GENUINE PARTS CO 10-Q

Item 1. Financial Statements GENUINE PARTS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and per share data) March 31, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $ 500,023 $ 477,179 Trade accounts receivable, less allowance for doubtful accounts (2026 – $ 80,950 ; 2025 – $ 85,537 ) 2,533,850 2,370,939 Merchandise inventories, net 6,127,233 6,071,996 Prepaid expenses and other current assets 1,723,404 1,644,620 Total current assets 10,884,510 10,564,734 Goodwill 3,181,594 3,188,815 Other intangible assets, less accumulated amortization 1,806,123 1,855,714 Property, plant and equipment, less accumulated depreciation (2026 – $ 2,200,146 ; 2025 – $ 2,137,108 ) 2,142,689 2,172,140 Operating lease assets 2,069,896 2,084,487 Other assets 891,765 929,650 Total assets $ 20,976,577 $ 20,795,540 Liabilities and equity Current liabilities: Trade accounts payable $ 6,177,867 $ 6,051,882 Short-term borrowings 1,160,797 943,540 Current portion of long-term debt 356,222 353,788 Dividends payable 147,820 143,291 Other current liabilities 2,113,831 2,295,204 Total current liabilities 9,956,537 9,787,705 Long-term debt 3,478,884 3,498,423 Operating lease liabilities 1,717,913 1,739,478 Pension and other post–retirement benefit liabilities 219,504 219,270 Deferred tax liabilities 374,234 385,948 Other long-term liabilities 737,288 724,353 Equity: Preferred stock, par value – $ 1 per share; authorized – 10,000,000 shares; none issued — — Common stock, par value – $ 1 per share; authorized – 450,000,000 shares; issued and outstanding – 2026 – 137,624,545 shares; 2025 – 137,617,832 shares 137,625 137,618 Additional paid-in capital 240,228 228,370 Accumulated other comprehensive loss ( 513,465 ) ( 511,766 ) Retained earnings 4,611,029 4,568,769 Total parent equity 4,475,417 4,422,991 Noncontrolling interests in subsidiaries 16,800 17,372 Total equity 4,492,217 4,440,363 Total liabilities and equity $ 20,976,577 $ 20,795,540 See accompanying Notes to Condensed Consolidated Financial Statements. 2 Tab l e of Contents GENUINE PARTS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended March 31, (in thousands, except per share data) 2026 2025 Net sales $ 6,264,940 $ 5,866,069 Cost of goods sold 3,925,976 3,692,385 Gross profit 2,338,964 2,173,684 Operating expenses: Selling, administrative and other expenses 1,856,830 1,709,679 Depreciation and amortization 131,028 115,435 Provision for doubtful accounts 7,103 5,855 Restructuring and other costs 57,732 54,770 Total operating expenses 2,052,693 1,885,739 Non-operating expenses (income): Interest expense, net 43,953 37,216 Other ( 3,075 ) ( 908 ) Total non-operating expenses 40,878 36,308 Income before income taxes 245,393 251,637 Income taxes 56,858 57,245 Net income $ 188,535 $ 194,392 Basic earnings per share $ 1.37 $ 1.40 Diluted earnings per share $ 1.37 $ 1.40 See accompanying Notes to Condensed Consolidated Financial Statements. 3 Tab l e of Contents GENUINE PARTS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended March 31, (in thousands) 2026 2025 Net income $ 188,535 $ 194,392 Other comprehensive income (loss), net of income taxes: Foreign currency translation adjustments, net of income taxes in 2026 — $ 15,027 ; 2025 — $ 16,766 678 49,329 Pension and postretirement benefit adjustments, net of income taxes in 2026 — $ 60 ; 2025 — $ 1,327 ( 2,377 ) 3,684 Other comprehensive income (loss), net of income taxes ( 1,699 ) 53,013 Comprehensive income $ 186,836 $ 247,405 See accompanying Notes to Condensed Consolidated Financial Statements. 4 Tab l e of Contents GENUINE PARTS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED) Three Months Ended March 31, 2026 (in thousands, except share and per share data) Common Stock Shares Common Stock Amount Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Parent Equity Non-controlling Interests in Subsidiaries Total Equity January 1, 2026 137,617,832 $ 137,618 $ 228,370 $ ( 511,766 ) $ 4,568,769 $ 4,422,991 $ 17,372 $ 4,440,363 Net income — — — — 188,535 188,535 — 188,535 Other comprehensive loss, net of tax — — — ( 1,699 ) — ( 1,699 ) — ( 1,699 ) Cash dividend declared, $ 1.0625 per share — — — — ( 146,275 ) ( 146,275 ) — ( 146,275 ) Shares issued from employee incentive plans 6,713 7 ( 310 ) — — ( 303 ) — ( 303 ) Share-based compensation — — 12,168 — — 12,168 — 12,168 Noncontrolling interest activities — — — — — — ( 572 ) ( 572 ) March 31, 2026 137,624,545 $ 137,625 $ 240,228 $ ( 513,465 ) $ 4,611,029 $ 4,475,417 $ 16,800 $ 4,492,217 Three Months Ended March 31, 2025 (in thousands, except share and per share data) Common Stock Shares Common Stock Amount Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Parent Equity Non-controlling Interests in Subsidiaries Total Equity January 1, 2025 138,779,664 $ 138,780 $ 196,532 $ ( 1,261,743 ) $ 5,263,838 $ 4,337,407 $ 14,444 $ 4,351,851 Net income — — — — 194,392 194,392 — 194,392 Other comprehensive income, net of tax — — — 53,013 — 53,013 — 53,013 Cash dividend declared, $ 1.0300 per share — — — — ( 142,951 ) ( 142,951 ) — ( 142,951 ) Shares issued from employee incentive plans 9,315 9 ( 511 ) — — ( 502 ) — ( 502 ) Share-based compensation — — 8,574 — — 8,574 — 8,574 Noncontrolling interest activities — — — — — — 186 186 March 31, 2025 138,788,979 $ 138,789 $ 204,595 $ ( 1,208,730 ) $ 5,315,279 $ 4,449,933 $ 14,630 $ 4,464,563 See accompanying Notes to Condensed Consolidated Financial Statements. 5 Tab l e of Contents GENUINE PARTS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, (in thousands) 2026 2025 Operating activities: Net income $ 188,535 $ 194,392 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 131,028 115,435 Share-based compensation 12,168 8,574 Excess tax benefits from share-based compensation ( 46 ) ( 182 ) Other operating activities, including changes in operating assets and liabilities ( 267,769 ) ( 359,046 ) Net cash provided by (used in) operating activities 63,916 ( 40,827 ) Investing activities: Purchases of property, plant and equipment ( 97,552 ) ( 119,840 ) Proceeds from sale of property, plant and equipment 14,592 15,814 Acquisitions of businesses ( 13,797 ) ( 74,127 ) Proceeds from divestitures of businesses 6,282 — Other investing activities ( 2,435 ) 23,335 Net cash used in investing activities ( 92,910 ) ( 154,818 ) Financing activities: Proceeds from debt 254,755 20,011 Payments on debt ( 300,258 ) ( 522,352 ) Net proceeds of commercial paper 263,541 772,108 Shares issued from employee incentive plans ( 304 ) ( 502 ) Dividends paid ( 141,746 ) ( 134,355 ) Other financing activities ( 19,275 ) ( 6,168 ) Net cash provided by financing activities 56,713 128,742 Effect of exchange rate changes on cash and cash equivalents ( 4,875 ) 7,359 Net increase (decrease) in cash and cash equivalents 22,844 ( 59,544 ) Cash and cash equivalents at beginning of period 477,179 479,991 Cash and cash equivalents at end of period $ 500,023 $ 420,447 See accompanying Notes to Condensed Consolidated Financial Statements. 6 Tab l e of Contents NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. General Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes required by accounting principles generally accepted in the U.S. (“U.S. GAAP”) for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the Notes to the Consolidated Financial Statements included in the Annual Report on Form 10-K of Genuine Parts Company (the “Company,” “we,” “our,” “us,” or “its”) for the year ended December 31, 2025. Accordingly, the unaudited Condensed Consolidated Financial Statements and related disclosures herein should be read in conjunction with our 2025 Annual Report on Form 10-K. On February 17, 2026, we announced our intention to separate the Company into two independent, publicly traded companies: Global Automotive and Global Industrial. Global Automotive would include our North America Automotive and International Automotive segments, and Global Industrial would include our Industrial segment. The transaction is intended to qualify as a tax-free transaction for U.S. federal income tax purposes for the Company’s shareholders. The separation is targeted for completion in the first quarter of 2027, subject to certain customary and regulatory conditions. There can be no assurance that any separation transaction will ultimately occur or, if one does occur, of its terms or timing. Our Condensed Consolidated Financial Statements and related footnotes do not reflect the proposed separation. The preparation of interim financial statements requires management to make estimates and assumptions that affect the amounts reported in the unaudited Condensed Consolidated Financial Statements. Specifically, we make estimates and assumptions in our unaudited Condensed Consolidated Financial Statements for inventory adjustments, the accrual of bad debts, credit losses on guaranteed loans, customer sales returns, volume incentives earned, and the asbestos-related product liability, among others. Inventory adjustments (including adjustments for a majority of inventories that are valued under the last-in, first-out (“LIFO”) method) are accrued on an interim basis and adjusted in the fourth quarter based on the annual book to physical inventory adjustment and LIFO valuation. Reserves for bad debts, credit losses on guaranteed loans and customer sales returns are estimated and accrued on an interim basis based on a consideration of historical experience, current conditions, and reasonable and supportable forecasts. Volume incentives are estimated based upon cumulative and projected purchasing levels. Certain prior year amounts are reclassified to conform to the current year presentation. These reclassifications had no impact on our previously reported total assets, total liabilities, results of operations, comprehensive income or net cash flows from operating, financing or investing activities. In the opinion of management, all adjustments necessary for a fair presentation of our financial results for the interim periods have been made. These adjustments are of a normal recurring nature. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of results for the year ended December 31, 2026. We have evaluated subsequent events through the date the unaudited Condensed Consolidated Financial Statements covered by this quarterly report were issued. Recent Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASU”) to the FASB Accounting Standards Codification (“ASC”). We consider the applicability and impact of all ASUs and any not listed below were assessed and determined to not be applicable or are expected to have an immaterial impact on our Condensed Consolidated Financial Statements. Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This standard requires disclosure in the notes to financial statements, at each interim and annual reporting period, of specified information about certain costs and expenses including purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption. Also required is a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated. This guidance is effective for all public entities for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, and early adoption is permitted. This guidance should be applied either prospectively to financial statements issued after the effective date of this update or retrospectively to all prior 7 Tab l e of Contents periods presented in the financial statements. We are currently evaluating the impact of adopting this standard on our financial statements and disclosures. Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other- Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This update provides revised guidance aimed at refining the accounting for costs related to internal-use software. The update removes the concept of distinct project phases and requires that capitalization of software costs begins once (1) management authorizes and commits to funding a computer software project, and (2) it is likely the project will be completed, and the software will be used to perform the function as intended. When assessing whether completion is probable, entities must carefully consider any substantial uncertainties in development. In addition, the guidance specifies that the property, plant, and equipment disclosure requirements apply to capitalized software costs. The new standard will take effect in the first quarter of 2028, though early adoption is permitted at the start of any annual reporting period. Entities may adopt the guidance using prospective application, retrospective application, or a modified transition approach. We are currently evaluating the impact of adopting this standard on our financial statements and disclosures. Interim Reporting (Topic 270) In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270). This update enhances the clarity and organization of interim reporting and the applicability of Topic 270. It also clarifies the required form and content of interim financial statements, including requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The standard is effective for interim reporting periods within annual periods beginning after December 15, 2027, with early adoption permitted. Entities may apply the update either prospectively or retrospectively. We are currently evaluating the impact of adopting this standard on our financial statements and disclosures. Prepaid Expenses and Other Current Assets The following table provides a detail of prepaid expenses and other current assets reported within the Condensed Consolidated Balance Sheets as of: (in thousands) March 31, 2026 December 31, 2025 Prepaid expenses $ 241,851 $ 150,014 Consideration receivable from vendors 844,408 907,321 Other current assets 637,145 587,285 Total prepaid expenses and other current assets $ 1,723,404 $ 1,644,620 Derivatives and Hedging We are exposed to various risks arising from business operations and market conditions, including fluctuations in certain foreign currencies. We use derivative and non-derivative instruments as risk management tools to mitigate the potential impact of foreign exchange rate risks. The objective of using these tools is to reduce fluctuations in our earnings and cash flows associated with changes in these rates. Derivative instruments are recognized in the Condensed Consolidated Balance Sheets at fair value and are designated as Level 2 in the fair value hierarchy. They are valued using inputs other than quoted prices, such as foreign exchange rates and yield curves. The following table summarizes the classification 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 (in thousands): March 31, 2026 December 31, 2025 Instrument Balance Sheet Location Notional Balance Notional Balance Net investment hedges: Forward contracts Prepaid expenses and other current assets $ 791,831 $ 15,387 $ 245,960 $ 7,146 Forward contracts Other current liabilities $ 1,087,525 $ 25,696 $ 1,633,396 $ 66,516 Foreign currency debt Long-term debt € 475,000 $ 544,445 € 475,000 $ 558,030 8 Tab l e of Contents The tables below presents pre-tax gains and losses related to net investment hedges: Gain (Loss) Recognized in AOCL before Reclassifications Gain Recognized in Interest Expense for Excluded Components (in thousands) 2026 2025 2026 2025 Three Months Ended March 31, Net investment hedges: Forward contracts $ 43,122 $ ( 43,081 ) $ 5,939 $ 5,759 Foreign currency debt 13,585 ( 20,188 ) — — Total $ 56,707 $ ( 63,269 ) $ 5,939 $ 5,759 Fair Value of Financial Instruments As of March 31, 2026 and December 31, 2025, the fair value of our senior unsecured notes was approximately $ 3.7 billion and $ 3.8 billion, respectively, which are designated as Level 2 in the fair value hierarchy. Our valuation technique is based primarily on prices and other relevant information generated by observable transactions involving identical or comparable assets or liabilities. Following the December 2025 settlement of our U.S. pension plan, we hold a short-term bond fund that is designated to fund future contributions to our U.S. defined contribution plan. The bond fund is classified as a noncurrent available-for-sale ("AFS") debt security within other assets in the Condensed Consolidated Balance Sheets. As of March 31, 2026 and December 31, 2025, the fair value of the AFS debt security was $ 244 million and $ 243 million, respectively. The difference between fair value and amortized cost at each date is immaterial. Guarantees We guarantee the borrowings of certain independently controlled automotive parts stores and businesses (“independents”). While such borrowings of the independents are outstanding, we are required to maintain compliance with certain covenants. As of March 31, 2026, we were in compliance with all such covenants. As of March 31, 2026, the total borrowings of the independents subject to guarantee by us were approximately $ 519 million. These loans generally mature over periods from one to six years . We regularly monitor the performance of these loans and the ongoing operating results, financial condition and ratings from credit rating agencies of the independents that participate in the guarantee programs. In the event that we are required to make payments in connection with these guarantees, we would obtain and liquidate certain collateral pledged by the independents (e.g., accounts receivable and inventory) to recover all or a substantial portion of the amounts paid under the guarantees. We recognize a liability equal to current expected credit losses over the lives of the loans in the guaranteed loan portfolio, based on a consideration of historical experience, current conditions, the nature and expected value of any collateral, and reasonable and supportable forecasts. To date, we have not had significant losses in connection with guarantees of independents’ borrowings and the current expected credit loss reserve is not material. As of March 31, 2026, 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. As of March 31, 2026, we have recognized $ 32 million of certain assets and liabilities for the guarantees related to the independents’ borrowings. These assets and liabilities are included in other assets and other long-term liabilities in the Condensed Consolidated Balance Sheets. The liabilities relate to our noncontingent obligation to stand ready to perform under the guarantee programs and they are distinct from our current expected credit loss reserve. Supply Chain Finance Programs Several global financial institutions offer voluntary supply chain finance (“SCF”) programs which enable our suppliers (generally those that grant extended terms), at their sole discretion, to sell their receivables from us to these financial institutions on a non-recourse basis at a rate that takes advantage of our credit rating and may be beneficial to them. We and our suppliers agree on commercial terms for the goods and services we procure, including prices, quantities and payment terms, regardless of whether the supplier elects to participate in the SCF program. Our current payment terms with the majority of our suppliers range from 30 to 360 days. The suppliers sell goods or services, as applicable, to us and they issue the associated invoices to us based on the agreed-upon contractual terms. Then, if they are participating in the SCF program, our suppliers, at their sole discretion, determine which invoices, if any, they want to sell to the financial institutions. In turn, we direct payment to the 9 Tab l e of Contents financial institutions, rather than the suppliers, for the invoices sold to the financial institutions. No guarantees are provided by us or any of our subsidiaries on third-party performance under the SCF program; however, we guarantee the payment by our subsidiaries to the financial institutions participating in the SCF program for the applicable invoices. We have no economic interest in a supplier’s decision to participate in the SCF program, and we have no direct financial relationship with the financial institutions, as it relates to the SCF program. Accordingly, amounts due to our suppliers that elected to participate in the SCF program are included in the line item accounts payable in our Condensed Consolidated Balance Sheets. All activity related to amounts due to suppliers that elected to participate in the SCF program is reflected in cash flows from operating activities in our Condensed Consolidated Statement of Cash Flows. As of March 31, 2026 and December 31, 2025, the outstanding payment obligations to the financial institutions were $ 3.2 billion and $ 3.1 billion, respectively. The amount settled through the SCF program was $ 1.0 billion and $ 1.1 billion for the three months ended March 31, 2026 and March 31, 2025, respectively. (in thousands) March 31, 2026 Obligations outstanding at the beginning of the period $ 3,142,713 Invoices confirmed during the year 1,028,046 Confirmed invoices paid during the year ( 993,415 ) Confirmed obligations outstanding at the end of the period $ 3,177,344 Earnings Per Share We calculate basic earnings per share by dividing net income by the weighted average number of common shares outstanding. Certain outstanding stock awards are not included in the diluted earnings per share calculation because their inclusion would have been anti-dilutive. Antidilutive common stock equivalents excluded from the diluted earnings per share calculation are not material. The following table summarizes basic and diluted shares outstanding: Three Months Ended March 31, (in thousands, except per share data) 2026 2025 Net income $ 188,535 $ 194,392 Weighted average common shares outstanding 137,622 138,783 Dilutive effect of stock awards 408 417 Weighted average common shares outstanding – assuming dilution 138,030 139,200 Basic earnings per share $ 1.37 $ 1.40 Diluted earnings per share $ 1.37 $ 1.40 10 Tab l e of Contents 2. Segment Information North America Automotive Segment The following table presents a summary of our reportable North America automotive segment financial information: Three Months Ended March 31, (in thousands) 2026 2025 Net sales $ 2,363,032 $ 2,264,781 Cost of goods sold 1,454,347 1,396,617 Gross profit 908,685 868,164 Operating expenses 752,480 721,169 EBITDA $ 156,205 $ 146,995 Gross margin (1) 38.5 % 38.3 % Operating expenses as a percentage of net sales 31.8 % 31.8 % EBITDA margin (2) 6.6 % 6.5 % International Automotive Segment The following table presents a summary of our reportable international automotive segment financial information: Three Months Ended March 31, (in thousands) 2026 2025 Net sales $ 1,585,516 $ 1,400,107 Cost of goods sold 866,327 760,207 Gross profit 719,189 639,900 Operating expenses 574,344 501,388 EBITDA $ 144,845 $ 138,512 Gross margin (1) 45.4 % 45.7 % Operating expenses as a percentage of net sales 36.2 % 35.8 % EBITDA margin (2) 9.1 % 9.9 % Industrial Segment The following table presents a summary of our reportable industrial segment financial information: Three Months Ended March 31, (in thousands) 2026 2025 Net sales $ 2,316,392 $ 2,201,181 Cost of goods sold 1,605,334 1,535,594 Gross profit 711,058 665,587 Operating expenses 396,938 386,876 EBITDA $ 314,120 $ 278,711 Gross margin (1) 30.7 % 30.2 % Operating expenses as a percentage of net sales 17.1 % 17.6 % EBITDA margin (2) 13.6 % 12.7 % 11 Tab l e of Contents (1) Gross margin is gross profit as a percentage of net sales. (2) EBITDA margin is earnings before interest, taxes, depreciation and amortization ("EBITDA") as a percentage of net sales. Additional Information The following table presents a reconciliation from EBITDA to net income: Three Months Ended March 31, (in thousands) 2026 2025 Segment EBITDA North America Automotive $ 156,205 $ 146,995 International Automotive 144,845 138,512 Industrial 314,120 278,711 Corporate EBITDA (1) ( 119,525 ) ( 91,125 ) Interest expense, net ( 43,953 ) ( 37,216 ) Depreciation and amortization ( 131,028 ) ( 115,435 ) Other unallocated costs ( 75,271 ) ( 68,805 ) Income before income taxes 245,393 251,637 Income taxes ( 56,858 ) ( 57,245 ) Net Income $ 188,535 $ 194,392 (1) Corporate EBITDA consists of costs related to our corporate headquarters' broad support to our business units and other costs that are managed centrally and not allocated to business segments. These include personnel and other costs for company-wide functions such as executive leadership, human resources, technology, cybersecurity, legal, corporate finance, internal audit, and risk management, as well as asbestos-related product liability costs and A/R Sales Agreement fees. The following table presents a summary of the other unallocated costs: Three Months Ended March 31, (in thousands) 2026 2025 Other unallocated costs: Restructuring and other costs (2) $ ( 57,732 ) $ ( 54,770 ) Separation costs (3) ( 17,539 ) — Acquisition and integration related costs and other (4) — ( 14,035 ) Total other unallocated costs $ ( 75,271 ) $ ( 68,805 ) (2) Refer to the Restructuring and Other Costs Footnote in the Notes to Condensed Consolidated Financial Statements for more information. (3) Adjustment primarily reflects legal and professional services and executive incentive plan costs related to the planned separation of our Global Automotive and Global Industrial businesses that was announced on February 17, 2026 and is targeted for completion in the first quarter of 2027. (4) Adjustment primarily reflects lease and other exit costs related to the integration of acquired independent automotive stores. 12 Tab l e of Contents The following table presents a summary of our reportable segment total assets, as well as Corporate and other unallocated reconciling items: Three Months Ended March 31, (in thousands) 2026 2025 Assets: North America Automotive $ 6,654,273 $ 6,846,904 International Automotive 3,968,127 4,082,999 Industrial 2,810,722 3,133,547 Corporate (5) 2,555,738 927,640 Goodwill and other intangible assets 4,987,717 4,826,115 Total assets $ 20,976,577 $ 19,817,205 Long-lived assets: United States $ 1,248,077 $ 1,182,474 Europe 410,707 388,071 Canada 225,332 190,168 Australasia 257,393 225,278 Mexico 1,180 816 Total long-lived assets $ 2,142,689 $ 1,986,807 (5) Corporate is a reconciling category that includes our corporate offices, substantially all financing activities and any other items that are not allocated to the business segments. The following table presents a summary of select financial information by reportable segment, as well as Corporate and other unallocated reconciling items: Three Months Ended March 31, (in thousands) 2026 2025 Depreciation and amortization: North America Automotive $ 40,550 $ 32,281 International Automotive 30,573 27,822 Industrial 11,072 9,664 Corporate 9,033 8,797 Intangible asset amortization 39,800 36,871 Total depreciation and amortization $ 131,028 $ 115,435 Capital expenditures: North America Automotive $ 12,803 $ 31,786 International Automotive 44,032 33,348 Industrial 12,072 15,166 Corporate 28,645 39,540 Total capital expenditures $ 97,552 $ 119,840 Net sales: United States $ 4,014,203 $ 3,853,778 Europe 1,091,974 972,865 Canada 500,572 463,474 Australasia 628,483 552,354 Mexico 29,708 23,598 Total net sales $ 6,264,940 $ 5,866,069 13 Tab l e of Contents Net sales are disaggregated by geographical region for each of our reportable segments , as we deem this presentation best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors. The following table presents disaggregated geographical net sales from contracts with customers by reportable segment: Three Months Ended March 31, (in thousands) 2026 2025 North America: Automotive $ 2,363,032 $ 2,264,781 Industrial 2,181,451 2,076,069 Total North America $ 4,544,483 $ 4,340,850 Australasia: Automotive $ 493,542 $ 427,242 Industrial 134,941 125,112 Total Australasia $ 628,483 $ 552,354 Europe – Automotive $ 1,091,974 $ 972,865 Total net sales $ 6,264,940 $ 5,866,069 3. Accounts Receivable Sales Agreement Under our accounts receivable sales agreement (the "A/R Sales Agreement"), we continuously sell designated pools of receivables as they are originated by us and certain U.S. subsidiaries to a separate bankruptcy-remote special purpose entity (“SPE”). On January 2, 2026, we amended our A/R Sales Agreement to increase the facility capacity from $ 1 billion to $ 1.25 billion and extended the agreement's maturity through January 8, 2027. We received a benefit from cash from operations of approximately $ 250 million in the quarter ended March 31, 2026. We continue to be involved with the receivables transferred by the SPE to the unaffiliated financial institutions by providing collection services. As cash is collected on sold receivables, the SPE continuously transfers ownership and control of new qualifying receivables to the unaffiliated financial institutions so that the total principal amount outstanding of receivables sold does not exceed $ 1.25 billion at any point in time (which is the maximum amount allowed under the A/R Sales Agreement). The total principal amount outstanding of receivables sold is approximately $ 1.25 billion and $ 1.0 billion as of March 31, 2026 and December 31, 2025, respectively. The amount of receivables pledged as collateral as of March 31, 2026 and December 31, 2025 is approximately $ 1.5 billion and $ 1.5 billion, respectively. The following table summarizes the activity and amounts outstanding under the A/R Sales Agreement as of: Three Months Ended March 31, (in thousands) 2026 2025 Receivables sold to the financial institutions and derecognized $ 2,231,061 $ 2,103,265 Cash collected on sold receivables $ 1,981,071 $ 2,103,255 Continuous cash activity related to the A/R Sales Agreement is reflected in net cash provided by (used in) operating activities in the Condensed Consolidated Statements of Cash Flows. The SPE incurs fees due to the unaffiliated financial institutions related to the accounts receivable sales transactions. Those fees, which totaled $ 12 million and $ 13 million for the three months ended March 31, 2026 and 2025, respectively, are recorded within other non-operating expense (income) in the Condensed Consolidated Statements of Income. The SPE has a recourse obligation to repurchase from the unaffiliated financial institutions any previously sold receivables that are not collected due to the occurrence of certain events, including credit quality deterioration and customer sales returns. The reserve recognized for this recourse obligation as of March 31, 2026 and December 31, 2025 is not material. The servicing liability related to our collection services also is not material, given the high quality of the customers underlying the receivables and the anticipated short collection period. 14 Tab l e of Contents 4. Debt Unsecured Revolving Credit Facility On October 30, 2020, we entered into a $ 1.5 billion Syndicated Facility Agreement (as amended, the "Unsecured Revolving Credit Facility"). On March 20, 2025, we amended the Unsecured Revolving Credit Facility to expand the borrowing capacity from $ 1.5 billion to $ 2.0 billion and extend the maturity date to March 20, 2030. We had $ 554 million outstanding borrowings under the Unsecured Revolving Credit Facility as of March 31, 2026 and $ 600 million outstanding as of December 31, 2025. Commercial Paper Program On November 29, 2023, we established a commercial paper program that allows us to issue unsecured commercial paper notes up to $ 1.5 billion outstanding. We amended our commercial paper program on March 27, 2025 to expand the maximum borrowing capacity from $ 1.5 billion to $ 2.0 billion. The maturities of the commercial paper notes vary but may not exceed 364 days from the date of issuance. The commercial paper notes are sold under customary terms in the commercial paper market and rank pari passu with unsecured and unsubordinated indebtedness. The notes are issued at par less a discount representing an interest factor or, if interest bearing, at par. We had $ 607 million outstanding under our commercial paper program as of March 31, 2026, presented in short-term borrowings on the Condensed Consolidated Balance Sheet, and $ 343 million outstanding borrowings as of December 31, 2025. The weighted average interest rate of our commercial paper outstanding as of March 31, 2026 was 4.39 %. Covenants Certain borrowings require us to comply with a financial covenant with respect to a maximum debt to EBITDA ratio. At March 31, 2026, we were in compliance with all such covenants. 5. Acquisitions We acquired several businesses for approximately $ 18 million and $ 152 million, which includes certain non-cash consideration and is net of cash acquired, during the three months ended March 31, 2026 and March 31, 2025, respectively. For each acquisition, we allocate the purchase price to the assets acquired and the liabilities assumed based on their fair values as of their respective acquisition dates. We recorded approximately $ 6 million of goodwill and other intangible assets associated with these acquisitions, primarily related to a U.S. acquisition in our industrial segment. Other intangible assets acquired of $ 2 million consisted of customer relationships with weighted average amortization lives of 20 years. The results of operations for acquired businesses are included in our Condensed Consolidated Statements of Income beginning on their respective acquisition dates. 6. Accumulated Other Comprehensive Loss The following tables present the changes in AOCL by component for the three months ended March 31: Changes in Accumulated Other Comprehensive Loss by Component, Net of Income Taxes (in thousands) Pension and Other Post-Retirement Benefits Foreign Currency Translation Total Beginning balance, January 1, 2026 $ ( 39,893 ) $ ( 471,873 ) $ ( 511,766 ) Other comprehensive income (loss) before reclassifications ( 2,556 ) 678 ( 1,878 ) Amounts reclassified from accumulated other comprehensive loss 179 — 179 Other comprehensive income (loss), net of income taxes ( 2,377 ) 678 ( 1,699 ) Ending balance, March 31, 2026 $ ( 42,270 ) $ ( 471,195 ) $ ( 513,465 ) 15 Tab l e of Contents Changes in Accumulated Other Comprehensive Loss by Component, Net of Income Taxes (in thousands) Pension and Other Post-Retirement Benefits Foreign Currency Translation Total Beginning balance, January 1, 2025 $ ( 581,000 ) $ ( 680,743 ) $ ( 1,261,743 ) Other comprehensive income (loss) before reclassifications — 49,329 49,329 Amounts reclassified from accumulated other comprehensive loss 3,684 — 3,684 Other comprehensive income (loss), net of income taxes 3,684 49,329 53,013 Ending balance, March 31, 2025 $ ( 577,316 ) $ ( 631,414 ) $ ( 1,208,730 ) Generally, tax effects in AOCL are established at the currently enacted tax rate and reclassified to net income in the same period that the related pre-tax AOCL reclassifications are recognized. 7. Commitments and Contingencies Legal Matters We are subject to various claims and lawsuits, principally in the United States, and regulatory proceedings worldwide. The liabilities recognized on these claims and other matters are based on the best available information and assumptions that we believe are reasonable. While litigation of any type contains an element of uncertainty, we believe that our insurance coverage and our defense, and ultimate resolution of pending and reasonably anticipated claims will not have a material adverse effect on our business, results of operations or financial condition. Asbestos-Related Product Liability and Insurance Receivable We maintain a liability for probable and estimable claims and settlements associated with our distribution and sales of asbestos-containing brake and friction products sold primarily before 1991. These claims and settlements are unrelated to our ongoing operations, revenue generating activities, and business strategy. We regularly conduct a comprehensive legal review of our asbestos liability. We review recent and historical claims data, including, (i) the number of pending claims filed, (ii) the nature and mix of those claims (e.g., disease type, plaintiff type, geography), (iii) the costs to resolve pending claims, and (iv) trends in filing rates and in costs to resolve claims (collectively, the “Claims Data”). We also consider the known latency periods for common asbestos diseases when projecting future filing trends and claims. We provide the Claims Data to a third-party actuarial specialist with expertise in determining the impact of Claim Data on future filing trends and costs. The actuarial specialist assists us in estimating the number of future claims and costs to resolve pending and future claims. We use this analysis to develop our estimate of probable liability on a discounted basis, using risk-free interest rates derived from market data about monetary assets with maturities comparable to those of the projected liability. Developments may occur that could affect our estimate of asbestos-related product liability and actual results may differ under different assumptions or conditions. These developments include, but are not limited to, significant changes in (i) the key assumptions underlying the estimate, including the number of future claims, the nature and mix of those claims, and the average cost of resolving claims (ii) trial and appellate outcomes, (iii) the law and procedure applicable to these claims, and (iv) the financial viability of other codefendants and insurers. Complaints nearly always assert claims against multiple defendants where the damages alleged are typically not attributed to individual defendants so that a defendant’s share of liability may turn on the law of joint and several liability, which can vary by state. Our estimate has been impacted by adverse inflation trends, a backlog of claims building up from court closures during the COVID-19 pandemic, and an evolving legal and product liability environment. We have 3,407 pending asbestos lawsuits as of March 31, 2026. The amount accrued for pending and future claims was $ 309 million as of March 31, 2026, which represented our best estimate of the liability within our calculated range of $ 249 million to $ 385 million, discounted using a discount rate of 4.30 %. The amount accrued for pending and future claims was $ 317 million as of December 31, 2025, which represented our best estimate of the liability within our calculated range of $ 258 million to $ 397 million, discounted using a discount rate of 4.18 %. Our undiscounted product liability was $ 390 million and $ 398 million as of March 31, 2026 and December 31, 2025, respectively. There have been no significant developments to the information presented in our 2025 Annual Report on Form 10-K with respect to litigation or commitments and contingencies. 16 Tab l e of Contents We hold insurance policies that cover some asbestos settlements and defense costs. Annually, we conduct an insurance exhaustion study to model expected recoveries for pending and future claims, and we adjust the insurance receivable balance to reflect the present value of these recoveries. Our receivable for estimated insurance recoveries related to pending and future claims was $ 36 million and $ 38 million as of March 31, 2026 and December 31, 2025, respectively. Environmental Liabilities Item 103 of SEC Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that we reasonably believe will exceed an applied threshold not to exceed $1 million. Applying this threshold, there are no environmental matters to disclose for this period. Tariffs On February 20, 2026, the U.S. Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Powers Act . The financial impact of this ruling is uncertain, as it is unclear to what extent duties will be refunded by t he U.S. Customs and Border Protection ("CBP"), what processes will govern such refunds, or if we can collect related accounts receivable. We are working with the C BP and are continuing to evaluate the impact of these developments on our business and financial statements. Our exposure as the importer of record represents less than 0.5% of our total purchases. Accordingly, we have not recorded any adjustments to our financial statements related to potential refunds, as any such amounts would not be material and are not reasonably estimable at this time. We continue to take steps to manage tariff-related cost pressures; however, these actions may not fully offset increased costs in future periods. 8. Restructuring and Other Costs In February 2024, we approved and initiated a global restructuring initiative designed to better align our assets and further improve the efficiency of the business. The initiative was approved and funded by our corporate office and therefore these costs are not allocated to our segments. We incurred $ 58 million and $ 55 million in restructuring and other costs for the three months ended March 31, 2026 and March 31, 2025, respectively. The tables below summarize the activity related to the global restructuring initiative. (in thousands) Severance and other employee costs Other restructuring costs (1) Total Liability as of January 1, 2026 $ 17,988 $ 709 $ 18,697 Restructuring and other costs 8,164 49,568 57,732 Cash payments ( 6,739 ) ( 40,346 ) ( 47,085 ) Non-cash charges — ( 9,362 ) ( 9,362 ) Translation ( 262 ) ( 1 ) ( 263 ) Liability as of March 31, 2026 $ 19,151 $ 568 $ 19,719 (1) Amount includes professional fees, accelerated rent, facility closure costs, moving expenses and asset impairment costs. (in thousands) Severance and other employee costs Other restructuring costs (1) Total Liability as of January 1, 2025 $ 23,830 $ 926 $ 24,756 Restructuring and other costs 21,131 33,639 54,770 Cash payments ( 16,270 ) ( 29,054 ) ( 45,324 ) Non-cash charges — ( 4,760 ) ( 4,760 ) Translation 517 41 558 Liability as of March 31, 2025 $ 29,208 $ 792 $ 30,000 17 Tab l e of Contents (1) Amount includes professional fees, accelerated rent, facility closure costs, moving expenses and asset impairment costs. 18 Tab l e of Contents