Genuine Parts 10-Q 2025-06-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

For the quarterly period ended June 30, 2025

OR

For the transition period from to

Commission file number: 1-5690

GENUINE PARTS COMPANY

(Exact name of registrant as specified in its charter)

678-934-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 139,092,294 shares of common stock outstanding as of July 17, 2025.

PART I – FINANCIAL INFORMATION

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

See accompanying Notes to Condensed Consolidated Financial Statements.

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

See accompanying Notes to Condensed Consolidated Financial Statements.

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

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The following discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and accompanying notes contained herein and with the audited Consolidated Financial Statements, accompanying notes, related information and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of results for the year ended December 31, 2025.

Forward-Looking Statements

Some statements in this report, as well as in other materials we file with the Securities and Exchange Commission (“SEC”), release to the public, or make available on our website, constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements in the future tense and all statements accompanied by words such as “expect,” “likely,” “outlook,” “forecast,” “preliminary,” “would,” “could,” “should,” “position,” “will,” “project,” “intend,” “plan,” “on track,” “anticipate,” “to come,” “may,” “possible,” “assume,” or similar expressions are intended to identify such forward-looking statements. These forward-looking statements include our view of business and economic trends for the remainder of the year and our expectations regarding our ability to capitalize on these business and economic trends and to execute our strategic priorities. Senior officers may also make verbal statements to analysts, investors, the media and others that are forward-looking.

We caution you that all forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the future are reasonable in view of currently available information, you are cautioned not to place undue reliance on our forward-looking statements. Actual results or events may differ materially from those indicated as a result of various important factors. Such factors may include, among other things, changes in general economic conditions, including unemployment, inflation (including the direct and indirect impact of tariffs and other similar measures, as well as the impact of retaliatory tariffs and other actions) or deflation, financial institution disruptions and geopolitical conflicts such as the conflict between Russia and Ukraine, the conflict in the Gaza strip and other continuing unrest in the Middle East; volatility in oil prices; significant cost increases, such as rising fuel and freight expenses; public health emergencies, including the effects on the financial health of our business partners and customers, on supply chains and our suppliers, on vehicle miles driven as well as other metrics that affect our business, and on access to capital and liquidity provided by the financial and capital markets; our ability to maintain compliance with our debt covenants; our ability to successfully integrate acquired businesses into our operations and to realize the anticipated synergies and benefits; our ability to successfully implement our business initiatives in our two business segments; slowing demand for our products; the ability to maintain favorable supplier arrangements and relationships; changes in national and international legislation or government regulations or policies, including changes to import tariffs, environmental and social policy, infrastructure programs and privacy legislation, and their direct and indirect impact to us, our suppliers and customers; changes in tax policies, including those included in the One Big Beautiful Bill Act; volatile exchange rates; our ability to successfully attract and retain employees in the current labor market; uncertain credit markets and other macroeconomic conditions; competitive product, service and pricing pressures; failure or weakness in our disclosure controls and procedures and internal controls over financial reporting; the uncertainties and costs of litigation; disruptions caused by a failure or breach of our information systems, as well as other risks and uncertainties discussed in our 2024 Annual Report on Form 10-K, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 and from time to time in our subsequent filings with the SEC.

Forward-looking statements speak only as of the date they are made, and we undertake no duty to update any forward-looking statements except as required by law. You are advised, however, to review any further disclosures we make on related subjects in our subsequent Forms 10-K, 10-Q, 8-K and other reports filed with the SEC.

Overview

Genuine Parts Company ("GPC") is a global service organization with a long history of growth and innovation dating back to our founding in Atlanta, Georgia, in 1928. Over nearly a century, we’ve built a reputation for delivering excellent customer service, profitable growth, leading distribution capabilities and strong cash flow.

As of June 30, 2025, we conducted business in North America, Europe and Australasia from more than 10,700 locations. Our Automotive business operated in the U.S., Canada, Mexico, France, the U.K., Ireland, Germany, Poland, the Netherlands, Belgium, Spain, Portugal, Australia and New Zealand and accounted for 63% of total revenues for the six months ended June 30, 2025. Our Industrial business operated in the U.S., Canada, Mexico, Australia, New Zealand, Indonesia and Singapore and accounted for 37% of total revenues during this period.

Key Performance Indicators

We consider a variety of performance and financial measures in assessing our business, and the key performance indicators used to measure our results are Comparable Sales, Gross Profit and Gross Margin, Selling, Administrative and Other Expenses ("SG&A"), Segment EBITDA and Segment EBITDA Margin, and Net Income and EBITDA along with their adjusted measures. For more information regarding our key performance indicators please reference the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Results of Operations

Our second quarter results reflect ongoing weakness in market conditions and persistent cost inflation. The operating environment across all of our geographies has several challenges, including recently enacted tariffs in the U.S., ongoing trade uncertainty, high interest rates and cautious customers. Despite these headwinds, execution of our strategic initiatives and cost actions has allowed us to partially mitigate the negative impact of these factors on our results for the quarter.

Net sales increased 3.4% year-over-year to $6.2 billion. Growth in Automotive sales was driven primarily by contributions from acquisitions and foreign exchange benefits. Industrial achieved modest sales growth despite the Purchasing Managers’ Index ("PMI"), a measure of U.S. manufacturing trends, signaling contraction and an overall weak industrial backdrop throughout the quarter.

Second quarter net income declined 13.8% compared to the same prior year period. This was primarily driven by higher depreciation and interest expense from planned investments and lower pension income due to a change in our investing strategy related to our planned U.S. pension plan termination. Additionally, we experienced higher SG&A expenses resulting from planned salary and merit increases and increased rent from lease renewals in a higher interest rate environment. Lastly, restructuring and other costs totaled $46 million in the second quarter, up slightly from $37 million in the prior year period, primarily driven by costs associated with facility closures and additional severance costs. These factors were partially offset by successful execution of our ongoing strategic pricing and sourcing initiatives and acquisitions completed in the prior year, which contributed to the 110 basis point improvement in gross margin. Additionally, disciplined cost management and the continued rollout of our global restructuring program yielded $33 million in operational savings, underscoring our commitment to enhancing business efficiency and adaptability amid a challenging economic environment.

During the first half of 2025, new global trade tariffs were announced on imports into the U.S., including additional tariffs on merchandise inventories sourced directly or indirectly from several countries, such as Canada, China, and Mexico. Since then, various modifications and delays to these tariffs have been implemented, with further changes anticipated, potentially including additional sector-specific tariffs or other measures. Our results were not materially impacted by this tariff activity during the first half of 2025. However, because the long-term effects remain uncertain, we continue to closely monitor the evolving tariff policy environment and the impact it may have on our operations. See Part II, Item 1A. Risk Factors in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 for further discussion regarding tariff-related risks.

Our second quarter results of operations are summarized below for the three and six months ended June 30, 2025 and 2024.

Net Sales

For the three months ended June 30, 2025, net sales increased 3.4% compared to 2024. The increase was driven by a 2.6% benefit from acquisitions and a net favorable impact of foreign currency and other of 0.6%. Comparable sales were essentially flat when compared to 2024.

For the six months ended June 30, 2025, net sales increased 2.4% compared to 2024. We experienced a 2.8% benefit from acquisitions, slightly offset by a net unfavorable impact of foreign currency and other of 0.1%. Comparable sales were essentially flat when compared to 2024.

Our net sales for the three and six months ended June 30, 2025 were impacted by the challenging macroeconomic environment. Net sales for the six months ended June 30, 2025 were also impacted by one less selling day in the U.S. compared to the prior period.

Automotive

Net sales for the three months ended June 30, 2025 for Automotive were $3.9 billion, an increase of 5.0% from 2024. The increase is attributable to a 3.4% benefit from acquisitions and a 1.2% net favorable impact of foreign currency and other.

Net sales for the six months ended June 30, 2025 for Automotive were $7.6 billion, an increase of 3.8% from 2024. The increase is attributable to a 3.7% benefit from acquisitions and a 0.3% net favorable impact of foreign currency and other.

Our sales growth was driven by the strong contribution from our stores that were acquired over the last twelve months, which enhanced our ability to reach and serve our customers, and, to a lesser extent, the favorable impact resulting from the strength of the Euro relative to the U.S. Dollar. Comparable sales were essentially flat for the three and six months ended June 30, 2025, nonetheless they demonstrated sequential improvement for the three months ended June 30, 2025 relative to the preceding quarter.

Industrial

Net sales for the three months ended June 30, 2025 for Industrial were $2.3 billion, an increase of 0.7% compared to 2024. The increase in sales reflects a 1.3% benefit from acquisitions, partially offset by a 0.5% unfavorable impact of foreign currency. Comparable sales were essentially flat when compared to 2024.

Net sales for the six months ended June 30, 2025 for Industrial were $4.5 billion, an increase of 0.2% compared to 2024. The increase in sales reflects a 1.3% benefit from acquisitions. This was partially offset by a 0.7% unfavorable impact of foreign currency. Comparable sales were essentially flat when compared to 2024.

This modest sales growth was achieved despite the Purchasing Managers’ Index ("PMI") signaling contraction and an overall weak industrial backdrop throughout the quarter.

Gross Profit and Gross Margin

Gross profit increased $144 million, or 6.6%, during the three months ended June 30, 2025 and gross margin increased 110 basis points to 37.7% compared to the prior year period. Gross profit increased $243 million, or 5.7%, during the six months ended June 30, 2025 and gross margin increased 120 basis points to 37.4% compared to the prior year period. These increases primarily reflect the benefit of successful execution of our ongoing strategic pricing and sourcing initiatives and acquisitions completed in the prior year.

Selling, Administrative and Other Expenses

SG&A expenses increased $124 million, or 7.5%, during the three months ended June 30, 2025 compared to the prior year period. The 7.5% increase comprised 4.3% from acquisitions and 3.2% from other cost increases.

SG&A expenses increased $258 million, or 8.0%, during the six months ended June 30, 2025 compared to the prior year period. The 8.0% increase comprised 4.8% from acquisitions and 3.2% from other cost increases.

We incurred higher SG&A expenses due to our recent acquisitions, driven largely by additional personnel and rent costs from acquiring more of our U.S. automotive stores from our independent owners. We expect the SG&A impact from acquiring these stores to diminish over time as we realize the impact of anticipated synergies. The remaining increase in SG&A is primarily due to planned salary and merit adjustments and increased rent from lease renewals in a higher interest rate environment. We are managing the impact of higher SG&A through our global restructuring initiatives, which we estimate had a $59 million benefit to SG&A for the six months ended June 30, 2025.

SG&A expenses as a percentage of sales increased to 28.7% of sales in the three months ended June 30, 2025 compared to 27.6% last year, but improved sequentially from 29.1% of sales during the first quarter of 2025. SG&A expenses as a percentage of sales increased to 28.9% of sales in the six months ended June 30, 2025 compared to 27.4% last year. The increases in percentage for both periods in 2025 was primarily driven by increased SG&A expenses from acquisitions and other items, as discussed above, and cost deleveraging from comparable sales that were essentially flat.

Restructuring and Other Costs

We incurred $46 million and $100 million of restructuring and other costs during the three months and six months ended June 30, 2025, respectively, as part of our global restructuring plan which was approved and initiated in February 2024 and remains on track to deliver an improved overall cost structure. Restructuring and other costs increased by $8 million compared to the prior period, reflecting costs associated with facility closures and additional

severance costs. For additional details, refer to the Restructuring Footnote in the Notes to Condensed Consolidated Financial Statements.

Depreciation and Amortization

Depreciation and amortization expenses increased $24 million and $49 million for the three and six months ended June 30, 2025, respectively, related to planned investments in technology and supply chain initiatives.

Non-Operating Expenses and Income

This category primarily includes net interest expense, pension and investment income, foreign currency gains and losses, and fees associated with our Accounts Receivable Sales Agreement ("A/R Sales Agreement").

We incurred $38 million in net non-operating expenses for the three months ended June 30, 2025, a $26 million change from $12 million in net non-operating expense in the prior year period. The $26 million expense increase primarily includes the effects of an $18 million increase in net interest expense in 2025, due to increased borrowings, as well as a $14 million decrease in pension income as a result of changes in expected returns due to the planned termination of our U.S. pension plan.

For the six months ended June 30, 2025, we incurred $75 million in net non-operating expenses, a $68 million change from the prior year period. The $68 million expense increase primarily includes the effects of a $38 million increase in net interest expense in 2025, due to increased borrowings, and a $27 million decrease in pension income as a result of changes in expected returns due to the planned termination of our U.S. pension plan.

Income Taxes

Our effective income tax rates were 24.7% and 23.5% for three months ended June 30, 2025 and 2024, respectively. Our effective income tax rates were 23.9% and 23.5% for six months ended June 30, 2025 and 2024, respectively. The rate increase for both the three and six month periods are primarily due to a reduction of excess tax stock compensation benefits and comparative restructuring costs.

Net Income and Adjusted Net Income

Net income was $255 million, for the three months ended June 30, 2025, a decrease of 13.8% compared to net income of $296 million for the prior year period. On a per share diluted basis, net income was $1.83, a decrease of 13.3% compared to $2.11 in the prior year period. For the six months ended June 30, 2025 net income was $449 million, a decrease of 17.5% compared to net income of $544 million for the prior year period. On a per share diluted basis, net income was $3.23, a decrease of 17.0% compared to $3.89 in the prior year period.

Adjusted net income was $292 million for the three months ended June 30, 2025, a decrease of 14.6% compared to the prior year period. On a per share basis, the three months ended June 30, 2025 adjusted net income was $2.10, a decrease of 13.9% compared to $2.44 in the prior year period. Adjusted net income was $535 million for the six months ended June 30, 2025, a decrease of 18.0% compared to the prior year period. On a per share basis, the six months ended June 30, 2025 adjusted net income was $3.84, a decrease of 17.6% compared to $4.66 in the prior year period.

In line with our expectations, these decreases are primarily due to continued soft market conditions, planned investments in the business generating higher depreciation and interest costs, lower pension income due to a change in our investing strategy related to our planned U.S. pension plan termination, and increased personnel and rent expenses. The decrease for the six month period was also impacted by lost profit from one less selling day in the U.S. compared to the prior year period. These factors were partially offset by a 110 basis point gross margin improvement driven by the continued execution of ongoing strategic pricing and sourcing initiatives and acquisitions completed in the prior year.

Segment EBITDA

Automotive

Automotive net sales increased 5.0% in the three months ended June 30, 2025, mainly driven by acquisitions and the favorable foreign currency effects primarily with our European operations. While gross margin improved due to store acquisitions and strategic pricing and sourcing initiatives, profitability declined due to inflation driven increases in the costs of salaries and wages, rent, and freight, along with loss of fixed cost leverage from essentially flat comparable sales. As a result, Automotive EBITDA declined 6.9%, and EBITDA margin decreased to 8.6%, down from 9.7% in the prior year period.

Automotive EBITDA decreased $59 million, or 8.7%, in the six months ended June 30, 2025 compared to the prior year period, and Automotive EBITDA margin decreased to 8.2% compared to 9.3% in the prior year period.

The increase in operating expenses and declines in Automotive EBITDA and EBITDA margin were driven by the factors detailed above.

Industrial

Despite a challenging macroeconomic environment and contracting PMI, our Industrial results reflect steady execution of our long-term strategic initiatives. Industrial net sales increased 0.7% in the three months ended June 30, 2025, primarily driven by a 1.3% benefit from acquisitions, partially offset by an unfavorable 0.5% impact of foreign currency translation. Industrial EBITDA increased 1.1%, with EBITDA margin improving slightly to 12.8% compared to 12.7% in the prior year period. For the six months ended June 30, 2025, Industrial sales grew 0.2%, primarily driven by a 1.3% benefit from acquisitions, partially offset by an unfavorable 0.7% impact of foreign currency translation. EBITDA increased $3 million, or 0.5%, with EBITDA margin holding steady at 12.7%.

Gross profit and operating expenses in our Industrial segment remained largely unchanged over both periods compared to the prior year.

Corporate EBITDA and Other Segment Reconciling items

Corporate EBITDA amounted to a loss of $79 million, or 1.3% of net sales, for the three months ended June 30, 2025, compared to a loss of $78 million, or 1.3% of net sales, for the three months ended June 30, 2024. Corporate EBITDA amounted to a loss of $170 million, or 1.4% of net sales, for the six months ended June 30, 2025, compared to a loss of $161 million, or 1.4% of net sales, in the prior year period.

We continue to consolidate certain back-office functions at Corporate to streamline operations and drive improvements. Our operational objective is to maintain Corporate EBITDA within a range of 1.5% to 2.0% of net sales.

Corporate EBITDA loss increased primarily due to increased personnel costs and ongoing investments in technology.

Other unallocated costs represent restructuring and other costs and acquisition and integration related costs and other.

EBITDA

EBITDA was $502 million for the three months ended June 30, 2025, a decrease of 1.1% from $507 million during the prior year period. Adjusted EBITDA was $547 million for the three months ended June 30, 2025, a decrease of 3.8% from $569 million during the prior year period.

EBITDA was $906 million for the six months ended June 30, 2025, a decrease of 3.7% from $941 million during the prior year period. Adjusted EBITDA was $1.0 billion for the six months ended June 30, 2025, a decrease of 6.0% from $1.1 billion during the prior year period.

In line with our expectations, the decreases in EBITDA and adjusted EBITDA are primarily due to continued soft market conditions, lower pension income due to a change in our investing strategy related to our planned U.S. pension plan termination, and increased personnel and rent expenses. These factors were partially offset by a 110 and 120 basis point gross margin improvement for the three and six months ended June 30, 2025, respectively, driven by the continued execution of our strategic pricing and sourcing initiatives as well as contributions from prior-year acquisitions. Additionally, sales were impacted by one less sales day in the six months ended June 30, 2025.

Adjusted net income, adjusted diluted EPS, EBITDA and adjusted EBITDA are non-GAAP measures (see table below for reconciliations to the most directly comparable GAAP measures).

Non-GAAP Financial Measures

The following tables set forth reconciliations of net income and diluted EPS to adjusted net income and adjusted diluted EPS, respectively, to account for the impact of adjustments. We also include a reconciliation from net income to adjusted EBITDA. We believe that the presentation of adjusted net income, adjusted diluted EPS, and adjusted EBITDA, which are not calculated in accordance with GAAP, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provide meaningful supplemental information to both management and investors that is indicative of our core operations. We consider these metrics useful to investors because they provide greater transparency into management’s view and assessment of our ongoing operating performance by removing items management believes are not representative of our operations and may distort our longer-term operating trends. For example, certain of the non-GAAP metrics contained herein exclude costs relating to our global restructuring initiative and acquisition of acquired independent automotive stores, which are one-time events that do not recur in the ordinary course of business. We believe the

non-GAAP metrics included herein also enhance the comparability of our results from period to period and with our competitors, as well as to show ongoing results from operations distinct from items that are infrequent or not associated with our core operations. We do not, nor do we suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information.

The table below represents amounts per common share assuming dilution:

(1) Amount reflects costs related to the global restructuring initiative which includes a voluntary retirement offer in the U.S. in 2024, and rationalization and optimization of certain distribution centers, stores and other facilities.

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

(3) We determine the tax effect of non-GAAP adjustments by considering the tax laws and statutory income tax rates applicable in the tax jurisdictions of the underlying non-GAAP adjustments, including any related valuation allowances. For the three and six months ended June 30, 2025, we applied the statutory income tax rates to the taxable portion of all of our adjustments, which resulted in a favorable tax impact of $9 million and $29 million, respectively.

The table below represents a reconciliation from GAAP net income to adjusted EBITDA:

(1) Amounts are the same as adjustments included within the adjusted net income table above.

The table below clarifies where the adjusted items are presented in the Condensed Consolidated Statements of Income:

Financial Condition

Our cash and cash equivalents balance was $458 million as of June 30, 2025, a decrease of $22 million from December 31, 2024. For the six months ended June 30, 2025, we had net cash provided by operating activities of $169 million, net cash used in investing activities of $318 million and net cash provided by financing activities of $103 million.

Cash from operations decreased mainly due to lower net income and working capital changes primarily driven by accelerated tax payments as compared to prior year. Additionally, the decrease was also impacted by the prior year timing and volume of purchases and related payments in connection with our strategic inventory investments that did not repeat in the current year. We had $318 million in net cash used for investing activities primarily consisting of capital expenditures and acquisitions of $361 million. We had $103 million in net cash provided by financing activities which comprised of $917 million in net proceeds from our commercial paper program, partially offset by $500 million used to repay the principal amount of our 1.75% Unsecured Senior Notes and $277 million for dividends paid to shareholders.

Accounts receivable increased $418 million, or 19.1%, from December 31, 2024. Inventory increased $260 million, or 4.7%. Accounts receivable and inventory were both impacted by an increase in revenues and related product demand in the six months ended June 30, 2025. Accounts payable increased $73 million, or 1.2%, from December 31, 2024, in line with the increase in inventory. Working capital at any point in time is subject to many variables, including seasonality, inventory management and category expansion, the timing of cash receipts and payments, vendor payment terms, and fluctuations in foreign exchange rates. Total debt of $4.8 billion at June 30, 2025 increased $522 million, or 12.2%, from December 31, 2024.

Liquidity and Capital Resources

As of June 30, 2025, we had $458 million of cash and cash equivalents, as well as $2 billion in undrawn capacity on our Revolving Credit Agreement, before giving effect to commercial paper borrowings. From time to time, we may enter into other credit facilities or financing arrangements to provide additional liquidity and to manage against foreign currency risk. We currently believe that the existing lines of credit, commercial paper program, and cash generated from operations will be sufficient to fund anticipated operations for the foreseeable future.

As announced in 2024, our Board of Directors approved the termination of the frozen U.S. qualified defined benefit pension plan, effective September 30, 2024. Plan settlement is expected between late 2025 and early 2026.

In connection with the anticipated settlement, we adjusted our investment strategy for our pension assets which resulted in lower pension income.

On February 18, 2025, we announced a 3% increase in the regular quarterly cash dividend for 2025. Our Board of Directors increased the cash dividend payable to an annual rate of $4.12 per share compared with the prior year dividend of $4.00 per share. We have paid a cash dividend every year since going public in 1948, and 2025 will mark the 69th consecutive year of increased dividends paid to shareholders.

In March 2025, we amended our 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 also amended our commercial paper program to expand the borrowing capacity from $1.5 billion to $2.0 billion.

As of June 30, 2025, we had no outstanding borrowings under the Unsecured Revolving Credit Facility. Outstanding borrowings under our commercial paper program totaled $922 million, of which $500 million was used to repay the principal amount of our 1.75% Unsecured Senior Notes that matured on February 1, 2025. The net proceeds of the remaining borrowings are expected to be used for general corporate purposes.

We have a strong cash position and solid financial strength to pursue strategic growth opportunities through disciplined, strategic capital deployment. Our key priorities include the reinvestment in our businesses through capital expenditures, mergers and acquisitions, the dividend and share repurchases. We have plans for additional investments in our businesses to drive growth, improve efficiencies and productivity, and drive shareholder value.

We expect to be able to continue to borrow funds at reasonable rates over the long term. At June 30, 2025, our total average cost of debt was 3.98%, and we remain in compliance with all covenants connected with our borrowings.

Any failure to comply with our debt covenants or restrictions could result in a default under our financing arrangements or could require us to obtain waivers from our lenders for failure to comply with these restrictions. The occurrence of a default that remains uncured or the inability to secure a necessary consent or waiver could create cross defaults under other debt arrangements and have a material adverse effect on our business, financial condition, results of operations and cash flows.

For quantitative and qualitative disclosures about market risk, refer to “Quantitative and Qualitative Disclosures About Market Risk” in Item 7A of Part II of our 2024 Annual Report on Form 10-K. Our exposure to market risk has not changed materially since December 31, 2024.

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance that information required to be disclosed by us in the reports that we file or furnish under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 of the SEC that occurred during our last quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Information with respect to our legal proceedings may be found in the Commitments and Contingencies Footnote in the Notes to Condensed Consolidated Financial Statements in Item 1 of Part I, which is incorporated herein by reference.

In addition to the other information set forth in this report, you should carefully consider the risk factors previously reported in Part I, ITEM 1A, "Risk Factors", in our 2024 Annual Report on Form 10-K and Part II, ITEM 1A, "Risk Factors", in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about the purchases of shares of our common stock during the three months ended June 30, 2025:

ISSUER PURCHASES OF EQUITY SECURITIES

(1)Consists of shares surrendered by employees to satisfy tax withholding obligations in connection with the vesting of shares of restricted stock, the exercise of share appreciation rights and/or tax withholding obligations.

(2)On August 21, 2017, the Board of Directors announced that it had authorized the repurchase of 15 million shares. The authorization for the repurchase continues until all such shares have been repurchased or the repurchase plan is terminated by action of the Board of Directors. Approximately 7.5 million shares authorized remain available to be repurchased. There were no other repurchase plans announced as of June 30, 2025.

Rule 10b5-1 Trading Plans

During the fiscal quarter ended June 30, 2025, none of the Company’s directors or executive officers adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

(a) The following exhibits are filed or furnished as part of this report:

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.