Item 1. Financial Statements

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share data)						March 31, 2025						December 31, 2024
Assets
Current assets:
Cash and cash equivalents						$	420,447					$	479,991
Trade accounts receivable, less allowance for doubtful accounts (2025 – $68,332; 2024 – $68,976)						2,507,216						2,182,856
Merchandise inventories, net						5,632,947						5,514,427
Prepaid expenses and other current assets						1,653,778						1,675,310
Total current assets						10,214,388						9,852,584
Goodwill						2,985,719						2,897,270
Other intangible assets, less accumulated amortization						1,840,396						1,799,031
Property, plant and equipment, less accumulated depreciation (2025 – $1,839,494; 2024 – $1,771,785)						1,986,807						1,950,760
Operating lease assets						1,829,113						1,769,720
Other assets						960,782						1,013,340
Total assets						$	19,817,205					$	19,282,705
Liabilities and equity
Current liabilities:
Trade accounts payable						$	6,011,293					$	5,923,684
Short-term borrowings						813,936						41,705
Current portion of long-term debt						—						500,000
Dividends payable						142,951						134,355
Other current liabilities						1,917,020						1,925,636
Total current liabilities						8,885,200						8,525,380
Long-term debt						3,775,858						3,742,640
Operating lease liabilities						1,512,488						1,458,391
Pension and other post–retirement benefit liabilities						220,031						218,629
Deferred tax liabilities						427,593						441,705
Other long-term liabilities						531,472						544,109
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 – 2025 – 138,788,979 shares; 2024 – 138,779,664 shares						138,789						138,780
Additional paid-in capital						204,595						196,532
Accumulated other comprehensive loss						(1,208,730)						(1,261,743)
Retained earnings						5,315,279						5,263,838
Total parent equity						4,449,933						4,337,407
Noncontrolling interests in subsidiaries						14,630						14,444
Total equity						4,464,563						4,351,851
Total liabilities and equity						$	19,817,205					$	19,282,705

See accompanying Notes to Condensed Consolidated Financial Statements.

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

						Three Months Ended March 31,
(in thousands, except per share data)						2025						2024
Net sales						$	5,866,069					$	5,783,631
Cost of goods sold						3,692,385						3,708,976
Gross profit						2,173,684						2,074,655
Operating expenses:
Selling, administrative and other expenses						1,709,679						1,574,927
Depreciation and amortization						115,435						90,610
Provision for doubtful accounts						5,855						6,211
Restructuring and other costs						54,770						83,042
Total operating expenses						1,885,739						1,754,790
Non-operating expenses (income):
Interest expense, net						37,216						17,690
Other						(908)						(23,006)
Total non-operating expenses (income)						36,308						(5,316)
Income before income taxes						251,637						325,181
Income taxes						57,245						76,287
Net income						$	194,392					$	248,894
Basic earnings per share						$	1.40					$	1.79
Diluted earnings per share						$	1.40					$	1.78

See accompanying Notes to Condensed Consolidated Financial Statements.

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

						Three Months Ended March 31,
(in thousands)						2025						2024
Net income						$	194,392					$	248,894
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustments						49,329						(79,920)
Pension and postretirement benefit adjustments, net of income taxes in 2025 — $1,327; 2024 — $1,063						3,684						2,888
Other comprehensive income (loss), net of income taxes						53,013						(77,032)
Comprehensive income						$	247,405					$	171,862

See accompanying Notes to Condensed Consolidated Financial Statements.

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

						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 loss, 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
Purchase of stock						—						—						—						—						—						—						—						—
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

						Three Months Ended March 31, 2024
(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, 2024						139,567,071						$	139,567					$	173,025					$	(976,872)					$	5,065,327					$	4,401,047					$	15,938					$	4,416,985
Net income						—						—						—						—						248,894						248,894						—						248,894
Other comprehensive income, net of tax						—						—						—						(77,032)						—						(77,032)						—						(77,032)
Cash dividend declared, $1.0000 per share						—						—						—						—						(139,385)						(139,385)						—						(139,385)
Shares issued from employee incentive plans						28,811						29						(2,240)						—						—						(2,211)						—						(2,211)
Share-based compensation						—						—						8,564						—						—						8,564						—						8,564
Purchase of stock						(260,540)						(261)						—						—						(37,239)						(37,500)						—						(37,500)
Noncontrolling interest activities						—						—						—						—						—						—						(1,139)						(1,139)
March 31, 2024						139,335,342						$	139,335					$	179,349					$	(1,053,904)					$	5,137,597					$	4,402,377					$	14,799					$	4,417,176

See accompanying Notes to Condensed Consolidated Financial Statements.

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

						Three Months Ended March 31,
(in thousands)						2025						2024
Operating activities:
Net income						$	194,392					$	248,894
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization						115,435						90,610
Share-based compensation						8,574						8,564
Excess tax benefits from share-based compensation						(182)						(3,461)
Other operating activities, including changes in operating assets and liabilities						(359,046)						(26,301)
Net cash (used in) provided by operating activities						(40,827)						318,306
Investing activities:
Purchases of property, plant and equipment						(119,840)						(115,690)
Proceeds from sale of property, plant and equipment						15,814						68,462
Acquisitions of businesses						(74,127)						(134,677)
Proceeds from divestitures of businesses						—						3,381
Other investing activities						23,335						80
Net cash used in investing activities						(154,818)						(178,444)
Financing activities:
Proceeds from debt						20,011						14
Payments on debt						(522,352)						(660)
Net proceeds of commercial paper						772,108						—
Shares issued from employee incentive plans						(502)						(2,211)
Dividends paid						(134,355)						(132,635)
Purchases of stock						—						(37,500)
Other financing activities						(6,168)						(2,231)
Net cash provided by (used in) financing activities						128,742						(175,223)
Effect of exchange rate changes on cash and cash equivalents						7,359						(17,058)
Net decrease in cash and cash equivalents						(59,544)						(52,419)
Cash and cash equivalents at beginning of period						479,991						1,102,007
Cash and cash equivalents at end of period						$	420,447					$	1,049,588

See accompanying Notes to Condensed Consolidated Financial Statements.

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, 2024. Accordingly, the unaudited Condensed Consolidated Financial Statements and related disclosures herein should be read in conjunction with our 2024 Annual Report on Form 10-K.

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, 2025 are not necessarily indicative of results for the year ended December 31, 2025. 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 Taxes (Topic 740): Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard requires disclosure of specific categories in the rate reconciliation and additional information for reconciling items, income before tax expense disaggregated between domestic and foreign, income tax expense disaggregated by federal, state and foreign, as well as further information on income taxes paid. The guidance is effective for the year ended December 31, 2025, with early adoption permitted. The guidance should be applied on a prospective basis, with retrospective application permitted. We are currently evaluating the impact of adopting this standard on our financial statements and disclosures.

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

periods presented in the financial statements. 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, 2025						December 31, 2024
Prepaid expenses						$	173,925					$	118,401
Consideration receivable from vendors						959,843						972,842
Other current assets						520,010						584,067
Total prepaid expenses and other current assets						$	1,653,778					$	1,675,310

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, 2025												December 31, 2024
Instrument						Balance Sheet Location						Notional						Balance						Notional						Balance
Net investment hedges:
Forward contracts						Prepaid expenses and other current assets						$	838,046					$	26,735					$	1,867,966					$	85,834
Forward contract						Other current liabilities						$	574,300					$	1,557					$	—					$	—
Foreign currency debt						Long-term debt						€	475,000					$	514,473					€	475,000					$	494,285

The tables below presents gains and losses related to designated net investment hedges:

						Gain (Loss) Recognized in AOCL before Reclassifications												Gain Recognized in Interest Expense for Excluded Components
(in thousands)						2025						2024						2025						2024
Three Months Ended March 31,
Net investment hedges:
Forward contracts						$	(43,081)					$	13,262					$	5,759					$	4,369
Foreign currency debt						(20,188)						17,080						—						—
Total						$	(63,269)					$	30,342					$	5,759					$	4,369

Fair Value of Financial Instruments

As of March 31, 2025, the fair value of our senior unsecured notes was approximately $3.7 billion, 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.

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, 2025, we were in compliance with all such covenants.

As of March 31, 2025, the total borrowings of the independents subject to guarantee by us were approximately $574 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, 2025, 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, 2025, we have recognized $40 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 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, 2025 and December 31, 2024, the outstanding payment obligations to the financial institutions were $3.3 billion and $3.3 billion, respectively. The amount settled through the SCF program was $1.1 billion and $1.0 billion for the three months ended March 31, 2025 and March 31, 2024, respectively.

(in thousands)						March 31, 2025
Obligations outstanding at the beginning of the period						$	3,341,333
Invoices confirmed during the year						1,033,405
Confirmed invoices paid during the year						(1,102,527)
Confirmed obligations outstanding at the end of the period						$	3,272,211

Earnings Per Share

We calculate basic earnings per share by dividing net income by the weighted average number of common shares outstanding. Certain outstanding options 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)						2025						2024
Net income						$	194,392					$	248,894
Weighted average common shares outstanding						138,783						139,429
Dilutive effect of stock options and non-vested restricted stock awards						417						667
Weighted average common shares outstanding – assuming dilution						139,200						140,096
Basic earnings per share						$	1.40					$	1.79
Diluted earnings per share						$	1.40					$	1.78

2. Segment Information

Automotive Segment

The following table presents a summary of our reportable automotive segment financial information:

						Three Months Ended March 31,
(in thousands)						2025						2024
Net sales						$	3,664,888					$	3,574,020
Cost of goods sold						2,156,824						2,161,716
Gross profit						1,508,064						1,412,304
Operating expenses						1,222,557						1,092,628
EBITDA						$	285,507					$	319,676
Gross margin (1)						41.1		%				39.5		%
Operating expenses as a percentage of net sales						33.4		%				30.6		%
EBITDA margin (2)						7.8		%				8.9		%

Industrial Segment

The following table presents a summary of our reportable industrial segment financial information:

						Three Months Ended March 31,
(in thousands)						2025						2024
Net sales						$	2,201,181					$	2,209,611
Cost of goods sold						1,535,594						1,547,300
Gross profit						665,587						662,311
Operating expenses						386,876						383,324
EBITDA						$	278,711					$	278,987
Gross margin (1)						30.2		%				30.0		%
Operating expenses as a percentage of net sales						17.6		%				17.3		%
EBITDA margin (2)						12.7		%				12.6		%

*(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)						2025						2024
Segment EBITDA
Automotive						$	285,507					$	319,676
Industrial						278,711						278,987
Corporate EBITDA (1)						(91,125)						(82,140)
Interest expense, net						(37,216)						(17,690)
Depreciation and amortization						(115,435)						(90,610)
Other unallocated costs (2)						(68,805)						(83,042)
Income before income taxes						251,637						325,181
Income taxes						(57,245)						(76,287)
Net Income						$	194,392					$	248,894

*(1)*Corporate EBITDA consists of costs related to our corporate headquarter’s 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.

(2)The following table presents a summary of the other unallocated costs:

						Three Months Ended March 31,
(in thousands)						2025						2024
Other unallocated costs:
Restructuring and other costs (3)						$	(54,770)					$	(83,042)
Acquisition and integration related costs and other (4)						(14,035)						—
Total other unallocated costs						$	(68,805)					$	(83,042)

*(3)*Please refer to the Restructuring and Other Costs Footnote in the Notes to Condensed Consolidated Financial Statements for more information.

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

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)						2025						2024
Assets:
Automotive						$	10,929,903					$	9,968,524
Industrial						3,133,547						3,226,428
Corporate (5)						927,640						632,360
Goodwill and other intangible assets						4,826,115						4,509,200
Total assets						$	19,817,205					$	18,336,512

*(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)						2025						2024
Depreciation and amortization:
Automotive						$	60,103					$	46,739
Industrial						9,664						8,149
Corporate						8,797						1,622
Intangible asset amortization						36,871						34,100
Total depreciation and amortization						$	115,435					$	90,610
Capital expenditures:
Automotive						$	65,134					$	65,732
Industrial						15,166						12,413
Corporate						39,540						37,545
Total capital expenditures						$	119,840					$	115,690
Net sales:
United States						$	3,853,778					$	3,783,929
Europe						972,865						976,782
Canada						463,474						472,803
Australasia						552,354						529,833
Mexico						23,598						20,284
Total net sales						$	5,866,069					$	5,783,631
Long-lived assets:
United States						$	1,182,474					$	976,888
Europe						388,071						348,720
Canada						190,168						151,624
Australasia						225,278						187,831
Mexico						816						857
Total long-lived assets						$	1,986,807					$	1,665,920

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)						2025						2024
North America:
Automotive						$	2,264,781					$	2,196,890
Industrial						2,076,069						2,080,126
Total North America						$	4,340,850					$	4,277,016
Australasia:
Automotive						$	427,242					$	400,348
Industrial						125,112						129,485
Total Australasia						$	552,354					$	529,833
Europe – Automotive						$	972,865					$	976,782
Total net sales						$	5,866,069					$	5,783,631

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”). The A/R Sales Agreement has a one year term expiring in January 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 is approximately $1.0 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 $1.0 billion and $1.0 billion as of March 31, 2025 and December 31, 2024, respectively. The amount of receivables pledged as collateral as of March 31, 2025 and December 31, 2024 is approximately $1.5 billion and $1.3 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)						2025						2024
Receivables sold to the financial institutions and derecognized						$	2,103,265					$	2,170,043
Cash collected on sold receivables						$	2,103,255					$	2,170,044

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 $13 million and $15 million for the three months ended March 31, 2025 and 2024, 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, 2025 and December 31, 2024 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.

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 no outstanding borrowings under the Unsecured Revolving Credit Facility as of March 31, 2025 or December 31, 2024.

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. The net proceeds of issuances of the commercial paper notes have been used to repay certain of our unsecured senior notes (as described below) and have been and are expected to continue to be used for general corporate purposes. We had $775 million outstanding under our commercial paper program as of March 31, 2025, presented in Short-term borrowings on the Condensed Consolidated Balance Sheet, and no outstanding borrowings as of December 31, 2024. The weighted average interest rate of our commercial paper outstanding as of March 31, 2025 was 4.63%.

In the Condensed Consolidated Statement of Cash Flows, we present commercial paper activity with original maturities of three-months or less on a net basis given their short-term nature.

Notes and Other Borrowings

In addition to funding other working capital requirements, we used commercial paper borrowings to repay the $500 million principal amount of our 1.75% Unsecured Senior Note due February 1, 2025.

Covenants

Certain borrowings require us to comply with a financial covenant with respect to a maximum debt to EBITDA ratio. At March 31, 2025, we were in compliance with all such covenants.

5. Employee Benefit Plans

Net periodic benefit income from our pension plans included the following components for the three months ended March 31:

						Pension Benefits
(in thousands)						2025						2024
Service cost						$	1,525					$	1,727
Interest cost						22,829						25,365
Expected return on plan assets						(29,083)						(44,404)
Amortization of prior service cost						285						281
Amortization of actuarial loss						4,622						3,567
Net periodic loss (income)						$	178					$	(13,464)

Service cost is recorded in selling, administrative and other expenses in the Condensed Consolidated Statements of Income while all other components are recorded within other non-operating expense (income). Pension benefits also include amounts related to supplemental retirement plans.

On April 29, 2024, our Board of Directors approved the termination of the frozen U.S. qualified defined benefit pension plan, effective September 30, 2024. To support this transition, during 2024 we adjusted our investment strategy to fully hedge plan obligations, including the purchase of annuity contracts using existing plan assets to fund ongoing obligations prior to termination. As a result of these changes, income from our expected return on plan assets is significantly reduced in 2025, with the investment strategy focused on minimizing funded status volatility during the termination process. The final settlement process, including transferring the management of benefits to an insurance company, is expected to be completed by late 2025 or early 2026, pending regulatory approvals.

6. Acquisitions

We acquired several businesses for approximately $152 million and $132 million, which includes certain non-cash consideration and is net of cash acquired, during the three months ended March 31, 2025 and March 31, 2024, 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 $94 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 $47 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. During the three months ended March 31, 2025, we recognized approximately $8 million and $13 million of revenue related to our current year Automotive and Industrial acquisitions, respectively.

7. 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, 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)

						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, 2024						$	(517,941)					$	(458,931)					$	(976,872)
Other comprehensive income (loss) before reclassifications						—						(79,920)						(79,920)
Amounts reclassified from accumulated other comprehensive loss						2,888						—						2,888
Other comprehensive income (loss), net of income taxes						2,888						(79,920)						(77,032)
Ending balance, March 31, 2024						$	(515,053)					$	(538,851)					$	(1,053,904)

The AOCL components related to the pension benefits are included in the computation of net periodic benefit income in the Employee Benefit Plans Footnote. 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.

8. 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 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 2,814 pending asbestos lawsuits as of March 31, 2025. The amount accrued for pending and future claims was $252 million as of March 31, 2025, which represented our best estimate of the liability within our calculated range of $218 million to $311 million, discounted using a discount rate of 4.23%. The amount accrued for pending and future claims was $256 million as of December 31, 2024, which represented our best estimate of the liability within our calculated range of $219 million to $313 million, discounted using a discount rate of 4.58%. Our undiscounted product liability was $329 million and $336 million as of March 31, 2025 and December 31, 2024, respectively. There have been no significant developments to the information presented in our 2024 Annual Report on Form 10-K with respect to litigation or commitments and contingencies.

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 $42 million and $44 million as of March 31, 2025 and December 31, 2024, 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.

9. 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. This initiative includes an announced voluntary retirement offer in the U.S., along with a rationalization and optimization of certain distribution centers, stores and other facilities. The initiative was approved and funded by our corporate office and therefore these costs are not allocated to our segments.

In the first quarter 2025, we incurred $55 million in restructuring and other costs compared to $83 million in the prior year period. We expect to incur total costs up to $180 million related to the global restructuring efforts in 2025 and to substantially complete the initiative by the end of 2025. In total, we expect to incur costs of between $370 million and $400 million related to our global restructuring initiative in 2024 and 2025. We may incur additional charges not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of these initiatives.

The tables below summarize the activity related to the restructuring costs discussed above.

(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

(1) Amount reflects professional fees, accelerated rent, facility closure costs, moving expenses and asset impairment costs that are attributable to our restructuring.

(in thousands)			Severance and other employee costs						Other restructuring costs (1)						Total
Liability as of January 1, 2024			$	—					$	—					$	—
Restructuring and other costs			61,624						21,418						83,042
Cash payments			(7,036)						(13,018)						(20,054)
Non-cash charges			1,339						(8,255)						(6,916)
Translation			(25)						—						(25)
Liability as of March 31, 2024			$	55,902					$	145					$	56,047

(1) Amount reflects professional fees, accelerated rent, facility closure costs, moving expenses and asset impairment costs that are attributable to our restructuring.