QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
Table of Contents | ||||||||
Page | ||||||||
(in thousands, except share and per share data) | June 30, 2020 | December 31, 2019 | ||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Trade accounts receivable, less allowance for doubtful accounts (2020 – $ | ||||||||||||||
Merchandise inventories, net | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Current assets of discontinued operations | ||||||||||||||
Total current assets | ||||||||||||||
Goodwill | ||||||||||||||
Other intangible assets, less accumulated amortization | ||||||||||||||
Deferred tax assets | ||||||||||||||
Property, plant and equipment, less accumulated depreciation (2020 – $ | ||||||||||||||
Operating lease assets | ||||||||||||||
Other assets | ||||||||||||||
Noncurrent assets of discontinued operations | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and equity | ||||||||||||||
Current liabilities: | ||||||||||||||
Trade accounts payable | $ | $ | ||||||||||||
Current portion of debt | ||||||||||||||
Dividends payable | ||||||||||||||
Other current liabilities | ||||||||||||||
Current liabilities of discontinued operations | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Pension and other post–retirement benefit liabilities | ||||||||||||||
Deferred tax liabilities | ||||||||||||||
Other long-term liabilities | ||||||||||||||
Noncurrent liabilities of discontinued operations | ||||||||||||||
Equity: | ||||||||||||||
Preferred stock, par value – $ | ||||||||||||||
Common stock, par value – $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Total parent equity | ||||||||||||||
Noncontrolling interests in subsidiaries | ||||||||||||||
Total equity | ||||||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
(in thousands, except per share data) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
Cost of goods sold | ||||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Selling, administrative and other expenses | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
Provision for doubtful accounts | ||||||||||||||||||||||||||
Restructuring costs | ||||||||||||||||||||||||||
Goodwill impairment charge | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
Non-operating (income) expenses: | ||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Other | ( | ( | ( | ( | ||||||||||||||||||||||
Total non-operating (income) expenses | ||||||||||||||||||||||||||
(Loss) income before income taxes | ( | ( | ||||||||||||||||||||||||
Income taxes | ||||||||||||||||||||||||||
Net (loss) income from continuing operations | ( | ( | ||||||||||||||||||||||||
Net (loss) income from discontinued operations | ( | ( | ||||||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Dividends declared per common share | $ | $ | $ | $ | ||||||||||||||||||||||
Basic (loss) earnings per share from continuing operations | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Diluted (loss) earnings per share from continuing operations | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||
Dilutive effect of stock options and non-vested restricted stock awards | ||||||||||||||||||||||||||
Weighted average common shares outstanding – assuming dilution |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
(in thousands, except per share data) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Other comprehensive income (loss), net of income taxes: | ||||||||||||||||||||||||||
Foreign currency translation adjustments, net of income taxes in 2020 — $ | ( | |||||||||||||||||||||||||
Cash flow hedge adjustments, net of income taxes in 2020 — $ | ( | ( | ( | |||||||||||||||||||||||
Pension and postretirement benefit adjustments, net of income taxes in 2020 — $ | ||||||||||||||||||||||||||
Other comprehensive income (loss), net of income taxes | ( | ( | ||||||||||||||||||||||||
Comprehensive (loss) income | $ | ( | $ | $ | ( | $ |
Three Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||
(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 | ||||||||||||||||||||||||||||||||||||||||||
April 1, 2020 | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Cash dividend declared, $ | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Share-based awards exercised, including tax benefit of $ | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interest activities | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
June 30, 2020 | $ | $ | $ | ( | $ | $ | $ | $ |
Six Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||
(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, 2020 | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Cash dividend declared, $ | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Share-based awards exercised, including tax benefit of $ | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Purchase of stock | ( | ( | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Cumulative effect from adoption of (1) | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interest activities | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
June 30, 2020 | $ | $ | $ | ( | $ | $ | $ | $ |
Three Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||
(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 | ||||||||||||||||||||||||||||||||||||||||||
April 1, 2019 | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Cash dividend declared, $ | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Share-based awards exercised, including tax benefit of $ | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interest activities | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
June 30, 2019 | $ | $ | $ | ( | $ | $ | $ | $ |
Six Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||
(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, 2019 | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Cash dividend declared, $ | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Share-based awards exercised, including tax benefit of $ | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Cumulative effect from adoption of ASU 2018-02 (2) | — | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Cumulative effect from adoption of ASU 2016-02, net of tax (2) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interest activities | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
June 30, 2019 | $ | $ | $ | ( | $ | $ | $ | $ |
Six Months Ended June 30, | ||||||||||||||
(in thousands) | 2020 | 2019 | ||||||||||||
Operating activities: | ||||||||||||||
Net (loss) income | $ | ( | $ | |||||||||||
Net (loss) income from discontinued operations | ( | |||||||||||||
Net (loss) income from continuing operations | ( | |||||||||||||
Adjustments to reconcile net (loss) income from continuing operations to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Share-based compensation | ||||||||||||||
Excess tax benefits from share-based compensation | ( | |||||||||||||
Realized currency losses | ||||||||||||||
Goodwill impairment charge | ||||||||||||||
Changes in operating assets and liabilities | ( | |||||||||||||
Net cash provided by operating activities from continuing operations | ||||||||||||||
Investing activities: | ||||||||||||||
Purchases of property, plant and equipment | ( | ( | ||||||||||||
Proceeds from sale of property, plant and equipment | ||||||||||||||
Proceeds from divestitures of businesses | ||||||||||||||
Acquisitions of businesses and other investing activities | ( | ( | ||||||||||||
Net cash provided by (used in) investing activities from continuing operations | ( | |||||||||||||
Financing activities: | ||||||||||||||
Proceeds from debt | ||||||||||||||
Payments on debt | ( | ( | ||||||||||||
Share-based awards exercised | ( | ( | ||||||||||||
Dividends paid | ( | ( | ||||||||||||
Purchases of stock | ( | |||||||||||||
Other financing activities | ( | |||||||||||||
Net cash (used in) provided by financing activities from continuing operations | ( | |||||||||||||
Cash flows from discontinued operations: | ||||||||||||||
Net cash provided by operating activities from discontinued operations | ||||||||||||||
Net cash used in investing activities from discontinued operations | ( | ( | ||||||||||||
Net cash provided by financing activities from discontinued operations | ||||||||||||||
Net cash provided by discontinued operations | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | |||||||||||||
Net increase in cash and cash equivalents | ||||||||||||||
Cash and cash equivalents at beginning of period | ||||||||||||||
Cash and cash equivalents at end of period | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Net sales: | ||||||||||||||||||||||||||
Automotive | $ | $ | $ | $ | ||||||||||||||||||||||
Industrial | ||||||||||||||||||||||||||
Total net sales | $ | $ | $ | $ | ||||||||||||||||||||||
Segment profit: | ||||||||||||||||||||||||||
Automotive | $ | $ | $ | $ | ||||||||||||||||||||||
Industrial | ||||||||||||||||||||||||||
Total segment profit | $ | $ | $ | $ | ||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | ||||||||||||||||||||||
Intangible asset amortization | ( | ( | ( | ( | ||||||||||||||||||||||
Corporate expense | ( | ( | ( | ( | ||||||||||||||||||||||
Other unallocated costs (1) | ( | ( | ( | ( | ||||||||||||||||||||||
(Loss) income before income taxes from continuing operations | $ | ( | $ | $ | ( | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Other unallocated costs: | ||||||||||||||||||||||||||
Goodwill impairment charge (2) | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Restructuring costs (3) | ( | ( | ||||||||||||||||||||||||
Realized currency loss (4) | ( | ( | ( | |||||||||||||||||||||||
Gain on insurance proceeds related to SPR Fire (5) | ||||||||||||||||||||||||||
Transaction and other costs (6) | ( | ( | ( | ( | ||||||||||||||||||||||
Total other unallocated costs | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
North America: | ||||||||||||||||||||||||||
Automotive | $ | $ | $ | $ | ||||||||||||||||||||||
Industrial | ||||||||||||||||||||||||||
Total North America | $ | $ | $ | $ | ||||||||||||||||||||||
Australasia: | ||||||||||||||||||||||||||
Automotive | $ | $ | $ | $ | ||||||||||||||||||||||
Industrial | ||||||||||||||||||||||||||
Total Australasia | $ | $ | $ | $ | ||||||||||||||||||||||
Europe – Automotive | $ | $ | $ | $ | ||||||||||||||||||||||
Total net sales | $ | $ | $ | $ |
Changes in Accumulated Other Comprehensive Loss by Component | |||||||||||||||||||||||
Pension and Other Post-Retirement Benefits | Cash Flow Hedges | Foreign Currency Translation | Total | ||||||||||||||||||||
Beginning balance, January 1, 2020 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive loss before reclassifications | ( | ( | ( | ||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | |||||||||||||||||||||||
Other comprehensive income (loss), net of income taxes | ( | ( | ( | ||||||||||||||||||||
Ending balance, June 30, 2020 | $ | ( | $ | ( | $ | ( | $ | ( |
Changes in Accumulated Other Comprehensive Loss by Component | |||||||||||||||||||||||
Pension and Other Post-Retirement Benefits | Cash Flow Hedges | Foreign Currency Translation | Total | ||||||||||||||||||||
Beginning balance, January 1, 2019 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss (1) | ( | ||||||||||||||||||||||
Other comprehensive income (loss), net of income taxes | ( | ||||||||||||||||||||||
Cumulative effect from adoption of ASU 2018-02 | ( | ( | |||||||||||||||||||||
Ending balance, June 30, 2019 | $ | ( | $ | ( | $ | ( | $ | ( |
Pension Benefits | ||||||||||||||
2020 | 2019 | |||||||||||||
Service cost | $ | $ | ||||||||||||
Interest cost | ||||||||||||||
Expected return on plan assets | ( | ( | ||||||||||||
Amortization of prior service credit | ( | |||||||||||||
Amortization of actuarial loss | ||||||||||||||
Net periodic benefit income | $ | ( | $ | ( |
Pension Benefits | ||||||||||||||
2020 | 2019 | |||||||||||||
Service cost | $ | $ | ||||||||||||
Interest cost | ||||||||||||||
Expected return on plan assets | ( | ( | ||||||||||||
Amortization of prior service credit | ( | |||||||||||||
Amortization of actuarial loss | ||||||||||||||
Net periodic benefit income | $ | ( | $ | ( |
June 30, 2020 | ||||||||
Receivables sold to the financial institution and derecognized | $ | |||||||
Cash collected on sold receivables | $ | |||||||
Receivables pledged as collateral on sold receivables as of period-end | $ |
June 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||
Instrument | Balance Sheet Location | Notional | Balance | Notional | Balance | |||||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||||||||
Interest rate swaps | Other current liabilities | $ | $ | $ | $ | |||||||||||||||||||||||||||
Net investment hedges: | ||||||||||||||||||||||||||||||||
Forward contracts | Prepaid expenses and other current assets | $ | $ | $ | $ | |||||||||||||||||||||||||||
Foreign currency debt | Long-term debt | € | $ | € | $ |
Gain (Loss) Recognized in AOCL Before Reclassifications | Gain Recognized in Interest Expense For Excluded Components | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Three Months Ended June 30, | ||||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||
Interest rate contracts | $ | ( | $ | ( | $ | — | $ | — | ||||||||||||||||||
Net investment hedges: | ||||||||||||||||||||||||||
Forward contracts | ( | ( | ||||||||||||||||||||||||
Foreign currency debt | ( | ( | — | — | ||||||||||||||||||||||
Total | $ | ( | $ | ( | $ | $ |
Gain (Loss) Recognized in AOCL Before Reclassifications | Gain Recognized in Interest Expense For Excluded Components | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Six Months Ended June 30, | ||||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||
Interest rate contracts | $ | ( | $ | ( | $ | — | $ | — | ||||||||||||||||||
Net investment hedges: | ||||||||||||||||||||||||||
Cross-currency swap | ||||||||||||||||||||||||||
Forward contracts | ||||||||||||||||||||||||||
Foreign currency debt | ( | — | — | |||||||||||||||||||||||
Total | $ | ( | $ | ( | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
Cost of goods sold | ||||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||
Loss (gain) on disposal | ||||||||||||||||||||||||||
Income before income taxes | ( | ( | ||||||||||||||||||||||||
Income taxes (1) | ( | |||||||||||||||||||||||||
Net (loss) income from discontinued operations | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Basic (loss) earnings per share from discontinued operations | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Diluted (loss) earnings per share from discontinued operations | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||
Weighted average common shares outstanding – assuming dilution |
December 31, 2019 | ||||||||
Assets | ||||||||
Trade accounts receivable, net | $ | |||||||
Merchandise inventories, net | ||||||||
Prepaid expenses and other current assets | ||||||||
Other intangible assets, less accumulated amortization | ||||||||
Operating lease assets | ||||||||
Other assets | ||||||||
Total assets of discontinued operations | $ | |||||||
Liabilities | ||||||||
Trade accounts payable | $ | |||||||
Other current liabilities | ||||||||
Operating lease liabilities | ||||||||
Total liabilities of discontinued operations | $ |
Goodwill | ||||||||||||||||||||||||||
Automotive | Industrial | Total | Other Intangible Assets, Net | |||||||||||||||||||||||
Balance as of December 31, 2019 | $ | $ | $ | $ | ||||||||||||||||||||||
Additions (1) | ( | |||||||||||||||||||||||||
Amortization | — | — | — | ( | ||||||||||||||||||||||
Impairments | ( | ( | ||||||||||||||||||||||||
Foreign currency translation | ( | ( | ( | ( | ||||||||||||||||||||||
Balance as of June 30, 2020 | $ | $ | $ | $ |
Total | ||||||||
Restructuring costs | $ | |||||||
Remaining costs expected but not yet incurred | ||||||||
Total costs | $ |
Severance and other employee costs | Facility and closure costs | Accelerated operating lease costs | Asset impairments | Total | ||||||||||||||||||||||||||||
Liability as of January 1, 2020 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Restructuring costs | ||||||||||||||||||||||||||||||||
Cash payments | ( | ( | ( | |||||||||||||||||||||||||||||
Non-cash charges | ( | ( | ( | |||||||||||||||||||||||||||||
Translation | ( | ( | ( | |||||||||||||||||||||||||||||
Liability as of June 30, 2020 | $ | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
(in thousands) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
GAAP net (loss) income from continuing operations | $ | (363,501) | $ | 209,519 | $ | (241,155) | $ | 355,203 | ||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Goodwill impairment charge (1) | 506,721 | — | 506,721 | — | ||||||||||||||||||||||
Restructuring costs (2) | 25,059 | — | 28,041 | — | ||||||||||||||||||||||
Realized currency loss (3) | 11,356 | — | 11,356 | 27,037 | ||||||||||||||||||||||
Gain on insurance proceeds related to SPR Fire (4) | (1,166) | — | (13,448) | — | ||||||||||||||||||||||
Transaction and other costs (5) | 13,555 | 4,108 | 21,104 | 10,185 | ||||||||||||||||||||||
Total adjustments | 555,525 | 4,108 | 553,774 | 37,222 | ||||||||||||||||||||||
Tax impact of adjustments | (1,500) | 1,769 | (5,310) | (5,140) | ||||||||||||||||||||||
Adjusted net income from continuing operations | $ | 190,524 | $ | 215,396 | $ | 307,309 | $ | 387,285 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
(in thousands, except per share data) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
GAAP net (loss) income from continuing operations | (2.52) | 1.43 | (1.67) | 2.42 | ||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Goodwill impairment charge (1) | 3.51 | — | 3.50 | — | ||||||||||||||||||||||
Restructuring costs (2) | 0.17 | — | 0.19 | — | ||||||||||||||||||||||
Realized currency loss (3) | 0.08 | — | 0.08 | 0.18 | ||||||||||||||||||||||
Gain on insurance proceeds related to SPR Fire (4) | (0.01) | — | (0.09) | — | ||||||||||||||||||||||
Transaction and other costs (5) | 0.10 | 0.03 | 0.15 | 0.07 | ||||||||||||||||||||||
Total adjustments | 3.85 | 0.03 | 3.83 | 0.25 | ||||||||||||||||||||||
Tax impact of adjustments | (0.01) | 0.01 | (0.04) | (0.04) | ||||||||||||||||||||||
Adjusted diluted net income from continuing operations per common share | $ | 1.32 | $ | 1.47 | $ | 2.12 | $ | 2.63 | ||||||||||||||||||
Weighted average common shares outstanding – assuming dilution | 144,262 | 146,736 | 144,657 | 146,713 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
(in thousands) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Line item: | ||||||||||||||||||||||||||
Cost of goods sold | $ | 12,891 | $ | 2,960 | $ | 12,891 | $ | 2,960 | ||||||||||||||||||
Selling, administrative and other expenses | 663 | 1,148 | 8,213 | 7,225 | ||||||||||||||||||||||
Goodwill impairment charge | 506,721 | — | 506,721 | — | ||||||||||||||||||||||
Restructuring costs | 25,059 | — | 28,041 | — | ||||||||||||||||||||||
Non-operating (income): Other | 10,191 | — | (2,092) | 27,037 | ||||||||||||||||||||||
Total adjustments | $ | 555,525 | $ | 4,108 | $ | 553,774 | $ | 37,222 |
Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
April 1, 2020 through April 30, 2020 | 8,533 | $70.56 | — | 14,484,676 | ||||||||||||||||||||||
May 1, 2020 through May 31, 2020 | 1,704 | $73.72 | — | 14,484,676 | ||||||||||||||||||||||
June 1, 2020 through June 30, 2020 | 14,782 | $91.85 | — | 14,484,676 | ||||||||||||||||||||||
Totals | 25,019 | $83.35 | — | 14,484,676 |
Exhibit 3.1 | ||||||||
Exhibit 3.2 | ||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 32 | ||||||||
Exhibit 10.1 | Second Amendment to Amended and Restated Syndicated Facility Agreement dated May 1, 2020 amending that certain Amended and Restated Syndicated Facility Agreement dated October 30, 2017 by and among Genuine Parts Company, Bank of America, N.A., as administrative agent, and the other lender parties thereto - filed herewith | |||||||
Exhibit 10.2 | ||||||||
Exhibit 101.INS | XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | |||||||
Exhibit 101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
Exhibit 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
Exhibit 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
Exhibit 101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | |||||||
Exhibit 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
Exhibit 104 | The cover page from this Annual Report on Form 10-Q for the period ended June 30, 2020 formatted in Inline XBRL |
Genuine Parts Company (Registrant) | ||||||||
Date: July 30, 2020 | /s/ Carol B. Yancey | |||||||
Carol B. Yancey | ||||||||
Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial and Accounting Officer) |
Pricing Tier | Leverage Ratio | Commitment Fee | Letter of Credit Fee | Eurocurrency Rate Loans | Base Rate Loans | ||||||||||||
I | < 0.75:1.00 | 0.280% | 1.500% | 1.500% | 0.500% | ||||||||||||
II | > 0.75:1.00 but < 1.25:1.00 | 0.300% | 1.625% | 1.625% | 0.625% | ||||||||||||
III | > 1.25:1.00 but < 1.75:1.00 | 0.325% | 1.875% | 1.875% | 0.875% | ||||||||||||
IV | > 1.75:1.00 but < 2.25:1.0 | 0.350% | 2.000% | 2.000% | 1.000% | ||||||||||||
V | > 2.25:1.00 but < 2.75:1.0 | 0.375% | 2.125% | 2.125% | 1.125% | ||||||||||||
VI | > 2.75:1.0 | 0.400% | 2.250% | 2.250% | 1.250% | ||||||||||||
Fiscal Quarter Ending | Leverage Ratio | ||||
June 30, 2020, September 30, 2020 and December 31, 2020 | 4.00:1.0 | ||||
March 31, 2021 and each fiscal quarter thereafter | 3.50:1.0 |
BORROWERS: | GENUINE PARTS COMPANY, | ||||
a Georgia corporation | |||||
By: /s/ Charles A. Chesnutt | |||||
Name: Charles A. Chesnutt | |||||
Title: Senior Vice President & Treasurer | |||||
UAP INC., | |||||
a company constituted under the laws of Quebec | |||||
By: /s/ Charles A. Chesnutt | |||||
Name: Charles A. Chesnutt | |||||
Title: Senior Vice President & Treasurer | |||||
DESIGNATED BORROWERS: | GPC ASIA PACIFIC PTY LTD, | ||||
an Australian proprietary company limited by shares registered under the laws of the State of Victoria | |||||
By: /s/ Julian A. Buckley | |||||
Name: Julian Buckley | |||||
Title: Director | |||||
By: /s/ Cary Laverty | |||||
Name: Cary Laverty | |||||
Title: Company Secretary | |||||
GPC ASIA PACIFIC LIMITED, | |||||
a New Zealand proprietary company limited by shares registered under the laws of New Zealand | |||||
By: /s/ Rob Cameron | |||||
Name: Rob Cameron | |||||
Title: Director | |||||
By: /s/ Julian A. Buckley | |||||
Name: Julian Buckley | |||||
Title: Director | |||||
GPC ASIA PACIFIC LIMITED, |
a New Zealand proprietary company limited by shares registered under the laws of New Zealand | |||||
By: /s/ Rob Cameron | |||||
Name: Rob Cameron | |||||
Title: Director | |||||
By: /s/ Julian A. Buckley | |||||
Name: Julian Buckley | |||||
Title: Director | |||||
GPC ASIA PACIFIC GROUP PTY LTD, | |||||
an Australian proprietary company limited by shares registered under the laws of the State of Victoria | |||||
By: /s/ Julian A. Buckley | |||||
Name: Julian Buckley | |||||
Title: Director | |||||
By: /s/ Cary Laverty | |||||
Name: Cary Laverty | |||||
Title: Company Secretary | |||||
GPC ASIA PACIFIC ACQUISITION CO PTY LTD, | |||||
an Australian proprietary company limited by shares registered under the laws of the State of Victoria | |||||
By: /s/ Julian A. Buckley | |||||
Name: Julian Buckley | |||||
Title: Director | |||||
By: /s/ Cary Laverty | |||||
Name: Cary Laverty | |||||
Title: Company Secretary | |||||
GPC ASIA PACIFIC HOLDINGS PTY LTD., | |||||
an Australian proprietary company limited by shares registered under the laws of the State of Victoria | |||||
By: /s/ Julian A. Buckley | |||||
Name: Julian Buckley | |||||
Title: Director |
By: /s/ Cary Laverty | |||||
Name: Cary Laverty | |||||
Title: Company Secretary | |||||
ALLIANCE AUTOMOTIVE INVESTMENT LIMITED, | |||||
a private limited company incorporated in England and Wales | |||||
By: /s/ John Frederick Coombes | |||||
Name: John Frederick Coombes | |||||
Title: Director | |||||
ADMINISTRATIVE | |||||
AGENT: | BANK OF AMERICA, N.A., | ||||
as Administrative Agent | |||||
By: /s/ Anthea Del Bianco | |||||
Name: Anthea Del Bianco | |||||
Title: Vice President | |||||
LENDERS: | BANK OF AMERICA, N.A., | ||||
as a Lender, Domestic Swing Line Lender and L/C Issuer | |||||
By: /s/ Charles Hart | |||||
Name: Charles Hart | |||||
Title: Senior Vice President | |||||
BANK OF AMERICA, N.A., acting through its Canada branch, as Canadian Swing Line Lender and Canadian L/C Issuer | |||||
By: /s/ Medina Sales de Andrade | |||||
Name: Medina Sales de Andrade | |||||
Title: Vice President | |||||
BANK OF AMERICA, N.A., acting through its Australia branch, as Australian Swing Line Lender | |||||
By: /s/ Ari Rubin | |||||
Name: Ari Rubin | |||||
Title: Vice President | |||||
TRUIST BANK, as successor by merger to SunTrust Bank and formerly known as Branch Banking and Trust Company, as a Lender | |||||
By: /s/ Max Greer | |||||
Name: Max Greer | |||||
Title: Senior Vice President | |||||
WELLS FARGO BANK, N.A., | |||||
as a Lender | |||||
By: /s/ William Nixon | |||||
Name: William Nixon | |||||
Title: Senior Vice President | |||||
JPMORGAN CHASE BANK, N.A., | |||||
as a Lender | |||||
By: /s/ Stephen Lescher | |||||
Name: Stephen Lescher | |||||
Title: Vice President | |||||
TORONTO DOMINION (TEXAS) LLC, | |||||
as a Lender | |||||
By: /s/ Peter Kuo | |||||
Name: Peter Kuo | |||||
Title: Authorized Signatory | |||||
U.S. BANK NATIONAL ASSOCIATION, | |||||
as a Lender | |||||
By: /s/ Conan Schleicher | |||||
Name: Conan Schleicher | |||||
Title: Senior Vice President | |||||
AUSTRALIA AND NEW ZEALAND BANKING | |||||
GROUP LIMITED, as a Lender | |||||
By: /s/ Robert Grillo | |||||
Name: Robert Grillo | |||||
Title: Director | |||||
NATIONAL AUSTRALIA BANK LIMITED, | |||||
as a Lender | |||||
By: /s/ John Allan-Smith | |||||
Name: John Allan-Smith | |||||
Title: Head of Client Coverage - US | |||||
THE NORTHERN TRUST COMPANY, | |||||
as a Lender | |||||
By: /s/ Kimberly A. Crotty | |||||
Name: Kimberly A. Crotty | |||||
Title: Vice President | |||||
SANTANDER BANK, N.A., | |||||
as a Lender | |||||
By: /s/ Pablo Urgoiti | |||||
Name: Pablo Urgoiti | |||||
Title: Managing Director | |||||
By: /s/ Nuno Dias Andrade | |||||
Name: Nuno Dias Andrade | |||||
Title: Managing Director | |||||
SYNOVUS BANK, | |||||
as a Lender | |||||
By: /s/ Chandra Cockrell | |||||
Name: Chandra Cockrell | |||||
Title: Corporate Banker | |||||
FIRST HORIZON BANK | |||||
(fka FIRST TENNESSEE BANK, N.A.), | |||||
as a Lender | |||||
By: /s/ Terence J Dolch | |||||
Name: Terence J Dolch | |||||
Title: Senior Vice President | |||||
BMO HARRIS BANK, N.A., |
as a Lender | |||||
By: /s/ William Thomson | |||||
Name: William Thomson | |||||
Title: Managing Director | |||||
BANK OF MONTREAL, | |||||
as a Lender | |||||
By: /s/ Tom Woolgar | |||||
Name: Tom Woolgar | |||||
Title: Managing Director | |||||
By: /s/ Scott Matthews | |||||
Name: Scott Matthews | |||||
Title: Managing Director | |||||
HSBC Bank USA, National Association, | |||||
as a Lender | |||||
By: /s/ Devin Moore | |||||
Name: Devin Moore | |||||
Title: Senior Vice President | |||||
CITIZENS BANK, N.A., | |||||
as a Lender | |||||
By: /s/ Karmyn Paul | |||||
Name: Karmyn Paul | |||||
Title: Vice President | |||||
PNC BANK, NATIONAL ASSOCIATION, | |||||
as a Lender | |||||
By: /s/ Andrew Fraser | |||||
Name: Andrew Fraser | |||||
Title: Vice President | |||||
MUFG BANK, LTD., | |||||
as a Lender | |||||
By: /s/ Henry Schwarz | |||||
Name: Henry Schwarz | |||||
Title: Authorized Signatory | |||||
NATIONAL WESTMINISTER BANK PLC, | |||||
as a Lender | |||||
By: /s/ Craig Nunn | |||||
Name: Craig Nunn | |||||
Title: Senior Director | |||||
Commerzbank AG, New York Branch, | |||||
as a Lender | |||||
By: /s/ Pedro Bell | |||||
Name: Pedro Bell | |||||
Title: Managing Director | |||||
By: /s/ Bianca Notari | |||||
Name: Bianca Notari | |||||
Title: Vice President |
Genuine Parts Company | ||
By: /s/ Charles A. Chesnutt | ||
Name: Charles A. Chesnutt | ||
Title: Senior Vice President and Treasurer |
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY | ||||||||
By: | Northwestern Mutual Investment | |||||||
Management Company, LLC, | ||||||||
Its Investment Adviser | ||||||||
By: | /s/ Bradley T. Kunath | |||||||
Name: | Bradley T. Kunath | |||||||
Title: | Managing Director | |||||||
Principal amount of Euro denominated Series J Notes held: € 80,000,000 | ||||||||
Principal amount of Euro denominated Series K Notes held: € 21,000,000 | ||||||||
Principal amount of Euro denominated Series L Notes held: € 25,000,000 | ||||||||
Principal amount of Euro denominated Series M Notes held: € 25,000,000 | ||||||||
METROPOLITAN LIFE INSURANCE COMPANY | ||||||||
By: | MetLife Investment Management, LLC, Its Investment Manager | |||||||
By: | /s/ John Wills | |||||||
Name: | John Wills | |||||||
Title: | Authorized Signatory | |||||||
Principal amount of Euro denominated Series K Notes held: € 13,700,000 | ||||||||
Principal amount of Euro denominated Series L Notes held: € 21,800,000 | ||||||||
Principal amount of Euro denominated Series M Notes held: € 21,800,000 | ||||||||
BRIGHTHOUSE LIFE INSURANCE COMPANY | ||||||||
By: | MetLife Investment Management, LLC, Its Investment Manager | |||||||
By: | /s/ John Wills |
Name: | John Wills | |||||||
Title: | Authorized Signatory | |||||||
Principal amount of Euro denominated Series K Notes held: € 8,950,000 | ||||||||
Principal amount of Euro denominated Series L Notes held: € 3,050,000 | ||||||||
Principal amount of Euro denominated Series M Notes held: € 3,050,000 | ||||||||
Principal amount of Euro denominated Series K Notes held: € 3,050,000 | ||||||||
METLIFE INSURANCE K.K. | ||||||||
By: | MetLife Investment Management, LLC, Its Investment Manager | |||||||
By: | /s/ John Wills | |||||||
Name: | John Wills | |||||||
Title: | Authorized Signatory | |||||||
Principal amount of Euro denominated Series L Notes held: € 40,900,000 | ||||||||
Principal amount of Euro denominated Series M Notes held: € 30,500,000 | ||||||||
PENSIONSKASSE DES BUNDES PUBLICA | ||||||||
By: | MetLife Investment Management Limited, as Investment Manager | |||||||
By: | /s/ Annette Bannister | |||||||
Name: | Annette Bannister | |||||||
Title: | Authorized Signatory | |||||||
Principal amount of Euro denominated Series K Notes held: € 1,400,000 | ||||||||
Principal amount of Euro denominated Series L Notes held: € 1,400,000 | ||||||||
Principal amount of Euro denominated Series M Notes held: € 1,400,000 | ||||||||
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY | ||||||||
By: | Barings LLC, as Investment Adviser | |||||||
By: | /s/ Elisabeth A. Perenick | |||||||
Its: | ||||||||
Principal amount of Euro denominated Series K Notes held: € 100,000,000 | ||||||||
NATIONWIDE LIFE INSURANCE COMPANY | ||||||||
By: | /s/ Cristian I. Donoso | |||||||
Name: | Cristian I. Donoso | |||||||
Title: | Authorized Signatory | |||||||
Principal amount of Euro denominated Series J Notes held: € 30,000,000 | ||||||||
Principal amount of Euro denominated Series K Notes held: € 25,000,000 | ||||||||
PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY | ||||||||
By: | PGIM, Inc., as investment manager | |||||||
By: | /s/ Billy Greer | |||||||
Vice President | ||||||||
Principal amount of Euro denominated Series J Notes held: € 50,000,000 | ||||||||
CONNECTICUT GENERAL LIFE INSURANCE COMPANY | ||||||||
By: | Cigna Investments, Inc. (authorized agent) | |||||||
By: | /s/ Jason Smith | |||||||
Name: | Jason Smith | |||||||
Title: | Managing Director | |||||||
Principal amount of Euro denominated Series J Notes held: € 7,000,000 | ||||||||
Principal amount of Euro denominated Series K Notes held: € 6,000,000 | ||||||||
CIGNA HEALTH AND LIFE INSURANCE COMPANY | ||||||||
By: | Cigna Investments, Inc. (authorized agent) | |||||||
By: | /s/ Jason Smith | |||||||
Name: | Jason Smith | |||||||
Title: | Managing Director | |||||||
Principal amount of Euro denominated Series J Notes held: € 18,000,000 | ||||||||
Principal amount of Euro denominated Series K Notes held: € 17,000,000 | ||||||||
VOYA RETIREMENT INSURANCE AND ANNUITY COMPANY | ||||||||
By: | Voya Investment Management LLC, as Agent | |||||||
By: | /s/ Justin Stach | |||||||
Name: | Justin Stach | |||||||
Title: | Senior Vice President | |||||||
Principal amount of US dollar denominated Series I Notes held: $9,900,000 | ||||||||
Principal amount of Euro denominated Series J Notes held: € 17,300,000 | ||||||||
SECURITY LIFE OF DENVER INSURANCE COMPANY | ||||||||
By: | Voya Investment Management LLC, as Agent | |||||||
By: | /s/ Justin Stach | |||||||
Name: | Justin Stach | |||||||
Title: | Senior Vice President | |||||||
Principal amount of US dollar denominated Series I Notes held: $100,000 | ||||||||
Principal amount of Euro denominated Series J Notes held: € 100,000 | ||||||||
RELIASTAR LIFE INSURANCE COMPANY | ||||||||
By: | Voya Investment Management LLC, as Agent | |||||||
By: | /s/ Justin Stach | |||||||
Name: | Justin Stach | |||||||
Title: | Senior Vice President | |||||||
Principal amount of US dollar denominated Series I Notes held: $1,100,000 | ||||||||
Principal amount of Euro denominated Series J Notes held: € 2,200,000 | ||||||||
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK | ||||||||
By: | Voya Investment Management LLC, as Agent | |||||||
By: | /s/ Justin Stach | |||||||
Name: | Justin Stach | |||||||
Title: | Senior Vice President | |||||||
Principal amount of US dollar denominated Series I Notes held: $100,000 | ||||||||
Principal amount of Euro denominated Series J Notes held: € 100,000 | ||||||||
VENERABLE INSURANCE AND ANNUITY COMPANY (F/K/A VOYA INSURANCE AND ANNUITY COMPANY) | ||||||||
By: | Voya Investment Management Co. LLC, as Agent | |||||||
By: | /s/ Justin Stach | |||||||
Name: | Justin Stach | |||||||
Title: | Senior Vice President | |||||||
Principal amount of US dollar denominated Series I Notes held: $200,000 | ||||||||
Principal amount of Euro denominated Series J Notes held: € 500,000 | ||||||||
PACIFIC LIFE INSURANCE COMPANY | ||||||||
By: | /s/ Cathy L. Schwartz | |||||||
Name: | Cathy L. Schwartz | |||||||
Title: | Assistant Vice President | |||||||
Principal amount of US dollar denominated Series I Notes held: $10,000,000 | ||||||||
Principal amount of Euro denominated Series K Notes held: € 30,000,000 | ||||||||
VOYA INSURANCE AND ANNUITY COMPANY | ||||||||
By: | Apollo Insurance Solutions Group LP, its investment adviser | |||||||
By: | Apollo Capital Management, L.P., its sub adviser | |||||||
By: | Apollo Capital Management GP, LLC, its General Partner | |||||||
By: | /s/ Joseph D. Glatt | |||||||
Name: | Joseph D. Glatt | |||||||
Title: | Vice President | |||||||
Principal amount of US dollar denominated Series I Notes held: $5,700,000 | ||||||||
RELIASTAR LIFE INSURANCE COMPANY | ||||||||
By: | Voya Investment Management LLC, its investment adviser | |||||||
By: | Apollo Insurance Solutions Group LP, its investment sub adviser | |||||||
By: | Apollo Capital Management, L.P., its sub adviser | |||||||
By: | Apollo Capital Management GP, LLC, its General Partner | |||||||
By: | /s/ Joseph D. Glatt | |||||||
Name: | Joseph D. Glatt | |||||||
Title: | Vice President | |||||||
Principal amount of US dollar denominated Series I Notes held: $200,000 | ||||||||
ATHENE ANNUITY & LIFE ASSURANCE COMPANY |
By: | Apollo Insurance Solutions Group LP, its investment adviser | |||||||
By: | Apollo Capital Management, L.P., its sub adviser | |||||||
By: | Apollo Capital Management GP, LLC, its General Partner | |||||||
By: | /s/ Joseph D. Glatt | |||||||
Name: | Joseph D. Glatt | |||||||
Title: | Vice President | |||||||
Principal amount of Euro denominated Series J Notes held: € 9,800,000 | ||||||||
ATHENE ANNUITY AND LIFE COMPANY | ||||||||
By: | Apollo Insurance Solutions Group LP, its investment adviser | |||||||
By: | Apollo Capital Management, L.P., its sub adviser | |||||||
By: | Apollo Capital Management GP, LLC, its General Partner | |||||||
By: | /s/ Joseph D. Glatt | |||||||
Name: | Joseph D. Glatt | |||||||
Title: | Vice President | |||||||
Aggregate principal amount of Euro denominated Series L Notes held: € 30,000,000 | ||||||||
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY | ||||||||
By: | Macquarie Investment Management | |||||||
Advisers, a series of Macquarie Investment | ||||||||
Management Business Trust, Attorney in Fact | ||||||||
By: | /s/ Brendan Dillon | |||||||
Name: | Brendan Dillon | |||||||
Title: | Vice President | |||||||
Principal amount of Euro denominated Series K Notes held: € 25,000,000 | ||||||||
UNITED OF OMAHA LIFE INSURANCE COMPANY | ||||||||
By: | /s/ Justin P. Kavan | |||||||
Name: | Justin P. Kavan | |||||||
Title: | Senior Vice President | |||||||
Principal amount of Euro denominated Series J Notes held: € 10,000,000 | ||||||||
Principal amount of Euro denominated Series M Notes held: € 10,000,000 | ||||||||
MUTUAL OF OMAHA INSURANCE COMPANY | ||||||||
By: | /s/ Justin P. Kavan | |||||||
Name: | Justin P. Kavan | |||||||
Title: | Senior Vice President | |||||||
Principal amount of Euro denominated Series L Notes held: € 5,000,000 | ||||||||
LEGAL & GENERAL ASSURANCE SOCIETY LIMITED | ||||||||
By: | Legal & General Investment Management America, Inc. its Investment Manager | |||||||
By: | /s/ Edward Wood | |||||||
Name: | Edward Wood | |||||||
Title: | Head of US Private Placements | |||||||
Principal amount of US dollar denominated Series I Notes held: $20,000,000 | ||||||||
AXA EQUITABLE LIFE INSURANCE COMPANY | ||||||||
By: | /s/ Amy Judd | |||||||
Name: | Amy Judd | |||||||
Title: | Investment Officer | |||||||
Principal amount of US dollar denominated Series I Notes held: $12,000,000 | ||||||||
USAA LIFE INSURANCE COMPANY |
By: | BLACKROCK FINANCIAL MANAGEMENT, INC., AS INVESTMENT MANAGER | |||||||
By: | /s/ Marshall Merriman | |||||||
Name: | Marshall Merriman | |||||||
Title: | Managing Director | |||||||
Principal amount of US dollar denominated Series I Notes held: $12,000,000 | ||||||||
THRIVENT FINANCIAL FOR LUTHERANS | ||||||||
By: | /s/ Martin Rosacker | |||||||
Name: | Martin Rosacker | |||||||
Title: | Managing Director | |||||||
Principal amount of US dollar denominated Series I Notes held: $11,000,000 | ||||||||
GENWORTHLIFE INSURANCE COMPANY | ||||||||
By: | /s/ Stuart Shepetin | |||||||
Name: | Stuart Shepetin | |||||||
Title: | Investment Officer | |||||||
Principal amount of US dollar denominated Series I Notes held: $10,000,000 | ||||||||
AMERICAN UNITED LIFE INSURANCE COMPANY | ||||||||
By: | /s/ Michael Bullock | |||||||
Name: | Michael Bullock | |||||||
Title: | VP, Private Placements | |||||||
Principal amount of US dollar denominated Series I Notes held: $5,000,000 | ||||||||
THE STATE LIFE INSURANCE COMPANY | ||||||||
By: | American United Life Insurance Company, its Agent | |||||||
By: | /s/ Michael Bullock | |||||||
Name: | Michael Bullock | |||||||
Title: | VP, Private Placements | |||||||
Principal amount of US dollar denominated Series I Notes held: $5,000,000 | ||||||||
CUMIS INSURANCE SOCIETY, INC. | ||||||||
By: | MEMBERS Capital Advisors, Inc. | |||||||
acting as Investment Advisor | ||||||||
By: | /s/ Anne M. Finucane | |||||||
Name: | Anne M. Finucane | |||||||
Title: | Managing Director, Investments | |||||||
Principal amount of US dollar denominated Series I Notes held: $3,000,000 | ||||||||
CMFG LIFE INSURANCE COMPANY | ||||||||
By: | MEMBERS Capital Advisors, Inc. | |||||||
acting as Investment Advisor | ||||||||
By: | /s/ Anne M. Finucane | |||||||
Name: | Anne M. Finucane | |||||||
Title: | Managing Director, Investments | |||||||
Principal amount of Euro denominated Series K Notes held: € 5,000,000 | ||||||||
AMERICAN EQUITY INVESTMENT LIFE INSURANCE COMPANY | ||||||||
By: | /s/ Sasha Kamper | |||||||
Name: | Sasha Kamper | |||||||
Title: | Authorized Signatory | |||||||
Principal amount of US dollar denominated Series I Notes held: $7,000,000 | ||||||||
MODERN WOODMEN OF AMERICA | ||||||||
By: | /s/ Brett M. Van. | |||||||
Name: | Brett M. Van. | |||||||
Title: | Treasurer & Chief Investment Officer | |||||||
By: | /s/ Christopher M. Cramer | |||||||
Name: | Christopher M. Cramer | |||||||
Title: | Manager – Fixed Income | |||||||
Principal amount of US dollar denominated Series I Notes held: $5,000,000 | ||||||||
COLONIAL LIFE & ACCIDENT INSURANCE COMPANY | ||||||||
By: | Provident Investment Management, LLC, its Agent | |||||||
By: | /s/ Ben Vance | |||||||
Name: | Ben Vance | |||||||
Title: | Vice President, Senior Managing Director | |||||||
Principal amount of US dollar denominated Series I Notes held: $2,700,000 |
1. | I have reviewed this quarterly report on Form 10-Q of Genuine Parts Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Paul D. Donahue | ||
Paul D. Donahue Chairman and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Genuine Parts Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Carol B. Yancey | ||
Carol B. Yancey Executive Vice President and Chief Financial Officer |
1 | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2 | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Paul D. Donahue | /s/ Carol B. Yancey | |||||||
Paul D. Donahue Chairman and Chief Executive Officer | Carol B. Yancey Executive Vice President and Chief Financial Officer | |||||||
July 30, 2020 | July 30, 2020 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 42,139 | $ 35,047 |
Accumulated depreciation | $ 1,275,388 | $ 1,199,285 |
Preferred stock, par value (usd per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 450,000,000 | 450,000,000 |
Common stock, shares issued (in shares) | 144,264,189 | 145,378,158 |
Common stock, shares outstanding (in shares) | 144,264,189 | 145,378,158 |
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Income Statement [Abstract] | ||||
Net sales | $ 3,823,227 | $ 4,457,931 | $ 7,915,753 | $ 8,717,060 |
Cost of goods sold | 2,532,740 | 2,975,227 | 5,237,088 | 5,841,558 |
Gross profit | 1,290,487 | 1,482,704 | 2,678,665 | 2,875,502 |
Operating expenses: | ||||
Selling, administrative and other expenses | 971,589 | 1,127,296 | 2,114,286 | 2,238,715 |
Depreciation and amortization | 66,733 | 62,684 | 133,987 | 121,301 |
Provision for doubtful accounts | 11,300 | 5,513 | 17,819 | 9,238 |
Restructuring costs | 25,059 | 0 | 28,041 | 0 |
Goodwill impairment charge | 506,721 | 0 | 506,721 | 0 |
Total operating expenses | 1,581,402 | 1,195,493 | 2,800,854 | 2,369,254 |
Non-operating (income) expenses: | ||||
Interest expense | 25,465 | 23,262 | 46,430 | 47,116 |
Other | (11,944) | (18,250) | (24,776) | (15,082) |
Total non-operating (income) expenses | 13,521 | 5,012 | 21,654 | 32,034 |
(Loss) income before income taxes | (304,436) | 282,199 | (143,843) | 474,214 |
Income taxes | 59,065 | 72,680 | 97,312 | 119,011 |
Net (loss) income from continuing operations | (363,501) | 209,519 | (241,155) | 355,203 |
Net (loss) income from discontinued operations | (200,871) | 14,911 | (186,682) | 29,477 |
Net (loss) income | $ (564,372) | $ 224,430 | $ (427,837) | $ 384,680 |
Dividends declared per common share (usd per share) | $ 0.7900 | $ 0.7625 | $ 1.5800 | $ 1.5250 |
Basic (loss) earnings per share from continuing operations (in dollars per share) | (2.52) | 1.43 | (1.67) | 2.43 |
Diluted (loss) earnings per share from continuing operations (in dollars per share) | $ (2.52) | $ 1.43 | $ (1.67) | $ 2.42 |
Weighted average common shares outstanding (in shares) | 144,262 | 146,075 | 144,657 | 146,029 |
Dilutive effect of stock options and non-vested restricted stock awards (in shares) | 0 | 661 | 0 | 684 |
Weighted average common shares outstanding - assuming dilution (in shares) | 144,262 | 146,736 | 144,657 | 146,713 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (564,372) | $ 224,430 | $ (427,837) | $ 384,680 |
Foreign currency translation adjustments, net of income taxes in 2020 — $12,114 and $3,445; 2019 — $4,015 and $3,695, respectively | 111,599 | 9 | (71,014) | 47,973 |
Cash flow hedge adjustments, net of income taxes in 2020 — $560 and $6,044; 2019 — $3,711 and $5,626, respectively | 1,514 | (10,034) | (16,342) | (15,213) |
Pension and postretirement benefit adjustments, net of income taxes in 2020 — $3,008 and $6,025; 2019 — $1,786 and $3,574, respectively | 7,844 | 4,833 | 16,292 | 9,665 |
Other comprehensive income (loss), net of income taxes | 120,957 | (5,192) | (71,064) | 42,425 |
Comprehensive (loss) income | $ (443,415) | $ 219,238 | $ (498,901) | $ 427,105 |
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustment, tax | $ 12,114 | $ 3,445 | $ 4,015 | $ 3,695 |
Net investment hedge, tax | 560 | 6,044 | 3,711 | 5,626 |
Pension and postretirement benefit adjustments, tax | $ 3,008 | $ 6,025 | $ 1,786 | $ 3,574 |
Condensed Consolidated Statements of Equity - USD ($) $ in Thousands |
Total |
Cumulative Effect, Period of Adoption, Adjustment |
Common Stock |
Additional Paid-In Capital |
Accumulated Other Comprehensive Loss |
Accumulated Other Comprehensive Loss
Cumulative Effect, Period of Adoption, Adjustment
|
Retained Earnings |
Retained Earnings
Cumulative Effect, Period of Adoption, Adjustment
|
Total Parent Equity |
Total Parent Equity
Cumulative Effect, Period of Adoption, Adjustment
|
Non-controlling Interests in Subsidiaries |
|||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Beginning balance (in shares) at Dec. 31, 2018 | 145,936,613 | |||||||||||||||||
Beginning balance at Dec. 31, 2018 | $ 3,471,991 | $ 145,937 | $ 78,380 | $ (1,115,078) | $ 4,341,212 | $ 3,450,451 | $ 21,540 | |||||||||||
Beginning balance (Accounting Standards Update 2018-02) at Dec. 31, 2018 | [1] | $ 0 | $ (122,526) | $ 122,526 | ||||||||||||||
Beginning balance (Accounting Standards Update 2016-02) at Dec. 31, 2018 | [1] | 4,797 | 4,797 | $ 4,797 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Net (loss) income | 384,680 | 384,680 | 384,680 | |||||||||||||||
Other comprehensive loss, net of tax | 42,425 | 42,425 | 42,425 | |||||||||||||||
Cash dividends declared | (222,735) | (222,735) | (222,735) | |||||||||||||||
Share-based awards exercised, including tax benefit (in shares) | 141,756 | |||||||||||||||||
Share-based awards exercised, including tax benefit | (7,371) | $ 141 | (7,512) | (7,371) | ||||||||||||||
Share-based compensation | 13,081 | 13,081 | 13,081 | |||||||||||||||
Noncontrolling interest activities | 1,107 | 1,107 | ||||||||||||||||
Ending balance (in shares) at Jun. 30, 2019 | 146,078,369 | |||||||||||||||||
Ending balance at Jun. 30, 2019 | 3,687,975 | $ 146,078 | 83,949 | (1,195,179) | 4,630,480 | 3,665,328 | 22,647 | |||||||||||
Beginning balance (in shares) at Dec. 31, 2018 | 145,936,613 | |||||||||||||||||
Beginning balance at Dec. 31, 2018 | 3,471,991 | $ 145,937 | 78,380 | (1,115,078) | 4,341,212 | 3,450,451 | 21,540 | |||||||||||
Beginning balance (Accounting Standards Update 2018-02) at Dec. 31, 2018 | [1] | 0 | $ (122,526) | 122,526 | ||||||||||||||
Beginning balance (Accounting Standards Update 2016-02) at Dec. 31, 2018 | [1] | 4,797 | 4,797 | 4,797 | ||||||||||||||
Ending balance (in shares) at Dec. 31, 2019 | 145,378,158 | |||||||||||||||||
Ending balance at Dec. 31, 2019 | $ 3,695,500 | (11,432) | [2] | $ 145,378 | 98,777 | (1,141,308) | 4,571,860 | (11,432) | [2] | 3,674,707 | (11,432) | [2] | 20,793 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||||||||||||||||
Beginning balance (in shares) at Mar. 31, 2019 | 146,063,911 | |||||||||||||||||
Beginning balance at Mar. 31, 2019 | $ 3,572,832 | $ 146,064 | 77,424 | (1,189,987) | 4,517,430 | 3,550,931 | 21,901 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Net (loss) income | 224,430 | 224,430 | 224,430 | |||||||||||||||
Other comprehensive loss, net of tax | (5,192) | (5,192) | (5,192) | |||||||||||||||
Cash dividends declared | (111,380) | (111,380) | (111,380) | |||||||||||||||
Share-based awards exercised, including tax benefit (in shares) | 14,458 | |||||||||||||||||
Share-based awards exercised, including tax benefit | (532) | $ 14 | (546) | (532) | ||||||||||||||
Share-based compensation | 7,071 | 7,071 | 7,071 | |||||||||||||||
Noncontrolling interest activities | 746 | 746 | ||||||||||||||||
Ending balance (in shares) at Jun. 30, 2019 | 146,078,369 | |||||||||||||||||
Ending balance at Jun. 30, 2019 | 3,687,975 | $ 146,078 | 83,949 | (1,195,179) | 4,630,480 | 3,665,328 | 22,647 | |||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 145,378,158 | |||||||||||||||||
Beginning balance at Dec. 31, 2019 | 3,695,500 | $ (11,432) | [2] | $ 145,378 | 98,777 | (1,141,308) | 4,571,860 | $ (11,432) | [2] | 3,674,707 | $ (11,432) | [2] | 20,793 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Net (loss) income | (427,837) | (427,837) | (427,837) | |||||||||||||||
Other comprehensive loss, net of tax | (71,064) | (71,064) | (71,064) | |||||||||||||||
Cash dividends declared | (228,444) | (228,444) | (228,444) | |||||||||||||||
Share-based awards exercised, including tax benefit (in shares) | 22,475 | |||||||||||||||||
Share-based awards exercised, including tax benefit | (790) | $ 22 | (812) | (790) | ||||||||||||||
Share-based compensation | 9,854 | 9,854 | 9,854 | |||||||||||||||
Purchase of stock (in shares) | (1,136,444) | |||||||||||||||||
Purchase of stock | (95,719) | $ (1,136) | (94,583) | (95,719) | ||||||||||||||
Noncontrolling interest activities | 820 | 820 | ||||||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 144,264,189 | |||||||||||||||||
Ending balance at Jun. 30, 2020 | 2,870,888 | $ 144,264 | 107,819 | (1,212,372) | 3,809,564 | 2,849,275 | 21,613 | |||||||||||
Beginning balance (in shares) at Mar. 31, 2020 | 144,249,343 | |||||||||||||||||
Beginning balance at Mar. 31, 2020 | 3,423,031 | $ 144,249 | 103,878 | (1,333,329) | 4,487,904 | 3,402,702 | 20,329 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Net (loss) income | (564,372) | (564,372) | (564,372) | |||||||||||||||
Other comprehensive loss, net of tax | 120,957 | 120,957 | 120,957 | |||||||||||||||
Cash dividends declared | (113,968) | (113,968) | (113,968) | |||||||||||||||
Share-based awards exercised, including tax benefit (in shares) | 14,846 | |||||||||||||||||
Share-based awards exercised, including tax benefit | (449) | $ 15 | (464) | (449) | ||||||||||||||
Share-based compensation | 4,405 | 4,405 | 4,405 | |||||||||||||||
Noncontrolling interest activities | 1,284 | 1,284 | ||||||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 144,264,189 | |||||||||||||||||
Ending balance at Jun. 30, 2020 | $ 2,870,888 | $ 144,264 | $ 107,819 | $ (1,212,372) | $ 3,809,564 | $ 2,849,275 | $ 21,613 | |||||||||||
|
Condensed Consolidated Statements of Equity (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared per share (usd per share) | $ 0.7900 | $ 0.7625 | $ 1.5800 | $ 1.5250 |
Share-based awards exercised, tax | $ 383 | $ 174 | $ (162) | $ 3,986 |
Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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. During the six months ended June 30, 2020, the Company completed the divestiture of its Business Products Group. Refer to the acquisitions, divestitures and discontinued operations footnote for more information. The Company's results of operations for the Business Products Group are reported as discontinued operations and all information related to the discontinued operations has been excluded from the notes to the condensed consolidated financial statements for all periods presented. Net (loss) income from discontinued operations for each period includes all costs that are directly attributable to these businesses and excludes certain corporate overhead costs that were previously allocated. Additionally, certain intercompany sales from the Automotive Parts Group are grossed up and recast in continuing operations in each period because those sales will continue with the discontinued operations after the divestiture. 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, 2019. Accordingly, the unaudited interim condensed consolidated financial statements and related disclosures herein should be read in conjunction with the Company’s 2019 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 interim condensed consolidated financial statements. Specifically, the Company makes estimates and assumptions in its interim condensed consolidated financial statements for inventory adjustments, the accrual of bad debts, credit losses on guaranteed loans, customer sales returns, and volume incentives earned, among others. Inventory adjustments (including adjustments for a majority of inventories that are valued under the last-in, first-out (“LIFO”) method) are accrued on an interim basis and adjusted in the fourth quarter based on the annual book to physical inventory adjustment and LIFO valuation. 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. In the opinion of management, all adjustments necessary for a fair presentation of the Company’s financial results for the interim periods have been made. These adjustments are of a normal recurring nature. The Company has reclassified certain prior period amounts to conform to the current period presentation. The results of operations for the six months ended June 30, 2020 are not necessarily indicative of results for the entire year. The Company's operations are concentrated in North America, Europe and Australasia and are vulnerable to the reduced economic activity caused by the COVID-19 outbreak, which was declared a pandemic in March 2020 and led many governments to put in place temporary social distancing and shelter-in-place mandates. In May and early June, many governments began phased reopenings of their economies. These phased approaches promote economic activity while adhering to new guidelines and enhanced safety measures. The extent to which the COVID-19 pandemic impacts the Company will depend on numerous factors and future developments that the Company cannot predict, including the severity of the virus; the occurrence of a “second wave” or additional spikes; the duration of the outbreak; governmental, business or other actions taken in response to the pandemic; and impacts on the Company's supply chain, its ability to keep operating locations open, and on customer demand. The Company's foreign subsidiaries are benefiting from various forms of government economic assistance including certain temporary subsidies that were received in the second quarter of 2020, which have been classified as a reduction of selling, administrative and other expenses. If the pandemic persists or worsens, the estimates and assumptions management made as of June 30, 2020 could change in subsequent interim reports and upon final determination at year-end, and it is reasonably possible such changes could be significant. The Company has evaluated subsequent events through the date the condensed consolidated financial statements covered by this quarterly report were issued. The Company will continue to evaluate the nature and extent of these potential impacts to its business and consolidated financial statements.
|
Segment Information |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The following table presents a summary of the Company's reportable segment financial information from continuing operations:
(1) The following table presents a summary of the other unallocated costs:
(2) Adjustment reflects the second quarter goodwill impairment charge related to the Company's European reporting unit. Refer to the goodwill and other intangible assets footnote. (3) Adjustment reflects restructuring costs related to the ongoing execution of the 2019 Cost Savings Plan announced in the fourth quarter of 2019. The costs are primarily associated with severance and other employee costs, including a voluntary retirement program, and facility and closure costs related to the consolidation of operations. Refer to the restructuring footnote. (4) Adjustment reflects realized currency losses related to divestitures. Refer to the acquisitions, divestitures and discontinued operations footnote. (5) Adjustment reflects insurance recoveries in excess of losses incurred on inventory, property, plant and equipment and other fire-related costs related to the S.P. Richards Headquarters and Distribution Center. Refer to the commitments and contingencies footnote. (6) Adjustment reflects (i) $2,481 and $8,490 of incremental costs associated with COVID-19 for the three and six months ended June 30, 2020, respectively, and (ii) costs associated with certain divestitures. COVID-19 related costs include incremental costs incurred relating to fees to cancel marketing events and increased cleaning and sanitization materials, among other things. Net sales are disaggregated by geographical region for each of the Company’s reportable segments, as the Company deems 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:
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Accumulated Other Comprehensive Loss |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following tables present the changes in accumulated other comprehensive loss (“AOCL”) by component for the six months ended June 30:
(1) Amount includes realized currency losses of $27,037 that were reclassified out of foreign currency translation into earnings in connection with the March 7, 2019 sale of Grupo Auto Todo. Refer to the acquisitions, divestitures and discontinued operations footnote for further details. The AOCL components related to the pension benefits are included in the computation of net periodic benefit income in the employee benefit plans footnote. The nature of the cash flow hedges are discussed in the derivatives and hedging footnote. Generally, tax effects in AOCL are established at the currently enacted tax rate and reclassified to net (loss) income in the same period that the related pre-tax AOCL reclassifications are recognized.
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Recent Accounting Pronouncements |
6 Months Ended |
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Jun. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of ASUs to the FASB Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs and any not listed below were assessed and determined to be not applicable or are expected to have a minimal impact on the Company's condensed consolidated financial statements. Financial Instruments - Credit Losses (Topic 326) In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. Among other things, the ASU and its amendments replace the incurred loss impairment model for receivables and loan guarantees with a current expected credit loss model. The new model measures impairment based on expected credit losses over the remaining contractual life of an asset, considering available information about the collectability of cash flows, past events, current conditions, and reasonable and supportable forecasts. Additional quantitative and qualitative disclosures are required. The Company adopted ASU 2016-13 and its amendments as of January 1, 2020, which included recognizing a cumulative-effect adjustment to reduce opening retained earnings by $11,432, net of taxes. Compensation - Retirement Benefits (Topic 715) In August 2018, the FASB issued ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans. The updated accounting guidance modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing, adding and clarifying certain disclosures. These provisions must be applied retrospectively. ASU 2018-14 is effective for periods beginning after December 15, 2020, with an option to adopt early. The adoption of ASU 2018-14 is not expected to have a significant impact on the Company’s financial position, results of operations or disclosures. The Company does not plan to early adopt the standard.
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Employee Benefit Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans Net periodic benefit income from the Company's pension plans included the following components for the three months ended June 30:
Net periodic benefit income from the Company's pension plans included the following components for the six months ended June 30:
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Guarantees |
6 Months Ended |
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Jun. 30, 2020 | |
Guarantees [Abstract] | |
Guarantees | Guarantees The Company guarantees the borrowings of certain independently controlled automotive parts stores and businesses (“independents”) and certain other affiliates in which the Company has a noncontrolling equity ownership interest (“affiliates”). Presently, the independents are generally consolidated by unaffiliated enterprises that have controlling financial interests through ownership of a majority voting interest in the independents. The Company has no voting interest or equity conversion rights in any of the independents. The Company does not control the independents or the affiliates but receives a fee for the guarantees. The Company has concluded that the independents are variable interest entities, but that the Company is not the primary beneficiary. Specifically, the equity holders of the independents have the power to direct the activities that most significantly impact the entities’ economic performance including, but not limited to, decisions about hiring and terminating personnel, local marketing and promotional initiatives, pricing and selling activities, credit decisions, monitoring and maintaining appropriate inventories, and store hours. Separately, the Company concluded that the affiliates are not variable interest entities. The Company’s maximum exposure to loss as a result of its involvement with these independents and affiliates is generally equal to the total borrowings subject to the Company’s guarantees. While such borrowings of the independents and affiliates are outstanding, the Company is required to maintain compliance with certain covenants, including a debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratio and certain limitations on additional borrowings. At June 30, 2020, the Company was in compliance with all such covenants. As of June 30, 2020, the total borrowings of the independents and affiliates subject to guarantee by the Company were approximately $925,109. These loans generally mature over periods from to six years. The Company regularly monitors the performance of these loans and the ongoing operating results, financial condition and ratings from credit rating agencies of the independents and affiliates that participate in the guarantee programs. In the event that the Company is required to make payments in connection with these guarantees, the Company would obtain and liquidate certain collateral pledged by the independents or affiliates (e.g., accounts receivable and inventory) to recover all or a substantial portion of the amounts paid under the guarantees. The Company recognizes a liability equal to current expected credit losses over the lives of the loans in the guaranteed loan portfolio, based on a consideration of historical experience, current conditions, the nature and expected value of any collateral, and reasonable and supportable forecasts. To date, the Company has had no significant losses in connection with guarantees of independents’ and affiliates’ borrowings and the current expected credit loss reserve is not material. As of June 30, 2020, there are no material guaranteed loans for which the borrower is experiencing financial difficulty and recovery is expected to be provided substantially through the operation or sale of the collateral. As of June 30, 2020, the Company has recognized certain assets and liabilities amounting to $90,000 each for the guarantees related to the independents’ and affiliates’ 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 the Company's noncontingent obligation to stand ready to perform under the guarantee programs and they are distinct from the Company's current expected credit loss reserve.
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Credit Facilities |
6 Months Ended |
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Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Credit Facilities | Credit Facilities On May 1, 2020, the Company entered into amendments to: (i) the Amended and Restated Syndicated Credit Facility Agreement, dated as of October 30, 2017 ("Credit Facility") and (ii) the Notes Purchase Agreement with certain investors governing the Series I, J, K, L and M senior notes, dated as of October 30, 2017 ("Notes Agreement"). The financial covenants in these agreements were amended to provide for the debt to EBITDA ratio to increase from 3.50 to 1.0 to 4.00 to 1.0 through December 31, 2020 (and then to revert to 3.50 to 1.0 after such date). With respect to the Credit Facility, the interest rates were amended to increase the applicable rate by 75 basis points (resulting in a rate of LIBOR + 225 basis points) and the LIBOR floor from 0.0% to 1.0%. With respect to the Notes Agreement, the interest rates were amended to increase the coupon applicable to each series of the Senior Notes by 50 basis points, effective immediately and applicable through December 31, 2020, and to increase the coupon applicable to each series of the Senior Notes by an additional 50 basis points, if and only if the debt to EBITDA ratio exceeds 3.50 to 1.0. |
Accounts Receivable Sales Agreement |
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable Sales Agreement | Accounts Receivable Sales Agreement On May 29, 2020 the Company entered into an agreement (the “A/R Sales Agreement”) to sell short-term receivables from certain customer trade accounts to an unaffiliated financial institution. The A/R Sales Agreement has a 364 day term, which the Company intends to renew each year. The terms of the A/R Sales Agreement limit the total principal amount outstanding of receivables sold to approximately $500,000 at any point in time. As part of the A/R Sales Agreement, the Company continuously sells designated pools of trade accounts receivable to a separate bankruptcy-remote special purpose entity whose assets would be first available to satisfy the creditor claims of the unaffiliated financial institution. The Company controls and therefore consolidates the special purpose entity in its condensed consolidated financial statements. The special purpose entity in turn sells certain of the receivables to the unaffiliated financial institution on a monthly basis. These sales to the unaffiliated financial institution are accounted for as sales because control over the receivables is transferred to the unaffiliated financial institution under the terms of the agreement. The following table represents a summary of the activity under the A/R Sales Agreement since its inception:
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Fair Value of Financial Instruments |
6 Months Ended |
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Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial InstrumentsThe carrying amounts reflected in the condensed consolidated balance sheets for cash and cash equivalents, trade accounts receivable, trade accounts payable, and borrowings under the line of credit and term loan approximate their respective fair values based on the short-term nature of these instruments. As of June 30, 2020, the carrying amount, net of debt issuance costs, and the fair value of fixed rate debt were approximately $1,939,978 and $1,845,693, respectively. The fair value of fixed rate debt is designated as Level 2 in the fair value hierarchy (i.e., significant observable inputs) and is based primarily on the discounted value of future cash flows using current market interest rates offered for debt of similar credit risk and maturity. The carrying amount, net of debt issuance costs, of fixed rate debt of $1,939,978 is included in long-term debt in the condensed consolidated balance sheets. Refer to the derivatives and hedging footnote for information on the fair value of derivative instruments. |
Derivatives and Hedging |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging | Derivatives and HedgingThe Company is exposed to various risks arising from business operations and market conditions, including fluctuations in interest rates and certain foreign currencies. When deemed appropriate, the Company uses derivative and non-derivative instruments as risk management tools to mitigate the potential impact of interest rate and foreign exchange rate risks. The objective of using these tools is to reduce fluctuations in the Company’s earnings and cash flows associated with changes in these rates. Derivative financial instruments are not used for trading or other speculative purposes. The Company has not historically incurred, and does not expect to incur in the future, any losses as a result of counterparty default related to derivative instruments. The Company formally documents relationships between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. This process includes linking cash flow hedges to specific forecasted transactions or variability of cash flow to be paid. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the designated derivative and non-derivative instruments that are used in hedging transactions are highly effective in offsetting changes in the cash flows of the hedged items. When a designated instrument is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable, hedge accounting is discontinued prospectively. The following table summarizes the location and carrying amounts of the derivative instruments and the foreign currency denominated debt, a non-derivative financial instrument, that are designated and qualify as part of hedging relationships:
The 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. Cash Flow Hedges The Company uses interest rate swaps to mitigate variability in forecasted interest payments on a portion of the Company’s U.S. dollar-denominated unsecured variable rate debt. The interest rate swaps effectively convert a portion of the floating rate interest payment into a fixed rate interest payment. The Company designates the interest rate swaps as qualifying hedging instruments and accounts for them as cash flow hedges. On May 1, 2020, the Company dedesignated its interest rate swaps and modified them to match the terms of its modified debt agreement and as a result the $48,492 payable as of that date was deemed a financing transaction. Subsequent cash flows to pay this amount over the remaining term of the agreement are reflected within financing activities in the condensed consolidated statement of cash flows. This payable is classified within other current liabilities on the condensed consolidated balance sheets. The corresponding amount in AOCL is being amortized to interest expense on a straight-line basis over the remaining life of the hedged instrument. The Company redesignated the portion of the modified interest rate swap that is not related to the financing agreement as a qualifying hedging instrument. Gains and losses from fair value adjustments on the cash flow hedges are initially classified in AOCL and are reclassified to interest expense on the dates interest payments are accrued. Hedges of Net Investments in Foreign Operations The Company has designated certain derivative instruments and a portion of its foreign currency denominated debt, a non-derivative financial instrument, as hedges of the foreign currency exchange rate exposure of the Company's Euro-denominated net investment in a European subsidiary. The Company applies the spot method to assess the hedge effectiveness of the derivative instruments and this assessment for each instrument excludes the initial value related to the difference at contract inception between the foreign exchange spot rate and the forward rate (i.e., the forward points). The initial value of this excluded component is recognized as a reduction to interest expense in a systematic and rational manner over the term of the derivative instrument. All other changes in value for the net investment hedges are included in AOCL within foreign currency translation and would only be reclassified to earnings if the European subsidiary were liquidated, or otherwise disposed. The tables below presents gains and losses related to designated cash flow hedges and net investment hedges:
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Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters As more fully discussed in the commitments and contingencies footnote of the Company's notes to the consolidated financial statements in its 2019 Annual Report on Form 10-K, a jury awarded damages against the Company in a litigated automotive product liability dispute. On February 19, 2020, the Washington Court of Appeals issued an order entirely reversing the jury’s finding on damages and ordering a new trial on damages. The plaintiffs subsequently appealed this order to the Washington Supreme Court; on July 7, 2020, the Washington Supreme Court indicated that it will consider a further appeal on this matter. At the time of the filing of these financial statements, based upon the Company’s legal defenses, insurance coverage, and reserves, the Company does not believe this matter will have a material impact to the condensed consolidated financial statements. Fire at S.P. Richards Headquarters and Distribution Center On July 19, 2019, a fire occurred at the S.P. Richards headquarters in Atlanta, Georgia. The building primarily held the S.P. Richards headquarters office and was connected to its Atlanta distribution center. The Company maintains property and casualty loss insurance coverage. The Company recognized a gain of $1,165 and $13,448 during the three and six months ended June 30, 2020, respectively, for insurance recoveries in excess of losses it has incurred on inventory, property, plant and equipment and other fire-related costs. The gain is included within other non-operating (income) expenses on the condensed consolidated statements of income. The Company expects to receive additional insurance recoveries in the future which will result in additional gains.
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Acquisitions, Divestitures and Discontinued Operations |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Divestitures | Acquisitions, Divestitures and Discontinued Operations Acquisitions The Company acquired several businesses for approximately $33,047 and $378,744, net of cash acquired, during the six months ended June 30, 2020 and June 30, 2019, respectively. The Company finalized the acquisition accounting for certain businesses acquired in prior periods, but there have been no significant measurement period adjustments during the three and six months ended June 30, 2020. Divestitures The Company received cash proceeds from divestitures of businesses totaling $382,737 and $12,028 for the six months ended June 30, 2020 and June 30, 2019, respectively. Grupo Auto Todo On March 7, 2019, the Company sold all of its equity in Grupo Auto Todo, a Mexican subsidiary within the Automotive Parts Group. Grupo Auto Todo contributed annual revenues of approximately $15,900 for the year ended December 31, 2019. The Company incurred realized currency losses of $27,037 from this transaction during the three months ended June 30, 2019. These losses are included within other non-operating (income) expenses on the condensed consolidated statements of income. Discontinued Operations Business Products Group Effective June 30, 2020, the Company completed the divestiture of its Business Products Group by selling Supply Source Enterprises, Inc. ("SSE") and S.P. Richards Company ("SPR") in separate transactions. There may be additional cash payments or receipts in subsequent quarters as the Company finalizes customary post-transaction working capital adjustments. These divestitures are part of the Company's long-term strategic initiative to streamline its operations and optimize its portfolio so that it can drive shareholder value by focusing on its global Automotive and Industrial Parts Groups. The Business Products Group was previously a reportable segment of the Company. These divestitures, together with prior period divestitures of Garland C. Norris (effective December 13, 2019), SPR Canada (effective January 1, 2020) and Safety Zone Canada (effective March 2, 2020), represent a single plan to exit the Business Products Group segment and are considered a strategic shift that will have a major effect on the Company’s operations and financial results. Therefore, the results of operations, financial position and cash flows for the Business Products Group are reported as discontinued operations for all periods presented. The Company maintains an immaterial investment in SPR and has concluded that SPR is a variable interest entity. The Company is not the primary beneficiary and therefore does not consolidate SPR. Among other things, the Company does not have any voting rights and does not have the power to direct the activities that most significantly affect SPR's economic performance. The Company’s results of operations for discontinued operations were:
(1)Income taxes include a $7,125 tax benefit associated with the (loss) gain on the disposal for the three and six months ended June 30, 2020. The Company’s assets and liabilities for discontinued operations, by major class, were:
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Total consolidated goodwill as of June 30, 2020 is $1,771,835, net of $506,721 of accumulated impairment loss. The changes in the carrying amount of goodwill during the periods ended June 30, 2020 and December 31, 2019 by reportable segment, as well as other identifiable intangible assets, are summarized as follows:
(1) Additions include measurement period adjustments related to prior year acquisitions. The Company reviews its goodwill annually for impairment in the fourth quarter, or sooner if circumstances indicate that the carrying amount may exceed fair value. The Company tests goodwill for impairment at the reporting unit level, which is an operating segment or a level below an operating segment (a component). Due to several factors that coalesced in the second quarter of 2020 the Company performed an interim impairment test as of May 31, 2020 for its European reporting unit and recorded a goodwill impairment charge of $506,721. The factors primarily resulted from the ongoing market volatility and uncertainty caused by the COVID-19 pandemic, which have extended into the second quarter and have impacted several critical impairment testing assumptions including weighted average cost of capital and market multiples, and near-term revenue and operating margin projections for the reporting unit. The Company also assessed the finite-lived, identifiable tangible and intangible assets at the European reporting unit for impairment under the undiscounted cash flows approach and concluded there was no impairment. The European reporting unit’s fair value was calculated using a combination of both income and market approaches and involved significant unobservable inputs (Level 3 inputs). The assumptions used in the income approach include projected revenue growth rates, operating margins, the estimated weighted average costs of capital and terminal value. The weighted-average cost of capital used in the income approach was adjusted to reflect the specific risks and uncertainties associated with the COVID-19 pandemic in developing the cash flow projections. The assumptions used in the market approach include benchmark company market multiples. The Company used inputs and assumptions it believed are consistent with those a hypothetical marketplace participant would use. The interim impairment tests were prepared in accordance with the Company's accounting policies as described in the summary of significant accounting policies footnote in its consolidated financial statements included in its Annual Report on Form 10-K for 2019. Should actual results differ from certain key assumptions used in the interim impairment test, including revenue and operating margin growth rates, which are both impacted by economic conditions, or should other key assumptions change, including benchmark company market multiples, weighted average costs of capital and terminal value, in subsequent periods the Company could record additional impairment charges for this reporting unit. If there are sustained declines in macroeconomic or business conditions in future periods, including as a result of the COVID-19 pandemic, affecting the projected earnings and cash flows at the Company's reporting units, among other things, there can be no assurance that goodwill at one or more reporting units may not be impaired. Based on the Company's interim impairment assessment as of June 30, 2020, which included reviewing the previous revenue and operating margin growth forecasts based on the current projections, the Company has determined that it is not more likely than not that the goodwill is impaired for all other reporting units.
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Income Taxes |
6 Months Ended |
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Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company's effective income tax rate was negative 19.4% for the three months ended June 30, 2020, compared to 25.8% for the same three month period in 2019. The effective income tax rate was negative 67.7% for the six months ended June 30, 2020, compared to 25.1% for the same period in 2019. The rate decrease is primarily due to the non-deductible goodwill impairment charge and certain transaction and other costs. |
Earnings Per Share |
6 Months Ended |
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Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per ShareAs more fully discussed in the share-based compensation footnote of the Company’s notes to the consolidated financial statements in its 2019 Annual Report on Form 10-K, the Company maintains various long-term incentive plans, which provide for the granting of stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), performance awards, dividend equivalents and other share-based awards. Options to purchase approximately 2,537 and 2,418 shares of common stock were outstanding but excluded from the computations of diluted earnings per share for the three and six month period ended June 30, 2020, respectively, as compared to approximately 247 and 135 for the three and six month period ended June 30, 2019, respectively. These options were excluded because their inclusion would have been anti-dilutive. |
Restructuring |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring 2019 Cost Savings Plan As more fully discussed in the restructuring footnote of the Company's notes to the consolidated financial statements in its 2019 Annual Report on Form 10-K, the Company approved and began to implement certain restructuring actions (the “2019 Cost Savings Plan”) across its subsidiaries primarily targeted at simplifying organizational structures and distribution networks. The Company believes these actions will reduce costs in the future and allow it to more effectively and efficiently manage its businesses. The table below summarizes costs incurred in 2020 associated with the 2019 Cost Savings Plan:
The 2019 Cost Savings Plan was approved and funded by the Company's corporate office and therefore these costs are not allocated to the Company's segments. The cumulative amount of costs incurred as of June 30, 2020 since inception is $182,982. The table below summarizes the activity related to the restructuring costs discussed above. As of June 30, 2020, the current portion of the restructuring liability of $32,586 is included in other current liabilities on the condensed consolidated balance sheet.
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Basis of Presentation (Policies) |
6 Months Ended |
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Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Accounting | 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. During the six months ended June 30, 2020, the Company completed the divestiture of its Business Products Group. Refer to the acquisitions, divestitures and discontinued operations footnote for more information. The Company's results of operations for the Business Products Group are reported as discontinued operations and all information related to the discontinued operations has been excluded from the notes to the condensed consolidated financial statements for all periods presented. Net (loss) income from discontinued operations for each period includes all costs that are directly attributable to these businesses and excludes certain corporate overhead costs that were previously allocated. Additionally, certain intercompany sales from the Automotive Parts Group are grossed up and recast in continuing operations in each period because those sales will continue with the discontinued operations after the divestiture. 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, 2019. Accordingly, the unaudited interim condensed consolidated financial statements and related disclosures herein should be read in conjunction with the Company’s 2019 Annual Report on Form 10-K. |
Use of Estimates | The preparation of interim financial statements requires management to make estimates and assumptions that affect the amounts reported in the interim condensed consolidated financial statements. Specifically, the Company makes estimates and assumptions in its interim condensed consolidated financial statements for inventory adjustments, the accrual of bad debts, credit losses on guaranteed loans, customer sales returns, and volume incentives earned, among others. Inventory adjustments (including adjustments for a majority of inventories that are valued under the last-in, first-out (“LIFO”) method) are accrued on an interim basis and adjusted in the fourth quarter based on the annual book to physical inventory adjustment and LIFO valuation. 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. In the opinion of management, all adjustments necessary for a fair presentation of the Company’s financial results for the interim periods have been made. These adjustments are of a normal recurring nature. The Company has reclassified certain prior period amounts to conform to the current period presentation. |
Recent Accounting Pronouncements | Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of ASUs to the FASB Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs and any not listed below were assessed and determined to be not applicable or are expected to have a minimal impact on the Company's condensed consolidated financial statements. Financial Instruments - Credit Losses (Topic 326) In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. Among other things, the ASU and its amendments replace the incurred loss impairment model for receivables and loan guarantees with a current expected credit loss model. The new model measures impairment based on expected credit losses over the remaining contractual life of an asset, considering available information about the collectability of cash flows, past events, current conditions, and reasonable and supportable forecasts. Additional quantitative and qualitative disclosures are required. The Company adopted ASU 2016-13 and its amendments as of January 1, 2020, which included recognizing a cumulative-effect adjustment to reduce opening retained earnings by $11,432, net of taxes. Compensation - Retirement Benefits (Topic 715) In August 2018, the FASB issued ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans. The updated accounting guidance modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing, adding and clarifying certain disclosures. These provisions must be applied retrospectively. ASU 2018-14 is effective for periods beginning after December 15, 2020, with an option to adopt early. The adoption of ASU 2018-14 is not expected to have a significant impact on the Company’s financial position, results of operations or disclosures. The Company does not plan to early adopt the standard.
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Guarantees | The Company guarantees the borrowings of certain independently controlled automotive parts stores and businesses (“independents”) and certain other affiliates in which the Company has a noncontrolling equity ownership interest (“affiliates”). Presently, the independents are generally consolidated by unaffiliated enterprises that have controlling financial interests through ownership of a majority voting interest in the independents. The Company has no voting interest or equity conversion rights in any of the independents. The Company does not control the independents or the affiliates but receives a fee for the guarantees. The Company has concluded that the independents are variable interest entities, but that the Company is not the primary beneficiary. Specifically, the equity holders of the independents have the power to direct the activities that most significantly impact the entities’ economic performance including, but not limited to, decisions about hiring and terminating personnel, local marketing and promotional initiatives, pricing and selling activities, credit decisions, monitoring and maintaining appropriate inventories, and store hours. Separately, the Company concluded that the affiliates are not variable interest entities. The Company’s maximum exposure to loss as a result of its involvement with these independents and affiliates is generally equal to the total borrowings subject to the Company’s guarantees. While such borrowings of the independents and affiliates are outstanding, the Company is required to maintain compliance with certain covenants, including a debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratio and certain limitations on additional borrowings. At June 30, 2020, the Company was in compliance with all such covenants.In the event that the Company is required to make payments in connection with these guarantees, the Company would obtain and liquidate certain collateral pledged by the independents or affiliates (e.g., accounts receivable and inventory) to recover all or a substantial portion of the amounts paid under the guarantees. The Company recognizes a liability equal to current expected credit losses over the lives of the loans in the guaranteed loan portfolio, based on a consideration of historical experience, current conditions, the nature and expected value of any collateral, and reasonable and supportable forecasts. To date, the Company has had no significant losses in connection with guarantees of independents’ and affiliates’ borrowings and the current expected credit loss reserve is not material. As of June 30, 2020, there are no material guaranteed loans for which the borrower is experiencing financial difficulty and recovery is expected to be provided substantially through the operation or sale of the collateral. |
Fair Value of Financial Instruments | The carrying amounts reflected in the condensed consolidated balance sheets for cash and cash equivalents, trade accounts receivable, trade accounts payable, and borrowings under the line of credit and term loan approximate their respective fair values based on the short-term nature of these instruments.The fair value of fixed rate debt is designated as Level 2 in the fair value hierarchy (i.e., significant observable inputs) and is based primarily on the discounted value of future cash flows using current market interest rates offered for debt of similar credit risk and maturity. |
Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Segment Information | The following table presents a summary of the Company's reportable segment financial information from continuing operations:
(1) The following table presents a summary of the other unallocated costs:
(2) Adjustment reflects the second quarter goodwill impairment charge related to the Company's European reporting unit. Refer to the goodwill and other intangible assets footnote. (3) Adjustment reflects restructuring costs related to the ongoing execution of the 2019 Cost Savings Plan announced in the fourth quarter of 2019. The costs are primarily associated with severance and other employee costs, including a voluntary retirement program, and facility and closure costs related to the consolidation of operations. Refer to the restructuring footnote. (4) Adjustment reflects realized currency losses related to divestitures. Refer to the acquisitions, divestitures and discontinued operations footnote. (5) Adjustment reflects insurance recoveries in excess of losses incurred on inventory, property, plant and equipment and other fire-related costs related to the S.P. Richards Headquarters and Distribution Center. Refer to the commitments and contingencies footnote. (6) Adjustment reflects (i) $2,481 and $8,490 of incremental costs associated with COVID-19 for the three and six months ended June 30, 2020, respectively, and (ii) costs associated with certain divestitures. COVID-19 related costs include incremental costs incurred relating to fees to cancel marketing events and increased cleaning and sanitization materials, among other things.
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Revenue from External Customers by Geographic Areas | The following table presents disaggregated geographical net sales from contracts with customers by reportable segment:
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Accumulated Other Comprehensive Loss (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Loss | The following tables present the changes in accumulated other comprehensive loss (“AOCL”) by component for the six months ended June 30:
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Employee Benefit Plans (Tables) |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Income for the Pension Plans | Net periodic benefit income from the Company's pension plans included the following components for the three months ended June 30:
Net periodic benefit income from the Company's pension plans included the following components for the six months ended June 30:
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Accounts Receivable Sales Agreement (Tables) |
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Loans, Notes, Trade and Other Receivables, Sales | The following table represents a summary of the activity under the A/R Sales Agreement since its inception:
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Derivatives and Hedging (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The following table summarizes the location and carrying amounts of the derivative instruments and the foreign currency denominated debt, a non-derivative financial instrument, that are designated and qualify as part of hedging relationships:
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Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The tables below presents gains and losses related to designated cash flow hedges and net investment hedges:
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Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) | The tables below presents gains and losses related to designated cash flow hedges and net investment hedges:
|
Acquisitions, Divestitures and Discontinued Operations (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations | The Company’s results of operations for discontinued operations were:
(1)Income taxes include a $7,125 tax benefit associated with the (loss) gain on the disposal for the three and six months ended June 30, 2020. The Company’s assets and liabilities for discontinued operations, by major class, were:
|
Goodwill and Other Intangible Assets (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets and Goodwill | The changes in the carrying amount of goodwill during the periods ended June 30, 2020 and December 31, 2019 by reportable segment, as well as other identifiable intangible assets, are summarized as follows:
(1) Additions include measurement period adjustments related to prior year acquisitions.
|
Restructuring (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | The table below summarizes costs incurred in 2020 associated with the 2019 Cost Savings Plan:
|
Segment Information - Operating Results by Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Segment Reporting Information [Line Items] | ||||
Net sales | $ 3,823,227 | $ 4,457,931 | $ 7,915,753 | $ 8,717,060 |
Intangible asset amortization | (45,996) | |||
(Loss) income before income taxes | (304,436) | 282,199 | (143,843) | 474,214 |
Incremental expense, COVID-19 | 2,481 | 8,490 | ||
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 3,823,227 | 4,457,931 | 7,915,753 | 8,717,060 |
Operating profit | 327,834 | 365,070 | 584,345 | 665,666 |
Operating Segments | Automotive Parts | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 2,495,799 | 2,776,210 | 5,078,484 | 5,399,916 |
Operating profit | 218,906 | 228,736 | 361,484 | 408,304 |
Operating Segments | Industrial Parts | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,327,428 | 1,681,721 | 2,837,269 | 3,317,144 |
Operating profit | 108,928 | 136,334 | 222,861 | 257,362 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Interest expense, net | (24,876) | (22,586) | (44,744) | (45,603) |
Intangible asset amortization | (23,256) | (22,604) | (45,996) | (43,875) |
Corporate expense | (28,613) | (33,573) | (83,674) | (64,752) |
Other unallocated amounts | $ (555,525) | $ (4,108) | $ (553,774) | $ (37,222) |
Segment Information - Summary of Unallocated Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Segment Reporting Information [Line Items] | ||||
Goodwill impairment charge | $ (506,721) | $ 0 | $ (506,721) | $ 0 |
Restructuring costs | (25,059) | 0 | (28,041) | 0 |
Gain on insurance proceeds related to SPR Fire | 1,165 | 13,448 | ||
Other | ||||
Segment Reporting Information [Line Items] | ||||
Goodwill impairment charge | (506,721) | 0 | (506,721) | 0 |
Restructuring costs | (25,059) | 0 | (28,041) | 0 |
Realized currency loss | (11,356) | 0 | (11,356) | (27,037) |
Gain on insurance proceeds related to SPR Fire | 1,166 | 0 | 13,448 | 0 |
Transaction and other costs | (13,555) | (4,108) | (21,104) | (10,185) |
Total other unallocated costs | $ (555,525) | $ (4,108) | $ (553,774) | $ (37,222) |
Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Jan. 01, 2020 |
Dec. 31, 2019 |
---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 3,809,564 | $ 4,571,860 | |
Cumulative Effect, Period of Adoption, Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ (11,432) |
Employee Benefit Plans - Components of Net Periodic Benefit Income for the Pension Plans (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Retirement Benefits [Abstract] | ||||
Service cost | $ 2,925 | $ 2,379 | $ 5,907 | $ 4,769 |
Interest cost | 20,865 | 24,335 | 41,790 | 48,683 |
Expected return on plan assets | (38,410) | (38,507) | (76,933) | (77,034) |
Amortization of prior service credit | 173 | (17) | 346 | (34) |
Amortization of actuarial loss | 11,088 | 7,746 | 22,210 | 15,495 |
Net periodic benefit income | $ (3,359) | $ (4,064) | $ (6,680) | $ (8,121) |
Guarantees (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
| |
Guarantor Obligations [Line Items] | |
Total borrowings of the independents and affiliates subject to guarantee | $ 925,109 |
Guarantees related to borrowings, other assets | 90,000 |
Guarantor obligation, current carrying value | $ 90,000 |
Minimum | |
Guarantor Obligations [Line Items] | |
Guaranteed obligations maturity (in years) | 1 year |
Maximum | |
Guarantor Obligations [Line Items] | |
Guaranteed obligations maturity (in years) | 6 years |
Accounts Receivable Sales Agreement (Details) - USD ($) |
6 Months Ended | |
---|---|---|
May 29, 2020 |
Jun. 30, 2020 |
|
Receivables [Abstract] | ||
Sale agreement term | 364 days | |
Sale agreement amount | $ 500,000,000 | |
Receivables sold to the financial institution and derecognized | $ 902,326,000 | |
Cash collected on sold receivables | 402,302,000 | |
Receivables pledged as collateral on sold receivables as of period-end | $ 342,636,000 |
Fair Value of Financial Instruments (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fixed rate debt, carrying amount | $ 1,939,978 |
Fair Value, Inputs, Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt instrument, fair value disclosure | 1,845,693 |
Fixed rate debt, carrying amount | $ 1,939,978 |
Commitments and Contingencies (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Insurance recoveries | $ 1,165 | $ 13,448 |
Acquisitions, Divestitures and Discontinued Operations - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Business Acquisition [Line Items] | |||||
Payments to acquire businesses, net | $ 33,047 | $ 378,744 | |||
Revenue of disposed entity | $ 379,938 | $ 476,329 | 846,944 | 954,033 | |
Business exit costs | $ 25,059 | 0 | 28,041 | 0 | |
Proceeds from divestitures of businesses | $ 382,737 | $ 12,028 | |||
Grupo Auto Todo | |||||
Business Acquisition [Line Items] | |||||
Revenue of disposed entity | $ 15,900 | ||||
Business exit costs | $ 27,037 |
Acquisitions, Divestitures and Discontinued Operations - Results of Operations for Discontinued Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Business Combinations [Abstract] | ||||
Net sales | $ 379,938 | $ 476,329 | $ 846,944 | $ 954,033 |
Cost of goods sold | 277,614 | 360,452 | 632,007 | 722,786 |
Gross profit | 102,324 | 115,877 | 214,937 | 231,247 |
Operating expenses | 89,385 | 95,947 | 179,461 | 190,820 |
Loss (gain) on disposal | 216,133 | 0 | 220,318 | 1,000 |
Income before income taxes | (203,194) | 19,930 | (184,842) | 39,427 |
Income taxes | (2,323) | 5,019 | 1,840 | 9,950 |
Net (loss) income from discontinued operations | $ (200,871) | $ 14,911 | $ (186,682) | $ 29,477 |
Basic (loss) earnings per share from discontinued operations (in dollars per share) | $ (1.39) | $ 0.10 | $ (1.29) | $ 0.20 |
Diluted (loss) earnings per share from discontinued operations (in dollars per share) | $ (1.39) | $ 0.10 | $ (1.29) | $ 0.20 |
Weighted average common shares outstanding (in shares) | 144,262 | 146,075 | 144,657 | 146,029 |
Weighted average common shares outstanding - assuming dilution (in shares) | 144,262 | 146,736 | 144,657 | 146,713 |
Income tax benefit from disposal | $ 7,125 | $ 7,125 |
Acquisitions, Divestitures and Discontinued Operations - Assets and Liabilities (Details) $ in Thousands |
Dec. 31, 2019
USD ($)
|
---|---|
Assets | |
Trade accounts receivable, net | $ 194,903 |
Merchandise inventories, net | 387,307 |
Prepaid expenses and other current assets | 132,041 |
Other intangible assets, less accumulated amortization | 76,829 |
Operating lease assets | 80,302 |
Other assets | 91,640 |
Total assets of discontinued operations | 963,022 |
Liabilities | |
Trade accounts payable | 158,163 |
Other current liabilities | 59,954 |
Operating lease liabilities | 68,906 |
Total liabilities of discontinued operations | $ 287,023 |
Income Taxes (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | (19.40%) | 25.80% | (67.70%) | 25.10% |
Earnings Per Share (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,537 | 247 | 2,418 | 135 |
Restructuring - Summary of Restructuring Costs (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
| |
Restructuring and Related Activities [Abstract] | |
Restructuring costs | $ 28,041 |
Remaining costs expected but not yet incurred | 6,863 |
Total costs | $ 34,904 |
Restructuring - Additional Information (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
Restructuring and Related Activities [Abstract] | |
Restructuring costs incurred to date | $ 182,982 |
Restructuring reserve, current | $ 32,586 |
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