid:0)(cid:17)(cid:0)(cid:39)(cid:35)(cid:46)(cid:0)(cid:36)(cid:73)(cid:83)(cid:84)(cid:82)(cid:73)(cid:66)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:35)(cid:69)(cid:78)(cid:84)(cid:69)(cid:82) (cid:115)(cid:0)(cid:18)(cid:0)(cid:41)(cid:77)(cid:80)(cid:65)(cid:67)(cid:84)(cid:0)(cid:36)(cid:73)(cid:83)(cid:84)(cid:82)(cid:73)(cid:66)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:35)(cid:69)(cid:78)(cid:84)(cid:69)(cid:82)(cid:83) (cid:115)(cid:0)(cid:17)(cid:0)(cid:45)(cid:65)(cid:76)(cid:84)(cid:0)(cid:36)istribution Center MAJOR PRODUCTS: (cid:115)(cid:0)(cid:0)(cid:39)(cid:69)(cid:78)(cid:69)(cid:82)(cid:65)(cid:76)(cid:0)(cid:47)(cid:70)(cid:108)(cid:67)(cid:69)(cid:0)(cid:48)roducts (cid:115)(cid:0)(cid:0)(cid:52)(cid:69)(cid:67)(cid:72)(cid:78)(cid:79)(cid:76)(cid:79)(cid:71)(cid:89)(cid:0)(cid:51)(cid:85)(cid:80)(cid:80)(cid:76)(cid:73)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:33)(cid:67)(cid:67)(cid:69)(cid:83)(cid:83)(cid:79)(cid:82)(cid:73)(cid:69)(cid:83) (cid:115)(cid:0)(cid:0)(cid:38)(cid:65)(cid:67)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:34)(cid:82)(cid:69)(cid:65)(cid:75)(cid:82)(cid:79)(cid:79)(cid:77)(cid:0)(cid:51)(cid:79)(cid:76)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83) (cid:115)(cid:0)(cid:0)(cid:36)(cid:73)(cid:83)(cid:80)(cid:79)(cid:83)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:38)(cid:79)(cid:79)(cid:68)(cid:0)(cid:51)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:0)(cid:48)(cid:82)(cid:79)(cid:68)(cid:85)(cid:67)(cid:84)(cid:83) (cid:115)(cid:0)(cid:0)(cid:47)(cid:70)(cid:108)(cid:67)(cid:69)(cid:0)(cid:38)(cid:85)(cid:82)(cid:78)(cid:73)(cid:84)(cid:85)(cid:82)(cid:69) (cid:115)(cid:0)(cid:0)(cid:51)(cid:67)(cid:72)(cid:79)(cid:79)(cid:76)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:37)(cid:68)(cid:85)(cid:67)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:65)(cid:76)(cid:0)(cid:48)(cid:82)(cid:79)(cid:68)(cid:85)(cid:67)(cid:84)(cid:83) (cid:115)(cid:0)(cid:0)(cid:40)(cid:69)(cid:65)(cid:76)(cid:84)(cid:72)(cid:67)(cid:65)(cid:82)(cid:69)(cid:0)(cid:48)(cid:82)(cid:79)(cid:68)(cid:85)(cid:67)(cid:84)(cid:83) (cid:115)(cid:0)(cid:0)(cid:51)(cid:65)(cid:70)(cid:69)(cid:84)(cid:89)(cid:0)(cid:6)(cid:0)(cid:51)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:89)(cid:0)(cid:41)(cid:84)(cid:69)(cid:77)(cid:83) PROPRIETARY BRANDS OF PRODUCTS: (cid:115) Sparco Brand ofﬁce supplies (cid:115)(cid:0)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:85)(cid:67)(cid:69)(cid:83)(cid:83)(cid:79)(cid:82)(cid:89)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:85)(cid:84)(cid:69)(cid:82)(cid:0)(cid:65)(cid:67)(cid:67)(cid:69)(cid:83)(cid:83)(cid:79)(cid:82)(cid:73)(cid:69)(cid:83) (cid:115)(cid:0)(cid:0)(cid:44)(cid:79)(cid:82)(cid:69)(cid:76)(cid:76)(cid:0)(cid:79)(cid:70)(cid:108)(cid:67)(cid:69)(cid:0)(cid:70)(cid:85)(cid:82)(cid:78)(cid:73)(cid:84)(cid:85)(cid:82)(cid:69) (cid:115)(cid:0)(cid:0)(cid:46)(cid:65)(cid:84)(cid:85)(cid:82)(cid:69)(cid:51)(cid:65)(cid:86)(cid:69)(cid:82)(cid:0)(cid:82)(cid:69)(cid:67)(cid:89)(cid:67)(cid:76)(cid:69)(cid:68)(cid:0)(cid:80)(cid:65)(cid:80)(cid:69)(cid:82)(cid:0)(cid:80)(cid:82)(cid:79)(cid:68)(cid:85)(cid:67)(cid:84)(cid:83)(cid:0) (cid:115)(cid:0)(cid:0)(cid:37)(cid:76)(cid:73)(cid:84)(cid:69)(cid:0)(cid:41)(cid:77)(cid:65)(cid:71)(cid:69)(cid:0)(cid:80)(cid:82)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:0)(cid:83)(cid:85)(cid:80)(cid:80)(cid:76)(cid:73)(cid:69)(cid:83) (cid:115)(cid:0)(cid:0)(cid:41)(cid:78)(cid:84)(cid:69)(cid:71)(cid:82)(cid:65)(cid:0)(cid:87)(cid:82)(cid:73)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:73)(cid:78)(cid:83)(cid:84)(cid:82)(cid:85)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83) (cid:115)(cid:0)(cid:0)(cid:39)(cid:69)(cid:78)(cid:85)(cid:73)(cid:78)(cid:69)(cid:0)(cid:42)(cid:79)(cid:69)(cid:0)(cid:67)(cid:76)(cid:69)(cid:65)(cid:78)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:66)(cid:82)(cid:69)(cid:65)(cid:75)(cid:82)(cid:79)(cid:79)(cid:77)(cid:0) products (cid:115)(cid:0)(cid:0)(cid:34)(cid:85)(cid:83)(cid:73)(cid:78)(cid:69)(cid:83)(cid:83)(cid:0)(cid:51)(cid:79)(cid:85)(cid:82)(cid:67)(cid:69)(cid:0)(cid:79)(cid:70)(cid:108)(cid:67)(cid:69)(cid:0)(cid:83)(cid:85)(cid:80)(cid:80)(cid:76)(cid:73)(cid:69)(cid:83) (cid:115)(cid:0)(cid:0)(cid:44)(cid:73)(cid:71)(cid:72)(cid:84)(cid:72)(cid:79)(cid:85)(cid:83)(cid:69)(cid:0)(cid:74)(cid:65)(cid:78)(cid:73)(cid:84)(cid:79)(cid:82)(cid:73)(cid:65)(cid:76)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:67)(cid:76)(cid:69)(cid:65)(cid:78)(cid:73)(cid:78)(cid:71)(cid:0) products Strategically targeted specialty industries include power generation, wastewater treatment facilities, alternative energy, government projects, transportation and ports, among others. WEBSITE: motionindustries.com HEADQUARTERS: Birmingham, AL LOCATIONS IN: U.S., Canada, Mexico and Puerto Rico: (cid:115)(cid:0)(cid:17)(cid:21)(cid:0)(cid:36)(cid:73)(cid:83)(cid:84)(cid:82)(cid:73)(cid:66)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:35)(cid:69)(cid:78)(cid:84)(cid:69)(cid:82)(cid:83) (cid:115)(cid:0)(cid:21)(cid:19)(cid:19)(cid:0)(cid:34)(cid:82)(cid:65)(cid:78)(cid:67)(cid:72)(cid:69)(cid:83) (cid:115)(cid:0)(cid:20)(cid:22)(cid:0)(cid:51)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:0)(cid:35)(cid:69)(cid:78)(cid:84)(cid:69)(cid:82)(cid:83) MAJOR PRODUCTS: (cid:115)(cid:0)(cid:0)(cid:34)(cid:69)(cid:65)(cid:82)(cid:73)(cid:78)(cid:71)(cid:83) (cid:115)(cid:0)(cid:0)(cid:45)(cid:69)(cid:67)(cid:72)(cid:65)(cid:78)(cid:73)(cid:67)(cid:65)(cid:76)(cid:0)(cid:6)(cid:0)(cid:37)(cid:76)(cid:69)(cid:67)(cid:84)(cid:82)(cid:73)(cid:67)(cid:65)(cid:76)(cid:0)(cid:48)(cid:79)(cid:87)(cid:69)(cid:82)(cid:0) Transmission Products (cid:115)(cid:0)(cid:0)(cid:41)(cid:78)(cid:68)(cid:85)(cid:83)(cid:84)(cid:82)(cid:73)(cid:65)(cid:76)(cid:0)(cid:33)(cid:85)(cid:84)(cid:79)(cid:77)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78) (cid:115)(cid:0)(cid:0)(cid:40)(cid:89)(cid:68)(cid:82)(cid:65)(cid:85)(cid:76)(cid:73)(cid:67)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:41)(cid:78)(cid:68)(cid:85)(cid:83)(cid:84)(cid:82)(cid:73)(cid:65)(cid:76)(cid:0)(cid:40)(cid:79)(cid:83)(cid:69) (cid:115)(cid:0)(cid:0)(cid:40)(cid:89)(cid:68)(cid:82)(cid:65)(cid:85)(cid:76)(cid:73)(cid:67)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:48)(cid:78)(cid:69)(cid:85)(cid:77)(cid:65)(cid:84)(cid:73)(cid:67)(cid:0) Components (cid:115)(cid:0)(cid:0)(cid:41)(cid:78)(cid:68)(cid:85)(cid:83)(cid:84)(cid:82)(cid:73)(cid:65)(cid:76)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:51)(cid:65)(cid:70)(cid:69)(cid:84)(cid:89)(cid:0)(cid:51)(cid:85)(cid:80)(cid:80)(cid:76)(cid:73)(cid:69)(cid:83) (cid:115)(cid:0)(cid:0)(cid:45)(cid:65)(cid:84)(cid:69)(cid:82)(cid:73)(cid:65)(cid:76)(cid:0)(cid:40)(cid:65)(cid:78)(cid:68)(cid:76)(cid:73)(cid:78)(cid:71)(cid:0)(cid:48)(cid:82)(cid:79)(cid:68)(cid:85)(cid:67)(cid:84)(cid:83) SERVICE CAPABILITIES INCLUDE: (cid:115)(cid:0)(cid:18)(cid:20)(cid:15)(cid:23)(cid:15)(cid:19)(cid:22)(cid:21)(cid:0)(cid:48)(cid:82)(cid:79)(cid:68)(cid:85)(cid:67)(cid:84)(cid:0)(cid:36)(cid:69)(cid:76)(cid:73)(cid:86)(cid:69)(cid:82)(cid:89) (cid:115)(cid:0)(cid:50)(cid:69)(cid:80)(cid:65)(cid:73)(cid:82)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:38)(cid:65)(cid:66)(cid:82)(cid:73)(cid:67)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78) (cid:115)(cid:0)(cid:49)(cid:85)(cid:65)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0)(cid:48)(cid:82)(cid:79)(cid:67)(cid:69)(cid:83)(cid:83)(cid:69)(cid:83)(cid:0)(cid:8)(cid:41)(cid:51)(cid:47)(cid:9) (cid:115)(cid:0)(cid:52)(cid:69)(cid:67)(cid:72)(cid:78)(cid:73)(cid:67)(cid:65)(cid:76)(cid:0)(cid:37)(cid:88)(cid:80)(cid:69)(cid:82)(cid:84)(cid:73)(cid:83)(cid:69) (cid:115)(cid:0)(cid:33)(cid:83)(cid:83)(cid:69)(cid:84)(cid:0)(cid:50)(cid:69)(cid:80)(cid:65)(cid:73)(cid:82)(cid:0)(cid:52)(cid:82)(cid:65)(cid:67)(cid:75)(cid:73)(cid:78)(cid:71) (cid:115)(cid:0)(cid:33)(cid:80)(cid:80)(cid:76)(cid:73)(cid:67)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:36)(cid:69)(cid:83)(cid:73)(cid:71)(cid:78) (cid:115)(cid:0)(cid:41)(cid:78)(cid:86)(cid:69)(cid:78)(cid:84)(cid:79)(cid:82)(cid:89)(cid:0)(cid:45)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:6)(cid:0)(cid:44)(cid:79)(cid:71)(cid:73)(cid:83)(cid:84)(cid:73)(cid:67)(cid:83) (cid:115)(cid:0)(cid:52)(cid:82)(cid:65)(cid:73)(cid:78)(cid:73)(cid:78)(cid:71)(cid:0)(cid:48)(cid:82)(cid:79)(cid:71)(cid:82)(cid:65)(cid:77)(cid:83) (cid:115)(cid:0)(cid:37)(cid:13)(cid:66)(cid:85)(cid:83)(cid:73)(cid:78)(cid:69)(cid:83)(cid:83)(cid:0)(cid:52)(cid:69)(cid:67)(cid:72)(cid:78)(cid:79)(cid:76)(cid:79)(cid:71)(cid:73)(cid:69)(cid:83) (cid:115)(cid:0)(cid:51)(cid:84)(cid:79)(cid:82)(cid:69)(cid:82)(cid:79)(cid:79)(cid:77)(cid:0)(cid:6)(cid:0)(cid:50)(cid:69)(cid:80)(cid:76)(cid:69)(cid:78)(cid:73)(cid:83)(cid:72)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:52)(cid:82)(cid:65)(cid:67)(cid:75)(cid:73)(cid:78)(cid:71) ELECTRICA L /ELECTRONIC MATERIA LS GROUP 5% OF TOTAL GPC NET SALES The Electrical/Electronic Materials Group distributes over 100,000 items to more than 20,000 customers from 49 branches and seven fabrication facilities in North America. Customers served include original equipment manufacturers, motor repair shops, specialty wire and cable users and a broad variety of industrial assembly markets in North America. Products include wire, cable and connectivity solutions, insulating and conductive materials, assembly tools and test equipment as well as custom fabricated parts and specialty coated materials. WEBSITE: eis-inc.com HEADQUARTERS: Atlanta, GA LOCATIONS IN: U.S., Canada, Mexico, Puerto Rico and Dominican Republic: (cid:115)(cid:0)(cid:20)(cid:25)(cid:0)(cid:34)(cid:82)(cid:65)(cid:78)(cid:67)(cid:72)(cid:69)(cid:83)(cid:0) (cid:115)(cid:0)(cid:23)(cid:0)(cid:38)(cid:65)(cid:66)(cid:82)(cid:73)(cid:67)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:38)(cid:65)(cid:67)(cid:73)(cid:76)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83) MAJOR PRODUCTS & INDUSTRY SEGMENTS: Electrical/Electronic (cid:115)(cid:0)(cid:0)(cid:45)(cid:65)(cid:71)(cid:78)(cid:69)(cid:84)(cid:0)(cid:55)(cid:73)(cid:82)(cid:69) (cid:115)(cid:0)(cid:0)(cid:44)(cid:69)(cid:65)(cid:68)(cid:0)(cid:55)(cid:73)(cid:82)(cid:69) (cid:115)(cid:0)(cid:48)(cid:82)(cid:69)(cid:83)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)(cid:51)(cid:69)(cid:78)(cid:83)(cid:73)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:52)(cid:65)(cid:80)(cid:69)(cid:83) 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(cid:115)(cid:0)(cid:0)(cid:45)(cid:79)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:34)(cid:69)(cid:65)(cid:82)(cid:73)(cid:78)(cid:71)(cid:83) (cid:115)(cid:0)(cid:0)(cid:54)(cid:65)(cid:82)(cid:78)(cid:73)(cid:83)(cid:72)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:50)(cid:69)(cid:83)(cid:73)(cid:78)(cid:83) (cid:115)(cid:0)(cid:0)(cid:41)(cid:78)(cid:68)(cid:85)(cid:83)(cid:84)(cid:82)(cid:73)(cid:65)(cid:76)(cid:0)(cid:45)(cid:50)(cid:47)(cid:0)(cid:45)(cid:65)(cid:84)(cid:69)(cid:82)(cid:73)(cid:65)(cid:76)(cid:83) (cid:115)(cid:0)(cid:0)(cid:51)(cid:79)(cid:76)(cid:68)(cid:69)(cid:82)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:35)(cid:72)(cid:69)(cid:77)(cid:73)(cid:67)(cid:65)(cid:76)(cid:83) (cid:115)(cid:0)(cid:0)(cid:51)(cid:76)(cid:69)(cid:69)(cid:86)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:52)(cid:85)(cid:66)(cid:73)(cid:78)(cid:71) (cid:115)(cid:0)(cid:0)(cid:51)(cid:84)(cid:65)(cid:84)(cid:73)(cid:67)(cid:0)(cid:35)(cid:79)(cid:78)(cid:84)(cid:82)(cid:79)(cid:76)(cid:0)(cid:48)(cid:82)(cid:79)(cid:68)(cid:85)(cid:67)(cid:84)(cid:83) and Joining Materials Specialty Wire and Cable (cid:115)(cid:0)(cid:0)(cid:52)(cid:69)(cid:76)(cid:69)(cid:67)(cid:79)(cid:77)(cid:77)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:51)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:0)(cid:48)(cid:82)(cid:79)(cid:86)(cid:73)(cid:68)(cid:69)(cid:82) (cid:115)(cid:0)(cid:46)(cid:65)(cid:86)(cid:89)(cid:0)(cid:15)(cid:0)(cid:36)(cid:69)(cid:70)(cid:69)(cid:78)(cid:83)(cid:69) (cid:115)(cid:0)(cid:0)(cid:47)(cid:73)(cid:76)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:39)(cid:65)(cid:83) (cid:115)(cid:0)(cid:50)(cid:65)(cid:73)(cid:76)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:52)(cid:82)(cid:65)(cid:78)(cid:83)(cid:73)(cid:84) (cid:115)(cid:0)(cid:0)(cid:45)(cid:65)(cid:82)(cid:73)(cid:78)(cid:69) (cid:115)(cid:0)(cid:0)(cid:35)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:33)(cid:83)(cid:83)(cid:69)(cid:77)(cid:66)(cid:76)(cid:89) (cid:115)(cid:0)(cid:41)(cid:78)(cid:68)(cid:85)(cid:83)(cid:84)(cid:82)(cid:73)(cid:65)(cid:76) 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, 2015 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 Secu- rities 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 Regulation 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, 2015, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $13,180,127,000 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 16, 2016 Common Stock, $1 par value per share 149,515,598 shares Specifically identified portions of the Company’s definitive Proxy Statement for the Annual Meeting of Shareholders to be held on April 25, 2016 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 2015, business was conducted from approximately 2,650 locations throughout the United States, Canada, Mexico, Australia and New Zealand. As of December 31, 2015, the Company employed approximately 39,600 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 guidelines, 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 shareholders 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 2016 annual meeting of shareholders. We expect to file that proxy statement with the SEC on or about Febru- ary 26, 2016, 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 Form 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 approximately 474,000 available part numbers, the Company offers complete inventory, cataloging, marketing, training and other programs in the automotive aftermarket. The Company is the sole member of the National Automotive Parts Association (“NAPA”), a voluntary trade association formed in 1925 to provide nationwide distribution of automotive parts. During 2015, 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; Repco and other automotive parts distribution centers, branches and auto parts stores in Australia and New Zealand owned and operated by GPC Asia Pacific, a wholly-owned subsidiary of the Company; import automotive parts distribution centers in the United States owned by the Company and operated by its Altrom America division; 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 Bal- kamp, Inc. (“Balkamp”), a wholly-owned subsidiary of the Company; distribution facilities in the United States owned by the Company and operated by its Rayloc division; 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 2 subsidiary of the Company; and an automotive parts distribution center and automotive parts stores in Mexico, owned and operated by Autopartes NAPA Mexico (“NAPA Mexico”), a wholly-owned subsidiary of the Com- pany. The Company’s network of U.S. automotive parts stores was expanded in 2015 via the acquisition of select store groups located in various regions of the United States. Additionally, the GPC Asia Pacific automotive busi- ness acquired Auto Electrics Australia (“AEA”) and Global Automotive (“Global”) in April and August, 2015, respectively. AEA is a specialist supplier of rotating electrical products, while Global has a regional network of six stores. Collectively, these new store groups and automotive businesses are expected to generate annual rev- enues of approximately $35 million USD. 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 that links North Ameri- can subscribers 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 49% of 2015 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 2015, the Company operated 59 domestic NAPA automotive parts distribution centers located in 40 states and approximately 1,100 domestic company-owned NAPA AUTO PARTS stores located in 45 states. The Company also operated domestically one TW Distribution heavy duty parts distribution center and 14 company-owned Traction Heavy Duty parts stores located in four states. The Traction operations are discussed further below in Related Operations. At December 31, 2015, the Company owned either a non- controlling or controlling interest in six corporations, which operated approximately 114 auto parts stores in nine states. 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 63% of the Company’s total U.S. Automotive sales and 23% 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 0.31% of the total sales of the Company. NAPA Canada/UAP, founded in 1926, is a leader in the distribution and marketing of replacement parts and accessories for automobiles and trucks and is also a significant supplier to the mining and forestry industries in Canada. NAPA Canada/UAP employs approximately 3,900 people and operates a network of 9 NAPA automo- tive parts distribution centers, three heavy duty parts distribution centers and one fabrication/remanufacturing facility supplying approximately 601 NAPA stores and 105 Traction wholesalers. The NAPA stores and Traction wholesalers in Canada include approximately 181 company owned stores, 12 joint ventures and 30 progressive owners in which NAPA Canada/UAP owns a 50% interest and approximately 483 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 three import automotive parts distribution centers and 10 branches. In the United States, Altrom America operates two import automotive parts distribution centers. 3 In Australia and New Zealand, GPC Asia Pacific, originally established in 1922, is a leading distributor of automotive replacement parts and accessories. GPC Asia Pacific operates eight distribution centers, 417 Repco stores and 80 branches associated with the Ashdown Ingram, Motospecs, McLeod and RDA Brakes operations. In Mexico, Auto Todo owns and operates 11 distribution centers, four auto parts stores and four tire centers. NAPA Mexico owns and operates one distribution center and eleven auto parts stores. Auto Todo and NAPA Mexico are licensees of the NAPA® name in Mexico. Products. Distribution centers have access to approximately 474,000 different parts and related supply items. Each item is cataloged and numbered for identification and accessibility. Significant inventories are car- ried 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 products. Traction sales also include products distributed under the HD Plus name, a proprietary line of automo- tive 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 40,000 products, which constitute the “Balkamp” line of products that are distributed through the NAPA system. These products are categorized into over 238 different product categories purchased from approx- imately 438 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 1,125 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 21 Traction Heavy Duty parts stores in the United States, of which 14 are company-owned and seven are independently owned. This group distributes heavy vehicle parts through the NAPA system and direct to small and large fleet owners and operators. Segment Data. In the year ended December 31, 2015, sales from the Automotive Parts Group were approximately 52% of the Company’s net sales, as compared to 53% in 2014 and 2013. 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 4 comprises an important feature of the inventory management services that the Company makes available to its NAPA AUTO PARTS store customers. Over the last 25 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 and whose sole member in 2015 owned and operated 59 distribution centers located throughout the United States. NAPA develops marketing concepts and programs that may be used by its members which, at December 31, 2015, includes only the Company. It is not involved in the chain of distribution. Among the automotive products purchased by the Company from various manufacturers for distribution are certain lines designated, cataloged, advertised and promoted as “NAPA” lines. Generally, the Company is not required to purchase any specific quantity of parts so designated and it may, and does, purchase competitive lines from the same as well as 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 products, industrial automation, hose, hydraulic and pneumatic components, industrial and safety 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 2015, 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 metals, 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, alternative energy, government, transportation, ports, and others. Motion services all manufacturing and processing industries with access to a database of 6.5 million parts. Additionally, Motion provides U.S. government agencies access to approximately 400,000 products and replacement parts through a Government Services Administration (GSA) schedule. 5 Effective February 1, 2015, Motion expanded its product and service offering in Alaska with the acquisition of Oil & Gas Supply, located in Anchorage, Alaska. We expect this business to generate $2-3 million in annual revenues. Effective February 2, 2015, Motion acquired Miller Bearings, a regional industrial distributor of bearings, power transmission products, industrial and safety supplies, hydraulic and pneumatic components. Headquartered in Orlando, Florida, Miller operates 17 branch locations throughout the state and one distribution center. In addi- tion, Miller has an export office providing industrial MRO products to Puerto Rico, the Dominican Republic and other Caribbean customers. Miller generates approximately $40 million in annual revenues and is operated as Miller Industrial Solutions, a division of Motion Industries. In 2015, the Industrial Parts Group also acquired Lake Erie Abrasive and Tool (“LEAT”) and Moss Rubber. LEAT was acquired on September 1, 2015, and is a distributor of abrasive tooling for the manufacturing industry. Moss Rubber was acquired December 1, 2015, and is a distributor of industrial rubber products includ- ing hose, belting, fittings and related products. LEAT and Moss Rubber are expected to generate annual revenues of approximately $30 million and $8 million, respectively. The Industrial Parts Group provides customers with supply chain efficiencies achieved through the compa- ny’s Inventory Management Solutions offering. This service provides inventory management, asset repair and tracking, vendor managed inventory commonly referred to as VMI, as well as RFID asset management of the customer’s inventory. Motion’s Energy Services Team routinely performs in-plant surveys and assessments, helping customers reduce their energy consumption and finding opportunities for improved sustainability, ulti- mately helping customers operate more profitably. Motion also provides a wide range of services and repairs such as: gearbox and fluid power assembly repair, process pump assembly and repair, hydraulic drive shaft repair, electrical panel assembly and repair, hose and gasket manufacture and assembly, as well as many other value-added services. A highly developed supply chain with vendor partnerships and 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. These services and supply chain efficiencies assist Motion in meeting the cost savings that many of its customers require and expect. Distribution System. In North America, the Industrial Parts Group operated 533 branches, 15 distribution centers and 46 service centers as of December 31, 2015. The distribution centers stock and distribute more than 260,000 different items purchased from more than 1,025 different suppliers. The service centers provide hydraulic, hose and mechanical repairs for customers. Approximately 33% of 2015 total industrial product pur- chases 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, which are 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. 6 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, 2015, sales from the Company’s Industrial Parts Group approximated 30% of the Company’s net sales, as compared to 31% in 2014 and 2013. For additional segment information, see Note 10 of Notes to Consolidated Financial Statements beginning on page F-1. 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” or “SPR”), a wholly-owned subsidiary of the Company, is headquartered in Atlanta, Georgia. S. P. Richards is engaged in the wholesale distribution 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 office furniture, technology products, general office and school sup- plies, cleaning, janitorial 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 January 2, 2015, S. P. Richards acquired JAL Associates Inc. (“JAL”). JAL is a regional whole- saler of office furniture with estimated annual revenues of $12 million. This business was consolidated into SPR’s operations in Baltimore, Maryland; Cranbury, New Jersey; and Richmond, Virginia during 2015. Effective May 1, 2015, S. P. Richards acquired the commercial products business of Dinesol Plastics, located in Niles, Ohio. This acquisition further expands SPR’s food service and janitorial product offering and is expected to generate annual revenues of approximately $3 million. Effective October 1, 2015, S. P. Richards acquired Malt Industries (“Malt”), a leading wholesale distributor of protective apparel located in Purvis, Mississippi. Malt is expected to generate annual revenues of approx- imately $20 million. Distribution System. The Office Products Group distributes more than 62,000 items to over 6,300 resellers and distributors throughout the United States and Canada from a network of 45 distribution centers. This group’s network of strategically located distribution centers provides overnight delivery of the Company’s compre- hensive product offering. Approximately 41% of the Company’s 2015 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, digital content and email campaigns for reseller websites, and education and training resources. In addition, world class market analytics programs are made available to qualified resellers. 7 Products. The Office Products Group distributes technology products and consumer electronics including storage media, printer supplies, iPad, iPhone and computer accessories, calculators, shredders, laminators, cop- iers, printers, fitness bracelets and digital cameras; office furniture including desks, credenzas, chairs, chair mats, office suites, panel systems, file, mobile and storage cabinets and computer workstations; 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 and audiovisual sup- plies; school and educational products including bulletin boards, teaching aids and art supplies; healthcare prod- ucts including first aid supplies, gloves, exam room supplies and furnishings, cleaners and waste containers; 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 700 of the industry’s leading manufacturers worldwide, S. P. Richards also markets products under its nine proprietary brands. These brands include: Spar- co™, an economical line of office supply basics; Compucessory®, a line of computer accessories; Lorell®, 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; Integra™, a line of writing instruments; Genuine Joe®, a line of cleaning and breakroom products; Business Source®, a line of basic office supplies available only to independent resellers; and Lighthouse, a brand of janitorial and cleaning products offered through the GCN busi- ness. The Company’s Impact and Malt businesses also offer an additional series of proprietary brands including ProGuard® and ProMax® that are product based and solution-specific oriented. Through the Company’s FurnitureAdvantage™ program, S. P. Richards provides resellers with an additional 16,000 furniture items made available to consumers in 7 to 10 business days. Segment Data. In the year ended December 31, 2015, sales from the Company’s Office Products Group approximated 13% of the Company’s net sales, as compared to 11% in 2014 and 12% in 2013. 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 product offerings, service, marketing programs, 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.” ELECTRICAL/ELECTRONIC MATERIALS GROUP The Electrical/Electronic Materials Group, operated as EIS, Inc. (“EIS”), a wholly-owned subsidiary of the Company, is headquartered in Atlanta, Georgia. EIS distributes materials to more than 20,000 electrical and elec- tronic manufacturers, as well as to industrial assembly and specialty wire and cable markets in North America. With 49 branch locations in the United States, Puerto Rico, the Dominican Republic, Mexico and Canada, EIS distributes over 100,000 items including wire, cable and connectivity solutions, insulating and conductive materials, assembly tools and test equipment. EIS also has seven light manufacturing facilities that provide cus- tom fabricated parts and specialty coated materials. Effective April 1, 2015, EIS acquired Connect Air International, Inc. (“Connect Air”) headquartered in Seat- tle, Washington. Connect Air is a leading North American specialty distributor of low-voltage wire and cable used in building applications, primarily HVAC (heating, ventilations and air-conditioning), security and fire alarm systems. Connect Air has six sales offices and warehouses across the United States and is expected to generate annual revenues of approximately $30 million. Distribution System. The Electrical/Electronic Materials Group provides distribution services to OEM’s, motor repair shops, specialty wire and cable users in market segments such as Telecom, Marine, Security and Industrial, as well as 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. 8 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 400 suppliers. 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 55% of 2015 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. EIS has developed AIMS™ (Advanced Inventory Management Solutions System), a totally integrated, highly automated solution for inventory management. EIS’ 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, 2015 and 2014, sales from the Company’s Electrical/ Electronic Materials Group approximated 5% of the Company’s net sales, as compared to 4% in 2013. For addi- tional 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, 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 9 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. 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 effect 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; • 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; • our ability to identify and successfully implement appropriate technological improvements; and • the economy in general. 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 number of vehicles in the automotive fleet, a function of new vehicle sales and vehicle scrappage rates, as a steady or growing total vehicle population supports the continued demand for maintenance 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; • gas prices, as increases in gas prices may deter consumers from using their vehicles; 10 • 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, which subsequently reduces demand for our products; 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 negatively impacts the need for certain office prod- ucts; • the level of unemployment, especially as it relates to white collar and service jobs, as high unemployment reduces the need for office products; • the level of office vacancy rates, as high vacancy rates reduces 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, changes in energy costs, uncertain credit markets, or other economic conditions, could have a negative impact on our business, financial condition, results of operations and cash flows. Our business and operating results have been and may in the future be adversely affected by uncertain global economic conditions, including domestic outputs, employment rates, inflation or deflation, instability in credit markets, declining consumer and business confidence, fluctuating commodity prices, interest rates, volatile exchange rates, and other challenges that could affect the global economy. Both our commercial and retail cus- tomers may experience deterioration of their financial resources, which could result in existing or potential cus- tomers delaying or canceling plans to purchase our products. Our vendors could experience similar conditions, which could impact their ability to fulfill their obligations to us. Future weakness in the global economy could adversely affect our business, results of operations, financial condition and cash flows in future periods. 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, changing customer preferences, store location, and pricing pressures. Because we seek to offer competitive prices, if our 11 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, both new and established. Furthermore, both the automotive aftermarket and the office supply industry continue to experience con- solidation. 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 competitors develop more effective strategies, we could lose customers and our sales and profits may decline. 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 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 con- solidation 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 vendors 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 or other economic factor. In addition, we would suffer an adverse impact if our vendors limit or cancel the return privileges that currently protect us from inventory obsolescence. If we experience a security breach, if our internal information systems fail to function properly or if we are unsuccessful in implementing, integrating or upgrading our information systems, our business operations could be materially affected. We depend on information systems to process customer orders, manage inventory and accounts receivable collections, purchase products, manage accounts payable processes, ship products to customers on a timely basis, maintain cost effective operations, provide superior service to customers and accumulate financial results. Despite our implementation of security measures, our IT systems are vulnerable to damages from computer viruses, natural disasters, unauthorized physical or electronic access, power outages, computer system or network failures, cyber-attacks and other similar disruptions. Maintaining and operating these measures requires con- tinuous investments, which the Company has made and will continue to make. A security breach could result in sensitive data being lost, manipulated or exposed to unauthorized persons or to the public. A serious prolonged disruption of our information systems for any of the above reasons could materially impair fundamental business processes and increase expenses, decrease sales or otherwise reduce earnings. Fur- thermore, such a breach may harm our reputation and business prospects and subject us to legal claims if there is 12 loss, disclosure or misappropriation of or access to our customers’ information. As threats related to cyber secu- rity breaches develop and grow, we may also find it necessary to make further investments to protect our data and infrastructure. 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 effect 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 taxes, 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 capi- tal 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. We recognize the growing demand for business-to-business and business-to-customer e-commerce options, and we could lose business if we fail to provide the e-commerce options our customers wish to use. Our success in e-commerce depends on our ability to accurately identify the products to make available through e-commerce platforms across our business segments, and to establish and maintain such platforms to provide the highest level of data security to our customers on and through the platforms our customers wish to use (including mobile) with rapidly changing technology in a highly competitive environment. We are dependent on key personnel and the loss of one or more of those key personnel could harm our business. Our future success significantly depends on the continued services and performance of our key management personnel. We believe our management team’s depth and breadth of experience in our industry is integral to executing our business plan. We also will need to continue to attract, motivate and retain other key personnel. The loss of services of members of our senior management team or other key employees, the inability to attract additional qualified personnel as needed or failure to plan for the succession of senior management and key per- sonnel could have a material adverse effect on our business. 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 59 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, 2015, the Company operated approximately 1,100 NAPA AUTO PARTS stores located in 45 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, one fabrication/remanufacturing facility and approximately 193 automotive parts and Traction stores in Canada. In 13 Mexico, Auto Todo operates 11 distribution centers and eight automotive parts stores and tire centers, and NAPA Mexico operates one distribution center and eleven automotive parts stores. These operations in both Canada and Mexico are conducted in leased facilities. GPC Asia Pacific operates throughout Australia and New Zealand with eight distribution centers, 417 Repco stores and 80 branches associated with the Ashdown Ingram, Motospecs, McLeod and RDA Brakes operations. These distribution center, store and branch operations are conducted in leased facilities. The Company’s Automotive Parts Group also operates four Balkamp distribution and redistribution centers, four Rayloc distribution facilities and three transfer and shipping facilities. Nearly all of the Balkamp and Rayloc operations are conducted in facilities owned by the Company. Altrom Canada operates 13 import parts dis- tribution centers and branches, and Altrom America operates two import parts distribution centers. The Heavy Vehicle Parts Group operates one TW distribution center, which serves 21 Traction stores of which 14 are com- pany 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, 46 service centers and 533 branches. Approximately 90% of these locations are operated in leased facilities. The Company’s Office Products Group operates 40 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 50 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 56 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 2,550 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. 14 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 2015 2014 High Low High Low Quarter First . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $108.07 94.74 91.02 92.32 $91.74 89.17 78.76 79.77 $ 90.00 89.05 90.20 109.00 $76.50 83.43 82.15 84.99 Dividends Declared per Share 2015 2014 Quarter First . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.6150 0.6150 0.6150 0.6150 $0.5750 0.5750 0.5750 0.5750 15 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, 2010 and ended December 31, 2015. This graph assumes that $100 was invested on December 31, 2010 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 300 275 250 225 200 175 150 125 100 75 50 25 0 2010 2011 2012 2013 2014 2015 Genuine Parts Company, S&P 500 Index and peer group composite index Cumulative Total Shareholder Return $ at Fiscal Year End 2010 2011 2012 2013 2014 2015 Genuine Parts Company 100.00 123.27 132.23 177.90 233.78 193.71 S&P 500 Peer Index 100.00 102.11 118.45 156.81 178.28 180.74 100.00 95.67 108.60 155.29 161.38 150.26 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, 2010 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 Essendant. 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 segments on a pro rata basis to calculate the final Peer Index. 16 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 2010 2011 2012 2013 2014 2015 Automotive Parts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Industrial Parts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Office Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Electrical/Electronic Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50% 49% 49% 53% 53% 52% 31% 33% 34% 31% 31% 30% 15% 14% 13% 12% 11% 13% 4% 4% 4% 4% 5% 5% Holders As of December 31, 2015, there were 4,816 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, 2015: Period October 1, 2015 through October 31, 2015 . . . November 1, 2015 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 14,932 $88.37 250 7,042,868 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298,349 $88.33 290,028 6,752,840 December 1, 2015 through December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 519,400 832,681 $86.45 $87.16 480,843 771,121 6,271,997 6,271,997 (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 6.3 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, 2015. 17 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, 2015 2014 2013 2012 2011 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: $15,280,044 10,724,192 (In thousands, except per share data) $14,077,843 9,857,923 $15,341,647 10,747,886 $13,013,868 9,235,777 $12,458,877 8,852,837 3,432,171 1,123,681 418,009 705,672 $ 3,476,022 1,117,739 406,453 711,286 $ 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 $ 152,496 154,375 155,714 156,420 157,660 Diluted net income . . . . . . . . . . . . . Dividends declared . . . . . . . . . . . . . December 31 closing stock price . . Total debt, less current maturities . . . . Total equity . . . . . . . . . . . . . . . . . . . . . Total assets . . . . . . . . . . . . . . . . . . . . . $ 4.63 2.46 85.89 250,000 3,159,242 $ 8,144,771 $ 4.61 2.30 106.57 500,000 3,312,364 $ 8,246,238 $ 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 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. The Company conducted business in 2015 throughout the United States, Canada, Australia, New Zealand, Mexico and Puerto Rico from approximately 2,650 locations. We recorded consolidated net sales of $15.3 billion for the year ended December 31, 2015, down 0.4% compared to sales in 2014. Consolidated net income for the year ended December 31, 2015 was $706 million, down 1% from $711 million in 2014. Our revenue and earnings in 2015 reflect a 3% negative impact of currency translation and after adjusting for this factor, the Company produced an increase in both sales and net income. The Company’s internal growth initiatives, including the positive impact of acquisitions, as well as effective cost management, which we discuss further below, served to support our underlying progress for the year. The relatively unchanged sales results for 2015 compare to a 9% sales increase in 2014 and an 8% sales increase in 2013. Net income in 2014 increased by 4% and was up 6% in 2013. In 2014, improved market con- ditions relative to the prior year drove sales and earnings growth in each of our four business segments. In 2013, we experienced difficult market conditions in the Industrial, Electrical/Electronic and Office industries, while the Automotive business performed reasonably well. Over the three year period of 2013 through 2015, our financial performance was positively impacted by a variety of initiatives the Company implemented to grow sales and earnings across our businesses. Examples of such initiatives include strategic acquisitions, the introduction of 18 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, 2015 consolidated balance sheet, the Company’s cash balance of $212 million compares to cash of $138 million at December 31, 2014. The Company continues to maintain a strong cash position, supported by relatively steady net income and effective asset management in 2015. Accounts receivable decreased by approximately 3%, which compares to an approximate 4% sales decrease in the fourth quarter of the year, and inventory was down by approximately 1%. Accounts payable increased $267 million or 10% from the prior year, due primarily to improved payment terms with certain suppliers. Total debt outstanding at December 31, 2015 was $625 million, down from total debt of $765 at December 31, 2014. RESULTS OF OPERATIONS Our results of operations are summarized below for the three years ended December 31, 2015, 2014 and 2013. Year Ended December 31, 2015 2014 2013 Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . Net Sales (In thousands except per share data) $15,341,647 4,593,761 711,286 4.61 $15,280,044 4,555,852 705,672 4.63 $14,077,843 4,219,920 684,959 4.40 Consolidated net sales for the year ended December 31, 2015 totaled $15.3 billion, down slightly from 2014. 2015 net sales included a 1.5% increase in sales volume and a 1% contribution from acquisitions, offset by an approximate 3% negative impact of currency. The impact of product inflation varied by business in 2015 and, cumulatively, prices were down 0.2% in the Automotive segment, up approximately 0.9% in the Industrial seg- ment, up approximately 0.6% in the Office segment and down approximately 1.7% in the Electrical/Electronic segment. The Company is well positioned with strategic plans in place to grow sales in 2016. Consolidated net sales for the year ended December 31, 2014 totaled $15.3 billion, a 9% increase from 2013 and driven by revenue growth in each of our four business segments. The increase in sales volume and acquis- itions across our four businesses each contributed 5% to our total sales growth, while currency negatively impacted total sales by 1%. The impact of product inflation varied by business in 2014 and, cumulatively, prices were flat in the Automotive segment, up approximately 1.5% in the Industrial segment, up approximately 1.4% in the Office segment and up approximately 0.3% in the Electrical/Electronic segment. Automotive Group Net sales for the Automotive Group (“Automotive”) were $8.0 billion in 2015, a 1% decrease from 2014. The decrease in sales for the year consists of a positive core sales increase of approximately 3.5% and a slight benefit from acquisitions. Combined, the approximate 4% growth was offset by a 5% negative impact of cur- rency associated with our automotive businesses in Canada, Australasia and Mexico. Automotive sales were not materially impacted by product inflation. In 2015, Automotive revenues were flat in the first and second quarters and down 2% in the third and fourth quarters. We believe that the underlying fundamentals in the automotive aftermarket, including the overall number and age of the vehicle population as well as the positive increase in miles driven, remain solid and will serve to drive sustained demand for automotive aftermarket maintenance and supply items in 2016. Despite the expectation for continued headwinds associated with the strong U.S. dollar and related impact of currency, we expect these fundamentals and the internal growth initiatives in our Automotive business to drive sales growth for this group in 2016. Net sales for Automotive were $8.1 billion in 2014, an increase of 8% from 2013. The increase in sales for the year consists of a positive comparable store sales increase of approximately 6% and approximately 4% from 19 acquisitions. These increases were offset by a 2% negative impact of currency associated with our automotive businesses in Canada, Australasia and Mexico. Automotive sales were not materially impacted by product inflation. In 2014, Automotive revenues were up 23% in the first quarter, up 5% in the second quarter and up 4% in the third and fourth quarters. The first quarter sales increase includes the impact of the GPC Asia Pacific acquisition, which was anniversaried on April 1, 2014. Industrial Group Net sales for Motion Industries, our Industrial Group (“Industrial”), were $4.6 billion in 2015, a 3% decrease from 2014. Sales volumes in Industrial were down approximately 4% from the prior year, while a 1% negative impact of currency associated with our Canadian and Mexican operations also contributed to the decline in sales. These items were partially offset by higher transaction values associated with product inflation, which added an approximate 1% to sales, and 1% in sales from acquisitions. Industrial revenues were up 3% in the first quarter of 2015, down 2% in the second quarter, down 4% in the third quarter and down 7.5% in the fourth quar- ter. The manufacturing indices we track in this group progressively weakened throughout 2015, which correlates to lower demand among our customer base and, in particular, those customers dependent on exports as well as the oil and gas sector. We expect the tough industrial economy to persist well into 2016, although we do have multiple initiatives in place to help us grow our market share and overcome these challenges. Net sales for Industrial were $4.8 billion in 2014, an increase of 8% from 2013. Sales volumes in Industrial were up approximately 4.5% from the prior year, while higher transaction values associated with product inflation added 1.5% and acquisitions contributed approximately 3% to sales in 2014. These items were offset by a 1% negative impact of currency associated with our Canadian business. Industrial revenues were up 4% in the first quarter of 2014, up 7% in the second quarter and up 10% in the third and fourth quarters. Office Group Net sales for S. P. Richards, our Office Products Group (“Office”), were $1.9 billion in 2015, an increase of 7.5% from 2014. The increase in sales reflects an approximate 4% increase in sales volume, a 0.6% increase in higher transaction values associated with price inflation and a 3% contribution from acquisitions. These items were offset by an approximate 0.5% negative impact of currency associated with our Canadian operations. In 2015, Office experienced relatively stable industry conditions, as evidenced by the steady growth in new jobs throughout the year. These conditions combined with new business from a primary customer, which anni- versaried on July 1, 2015, served to drive the increase in sales volume for the year. Sales were up 17% in the first quarter, up 14% in the second quarter, up 3% in the third quarter and down 2% in the fourth quarter of 2015. We will continue to focus on our growth initiatives, including the ongoing diversification of product and customer portfolios, market share gains and acquisitions to further improve the Office business in 2016. Net sales for Office were $1.8 billion in 2014, an increase of 10% from 2013. The increase in sales reflects a 4% increase in sales volume, a 1.4% increase in higher transaction values associated with price inflation and a 5% contribution from acquisitions. These items were offset by the slight negative impact of currency associated with our Canadian operations. In 2014, Office experienced improving industry conditions, as evidenced by con- sistently stronger new jobs reports relative to 2013 as well as a strengthening U.S. GDP. These conditions com- bined with new business with a primary customer, effective July 1, 2014, served to drive the increased sales volume for the year. Sales were unchanged in the first quarter, up 4% in the second quarter, up 15% in the third quarter and up 22% in the fourth quarter of 2014. Electrical/Electronic Group Net sales for EIS, our Electrical and Electronic Group (“Electrical/Electronic”), were $751 million in 2015, an increase of 1.5% from 2014. The increase in sales consists of a 5% contribution from acquisitions, offset by a 1.7% headwind from lower transaction values associated with price deflation, a 1% negative sales impact of copper pricing and a 1% decrease in sales volume. Sales for Electrical/Electronic increased by 1% in the first quarter, 4% in the second quarter, 2% in the third quarter and were unchanged in the fourth quarter, relative to 20 the prior year periods. As this business is dependent on the manufacturing segment of the economy, we expect to face challenging end market conditions for at least the first half of 2016. To offset the challenges, we have ini- tiatives in place to generate growth for this business. Net sales for Electrical/Electronic were $739 million in 2014, an increase of 30% from 2013. The increase in sales consists of an increase in sales volume of approximately 1% and a 29% sales contribution from acquis- itions. The benefit of higher transaction values associated with slight price inflation for the year was offset by the negative sales impact of copper pricing. Sales for Electrical/Electronic increased by 30% in the first quarter, 32% in the second quarter, 35% in the third quarter and 23% 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 items 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 $10.72 billion in 2015, $10.75 bil- lion in 2014 and $9.86 billion in 2013. Cost of goods sold in 2015 and 2014 changed from the prior year periods in accordance with the related percentage change in sales for the same periods. For these periods, product inflation was relatively insignificant and actual costs were relatively unchanged from the prior year. Cost of goods sold represented 70.2% of net sales in 2015, 70.1% of net sales in 2014 and 70.0% of net sales in 2013 and, as a percent of net sales, increased slightly in 2015 from 2014 and also in 2014 from 2013. In 2015, 2014 and 2013, the Industrial and Office business segments experienced slight vendor price increases. In 2014 and 2013, the Electrical/Electronic business also experienced slight 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, stores and branches, which accounts for approx- imately 65% of total SG&A. Additional costs in SG&A include our facilities, delivery, marketing, advertising, legal and professional costs. SG&A of $3.28 billion in 2015 decreased by $37 million or approximately 1% from 2014. This represents 21.4% of net sales, and compares favorably to 21.6% of net sales in 2014. The decrease in SG&A expenses as a percentage of net sales from the prior year reflect the positive impact of our cost control measures and our man- agement teams’ focus on properly managing the Company’s expenses. We also continue to assess the optimal cost structure in our businesses. Depreciation and amortization expense was $142 million in 2015, a decrease of approximately $6 million or 4% from 2014. The provision for doubtful accounts was $12 million in 2015, up from $7 million in 2014. We believe the Company is adequately reserved for bad debts at December 31, 2015. SG&A increased by $286 million or approximately 9% to $3.31 billion in 2014, representing 21.6% of net sales, which compares to 21.5% of net sales in 2013. The increase in SG&A expenses as a percentage of net sales from the prior year primarily reflects the $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 $148 million in 2014, an increase of $14 million or 11% from 2013. This increase relates to higher depreciation and the amortization associated with acquisitions in both 2014 and 2013. The provision for doubtful accounts was $7 million in 2014, down from $9 million in 2013. Total share-based compensation expense for the years ended December 31, 2015, 2014 and 2013 was $17.7 million, $16.2 million and $12.6 million, respectively. Refer to Note 5 of the Consolidated Financial Statements for further information regarding share-based compensation. 21 Non-Operating Expenses and Income Non-operating expenses consist primarily of interest. Interest expense was $22 million in 2015, $25 million in 2014 and $27 million in 2013. The $3 million decrease in interest expense in 2015 reflects the impact of lower outstanding debt levels during the year relative to 2014. The $2 million decrease in interest expense in 2014 reflects the favorable interest rate on certain debt, which was renewed in November 2013. In “Other”, the net benefit of interest income, equity method investment income, investment dividends and noncontrolling interests in 2015 was $21 million, a $2 million increase from the prior year due to higher interest income earned in 2015 relative to 2014. These items were $19 million in 2014, down from $22 million in 2013. The decrease of $3 million from the prior year was due to lower interest income earned in 2014 relative to 2013. Income Before Income Taxes Income before income taxes was $1.1 billion in 2015, a slight increase from 2014. As a percentage of net sales, income before income taxes was 7.4% in 2015 compared to 7.3% in 2014. In 2014, income before income taxes of $1.1 billion was up 7% from 2013 and as a percentage of net sales was 7.3% compared to 7.4% in 2013. Automotive Group Automotive income before income taxes as a percentage of net sales, which we refer to as operating margin, increased to 9.1% in 2015 from 8.7% in 2014. This group’s initiatives to improve its gross margin and effectively manage its costs positively impacted Automotive’s operating profit during the year. Looking forward, planned initiatives to grow sales and control costs are intended to further improve its operating margin in the years ahead. Automotive’s operating margin of 8.7% in 2014 was up slightly from 8.6% in 2013. The change in operat- ing costs as a percentage of net sales positively impacted operating profit during the year. Industrial Group Industrial’s operating margin decreased to 7.3% in 2015 from 7.8% in 2014, as the decline in sales for the year resulted in lower volume incentives, which pressured gross margins, and reduced expense leverage relative to 2014. The challenging market conditions for this business are expected to persist well into 2016. However, Industrial has multiple initiatives in place to help us overcome these challenges. Industrial’s operating margin improved to 7.8% in 2014 from 7.2% in 2013, as the combination of greater expense leverage associated with the increase in sales and generally improving gross margins, primarily related to the increase in volume incentives, positively impacted operating profit in 2014. Office Group Office’s operating margin decreased slightly to 7.3% in 2015 from 7.4% in 2014, primarily related to the deleveraging of expenses due to slower sales growth in the last half of the year. Office will continue to focus on its sales initiatives and cost control measures in 2016. Office’s operating margin decreased to 7.4% in 2014, down from 7.5% in 2013, primarily related to the lower operating margin generated by new business with a large primary customer. This was partially offset by greater expense leverage driven by this group’s overall sales increase in 2014. Electrical/Electronic Group Electrical/Electronic’s operating margin increased to 9.3% in 2015 from 8.8% in 2014, as higher margin acquisitions, declining copper prices and effective cost management positively impacted the operating margins for this group. Electrical/Electronic will continue to focus on its sales initiatives and cost controls to further improve its operating margin in 2016. Electrical/Electronic’s operating margin increased to 8.8% in 2014 from 8.4% in 2013, primarily due to greater expense leverage associated with this group’s sales increase in 2014. 22 Income Taxes The effective income tax rate of 37.2% in 2015 increased from 36.4% in 2014. The increase in rate primar- ily reflects the Company’s higher mix of U.S. earnings in 2015, which is taxed at a higher rate relative to our foreign operations. To a lesser extent, the less favorable retirement asset valuation adjustment in 2015 relative to 2014 impacted the increase in rate. The income tax rate of 36.4% in 2014 increased from 34.4% in 2013. The increase in rate is primarily due to the favorable tax rate applied to the one-time gain associated with the GPC Asia Pacific acquisition recorded in 2013. Additionally, the Company’s retirement asset valuation adjustment was less favorable in 2014 relative to 2013. The higher mix of U.S. earnings, taxed at a higher rate relative to our foreign operations, also contributed to the increase in the 2014 tax rate. Net Income Net income was $706 million in 2015, a decrease of 1% from $711 million in 2014. On a per share diluted basis, net income was $4.63 in 2015, up slightly compared to $4.61 in 2014. Net income was 4.6% of net sales in 2015 and 2014. Net income was $711 million in 2014, an increase of 4% from $685 million in 2013. On a per share diluted basis, net income was $4.61 in 2014 compared to $4.40 in 2013, up 5%. Net income in 2014 was 4.6% of net sales compared to 4.9% of net sales in 2013. 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. Before the impact of these adjustments, net income in 2014 was up 9% from 2013, and on a per share diluted basis, net income was up 10% from 2013. FINANCIAL CONDITION Our cash balance of $212 million at December 31, 2015 compares to our cash balance of $138 million at December 31, 2014, as discussed further below. The Company’s accounts receivable balance at December 31, 2015 decreased by approximately 3% from the prior year. This compares to the Company’s 4% sales decrease for the fourth quarter of 2015, and we are satisfied with the quality and collectability of our accounts receivable. Inventory at December 31, 2015 decreased by approximately 1% from December 31, 2014 and accounts payable increased $267 million or approximately 10% from December 31, 2014 due primarily to improved payment terms with certain suppliers. 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 $625 million of total debt outstanding at December 31, 2015, of which $250 million matures in November 2016 and $250 million matures in December 2023. In addition, the Company has an unsecured revolving line of credit with a consortium of financial institutions for $1.2 billion, of which approximately $125 million and $265 million were outstanding under the line of credit at December 31, 2015 and 2014, respectively. 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 operations, including working capital requirements, scheduled debt payments, interest payments, capital expenditures, benefit plan contributions, income tax obligations, dividends, share repurchases and contemplated acquisitions. The ratio of current assets to current liabilities was 1.4 to 1 at December 31, 2015 and 1.6 to 1 at December 31, 2014. Our liquidity position remains solid. The Company’s total debt outstanding at December 31, 2015 is down $140 million or 18% from December 31, 2014. 23 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): 2015 2014 2013 2015 vs. 2014 2014 vs. 2013 Operating Activities . . . . . . . . . . . . . . . . . . . . Investing Activities . . . . . . . . . . . . . . . . . . . . . Financing Activities . . . . . . . . . . . . . . . . . . . . $1,159,373 (263,627) (806,074) (In thousands) $ 790,145 (386,715) (455,440) $1,056,731 (825,579) (425,117) 47% (32)% 77% (25)% (53)% 7% Net Cash Provided by Operating Activities: The Company continues to generate cash and in 2015 net cash provided by operating activities totaled $1.2 billion. This reflects a 47% increase from 2014, as the collective change in trade accounts receivable, merchan- dise inventories and trade accounts payable represented a $312 million source of cash in 2015 compared to a $34 million use of cash in 2014. Net cash provided by operating activities was $790 million in 2014, a 25% decrease from 2013 due primarily to the change in trade accounts receivable, merchandise inventories and trade accounts payable, which, collectively, net to a $34 million use of cash in 2014 compared to a $278 million source of cash in 2013. This decline was partially offset by the increase in net income and depreciation and amortization of $26 million and $14 million, respectively, in 2014. Net Cash Used in Investing Activities: Net cash flow used in investing activities was $264 million in 2015 compared to $387 million in 2014, a decrease of 32%. Cash used for acquisitions of businesses and other investing activities in 2015 was $163 mil- lion, or $125 million less than in 2014. Capital expenditures of $110 million in 2015 were relatively unchanged from 2014, and were slightly lower than our original estimate of $125 to $145 million for the year. We estimate that cash used for capital expenditures in 2016 will be approximately $140 to $160 million. Net cash flow used in investing activities was $387 million in 2014 compared to $826 million in 2013, a decrease of 53%. Cash used for acquisitions of businesses and other investing activities in 2014 was $288 million, or $424 million less than in 2013. Capital expenditures of $108 million in 2014 decreased by $16 million or 13% from 2013, and were slightly lower than our estimate of $120 to $130 million for the year. Net Cash Used in Financing Activities: The Company used $806 million of cash in financing activities in 2015, up 77% from the $455 million used in financing activities in 2014. Cash used in financing activities in 2014 was up $30 million or 7% from the $425 million used in 2013. For the three years presented, net cash used in financing activities was primarily for divi- dends paid to shareholders and repurchases of the Company’s common stock. The Company paid dividends to shareholders of $368 million, $347 million and $326 million during 2015, 2014 and 2013, respectively. The Company expects this trend of increasing dividends to continue in the foreseeable future. During 2015, 2014 and 2013, the Company repurchased $292 million, $96 million and $121 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. In 2015, net cash used in financing activities also included payments on debt of approx- imately $140 million net of debt proceeds. Notes and Other Borrowings The Company maintains a $1.2 billion unsecured revolving line of credit with a consortium of financial institutions, which matures in June 2020 with two optional one year extensions and bears interest at LIBOR plus a margin, which is based on the Company’s leverage ratio (1.17% at December 31, 2015). 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 facility with appropriate notice. At December 31, 2015 and 24 2014, approximately $125 million and $265 million were outstanding under this line of credit, respectively. Due to the workers’ compensation and insurance reserve requirements in certain states, the Company also had unused letters of credit of approximately $63 million outstanding at December 31, 2015 and 2014. At December 31, 2015, the Company had unsecured Senior Notes outstanding under financing arrangement 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, 2015, the Company was in compliance with all such covenants. The weighted average interest rate on the Company’s total outstanding borrowings was approximately 2.76% at December 31, 2015 and 2.46% at December 31, 2014. Total interest expense, net of interest income, for all borrowings was $20.4 million, $24.2 million and $24.3 million in 2015, 2014 and 2013, 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, 2015: Contractual Obligations Payment Due by Period Total Less Than 1 Year 1-3 Years 3-5 Years Over 5 Years Credit facilities . . . . . . . . . . . . . . . . . . . . . Operating leases . . . . . . . . . . . . . . . . . . . . $ 693,300 767,900 $390,900 207,800 (In thousands) $ 15,000 281,400 $ 15,000 126,400 $272,400 152,300 Total contractual cash obligations . . . . . . . $1,461,200 $598,700 $296,400 $141,400 $424,700 Due to the uncertainty of the timing of future cash flows associated with the Company’s unrecognized tax benefits at December 31, 2015, the Company is unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authorities. Therefore, $18 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. 25 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, 2015: 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 62,874 62,874 — $ — $— — — — (In thousands) — $ 332,632 130,218 123,028 79,386 — Total commercial commitments . . . . . . . . . . $395,506 $193,092 $123,028 $79,386 $— 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 2015 were $55 million. We expect to make $49 million in cash contributions to our qualified defined benefit plans in 2016, and contributions required for 2016 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 2015, the Company repurchased approximately 3.3 million shares and the Company had remaining authority to purchase approximately 6.3 million shares at December 31, 2015. 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 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 provisions related thereto. Historically, these losses have not been significant as the vast majority of the Company’s inventories are 26 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 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 expected defaults and, therefore, the need to revise estimates for bad debts. For the years ended December 31, 2015, 2014 and 2013, the Company recorded provisions for doubtful accounts of approximately $12.4 million, $7.2 million, and $8.7 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 2016 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- vide 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). 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. Refer to Note 7 of the Consolidated Finan- cial Statements for more information regarding these assumptions. 27 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 2016 pension expense or income is 7.83% 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 4.82% at December 31, 2015. Net periodic benefit (income) cost for our defined benefit pension plans was ($5.8) million, ($9.6) million and $51.1 million for the years ended December 31, 2015, 2014 and 2013, respectively. The income associated with the pension plans in 2015 and 2014 reflects the impact of the hard freeze effective December 31, 2013. Refer to Note 7 of the Consolidated Financial Statements for more information regarding employee benefit plans. QUARTERLY RESULTS OF OPERATIONS The following is a summary of the quarterly results of operations for the years ended December 31, 2015 and 2014: 2015 Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earnings per share: Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earnings per share: Three Months Ended March 31, June 30, Sept. 30, Dec. 31, (In thousands except per share data) $3,736,051 1,112,819 161,010 $3,940,401 1,178,330 195,373 $3,921,802 1,169,225 188,016 $3,681,790 1,095,478 161,273 1.05 1.05 1.28 1.28 1.24 1.24 1.07 1.07 $3,624,897 1,084,630 157,484 $3,908,387 1,179,168 197,727 $3,985,909 1,183,422 190,516 $3,822,454 1,146,541 165,559 Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02 1.02 1.29 1.28 1.25 1.24 1.08 1.07 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 condensed consolidated financial statements for inventory adjustments, the accrual of bad debts, customer sales returns and volume incentives earned, among others. Inventory adjustments (including adjustments for a majority of inventories that are valued under the last- in, first-out (LIFO) method) are accrued on an interim basis and adjusted in the fourth quarter based on the annual book to physical inventory adjustment and LIFO valuation, which is performed each year-end. Reserves for bad debts and customer sales returns are estimated and accrued on an interim basis based upon historical experience. Volume incentives are estimated based upon cumulative and projected purchasing levels. The esti- mates and assumptions for interim reporting may change upon final determination at year-end, and such changes may be significant. The effect of these adjustments in 2015 and 2014 was not significant. 28 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, the Australian dollar, the functional currency of our Australasian operations and, to a lesser extent, the Mexican peso, the functional currency of our Mexican 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, 2015. During 2015 and 2014, 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 $252 million and $258 million, respectively. A 15% shift in exchange rates between those functional currencies and the U.S. dollar would have impacted translated net sales by approximately $378 million in 2015 and $388 million in 2014. A 20% shift in exchange rates between those functional currencies and the U.S. dollar would have impacted trans- lated net sales by approximately $504 million in 2015 and $517 million in 2014. 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. Not applicable. 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. 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, 2015 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. 29 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, 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. ITEM 9B. OTHER INFORMATION. Not applicable. 30 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 or her successor has been elected and qualified, or until his or her earlier death, resignation, removal, retirement or disqualification. The current executive officers of the Company are: Thomas C. Gallagher, age 68, 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 59, a director of the Company since April 2012, was appointed President of the Company in January 2012, and served as President of the Company’s U.S. Automotive Parts Group from July 2009 to February 1, 2016. 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 Marketing in 2003, the year he joined the Company. Carol B. Yancey, age 52, has been Executive Vice President and Chief Financial Officer of the Com- pany since March 2013, and also held the additional title of Corporate Secretary of the Company up to February 2015. 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. James R. Neill, age 54, was appointed Senior Vice President of Human Resources of the Company in April 2014. Mr. Neill was Senior Vice President of Employee Development and HR Services from April 2013 until his appointment as Senior Vice President of Human Resources of the Company. Previously, Mr. Neill served as the Senior Vice President of Human Resources at Motion Industries from 2008 to 2013. Mr. Neill was Vice President of Human Resources at Motion from 2006 to 2007. Timothy P. Breen, age 55, was appointed President and Chief Executive Officer of Motion Industries in November 2014. Mr. Breen was President and Chief Operating Officer from 2013 until his appointment as President and Chief Executive Officer. Previously, Mr. Breen was the Executive Vice President and Chief Operating Officer from 2012 to 2013. Mr. Breen was the Senior Vice President of Motion’s U.S. Operations from 2011 to 2012 and was Senior Vice President and Group Executive from 2008 to 2011. Mr. Breen served as Vice President of Motion Industries from 2000 to 2008. 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”, “2015 Grants of Plan-Based Awards”, “2015 Outstanding Equity Awards at Fiscal Year-End”, “2015 Option Exercises and Stock Vested”, “2015 Pension Benefits”, “2015 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. 31 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. Equity Compensation Plan Information The following table gives information as of December 31, 2015 about the common stock that may be issued under all of the Company’s existing equity compensation plans: (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 Plan Category Equity Compensation Plans Approved by Shareholders: . . . . . . . . . . . . . . . . . . . . . . . . Equity Compensation Plans Not Approved by Shareholders: . . . . . . . . . . . . . . . . . . . . . . . . 46,000(2) 4,134,845(3) —(4) 85,284(5) Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,266,129 $44.20 $70.97 n/a n/a — (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) — — 10,000,000(6) 914,716 10,914,716 (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 2015 Incentive Plan (5) Genuine Parts Company Directors’ Deferred Compensation Plan, as amended (6) 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 ACCOUNTANT FEES AND SERVICES. Information required by this item is set forth under the heading “Proposal 4. Ratification of Selection of Independent Auditors” of the Proxy Statement and is incorporated herein by reference. 32 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, 2015 and 2014 Consolidated statements of income and comprehensive income — Years ended December 31, 2015, 2014 and 2013 Consolidated statements of equity — Years ended December 31, 2015, 2014 and 2013 Consolidated statements of cash flows — Years ended December 31, 2015, 2014 and 2013 Notes to consolidated financial statements — December 31, 2015 (2) Financial Statement Schedules The following consolidated financial statement schedule of Genuine Parts Company and Subsidiaries, set forth immediately following the consolidated financial 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 not applicable, 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.) 33 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.) 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.) 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.) 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.) 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. 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. 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.) 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.) 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 Compa- ny’s Annual Report on Form 10-K, dated March 10, 2000.) Genuine Parts Company Supplemental Retirement Plan, as amended and restated as of Jan- uary 1, 2009. (Incorporated herein by reference from the Company’s Annual Report on Form 10-K, dated February 27, 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.) 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.) 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. 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.) 34 Exhibit 10.18* Exhibit 10.19* Exhibit 10.20* Exhibit 10.21* Exhibit 10.22* Exhibit 10.23* Exhibit 10.24* Exhibit 10.25* Exhibit 10.26* Exhibit 10.27* Exhibit 10.28* 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.) Description of Director Compensation. (Incorporated herein by reference from the Company’s Quarterly Report on Form 10-Q, dated May 7, 2014.) 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.) 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 Company’s Annual Report on Form 10-K, dated February 28, 2007.) 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.) Genuine Parts Company 2015 Incentive Plan, effective November 17, 2014. (Incorporated herein by reference from the Company’s Current Report on Form 8-K, dated April 28, 2015.) Genuine Parts Company Performance Restricted Stock Unit Award Agreement. (Incorporated herein by reference from the Company’s Quarterly Report on Form 10-Q, dated May 7, 2014.) 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.) 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.) Form of Executive Officer Change in Control Agreement. (Incorporated herein by reference from the Company’s Annual Report on Form 10-K, dated February 26, 2015) * Indicates management contracts and compensatory plans and arrangements. Exhibit 21 Exhibit 23 Exhibit 31.1 Exhibit 31.2 Exhibit 32.1 Exhibit 32.2 Exhibit 101 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). 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, 2015 and 2014; (ii) the Consolidated Statements of Income and Comprehensive Income for the Years ended December 31, 2015, 2014 and 2013; (iii) the Consolidated Statements of Equity for the Years ended December 31, 2015, 2014 and 2013; (iv) the Consolidated Statements of Cash Flows for Years ended December 31, 2015, 2014 and 2013; (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. 35 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 2/26/2016 (Date) /s/ Carol B. Yancey 2/26/2016 Carol B. Yancey (Date) Executive Vice President and Chief Financial and Accounting Officer 36 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/ Thomas C. Gallagher Thomas C. Gallagher Director Chairman and Chief Executive Officer (Principal Executive Officer) 2/15/2016 (Date) /s/ Carol B. Yancey Carol B. Yancey Executive Vice President and Chief Finan- cial and Accounting Officer (Principal Financial and Accounting Officer) 2/15/2016 (Date) 2/15/2016 (Date) 2/15/2016 (Date) 2/15/2016 (Date) 2/15/2016 (Date) 2/15/2016 (Date) 2/15/2016 (Date) /s/ Dr. Mary B. Bullock Dr. Mary B. Bullock Director /s/ Paul D. Donahue Paul D. Donahue Director /s/ Gary P. Fayard Gary P. Fayard Director /s/ Donna W. Hyland Donna W. Hyland Director /s/ Robert C. Loudermilk, Jr. Robert C. Loudermilk, Jr. Director Jerry W. Nix /s/ Jerry W. Nix Director /s/ E. Jenner Wood, III E. Jenner Wood, III Director /s/ Elizabeth W. Camp Elizabeth W. Camp Director Jean Douville /s/ Jean Douville Director John R. Holder /s/ John R. Holder Director John D. Johns /s/ John D. Johns Director /s/ Wendy B. Needham Wendy B. Needham Director /s/ Gary W. Rollins Gary W. Rollins Director 2/15/2016 (Date) 2/15/2016 (Date) 2/15/2016 (Date) 2/15/2016 (Date) 2/15/2016 (Date) 2/15/2016 (Date) 2/15/2016 (Date) 37 ANNUAL REPORT ON FORM 10-K INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE Report of Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 as of December 31, 2015 and 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2015, 2014 and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statements of Equity for the Years Ended December 31, 2015, 2014 and 2013 . . . . . . . . . . . . Consolidated Statements of Cash Flows for the Years Ended December 31, 2015, 2014 and 2013 . . . . . . . . Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial Statement Schedule II — Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page F-2 F-3 F-4 F-5 F-6 F-7 F-8 F-9 S-1 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, 2015, 2014, and 2013. The opinion of Ernst & Young LLP, the Compa- ny’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 appropriate 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, 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, 2015. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (COSO) in “Internal Control-Integrated Framework.” Based on this assessment, management concluded that, as of December 31, 2015, 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, 2015. 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 26, 2016 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, 2015, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 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. In our opinion, Genuine Parts Company and Subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, 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, 2015 and 2014, 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, 2015 of Genuine Parts Company and Sub- sidiaries and our report dated February 26, 2016 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP Atlanta, Georgia February 26, 2016 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, 2015 and 2014, 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, 2015. 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, 2015 and 2014, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2015 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, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Com- mittee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated Febru- ary 26, 2016 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP Atlanta, Georgia February 26, 2016 F-4 Genuine Parts Company and Subsidiaries Consolidated Balance Sheets December 31 2015 2014 (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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 211,631 1,822,419 2,999,966 521,300 $ 137,730 1,872,365 3,043,848 538,582 Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other intangible assets, less accumulated amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Property, plant, and equipment: Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Buildings, less accumulated depreciation (2015 — $282,804; 2014 — $270,946) Machinery and equipment, less accumulated depreciation (2015 — $620,113; 2014 — $598,137) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net property, plant, and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,555,316 840,582 521,213 118,525 460,918 5,592,525 839,075 547,515 145,331 451,690 85,450 267,446 295,321 648,217 87,651 281,824 300,627 670,102 $8,144,771 $8,246,238 Liabilities and equity Current liabilities: Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current portion of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividends 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 150,081,474 shares in 2015 and 153,113,042 shares in 2014 . . . . . . . . . . . . . Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total parent equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Noncontrolling interests in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,821,526 375,000 148,265 503,268 92,595 3,940,654 250,000 284,235 50,684 459,956 $2,554,759 265,466 165,291 510,560 88,039 3,584,115 500,000 329,531 72,479 447,749 — — 150,081 41,353 (930,618) 3,885,751 3,146,567 12,675 153,113 26,414 (720,211) 3,841,932 3,301,248 11,116 Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,159,242 3,312,364 $8,144,771 $8,246,238 See accompanying notes. F-5 Genuine Parts Company and Subsidiaries Consolidated Statements of Income and Comprehensive Income Year Ended December 31 2015 2014 2013 Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Operating expenses: (In Thousands, Except per Share Amounts) $15,341,647 10,747,886 $14,077,843 9,857,923 $15,280,044 10,724,192 4,555,852 4,593,761 4,219,920 Selling, administrative, and other expenses . . . . . . . . . . . . . . . . . . Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,277,390 141,675 12,373 3,314,030 148,313 7,192 3,028,028 133,957 8,691 Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-operating expenses (income): 3,431,438 3,469,535 3,170,676 Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,662 (20,929) 25,088 (18,601) 26,971 (22,031) 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 733 1,123,681 418,009 705,672 4.65 4.63 $ $ $ 6,487 1,117,739 406,453 711,286 4.64 4.61 $ $ $ 4,940 1,044,304 359,345 684,959 4.43 4.40 $ $ $ 151,667 153,299 154,636 awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829 1,076 1,078 Weighted average common shares outstanding — assuming dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152,496 154,375 155,714 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other comprehensive (loss) income, net of tax: Foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . Pension and postretirement benefit adjustments, net of income taxes of 2015 — $5,335, 2014 — $112,993, and 2013 — ($175,297) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 705,672 $ 711,286 $ 684,959 (207,986) (149,379) (168,703) (2,421) (173,177) 272,540 Other comprehensive (loss) income, net of tax . . . . . . . . . . . . . . . . . . (210,407) (322,556) 103,837 Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 495,265 $ 388,730 $ 788,796 See accompanying notes. F-6 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 Retained Earnings Total Parent Equity Non- controlling Interests in Subsidiaries Total Equity Balance at January 1, 2013 . . . . . . . 154,841,438 $154,841 — — Net income . . . . . . . . . . . . . . . . . Other comprehensive income, $ — — $(501,492) — $3,344,538 $2,997,887 684,959 684,959 $10,292 — $3,008,179 684,959 103,837 — 103,837 153,773 — 14,935 — (397,655) — 3,578,021 711,286 3,349,074 711,286 9,694 — 3,358,768 711,286 — — (598) (598) net of tax . . . . . . . . . . . . . . . . . Cash dividends declared, $2.15 per share . . . . . . . . . . . . . . . . . Share-based awards 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) — — — Balance at December 31, 2013 . . . . 153,773,098 — Net income . . . . . . . . . . . . . . . . . Other comprehensive loss, net of tax . . . . . . . . . . . . . . . . . . . . . . Cash dividends declared, $2.30 per share . . . . . . . . . . . . . . . . . Share-based awards exercised, including tax benefit of $17,766 . . . . . . . . . . . . . . . . . . Share-based compensation . . . . . Purchase of stock . . . . . . . . . . . . Noncontrolling interest activities . . . . . . . . . . . . . . . . . — — — — — — 474,800 — (1,134,856) 475 (4,760) — 16,239 — (1,135) — — — Balance at December 31, 2014 . . . . 153,113,042 — Net income . . . . . . . . . . . . . . . . . Other comprehensive loss, net of tax . . . . . . . . . . . . . . . . . . . . . . Cash dividends declared, $2.46 per share . . . . . . . . . . . . . . . . . Share-based awards exercised, including tax benefit of $7,024 . . . . . . . . . . . . . . . . . . . Share-based compensation . . . . . Purchase of stock . . . . . . . . . . . . Noncontrolling interest activities . . . . . . . . . . . . . . . . . — — — — — — 229,958 — (3,261,526) 230 (2,778) — 17,717 — (3,262) — — — (332,322) (332,322) — — (119,154) 2,737 12,648 (120,672) (322,556) — (322,556) (352,564) (352,564) — — (94,811) (4,285) 16,239 (95,946) (210,407) — (210,407) (372,840) (372,840) — — (289,013) (2,548) 17,717 (292,275) — — — — — — — — — — — — — — — — — — — — 103,837 (332,322) 2,737 12,648 (120,672) — — — — — (322,556) (352,564) (4,285) 16,239 (95,946) — — — — — (210,407) (372,840) (2,548) 17,717 (292,275) 153,113 — 26,414 — (720,211) — 3,841,932 705,672 3,301,248 705,672 11,116 — 3,312,364 705,672 — — 1,422 1,422 — — 1,559 1,559 Balance at December 31, 2015 . . . . 150,081,474 $150,081 $41,353 $(930,618) $3,885,751 $3,146,567 $12,675 $3,159,242 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 liabilities . . . . . . . . . . . . . . . . . . . . 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 Share-based awards exercised, net of taxes paid . . . . . . . . . . . . . . . . . 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 increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . Year Ended December 31 2015 2014 2013 (In Thousands) $ 705,672 $ 711,286 $ 684,959 141,675 (7,024) (3,189) 35,544 17,717 — 1,974 (21,821) 331,419 967 (43,561) 453,701 148,313 (17,766) (3,719) 54,319 16,239 — (225,178) (100,820) 292,257 15,616 (100,402) 133,957 (12,905) (4,729) (21,622) 12,648 (59,000) (116,080) (79,253) 473,424 (14,418) 59,750 78,859 371,772 1,159,373 790,145 1,056,731 (109,544) 8,618 (162,701) (107,681) 8,866 (287,900) (124,063) 10,657 (712,173) (263,627) (386,715) (825,579) 3,862,224 (4,005,191) (9,572) 7,024 (368,284) (292,275) (806,074) (15,771) 73,901 137,730 2,727,924 (2,735,862) (22,051) 17,766 (347,271) (95,946) (455,440) (7,153) (59,163) 196,893 3,019,931 (2,995,335) (15,728) 12,905 (326,217) (120,673) (425,117) (12,237) (206,202) 403,095 Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . $ 211,631 $ 137,730 $ 196,893 Supplemental disclosures of cash flow information Cash paid during the year for: Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ $ 352,153 23,687 $ $ 408,604 25,155 $ $ 342,372 27,221 See accompanying notes. F-8 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements December 31, 2015 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 2,650 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) December 31, 2015 expected defaults and, therefore, the need to revise estimates for bad debts. For the years ended December 31, 2015, 2014, and 2013, the Company recorded provisions for doubtful accounts of approximately $12,373,000, $7,192,000, and $8,691,000, respectively. At December 31, 2015 and 2014, the allowance for doubtful accounts was approximately $10,693,000 and $11,836,000, 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 $438,510,000 and $434,790,000 higher than reported at December 31, 2015 and 2014, respectively. During 2014 and 2013, reductions in inventory levels in automotive parts inventories (2013) and industrial parts inventories (2014 and 2013) resulted in liquidations of LIFO inventory layers. The effect of the LIFO liquidations in 2014 and 2013 was to reduce cost of goods sold by approximately $8,000,000 and $5,000,000, 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 2016 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, amounts due from vendors, and income taxes receivable. 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 Company tests goodwill for impairment at the reporting unit level, which is an operating segment or a level below an operating segment, which is referred to as a component. A component of an operating segment is a reporting unit if the component constitutes a business for which dis- crete financial information is available and management regularly reviews the operating results of that compo- nent. However, two or more components of an operating segment are aggregated and deemed a single reporting unit if the components have similar economic characteristics. 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, 2015, 2014, and 2013. F-10 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 Other Assets Other assets are comprised of the following: December 31 2015 2014 Retirement benefit assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred compensation benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash surrender value of life insurance policies . . . . . . . . . . . . . . . . . . . . . . . . . Customer sales returns inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Guarantees related to borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other long-term prepayments and receivables . . . . . . . . . . . . . . . . . . . . . . . . . $ $ (In Thousands) 3,336 28,488 28,351 105,213 72,814 35,000 187,716 4,247 27,828 29,139 105,227 67,400 29,000 188,849 Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $460,918 $451,690 The guarantees related to borrowings are discussed further in the guarantees footnote. 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Guarantees related to borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 31 2015 2014 (In Thousands) $ 54,034 33,979 37,642 15,495 85,552 35,000 198,254 $ 57,754 48,569 40,040 18,947 81,496 29,000 171,943 Total other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $459,956 $447,749 F-11 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 The guarantees related to borrowings are discussed further in the guarantees footnote. 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- 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 Accumulated other comprehensive loss is comprised of the following: December 31 2015 2014 (In Thousands) Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unrecognized net actuarial loss, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . Unrecognized prior service credit, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . $(394,984) (540,018) 4,384 $(186,998) (538,614) 5,401 Total accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . $(930,618) $(720,211) The following table presents the changes in accumulated other comprehensive loss by component for the years ended on December 31, 2015 and 2014: Changes in Accumulated Other Comprehensive Loss by Component Pension Benefits Other Post- Retirement Benefits Foreign Currency Translation (In Thousands) Total Beginning balance, January 1, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . $(359,079) $ (957) $ (37,619) $(397,655) (342,600) (149,379) (193,182) (39) Other comprehensive loss before reclassifications, net of tax . . . Amounts reclassified from accumulated other comprehensive loss, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,192 (148) — 20,044 Net current period other comprehensive loss . . . . . . . . . . . . . . . . (172,990) (187) (149,379) (322,556) Ending balance, December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . Other comprehensive loss before reclassifications, net of tax . . . Amounts reclassified from accumulated other comprehensive (532,069) (25,558) (1,144) (111) (186,998) (207,986) (720,211) (233,655) loss, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,412 (164) — 23,248 Net current period other comprehensive loss . . . . . . . . . . . . . . . . (2,146) (275) (207,986) (210,407) Ending balance, December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . $(534,215) $(1,419) $(394,984) $(930,618) F-12 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 The accumulated other comprehensive loss components related to the pension benefits are included in the computation of net periodic benefit (income) 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, trade accounts payable, and borrowings under the line of credit approximate their respective fair values based on the short-term nature of these instruments. At December 31, 2015 and 2014, the fair value of fixed rate debt was approximately $501,000,000 and $505,000,000, 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. At December 31, 2015 and 2014, the carrying value of fixed rate debt was $500,000,000 and is included in current portion of debt and long-term debt in the consolidated balance sheets. 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 $270,000,000, $270,000,000, and $250,000,000, for the years ended December 31, 2015, 2014, and 2013, respectively. Advertising Costs Advertising costs are expensed as incurred and totaled $75,000,000, $71,300,000, and $57,900,000 in the years ended December 31, 2015, 2014, and 2013, 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 1,280,000, 610,000, and 630,000 shares of common stock ranging from $77 — $92 per share were outstanding at December 31, 2015, 2014, and 2013, respectively. These options were excluded from the computation of diluted net income per common share because the options’ exercise prices were greater than the average market prices of common stock in each respective year. F-13 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-9, Revenue from Contracts with Customers (“ASU 2014-9”), which creates a single, compre- hensive revenue recognition model for all contracts with customers. The updated standard requires an entity to recognize revenue to reflect the transfer of promised goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods and services. ASU 2014-9 may be adopted either retro- spectively or on a modified retrospective basis whereby the new standard would be applied to new contracts and existing contracts with remaining performance obligations as of the effective date, with a cumulative catch-up adjustment recorded to beginning retained earnings at the effective date for existing contracts with remaining performance obligations. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of that deferred the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date. The FASB permitted early adoption of the standard, but not before the original effective date of December 15, 2016. The Company is cur- rently evaluating the impact of ASU 2014-9 on the Company’s consolidated financial statements and related dis- closures. the Effective Date, In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Con- solidation Analysis (“ASU 2015-02”). ASU 2015-02 amends the consolidation requirements and significantly changes the consolidation analysis required. ASU 2015-02 requires management to reevaluate all legal entities under a revised consolidation model to specifically (i) modify the evaluation of whether limited partnership and similar legal entities are variable interest entities (“VIEs”), (ii) eliminate the presumption that a general partner should consolidate a limited partnership, (iii) affect the consolidation analysis of reporting entities that are involved with VIEs particularly those that have fee arrangements and related party relationships, and (iv) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Act of 1940 for registered money market funds. ASU 2015-02 will be effective for the Company’s interim and annual periods beginning after December 15, 2015. The adoption of ASU 2015-02 is not expected to have a material effect on the Company’s consolidated financial statements and related disclosures. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which amends the existing guidance to require presentation of deferred tax assets and liabilities as noncurrent within a balance sheet. This guidance was adopted, on a prospective basis, at December 31, 2015. The adoption did not have a material impact on the Company’s financial statements. F-14 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 2. Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill during the years ended December 31, 2015 and 2014 by reportable segment, as well as other identifiable intangible assets, are summarized as follows (in thousands): Automotive Industrial Balance as of January 1, 2014 . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . . . . . . Amortization . . . . . . . . . . . . . . . . . . . . . . Foreign currency translation . . . . . . . . . . $622,180 20,404 — (42,745) $116,136 3,577 — (751) Balance as of December 31, 2014 . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . . . . . . Amortization . . . . . . . . . . . . . . . . . . . . . . Foreign currency translation . . . . . . . . . . 599,839 5,030 — (49,866) 118,962 18,696 — (1,579) Goodwill Office Products $10,554 37,054 — — 47,608 8,891 — — Electrical/ Electronic Materials Total Other Intangible Assets, Net $789,971 92,600 $41,101 31,565 — — (43,496) $499,385 110,129 — (36,867) (25,132) 839,075 52,952 72,666 20,335 — — (51,445) 547,515 38,596 — (34,878) (30,020) Balance as of December 31, 2015 . . . . . . . . $555,003 $136,079 $56,499 $93,001 $840,582 $521,213 The gross carrying amounts and accumulated amortization relating to other intangible assets at December 31, 2015 and 2014 is as follows (in thousands): 2015 2014 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Customer relationships . . . . . . . . . . . . Trademarks . . . . . . . . . . . . . . . . . . . . . Non-competition agreements . . . . . . . $494,516 153,346 5,765 $(115,636) $378,880 $477,484 166,507 6,062 (11,922) (4,856) 141,424 909 $ (88,923) $388,561 157,853 1,101 (8,654) (4,961) $653,627 $(132,414) $521,213 $650,053 $(102,538) $547,515 Amortization expense for other intangible assets totaled $34,878,000, $36,867,000, and $28,987,000 for the years ended December 31, 2015, 2014, and 2013, respectively. Estimated other intangible assets amortization expense for the succeeding five years is as follows (in thousands): 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 35,000 35,000 35,000 34,000 34,000 $173,000 F-15 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 3. Credit Facilities The principal amounts of the Company’s borrowings subject to variable rates totaled approximately $125,000,000 and $265,466,000 at December 31, 2015 and 2014, respectively. The weighted average interest rate on the Company’s outstanding borrowings was approximately 2.76% and 2.46% at December 31, 2015 and 2014, respectively. The Company maintains a $1,200,000,000 unsecured revolving line of credit with a consortium of financial institutions, which matures in June 2020 with two optional one year extensions and bears interest at LIBOR plus a margin, which is based on the Company’s leverage ratio (1.17% at December 31, 2015). 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 facility with appropriate notice. At December 31, 2015 and 2014, approximately $125,000,000 and $265,466,000 were outstanding under this line of credit, respectively. Certain borrowings require the Company to comply with a financial covenant with respect to a maximum debt-to-capitalization ratio. At December 31, 2015, 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 $62,874,000 and $62,515,000 outstanding at December 31, 2015 and 2014, respectively. Amounts outstanding under the Company’s credit facilities consist of the following: December 31 2015 2014 (In Thousands) Unsecured revolving line of credit, $1,200,000,000, LIBOR plus 0.75% variable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $125,000 $265,466 Unsecured term notes: 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250,000 250,000 Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less debt due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625,000 375,000 765,466 265,466 Long-term debt, excluding current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . $250,000 $500,000 Approximate maturities under the Company’s credit facilities are as follows (in thousands): 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $375,000 — — — — 250,000 $625,000 F-16 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 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, 2015 (in thousands): 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $207,800 163,100 118,300 78,000 48,400 152,300 Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $767,900 Rental expense for operating leases was approximately $254,000,000, $233,000,000, and $208,000,000 for 2015, 2014, and 2013, respectively. 5. Share-Based Compensation At December 31, 2015, total compensation cost related to nonvested awards not yet recognized was approx- imately $33,000,000. The weighted-average period over which this compensation cost is expected to be recog- nized is approximately three years. The aggregate intrinsic value for SARs and RSUs outstanding at December 31, 2015 and 2014 was approximately $104,000,000 and $198,100,000, respectively. The aggregate intrinsic value for SARs and RSUs vested totaled approximately $65,000,000 and $116,200,000 at December 31, 2015 and 2014, respectively. At December 31, 2015, the weighted-average contractual life for outstanding and exercisable SARs and RSUs was six and five years, respectively. Share-based compensation costs of $17,717,000, $16,239,000, and $12,648,000, were recorded for the years ended December 31, 2015, 2014, and 2013, respectively. The total income tax benefits recognized in the consolidated statements of income and com- prehensive income for share-based compensation arrangements were approximately $7,100,000, $6,500,000, and $5,100,000 for 2015, 2014, and 2013, respectively. There have been no modifications to valuation methodologies or methods during the years ended December 31, 2015, 2014, or 2013. For the years ended December 31, 2015, 2014, and 2013, the fair values for SARs granted were estimated using a Black-Scholes option pricing model with the following weighted-average assumptions, respectively: risk- free interest rate of 2.0%, 2.8%, and 2.0%; dividend yield of 2.6%, 2.8%, and 3.2%; annual historical volatility factor of the expected market price of the Company’s common stock of 19% for each of the three years; an aver- age expected life and estimated turnover based on the historical pattern of existing grants of approximately seven years and 5.4%, respectively. The fair value of RSUs is based on the price of the Company’s stock on the date of grant. The total fair value of shares vested during the years ended December 31, 2015, 2014, and 2013 were $15,200,000, $13,800,000, and $8,100,000, respectively. F-17 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 Shares (1) (In Thousands) 3,923 887 (540) (89) 4,181 2,437 Weighted- Average Exercise Price (2) $64 92 54 81 $71 $61 Shares available for future grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000 (1) Shares include Restricted Stock Units (RSUs). (2) The weighted-average exercise price excludes RSUs. (3) The exercise prices for SARs outstanding as of December 31, 2015 ranged from approximately $42 to $92. The weighted-average remaining contractual life of all SARs outstanding is approximately six years. The weighted-average grant date fair value of SARs granted during the years 2015, 2014, and 2013 was $13.53, $13.77, and $10.14, respectively. The aggregate intrinsic value of SARs and RSUs exercised during the years ended December 31, 2015, 2014, and 2013 was $30,100,000, $65,200,000, and $43,900,000, respectively. In 2015, the Company granted approximately 711,000 SARs and 176,000 RSUs. In 2014, the Company granted approximately 680,000 SARs and 165,000 RSUs. In 2013, the Company granted approximately 727,000 SARs and 172,000 RSUs. A summary of the Company’s nonvested share awards activity is as follows: Nonvested Share Awards (RSUs) Nonvested at January 1, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shares (In Thousands) 420 176 (123) (40) Nonvested at December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433 Weighted- Average Grant Date Fair Value $72 92 62 76 $82 For the years ended December 31, 2015, 2014, and 2013 approximately $7,000,000, $17,800,000, and $12,900,000, respectively, of excess tax benefits were classified as financing cash inflows. 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 F-18 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 December 31, 2015, the Company has not provided Federal income taxes on approximately $623,000,000 of undistributed earnings of its foreign subsidiaries. The Company intends to reinvest these earnings to fund expansion in these and other markets outside the U.S. Accordingly, the Company has not provided any provision for income tax expense in excess of foreign jurisdiction income tax requirements relative to such undistributed earnings in the accompanying consolidated financial statements. Due to the complexities associated with the hypothetical calculation to determine residual taxes on the undistributed earnings, including the availability of foreign tax credits, applicability of any additional local withholding tax and other indirect tax consequence that may arise due to the distribution of these earnings, the Company has concluded it is not practicable to determine the unrecognized deferred tax liability related to the undistributed earnings. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which amends the existing guidance to require presentation of deferred tax assets and liabilities as noncurrent within a classified statement of financial position. The Company adopted the guidance, on a prospective basis, at December 31, 2015. 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 . . . . . . . . . . . . . . . . . . . $318,368 347,263 $337,792 341,904 2015 2014 (In Thousands) Deferred tax liabilities related to: Employee and retiree benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Property, plant, and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 665,631 679,696 249,126 147,199 111,305 58,496 31,664 227,926 152,913 105,482 59,600 30,641 597,790 576,562 Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current portion of deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67,841 — 103,134 (30,282) Noncurrent net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 67,841 $ 72,852 The current portion of the deferred tax assets and liabilities are included in prepaid expenses and other cur- rent assets and other current liabilities, respectively, in the consolidated balance sheet at December 31, 2014. The components of income before income taxes are as follows: United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,004,919 118,762 (In Thousands) $ 978,824 138,915 $ 850,866 193,438 Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . $1,123,681 $1,117,739 $1,044,304 2015 2014 2013 F-19 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 The components of income tax expense are as follows: 2015 2014 2013 (In Thousands) Current: Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $309,403 45,460 27,602 35,544 $224,591 43,513 84,030 54,319 $303,016 47,010 30,941 (21,622) $418,009 $406,453 $359,345 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital loss expiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reversal of capital loss valuation allowance . . . . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 2014 2013 $393,288 32,295 (In Thousands) $391,209 32,646 $365,506 28,823 (13,684) (264) — — 6,374 (3,453) (20,170) — — 6,221 (37,873) — 16,803 (16,803) 2,889 $418,009 $406,453 $359,345 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 2008. 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 amounts 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 $17,581 1,969 61 (3,152) (425) (219) 2014 (In Thousands) $ 47,190 3,303 6,415 (851) (481) (37,995) 2013 $45,455 3,238 3,759 (1,472) (1,714) (2,076) Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,815 $ 17,581 $47,190 F-20 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 The amount of gross tax effected unrecognized tax benefits, including interest and penalties, as of December 31, 2015 and 2014 was approximately $17,684,000 and $19,497,000, respectively, of which approx- imately $9,317,000 and $11,106,000, respectively, if recognized, would affect the effective tax rate. During 2014, the Company settled certain transfer pricing methodologies with tax authorities, and on a consolidated basis, the difference, in related payments and refunds and the amount reflected in the tax reserves, was not material. During the years ended December 31, 2015, 2014, and 2013, the Company paid interest and penalties of respectively. The Company had approximately approximately $1,051,000, $14,000,000, and $405,000, $1,746,000 and $1,916,000 of accrued interest and penalties at December 31, 2015 and 2014, respectively. The Company recognizes potential 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. As of December 31, 2013, the Company implemented a hard freeze for the U.S. qualified defined benefit plan. Therefore, no further benefit accruals were provided after that date for additional credited service or earnings. In addition, all participants who are employed after December 31, 2013 became fully vested as of December 31, 2013. 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. 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. Several assumptions are used to determine the benefit obligations, plan assets, and net periodic (income) cost. The discount rate for the pension plans is calculated using a bond matching approach to select specific bonds that would satisfy the projected benefit payments. The bond matching approach reflects the process that would be used to settle the pension obligations. The expected return on plan assets is based on a calculated market-related value of plan assets, where gains and losses on plan assets are amortized over a five year period and accumulate in other comprehensive income. Other non-investment unrecognized gains and losses are amor- tized in future net income based on a “corridor” approach, where the corridor is equal to 10% of the greater of the benefit obligation or the market-related value of plan assets at the beginning of the year. The unrecognized gains and losses in excess of the corridor criteria are amortized over the average future lifetime or service of plan participants, depending on the plan. These assumptions are updated at each annual measurement date. Changes in benefit obligations for the years ended December 31, 2015 and 2014 were: 2015 2014 Changes in benefit obligation Benefit obligation at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign currency exchange rate changes . . . . . . . . . . . . . . . . . . . . . . . . . . Gross benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (In Thousands) $2,352,094 8,562 98,088 2,838 (139,573) (35,082) (87,571) $2,035,185 7,824 102,465 3,526 346,875 (18,697) (125,084) Benefit obligation at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,199,356 $2,352,094 F-21 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 The actuarial loss incurred in the year ended December 31, 2014 is primarily attributable to a lower discount rate, as well as changes in the mortality assumptions. The benefit obligations for the Company’s U.S. pension plans included in the above were $2,012,935,000 and $2,135,827,000 at December 31, 2015 and 2014, respectively. The total accumulated benefit obligation for the Company’s defined benefit pension plans in the U.S. and Canada was approximately $2,179,626,000 and $2,328,489,000 at December 31, 2015 and 2014, respectively. The assumptions used to measure the pension benefit obligations for the plans at December 31, 2015 and 2014, were: 2015 2014 Weighted-average discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rate of increase in future compensation levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.82% 4.26% 3.12% 3.07% Changes in plan assets for the years ended December 31, 2015 and 2014 were: 2015 2014 (In Thousands) 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,021,837 (45,529) (33,382) 54,543 2,838 (87,571) $1,933,063 174,652 (17,616) 53,296 3,526 (125,084) Fair value of plan assets at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,912,736 $2,021,837 The fair values of plan assets for the Company’s U.S. pension plans included in the above were $1,731,368,000 and $1,819,747,000 at December 31, 2015 and 2014, respectively. The asset allocations for the Company’s funded pension plans at December 31, 2015 and 2014, and the tar- get allocation for 2016, by asset category were: Asset Category Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Target Allocation 2016 Percentage of Plan Assets at December 31 2015 2014 71% 69% 70% 29% 31% 30% 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 investment objectives for the pension plans are to provide for a reasonable amount of long-term growth of capital, without F-22 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 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, 2015 and 2014, by asset category, are shown in the tables below. Various inputs are considered when determining the value of the Company’s pension plan assets. 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. Equity Securities Common stocks — mutual funds — equity . . . . . . . . . . . . . Genuine Parts Company common stock . . . . . . . . . . . . . . . . Other stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Debt Securities Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Asset-backed and mortgage–backed securities . . . . . . . . . . Convertible securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other-international Municipal bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mutual funds — fixed income . . . . . . . . . . . . . . . . . . . . . . . Other Cash surrender value of life insurance policies . . . . . . . . . . 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Total Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In Thousands) $ 349,852 173,363 793,229 $ 349,852 173,363 792,624 $ — — — $ — — 605 46,195 2,978 193,436 172,119 27,510 434 21,137 5,857 123,895 46,195 2,978 109,559 — — 83,877 — 172,119 27,510 — 434 — 352 20,785 — 5,857 — 123,895 — — — — — — — — — 2,731 — — 2,731 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,912,736 $1,495,356 $414,044 $3,336 F-23 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 2014 Quoted Prices in Active Markets for Identical Assets (Level 1) Total Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In Thousands) $ 366,716 215,477 822,782 $ 366,716 215,477 822,782 $ — — — $ — — — 41,882 8,921 192,413 178,214 27,756 633 25,137 6,435 132,752 7 2,712 41,882 8,921 96,480 — — 95,933 — 178,214 27,756 — 633 — 3,322 21,815 — 6,435 — 132,752 — — — — — — — — — 7 — — — — 2,712 Equity Securities Common stocks — mutual funds — equity . . . . . . . . . . . . . Genuine Parts Company common stock . . . . . . . . . . . . . . . . Other stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Debt Securities Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Asset-backed and mortgage–backed securities . . . . . . . . . . Convertible securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other-international . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Municipal bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mutual funds — fixed income . . . . . . . . . . . . . . . . . . . . . . . Other Options and futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash surrender value of life insurance policies . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,021,837 $1,574,080 $445,045 $2,712 Equity securities include Genuine Parts Company common stock in the amounts of $173,363,000 (9% of total plan assets) and $215,477,000 (11% of total plan assets) at December 31, 2015 and 2014, respectively. Dividend payments received by the plan on Company stock totaled approximately $4,965,000 and $4,650,000 in 2015 and 2014, 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 2015 and 2014 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 2016 pension cost or income is 7.83% 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. F-24 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheets at December 31: 2015 2014 Other long-term asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other current liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pension and other post-retirement liabilities . . . . . . . . . . . . . . . . . . . . . . . . . $ (In Thousands) 3,336 (7,432) (282,524) 4,247 (6,740) (327,764) $ Amounts recognized in accumulated other comprehensive loss consist of: $(286,620) $(330,257) 2015 2014 (In Thousands) Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prior service credit $882,464 (1,814) $875,788 (2,436) $880,650 $873,352 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 2016, approximately $7,382,000 is expected to be paid from employer assets. Expected employer contributions below reflect amounts expected to be contributed to funded plans. Information about the expected cash flows for the pension plans follows (in thousands): Employer contribution 2016 (expected) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 49,000 Expected benefit payments: 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2021 through 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 93,000 102,000 109,000 116,000 124,000 703,000 Net periodic benefit (income) cost included the following components: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Service cost Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . Amortization of prior service credit . . . . . . . . . . . . . . . . . . . . . Amortization of actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . 2015 2014 2013 $ 8,562 98,088 (150,130) (565) 38,197 (In Thousands) $ 7,824 102,465 (144,746) (1,890) 26,791 $ 19,083 89,408 (133,816) (7,538) 83,934 Net periodic benefit (income) cost . . . . . . . . . . . . . . . . . . . . . . $ (5,848) $ (9,556) $ 51,071 F-25 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows: 2015 2014 2013 Current year actuarial loss (gain) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recognition of actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recognition of prior service credit $ 44,930 (38,197) 565 (In Thousands) $312,011 (26,791) 638 $(368,587) (83,934) 7,538 Total recognized in other comprehensive income (loss) . . . . . . . . . . . . . . . . . . $ 7,298 $285,858 $(444,983) Total recognized in net periodic benefit (income) cost and other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,450 $276,303 $(393,912) The estimated amounts that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2016 are as follows in thousands: Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prior service credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $31,146 (430) Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $30,716 The assumptions used in measuring the net periodic benefit (income) cost for the plans follow: 2015 2014 2013 Weighted average discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rate of increase in future compensation levels . . . . . . . . . . . . . . . . . . . . . . . . . . Expected long-term rate of return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . 4.26% 5.10% 4.17% 3.07% 3.04% 3.30% 7.85% 7.85% 7.83% Prior to 2014, the Company had two defined contribution plans that covered substantially all of its domestic employees. The Company’s matching contributions were determined based on the employee’s participation in the U.S. pension plan. Prior to 2014, U.S. pension plan participants who continued earning credited service after 2008 received a matching contribution of 20% of the first 6% of the employee’s salary. Other employees received a matching contribution of 100% of the first 5% of the employee’s salary. The two plans were merged effective January 1, 2014. Beginning in 2014, all employees receive a matching contribution of 100% of the first 5% of the employees’ salary. Total plan expense was approximately $55,066,000 in 2015, $53,351,000 in 2014, and $43,236,000 in 2013. 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 F-26 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 marketing and promotional initiatives, pricing and selling activities, credit decisions, monitoring and maintaining 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, 2015, the Company was in compliance with all such covenants. At December 31, 2015, the total borrowings of the independents and affiliates subject to guarantee by the Company were approximately $332,632,000. 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 estimated loss. To date, losses in connection with guarantees of independents’ and affiliates’ borrowings. the Company has had no significant The Company has recognized certain assets and liabilities amounting to $35,000,000 and $29,000,000 for the guarantees related to the independents’ and affiliates’ borrowings at December 31, 2015 and 2014, respectively. These assets and liabilities are included in other assets and other long-term liabilities in the con- solidated balance sheets. 9. Acquisitions During 2015, the Company acquired one company in the Electrical/Electronic Materials Group, three compa- nies in the Office Products Group, four companies in the Industrial Group, and five store groups in the Automo- tive Parts Group for approximately $120,000,000, net of cash acquired. During 2014, the Company acquired two companies each in the Automotive Group, Office Products Group, and Electrical/Electronic Materials Group and one company in the Industrial Group for approximately $260,000,000, net of cash acquired. 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. 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 $90,000,000, $200,000,000 and $950,000,000 of goodwill and other intangible assets associated with the 2015, 2014, and 2013 acquisitions, respectively. For the 2015 acquisitions, other intangible assets acquired consisted of customer relationships of $39,000,000 with weighted average amortization lives of 15 years. For the 2014 acquisitions, other intangible assets acquired consisted of customer relationships of $82,000,000 and trademarks of $28,000,000 with weighted average amortization lives of 18 and 40 years, 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 average amortization lives of 15, 40, and 1 years, respectively. Additional disclosure on the 2013 automotive acquisition of GPC Asia Pacific is 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 F-27 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 70% interest in GPC Asia Pacific for approximately $590,000,000, net of cash acquired of $70,000,000, and the 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 $1,000,000,000 and a company-owned store footprint of approximately 500 locations across Australia and New Zealand. This acquisition provides an opportunity for the Company to participate 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. Both approaches were given equal weight in the conclusion of fair value, which the Company believes is a reasonable approach. For the market approach, the Company utilized companies that are comparable in line of business, size, operating performance, and financial condition to GPC Asia Pacific to develop a market multiple. For the income approach, the Company utilized GPC Asia Pacific’s projected cash flows, an appropriate discount rate, and an expected long-term growth rate. For both approaches, the Company applied discounts for lack of control and lack of marketability. 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 and 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 for the year ended December 31, 2013. 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-28 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquis- ition date. 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net identifiable assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . April 1, 2013 (In Thousands) $ 94,000 306,000 31,000 59,000 347,000 24,000 861,000 (224,000) (230,000) (125,000) (579,000) 282,000 542,000 Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 824,000 The acquired intangible assets of approximately $347,000,000 were assigned to customer relationships 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 goodwill recognized as part of the acquisition is not tax deductible and has been assigned to the automo- tive segment. The goodwill is attributable primarily to expected synergies and the assembled workforce 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 year ended December 31, 2013 would be estimated at $14,400,000,000 in net sales and net income of $4.42 on a per share diluted basis. The pro forma information is not necessarily indicative of the results of operations that we would have reported had the transaction actually occurred at the beginning of this period, 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. 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. F-29 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 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, and equity in income from investees, amortization, and noncontrolling interests. Approximately $118,800,000, $138,900,000 and $193,400,000 of income before income taxes was generated in jurisdictions outside the United States for the years ended December 31, 2015, 2014, and 2013, respectively. Net sales and net property, plant and equipment 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-30 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 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. 2015 2014 2013 2012 2011 (In Thousands) Net sales: Automotive . . . . . . . . . . . . . . . . . Industrial . . . . . . . . . . . . . . . . . . . Office products . . . . . . . . . . . . . . Electrical/electronic materials . . . Other . . . . . . . . . . . . . . . . . . . . . . $ 8,015,098 4,646,689 1,937,629 750,770 (70,142) $ 8,096,877 4,771,080 1,802,754 739,119 (68,183) $ 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) Total net sales . . . . . . . . . . . . . . . . . . . $15,280,044 $15,341,647 $14,077,843 $13,013,868 $12,458,877 Operating profit: Automotive . . . . . . . . . . . . . . . . . Industrial . . . . . . . . . . . . . . . . . . . Office products . . . . . . . . . . . . . . Electrical/electronic materials . . . $ $ 729,152 339,180 140,866 70,151 $ 700,386 370,043 133,727 64,884 $ $ 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 . . . . . . . . 1,279,349 (20,354) (100,436) (34,878) 1,269,040 (24,192) (90,242) (36,867) 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) Income before income taxes . . . . . . . . $ 1,123,681 $ 1,117,739 $ 1,044,304 $ 1,018,932 $ 890,806 Assets: Automotive . . . . . . . . . . . . . . . . . Industrial . . . . . . . . . . . . . . . . . . . Office products . . . . . . . . . . . . . . Electrical/electronic materials . . . Corporate . . . . . . . . . . . . . . . . . . . Goodwill and other intangible $ 4,293,290 1,143,952 831,546 191,866 322,323 $ 4,275,298 1,224,735 835,592 196,400 327,623 $ 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 assets . . . . . . . . . . . . . . . . . . . . 1,361,794 1,386,590 1,289,356 497,839 279,775 Total assets . . . . . . . . . . . . . . . . . . . . . $ 8,144,771 $ 8,246,238 $ 7,680,297 $ 6,807,061 $ 6,202,774 F-31 Genuine Parts Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) December 31, 2015 2015 2014 2013 2012 2011 (In Thousands) Depreciation and amortization: $ Automotive . . . . . . . . . . . . . . . . . Industrial . . . . . . . . . . . . . . . . . . . Office products . . . . . . . . . . . . . . Electrical/electronic materials . . . Corporate . . . . . . . . . . . . . . . . . . . Intangible asset amortization . . . . $ 70,112 9,960 10,922 2,933 12,870 34,878 $ 77,645 9,906 10,728 2,658 10,509 36,867 $ 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 Total depreciation and amortization . . $ 141,675 $ 148,313 $ 133,957 $ 98,383 $ 88,936 Capital expenditures: $ Automotive . . . . . . . . . . . . . . . . . Industrial . . . . . . . . . . . . . . . . . . . Office products . . . . . . . . . . . . . . Electrical/electronic materials . . . Corporate . . . . . . . . . . . . . . . . . . . $ 77,504 13,998 12,323 2,824 2,895 $ 78,537 12,442 11,135 3,003 2,564 $ 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 Total capital expenditures . . . . . . . . . . $ 109,544 $ 107,681 $ 124,063 $ 101,987 $ 103,469 Net sales: United States . . . . . . . . . . . . . . . . Canada . . . . . . . . . . . . . . . . . . . . . Australasia . . . . . . . . . . . . . . . . . . Mexico . . . . . . . . . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . $12,843,078 1,395,695 992,064 119,349 (70,142) $12,565,329 1,583,075 1,133,620 127,806 (68,183) $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) Total net sales . . . . . . . . . . . . . . . . . . . $15,280,044 $15,341,647 $14,077,843 $13,013,868 $12,458,877 Net property, plant, and equipment: United States . . . . . . . . . . . . . . . . Canada . . . . . . . . . . . . . . . . . . . . . Australasia . . . . . . . . . . . . . . . . . . Mexico . . . . . . . . . . . . . . . . . . . . . $ $ 495,073 79,023 65,289 8,832 $ $ 495,452 98,939 65,707 10,004 503,882 99,135 60,614 6,430 $ 466,473 93,496 — 6,396 411,193 84,210 — 4,801 Total net property, plant, and equipment . . . . . . . . . . . . . . . . . . . . $ 648,217 $ 670,102 $ 670,061 $ 566,365 $ 500,204 F-32 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, 2013: Reserves and allowances deducted from asset accounts: Allowance for doubtful accounts . . . . . . . . . . . . Year ended December 31, 2014: Reserves and allowances deducted from asset accounts: Allowance for doubtful accounts . . . . . . . . . . . . Year ended December 31, 2015: Reserves and allowances deducted from asset accounts: Allowance for doubtful accounts . . . . . . . . . . . . (1) Doubtful accounts written off, net of recoveries. $19,180,190 $ 8,691,000 $(13,448,190) $14,423,000 $14,423,000 $ 7,192,000 $ (9,779,000) $11,836,000 $11,836,000 $12,373,000 $(13,516,000) $10,693,000 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 Amended and Restated Articles of Incorporation of the Company, amended April 23, 2007. — 3.2 By-Laws of the Company as amended and restated November 18, 2013. — 4.2 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 Tax-Deferred Savings Plan, effective January 1, 1993. — 10.2* — 10.3* — 10.4* — 10.5* — 10.6* — 10.7* — 10.8* — 10.9* Amendment No. 1 to the Genuine Parts Company Tax-Deferred Savings Plan, dated June 1, 1996, effective June 1, 1996. Amendment No. 2 to the Genuine Parts Company Tax-Deferred Savings 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. Amendment No. 4 to the Genuine Parts Company Tax-Deferred Savings Plan, dated June 5, 2003, effective June 5, 2003. Amendment No. 5 to the Genuine Parts Company Tax-Deferred Savings Plan, dated December 28, 2005, effective January 1, 2006. Amendment No. 6 to the Genuine Parts Company Tax-Deferred Savings Plan, dated November 28, 2007, effective January 1, 2008. Amendment No. 7 to the Genuine Parts Company Tax-Deferred Savings Plan, dated November 16, 2010, effective January 1, 2011. Amendment No. 8 to the Genuine Parts Company Tax-Deferred Savings Plan, dated December 7, 2012, effective December 7, 2012. — 10.10* The Genuine Parts Company Original Deferred Compensation Plan, as amended and restated as of August 19, 1996. — 10.11* Amendment to the Genuine Parts Company Original Deferred Compensation Plan, dated April 19, 1999, effective April 19, 1999. — 10.12* — 10.13* — 10.14* — 10.15* — 10.16* — 10.17* — 10.18* Genuine Parts Company Supplemental Retirement Plan, as amended and restated as of 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 as of January 1, 2009, dated November 16, 2010, effective January 1, 2011. 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. Genuine Parts Company Directors’ Deferred Compensation Plan, as amended and restated effective January 1, 2003, and executed November 11, 2003. Amendment No. 1 to the Genuine Parts Company Directors’ Deferred Compensation Plan, dated November 19, 2007, effective January 1, 2008. Amendment No. 2 to the Genuine Parts Company Director’s Deferred Compensation Plan, dated December 7, 2012, effective December 7, 2012 — 10.19* Description of Director Compensation. — 10.20* Genuine Parts Company 1999 Long-Term Incentive Plan, as amended and restated as of November 19, 2001. — 10.21* Genuine Parts Company 2006 Long-Term Incentive Plan, effective April 17, 2006. — 10.22* — 10.23* Amendment to the Genuine Parts Company 2006 Long-Term Incentive Plan, dated November 20, 2006, effective November 20, 2006. Amendment No. 2 to the Genuine Parts Company 2006 Long-Term Incentive Plan, dated November 19, 2007, effective November 19, 2007. — 10.24* Genuine Parts Company 2015 Incentive Plan, effective November 17, 2014. — 10.25* Genuine Parts Company Performance Restricted Stock Unit Award Agreement. — 10.26* Genuine Parts Company Restricted Stock Unit Award Agreement. — 10.27* Genuine Parts Company Stock Appreciation Rights Agreement. —10.28* Form of Executive Officer Change in Control Agreement. * Indicates management contracts and compensatory plans and arrangements. SUBSIDIARIES OF THE COMPANY (as of December 31, 2015) 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. COMSERES de MEXICO, S. de R.L. 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. ELECTRICAL INSULATION SUPPLIERS 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 AUTOPARTES NAPA MEXICO, S. de R.L. de C.V. SUPPLY SOURCE ENTERPRISES, INC. IMPACT PRODUCTS LLC GPIC LLC GPIC CANADA LP GPC ASIA PACIFIC LLC % Owned Jurisdiction of Incorporation 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% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 90.0% 100.0% 100.0% 100.0% 100.0% 22.0% 20.0% 90.0% 75.8% 79.0% 79.0% 79.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% INDIANA GEORGIA GEORGIA DELAWARE GEORGIA MICHIGAN DELAWARE GEORGIA GEORGIA GEORGIA GEORGIA NORTH CAROLINA PUEBLA, MEXICO PUEBLA, MEXICO GUADALAJARA, JALISCO, MEXICO BRITISH COLUMBIA, CANADA ONTARIO, CANADA OTTAWA, ONTARIO GUADALAJARA, MEXICO BRITISH COLUMBIA, CANADA QUEBEC, CANADA FEDERAL, CANADA FEDERAL, CANADA ONTARIO, CANADA QUEBEC, CANADA FEDERAL, CANADA QUEBEC, CANADA HONG KONG, CHINA SHENZHEN, CHINA BRITISH COLUMBIA, CANADA GUADALAJARA, JALISCO, MEXICO GEORGIA GEORGIA DELAWARE MARYLAND MARYLAND MARYLAND PENNSYLVANIA DELAWARE AMSTERDAM, THE NETHERLANDS AMSTERDAM, THE NETHERLANDS VICTORIA, AUSTRALIA PUEBLA, MEXICO GEORGIA DELAWARE GEORGIA ALBERTA, CANADA GEORGIA EXHIBIT 23 Consent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in the following Registration Statements: (1) (2) (3) (4) Registration Statement (Form S-8 No. 333-21969) pertaining to the Directors’ Deferred Compensation Plan of Genuine Parts Company and Subsidiaries, Registration Statement (Form S-8 No. 333-76639) pertaining to the 1999 Long-Term Incentive Plan of Genuine Parts Company and Subsidiaries, Registration Statement (Form S-8 No. 333-133362) pertaining to the 2006 Long-Term Incentive Plan of Genuine Parts Company and Subsidiaries; and Registration Statement (Form S-8 No. 333-204390) pertaining to the 2015 Incentive Plan of Genuine Parts Company and Subsidiaries; of our reports dated February 26, 2016, 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) of Genuine Parts Com- pany and Subsidiaries for the year ended December 31, 2015. /s/ Ernst & Young LLP Atlanta, Georgia February 26, 2016 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 26, 2016 /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 regis- trant’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 26, 2016 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 EXHIBIT 32.1 In connection with the Annual Report of Genuine Parts Company (the “Company”) on Form 10-K for the year ended December 31, 2015 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 26, 2016 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 EXHIBIT 32.2 In connection with the Annual Report of Genuine Parts Company (the “Company”) on Form 10-K for the year ended December 31, 2015 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 26, 2016 BOARD OF DIRECTORS AND OFFICERS OF THE COMPANY Board of Directors Dr. Mary B. Bullock Elizabeth W. “Betsy” Camp Paul D. Donahue Jean Douville Gary P. Fayard Thomas C. Gallagher John R. Holder Donna W. Hyland John D. Johns Robert C. “Robin” Loudermilk, Jr. President and Chief Executive Officer of The Loudermilk Companies, LLC Wendy B. Needham Jerry W. Nix Gary W. Rollins E. Jenner Wood III President Emerita of Agnes Scott College President and Chief Executive Officer of DF Management, Inc. President Chairman of the Board of Directors of UAP Inc. Retired Chief Financial Officer of The Coca-Cola Company Chairman and Chief Executive Officer Chairman and Chief Executive Officer of Holder Properties President and Chief Executive Officer of Children’s Healthcare of Atlanta Chairman and Chief Executive Officer of Protective Life Corporation 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 Executive Vice President of SunTrust Banks, Inc. Corporate Officers Thomas C. Gallagher Paul D. Donahue Carol B. Yancey Scott W. LeProhon Treg S. Brown Charles A. Chesnutt Gregory N. Miller Robert A. Milstead James R. Neill Michael D. Orr Scott C. Smith Kirk J. Allan Thomas K. Davis Thomas E. Dunmon, Jr. Christopher T. Galla Lisa K. Hamilton David A. Haskett Philip C. Johnson Sidney G. Jones Karl J. Koenig Napoleon B. Rutledge, Jr. Vickie S. Smith Eric N. Sundby Robert L. Swann Jennifer L. Ellis Matthew P. Brigham Jessica E. Morgan Christine E. Powell Chairman and Chief Executive Officer President Executive Vice President & Chief Financial Officer Executive Vice President — Global Procurement Senior Vice President — Planning and Acquisitions Senior Vice President and Treasurer Senior Vice President and Chief Information Officer Senior Vice President — Digital Senior Vice President — Human Resources Senior Vice President — Operations and Logistics Senior Vice President — Corporate Counsel Vice President — Human Resources Operations and Compliance Vice President — Supplier Business IT Vice President — Corporate Reporting and Analysis Vice President and Assistant 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 — Finance Vice President — Employee Relations Vice President — Information Technology Vice President — Internal Audit, Compliance and Risk Corporate Secretary and Associate Counsel Assistant Vice President and Assistant Treasurer Assistant Vice President — Risk Management Assistant Vice President — Financial Analysis U.S. Automotive Parts Group Lee A. Maher Glenn M. Chambers Daniel F. Askey Todd P. Helms Kevin E. Herron M. Todd McMurtrie Gaylord M. Spencer J. Richard Borman Michael A. Briggs Byron H. Frantz Richard A. Geiger Rozina Kassam Karen E. Kreider Jett W. Kuntz David B. Nicki J. Michael Phillips Cameron Richardson Michael L. Swartz Dennis P. Tolivar Divisions J. Michael Riess Bret A. Robyck Michael J. Kelleher Gregg T. Sargent Dennis G. Gibbs Eric G. Fritsch Christopher R. Agostino Patrick A. Wolfe Stuart A. Kambury Thomas E. Skov U.S. Automotive Supply Group Balkamp (Indianapolis, IN) D. Tip Tollison Mary F. Knudsen Matthew N. LeTexier Ryan D. Maxwell J. Stephen Yancey Rayloc (Atlanta, GA) William J. Westerman III Michael S. Gaffney II Cheryl Hiles Joseph W. Lashley Scott J. Rolf President and Chief Operating Officer Executive Vice President — Operations Senior Vice President — Sales Senior Vice President — Human Resources Group Senior Vice President Group Senior Vice President Senior Vice President — Marketing Vice President — Supply Chain and Logistics Vice President — Retail Product Management and Merchandising Vice President — Wholesale Product Management Vice President — Finance Vice President and Chief Financial Officer Vice President and Chief Information Officer Vice President — Integrated Business Solutions Vice President — NAPA Tools and Equipment Sales Vice President — Organizational Development Vice President — Retail Vice President — Inventory & Procurement Vice President — Major Accounts Vice President — Atlantic Division Vice President — Central Division Vice President — Eastern Division Vice President — Florida Division Vice President — Midwest Division Vice President — Mountain Division Vice President — Quaker Division Vice President — Southern Division Vice President — Southwest Division Vice President — Western Division President Vice President — Finance and Treasurer Vice President — Marketing and Category Management Vice President — Supply Chain Vice President — Customer Relations and Sales President Senior Vice President — Finance and Operations Vice President — Human Resources Vice President — Information Services Vice President — Sales and Marketing Heavy Vehicle Parts (Atlanta, GA) Greg A. Lancour Vice President — Operations Altrom Import Parts (Vancouver, Canada) President Matthew D. Johnson NAPA Canada & HVPG/ UAP Inc. (Montreal, Canada) Jean Douville Alain Masse John Buckley Frank Pipito Pierre Rachiele Simon Bourque Marie Claire Dupuis Vinay Dhawan Thomas Hunt Eric Leveille Mark Miron Michel Pomerleau Simon Weller Chairman President Executive Vice President — Auto Parts Division Executive Vice President — Finance and Administration Executive Vice President — Heavy Vehicle Parts Division Vice President — Heavy Vehicle Operations Vice President — Human Resources Vice President — Information Systems Vice President — NAPA Product Development Vice President — Paint, Body and Equipment Vice President — Distribution and Logistics Vice President — NAPA Store Operations Vice President — NAPA Sales and Marketing Grupo Auto Todo (Puebla, Mexico) Juan Lujambio Virginia Garcia Iriarte Juan Quintal President and Chief Executive Officer Chief Financial Officer Vice President and General Manager NAPA Mexico GPC Asia Pacific (Melbourne, Australia) John L. Moller Marc Anderle Mark G. Brunton Wayne F. Bryant Rob Cameron Gary T. Dunwell Aileen Hayes Cary D. Laverty Lincoln P. McFayden J. Scott Mosteller Mark B. Sookias Julian A. Buckley Managing Director Executive General Manager — Business Systems Executive General Manager — Repco New Zealand Executive General Manager — Sales and Operations, Repco Australia Executive General Manager — Automotive Specialist Group Executive General Manager — Repco Australia, Merchandising and Strategic Marketing Executive General Manager — Human Resources Executive General Manager — Legal and Commercial Executive General Manager — McLeod Accessories Executive General Manager — Logistics and Technology Executive General Manager — Motospecs Chief Financial Officer EIS, Inc. (Atlanta, GA) Robert W. Thomas Larry L. Griffin Matthew C. Tyser David W. Brower Alexander Gonzalez Derek B. Goshay William C. Knight Peter F. Sheehan Chief Executive Officer President Executive Vice President and Chief Operating Officer Senior Vice President — Marketing Senior Vice President — Fabrication and Coating Senior Vice President — Human Resources Senior Vice President — Logistics and Operations Senior Vice President — Genuine Wire and Cable Motion Industries (Birmingham, AL) Timothy P. Breen G. Harold Dunaway, Jr. Randall P. Breaux Anthony G. Cefalu Ellen H. Holladay Scott A. MacPherson Kevin P. Storer Mark R. Thompson Austin W. Amos Richard W. Burmester James F. Howe James Randazzo Gerald V. Sourbeer Randy R. Till Donald Bland Darryl J. Britain Frederick H. “Ted” Cowie Zahirudin K. Hameer Billy W. Hamilton M. Keith Knight N. Joe Limbaugh Douglas R. Osborne Brandon C. Scordino James R. Summers J. Marvin Walker James F. Williams Michael D. Harper Dermot R. Strong President and Chief Executive Officer Executive Vice President — Finance & Administration and Secretary Senior Vice President — Marketing, Distribution and Purchasing Senior Vice President — Hose & Rubber, Shops and Service Centers Senior Vice President, Chief Information Officer and Operational Excellence Officer Senior Vice President — Sales and Acquisitions Senior Vice President — U.S. Operations and President-Motion Mexico Senior Vice President — Corporate Accounts, Government and Global Sourcing Senior Vice President & Group Executive — Midwest Senior Vice President & Group Executive — Southwest Senior Vice President & Group Executive — West Senior Vice President & Group Executive — Central Senior Vice President & Group Executive — Southeast Senior Vice President & Group Executive — East Vice President — Corporate Accounts Vice President — IT Infrastructure Vice President — Safety and Industrial Vice President — Inventory, Branch Support and Quality Vice President — Human Resources Vice President — Business Systems Vice President — Operations, Distribution Centers and Fleet Vice President — MI Services Vice President — Technology Planning and Integration Vice President — IT Governance and Operations Vice President — Finance Vice President — Corporate Purchasing and Supplier Relations Treasurer President — Motion Canada S. P. Richards Company (Atlanta, GA) C. Wayne Beacham Richard T. Toppin Steven E. Lynn James F. O’Brien E. Chadwick Lee G. Henry Martin Brian M. McGill Donald C. Mikolasy John R. “Jack” Reagan J. Phillip Welch, Jr. Bryan A. Wight Dennis J. Arnold John K. Burgess Dennis J. Flynn Paul D. Gatens A. Gaius Gough Manning N. Lomax Tom C. Maley Doug H. Sawyer Jason R. Smith Thomas M. Testa Richard “Rick” Weeks Chris F. Whiting Brad J. Zwigart Lester P. Christian Bryan T. Hall Gregory L. Nissen Ray J. Sreca Peter R. Dalglish Chairman and Chief Executive Officer President and Chief Operating Officer Executive Vice President — Global Procurement Executive Vice President — Operations Senior Vice President — Operations and Logistics Senior Vice President — Human Resources Senior Vice President — Information Technology & CIO Senior Vice President — Sales Senior Vice President — Merchandising Senior Vice President — Finance and CFO Senior Vice President — Sales and Marketing Vice President — Furniture Vice President — Sales Vice President — Supply Chain Vice President — E-Commerce and Marketing Services Vice President — Sales Vice President — Sales — Facility, Breakroom, and Janitorial Supplies Vice President — Business Development and Analytics Vice President — Finance and Controller Vice President — Sales — Emerging Markets Vice President — Sales Vice President — Operational Excellence Vice President — Cleaning and Breakroom Supply Vice President — Logistics Vice President — Southeast Division Vice President — Central Division Vice President — Western Division Vice President — Northeast Division Managing Director — S. P. Richards Canada ® SHAREHOLDER INFORMATION G EN U I N E PAR TS C O M PA N Y 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 MEETING OF SHAREHOLDERS The 2016 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 25, 2016. 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 (cid:37)(cid:82)(cid:78)(cid:83)(cid:84)(cid:0)(cid:6)(cid:0)(cid:57)(cid:79)(cid:85)(cid:78)(cid:71)(cid:0)(cid:44)(cid:44)(cid:48)(cid:0)(cid:13)(cid:0)(cid:33)(cid:84)(cid:76)(cid:65)(cid:78)(cid:84)(cid:65)(cid:12)(cid:0)(cid:39)(cid:69)(cid:79)(cid:82)(cid:71)(cid:73)(cid:65) GENERAL COUNSEL (cid:33)(cid:76)(cid:83)(cid:84)(cid:79)(cid:78)(cid:0)(cid:6)(cid:0)(cid:34)(cid:73)(cid:82)(cid:68)(cid:0)(cid:44)(cid:44)(cid:48)(cid:0)(cid:13)(cid:0)(cid:33)(cid:84)(cid:76)(cid:65)(cid:78)(cid:84)(cid:65)(cid:12)(cid:0)(cid:39)(cid:69)(cid:79)(cid:82)(cid:71)(cid:73)(cid:65) EXECUTIVE OFFICES GENUINE PARTS COMPANY 2999 CIRCLE 75 PARKWAY ATLANTA, GEORGIA 30339 770.953.1700 SHAREHOLDER WEBSITE: WWW.COMPUTERSHARE.COM/INVESTOR SHAREHOLDER ONLINE INQUIRIES: WWW-US.COMPUTERSHARE.COM/INVESTOR/CONTACT GE N U I N E PART S COM PAN Y 2 9 9 9 C I R C L E 75 PA R K WAY AT L A N TA , G A 3 0 3 3 9 7 70 . 9 5 3 .170 0 w w w . g e n p t . c o m

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