4 unchanged sentences
Consolidated Balance Sheets as of December 31, 2020 and 2019
−Removed: Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2019, 2018 and 2017
+Added: Consolidated Statements of Income for the Years Ended December 31, 2020, 2019 and 2018
+Added: Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2020, 2019, and 2018
Consolidated Statements of Equity for the Years Ended December 31, 2020, 2019 and 2018
4 unchanged sentences
Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheets of Genuine Parts Company and Subsidiaries (the Company) as of December 31, 2019 and 2018, 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, 2019, and the related notes (collectively referred to as the “consolidated financial statements”).
+Added: We have audited the accompanying consolidated balance sheets of Genuine Parts Company and Subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S.
1 unchanged sentence
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 19, 2021 expressed an unqualified opinion thereon.
−Removed: Adoption of New Accounting Standard
−Removed: As discussed in Note 1 to the consolidated financial statements, the Company changed its method for accounting for leases in 2019.
−Removed: See below for discussion of our related critical audit matter.
Basis for Opinion
14 unchanged sentences
Valuation of Goodwill
−Removed: Description of the Matter
−Removed: As of December 31, 2019, the Company’s goodwill was $2,293,519,000.
+Added: Description of the Matter As of December 31, 2020, the Company’s goodwill was $ 1,917,477,000 .
As disclosed in Note 1 to the consolidated financial statements, goodwill is tested for impairment at least annually at the reporting unit level.
For a reporting unit in which the Company concludes, based on the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount (or if the Company elects to skip the optional qualitative assessment), the Company is required to perform a quantitative impairment test, which includes measuring the fair value of the reporting unit and comparing it to the reporting unit’s carrying amount.
−Removed: In the year ended December 31, 2019, the Company recorded a goodwill impairment charge of $81,968,000 related to one of its reporting units as disclosed in Note 2 to the consolidated financial statements.
−Removed: Auditing management’s quantitative impairment test for goodwill was complex and judgmental due to the significant estimation required to determine the fair value of a reporting unit.
−Removed: In particular, the fair value estimate was sensitive to significant assumptions, such as changes in the weighted average costs of capital, revenue growth rates, operating margins, working capital and terminal value, which are affected by expectations about future market or economic conditions.
−Removed: How We Addressed the Matter in Our Audit
−Removed: We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment review process, including controls over management’s review of the significant assumptions described above.
−Removed: To test the estimated fair value of the reporting units where the quantitative impairment tests were performed, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis.
+Added: In the year ended December 31, 2020, the Company recorded a goodwill impairment charge of $506,721,000 related to its European reporting unit as disclosed in Note 3 to the consolidated financial statements.
+Added: Auditing management’s quantitative impairment test for goodwill was complex and judgmental due to the significant estimation required to determine the fair value of the reporting unit.
+Added: In particular, the fair value estimate was sensitive to significant assumptions, such as changes in the weighted average cost of capital and market multiples, and near-term revenue and operating margin projections, which are affected by expectations about future market or economic conditions.
+Added: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment review process, including controls over management’s review of the significant assumptions described above.
+Added: To test the estimated fair value of the European reporting unit, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis.
For example, we compared the significant assumptions of the reporting unit to current industry, market and economic trends, to the Company's historical results and those of other guideline companies in the same industry, and to other relevant factors.
We involved our valuation specialists to assist in our evaluation of the Company's valuation methodology and significant assumptions.
−Removed: In addition, we assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair values of the reporting units that would result from changes in the assumptions.
+Added: In addition, we assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the assumptions.
We also recalculated the resulting impairment charge recorded by the Company.
−Removed: Fair Value of Customer Relationships Acquired in Business Combinations
−Removed: Description of the Matter
−Removed: As disclosed in Note 12 to the consolidated financial statements, the Company’s cash used in acquisitions of businesses totaled $732,142,000, net of cash acquired, during the year ended December 31, 2019.
−Removed: These acquisitions were accounted for under the acquisition method of accounting for business combinations.
−Removed: For each business combination, the Company allocated the net purchase price to the assets acquired and the liabilities assumed based on their respective fair values as of the date of acquisition, including other intangible assets of $340,799,000.
−Removed: Of the other intangible assets acquired, the largest was customer relationships of $304,302,000.
−Removed: Auditing the Company's accounting for business combinations was complex due to the significant estimation uncertainty in the Company’s determination of the fair value of customer relationships.
−Removed: The significant estimation uncertainty was primarily due to the sensitivity of the respective fair values of customer relationships to assumptions about the future cash flows that the Company expects to generate from the acquired businesses.
−Removed: The Company used the multi-period excess earnings method under the income approach to measure the customer relationships.
−Removed: The significant assumptions used to estimate the fair value of the customer relationships included discount rates and certain assumptions that form the basis of the forecasted results (e.g., future revenue growth rates, operating margins and attrition rates).
−Removed: The significant assumptions are forward-looking and could be affected by future economic and market conditions.
−Removed: How We Addressed the Matter in Our Audit
−Removed: We obtained an understanding, evaluated the design and tested the operating effectiveness of relevant controls over the Company’s process for estimating the fair value of customer relationships, including controls over management's review of the significant assumptions used in the multi-period excess earnings method under the income approach.
−Removed: To test the estimated fair value of the customer relationships, we performed audit procedures that included, among others, evaluating the Company's selection and application of the multi-period excess earnings method under the income approach and evaluating the significant assumptions used by the Company.
−Removed: We involved our valuation specialists to assist with our evaluation of the methodology used by the Company and significant assumptions included in the fair value estimates.
−Removed: For example, we compared the significant assumptions to the historical results of the acquired businesses and to other guideline companies within the same industries.
−Removed: We also performed sensitivity analyses of the significant assumptions, including the future revenue growth rates, operating margins and attrition rates, to evaluate the change in the fair value of the intangible assets resulting from changes in the assumptions.
−Removed: Adoption of New Lease Accounting Standard
−Removed: Description of the Matter
−Removed: As discussed above and in Note 1 to the consolidated financial statements, the Company adopted Accounting Standard Codification Topic 842, Leases (“ASC 842”) as of January 1, 2019.
−Removed: The adoption of ASC 842 resulted in the recognition of a right-of-use asset and lease liability on the consolidated balance sheet for substantially all leases, including operating leases.
−Removed: The cumulative effect of adopting the standard resulted in an adjustment to retained earnings of $4,797,000, net of taxes, at the same date.
−Removed: Management elected to adopt ASC 842 using the modified retrospective approach, in which existing leases were recorded at the adoption date, but prior periods were not recast under this approach.
−Removed: As of December 31, 2019, the Company’s right-of-use asset and lease liability were $1,075,969,000 and $1,096,298,000, respectively, as disclosed in Note 6 to the consolidated financial statements.
−Removed: The right-of-use asset and liability were dependent on management’s determination of incremental borrowing rates (IBRs), which required significant judgment.
−Removed: Auditing the Company's adoption of ASC 842 was especially challenging due to the effort required to ensure the completeness of the lease population and accuracy of lease terms given the significant volume of lease arrangements and subjectivity due to management’s judgment required to estimate its IBRs.
−Removed: Generally, the Company's lease arrangements do not provide an implicit interest rate.
−Removed: Therefore, the Company was required to estimate its IBRs across various currency environments to use as the discount rates when determining its right-of-use asset and lease liability.
−Removed: How We Addressed the Matter in Our Audit
−Removed: We obtained an understanding, evaluated the design and tested the operating effectiveness of relevant controls over the Company’s process for implementing the new lease accounting standard.
−Removed: For example, we tested controls over management's process for review of the application of accounting policy elections and over management’s review of the IBRs.
−Removed: To test the Company’s adoption of ASC 842, our audit procedures included, among others, an evaluation of the completeness of the population of contracts that meet the definition of a lease under ASC 842, testing the accuracy of lease terms within the lease information technology system, and testing the accuracy of the Company’s system calculations of initial right-of-use assets and lease liabilities.
−Removed: Additionally, we involved our valuation specialists to test management’s model for estimating the IBRs.
−Removed: Our specialists assisted us in evaluating management’s methodology for developing the IBR, testing significant assumptions, such as currency environment adjustments, and comparing the Company’s IBRs to ranges developed by our specialists based on independently observed data.
Loss Contingencies Related to Product Liabilities
−Removed: Description of the Matter
−Removed: As disclosed in Notes 1 and 11 to the consolidated financial statements, the Company is subject to pending product liability lawsuits primarily resulting from its national distribution of automotive parts and supplies.
+Added: Description of the Matter As disclosed in Notes 1 and 13 to the consolidated financial statements, the Company is subject to pending product liability lawsuits primarily resulting from its national distribution of automotive parts and supplies.
The Company accrues for loss contingencies related to product liabilities if it is probable that the Company will incur a loss and the loss can be reasonably estimated.
2 unchanged sentences
In addition, the loss contingencies related to product liabilities are sensitive to significant management assumptions, including the number, type, and severity of claims incurred and estimated to be incurred in future periods.
−Removed: How We Addressed the Matter in Our Audit
−Removed: We obtained an understanding, evaluated the design and tested the operating effectiveness of relevant controls over the Company’s process for estimating loss contingencies related to product liabilities.
+Added: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of relevant controls over the Company’s process for estimating loss contingencies related to product liabilities.
For example, we tested controls over management's review of the significant assumptions described above and the reconciliation of claims data to that used by the Company’s actuarial specialist.
17 unchanged sentences
Prepaid expenses and other current assets 1,060,360 1,063,245
+Added: Current assets of discontinued operations — 714,251
Total current assets 7,113,763 7,938,616
+Added: Goodwill 1,917,477 2,293,519
Other intangible assets, net 1,498,257 1,492,097
1 unchanged sentence
Operating lease assets 1,038,877 995,667
+Added: Other assets 644,140 457,350
Property, plant and equipment, net 1,162,043 1,173,688
+Added: Noncurrent assets of discontinued operations — 248,771
+Added: Total assets $ 13,440,215 $ 14,645,629
Liabilities and equity
4 unchanged sentences
Dividends payable 114,043 110,851
+Added: Current liabilities of discontinued operations — 218,117
Total current liabilities 5,894,084 6,394,120
4 unchanged sentences
Other long-term liabilities 543,623 445,652
+Added: Noncurrent liabilities of discontinued operations — 68,906
Preferred stock, par value $ 1 per share — authorized 10,000,000 shares;
1 unchanged sentence
issued and outstanding - 2020 - 144,354,335 shares and 2019 - 145,378,158 shares
+Added: 144,354 145,378
Additional paid-in capital 117,165 98,777
3 unchanged sentences
Noncontrolling interests in subsidiaries 13,207 20,793
+Added: Total equity 3,218,003 3,695,500
Total liabilities and equity $ 13,440,215 $ 14,645,629
1 unchanged sentence
Genuine Parts Company and Subsidiaries
−Removed: Consolidated Statements of Income and Comprehensive Income
+Added: Consolidated Statements of Income
(In Thousands, Except per Share Amounts)
Year Ended December 31,
+Added: 2020 2019 2018
+Added: Net sales $ 16,537,433 $ 17,522,234 $ 16,831,605
Cost of goods sold 10,882,592 11,662,551 11,311,850
+Added: Gross profit 5,654,841 5,859,683 5,519,755
Operating expenses:
7 unchanged sentences
Interest expense 93,713 95,583 101,796
+Added: Other ( 58,138 ) ( 86,712 ) ( 61,395 )
Special termination costs — 42,757 —
1 unchanged sentence
Income before income taxes 379,368 859,283 994,638
−Removed: Basic net income per common share
−Removed: Diluted net income per common share
+Added: Income taxes 215,973 212,808 245,104
+Added: Net income from continuing operations 163,395 646,475 749,534
+Added: Net (loss) income from discontinued operations ( 192,497 ) ( 25,390 ) 60,940
+Added: Net (loss) income $ ( 29,102 ) $ 621,085 $ 810,474
+Added: Basic (loss) earnings per share:
+Added: Continuing operations $ 1.13 $ 4.44 $ 5.11
+Added: Discontinued operations ( 1.33 ) ( 0.18 ) 0.42
+Added: Basic (loss) earnings per share $ ( 0.20 ) $ 4.26 $ 5.53
+Added: Diluted (loss) earnings per share:
+Added: Continuing operations $ 1.13 $ 4.42 $ 5.09
+Added: Discontinued operations ( 1.33 ) ( 0.18 ) 0.41
+Added: Diluted (loss) earnings per share $ ( 0.20 ) $ 4.24 $ 5.50
Weighted average common shares outstanding 144,474 145,736 146,657
−Removed: Dilutive effect of stock options and nonvested restricted stock awards
+Added: Dilutive effect of stock options and non-vested restricted stock awards 641 681 584
Weighted average common shares outstanding — assuming dilution
−Removed: Other comprehensive income (loss), net of tax:
−Removed: Foreign currency translation adjustment
−Removed: Net gain (loss) on cash flow and net investment hedges, net of income taxes of 2019 — $16,600;
145,115 146,417 147,241
+Added: See accompanying notes.
+Added: Genuine Parts Company and Subsidiaries
+Added: Consolidated Statements of Comprehensive Income
+Added: (In Thousands, Except per Share Amounts)
+Added: Year Ended December 31,
2020 2019 2018
−Removed: Pension and postretirement benefit adjustments, net of income taxes of 2019 — $5,036;
+Added: Net (loss) income $ ( 29,102 ) $ 621,085 $ 810,474
+Added: Other comprehensive income (loss), net of income taxes:
+Added: Foreign currency translation adjustments 102,595 67,902 ( 200,490 )
+Added: Cash flow hedge adjustments, net of income taxes in 2020 — $ 3,453 , 2019 — $ 5,932 , and 2018 — $ 1,713
( 9,336 ) ( 16,039 ) ( 4,631 )
+Added: Pension and postretirement benefit adjustments, net of income taxes of 2020 — $ 4,639 , 2019 — $ 5,036 , and 2018 — $ 21,297
11,547 44,433 ( 57,365 )
5 unchanged sentences
(In Thousands, Except Share Data and per Share Amounts)
+Added: Common Stock Additional
+Added: Capital Accumulated
Comprehensive
+Added: Loss Retained
+Added: Earnings Total
+Added: Subsidiaries Total
+Added: Shares Amount
Balance at January 1, 2018 146,652,615 $ 146,653 $ 68,126 $ ( 852,592 ) $ 4,049,965 $ 3,412,152 $ 52,004 $ 3,464,156
−Removed: Other comprehensive income, net of tax
+Added: Net income — — — — 810,474 810,474 — 810,474
+Added: Other comprehensive loss, net of tax — — — ( 262,486 ) — ( 262,486 ) — ( 262,486 )
Cash dividends declared, $ 2.88 per share
+Added: — — — — ( 422,352 ) ( 422,352 ) — ( 422,352 )
Share-based awards exercised, including tax benefit of $ 4,232
+Added: 235,058 235 ( 10,462 ) — — ( 10,227 ) — ( 10,227 )
Share-based compensation — — 20,716 — — 20,716 — 20,716
Purchase of stock ( 951,060 ) ( 951 ) — — ( 91,032 ) ( 91,983 ) — ( 91,983 )
+Added: Cumulative effect from adoption of ASU No.
+Added: 2014-09 , net of tax
+Added: — — — — ( 5,843 ) ( 5,843 ) — ( 5,843 )
Noncontrolling interest activities — — — — — — ( 30,464 ) ( 30,464 )
Balance at December 31, 2018 145,936,613 145,937 78,380 ( 1,115,078 ) 4,341,212 3,450,451 21,540 3,471,991
−Removed: Other comprehensive loss, net of tax
+Added: Net income — — — — 621,085 621,085 — 621,085
+Added: Other comprehensive income, net of tax — — — 96,296 — 96,296 — 96,296
Cash dividends declared, $ 3.05 per share
+Added: — — — — ( 444,372 ) ( 444,372 ) — ( 444,372 )
Share-based awards exercised, including tax benefit of $ 4,920
+Added: 240,568 240 ( 11,653 ) — — ( 11,413 ) — ( 11,413 )
Share-based compensation — — 32,050 — — 32,050 — 32,050
1 unchanged sentence
Cumulative effect from adoption of ASU No.
+Added: 2018-02 — — — ( 122,526 ) 122,526 — — —
+Added: Cumulative effect from adoption of ASU No.
2016-02, net of tax — — — — 4,797 4,797 — 4,797
1 unchanged sentence
Balance at December 31, 2019 145,378,158 145,378 98,777 ( 1,141,308 ) 4,571,860 3,674,707 20,793 3,695,500
+Added: Net loss — — — — ( 29,102 ) ( 29,102 ) — ( 29,102 )
Other comprehensive income, net of tax — — — 104,806 — 104,806 — 104,806
−Removed: Cash dividends declared, $3.05 per share
+Added: Cash dividend declared, $ 3.16 per share
+Added: — — — — ( 456,469 ) ( 456,469 ) — ( 456,469 )
Share-based awards exercised, including tax benefit of $ 677
+Added: 112,621 113 ( 4,233 ) — — ( 4,120 ) — ( 4,120 )
Share-based compensation — — 22,621 — — 22,621 — 22,621
Purchase of stock ( 1,136,444 ) ( 1,137 ) — — ( 95,078 ) ( 96,215 ) — ( 96,215 )
−Removed: Cumulative effect from adoption of ASU No.
−Removed: Cumulative effect from adoption of ASU No.
−Removed: 2016-02, net of tax
+Added: Cumulative effect from adoption of ASU 2016-13 , net of tax
+Added: — — — — ( 11,432 ) ( 11,432 ) — ( 11,432 )
Noncontrolling interest activities — — — — — — ( 7,586 ) ( 7,586 )
5 unchanged sentences
Year Ended December 31
+Added: 2020 2019 2018
Operating activities:
−Removed: Adjustments to reconcile net income to net cash provided by operating activities:
+Added: Net (loss) income $ ( 29,102 ) $ 621,085 $ 810,474
+Added: Net (loss) income from discontinued operations ( 192,497 ) ( 25,390 ) 60,940
+Added: Net income from continuing operations 163,395 646,475 749,534
+Added: Adjustments to reconcile net income from continuing operations to net cash provided by operating activities:
Depreciation and amortization 272,842 257,263 227,584
−Removed: Excess tax benefits from share-based compensation
+Added: Excess tax benefit from share-based compensation ( 677 ) ( 4,920 ) ( 4,232 )
Deferred income taxes ( 27,722 ) ( 55,939 ) 1,593
10 unchanged sentences
Other long-term assets and liabilities 57,903 76,937 ( 57,372 )
−Removed: Net cash provided by operating activities
+Added: Net cash provided by operating activities from continuing operations 2,014,522 832,519 1,056,722
Investing activities:
3 unchanged sentences
Acquisitions of businesses and other investing activities ( 69,173 ) ( 724,718 ) ( 257,823 )
−Removed: Net cash used in investing activities
+Added: Net cash provided by (used in) investing activities from continuing operations 182,768 ( 543,595 ) ( 469,938 )
Financing activities:
1 unchanged sentence
Payments on debt ( 3,533,017 ) ( 4,897,769 ) ( 5,124,265 )
−Removed: Payments on acquired debt of AAG
Share-based awards exercised ( 4,120 ) ( 11,413 ) ( 10,227 )
2 unchanged sentences
Other financing activities ( 65,150 ) ( 871 ) ( 30,663 )
−Removed: Net cash (used in) provided by financing activities
−Removed: Effect of exchange rate changes on cash
−Removed: Net (decrease) increase in cash and cash equivalents
+Added: Net cash used in financing activities from continuing operations ( 1,513,765 ) ( 385,962 ) ( 608,830 )
+Added: Cash flows from discontinued operations:
+Added: Net cash flows provided by operating activities from discontinued operations 5,039 59,491 88,442
+Added: Net cash used in investing activities from discontinued operations ( 11,131 ) ( 19,611 ) ( 26,186 )
+Added: Net cash provided by financing activities from discontinued operations — — —
+Added: Net cash (used in) provided by discontinued operations ( 6,092 ) 39,880 62,256
+Added: Effect of exchange rate changes on cash and cash equivalents 35,741 603 ( 21,562 )
+Added: Net increase (decrease) in cash and cash equivalents 713,174 ( 56,555 ) 18,648
Cash and cash equivalents at beginning of year 276,992 333,547 314,899
2 unchanged sentences
Cash paid during the year for:
+Added: Income taxes $ 223,019 $ 303,736 $ 236,536
+Added: Interest $ 91,344 $ 95,281 $ 102,131
See accompanying notes.
4 unchanged sentences
Summary of Significant Accounting Policies
−Removed: Genuine Parts Company and all of its majority-owned subsidiaries (the "Company") is a distributor of automotive replacement parts, industrial parts and materials and business products.
−Removed: The Company serves a diverse customer base through approximately 3,600 locations in North America, Australasia and Europe and, therefore, has limited exposure from credit losses to any particular customer, region, or industry segment.
+Added: Genuine Parts Company (the "Company") is a distributor of automotive replacement parts and industrial parts and materials.
+Added: The Company serves a diverse customer base through a network of more than 10,000 locations throughout North America, Australasia, and Europe and, therefore, has limited exposure from credit losses to any particular customer, region, or industry segment.
The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral.
+Added: The Company's operations are vulnerable to the reduced economic activity caused by the COVID-19 outbreak, which was declared a pandemic in March 2020.
+Added: The extent to which the COVID-19 pandemic impacts the Company will depend on numerous factors and future developments that the Company cannot predict, including the severity of the virus;
+Added: the occurrence of additional waves or spikes in infection rates;
+Added: the duration of the outbreak;
+Added: governmental, business or other actions taken in response to the pandemic and the efficacy of these actions, including partial or complete shut downs, travel restrictions, and stay-at-home orders among other actions;
+Added: the effectiveness and distribution of COVID-19 vaccines;
+Added: and impacts on the Company's supply chain, its ability to keep operating locations open, and on customer demand.
+Added: The Company benefited from various forms of government economic assistance including certain temporary subsidies that were received in 2020, which have been classified as a reduction of selling, administrative and other expenses.
The Company has evaluated subsequent events through the date the financial statements were issued.
+Added: On June 30, 2020, the Company completed the divestiture of its Business Products Group.
+Added: Refer to the acquisitions, divestitures and discontinued operations footnote for more information.
+Added: The Company's results of operations for the Business Products Group are reported as discontinued operations and all information related to the discontinued operations has been excluded from the notes to the consolidated financial statements for all periods presented.
+Added: Net (loss) income from discontinued operations for each period includes all costs that are directly attributable to these businesses and excludes certain corporate overhead costs that were previously allocated.
Principles of Consolidation
6 unchanged sentences
Actual results may differ from those estimates and the differences could be material.
+Added: If the pandemic persists or worsens, the estimates and assumptions management made as of December 31, 2020 could change, and it is reasonably possible such changes could be significant.
Revenue Recognition
−Removed: The Company applied ASU 2014-09, using the modified retrospective method effective January 1, 2018.
−Removed: The cumulative effect of initially applying ASU 2014-09 and its amendments resulted in a reduction to the opening retained earnings balance of $ 8,000 prior to the tax adjustment, at January 1, 2018 and a related adjustment to other current liabilities as of that date.
−Removed: Revenue for periods prior to January 1, 2018 has not been adjusted and continues to be reported under Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition (ASC 605) .
The Company primarily recognizes revenue at the point the customer obtains control of the products or services and at an amount that reflects the consideration expected to be received for those products or services.
7 unchanged sentences
Liabilities for customer incentives, discounts, or rebates are included in other current liabilities in the consolidated balance sheets.
+Added: Genuine Parts Company and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2020
Product Distribution Revenues
8 unchanged sentences
Revenue from these services is recognized over a short duration and the impact to our consolidated financial statements is not significant.
−Removed: Genuine Parts Company and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2019
Variable Consideration
5 unchanged sentences
Foreign Currency Translation
−Removed: The consolidated balance sheets and statements of income and comprehensive income of the Company’s foreign subsidiaries have been translated into U.S.
+Added: The consolidated balance sheets and statements of income of the Company’s foreign subsidiaries have been translated into U.S.
dollars at the current and average exchange rates, respectively.
4 unchanged sentences
The Company evaluates the collectability of trade accounts receivable based on a combination of factors.
−Removed: 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.
+Added: The Company estimates an allowance for doubtful accounts as a percentage of net sales based on various factors, including historical experience, current economic conditions and future expected credit losses and collectability trends.
+Added: The Company will periodically adjust 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.
4 unchanged sentences
Cost is determined by the last-in, first-out ("LIFO") method for a majority of U.S.
−Removed: automotive and industrial parts, and generally by the first-in, first-out ("FIFO") method for business products and certain non-U.S.
−Removed: and other inventories.
+Added: automotive and industrial parts, and generally by the first-in, first-out ("FIFO") method for non-U.S.
+Added: and certain other inventories.
If the FIFO method had been used for all inventories, cost would have been approximately $ 524,400 and $ 531,800 higher than reported at December 31, 2020 and 2019, respectively.
During 2020 and 2019, reductions in industrial parts inventories resulted in liquidations of LIFO inventory layers, which reduced cost of goods sold by approximately $ 15,500 and $ 10,400 , respectively.
−Removed: There were no LIFO liquidations in 2018.
The Company identifies slow moving or obsolete inventories and estimates appropriate provisions related thereto.
1 unchanged sentence
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.
+Added: Genuine Parts Company and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2020
The Company enters into agreements at the beginning of each year with many of its vendors that provide for inventory purchase incentives.
4 unchanged sentences
Prepaid expenses and other current assets consist primarily of amounts due from vendors, prepaid expenses, and income and other taxes receivable.
−Removed: Genuine Parts Company and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2019
The Company reviews its goodwill annually for impairment in the fourth quarter, or sooner if circumstances indicate that the carrying amount may exceed fair value.
7 unchanged sentences
The Company typically calculates the fair value by using a combination of a market approach and an income approach that is based on a discounted cash flow model.
−Removed: The assumptions used in the market approach generally include benchmark company market multiples and the assumptions used in the income approach generally include the projected cash flows of the reporting unit, which are based on projected revenue growth rates and operating margins, and the estimated weighted average costs of capital, working capital and terminal value.
−Removed: The Company uses inputs and assumptions it believes are consistent with those a hypothetical marketplace participants would use.
+Added: The assumptions used in the market approach generally include benchmark company market multiples and the assumptions used in the income approach generally include the projected cash flows of the reporting unit, which are based on projected revenue growth rates and operating margins, and the estimated weighted average cost of capital, working capital and terminal value.
+Added: The Company uses inputs and assumptions it believes are consistent with those a hypothetical marketplace participant would use.
The Company recognizes goodwill impairment (if any) as the excess of the reporting unit's carrying value over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.
5 unchanged sentences
Impairment losses, if any, are measured based upon the difference between the carrying amount and the fair value of the assets.
−Removed: For the year ended December 31, 2019, the Company recognized long-lived asset impairments of $ 7,792 related to certain assets expected to be abandoned in connection with the 2019 Cost Savings Plan (refer to the restructuring footnote for more information).
−Removed: The Company also assessed the finite-lived, identifiable tangible and intangible assets at the Business Products reporting unit for impairment under the undiscounted cash flows approach and concluded there was no impairment.
−Removed: No impairments were recognized in 2018 or 2017 .
−Removed: Other assets consist primarily of cash surrender value of life insurance policies, equity method investments, guarantee fees receivable, and deferred compensation benefits.
+Added: For the years ended December 31, 2020 and 2019, the Company recognized long-lived asset impairments of $ 6,243 and $ 5,408 , respectively, related to certain assets expected to be abandoned in connection with the 2019 Cost Savings Plan (refer to the restructuring footnote for more information).
+Added: Genuine Parts Company and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2020
+Added: Other assets consist primarily of cash surrender value of life insurance policies, debt securities, equity method and other investments, guarantee fees receivable, and deferred compensation benefits.
Property, Plant and Equipment
1 unchanged sentence
Depreciation and amortization are primarily determined on a straight-line basis over the following estimated useful lives of each asset:
−Removed: buildings and improvements, 10 to 40 years;
+Added: buildings, 10 to 40 years;
machinery and equipment, 5 to 15 years;
+Added: and the shorter of lease term or useful life for leasehold improvements.
Other Current Liabilities
−Removed: Other current liabilities consist primarily of reserves for sales returns expected within the next year, accrued compensation, accrued customer incentives, accrued income and other taxes, and other reserves for expenses incurred.
+Added: Other current liabilities consist primarily of current lease obligations, reserves for sales returns expected within the next year, accrued compensation, accrued income and other taxes, and other reserves for expenses incurred.
Other Long-term Liabilities
Other long-term liabilities consist primarily of reserves for sales returns expected after the next year, guarantee obligations, accrued taxes and other non-current obligations.
−Removed: Genuine Parts Company and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2019
Self-Insurance
7 unchanged sentences
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.
−Removed: Accumulated Other Comprehensive Loss
−Removed: The following table presents the amounts that comprise accumulated other comprehensive loss ("AOCL") as well as the changes in those amounts by component for the years ended on December 31, 2019 and 2018 :
−Removed: Changes in Accumulated Other Comprehensive
−Removed: Loss by Component
−Removed: Other Post-Retirement Benefits
−Removed: Cash Flow and Net Investment Hedges
−Removed: Beginning balance, January 1, 2018
−Removed: Other comprehensive (loss) income before reclassifications, net of tax
−Removed: Amounts reclassified from accumulated other comprehensive loss, net of tax
−Removed: Net current period other comprehensive (loss) income
−Removed: Ending balance, December 31, 2018
−Removed: Other comprehensive income (loss) before reclassifications, net of tax
−Removed: Amounts reclassified from accumulated other comprehensive loss, net of tax
−Removed: Net current period other comprehensive income (loss)
−Removed: Cumulative effect from adoption of ASU 2018-02
−Removed: Ending balance, December 31, 2019
−Removed: The accumulated other comprehensive loss components related to the pension benefits are included in the computation of net periodic benefit income in the employee benefit plans footnote.
−Removed: The components related to the cash flow and net investment hedges are included in the derivatives and hedging footnote.
Business Combinations
5 unchanged sentences
The Company typically measures customer relationship and other intangible assets using an income approach.
−Removed: Significant estimates and assumptions used in this approach include discount rates and certain assumptions that form the basis of the forecasted cash
−Removed: Genuine Parts Company and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2019
−Removed: flows expected to be generated from the asset (e.g., future revenue growth rates, operating margins and attrition rates).
+Added: Significant estimates and assumptions used in this approach include discount rates and certain assumptions that form the basis of the forecasted cash flows expected to be generated from the asset (e.g., future revenue growth rates, operating margins and attrition rates).
If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop these values, the Company could record impairment charges.
2 unchanged sentences
Legal and Product Liabilities
−Removed: The Company accrues for potential losses related to legal disputes, litigation, product liabilities, and regulatory matters when it is probable (more likely than not) that the Company will incur a loss and the amount of the loss can be reasonably estimated.
+Added: The Company accrues for potential losses related to legal disputes, litigation, product liabilities, and regulatory matters when it is probable (the future event or events are likely to occur) that the Company will incur a loss and the amount of the loss can be reasonably estimated.
+Added: Genuine Parts Company and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2020
The amount of the product liability reflects the Company’s reasonable estimate of losses based upon currently known facts.
4 unchanged sentences
Fair Value Measurements
−Removed: 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 and term loan approximate their respective fair values based on the short-term nature of these instruments.
−Removed: At December 31, 2019 and 2018 , the fair value of fixed rate debt was approximately $ 2,013,542 and $ 1,427,381 , respectively.
−Removed: 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.
−Removed: At December 31, 2019 and 2018 , the carrying value of fixed rate debt, net of debt issuance costs, was $ 1,945,387 and $ 1,466,803 , respectively, and is included in long-term and short-term debt in the consolidated balance sheets.
+Added: Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.
+Added: Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability.
+Added: Additionally, ASC 820, Fair Value Measurements , defines levels within a hierarchy based upon observable and non-observable inputs.
+Added: Observable inputs such as quoted prices in active markets;
+Added: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly;
+Added: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions
+Added: At December 31, 2020 and 2019, the fair value of the Company's senior unsecured notes was approximately $ 2,680,545 and $ 2,013,542 , respectively, which are designated as Level 2 in the fair value hierarchy.
+Added: Our valuation technique is based primarily on prices and other relevant information generated by observable transactions involving identical or comparable assets or liabilities.
Derivative instruments are recognized in the consolidated balance sheets at fair value and are designated as Level 2 in the fair value hierarchy.
1 unchanged sentence
Fair value measurements of non-financial assets and non-financial liabilities are primarily used in the impairment analyses of goodwill, other intangible assets, and long-lived assets.
−Removed: These involve fair value measurements on a nonrecurring basis using Level 3 inputs as defined in the fair value hierarchy (i.e., unobservable pricing inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing an asset or liability).
+Added: These involve fair value measurements on a nonrecurring basis using Level 3 inputs as defined in the fair value hierarchy.
+Added: 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.
Derivatives and Hedging
8 unchanged sentences
When a designated instrument is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable, hedge accounting is discontinued prospectively.
+Added: Shipping and Handling Costs
+Added: Shipping and handling costs are classified as selling, administrative and other expenses in the accompanying consolidated statements of income and totaled approximately $ 301,900 , $ 303,900 , and $ 278,500 , for the years ended December 31, 2020, 2019, and 2018, respectively.
Genuine Parts Company and Subsidiaries
1 unchanged sentence
December 31, 2020
−Removed: Shipping and Handling Costs
−Removed: 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 $ 420,000 , $ 390,000 , and $ 290,000 , for the years ended December 31, 2019 , 2018 , and 2017 , respectively.
Advertising Costs
16 unchanged sentences
The Company recognizes a tax benefit from uncertain tax positions when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits.
−Removed: Net Income per Common Share
−Removed: Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the year.
−Removed: 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.
+Added: Net Income from Continuing Operations per Common Share
+Added: Basic net income from continuing operations per common share is computed by dividing net income from continuing operations by the weighted average number of common shares outstanding during the year.
+Added: The computation of diluted net income from continuing operations per common share includes the dilutive effect of stock options, stock appreciation rights and nonvested restricted stock awards options.
Options to purchase approximately 1,602 , 210 , and 1,490 shares of common stock ranging from $ 72 - $ 105 per share were outstanding at December 31, 2020, 2019, and 2018, respectively.
−Removed: 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.
+Added: These options were excluded from the computation of diluted net income from continuing operations per common share because the options’ exercise prices were greater than the average market prices of common stock in each respective year.
+Added: Genuine Parts Company and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2020
Recent Accounting Pronouncements
+Added: Changes to U.S.
+Added: GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standard Updates (“ASUs”) to the FASB Accounting Standards Codification (“ASC”).
+Added: The Company considers the applicability and impact of all ASUs and any not listed below were assessed and determined to be not applicable or are expected to have a minimal impact on the Company's consolidated financial statements.
+Added: Credit Losses (Topic 326)
+Added: In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments .
+Added: Among other things, the ASU and its amendments replace the incurred loss impairment model for receivables and loan guarantees with a current expected credit loss model.
+Added: The new model measures impairment based on expected credit losses over the remaining contractual life of an asset, considering available information about the collectability of cash flows, past events, current conditions, and reasonable and supportable forecasts.
+Added: Additional quantitative and qualitative disclosures are required.
+Added: The Company adopted ASU 2016-13 and its amendments as of January 1, 2020, which included recognizing a cumulative-effect adjustment to reduce opening retained earnings by $ 11,432 , net of taxes.
+Added: Compensation - Retirement Benefits (Topic 715)
+Added: In August 2018, the FASB issued ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans .
+Added: The updated accounting guidance modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing, adding and clarifying certain disclosures.
+Added: The Company adopted this new accounting standard on January 1, 2020 on a retrospective basis.
+Added: The adoption of this ASU did not have an impact on the Company’s financial position, results of operations, or cash flows.
+Added: Income Statement - Reporting Comprehensive Income (Topic 220)
+Added: In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income .
+Added: The ASU permits a company to make a one-time election to reclassify stranded tax effects caused by the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings.
+Added: The ASU also requires companies to disclose their accounting policies for releasing income tax effects from accumulated other comprehensive income.
+Added: ASU 2018-02 was effective for periods beginning after December 15, 2018, with an election to adopt early.
+Added: The Company adopted ASU 2018-02 as of January 1, 2019 and recognized an adjustment to increase retained earnings and to adjust accumulated other comprehensive loss by approximately $ 122,526 .
+Added: Intangibles - Goodwill and Other (Topic 350)
+Added: In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment .
+Added: The ASU simplifies the subsequent measurement of goodwill by eliminating the second step from the goodwill impairment test.
+Added: ASU 2017-04 requires applying a one-step quantitative test and recording the amount of goodwill impairment as the excess of the reporting unit's carrying value over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.
+Added: ASU 2017-04 does not amend the optional qualitative assessment of goodwill impairment.
+Added: The Company adopted ASU 2017-04 as of October 1, 2019 and performed its annual evaluation of goodwill in accordance with this standard.
Leases (Topic 842)
15 unchanged sentences
The standard did not have an impact on debt-covenant compliance under the Company's current debt agreements.
−Removed: Income Statement - Reporting Comprehensive Income (Topic 220)
−Removed: In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income .
−Removed: The ASU permits a company to make a one-time election to reclassify stranded tax effects caused by the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings.
−Removed: The ASU also requires companies to disclose their accounting policies for releasing income tax effects from accumulated other comprehensive income.
−Removed: ASU 2018-02 was effective for periods beginning after December 15, 2018, with an election to adopt early.
−Removed: The Company adopted ASU 2018-02 as of January 1, 2019 and recognized an adjustment to increase retained earnings and to adjust accumulated other comprehensive loss by approximately $ 122,526 .
−Removed: Intangibles - Goodwill and Other (Topic 350)
−Removed: In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment .
−Removed: The ASU simplifies the subsequent measurement of goodwill by eliminating the second step from the goodwill impairment test.
−Removed: ASU 2017-04 requires applying a one-step quantitative test and recording the amount of goodwill impairment as the excess of the reporting unit's carrying value over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.
−Removed: ASU 2017-04 does not amend the optional qualitative assessment of goodwill impairment.
−Removed: The Company adopted ASU 2017-04 as of October 1, 2019 and performed its annual evaluation of goodwill in accordance with this standard, which resulted in a goodwill impairment charge in 2019 of $ 81,968 related to the Company's Business Products reporting unit.
−Removed: Financial Instruments - Credit Losses (Topic 220)
−Removed: In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments .
−Removed: Among other things, the ASU and its amendments replace the incurred loss impairment model for receivables and certain other financial instruments with a current expected credit loss model.
−Removed: The new model measures impairment based on expected credit losses over the remaining contractual life of an asset, considering available information about the collectability of cash flows, past events, current conditions, and reasonable and supportable forecasts.
−Removed: Additional quantitative and qualitative disclosures are required.
−Removed: ASU 2016-13 is effective for periods beginning after December 15, 2019, with an option to adopt early.
−Removed: The Company plans to adopt the ASU and its amendments on January 1, 2020.
−Removed: On this date the Company currently expects to record an immaterial cumulative effect adjustment to reduce retained earnings as a result of the adoption.
−Removed: The adoption of ASU 2016-13 and its amendments is not expected to have a significant impact on the Company's consolidated financial statements.
−Removed: Compensation - Retirement Benefits (Topic 715)
−Removed: In August 2018, the FASB issued ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans .
−Removed: The updated accounting guidance modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing, adding and clarifying certain disclosures.
−Removed: These provisions must be applied retrospectively.
−Removed: ASU 2018-14 is effective for periods beginning after December 15, 2020, with an option to adopt early.
−Removed: The adoption of ASU 2018-14 is not expected to have a significant impact on the Company’s financial position, results of operations or disclosures.
−Removed: The Company does not plan to early adopt the standard.
−Removed: Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)
−Removed: In August 2018, the FASB issued ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract .
−Removed: 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop internal-use software.
−Removed: These provisions should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption.
−Removed: ASU 2018-15 is effective for periods beginning after December 15, 2019, with an option to adopt early.
−Removed: The adoption of ASU 2018-15 is not expected to have a significant impact on the Company’s financial position, results of operations or disclosures.
−Removed: The Company does not plan to early adopt the standard .
+Added: Accumulated Other Comprehensive Loss
+Added: The following tables present the changes in accumulated other comprehensive loss (“AOCL”) by component:
+Added: Changes in Accumulated Other
+Added: Comprehensive Loss by Component
+Added: Pension and Other Post-Retirement Benefits Cash Flow Hedges Foreign Currency Translation Total
+Added: Beginning balance, January 1, 2020 $ ( 704,415 ) $ ( 20,671 ) $ ( 416,222 ) $ ( 1,141,308 )
+Added: Other comprehensive income (loss) before reclassifications ( 17,343 ) ( 21,509 ) 91,239 52,387
+Added: Amounts reclassified from accumulated other comprehensive loss 28,890 12,173 11,356 52,419
+Added: Net current period other comprehensive income (loss) 11,547 ( 9,336 ) 102,595 104,806
+Added: Ending balance, December 31, 2020 $ ( 692,868 ) $ ( 30,007 ) $ ( 313,627 ) $ ( 1,036,502 )
+Added: Changes in Accumulated Other
+Added: Comprehensive Loss by Component
+Added: Pension and Other Post-Retirement Benefits Cash Flow Hedges Foreign Currency Translation Total
+Added: Beginning balance, January 1, 2019 $ ( 626,322 ) $ ( 4,632 ) $ ( 484,124 ) $ ( 1,115,078 )
+Added: Other comprehensive income (loss) before reclassifications 22,120 ( 18,419 ) 33,201 36,902
+Added: Amounts reclassified from accumulated other comprehensive loss (1) 22,313 2,380 34,701 59,394
+Added: Net current period other comprehensive income (loss) 44,433 ( 16,039 ) 67,902 96,296
+Added: Cumulative effect from adoption of ASU 2018-02 ( 122,526 ) — — ( 122,526 )
+Added: Ending balance, December 31, 2019 $ ( 704,415 ) $ ( 20,671 ) $ ( 416,222 ) $ ( 1,141,308 )
+Added: (1) Amount includes realized currency losses of $ 34,701 that were reclassified out of foreign currency translation into earnings in connection with the March 7, 2019 sale of Grupo Auto Todo and the September 30, 2019 sale of EIS.
+Added: Refer to the acquisitions, divestitures and discontinued operations footnote for further details.
+Added: The AOCL components related to the pension benefits are included in the computation of net periodic benefit income in the employee benefit plans footnote.
+Added: The nature of the cash flow hedges are discussed in the derivatives and hedging footnote.
+Added: Generally, tax effects in AOCL are established at the currently enacted tax rate and reclassified to net (loss) income in the same period that the related pre-tax AOCL reclassifications are recognized.
Genuine Parts Company and Subsidiaries
3 unchanged sentences
The changes in the carrying amount of goodwill during the years ended December 31, 2020 and 2019 by reportable segment, as well as other identifiable intangible assets, are summarized as follows:
−Removed: Business Products
−Removed: Other Intangible Assets, Net
+Added: Automotive Industrial Total Other Intangible Assets, Net
Balance as of January 1, 2019 $ 1,721,823 $ 324,997 $ 2,046,820 $ 1,327,898
+Added: Additions 194,561 185,679 380,240 340,799
+Added: Divestitures ( 294 ) ( 115,437 ) ( 115,731 ) ( 89,030 )
+Added: Amortization — — — ( 92,206 )
+Added: Impairments — — — ( 2,194 )
Foreign currency translation ( 18,595 ) 785 ( 17,810 ) 6,830
Balance as of December 31, 2019 1,897,495 396,024 2,293,519 1,492,097
+Added: Additions 15,061 5,261 20,322 21,890
+Added: Amortization — — — ( 94,962 )
+Added: Impairments ( 506,721 ) — ( 506,721 ) —
Foreign currency translation 99,688 10,669 110,357 79,232
Balance as of December 31, 2020 $ 1,505,523 $ 411,954 $ 1,917,477 $ 1,498,257
−Removed: The Company completed both qualitative and quantitative goodwill assessments as of October 1, 2019.
−Removed: Due to s everal factors that developed in the fourth quarter of 2019, the Company performed an interim impairment test as of December 31, 2019 for its Business Products reporting unit and recorded a goodwill impairment charge of $ 81,968 .
−Removed: As such, total goodwill is net of $ 81,968 of accumulated impairment loss.
−Removed: The factors that developed in the fourth quarter of 2019 at the Business Products reporting unit included:
−Removed: (i) greater uncertainty associated with long-term industry trends and the competitive environment and (ii) fourth quarter results, including segment profitability, that were below management expectations due primarily to a reduction in volume with certain national account customers .
−Removed: The Company performed a quantitative goodwill impairment test as of December 31, 2019 and concluded that the full amount of goodwill allocated to the Business Products reporting unit was impaired.
−Removed: The Company determined that the fair values of its remaining reporting units are in excess of their carrying amounts and there were no other indicators that goodwill was impaired.
−Removed: The gross carrying amounts and accumulated amortization relating to other intangible assets at December 31, 2019 and 2018 are as follows:
−Removed: Gross Carrying Amount
−Removed: Accumulated Amortization
−Removed: Gross Carrying Amount
−Removed: Accumulated Amortization
−Removed: Customer relationships
−Removed: Non-competition agreements
+Added: Due to several factors that coalesced in the second quarter of 2020 the Company performed an interim impairment test as of May 31, 2020 for its European reporting unit and recorded a goodwill impairment charge of $ 506,721 .
+Added: The factors primarily resulted from the ongoing market volatility and uncertainty caused by the COVID-19 pandemic, which extended into the second quarter and impacted several critical impairment testing assumptions including weighted average cost of capital and market multiples, and near-term revenue and operating margin projections for the reporting unit.
+Added: During the second quarter, the Company also assessed the finite-lived, identifiable tangible and intangible assets at the European reporting unit for impairment under the undiscounted cash flows approach and concluded there was no impairment.
+Added: The European reporting unit’s fair value was calculated using a combination of both income and market approaches and involved significant unobservable inputs (Level 3 inputs).
+Added: The assumptions used in the income approach include projected revenue growth rates, operating margins, the estimated weighted average cost of capital and terminal value.
+Added: The weighted-average cost of capital used in the income approach was adjusted to reflect the specific risks and uncertainties associated with the COVID-19 pandemic in developing the cash flow projections.
+Added: The assumptions used in the market approach include benchmark company market multiples.
+Added: The Company used inputs and assumptions it believed are consistent with those a hypothetical marketplace participant would use.
+Added: The Company completed its annual qualitative goodwill assessment as of October 1, 2020.
+Added: Based on the Company's assessment, which included reviewing historical revenue and operating profit growth trends and evaluating the inputs to a weighted average cost of capital, the Company has determined that it is not more likely than not that the goodwill is impaired for all reporting units.
+Added: Should actual results differ from certain key assumptions used in the interim or annual impairment tests, including revenue and operating margin growth rates, which are both impacted by economic conditions, or should other key impairment testing assumptions change in subsequent periods, there can be no assurance that goodwill at one or more reporting units may not be impaired.
Genuine Parts Company and Subsidiaries
1 unchanged sentence
December 31, 2020
+Added: The gross carrying amounts and accumulated amortization relating to other intangible assets at December 31, 2020 and 2019 are as follows:
+Added: Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net
+Added: Customer relationships $ 1,578,153 $ ( 388,120 ) $ 1,190,033 $ 1,481,470 $ ( 287,851 ) $ 1,193,619
+Added: Trademarks 358,253 ( 50,227 ) 308,026 334,643 ( 36,501 ) 298,142
+Added: Non-competition agreements 5,719 ( 5,521 ) 198 5,268 ( 4,932 ) 336
+Added: $ 1,942,125 $ ( 443,868 ) $ 1,498,257 $ 1,821,381 $ ( 329,284 ) $ 1,492,097
Amortization expense for other intangible assets totaled $ 94,962 , $ 92,206 , and $ 83,489 for the years ended December 31, 2020, 2019, and 2018, respectively.
Estimated other intangible assets amortization expense for the succeeding five years is as follows:
+Added: 2021 $ 100,630
Property, Plant and Equipment
Property, plant and equipment as of December 31, 2020 and December 31, 2019, consisted of the following:
+Added: Land $ 131,117 $ 128,353
+Added: Buildings and leasehold improvements 899,723 779,124
Machinery, equipment and other 1,529,298 1,466,899
2 unchanged sentences
Property, plant and equipment, net $ 1,162,043 $ 1,173,688
−Removed: Credit Facilities
The principal amounts of the Company’s borrowings subject to variable rates (after consideration of hedging arrangements) totaled approximately $ 114,002 and $ 554,902 at December 31, 2020 and 2019, respectively.
The weighted average interest rate on the Company’s outstanding borrowings was approximately 2.65 % and 2.18 % at December 31, 2020 and 2019, respectively.
−Removed: The Company entered into long-term fixed rate debt private placement agreements of € 250,000 and Australian dollar ("A$") A$ 310,000 on May 31, 2019 and June 30, 2019, respectively.
−Removed: The rates of interest and maturity dates related to these agreements are included in the table below.
−Removed: Certain borrowings require the Company to comply with a financial covenant with respect to a maximum debt to EBITDA ratio.
+Added: Certain borrowings require the Company to comply with a financial covenant with respect to a maximum debt to Adjusted EBITDA ratio.
At December 31, 2020, 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 approximately $ 69,899 and $ 65,322 outstanding at December 31, 2020 and 2019, respectively.
+Added: On October 27, 2020, the Company issued $ 500,000 aggregate principal amount of 1.875 % Senior Unsecured Notes due 2030 at a price to the public of 99.069 % of their face value with U.S.
+Added: Bank National Association as trustee.
+Added: Interest on the 1.875 % Senior Unsecured Notes due 2030 is payable semi-annually on May 1 and November 1 of each year, which begins on May 1, 2021, and is computed on the basis of a 360-day year.
Genuine Parts Company and Subsidiaries
1 unchanged sentence
December 31, 2020
+Added: On October 30, 2020, the Company entered into a new $ 1.5 billion Syndicated Facility Agreement (the "October 30, 2020 Syndicated Facility").
+Added: Simultaneously with the entry into the October 30, 2020 Syndicated Facility, the Company terminated and paid in full all outstanding indebtedness under the previous October 30, 2017 Syndicated Facility and repaid the existing term loan A facility.
Amounts outstanding under the Company’s credit facilities, net of debt issuance costs consist of the following:
+Added: December 31, 2020 December 31, 2019
Unsecured Revolving Credit Facility, $ 1,500,000 , LIBOR plus 1.50 % variable, due October 30, 2025
+Added: Unsecured Revolving Credit Facility, $ 1,500,000 , LIBOR plus 1.50 % variable, due October 30, 2022 (Terminated as of October 30, 2020)
Unsecured Term Loan A, $ 1,100,000 , LIBOR plus 1.50 % variable, due October 30, 2022
−Removed: Unsecured term notes:
+Added: October 27, 2020, Senior Unsecured Notes, $ 500,000 , 1.875 % fixed, due November 1, 2030
July 29, 2016, Series G Senior Unsecured Notes, $ 50,000 , 3.14 % fixed, due July 29, 2021
+Added: 50,000 50,000
December 2, 2013, Series F Senior Unsecured Notes, $ 250,000 , 3.74 % fixed, due December 2, 2023
+Added: 250,000 250,000
June 30, 2019, Series A Senior Unsecured Notes, A$ 155,000 , 3.60 % fixed, due June 30, 2024
+Added: 119,133 108,422
October 30, 2017, Series J Senior Unsecured Notes, € 225,000 , 1.90 % fixed, due October 30, 2024
+Added: 276,773 252,000
June 30, 2019, Series B Senior Unsecured Notes, A$ 155,000 , 3.93 % fixed, due June 30, 2026
+Added: 119,133 108,422
November 30, 2016, Series H Senior Unsecured Notes, $ 250,000 , 3.74 % fixed, due November 30, 2026
+Added: 250,000 250,000
October 30, 2017, Series K Senior Unsecured Notes, € 250,000 , 2.31 % fixed, due October 30, 2027
+Added: 307,525 280,000
October 30, 2017, Series I Senior Unsecured Notes, $ 120,000 , 4.20 % fixed, due October 30, 2027
+Added: 120,000 120,000
May 31, 2019, Series A Senior Unsecured Notes, € 50,000 , 2.05 % fixed, due May 31, 2029
+Added: 61,505 56,000
October 30, 2017, Series L Senior Unsecured Notes, € 125,000 , 2.52 % fixed, due October 30, 2029
+Added: 153,762 140,000
May 31, 2019, Series B Senior Unsecured Notes, € 100,000 , 2.24 % fixed, due May 31, 2031
+Added: 123,010 112,000
October 30, 2017, Series M Senior Unsecured Notes, € 100,000 , 2.82 % fixed, due October 30, 2032
+Added: 123,010 112,000
May 31, 2019, Series C Senior Unsecured Notes, € 100,000 , 2.45 % fixed, due May 31, 2034
+Added: 123,010 112,000
Other unsecured debt
+Added: 114,002 40,340
Total unsecured debt
+Added: 2,690,863 3,431,557
Unamortized debt issuance costs ( 9,136 ) ( 5,458 )
+Added: Unamortized discounts ( 4,582 ) —
+Added: 2,677,145 3,426,099
Less debt due within one year
+Added: 160,531 624,043
Long-term debt, excluding current portion
+Added: $ 2,516,614 $ 2,802,056
Genuine Parts Company and Subsidiaries
1 unchanged sentence
December 31, 2020
−Removed: Approximate maturities under the Company’s credit facilities, net of debt issuance costs, are as follows:
−Removed: Derivatives and Hedging
−Removed: The following table summarizes the location and carrying amounts of the derivative instruments and the foreign currency denominated debt, a non-derivative financial instrument, that are designated and qualify as part of hedging relationships:
+Added: Approximate maturities under the Company’s credit facilities are as follows:
+Added: 2021 $ 162,429
+Added: Thereafter 1,880,955
+Added: Accounts Receivable Sales Agreement
+Added: On May 29, 2020 the Company entered into an agreement (the “A/R Sales Agreement”) to sell short-term receivables from certain customer trade accounts to an unaffiliated financial institution.
+Added: The A/R Sales Agreement has a 364 day term, which the Company intends to renew each year.
+Added: As part of the A/R Sales Agreement, the Company continuously sells designated pools of receivables as they are originated by it and certain U.S.
+Added: subsidiaries to a separate bankruptcy-remote special purpose entity (“SPE”).
+Added: The assets of the SPE would be first available to satisfy the creditor claims of the unaffiliated financial institution.
+Added: The Company controls and therefore consolidates the SPE in its consolidated financial statements.
+Added: At the inception of the A/R Sales Agreement, the SPE transferred ownership and control of approximately $ 500,000 in receivables that met certain qualifying conditions to the unaffiliated financial institution in exchange for cash.
+Added: On October 29, 2020 the Company transferred ownership and control of an additional $ 300,000 in receivables under the A/R Sales Agreement bringing the total to $ 800,000 .
+Added: The Company accounts for transactions with the unaffiliated financial institution as sales of financial assets, with the associated receivables derecognized from the Company's consolidated balance sheet.
+Added: The remaining receivables held by the special purpose subsidiary were pledged to secure the collectability of the sold receivables.
+Added: The amount of receivables pledged as collateral as of December 31, 2020 is approximately $ 771,000 .
+Added: The Company continues to be involved with the receivables transferred by the SPE to the unaffiliated financial institution by providing collection services.
+Added: As cash is collected on sold receivables, the SPE continuously transfers ownership and control of new qualifying receivables to the unaffiliated financial institution so that the total principal amount outstanding of receivables sold is approximately $ 800,000 at any point in time (which is the maximum amount allowed under the amended agreement).
+Added: The future amount of receivables outstanding as sold could decrease, based on the level of activity and other factors.
+Added: The following table summarizes the activity and amounts outstanding under the A/R Sales Agreement as of period end:
December 31, 2020
+Added: Receivables sold to the financial institution and derecognized since inception $ 3,928,024
+Added: Cash collected on sold receivables since inception $ 3,128,023
+Added: Total principal amount outstanding of receivables sold at period end $ 800,001
+Added: Cash activity related to the A/R Sales Agreement is presented in cash from operating activities in the consolidated statement of cash flows.
+Added: The SPE incurs fees due to the unaffiliated financial institution related to the accounts receivable sales transactions.
+Added: Those fees, which are immaterial, are recorded within other non-operating (income) expenses in the consolidated statements of income.
+Added: The SPE has a recourse obligation to repurchase from the unaffiliated financial institution any previously sold receivables that are not collected due to the occurrence of certain events, including credit quality deterioration and customer sales returns.
+Added: The reserve recognized for this recourse obligation as of December 31, 2020 is not material.
+Added: The servicing liability related to the Company's collection services also is not material, given the high quality of the customers underlying the receivables and the anticipated short collection period.
+Added: Genuine Parts Company and Subsidiaries
+Added: Notes to Consolidated Financial Statements
December 31, 2020
+Added: Derivatives and Hedging
+Added: The following table summarizes the location and carrying amounts of the derivative instruments and the foreign currency denominated debt, a non-derivative financial instrument, that are designated and qualify as part of hedging relationships:
+Added: December 31, 2020 December 31, 2019
Balance sheet location
+Added: Notional Balance Notional Balance
Cash flow hedges:
−Removed: Interest rate swaps
−Removed: Other current liabilities
+Added: Interest rate swaps Other current liabilities
+Added: $ — $ — $ 800,000 $ 24,792
Net investment hedges:
−Removed: Cross-currency swap
−Removed: Prepaid expenses and other current assets
Forward contracts
Prepaid expenses and other current assets
+Added: $ 800,000 $ 7,668 $ 925,810 $ 39,965
+Added: Forward contracts
+Added: Other current liabilities
+Added: $ 360,990 $ 19,442 $ — $ —
Foreign currency debt
Long-term debt
+Added: € 700,000 $ 861,070 € 700,000 $ 784,000
Cash Flow Hedges
3 unchanged sentences
The Company designates the interest rate swaps as qualifying hedging instruments and accounts for them as cash flow hedges.
−Removed: Gains and losses from fair value adjustments on the cash flow hedges are initially classified in accumulated other comprehensive loss and are reclassified to interest expense on the dates interest payments are accrued.
+Added: On May 1, 2020, the Company dedesignated its interest rate swaps and modified them to match the terms of its modified debt agreement and as a result the $ 48,492 payable as of that date was deemed a financing transaction.
+Added: The Company redesignated the portion of the modified interest rate swap that is not related to the financing agreement as a qualifying hedging instrument.
+Added: Gains and losses from fair value adjustments on the qualifying hedging instruments are initially classified in AOCL and are reclassified to interest expense on the dates interest payments are accrued.
+Added: On October 30, 2020 the Company terminated its interest rate swaps and settled the outstanding balances through cash payments totaling $ 41,000 , which were primarily classified in financing activities on the Consolidated Statement of Cash Flows because they primarily related to the financing agreement.
+Added: The remaining amount in AOCL is being amortized to interest expense on a straight-line basis over the remaining life of the hedged instrument.
Hedges of Net Investments in Foreign Operations
6 unchanged sentences
December 31, 2020
−Removed: The table below presents pre-tax gains and losses related to designated cash flow hedges and net investment hedges:
−Removed: Gain (Loss) Recognized in AOCL Before Reclassifications
−Removed: Gain Recognized in Interest Expense For Excluded Components
+Added: The table below presents pre-tax gains and losses related to cash flow hedges and net investment hedges:
+Added: (Loss) Gain Recognized in AOCL Before Reclassifications Gain Recognized in Interest Expense For Excluded Components
+Added: 2020 2019 2018 2020 2019 2018
Year Ended December 31,
1 unchanged sentence
Interest rate contract
+Added: $ ( 29,464 ) $ ( 21,972 ) $ ( 7,896 ) $ — $ — $ —
Net Investment Hedges:
Cross-currency swap
+Added: — 2,936 6,006 — 2,294 6,740
Forward contracts
+Added: ( 85,390 ) 20,679 — 27,146 17,892 —
Foreign currency debt
+Added: ( 77,070 ) 17,010 38,850 — — —
+Added: Total $ ( 191,924 ) $ 18,653 $ 36,960 $ 27,146 $ 20,186 $ 6,740
Amounts reclassified from accumulated other comprehensive loss to interest expense for the periods presented were not material.
6 unchanged sentences
Lease agreements generally do not require material variable lease payments, residual value guarantees or restrictive covenants.
−Removed: The table below presents the locations of the operating lease assets and liabilities on the consolidated balance sheets as of December 31, 2019:
−Removed: Balance Sheet Line Item
−Removed: December 31, 2019
+Added: The table below presents the locations of the operating lease assets and liabilities on the consolidated balance sheets:
+Added: Balance Sheet Line Item December 31, 2020 December 31, 2019
Operating lease assets
3 unchanged sentences
Other current liabilities
+Added: $ 270,739 $ 255,207
Noncurrent operating lease liabilities
Operating lease liabilities
+Added: 789,294 756,519
Total operating lease liabilities
+Added: $ 1,060,033 $ 1,011,726
The depreciable lives of operating lease assets and leasehold improvements are limited by the expected lease term.
2 unchanged sentences
The Company used incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date.
−Removed: The Company's weighted average remaining lease term and weighted average discount rate for operating leases as of December 31, 2019 are:
+Added: The Company's weighted average remaining lease term and weighted average discount rate for operating leases are:
+Added: December 31, 2020 December 31, 2019
Weighted average remaining lease term (in years) 5.35 5.50
4 unchanged sentences
The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on the consolidated balance sheets as of December 31, 2020:
+Added: 2021 $ 295,841
Total undiscounted future minimum lease payments
1 unchanged sentence
Total operating lease liabilities
−Removed: Operating lease payments include $ 55,055 related to options to extend lease terms that are reasonably certain of being exercised.
−Removed: Operating lease costs (as defined under ASU 2016-02) were $ 330,275 for the year ended December 31, 2019.
−Removed: Operating lease costs are included within selling, administrative and other expenses on the consolidated statements of income and comprehensive income.
+Added: Future minimum lease payments include $ 60,198 related to options to extend lease terms that are reasonably certain of being exercised.
+Added: The table below presents operating lease costs and supplemental cash flow information related to leases:
+Added: Operating lease costs $ 313,315 $ 310,028
+Added: Cash paid for amounts included in the measurement of operating lease liabilities $ 323,336 $ 311,170
+Added: Operating lease assets obtained in exchange for new operating lease liabilities $ 302,114 $ 330,103
+Added: Operating lease costs (as defined under ASU 2016-02) are included within selling, administrative and other expenses on the consolidated statements of income.
Short-term lease costs, variable lease costs and sublease income were not material for the periods presented.
−Removed: Rental expense for operating leases (as defined prior to the adoption of ASU 2016-02) was approximately $ 366,000 and $ 306,000 for 2018 and 2017, respectively.
−Removed: Cash paid for amounts included in the measurement of operating lease liabilities was $ 330,792 for the year ended December 31, 2019, and this amount is included in operating activities in the consolidated statements of cash flows.
−Removed: Operating lease assets obtained in exchange for new operating lease liabilities were $ 373,779 for the year ended December 31, 2019.
+Added: Rental expense for operating leases (as defined prior to the adoption of ASU 2016-02) was approximately $ 334,000 for the year ended December 31, 2018.
+Added: Cash paid for amounts included in the measurement of operating lease liabilities is included in operating activities in the condensed consolidated statements of cash flows.
Share-Based Compensation
−Removed: At December 31, 2019 , total compensation cost related to nonvested awards not yet recognized was approximately $ 38,000 .
−Removed: The weighted-average period over which this compensation cost is expected to be recognized is approximately two years .
−Removed: The aggregate intrinsic value for SARs and RSUs outstanding at December 31, 2019 and 2018 was approximately $ 132,700 and $ 97,800 , respectively.
−Removed: The aggregate intrinsic value for SARs and RSUs vested totaled approximately $ 58,200 and $ 41,300 at December 31, 2019 and 2018 , respectively.
−Removed: At December 31, 2019 , the weighted-average contractual life for outstanding and exercisable SARs and RSUs was 4 years .
Share-based compensation costs of $ 22,621 , $ 28,703 , and $ 17,737 , were recorded for the years ended December 31, 2020, 2019, and 2018, respectively.
−Removed: The total income tax benefits recognized in the consolidated statements of income and comprehensive income for share-based compensation arrangements were approximately $ 8,700 , $ 5,600 , and $ 4,600 for 2019 , 2018 , and 2017 , respectively.
+Added: The total income tax benefits recognized in the consolidated statements of income for share-based compensation arrangements were approximately $ 6,108 , $ 8,700 , and $ 5,600 for 2020, 2019, and 2018, respectively.
+Added: At December 31, 2020, total compensation cost related to nonvested awards not yet recognized was approximately $ 33,754 .
There have been no modifications to valuation methodologies or methods during the years ended December 31, 2020, 2019, or 2018.
−Removed: The fair value of RSUs is based on the price of the Company’s stock on the date of grant.
−Removed: The total fair value of RSUs vested during the years ended December 31, 2019 , 2018 , and 2017 were $ 26,200 , $ 20,800 , and $ 15,500 , respectively.
−Removed: The Company did not grant SARs for the years ended December 31, 2019 and 2018.
−Removed: For the year ended December 31, 2017 , the fair value of SARs granted were estimated using a Black-Scholes option pricing model with the following weighted-average assumptions:
−Removed: risk-free interest rate of 2.3 % ;
−Removed: dividend yield of 2.8 % ;
−Removed: annual historical volatility factor of the expected market price of the Company’s common stock of 19 % for an average expected life of approximately 6 years .
+Added: As of December 31, 2020, there were 7,601 shares of common stock available for issuance pursuant to future equity-based compensation awards.
Genuine Parts Company and Subsidiaries
1 unchanged sentence
December 31, 2020
−Removed: A summary of the Company’s share-based compensation activity and related information is as follows:
−Removed: Weighted Average Exercise Price (2)
+Added: A summary of the Company’s restricted stock units activity and related information is as follows:
+Added: Nonvested Share Awards (RSUs) Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value
+Added: Nonvested at beginning of year 677 $ 95
+Added: Granted 426 $ 72
+Added: Vested ( 89 ) $ 89
+Added: Forfeited ( 160 ) $ 92
+Added: Nonvested at end of year 854 $ 85 1.9 $ 85,775
+Added: A summary of the Company’s stock appreciation rights activity and related information is as follows:
+Added: Stock Appreciation Rights (SARs) Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value
Outstanding at beginning of year 2,154 $ 88
+Added: Granted — $ —
+Added: Exercised ( 331 ) $ 80
+Added: Forfeited ( 36 ) $ 94
Outstanding at end of year 1,787 $ 89 3.5 $ 20,515
Exercisable at end of year 1,787 $ 89 3.5 $ 20,515
−Removed: Shares available for future grants
−Removed: Shares include RSUs.
−Removed: The weighted average exercise price excludes RSUs.
−Removed: The exercise prices for SARs outstanding as of December 31, 2019 ranged from approximately $ 43 to $ 100 .
−Removed: The weighted average remaining contractual life of all SARs outstanding is approximately five years .
−Removed: The weighted average grant date fair value of SARs granted during 2017 was $ 13.89 .
The aggregate intrinsic value of SARs and RSUs exercised during the years ended December 31, 2020, 2019, and 2018 was $ 14,417 , $ 36,200 and $ 32,600 , respectively.
−Removed: In 2019 , the Company granted approximately 395 RSUs.
−Removed: In 2018 , the Company granted approximately 360 RSUs.
−Removed: In 2017 , the Company granted approximately 746 SARs and 171 RSUs.
−Removed: A summary of the Company’s nonvested share awards activity is as follows:
−Removed: Nonvested Share Awards (RSUs)
−Removed: Weighted Average Grant Date Fair Value
−Removed: Nonvested at January 1, 2019
−Removed: Nonvested at December 31, 2019
+Added: The fair value of RSUs is based on the 60-day average price of the Company's stock on the date of grant for the year ended December 31, 2020.
+Added: The fair value of RSUs is based on the price of the Company’s stock on the date of grant for the years ended December 31, 2019 and 2018.
+Added: The fair value of SARs is estimated using a Black-Scholes option pricing model.
+Added: The Company ceased issuing SARs in 2017.
+Added: The total fair value of SARs and RSUs vested during the years ended December 31, 2020, 2019, and 2018 were $ 10,014 , $ 26,200 , and $ 20,800 , respectively.
Genuine Parts Company and Subsidiaries
6 unchanged sentences
Pension liability not yet deducted for tax purposes 257,526 261,909
+Added: Capital loss 10,875 18,317
Net operating loss 56,028 43,932
+Added: 956,851 877,369
Deferred tax liabilities related to:
Employee and retiree benefits 226,356 215,899
+Added: Inventory 90,213 92,577
Operating lease assets 282,486 274,630
1 unchanged sentence
Property, plant and equipment 73,333 63,518
+Added: Other 29,961 38,936
+Added: 1,068,174 1,029,209
Net deferred tax liability before valuation allowance ( 111,323 ) ( 151,840 )
4 unchanged sentences
The components of income before income taxes are as follows:
+Added: 2020 2019 2018
United States $ 706,594 $ 613,910 $ 712,951
+Added: Foreign ( 327,226 ) 245,373 281,687
Income before income taxes $ 379,368 $ 859,283 $ 994,638
The components of income tax expense are as follows:
+Added: 2020 2019 2018
+Added: Federal $ 130,680 $ 162,883 $ 130,144
+Added: State 35,474 45,488 36,457
+Added: Foreign 77,541 60,376 76,910
+Added: Federal 2,048 ( 21,617 ) 13,295
+Added: State 801 ( 11,273 ) 5,427
+Added: Foreign ( 30,571 ) ( 23,049 ) ( 17,129 )
+Added: $ 215,973 $ 212,808 $ 245,104
Genuine Parts Company and Subsidiaries
2 unchanged sentences
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:
+Added: 2020 2019 2018
Statutory rate applied to income (1) $ 79,667 $ 180,449 $ 208,874
3 unchanged sentences
tax reform - deferred tax remeasurement (3)
+Added: Non-deductible goodwill impairment tax effect 106,411 — —
Foreign rate change - deferred tax remeasurement 9,045 6,215 ( 1,461 )
1 unchanged sentence
Valuation allowance 1,995 4,503 20,505
+Added: Other ( 731 ) 7,782 ( 1,395 )
+Added: $ 215,973 $ 212,808 $ 245,104
statutory rates applied to income are as follows:
−Removed: 2019 and 2018 at 21% , 2017 at 35% .
+Added: 2020, 2019 and 2018 at 21%.
(2) The Company's effective tax rate reflects the net benefit of having operations outside of the U.S.
11 unchanged sentences
A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
+Added: 2020 2019 2018
Balance at beginning of year $ 21,461 $ 18,428 $ 14,697
3 unchanged sentences
Reduction for lapse in statute of limitations ( 3,765 ) — ( 2,338 )
+Added: Settlements ( 328 ) ( 323 ) ( 27 )
Balance at end of year $ 23,237 $ 21,461 $ 18,428
The amount of gross unrecognized tax benefits, including interest and penalties, as of December 31, 2020 and 2019 was approximately $ 25,870 and $ 24,347 , respectively, of which approximately $ 21,426 and $ 18,286 , respectively, if recognized, would affect the effective tax rate.
−Removed: During the years ended December 31, 2019 , 2018 , and 2017 , the Company paid, received refunds, or accrued insignificant amounts of interest and penalties.
−Removed: The Company recognizes potential interest and penalties related to unrecognized tax benefits as a component of income tax expense.
Genuine Parts Company and Subsidiaries
1 unchanged sentence
December 31, 2020
+Added: During the years ended December 31, 2020, 2019, and 2018, the Company paid, received refunds, or accrued insignificant amounts of interest and penalties.
+Added: The Company recognizes potential interest and penalties related to unrecognized tax benefits as a component of income tax expense.
As of December 31, 2020, the Company estimates that it has an outside basis difference in certain foreign subsidiaries of approximately $ 520,000 , which includes the cumulative undistributed earnings from the Company's foreign subsidiaries.
26 unchanged sentences
These assumptions are updated at each annual measurement date.
+Added: Genuine Parts Company and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2020
Changes in benefit obligations for the years ended December 31, 2020 and 2019 were:
1 unchanged sentence
Benefit obligation at beginning of year $ 2,496,600 $ 2,278,043
+Added: Service cost 12,105 9,558
Interest cost 83,732 97,441
Plan participants’ contributions 1,864 2,246
−Removed: Actuarial loss (gain)
+Added: Actuarial loss 218,534 246,352
Foreign currency exchange rate changes 9,394 9,073
1 unchanged sentence
Plan amendments — 3,327
+Added: Curtailments ( 472 ) ( 6,569 )
+Added: Settlements — ( 67,831 )
Special termination costs — 42,757
4 unchanged sentences
The total accumulated benefit obligation for the Company’s defined benefit pension plans in the U.S., Canada, and Europe was approximately $ 2,649,418 and $ 2,466,322 at December 31, 2020 and 2019, respectively.
−Removed: Genuine Parts Company and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2019
−Removed: The Company recorded $ 42,757 in special termination costs related to benefits provided through the Company's defined benefit plans to employees that accepted the voluntary retirement program ("VRP") as part of the Company's 2019 Cost Savings Plan.
+Added: pension plan, there was a net actuarial liability loss of $ 175,200 and an asset gain of $ 184,200 .
+Added: The liability loss was comprised primarily of a $ 173,000 loss due to discount rate changes.
+Added: supplemental retirement plan, there was a net actuarial liability loss of $ 20,300 comprised primarily of a $ 21,400 loss due to discount rate changes.
+Added: In 2019, the Company recorded $ 42,757 in special termination costs related to benefits provided through the Company's defined benefit plans to employees that accepted the voluntary retirement program (“VRP”) as part of the Company's 2019 Cost Savings Plan.
Refer to the restructuring footnote for more information.
2 unchanged sentences
Rate of increase in future compensation levels 3.11 % 3.13 %
+Added: Genuine Parts Company and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2020
Changes in plan assets for the years ended December 31, 2020 and 2019 were:
6 unchanged sentences
Benefits paid ( 144,508 ) ( 119,789 )
+Added: Settlements — ( 67,831 )
Fair value of plan assets at end of year $ 2,545,359 $ 2,311,227
1 unchanged sentence
pension plans included in the above were $ 2,258,246 and $ 2,051,474 at December 31, 2020 and 2019, respectively.
−Removed: For the years ended December 31, 2019 and 2018 , the aggregate benefit obligation and aggregate fair value of plan assets for plans with benefit obligations in excess of plan assets were as follows:
−Removed: Aggregate benefit obligation
+Added: For the years ended December 31, 2020 and 2019, the aggregate projected benefit obligation and aggregate fair value of plan assets for plans with projected benefit obligations in excess of plan assets were as follows:
+Added: Aggregate projected benefit obligation $ 328,517 $ 298,565
Aggregate fair value of plan assets $ 45,728 $ 39,672
3 unchanged sentences
The asset allocations for the Company’s funded pension plans at December 31, 2020 and 2019, and the target allocation for 2021, by asset category were:
−Removed: Target Allocation
−Removed: Percentage of Plan Assets at December 31
+Added: Target Allocation Percentage of Plan Assets at December 31
+Added: 2021 2020 2019
Asset Category
1 unchanged sentence
Debt securities 32 % 30 % 30 %
−Removed: Genuine Parts Company and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2019
+Added: 100 % 100 % 100 %
The Company’s benefit plan committees in the U.S.
5 unchanged sentences
The Company’s investment strategy with respect to pension plan assets is to generate a return in excess of the passive portfolio benchmark ( 47 % S&P 500 Index, 5 % Russell Midcap Index, 7 % Russell 2000 Index, 5 % MSCI EAFE Index, 5 % DJ Global Moderate Index, 3 % MSCI Emerging Market Net, and 28 % Barclays U.S.
−Removed: Long Govt/Credit).
+Added: Govt/Credit).
+Added: Genuine Parts Company and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2020
The fair values of the plan assets as of December 31, 2020 and 2019, by asset category, are shown in the tables below.
5 unchanged sentences
Certain investments are measured at fair value using the net asset value ("NAV") per share as a practical expedient and have not been classified in the fair value hierarchy.
−Removed: Genuine Parts Company and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2019
The valuation methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.
3 unchanged sentences
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.
−Removed: Assets Measured at NAV
−Removed: Quoted Prices
+Added: Total Assets Measured at NAV Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
Equity Securities
Common stocks — mutual funds — equity
+Added: $ 586,196 $ 204,303 $ 381,893 $ — $ —
Genuine Parts Company common stock 202,711 — 202,711 — —
+Added: Other stocks 989,258 — 989,258 — —
Debt Securities
4 unchanged sentences
Asset-backed and mortgage-backed securities
+Added: 10,161 — — 10,161 —
Other-international 39,992 — 37,041 2,951 —
2 unchanged sentences
Cash surrender value of life insurance policies
+Added: 2,269 — — — 2,269
+Added: Total $ 2,545,359 $ 204,303 $ 1,852,568 $ 486,219 $ 2,269
Genuine Parts Company and Subsidiaries
1 unchanged sentence
December 31, 2020
−Removed: Assets Measured at NAV
−Removed: Quoted Prices
+Added: Total Assets Measured at NAV Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
Equity Securities
Common stocks — mutual funds — equity
+Added: $ 527,151 $ 187,500 $ 339,651 $ — $ —
Genuine Parts Company common stock 214,418 — 214,418 — —
+Added: Other stocks 865,078 — 865,070 — 8
Debt Securities
4 unchanged sentences
Asset-backed and mortgage-backed securities
+Added: 9,316 — — 9,316 —
Other-international 27,903 — 27,903 — —
2 unchanged sentences
Cash surrender value of life insurance policies
+Added: 2,270 — — — 2,270
+Added: Total $ 2,311,227 $ 276,798 $ 1,664,785 $ 367,366 $ 2,278
Equity securities include Genuine Parts Company common stock in the amounts of $ 202,711 ( 8 % of total plan assets) and $ 214,418 ( 9 % of total plan assets) at December 31, 2020 and 2019, respectively.
8 unchanged sentences
Pension and other post-retirement liabilities ( 265,216 ) ( 247,201 )
+Added: $ ( 133,606 ) $ ( 185,373 )
Genuine Parts Company and Subsidiaries
4 unchanged sentences
Prior service cost 8,648 9,343
+Added: $ 947,938 $ 961,476
The following table reflects the total benefits expected to be paid from the pension plans’ or the Company’s assets.
5 unchanged sentences
Expected benefit payments:
+Added: 2021 $ 136,183
+Added: 2022 $ 134,054
+Added: 2023 $ 137,788
+Added: 2024 $ 140,987
+Added: 2025 $ 144,405
2026 through 2030 $ 741,572
Net periodic benefit income included the following components:
+Added: 2020 2019 2018
+Added: Service cost $ 12,105 $ 9,558 $ 10,410
Interest cost 83,732 97,441 88,247
Expected return on plan assets ( 154,111 ) ( 154,137 ) ( 154,006 )
−Removed: Amortization of prior service credit
+Added: Amortization of prior service cost (credit) 692 ( 67 ) ( 147 )
Amortization of actuarial loss 39,613 31,000 39,721
Net periodic benefit income $ ( 17,969 ) $ ( 16,205 ) $ ( 15,775 )
−Removed: Service cost is recorded in selling, administrative and other expenses in the consolidated statements of income and comprehensive income while all other components except for special termination costs are recorded within other non-operating expenses (income).
+Added: Service cost is recorded in selling, administrative and other expenses in the consolidated statements of income while all other components except for special termination costs are recorded within other non-operating expenses (income).
The special termination costs incurred in connection with the 2019 Cost Savings Plan are presented on their own line within non-operating expenses (income).
−Removed: Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows:
−Removed: Current year actuarial (gain) loss
+Added: Other changes in plan assets and benefit obligations recognized in other comprehensive income are as follows:
+Added: 2020 2019 2018
+Added: Current year actuarial loss (gain) $ 24,613 $ ( 33,677 ) $ 117,867
Recognition of actuarial loss ( 39,613 ) ( 31,000 ) ( 39,721 )
Current year prior service cost — 3,327 —
−Removed: Recognition of prior service credit
−Removed: Recognition of curtailment loss
+Added: Recognition of prior service (cost) credit ( 692 ) 67 147
+Added: Recognition of curtailment gain (loss) 435 ( 155 ) —
+Added: Other — ( 50 ) —
Total recognized in other comprehensive (loss) income $ ( 15,257 ) $ ( 61,488 ) $ 78,293
3 unchanged sentences
December 31, 2020
−Removed: The estimated amounts that will be amortized from accumulated other comprehensive loss into net periodic benefit income in 2020 are as follows:
−Removed: Actuarial loss
−Removed: Prior service credit
The assumptions used in measuring the net periodic benefit income for the plans follow:
+Added: 2020 2019 2018
Weighted average discount rate 3.43 % 4.36 % 3.70 %
8 unchanged sentences
Total plan expense was approximately $ 4,486 in 2020 and $ 4,433 in 2019.
−Removed: 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).
−Removed: Presently, the independents are generally consolidated by unaffiliated enterprises that have a controlling financial interest through ownership of a majority voting interest in the independent.
−Removed: The Company has no voting interest or other equity conversion rights in any of the independents.
−Removed: The Company does not control the independents or the affiliates, but receives a fee for the guarantee.
+Added: The Company guarantees the borrowings of certain independently controlled automotive parts stores and businesses (“independents”) and certain other affiliates in which the Company has a noncontrolling equity ownership interest (“affiliates”).
+Added: Presently, the independents are generally consolidated by unaffiliated enterprises that have controlling financial interests through ownership of a majority voting interest in the independents.
+Added: The Company has no voting interest or equity conversion rights in any of the independents.
+Added: The Company does not control the independents or the affiliates but receives a fee for the guarantees.
The Company has concluded that the independents are variable interest entities, but that the Company is not the primary beneficiary.
−Removed: Specifically, the equity holders of the independents have the power to direct the activities that most significantly impact the entity’s economic performance including, but not limited to, decisions about hiring and terminating personnel, local marketing and promotional initiatives, pricing and selling activities, credit decisions, monitoring and maintaining appropriate inventories, and store hours.
−Removed: Separately, the Company concluded the affiliates are not variable interest entities.
−Removed: 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.
−Removed: 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 EBITDA ratio and certain limitations on additional borrowings.
+Added: Specifically, the equity holders of the independents have the power to direct the activities that most significantly impact the entities’ economic performance including, but not limited to, decisions about hiring and terminating personnel, local marketing and promotional initiatives, pricing and selling activities, credit decisions, monitoring and maintaining appropriate inventories, and store hours.
+Added: Separately, the Company concluded that the affiliates are not variable interest entities.
+Added: 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 guarantees.
+Added: While such borrowings of the independents and affiliates are outstanding, the Company is required to maintain compliance with certain covenants, including a debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratio and certain limitations on additional borrowings.
At December 31, 2020, the Company was in compliance with all such covenants.
1 unchanged sentence
These loans generally mature over periods from one to six years .
−Removed: 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 receivable and inventory) to recover all or a portion of the amounts paid under the guarantee.
−Removed: When it is deemed probable that the Company will incur a loss in connection with a guarantee, a liability is recorded equal to this estimated loss.
−Removed: To date, the Company has had no significant losses in connection with guarantees of independents’ and affiliates’ borrowings.
+Added: The Company regularly monitors the performance of these loans and the ongoing operating results, financial condition and ratings from credit rating agencies of the independents and affiliates that participate in the guarantee programs.
+Added: In the event that the Company is required to make payments in connection with these guarantees, the Company would obtain and liquidate certain collateral pledged by the independents or affiliates (e.g., accounts receivable and inventory) to recover all or a substantial portion of the amounts paid under the guarantees.
+Added: The Company recognizes a liability equal to current expected credit losses over the lives of the loans in the guaranteed loan portfolio, based on a consideration of historical experience, current conditions, the nature and expected value of any collateral, and reasonable and supportable forecasts.
+Added: To date, the Company has had no significant losses in connection with guarantees of independents’ and affiliates’ borrowings and the current expected credit loss reserve is not material.
+Added: As of December 31, 2020, there are no material guaranteed loans for which the borrower is experiencing financial difficulty and recovery is expected to be provided substantially through the operation or sale of the collateral.
The Company has recognized certain assets and liabilities amounting to $ 81,000 and $ 90,000 for the guarantees related to the independents’ and affiliates’ borrowings at December 31, 2020 and 2019, respectively.
These assets and liabilities are included in other assets and other long-term liabilities in the consolidated balance sheets.
+Added: The liabilities relate to the Company's noncontingent obligation to stand ready to perform under the guarantee programs and they are distinct from the Company's current expected credit loss reserve.
+Added: Genuine Parts Company and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2020
Commitments and Contingencies
2 unchanged sentences
Many of these involve claims of personal injury allegedly resulting from the use of automotive parts distributed by the Company.
−Removed: Genuine Parts Company and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2019
−Removed: The amounts accrued for product liabilities as of December 31, 2019 and 2018 were $ 146,230 and $ 141,203 , respectively.
+Added: The amount accrued for pending and future claims as of December 31, 2020 and 2019 was $ 169,461 and $ 146,230 , respectively.
While litigation of any type contains an element of uncertainty, the Company believes that its insurance coverage and 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.
+Added: Pending Claims
On April 17, 2017, a jury awarded damages against the Company of $ 81,500 in a litigated automotive product liability dispute.
2 unchanged sentences
The Company challenged the verdict through an appeal to a higher court.
−Removed: On February 19, 2020, the higher court issued an order entirely reversing the jury’s finding on damages and ordering a new trial on damages.
−Removed: Absent any further appeal, the matter will be remanded to the trial court for a new trial on damages only.
−Removed: At the time of the filing of these financial statements, based upon the Company’s legal defenses, insurance coverage, and reserves, the Company does not believe this matter will have a material impact to the consolidated financial statements.
+Added: On February 19, 2020, the Washington Court of Appeals issued an order entirely reversing the jury’s finding on damages and ordering a new trial on damages.
+Added: The plaintiffs subsequently appealed this order to the Washington Supreme Court.
+Added: On July 7, 2020, the Washington Supreme Court indicated that it would consider a further appeal on this matter and oral arguments occurred on November 10, 2020.
+Added: A ruling from Washington Supreme Court is expected in 2021.
+Added: At the time of the filing of these financial statements, based upon the Company’s legal defenses and insurance coverage, the Company does not believe this matter will have a material impact to the consolidated financial statements.
Richards Headquarters and Distribution Center
−Removed: On July 19, 2019, a fire occurred at the S.P.
−Removed: Richards headquarters in Atlanta, Georgia.
−Removed: The building primarily held the S.P.
+Added: On July 19, 2019, a fire occurred at a building owned by the Company in Atlanta, Georgia, which primarily held the S.P.
Richards headquarters office and was connected to its Atlanta distribution center.
The Company maintains property and casualty loss insurance coverage.
−Removed: The Company expects to recover all losses on inventory, property, plant and equipment and other fire-related costs from insurance proceeds.
−Removed: Acquisitions and Divestitures
+Added: The Company recognized a gain of $ 13,448 during the year ended December 31, 2020 for insurance recoveries in excess of losses it has incurred on inventory, property, plant and equipment and other fire-related costs.
+Added: The gain is included within other non-operating expenses (income) on the consolidated statements of income.
+Added: Acquisitions, Divestitures and Discontinued Operations
+Added: For each acquisition, the Company allocates the purchase price to the assets acquired and the liabilities assumed based on their fair values as of their respective acquisition dates.
+Added: The results of operations for acquired businesses are included in the Company’s consolidated statements of income beginning on their respective acquisition dates.
+Added: The Company acquired several businesses for approximately $ 86,384 , net of cash acquired, during the year ended December 31, 2020.
+Added: The Company has not recognized any significant measurement period adjustments related to finalizing acquisition accounting during the year ended December 31, 2020.
The Company's cash used in acquisitions of businesses totaled $ 732,142 , net of cash acquired, during the year ended December 31, 2019.
In the Automotive Parts Group, the acquired businesses included all of its equity interests in Hennig Fahrzeugteile Group ("Hennig") in January 2019 and of PartsPoint Group in June 2019, which together generate estimated annual revenues of approximately $ 520,000 , as well as several bolt-on acquisitions.
−Removed: In the Industrial Parts Group, the Company acquired all of the equity interests in Axis New England and Axis New York ("Axis") in March 2019, which generate estimated annual revenue of approximately $ 55,000 , and the remaining 65 % equity investment in Inenco Group Pty Ltd ("Inenco") in July 2019.
−Removed: Inenco is one of Australasia's leading industrial distributors of key product categories such as bearings, power transmission and seals and it generates estimated annual revenues of approximately $ 400,000 .
−Removed: Prior to the 65 % acquisition, the Company accounted for its 35 % investment in Inenco under the equity method of accounting.
−Removed: Upon acquisition the Company recognized the 35 % investment at its acquisition-date fair value of $ 123,385 .
+Added: In the Industrial Parts Group, the Company acquired all of the equity interests in Axis New England and Axis New York ("Axis") in March 2019, which generate estimated annual revenue of approximately $ 55,000 , and the remaining 65 % equity investment in Inenco Group Pty Ltd (now referred to as Motion Asia Pacific) in July 2019.
+Added: Motion Asia Pacific is one of Australasia's leading industrial distributors of key product categories such as bearings, power transmission and seals and it generates estimated annual revenues of approximately $ 400,000 .
+Added: Prior to the 65 % acquisition, the Company accounted for its 35 % investment in Motion Asia Pacific under the equity method of accounting.
+Added: Upon acquisition the Company recognized the
+Added: Genuine Parts Company and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2020
+Added: 35 % investment at its acquisition-date fair value of $ 123,385 .
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 $ 38,663 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.
−Removed: The gain is included in the line item "other" within non-operating (income) expenses on the consolidated statement of income and comprehensive income for the year ended December 31, 2019 .
+Added: The gain is included in the line item "other" within non-operating expenses (income) on the consolidated statement of income for the year ended December 31, 2019.
The total acquisition date fair value of the consideration transferred for the businesses and of any previously held equity interests was $ 860,712 , net of cash acquired of $ 16,591 , and it consisted of the following:
December 31, 2019
−Removed: Fair value of 35% investment in Inenco held prior to business combination
+Added: Fair value of 35 % investment in Motion Asia Pacific held prior to business combination
Fair value of other investments held prior to business combination
−Removed: The following table summarizes the preliminary, estimated fair values of the assets acquired and liabilities assumed at the acquisition dates for the aggregate of these businesses.
−Removed: Additional adjustments may be made to the acquisition accounting during the measurement period primarily related to intangible asset revaluations and tax accounting.
−Removed: Genuine Parts Company and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2019
+Added: The following table summarizes the final fair values of the assets acquired and liabilities assumed at the acquisition dates for the aggregate of these businesses.
As of Acquisition Dates
16 unchanged sentences
Net assets acquired
−Removed: The acquired intangible assets of approximately $ 340,799 were provisionally assigned to customer relationships of $ 304,302 , trademarks of $ 32,907 , and other intangibles of $ 3,590 with weighted average amortization lives of 16.6 , 21.7 , and 5.0 years, respectively, for a total weighted average amortization life of 17.0 years.
−Removed: The fair value of the acquired identifiable intangible assets is provisional pending completion of the final valuations for these assets.
−Removed: The estimated goodwill recognized as part of the acquisitions is generally not tax deductible.
+Added: The acquired intangible assets of approximately $ 340,799 were assigned to customer relationships of $ 304,302 , trademarks of $ 32,907 , and other intangibles of $ 3,590 with weighted average amortization lives of 16.6 , 21.7 , and 5.0 years, respectively, for a total weighted average amortization life of 17.0 years.
+Added: The goodwill recognized as part of the acquisitions is generally not tax deductible.
The goodwill is attributable primarily to the expected synergies and assembled workforces of the acquired businesses.
−Removed: The results of operations for the acquired businesses were included in the Company’s consolidated statements of income and comprehensive income beginning on their respective acquisition dates.
−Removed: In 2018 , a significant portion of the businesses acquired included 20 businesses in the Automotive Parts Group and three businesses in the Industrial Parts Group.
−Removed: The 20 Automotive Parts Group acquisitions generate estimated annual revenues of approximately $ 180,000 .
−Removed: The acquisitions included TMS Motor Spares ("TMS") in August 2018 and Platinum International Group ("Platinum") in October 2018.
−Removed: TMS is a leading automotive parts distributor and operates 17 locations in Scotland and seven locations in England.
−Removed: Platinum is a leading value-added battery distributor in the automotive, industrial, and leisure markets and operates nine locations in the U.K.
−Removed: and one location in the Netherlands.
−Removed: The three Industrial Parts Group acquisitions generate estimated annual revenues of approximately $ 100,000 .
−Removed: The largest acquisition was Hydraulic Supply Company ("HSC") in October 2018, which operates 30 locations in the U.S.
−Removed: HSC is a full-service fluid power distributor, with a product offering of hydraulic, pneumatic and industrial components and systems.
−Removed: 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.
−Removed: The results of operations for the acquired businesses were included in the Company’s consolidated statements of income and comprehensive income beginning on their respective acquisition dates.
−Removed: The Company recorded approximately $ 167,000 of goodwill and other intangible assets associated with the 2018 acquisitions.
−Removed: Other intangible assets acquired consisted of customer relationships of $ 76,000 with weighted average amortization lives of 15 years.
Genuine Parts Company and Subsidiaries
1 unchanged sentence
December 31, 2020
−Removed: In 2017 , a significant portion of the businesses acquired included 12 businesses in the Automotive Parts Group and three businesses in the Industrial Parts Group.
−Removed: The aggregate purchase price for these 15 acquisitions was approximately $ 1,334,000 , net of cash acquired.
−Removed: In 2017, 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.
−Removed: 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.
−Removed: The Company recorded $ 1,926,000 of goodwill and other intangible assets associated with the 2017 acquisitions.
−Removed: Other intangible assets acquired in 2017, excluding AAG, consisted of customer relationships of $ 69,000 with weighted average amortization lives of 15 years.
+Added: For the year ended December 31, 2018, the Company acquired several businesses for approximately $ 262,510 , net of cash acquired.
+Added: The Company recorded approximately $ 167,000 of goodwill and other intangible assets associated with the 2018 acquisitions.
+Added: Other intangible assets acquired consisted of customer relationships of $ 76,000 with weighted average amortization lives of 15 years.
The Company received proceeds from divestitures of businesses totaling $ 387,379 during the year ended December 31, 2020.
+Added: Refer to the discontinued operations section below for additional information.
+Added: The Company received proceeds from divestitures of businesses totaling $ 434,609 during the year ended December 31, 2019.
The divestitures are not considered strategic shifts that will have a major effect on the Company’s operations or financial results;
therefore, they are not reported as discontinued operations.
−Removed: The Company recognized losses totaling $ 41,499 related to these transactions during the year ended December 31, 2019, which includes realized currency losses of $ 34,701 .
−Removed: These losses are included in the line item "other" within non-operating expenses (income) on the consolidated statement of income and comprehensive income for the year ended December 31, 2019.
+Added: The Company recognized realized currency losses of $ 34,701 during the year ended December 31, 2019.
+Added: These losses are included in the line item "other" within non-operating expenses (income) on the consolidated statement of income for the year ended December 31, 2019.
Grupo Auto Todo
4 unchanged sentences
EIS contributed revenues of $ 588,031 for the year ended December 31, 2019 and $ 817,249 for the year ended December 31, 2018.
−Removed: Norris & SPR Canada
−Removed: During the fourth quarter of 2019, the Company approved a transaction to sell the assets of Garland C.
−Removed: Norris ("GCN"), a wholly owned subsidiary within the Business Products Group.
−Removed: The transaction closed on December 13, 2019.
−Removed: On December 6, 2019, the Company also entered into a definitive agreement to sell all of the equity of SPR Canada, a subsidiary in the Business Products Group and the transaction closed on January 1, 2020.
−Removed: These businesses contributed revenues of $ 66,705 for the year ended December 31, 2019 and $ 79,665 for the year ended December 31, 2018.
+Added: Discontinued Operations
Business Products Group
−Removed: On April 12, 2018, the Company entered into a definitive agreement with Essendant, Inc.
−Removed: ("Essendant") for Essendant to combine with the Company's Business Products Group in a business combination transaction.
−Removed: The transaction was to be structured as a Reverse Morris Trust, in which the Company would separate the Business Products Group into a standalone company and spin off that standalone company to the Company's shareholders, immediately followed by the merger of a subsidiary of Essendant and the spun-off company.
−Removed: On September 14, 2018, the definitive agreement with Essendant was terminated by Essendant, so that Essendant could enter into a merger agreement with another party.
−Removed: Concurrently with the termination, the Company received a termination fee of $ 12,000 .
−Removed: The termination fee is classified as an offset to the transaction and other costs incurred related to the merger agreement within selling, administrative and other expenses in the consolidated statements of income and comprehensive income.
−Removed: The Company’s reportable segments consist of automotive and industrial parts and business products.
−Removed: 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.
−Removed: The Company’s automotive segment distributes replacement parts (other than body parts) for substantially all makes and models of automobiles, trucks, and other vehicles.
+Added: Effective June 30, 2020, the Company completed the divestiture of its Business Products Group by selling Supply Source Enterprises, Inc.
+Added: ("SSE") and S.P.
+Added: Richards Company ("SPR") in separate transactions.
+Added: These divestitures are part of the Company's long-term strategic initiative to streamline its operations and optimize its portfolio so that it can drive shareholder value by focusing on its global Automotive and Industrial Parts Groups.
+Added: The Business Products Group was previously a reportable segment of the Company.
+Added: These divestitures, together with prior period divestitures of Garland C.
+Added: Norris (effective December 13, 2019), SPR Canada (effective January 1, 2020) and Safety Zone Canada (effective March 2, 2020), represent a single plan to exit the Business Products Group segment and are considered a strategic shift that will have a major effect on the Company’s operations and financial results.
+Added: Therefore, the results of operations, financial position and cash flows for the Business Products Group are reported as discontinued operations for all periods presented.
+Added: The Company maintains an investment in SPR with a carrying value of $ 67,601 , which is included within other assets on the consolidated balance sheet, as of December 31, 2020.
+Added: During the three months ended December 31, 2020, the Company recognized an allowance on the investment and corresponding charge of $ 17,000 equal to the current expected credit losses based on a consideration of historical experience, current market conditions and reasonable and supportable forecasts related to this investment.
+Added: This charge is included within non-operating expenses (income) on the consolidated statement of income for the year ended December 31, 2020.
+Added: The Company also remains involved with SPR for a limited period of time through various lease, sublease, freight distribution and transition service agreements.
+Added: The Company has concluded that SPR is a variable interest entity, but the Company is not the primary beneficiary and therefore the entity is not consolidated.
+Added: Among other things, the Company does not have any voting rights and does not have the power to direct the activities that most significantly affect SPR's economic performance.
+Added: For a limited period of time as SPR completes its transition away from the Company’s shared services platform, the Company
Genuine Parts Company and Subsidiaries
1 unchanged sentence
December 31, 2020
+Added: continues to pay certain payables on SPR’s behalf and at SPR’s direction with full, weekly reimbursement from SPR under the terms of a transition services agreement.
+Added: The Company’s results of operations for discontinued operations were:
+Added: Year Ended December 31,
+Added: 2020 2019 2018
+Added: Net sales $ 846,944 $ 1,870,071 $ 1,903,468
+Added: Cost of goods sold 632,007 1,413,485 1,439,436
+Added: Gross profit 214,937 456,586 464,032
+Added: Operating and non-operating expenses 179,461 476,521 383,058
+Added: Loss on disposal 223,928 9,048 —
+Added: (Loss) income before income taxes ( 188,452 ) ( 28,983 ) 80,974
+Added: Income taxes 4,045 ( 3,593 ) 20,034
+Added: Net (loss) income from discontinued operations $ ( 192,497 ) $ ( 25,390 ) $ 60,940
+Added: The Company’s assets and liabilities for discontinued operations, by major class, were:
+Added: December 31, 2019
+Added: Trade accounts receivable, net $ 194,903
+Added: Merchandise inventories, net 387,307
+Added: Prepaid expenses and other current assets 132,041
+Added: Other intangible assets, net 76,829
+Added: Operating lease assets 80,302
+Added: Other assets 91,640
+Added: Total assets of discontinued operations $ 963,022
+Added: Trade accounts payable $ 158,163
+Added: Other current liabilities 59,954
+Added: Long-term liabilities 68,906
+Added: Total liabilities of discontinued operations $ 287,023
+Added: The Company’s reportable segments consist of automotive and industrial parts.
+Added: 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.
+Added: 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.
−Removed: The Company’s business products segment distributes a wide variety of office products, computer supplies, office furniture, and business electronics.
Inter-segment sales are not significant.
−Removed: Segment profit for each industry segment is calculated as net sales less operating expenses excluding general corporate expenses, interest expense, equity in income from investees, intangible asset amortization, income attributable to noncontrolling interests and other unallocated amounts that are driven by corporate initiatives.
−Removed: Approximately $ 243,196 , $ 285,020 and $ 196,190 of income before income taxes was generated in jurisdictions outside the U.S.
−Removed: for the years ended December 31, 2019 , 2018 , and 2017 , respectively.
+Added: Segment profit for each industry segment is calculated as net sales less operating expenses excluding general corporate expenses, interest expense, equity in income from investees, intangible asset amortization, income attributable to noncontrolling interests and other unallocated amounts that are driven by corporate
+Added: Genuine Parts Company and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2020
+Added: Approximately $ 327,226 of loss before income taxes for the year ended December 31, 2020 and approximately $ 245,373 and $ 281,687 of income before income taxes was generated in jurisdictions outside the U.S.
+Added: for the years ended 2019, and 2018, 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.
−Removed: Business products
+Added: 2020 2019 2018
+Added: Automotive $ 10,860,695 $ 10,993,902 $ 10,533,021
+Added: Industrial 5,676,738 6,528,332 6,298,584
Total net sales $ 16,537,433 $ 17,522,234 $ 16,831,605
Segment profit:
−Removed: Business products
+Added: Automotive $ 867,743 $ 831,951 $ 856,014
+Added: Industrial 481,854 521,830 487,360
Total segment profit $ 1,349,597 $ 1,353,781 $ 1,343,374
2 unchanged sentences
Intangible asset amortization ( 94,962 ) ( 92,206 ) ( 83,489 )
−Removed: Other unallocated amounts:
+Added: Other unallocated costs ( 634,465 ) ( 170,072 ) ( 34,930 )
+Added: Income before income taxes from continuing operations $ 379,368 $ 859,283 $ 994,638
+Added: The following table presents a summary of the other unallocated costs:
+Added: 2020 2019 2018
+Added: Other unallocated costs:
+Added: Goodwill impairment charge (1) $ ( 506,721 ) $ — $ —
Restructuring costs (2) ( 50,019 ) ( 100,023 ) —
Special termination costs (2) — ( 42,757 ) —
−Removed: Goodwill impairment charge
Realized currency and other divestiture losses (3) ( 11,356 ) ( 34,701 ) —
−Removed: Termination fee
+Added: Gain on insurance proceeds related to SPR fire (4) 13,448 — —
Gain on equity investment (5) — 38,663 —
+Added: Inventory adjustment (6) ( 40,000 ) — —
Transaction and other costs (7) ( 39,817 ) ( 31,254 ) ( 34,930 )
−Removed: Total other unallocated amounts
−Removed: Income before income taxes
−Removed: Business products
−Removed: Goodwill and other intangible assets
+Added: Total other unallocated costs $ ( 634,465 ) $ ( 170,072 ) $ ( 34,930 )
+Added: (1) Adjustment reflects a second quarter goodwill impairment charge related to our European reporting unit.
+Added: (2) Adjustment reflects restructuring and special termination costs related to the 2019 Cost Savings Plan announced in the fourth quarter of 2019.
+Added: The costs are primarily associated with severance and other employee costs, including a voluntary retirement program, and facility and closure costs related to the consolidation of operations.
+Added: (3) Adjustment reflects realized currency losses related to divestitures.
+Added: (4) Adjustment reflects insurance recoveries in excess of losses incurred on inventory, property, plant and equipment and other fire-related costs related to the S.P.
+Added: Richards Headquarters and Distribution Center.
+Added: (5) Adjustment relates to the gain recognized upon remeasuring the Company's preexisting 35 % equity investment to fair value upon acquiring the remaining equity of Motion Asia Pacific on July 1, 2019.
+Added: (6) Adjustment reflects a $ 40 million increase to cost of goods sold recorded during the quarter ended December 31, 2020 due to the correction of an immaterial error related to the accounting in prior years for consideration received from vendors.
Genuine Parts Company and Subsidiaries
1 unchanged sentence
December 31, 2020
+Added: (7) Adjustment includes a $ 17 million loss on investment, $ 10 million of incremental costs associated with COVID-19 and costs associated with certain divestitures.
+Added: COVID-19 related costs include incremental costs incurred relating to fees to cancel marketing events and increased cleaning and sanitization materials, among other things.
+Added: For the three and twelve months ended December 31, 2019, adjustment reflects transaction and other costs related to acquisitions and divestitures.
+Added: 2020 2019 2018
+Added: Automotive $ 7,858,334 $ 7,376,408 $ 6,248,117
+Added: Industrial 1,911,520 1,993,457 1,792,662
+Added: Corporate 254,627 527,126 297,282
+Added: Goodwill and other intangible assets 3,415,734 3,785,616 3,374,718
+Added: Discontinued operations — 963,022 970,261
+Added: Total assets $ 13,440,215 $ 14,645,629 $ 12,683,040
Depreciation and amortization:
−Removed: Business products
+Added: Automotive $ 120,932 $ 122,905 $ 105,238
+Added: Industrial 16,315 17,577 14,518
+Added: Corporate 40,633 24,575 24,339
Intangible asset amortization 94,962 92,206 83,489
1 unchanged sentence
Capital expenditures:
−Removed: Business products
+Added: Automotive $ 133,523 $ 227,420 $ 198,910
+Added: Industrial 19,287 39,003 21,783
+Added: Corporate 692 11,450 5,813
Total capital expenditures $ 153,502 $ 277,873 $ 226,506
United States $ 10,863,348 $ 12,226,381 $ 12,083,120
+Added: Europe 2,408,913 2,223,498 1,860,912
+Added: Canada 1,526,202 1,614,659 1,565,393
+Added: Australasia 1,691,190 1,369,361 1,193,148
+Added: Mexico 47,780 88,335 129,032
Total net sales $ 16,537,433 $ 17,522,234 $ 16,831,605
1 unchanged sentence
United States $ 728,802 $ 763,746 $ 693,683
+Added: Europe 164,268 153,357 110,184
+Added: Canada 102,409 103,320 91,195
+Added: Australasia 165,596 147,457 95,578
+Added: Mexico 968 5,808 4,014
Total net property, plant and equipment $ 1,162,043 $ 1,173,688 $ 994,654
−Removed: The net effect of discounts, incentives, and freight billed to customers has been allocated to their respective segments for the current and prior periods.
−Removed: Previously, the net effect of such items were captured and presented separately in a line item entitled “Other.”
+Added: The following table presents disaggregated geographical net sales from contracts with customers by reportable segment.
+Added: The Company believes this presentation best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors:
Genuine Parts Company and Subsidiaries
1 unchanged sentence
December 31, 2020
−Removed: The following table presents disaggregated geographical net sales from contracts with customers by reportable segment.
−Removed: The Company believes this presentation best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors:
+Added: 2020 2019 2018
North America:
−Removed: Business products
+Added: $ 7,177,543 $ 7,613,047 $ 7,478,961
+Added: 5,259,787 6,316,328 6,298,584
Total North America $ 12,437,330 $ 13,929,375 $ 13,777,545
+Added: $ 1,274,239 $ 1,157,357 $ 1,193,148
+Added: 416,951 212,004 —
Total Australasia $ 1,691,190 $ 1,369,361 $ 1,193,148
1 unchanged sentence
Total net sales $ 16,537,433 $ 17,522,234 $ 16,831,605
−Removed: Genuine Parts Company and Subsidiaries
−Removed: Notes to Consolidated Financial Statements
−Removed: December 31, 2019
Restructuring
−Removed: In October of 2019, the Company approved and began to implement certain restructuring actions (the "2019 Cost Savings Plan") across its subsidiaries primarily targeted at simplifying organizational structures and distribution networks.
−Removed: The Company believes these actions will reduce costs in the future and allow it to more effectively and efficiently manage its businesses.
−Removed: Among other things, the 2019 Cost Savings Plan will result in workforce reductions and facility closures and consolidations.
+Added: In October of 2019, the Company approved certain restructuring actions (the "2019 Cost Savings Plan") across its subsidiaries primarily targeted at simplifying organizational structures and distribution networks.
+Added: Among other things, the 2019 Cost Savings Plan resulted in workforce reductions and facility closures and consolidations.
The Company executed a VRP for its U.S.
and Canadian subsidiaries in the fourth quarter of 2019 in connection with this plan.
−Removed: The table below summarizes costs associated with the 2019 Cost Savings Plan:
+Added: The table below summarizes costs incurred for the 2019 Cost Savings Plan:
Restructuring costs $ 50,019 $ 100,023
Special termination costs — 42,757
−Removed: Total costs incurred in 2019
−Removed: Remaining costs expected but not yet incurred
+Added: Total costs incurred $ 50,019 $ 142,780
The 2019 Cost Savings Plan was approved and funded by the Company's corporate office and therefore these costs are not allocated to the Company's segments.
See the segment data footnote for more information.
+Added: No material further costs are expected to be incurred for the 2019 Cost Savings Plan.
The table below summarizes the activity related to the restructuring costs discussed above.
−Removed: As of December 31, 2019 , the current portion of the restructuring liability of $ 82,638 is included in other current liabilities on the consolidated balance sheet.
−Removed: Severance and other employee costs
−Removed: Facility and closure costs
−Removed: Accelerated operating lease costs
−Removed: Asset impairments
+Added: As of December 31, 2020, the current portion of the restructuring liability is included in other current liabilities on the consolidated balance sheet.
+Added: Severance and other employee costs Facility and closure costs Accelerated operating lease costs Asset impairments Total
Liability as of January 1, 2020 $ 72,192 $ 6,639 $ — $ — $ 78,831
2 unchanged sentences
Non-cash charges — — ( 6,724 ) ( 6,243 ) ( 12,967 )
+Added: Translation 936 318 — 1,254
Liability as of December 31, 2020 $ 21,394 $ 10,133 $ — $ — $ 31,527
+Added: Genuine Parts Company and Subsidiaries
+Added: Notes to Consolidated Financial Statements
+Added: December 31, 2020
+Added: Quarterly Financial Data (Unaudited)
+Added: The following is a summary of the quarterly results of operations for the years ended December 31, 2020 and 2019:
+Added: Three Months Ended
+Added: (In thousands, except per share data)
+Added: March 31, 2020 June 30, 2020 Sept.
+Added: 30, 2020 Dec.
+Added: Net sales $ 4,092,526 $ 3,823,227 $ 4,370,086 $ 4,251,594
+Added: Gross profit $ 1,388,178 $ 1,290,487 $ 1,528,066 $ 1,448,110
+Added: Net income (loss) from continuing operations $ 122,346 $ ( 363,501 ) $ 232,918 $ 171,632
+Added: Net income (loss) $ 136,535 $ ( 564,372 ) $ 227,531 $ 171,204
+Added: Earnings per share from continuing operations:
+Added: Basic $ 0.84 $ ( 2.52 ) $ 1.61 $ 1.19
+Added: Diluted $ 0.84 $ ( 2.52 ) $ 1.61 $ 1.18
+Added: Earnings per share:
+Added: Basic $ 0.94 $ ( 3.91 ) $ 1.58 $ 1.19
+Added: Diluted $ 0.94 $ ( 3.91 ) $ 1.57 $ 1.18
+Added: Three Months Ended
+Added: (In thousands, except per share data) March 31, 2019 June 30, 2019 Sept.
+Added: 30, 2019 Dec.
+Added: Net sales $ 4,259,129 $ 4,457,931 $ 4,525,284 $ 4,279,890
+Added: Gross profit $ 1,392,798 $ 1,482,704 $ 1,505,233 $ 1,478,948
+Added: Net income from continuing operations $ 145,684 $ 209,519 $ 212,256 $ 79,016
+Added: Net income $ 160,250 $ 224,430 $ 227,487 $ 8,918
+Added: Earnings per share from continuing operations:
+Added: Basic $ 1.00 $ 1.43 $ 1.46 $ 0.54
+Added: Diluted $ 0.99 $ 1.43 $ 1.45 $ 0.54
+Added: Earnings per share:
+Added: Basic $ 1.10 $ 1.54 $ 1.56 $ 0.06
+Added: Diluted $ 1.09 $ 1.53 $ 1.56 $ 0.06
+Added: We recorded the quarterly earnings per share amounts as if each quarter was a discrete period.
+Added: 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.
+Added: Certain of the quarterly results identified in the table above include material, unusual or infrequently occurring items as follows on a pre-tax basis:
+Added: In the second quarter of 2020, the Company recorded a goodwill impairment charge of $ 506,721 .
+Added: Refer to the goodwill and other intangible assets footnote within the Notes to the Consolidated Financial Statements for additional information.
+Added: In the fourth quarter of 2019, the Company recognized $ 142,780 in total restructuring costs and special termination costs.
+Added: The Company recognized $ 50,019 in total restructuring costs for the year ending December 31, 2020.
+Added: Refer to the restructuring footnote in the Notes to Consolidated Financial Statements for additional information.
+Added: During the fourth quarter of 2020, the Company determined that inventory was overstated because certain consideration received from vendors was not properly recognized as a reduction to carrying amount of inventory in the years ending December 31, 2019 and prior.
+Added: The Company corrected this misstatement and recorded an adjustment to decrease inventory and increase cost of goods sold by $ 40,000 during the quarter ended December 31, 2020.
+Added: In accordance with Staff Accounting Bulletin (“SAB”) No.
+Added: 99, Materiality , and SAB No.
+Added: 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements , the Company concluded that this misstatement was not material to the Company's previously issued annual and interim financial statements.
+Added: The Company also concluded the correction of this misstatement during the quarter ended December 31, 2020 was not material to the 2020 consolidated financial statements.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE .
1 unchanged sentence
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.